DMG Blockchain Solutions Inc. (TSX-V: DMGI) (DMGGF:OTCQB US)
(FRANKFURT:6AX) (“DMG” or the “Company”), a vertically integrated
blockchain and cryptocurrency technology company, is pleased to
announce that it has closed its previously announced sale to U.S.
and foreign institutional investors of its common shares
("
Common Shares") and warrants to purchase common
shares ("
Warrants") for aggregate gross proceeds
to the Company of approximately Cdn$70 million (the
"
Private Placement"). Pursuant to the Private
Placement, the Company issued 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 half
Warrant. Each whole Warrant entitles the holder thereof to purchase
one Common Share at an exercise price of
Cdn
$3.55 per Common Share at any
time on or before March 5, 2024 (totaling another Cdn$41.4 million
once exercised).
“We are very pleased to complete this equity financing
above current market prices. The net proceeds from this financing
will allow DMG to rapidly advance its business plan, its operations
and pursue a variety of new projects. We are also very pleased to
expand our institutional presence in the United States and
abroad”, commented Dan Reitzik, CEO and Sheldon Bennett,
COO, who jointly managed this process for DMG.
H.C. Wainwright & Co. acted as the exclusive
placement agent for the Private Placement.
H.C. Wainwright & Co. received (i) a cash
commission of approximately Cdn$3.85 million (equal to 5.5% of the
gross proceeds of the Private Placement) and (ii) 1,283,333
non-transferable compensation warrants (the "Agent
Warrants"). Each Agent Warrant entitles the holder thereof
to purchase one Common Share at an exercise price of Cdn$3.75 per
Common Share at any time on or before March 5, 2024.
The Company intends to use the net proceeds of
the Private Placement for infrastructure expansion (i.e., continued
retrofitting of initially 30 and up to 60 MW capacity from air
cooling to immersion cooling and general upgrades to the facility),
equipment purchases (i.e., necessary technologies to expand DMG‘s
self-mining infrastructure and hashrate at its Christina Lake
facility to 2.0 EH/s in 2021 with the first 1.0 EH/s planned by
this summer), investment in cryptocurrencies (i.e., buying
Bitcoin), potential future acquisitions, equity interests and
partnerships, software development (i.e., further advancements of
Blockseer and Walletscore as part of DMG’s ongoing Bitcoin mining
pool efforts), immersion cooling research and prototyping (i.e.,
including all required technical components of various suppliers),
expansion of marketing and sales activities and working capital and
general corporate purposes. Details as to the intended specific
allocation of the proceeds are disclosed in the Prospectus
Supplement referred to below and further business development
announcements will be made by DMG in due course as they arise.
The Common Shares and Warrants issued under the
Private Placement were qualified by way of a prospectus supplement
dated March 4, 2021 under the Company’s base shelf prospectus dated
March 1, 2021 (collectively, the “Prospectus Supplement”) which was
filed in each of the provinces of Canada, except Québec, copies of
which are available under the Company’s profile at www.sedar.com.
The Common Shares and Warrants were offered and sold in the United
States 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 all applicable
state securities laws, and in certain other jurisdictions in
accordance with applicable securities laws. No securities were
offered or sold to Canadian purchasers.
The securities issued under the Private
Placement are subject to resale restrictions in the United States
under applicable U.S. federal and state securities laws with no
resale restrictions in Canada.
This news release shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be
any sale of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
This news release shall not constitute an offer of securities for
sale in the United States. The securities being offered have not
been, nor will they be, registered under the U.S. Securities Act
and such securities may not be offered or sold within the United
States absent registration under U.S. federal and state securities
laws or an applicable exemption from such U.S. registration
requirements.
About DMG Blockchain Solutions Inc.
DMG is a vertically integrated blockchain and
cryptocurrency company that manages, operates, and develops
end-to-end digital solutions to monetize the blockchain ecosystem.
DMG’s businesses are segmented into three main divisions: data
centre operations, data analytics and forensics and developing
enterprise blockchains. DMG’s data centre operations focus on
earning revenues from block rewards and transaction fees by mining
primarily bitcoin as well as providing hosting services for
industrial mining clients. DMG’s data analytics and forensic
services provide technical expertise software products such as
Blockseer Pool, Mine Manager and Walletscore, as well as working
with auditors, law firms, and law enforcement organizations. DMG’s
permissioned blockchain technology is focused on developing
enterprise software for the supply chain management of controlled
products. DMG’s strategy is to become the domain experts across the
business verticals it focuses on. DMG’s management team includes
seasoned crypto experts, forensic & financial professionals and
blockchain developers with deep relationships throughout the
industry.
For more information on DMG Blockchain Solutions visit:
www.dmgblockchain.com
On behalf of the Board of Directors,
Daniel Reitzik, CEO & Director
For further information, please contact:
DMG Blockchain Solutions Inc.Email:
investors@dmgblockchain.com Web: www.dmgblockchain.com
Neither the TSX Venture Exchange nor its
Regulation Service Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news release.
Cautionary Note Regarding
Forward-Looking Information This news release contains
forward-looking information based on current expectations.
Forward-looking statements contained in this news release include
statements regarding the intended use of proceeds from the Private
Placement, and the expected timelines to complete its business
objectives. Forward-looking statements consist of statements that
are not purely historical, including any statements regarding
beliefs, plans, expectations or intentions regarding the future.
Such information can generally be identified by the use of
forwarding looking wording such as “may”, “expect”, “estimate”,
“anticipate”, “intend”, “believe” and “continue” or the negative
thereof or similar variations. The reader is cautioned that
assumptions used in the preparation of any forward-looking
information may prove to be incorrect. Events or circumstances may
cause actual results to differ materially from those predicted, as
a result of numerous known and unknown risks, uncertainties, and
other factors, many of which are beyond the control of the Company,
including but not limited to, market and other conditions,
volatility in the trading price of the Common Shares, business,
economic and capital market conditions; the ability to manage
operating expenses, which may adversely affect the Company’s
financial condition; the ability to remain competitive as other
better financed competitors develop and release competitive
products; regulatory uncertainties; access to equipment; market
conditions and the demand and pricing for products; the demand and
pricing of bitcoins; security threats, including a loss/theft of
DMG’s bitcoins; DMG’s relationships with its customers,
distributors and business partners; the inability to add more power
to DMG’s facilities; DMG’s ability to successfully define, design
and release new products in a timely manner that meet customers’
needs; the ability to attract, retain and motivate qualified
personnel; competition in the industry; the impact of technology
changes on the products and industry; failure to develop new and
innovative products; the ability to successfully maintain and
enforce our intellectual property rights and defend third-party
claims of infringement of their intellectual property rights; the
impact of intellectual property litigation that could materially
and adversely affect the business; the ability to manage working
capital; and the dependence on key personnel. DMG may not actually
achieve its plans, projections, or expectations. Such statements
and information are based on numerous assumptions regarding present
and future business strategies and the environment in which the
Company will operate in the future, including the demand for its
products, the ability to successfully develop software, that there
will be no regulation or law that will prevent the Company from
operating its business, anticipated costs, the ability to secure
sufficient capital to complete its business plans, the ability to
achieve goals and the price of bitcoin. Given these risks,
uncertainties and assumptions, you should not place undue reliance
on these forward-looking statements.
The securities of DMG are considered highly speculative due to
the nature of DMG’s business.
Factors that could cause actual results to
differ materially from those in forward-looking statements include,
failure to obtain regulatory approval, the continued availability
of capital and financing, equipment failures, lack of supply of
equipment, power and infrastructure, failure to obtain any permits
required to operate the business, the impact of technology changes
on the industry, the impact of Covid-19 or other viruses and
diseases on the Company’s ability to operate, secure equipment, and
hire personnel, competition, security threats including stolen
bitcoins from DMG or its customers, consumer sentiment towards
DMG’s products, services and blockchain technology generally,
failure to develop new and innovative products, litigation,
increase in operating costs, increase in equipment and labor costs,
decrease in the price of Bitcoin, failure of counterparties to
perform their contractual obligations, government regulations, loss
of key employees and consultants, and general economic, market or
business conditions. Forward-looking statements contained in this
news release are expressly qualified by this cautionary statement.
The reader is cautioned not to place undue reliance on any
forward-looking information. The forward-looking statements
contained in this news release are made as of the date of this news
release. Except as required by law, the Company disclaims any
intention and assumes no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Additionally, the Company undertakes no
obligation to comment on the expectations of, or statements made by
third parties in respect of the matters discussed above.
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