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DGTL Holdings Inc. (TSXV: DGTL) (OTCQB: DGTHF) (FSE: A2QB0L) ("DGTL" or the "Company"), today announced the closing of a first tranche (the "First Tranche") of its previously announced private placement offering of subscription receipts ("Subscription Receipts"). Under the First Tranche, the Company issued 1,030 Subscription Receipts at an offering price of $1,000 per Subscription Receipts, for aggregate gross proceeds of $1,030,000. The completion of the First Tranche satisfied a key condition to closing in the arrangement agreement between the Company and Engagement Labs Inc. ("EL") dated August 11, 2021, as amended.
The gross proceeds of the First Tranche (the "Subscription Receipt Proceeds") are held by Garfinkle Biderman LLP ("Garfinkle"), in its capacity as subscription receipt agent, pursuant to the terms of a subscription receipt agreement entered into between DGTL and Garfinkle. Upon the satisfaction and/or waiver of certain escrow release conditions (the "Escrow Release Conditions") each Subscription Receipt will automatically be converted into a $1,000 principal amount Convertible Debenture (as defined below) and the Subscription Receipt Proceeds will be released. The Escrow Release Conditions shall include, without limitation, the completion of the DGTL's previously announced acquisition of EL pursuant to a plan of arrangement and the delivery by DGTL of a notice to Garfinkle confirming such condition has been met.
The Convertible Debentures will bear interest at an annual rate of 7.00% payable in arrears in equal installments semi-annually. The Convertible Debentures will mature two years following the satisfaction of the Escrow Release Conditions (the "Maturity Date") as will be further set out in debenture certificates to be issued upon conversion of the Subscription Receipts. The principal amount of Convertible Debenture will be convertible at the holder's option into common shares of DGTL (the "Conversion Shares") at any time prior to the Maturity Date at a conversion price of $0.30 per Conversion Share. Subject to the approval of the TSX Venture Exchange (the "TSXV"), in lieu of paying any interest accrued and payable in respect of the Convertible Debentures, DGTL may elect to settle such interest in common shares in the capital of DGTL.
In connection with the First Tranche, the Company is required to pay finder's fees to eligible finders comprised of an aggregate of $49,000 in cash, and such cash finder's fees form part of the Subscription Receipt Proceeds and will be released to the finders upon satisfaction of the Escrow Release Conditions, and DGTL will issue 81,659 finder's warrants ("Finder's Warrants") upon satisfaction of the Escrow Release Conditions. Each Finder's Warrant entitles the holder thereof to purchase one common share of DGTL at a price of $0.40 for a period of 36 months following the date on which the Escrow Release Conditions are satisfied.
The Subscription Receipts and any underlying securities issued pursuant to the First Tranche are subject to a statutory hold period of four months and one day from the date hereof.
In connection with the First Tranche, a "related party," for the purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), subscribed for an aggregate of 200 Subscription Receipts. The issuance and sale of these securities to such related party constituted a "related party transaction" for the purposes of MI 61-101. The Company is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The Offering is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 (pursuant to subsection 5.5(b) and 5.7(1)(b)) as the Company is not listed on the markets specified in MI 61-101 and neither the fair market value of the Subscription Receipts distributed to, nor the consideration received from interested parties exceeded $2,500,000.
ABOUT DGTL
DGTL Holdings Inc. acquires and accelerates transformative digital media, marketing and advertising software technologies, powered by Artificial Intelligence (AI). DGTL (i.e. Digital Growth Technologies and Licensing) specializes in accelerating commercialized enterprise level SaaS (software-as-aservice) companies in the sectors of content, analytics and distribution, via a blend of unique capitalization structures. DGTL Holdings Inc. is traded on the Toronto Venture Exchange as "DGTL," the OTCQB exchange as "DGTHF," and the Frankfurt Stock Exchange as "A2QB0L." For more information, visit: www.dgtlinc.com.
HASHOFF LLC
As a wholly owned subsidiary of DGTL Holdings Inc., Hashoff is an enterprise level self-service CaaS (content-as-a-service) built on proprietary Artificial Intelligence and Machine Learning (AI-ML) technology. Hashoff's AI-ML platform functions as a full-service content management system, designed to empower global brands by identifying, optimizing, engaging, managing, and tracking top-ranked digital content publishers for localized brand marketing campaigns. Hashoff is fully commercialized and currently serves numerous global brands by providing direct access to the global gig-economy of over 150 million freelance content creators.
Hashoff's customer portfolio includes global brands in a range of key growth categories, including Anheuser Busch-InBev, Nestle, Post Holdings, Danone and Keurig-Dr. Pepper, Dunkin Brands, The Container Store, TJ Maxx, Ulta Beauty and Pizza Hut Live Nation, The CW, Scribd, Syneos Health and Novartis, etc.[1] Learn more by visiting: https://dgtlinc.com/technology.
CONTACTS - DGTL
John Belfontaine, Director
Email: IR@dgtlinc.com
Phone: +1 (877) 879-3485
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information in this news release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expect", "potential", "believe", "intend" or the negative of these terms and similar expressions. Forward-looking statements in this news release include, but are not limited to the satisfaction of closing conditions including, without limitation: (i) the ability of DGTL to obtain the approval of the TSX Venture Exchange in connection with the Concurrent Financing, (ii) DGTL's ability to complete the second tranche of the Concurrent Financing, (iii) the ability of DGTL to complete the Escrow Release Conditions and (v) the completion other closing conditions, including, without limitation, obtaining certain consents, the operation and performance of the DGTL and EL businesses in the ordinary course until closing of the Arrangement and compliance by DGTL and EL with various covenants contained in the Arrangement Agreement. In particular, there can be no assurance that the Arrangement will be completed.
Forward-looking statements are based on certain assumptions regarding DGTL and EL, including expected growth, results of operations, performance, continued approval of DGTL's and EL's activities by the relevant governmental and/or regulatory authorities, and industry trends. While DGTL and EL consider these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Readers are cautioned not to place undue reliance on forward-looking statements.
Forward-looking statements also necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; future legislative and regulatory developments; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; income tax and regulatory matters; the ability of DGTL and EL to implement their business strategies; competition; currency and interest rate fluctuations, the inability of DGTL to complete the Concurrent Financing, the inability of DGTL and EL to complete the other with various covenants contained in the Arrangement Agreement; the inability of DGTL to complete the second tranche of the Concurrent Financing; the inability of DGTL to complete the Escrow Release Conditions; and other risks. Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and thus are subject to change thereafter. DGTL and EL disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. This news release has been approved by the board of directors of each of DGTL and EL. Factors that could cause anticipated opportunities and actual results to differ materially include, but are not limited to, matters referred to above and elsewhere in DGTL's and EL's public filings and material change reports that will be filed in respect of the Arrangement which are and will be available on SEDAR.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/106860
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