DMG Blockchain Solutions Inc. (TSXV: DMGI) (DMGGF: OTCQB) (FSE:
6AX) ("DMG" or the "Company"), a vertically integrated blockchain
and cryptocurrency technology company is pleased to announce that
it has entered into a securities purchase agreement for a private
placement of its common shares ("Common Shares") and warrants to
purchase common shares ("Warrants") to institutional investors only
for aggregate gross proceeds to the Company of approximately
Cdn$28.1 million (the "Private Placement"). Pursuant to the Private
Placement, the Company will issue 22,297,644 Common Shares and
Warrants to purchase up to 22,297,644 Common Shares at a purchase
price of Cdn$1.26 per Common Share and associated Warrant. Each
Warrant will entitle the holder thereof to purchase one Common
Share at an exercise price of Cdn$1.50 per Common Share at any time
prior to the three-year anniversary of the closing date of the
Private Placement (the "Closing Date").
H.C. Wainwright & Co. is acting as the
exclusive placement agent for the private placement in the United
States.
The Common Shares and Warrants to be issued
under the Private Placement will be qualified by way of a
prospectus supplement under the Company's base shelf prospectus
dated March 1, 2021 (collectively, the "Prospectus Supplement")
which will be filed in each of the provinces of Canada, except
Québec. In the United States, the Common Shares, Warrants and the
shares issuable upon the exercise of the Warrants will be offered
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 certain other
jurisdictions in accordance with applicable securities laws.
The net proceeds of the Private Placement are
expected to be used by the Company for infrastructure expansion and
equipment purchases, investment in cryptocurrencies, potential
future acquisitions and partnerships, software development,
expansion of marketing and sales activities and working capital and
general corporate purposes. Details as to the specific allocation
of the proceeds will be disclosed in the Prospectus Supplement.
The Company expects the Closing Date to occur on
or about May 3, 2021. The Company has applied to list the Common
Shares issued in the Private Placement and the Common Shares
underlying the Warrants on the TSX Venture Exchange (the "TSXV").
The Private Placement is subject to the satisfaction of certain
customary closing conditions, including, but not limited to, the
receipt of all necessary regulatory and stock exchange approvals
(including, for certainty, the acceptance of the TSXV).
No securities were offered for sale or sold to
Canadian residents.
This news release shall not constitute an offer
to sell or a solicitation of an offer to buy nor shall there be any
sale of any of the securities in any jurisdiction in Canada in
connection with the Private Placement. 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.
Future changes in the Bitcoin network-wide
mining difficulty rate or Bitcoin hashrate may materially affect
the future performance of DMG’s production of Bitcoin, and future
operational results could also be materially affected by the price
of Bitcoin and an increase in hashrate mining difficulty.
For more information on DMG Blockchain Solutions
visit: www.dmgblockchain.comOn behalf of the Board of
Directors,
Sheldon Bennett, CEO & Director
For further information, please contact:DMG
Blockchain Solutions Inc.Email: investors@dmgblockchain.comWeb:
www.dmgblockchain.com
Investor Relations Contact:CORE IR
516-222-2560
For Media Inquiries:Jules Abraham, Head of
Public RelationsCORE IRjabraham@coreir.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 closing of the Private Placement, the timing of the
closing of the Private Placement, the use of proceeds from the
Private Placement and the receipt of requisite regulatory
approvals. 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, risks
relating to the ability of the Company to obtain the requisite
regulatory approvals relating to the Private Placement, 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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