Vogogo Announces Debt Conversion

Vogogo (CSE:VGO) has announced it has signed a settlement and released an agreement with the vendor of the previous 828 acquisition, which includes the conversion of the C$7.5 million of debt owed to 828 L.P.

As quoted in the press release:

Under the terms of the Agreement, and subject to applicable regulatory filings, Vogogo has agreed to (i) issue to 828 L.P.  75,000,000 Common Shares of the Company with a value of CAD$7.5 million, based on a price of CAD$0.10 per Common Share, and (ii) make a cash payment to 828 L.P. of CAD$2,500,000, in exchange for the cancellation of a promissory note in the amount of CAD$10,000,000 (the “Note”).  The Note was originally issued to 828 L.P. as part of the consideration for the purchase of a 30 MW state-of-the-art cryptocurrency mining facility and 14,000 Antminer S9 crytpocurrency miners. The Note bore interest at 8% per annum for a two year term, with monthly interest payments. Principal was repayable as to CAD$5 million on the first anniversary of the loan and CAD$5 million at maturity. The Note was secured by the cryptocurrency mining machines and other assets acquired as part of the 828 Acquisition.

John Kennedy FitzGerald, President and Chief Executive Officer of Vogogo, stated, “This transaction enables us to strengthen our balance sheet and further our business development efforts. We are pleased to have 828 L.P. as a major shareholder. Their confidence and support will help us to execute on our vision of becoming a dominant player in the cryptocurrency industry.”

F.I.T. Ventures L.P., an affiliate of 828 L.P., is deemed to be acting jointly or in concert with 828 L.P. pursuant to applicable securities laws and, accordingly, 828 L.P. and F.I.T. Ventures may be referred to collectively as the “Acquiror”.

Immediately prior to the completion of the acquisition of the 75,000,000 Common Shares, at a deemed issue price of CAD$0.10 per Common Share, the Acquiror had ownership of 10,358,000 Common Shares of Vogogo, representing approximately 5.3% of the 197,069,433 issued and outstanding Common Shares and 51,798,805 non-voting, convertible series 1 preferred shares in the capital of Vogogo (the “Preferred Shares”).  As previously disclosed, the terms of the Preferred Shares provide, among other things, that they: (i) are non-voting; (ii) are convertible into Common Shares on a one for one basis, subject to customary adjustments; (iii) are eligible to participate in dividends if and when declared on the Common Shares; (iv) have priority rights on liquidation; and (v) are subject to a restriction that no holder of the Preferred Shares may convert into a number of Common Shares that would result in such holder beneficially owning greater than 9.9% of the Common Shares.  Accordingly, the Acquiror has not converted any of its Preferred Shares.

Click here to read the full press release.