DGTL Holdings Inc said it has agreed to merge with Engagement Labs (TSX-V:EL) Inc in an all-stock transaction.
Under the terms of the arrangement, Engagement Labs (TSX-V:EL) shareholders will receive 0.1136 of a DGTL share in exchange for each Engagement Labs share held, on the basis of a 10-day volume-weighted average trading price per DGTL share of $0.322, involving a total of 5,320,000 DGTL Holdings shares.
Concurrently, DGTL will use its reasonable commercial efforts to conduct a financing of subscription receipts, to be priced within the context of the market, for gross proceeds of a minimum of US$2 million on or before October 1, 2021. The merger is conditional upon completion of the financing as well as factors such as shareholder, regulatory, and court approval.
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DGTL Holdings will also issue 280,000 DGTL shares and 13,750 DGTL compensation warrants to Oberon Securities LLC, which assisted Engagement Labs as its financial advisor. Each warrant is exercisable at a price per share equal to a 35% premium to the issue price in the concurrent financing for the purchase of one DGTL share for a period of five years following the closing date of the arrangement.
Directors, management and certain key Engagement Labs shareholders have signed lockup agreements to vote their respective shares in favour of the arrangement, and have agreed not to trade the DGTL shares they receive pursuant to the arrangement for a period of one year following closing.
DGTL noted the merger is expected to close in the fourth quarter of 2021.
DGTL Holdings acquires and accelerates transformative digital media, marketing and advertising software technologies, powered by Artificial Intelligence (AI).
The company also specializes in accelerating commercialized enterprise level software-as-a-service (SaaS) companies in the sectors of content, analytics and distribution, via a blend of unique capitalization structures.
Contact Sean at sean@proactiveinvestors.com