TORONTO, Jan. 31, 2019 /CNW/ - Cobalt Blockchain Inc.
("COBC" or the "Company") (TSX-V: COBC; OTCQB: COBCF) is pleased to
announce that it has engaged IBK Capital Corp. ("IBK" or the
"Agent"), to sell, by way of a private placement on a best efforts
basis, units (the "Units") of the Company at a price of
$0.15 per Unit (the "Issue Price")
for gross proceeds of $1,500,000 (the
"Offering").
Each Unit issued pursuant to the Offering will consist of one
common share in the capital of the Company (a "Common Share") and
one half of one Common Share purchase warrant (each whole warrant,
a "Warrant"). Each Warrant entitles the holder thereof to purchase
one additional Common Share at a price of $0.20 for a period of five years.
The Company intends to use the net proceeds of the Offering to
fund i) exploration work on its joint venture properties, ii)
establishment of assay lab facilities and regional offices, and
iii) for working capital and general corporate purposes.
The Offering may be completed in multiple closings, with the
final closing expected to occur on February
11, 2019, subject to the receipt of all necessary regulatory
approvals, including the approval of the TSX Venture Exchange. All
securities issued pursuant to the Offering will be subject to a
four month hold period in accordance with applicable Canadian
securities laws.
The Company will, upon the closing of the Offering: 1) pay the
Agent a cash commission equal to 8% of the gross proceeds of the
Offering, except in respect of any subscriptions by purchasers on
the President's List; and 2) issue to the Agent compensation
warrants equal to 10% of the Common Shares sold to purchasers not
listed on the President's List, subject to compliance with all
required regulatory approvals. Each broker warrant entitles
the holder to purchase one Unit at the Offering price for a period
of five years.
Four Insiders of the Company, Peter
Hooper (CEO of COBC), Lance
Hooper (President of COBC), Yves T.
Kabongo (Vice President of COBC), and William F. White (Chairman of IBK), and another
non-related creditor have agreed to convert outstanding debt
totalling $462,000 in exchange for
3,080,000 Common Shares at a price of $0.15 per share. No Warrants will be issued in
connection with the debt settlement for Insiders while the
non-related party will receive 133,333 Warrants. Each Warrant
entitles the holder thereof to purchase one additional Common Share
at a price of $0.20 for a period of
five years. The settlement price of $0.15 per share is above the prevailing market
price for the Common Shares of COBC and there is no material
undisclosed information relating to the Company. The debt
settlement is related to the repayment of promissory notes
($392,000), management fees
($30,000), and legal fees
($40,000).
The debt settlement transaction is subject to the approval of
the TSX Venture Exchange and all Shares issued pursuant to the debt
settlements will be subject to a four-month statutory hold period.
The debt settlement will not create a new Insider nor a new Control
Person. The Company believes it is in the best interest of
its shareholders to reduce the amount of accrued indebtedness to
improve its financial position.
The issuance of a portion of the Common Shares in the debt
settlement transaction constitutes a Related Party Transaction
within the meaning of Multilateral Instrument 61-101, as directors,
officers and Insiders of the Company will receive an aggregate of
2,813,333 Common Shares. All the directors of the company without a
material interest in the debt settlement, acting in good faith,
considered the debt settlement and have determined that the value
of the consideration to be received by COBC for the Common Shares
is fair and reasonable. The Company is relying on exemptions
from the formal valuation and minority approval requirements of MI
61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 as
the fair market value of the debt settlement insofar as it involves
Related Parties, does not exceed 25 per cent of the market
capitalization of COBC. Additionally, no new Insider nor new
Control Person will be created as a result of either the debt
conversion transaction or the private placement Offering.
Conferences and Events
COBC management will be attending upcoming conferences
including:
- Investing in Africa Mining Indaba (Cape Town, Feb 4
- 7).
- Prospectors & Developers Association of Canada (PDAC) 2019 (Toronto, Mar 3 -
6)
This press release does not constitute an offer to sell or
solicitation of an offer to sell any of the securities. The
securities have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act"), or any state securities laws.
About Cobalt Blockchain Inc.
Cobalt Blockchain Inc. (TSX-V: COBC; OTCQB: COBCF) is a Canadian
resource company expanding its exploration and development business
to include cobalt assets in the Democratic Republic of the Congo
("DRC"). Through its wholly owned DRC subsidiary it holds
processing and export licenses for tin, tantalum, tungsten, copper
and cobalt. COBC is the first mining and mineral trade
company set up specifically to procure cobalt in compliance with
the Organisation for Economic Co-operation and Development ("OECD")
due diligence framework. COBC and its partners have developed and
are implementing a blockchain-based traceability and reporting
platform to provide greater certainty of provenance and further
assurance that all minerals procured are ethically-sourced.
Senior management have over twelve years of experience working in
the DRC and a proven international track record in exploration
success and the trading of certified conflict-free,
child-labour-free minerals.
Forward-Looking Information
This release includes certain statements that may be deemed
"forward-looking statements". All statements in this release, other
than statements of historical facts, that address future
production, reserve potential, exploration drilling, exploitation
activities and events or developments that the Company expects are
forward-looking statements. Although the Company believes the
expectations expressed in such statements are based on reasonable
assumptions, such statements are not guarantees of future
performance and actual results or developments may differ
materially from those in the statements. There are certain factors
that could cause actual results to differ materially from those in
forward-looking statements. These include market prices,
exploitation and exploration successes, continued availability of
capital and financing, and general economic, market or business
conditions. Investors are cautioned that any such statements are
not guarantees of future performance and actual results or
developments may differ materially from those projected in the
forward-looking statements. For more information on the Company,
investors should review registered filings at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Cobalt Blockchain Inc.