An anonymous representative of ESW Capital reports

ESW CAPITAL RELEASES OPEN LETTER TO OUR FELLOW REDKNEE STAKEHOLDERS

ESW Capital LLC is writing to Redknee Solutions Inc. stakeholders with the goal of providing clarity and comfort that the funds for Redknee's announced strategic restructuring can and will be raised. Redknee first announced plans for this restructuring with its first quarter fiscal 2017 earnings press release on Feb. 8, 2017. Further details around this strategic plan were announced in a release on Feb. 23, 2017.

ESW Capital, through its affiliate Wave Systems Corp., has provided the Redknee board with two offers that should give all stakeholders, especially Redknee's customers, certainty that these restructuring funds can be raised.

The first offer commits to a full backstop of an equity rights offering sufficient to finance the needed restructuring. The terms of the offer are substantially that Redknee would:

• Launch a rights offering, fully backstopped by ESW, with aggregate gross proceeds of approximately $54-million (U.S.) at a subscription price per right of 50 U.S. cents;
• Use the funds for restructuring of the business;
• Enter into long-term shared service agreements with ESW affiliates Crossover Markets Inc. and DevFactory FZ-LLC;
• Grant ESW a warrant to purchase five million common shares at a price of 50 U.S. cents per share in consideration for the full backstop.

This first offer would result in a dilution of approximately 113 million additional shares.

The outline of a second offer was additionally provided based on feedback from the Redknee board. This offer commits to a full backstop of an equity rights offering sufficient to both finance the needed restructuring and redeem the Series A preferred stock. The terms of the offer are substantially that Redknee would:

• Launch a rights offering, fully backstopped by ESW, with aggregate gross proceeds of $140-million (U.S.) at a subscription price per right between 50 U.S. cents and 70 U.S. cents, at Redknee's election;
• Use the funds for restructuring of the business and to fully redeem the Series A preferred stock;
• Guarantee ESW a minimum subscription of 25 per cent of the non-ESW affiliated rights;
• Grant ESW a warrant package of $60-million (U.S.) priced at the rights offering price;
• Remove the four preferred directors as a part of redeeming the Series A preferred stock, but also grant ESW one to two board seats in addition to those it may already be entitled to.

This second offer would result in a dilution of approximately 300 million to 400 million additional shares depending on the pricing election.

ESW respects that this matter is in the hands of the three independent directors elected by the common shareholders to decide. It simply encourages them to take swift, decisive action that is clearly required to preserve value for all stakeholders (customers, shareholders and employees alike).