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 closed its previously announced private placement to
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$28.1 million (the
"Private Placement"). Pursuant to the Private Placement, the
Company issued 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 entitles the
holder thereof to purchase one Common Share at an exercise price of
Cdn$1.50 per Common Share at any time on or prior to May 3, 2024.
H.C. Wainwright & Co. acted as the exclusive
placement agent for the private placement in the United States.
H.C. Wainwright & Co. received: (i) a cash commission of
approximately Cdn$1.54 million (equal to 5.5% of the gross proceeds
of the Private Placement), and (ii) 1,226,370 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$1.575 per Common Share at any time on or
before May 3, 2024.
The Company intends to use the net proceeds of
the Private Placement for infrastructure expansion, equipment
purchases, software development, expansion of marketing and sales
activities, 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
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 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.com.On behalf of the Board of
Directors,
Sheldon Bennett, CEO & Director
For further information, please contact:DMG
Blockchain Solutions Inc.Email:
investors@dmgblockchain.com Web:
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 intended use of proceeds from the Private Placement.
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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