Aggregate proceeds of $1,068,000 satisfy key condition of closing of proposed merger with Engagement Labs
DGTL Holdings Inc. (TSXV: DGTL) (OTCQB: DGTHF) (FSE: A2QB0L) (“DGTL” or the “Company”), is pleased to announce the closing of a second and final tranche (the “Final Tranche”) ) of its previously announced private placement of subscription receipts (“Subscription Receipts”) and the closing of its first tranche (the “First Tranche”, together with the final Tranche, the “Offer”) on December 7, 2021. In As part of the Final Tranche, the Company issued 38 Subscription Receipts at the Offering Price of $1,000 per Subscription Receipt, for aggregate gross proceeds of $38,000, bringing the total number of Subscription Receipts issued in the offering at 1,068 for aggregate gross proceeds of $1,068,000. Completion of the Offer has satisfied a key condition of the closing of the Arrangement Agreement between the Company and Engagement Labs Inc. (TSXV: EL) (“EL”) dated August 11, 2021, as amended ( the “arrangement”).
The gross proceeds of the Offering (the “Proceeds from subscription receipts“) are owned 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 satisfaction and/or waiver of certain escrow release conditions (the “Escrow Release Terms“) each Subscription Receipt will be automatically converted into a Convertible Debenture in the principal amount of $1,000 (as defined below) and the proceeds of the Subscription Receipt will be released. The terms of release of the escrow will include without limitation, the completion of the Arrangement pursuant to a plan of the Arrangement and the delivery by DGTL of a notice to Garfinkle confirming that such condition has been satisfied.
The convertible debentures will bear interest at the annual rate of 7.00% payable in arrears in equal semi-annual installments. The Convertible Debentures will mature two years after satisfaction of the escrow release conditions (the “Due date“) as will be specified in the certificates of debenture which will be issued upon conversion of the subscription receipts. The principal amount of the convertible debenture will be convertible, at the option of the holder, into common shares of DGTL (the “Conversion share“) at any time prior to the Maturity Date at a Conversion Price of $0.30 per Converting Share. Subject to the approval of the TSX Venture Exchange (the “TSXV“), instead of paying any accrued and payable interest on the Convertible Debentures, DGTL may elect to settle such interest in Conversion Shares.
In connection with the Offering, the Company is required to pay finder’s fees to eligible intermediaries, consisting of an aggregate of USD 49,000 in cash, and such cash finder’s fees form part of the proceeds of the receipts of subscription and will be released to intermediaries upon satisfaction of escrow release conditions, and DGTL will issue 81,659 intermediation mandates (“Intermediary mandates“) upon satisfaction of the escrow release conditions. Each finder’s warrant entitles its holder to purchase one common share of DGTL at a price of $0.40 for a period of 36 months from the date on which the escrow release conditions are met.
The Subscription Receipts and all underlying securities issued in connection with the last tranche are subject to a statutory hold period of four months and one day from the date hereof.
EL is in the process of preparing a joint information circular with DGTL in connection with their annual general and special meeting of shareholders to be held on February 14, 2022, to approve, among other things, the arrangement.
DGTL 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 SaaS (Software as a Service) businesses marketed at the enterprise level in the content, analytics and content industries. distribution, through a combination of unique capitalization structures. DGTL is listed on the TSXV as “DGTL”, on the OTCQB as “DGTHF” and on the Frankfurt Stock Exchange as “A2QB0L”. For more information, visit: www.dgtlinc.com.
As a wholly owned subsidiary of DGTL Holdings Inc., Hashoff LLC owns an enterprise-level self-service CaaS (content as a service) platform based on proprietary artificial intelligence and machine learning technology. automatic (AI-ML). Hashoff enables global brands to identify, score, optimize, engage, manage and track top-ranking digital content publishers for global brand marketing campaigns. Hashoff recently launched version 2.0 compatible for video-based applications (e.g. TikTok) and for converting social content into web ads through programmatic DSP distribution platforms.
Hashoff’s active key customer portfolio includes DraftKings, Beam Suntory, Anheuser Busch-InBev, Dunkin Brands, Currency.com, Syneos Health, American Nurses Federation, Philippines Airlines and channel partners Veritone, Centro, Wideout AQA, etc. Past customers are Nestlé, Post Holdings Keurig-Dr. Pepper, Pizza Hut, Live Nation, The CW, Scribd, Novartis, etc.Learn more at https://dgtlinc.com/technology.[i]
CONTACTS – DGTL
Jean Belfontaine, director
Email: [email protected]
Phone: +1 (877) 879-3485
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 release.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained in this press release constitutes forward-looking statements under applicable securities laws. All statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by words such as “may”, “should”, “anticipate”, “expect”, “potential”, “believe”, “intend” or the negative form of these similar terms and expressions. Forward-looking statements contained in this press release include, but are not limited to, the satisfaction of closing conditions, including, without limitation: (i) DGTL’s ability to satisfy the conditions to release the escrow and (ii) the satisfaction of other closing conditions, including, without limitation, obtaining certain consents and approvals from the TSXV, the operation and performance of DGTL’s and EL’s in-the-money business normal until the closing of the Arrangement and the fulfillment by DGTL and EL of 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 about DGTL and EL, including expected growth, results of operations, performance, continued approval of DGTL and EL’s business by relevant governmental and/or regulatory authorities, including the TSXV, and industry trends. Although DGTL considers these assumptions to be reasonable, based on currently available information, 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 favorable terms; income tax and regulatory matters; the ability of DGTL and EL to implement their business strategies; competetion; currency and interest rate fluctuations; DGTL’s failure to satisfy escrow release conditions; failure of DGTL and EL to obtain necessary approvals, including TSXV approval; the failure of DGTL and EL to complement each other through various covenants contained in the Arrangement Agreement; 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 based will occur. Such information, although considered reasonable by management at the time it was prepared, may prove to be incorrect and actual results may differ materially from those anticipated. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and are therefore subject to change thereafter. DGTL disclaims 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 release has been approved by DGTL’s Board of Directors. Factors that could cause the anticipated opportunities and actual results to differ materially include, but are not limited to, the matters noted above and elsewhere in the public filings by DGTL and material change reports to be filed. with respect to the Arrangement which are and will be available on SEDAR.