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Fortress Technologies Inc. (TSX-V: FORT) (the “Company” or “Fortress”), a Bitcoin company that develops and operates world-class bitcoin mining infrastructure, is pleased to announce that due to strong demand, it has agreed to increase the size of its previously announced non-brokered private placement of CDN$20,000,000 (the “OriginalOffering”) of 3.5% senior secured convertible debenture units due 36 months following the date of issuance (each, a “Convertible Debenture Unit”), such that a consortium on institutional investors will purchase an aggregate of up to CDN$25,000,000 Convertible Debenture Units (the “Upsized Offering”). The Upsized Offering will be completed on identical terms as the Original Offering, except for the increase in the number of Convertible Debenture Units to be issued in connection with the Upsized Offering. A further press release will be issued upon closing of the Original Offering and the Upsized Offering.
As previously announced, each Convertible Debenture Unit consists of: (i) CDN$1,000 principal amount of senior secured convertible debenture of the Company (each, a “Debenture”); and (ii) 641 common share purchase warrants of the Company (each, a “Warrant”), with each Warrant exercisable for one common share of the Company (a “Common Share”). Each Warrant shall entitle the holder to acquire one Common Share (a “Warrant Share”) at an exercise price of CDN$0.95 per Warrant Share for a period of 60 months from the date of issuance. Upon the Upsized Offering being fully subscribed, there would be an aggregate of CDN$25,000,000 principal of Debentures outstanding convertible for approximately 32,051,282 Common Shares, and approximately 16,025,000 Warrants exercisable for 16,025,000 Warrant Shares.
The Debentures will mature on the date that is 36 months from the date of issuance (the “Maturity Date”) and bear interest at a rate of 3.5% per annum, payable quarterly in arrears, and will not be redeemable by the Company at any time. The Debentures will be convertible into Common Shares (each, a “Debenture Share) at the option of the holder thereof at any time prior to the Maturity Date at a conversion price of CDN$0.78 per Debenture Share. The Debentures will be secured against the Company’s digital assets and property in the State of Washington.
Fortress intends to use the proceeds from the Original Offering and the Upsized Offering for the purchase of 4,500 Bitmain Antminer S19j Pro (100 TH/s) bitcoin mining machines announced on November 1, 2021, general corporate purposes and working capital.
All securities issuable pursuant to the Original Offering and the Upsized Offering will be subject to a four-month-and one-day statutory hold period in accordance with applicable securities laws. For additional information please see the Company’s news release that pertains to the Original Offering dated October 20, 2021.
The Original Offering and the Upsized Offering is subject to the completion of final transactions documentation and all regulatory approvals, including the approval of the TSX Venture Exchange.
The securities offered in the Original Offering and the Upsized Offering 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 U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons, absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release does not constitute an offer to sell or the solicitation of any offer to buy securities in the United States, nor in any other jurisdiction.
About Fortress Technologies
Fortress Technologies Inc. (TSX-V: FORT) is a Bitcoin company that develops and operates world-class bitcoin mining infrastructure.
Fortress believes sound money and cheap, abundant energy are the fundamental ingredients to human progress, and is committed to advancing both by working closely with the energy sector to secure the Bitcoin network. Today, Fortress owns 114 PH/s across various sites around the United States and expects to deploy an additional 81 PH/s and 450 PH/s in Q4 2021 and 2022, respectively. Upon the full deployment of its purchased machines, Fortress’s hash rate is expected to total 645 PH/s. The Company is focused on expanding its portfolio of hash rate through a diversified approach to site selection and operations, utilizing multiple energy sources across various jurisdictions.
For more information about Fortress Technologies, visit fortresstechnologies.io.
Cautionary Statement
Trading in the securities of the Company should be considered highly speculative. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
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.
Forward-Looking Statements
This news release contains certain “forward-looking information” within the meaning of applicable Canadian securities laws that are based on expectations, estimates and projections as at the date of this news release. The information in this release about future plans and objectives of the Company, are forward-looking information. Other forward-looking information includes but is not limited to information concerning: the Original Offering, the Upsized Offering, the demand for the Convertible Debenture Units, the terms as described in the news release for the Original Offering or the Upsized Offering, the use of any proceeds from the Original Offering or the Upsized Offering, the expected deployment of an additional 81 PH/s and 450 PH/s in Q4 2021 and 2022, respectively, the expected hash rate of 645 PH/s, the intentions and future actions of senior management, the intentions, plans and future actions of the Company, as well as the Company’ ability to successfully mine digital currency; revenue increasing as currently anticipated; the ability to profitably liquidate current and future digital currency inventory; volatility of network difficulty and, digital currency prices and the resulting significant negative impact on the Company’s operations; the construction and operation of expanded blockchain infrastructure as currently planned; and the regulatory environment of cryptocurrency in applicable jurisdictions.
Any statements that involve 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 information and are intended to identify forward-looking information.
This forward-looking information is based on reasonable assumptions and estimates of management of the Company at the time it was made, and involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others: risks related to the Original Offering and the Upsized Offering; completion of definitive documentation pursuant to the Original Offering and the Upsized Offering; the inability to obtain the necessary regulatory approvals from the applicable securities regulators or obtain the approval of the TSX Venture Exchange in connection with the Original Offering and the Upsized Offering; Completion of the Original Offer or Upsized Offering on the terms announced, the occurrence of a material adverse change, disaster, change of law or other failure to satisfy the conditions of the Original Offering or the Upsized Offering; the inability of the Company to apply the use of proceeds from the Original Offering or the Upsized Offering as anticipated; the proposed Original Offer or the Upsized Offering may not have a positive impact on the Company’s revenue or gross mining margin, the structure and terms of which the Original Offering and the Upsized Offering are completed, the receipt of all required regulatory approvals, the ability of the Company to achieve its corporate objectives or otherwise advance the progress of the Company; risks related to the international operations; the Company's inability to obtain any necessary permits, consents or authorizations required for its activities; an inability to predict and counteract the effects of COVID-19 on the business of the Company, including but not limited to the effects of COVID-19 on capital market conditions, restriction on labour and international travel and supply chains; general market and industry conditions; and those risks set out in the Company’s public documents filed on SEDAR. The Company has also assumed that no significant events occur outside of the Company’s normal course of business. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company undertakes no obligation to revise or update any forward-looking information other than as required by law.
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