Secures 100 MW of Renewable Power and 10,000
Machine Hosting Contract
Transformational
Agreement Includes 10 Year Lease and Power Purchase Agreement (PPA)
on a 40,000 sq ft Facility with 16 Acres for Modular
Mining
/NOT FOR DISSEMINATION IN THE
UNITED STATES OR THROUGH US NEWSWIRE SERVICES/
TORONTO, Feb. 26, 2018 /CNW/ - (TSXV: CPTO) CryptoGlobal
Corp. is powering into Spring with the news it has agreed to
acquire BitCity Group along with a transformational 100 MW, ten
year Power Purchase Agreement (PPA) and hosting agreement to
build out a 40,000 sq foot cryptocurrency mine in Ontario.
The acquisition will consist of $39,000,000 common shares to be paid in four
installments and a $1 million cash
payment to be paid between closing and June
1, 2018. [see detailed terms below]
Fully Powered for the Future
"With this agreement to
acquire BitCity Group, CryptoGlobal is fully-powered for the
future, says CryptoGlobal CEO Rob
Segal. "For our investors, this agreement marks a pivotal
moment in the company's maturation and ensures expanded hosting and
mining revenue streams to continue to fuel our growth," he
explains.
35 MW of Immediate Power – 100 MW Long-Term Potential
Under the terms of the acquisition agreement, CryptoGlobal and
BitCity have reached a five year Power Purchase Agreement (PPA)
that includes a further five year extension option with one of
Canada's leading power companies.
The power and lease deal secures 40,000 sq. feet of building space
with 35 MW of immediate power capacity and the potential to scale
to 100 MW, confirms CryptoGlobal President James Millership.
Millership says the company has an option on an additional 16
acres of land, which is "tailor-made" for CryptoGlobal's innovative
mobile mining units. CryptoGlobal will also acquire a 10,000
machine hosting contract, under the terms of the deal, which
Millership says the company expects to operate under the long-term
PPA at a current price per KW hour of 6
cents or less.
CryptoGlobal to Acquire BitCity Group
Segal says
additional financial details about the deal will be shared when the
company releases its first quarter financials later this Spring —
adding he is delighted to welcome BitCity Group CEO Brandon Keks, COO Jill
Javier and CTO Jordan Black
to the CryptoGlobal leadership team.
"Our team shares CryptoGlobal's vision and we believe there are
great synergies between the two companies," explains BitCity Group
CEO Brandon Keks. "We're
excited to work together and bring our expertise to the
CryptoGlobal team," he says.
Summary of the Consideration Paid for the Acquisition
Agreement
The purchase price for the pending acquisition
consists of $1 million in cash, of
which $500,000 is payable on closing
of the acquisition and $500,000 is
payable on June 1, 2018, and the
issuance of:
- $9 million of CryptoGlobal shares
on the closing date of the acquisition at a price of $1.80 per CryptoGlobal Share (the "Current
FMV");
- $10 million of CryptoGlobal
shares on September 1, 2018;
- $10 million of CryptoGlobal
shares on March 1, 2019; and
- $10 million of CryptoGlobal
shares on September 1, 2019.
The number of CryptoGlobal shares to be issued in instalments
two, three and four noted above shall be based on the greater of:
(a) the fair market value of the CryptoGlobal shares on the date of
issuance; and (b) the Current FMV.
The acquisition is subject to CryptoGlobal completing its due
diligence in respect of BitCity and standard closing conditions,
including the approval of the shareholders of BitCity; the
directors of CryptoGlobal and the TSX Venture Exchange
("TSXV"). Haywood Securities acted as CryptoGlobal's advisor
during negotiations. BitCity Group was represented by VIII
Capital.
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 completion of the
acquisition; the anticipated benefits of the acquisition to the
company and its shareholders; the timing and receipt of the
required regulatory approvals for the acquisition; the timing and
ability of the company to satisfy the conditions precedent to
completing the acquisition; and future growth potential of the
company on a post-acquisition basis.
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: satisfaction or waiver of all
applicable conditions to the completion of the acquisition
(including receipt of all necessary regulatory approvals or
consents, and the absence of material changes with respect to the
parties and their respective businesses, all as more particularly
to be set forth in a definitive agreement with respect to the
acquisition); the results expected from the acquisition not being
realized; business integration risks; 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.