NOT FOR DISSEMINATION IN THE UNITED
STATES OR THROUGH US NEWSWIRE SERVICES
CryptoGlobal Corp. (TSXV:CPTO) (the “
Company”) —
one of Canada’s fastest growing blockchain and financial technology
companies — announces a CAD$10 million private placement.
The Company has entered into an engagement
letter with Eight Capital and Haywood Securities Inc. to act as
co-lead agents (the “Co-Lead Agents”) and joint
bookrunners, pursuant to which the Co-Lead Agents have agreed to
offer for sale, together with a syndicate of agents (together with
the Co-Lead Agents, the “Agents”), up to 8,333,333
special warrants of the Company (the “Special
Warrants”) on a “best efforts” private placement basis at
a price of $1.20 per Special Warrant for aggregate gross proceeds
of up to $10,000,000 (the “Offering”). The Company
has also granted to the Agents an option (the “Agents’
Option”) to sell up to an additional 15% of the Special
Warrants sold pursuant to the Offering, which Agent’s Option is
exercisable by giving notice to the Company not less than 48 hours
prior to the closing of the Offering. If the Agents’ Option is
exercised in its entirety, the aggregate gross proceeds of the
Offering will be $11,500,000. Closing of the Offering is expected
to occur on or about March 16, 2018 (the “Closing
Date”), subject to receipt of regulatory approvals.
The Offering follows yesterday’s announcement
that CryptoGlobal has agreed to acquire BitCity Group, in a deal
that includes a 10 year land and Power Purchasing Agreement (PPA)
for 35 MW of immediate power – and the potential to scale to 100 MW
over the long-term. The acquisition agreement also includes a
10,000 machine hosting contract.
Important Milestone in Building a
Leading Canadian Blockchain and FinTech Company
“Today’s news marks an important milestone in
CryptoGlobal’s journey to build a leading blockchain and FinTech
company for the long-term,” says CryptoGlobal CEO Rob Segal, adding
that the Company intends to use the net proceeds of the Offering
(including any proceeds received as a result of the exercise of the
Agents’ Option) to build out the Company’s newly announced Ontario
facilities and drive its growth plans.
Key Terms of the Offering are as
Follows:
Each Special Warrant shall be automatically
exercisable into units of the Company (the
“Units”), with each Unit consisting of one common
share of the Company (a “Share”) and one Share
purchase warrant (a “Warrant”). Each Warrant shall
entitle the holder thereof to acquire one Share at a price of $1.50
per Share for a period of 24 months following the Closing Date.
Each Special Warrant shall be automatically
exercisable, for no additional consideration, into Units on the
date (the “Automatic Exercise Date”) that is the
earlier of: (i) the date that is three business days following the
date on which the Company obtains a receipt from the applicable
securities regulatory authorities, other than Quebec (the
“Securities Commissions”), for a (final) short
form prospectus qualifying distribution of the Units underlying the
Special Warrants (as well as the Shares underlying the Compensation
Warrants and the Penalty Units (each as defined below) (the
“Qualifying Prospectus”), and (ii) the date that
is four months and one day after the closing of the Offering.
The Company will use its commercially reasonable
efforts to obtain a receipt from the Securities Commissions for the
Qualifying Prospectus before that date that is 75 days following
the Closing Date (the “Outside Date”), provided,
however, that there is no assurance that a Qualifying Prospectus
will be filed or that a receipt therefor will be issued by the
Securities Commissions prior to the expiry of the statutory four
month hold period.
Notwithstanding the foregoing, in the event the
Company has not received a receipt from the Securities Commissions
for the Qualifying Prospectus on or before the Outside Date, the
Company shall continue to use its commercially reasonable best
efforts until the Automatic Exercise Date to qualify the Units, and
each unexercised Special Warrant will thereafter entitle the holder
to receive, upon the exercise thereof, and for no additional
consideration, 1.05 Units (instead of one (1) Unit) (the additional
0.05 Units are collectively referred to herein as the
“Penalty Units”); provided, however, that any
fractional entitlement to Penalty Units will be rounded down to the
nearest whole Penalty Unit.
In connection with the Offering, the Agents will
receive a cash commission equal to 5% of the gross proceeds of the
Offering (including sales to subscribers on a President’s List) and
such number of compensation warrants (the “Compensation
Warrants”) equal to 7% of the number of Special Warrants
sold pursuant to the Offering (including sales to subscribers on a
President’s List and including any Special Warrants sold pursuant
to the exercise of the Agents’ Option). Each Compensation Warrant
shall entitle the holder to purchase one Share at a price that is
the greater of: (i) $1.20; and (ii) the lowest price permitted by
the TSXV, for a period of 24 months following the Closing Date.
The Offering is subject to certain conditions
including, but not limited to, the receipt of all necessary
regulatory and stock exchange approvals, including the approval of
the TSX Venture Exchange. Prior to the filing of the Qualifying
Prospectus and the automatic exercise of the Special Warrants, the
securities issued under the Offering will be subject to a statutory
four month hold period from the date of closing of the Offering in
addition to any other restrictions under applicable law.
The Offering is in the form of a best efforts
private placement (i) in Canada to “accredited investors” within
the meaning of National Instrument 45-106 – Prospectus Exemptions
and other exempt purchasers in each province of Canada (other than
Quebec), as agreed upon by the Company and the Agents, (ii) in the
United States pursuant to exemptions from the registration
requirements of the United States Securities Act of 1933, as
amended (the “U.S. Securities
Act”), and (iii) outside Canada and the United States on a
basis which does not require the qualification or registration of
any of the Special Warrants or the Company.
The securities being offered have not been, nor
will they be, registered under the U.S. Securities Act and may not
be offered or sold in the United States or to, or for the account
or benefit of, U.S. persons absent registration or an applicable
exemption from the registration requirements. This news release
will not constitute an offer to sell or the solicitation of an
offer to buy nor will there be any sale of the securities in any
State in which such offer, solicitation or sale would be
unlawful.
CryptoGlobal – We Power the
Blockchain
CryptoGlobal is a leading Canadian blockchain
and financial technology company with facilities in Ontario and
Quebec. Our team mines a diverse portfolio of
cryptocurrencies from one of Canada’s largest and most efficient
mining operations. Currently, CryptoGlobal focuses on mining
Bitcoin, DASH, Ether and Litecoin – using a mix of custom-tuned
mining technologies.
Learn more about CryptoGlobal and the future of
mining at www.cryptoglobal.io
For more information and to book media
interviews, please contact:Debra
Quinn
T: 647.985.7162E: deb@cryptoglobal.io
Cautionary Note Regarding Forward
Looking Information
This news release contains certain
forward-looking information and forward-looking statements within
the meaning of the applicable Canadian securities legislation. All
statements, other than statements of historical fact, are
forward-looking statements and are based on expectations, estimates
and projections as at the date of this news release. Any statement
that involves discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions,
future events or performance (often but not always using phrases
such as "expects", or "does not expect", "is expected",
"anticipates" or "does not anticipate", "plans", "budget",
"scheduled", "forecasts", "estimates", "believes" or "intends" or
variations of such words and phrases or stating that certain
actions, events or results "may" or "could", "would", "might" or
"will" be taken to occur or be achieved) are not statements of
historical fact and may be forward-looking statements. In this news
release, forward-looking statements relate, among other things, to:
the timing and completion of the Offering; receipt of all
regulatory approvals, including the receipt from the Securities
Commissions for the Qualifying Prospectus; and the use of proceeds
of the Offering, including the Company’s future growth plans.
These forward-looking statements are based on
reasonable assumptions and estimates of management of the Company
at the time such statements were made. Actual future results may
differ materially as forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to
materially differ from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors, among other things, include: fluctuations
in general macroeconomic conditions; fluctuations in securities
markets; fluctuations in the prices of cryptocurrencies mined by
the Company; historical prices of cryptocurrencies and the ability
of the Company to mine cryptocurrencies consistent with historical
prices; the presence of laws and regulations that may impose
restrictions on the ability of the Company to operate it business;
the speculative nature of cryptocurrency mining and blockchain
operations; changes in project parameters as plans continue to be
evaluated; and those factors described under the heading "Risks
Factors” in the Company’s most filing statement dated January 17,
2018 available on SEDAR. Although the forward-looking statements
contained in this news release are based upon what management of
the Company believes, or believed at the time, to be reasonable
assumptions, the Company cannot assure shareholders that actual
results will be consistent with such forward-looking statements, as
there may be other factors that cause results not to be as
anticipated, estimated or intended. Accordingly, readers should not
place undue reliance on forward-looking statements and information.
There can be no assurance that forward-looking information, or the
material factors or assumptions used to develop such
forward-looking information, will prove to be accurate. The Company
does not undertake any obligations to release publicly any
revisions for updating any voluntary forward-looking statements,
except as required by applicable securities law.
Neither the TSXV nor its Regulation
Services Provider (as that term is defined in the policies of the
TSXV) accepts responsibility for the adequacy or accuracy of this
news release.
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