/NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH US NEWSWIRE SERVICES/
TORONTO, Feb. 27, 2018 /CNW/ - 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
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.
SOURCE CryptoGlobal Corp.
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