AMPD Ventures Inc. has said it intends to complete a private placement for aggregate proceeds of up to C$3.5 million and also announced that it has signed a non-binding Letter of Intent (LOI) regarding the potential acquisition of Departure Lounge Inc, a company pursuing various technology and content initiatives related to the development of the Metaverse.
Under the private placement, the company said it is expected to issue and sell up to 11,666,667 units at a price of C$0.30 per unit. Each unit will be comprised of one common share of the company and one common share purchase warrant, with each warrant entitling the holder to subscribe for one common share at an exercise price of C$0.50 each for a period of 24 months following the date of the closing of the private placement.
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The expiry date of the warrants may be accelerated at the option of the company if, at any time prior to expiry, the volume-weighted average trading price of the underlying common shares on the Canadian Securities Exchange (or such other recognized Canadian stock exchange on which the common shares are then listed) is or exceeds C$0.80 for a period of ten consecutive trading days.
As part of this transaction, the company may enter into finder's fee agreements with certain finders, paying to such finders a fee comprised of either i) a cash commission of up to 7% of the gross proceeds raised by finders, and that number of finder's warrants, with the same terms as the warrants, equal to up to 7% of the number of units sold on the portion of the private placement raised by finders, or ii) issue shares to finders equal to up to 7% of the number of units sold on the portion of the private placement raised by finders.
The private placement is subject to regulatory approval and all securities issued will be subject to a four-month hold period.
Departure Lounge deal
The non-binding LOI signed with Departure Lounge Inc. and its shareholders is subject to a number of conditions, including entering into a definitive share purchase agreement through which the company will acquire all the issued and outstanding shares of Departure Lounge.
The company said it intends to use $2.5 million of the proceeds from the private placement to fund the ongoing operations of Departure Lounge post-acquisition.
Departure Lounge recently signed an agreement through its operating subsidiary, 1310675 B.C. Ltd., with leading 4D holographic capture provider, Metastage Inc., to build a Metastage holographic capture facility in Vancouver. Departure Lounge will build on this initial foundation with a range of Metaverse-related technology and content initiatives.
In a statement, Anthony Brown, CEO at AMPD said: "Part of AMPD's mission with the development of our High-Performance Edge platform has always been to become the hosting company for the Metaverse. By adding Departure Lounge to AMPD's growing roster of subsidiaries and having AMPD's CSO, James Hursthouse, transition to running Departure Lounge as a wholly-owned subsidiary of AMPD, we add significantly to the value of what we are creating through technology and content initiatives that require exactly the type of compute that AMPD specializes in providing. The result is a full 360-degree Metaverse focused organization."
The purchase price for the acquisition contemplated by the LOI is C$1,079,458, plus an agreed earnout based on performance, which will be satisfied through the issuance of 3,598,195 common shares in the capital of AMPD to be issued at a deemed price of $0.30 per share. The purchase shares will be subject to statutory resale restrictions of four months and a day, and, in addition, 50% of the shares will be subject to contractual resale restrictions for two years from the date of issuance and will be released in four equal instalments every six months following the closing of the acquisition.
"By joining the AMPD family, we have an exceptionally firm technology and infrastructure foundation on which to build our business," added Charles Creighton, president of the Departure Lounge. "AMPD's prowess in providing the type of infrastructure that we need is second to none and we're exceptionally excited about growing the business together."
Completion of the acquisition is subject to, among other things, the successful completion of AMPD's due diligence review of Departure Lounge, entering into of the share purchase agreement, approval of the directors and shareholders, as applicable, of AMPD and Departure Lounge, and any required approvals of the CSE, among other conditions.
AMPD Ventures specializes in providing high-performance and computing solutions for low-latency applications, including video games and eSports, digital animation and visual effects, and big data collection, analysis and visualization.
Contact the author at jon.hopkins@proactiveinvestors.com