Vancouver, British Columbia--(Newsfile Corp. - March 2, 2021) - DMG Blockchain Solutions Inc. (TSXV: DMGI) (DMGGF: OTCQB) (FSE: 6AX) ("DMG" or the "Company"), a vertically integrated blockchain and cryptocurrency technology company is pleased to announce that it has entered into a securities purchase agreement for a private placement of its common shares ("Common Shares") and warrants to purchase common shares ("Warrants") to U.S. institutional investors only for aggregate gross proceeds to the Company of approximately Cdn$70 million (the "Private Placement"). Pursuant to the Private Placement, the Company will issue 23,333,334 Common Shares and Warrants to purchase up to 11,666,667 Common Shares at a purchase price of Cdn$3.00 per Common Share and associated Warrant. Each Warrant will entitle the holder thereof to purchase one Common Share at an exercise price of Cdn$3.55 per Common Share at any time prior to the three-year anniversary of the closing date of the Private Placement (the "Closing Date").
H.C. Wainwright & Co. is acting as the exclusive placement agent for the private placement in the United States.
The Common Shares and Warrants to be issued under the Private Placement will be qualified by way of a prospectus supplement under the Company's base shelf prospectus dated March 1, 2021 (collectively, the "Prospectus Supplement") which will be filed in each of the provinces of Canada, except Qubec. In the United States, the Common Shares, Warrants and the shares issuable upon the exercise of the Warrants will be offered on a private placement basis pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and certain other jurisdictions in accordance with applicable securities laws.
The net proceeds of the Private Placement are expected to be used by the Company for infrastructure expansion and equipment purchases, investment in cryptocurrencies, potential future acquisitions and partnerships, software development, expansion of marketing and sales activities and working capital and general corporate purposes. Details as to the specific allocation of the proceeds will be disclosed in the Prospectus Supplement.
The Company expects the Closing Date to occur on or about March 5, 2021. The Company has applied to list the Common Shares issued in the Private Placement and the Common Shares underlying the Warrants on the TSX Venture Exchange (the "TSXV"). The Private Placement is subject to the satisfaction of certain customary closing conditions, including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals (including, for certainty, the acceptance of the TSXV).