DGTL Holdings Inc has announced the closing of a second and final tranche of its previously announced private placement offering of subscription receipts after the closing of its first and tranche on December 7, 2021.
Under the final tranche, the company issued 38 subscription receipts at an offering price of $1,000 each, for aggregate gross proceeds of $38,000, bringing the total number of subscription receipts issued under the offering to 1,068 for aggregate total gross proceeds of $1,068,000.
DGTL noted that completion of the offering satisfied a key condition to closing in the arrangement agreement between the company and Engagement Labs (TSX-V:EL) Inc, dated August 11, 2021.
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The gross proceeds of the offering are held by Garfinkle Biderman LLP in its capacity as subscription receipt agent. Upon the satisfaction and/or waiver of certain escrow release conditions each subscription receipt will automatically be converted into a $1,000 principal amount convertible debenture and the subscription receipt proceeds will be released.
The escrow release conditions include, without limitation, the completion of the arrangement with EL and the delivery by DGTL of a notice to Garfinkle confirming such condition has been met.
The convertible debentures will bear interest at an annual rate of 7.00% payable in arrears in equal installments semi-annually and will mature two years following the satisfaction of the escrow release conditions.
The principal amount of the debenture will be convertible at the holder's option into common shares of DGTL at any time prior to the maturity date at a conversion price of $0.30 per conversion share. Subject to the approval of the TSX Venture Exchange, in lieu of paying any interest accrued and payable in respect of 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 finders comprised of an aggregate of $49,000 in cash, and such cash finder's fees form part of the subscription receipt proceeds and will be released to the finders upon satisfaction of the escrow release conditions, and DGTL will issue 81,659 finder's warrants upon satisfaction of those conditions.
Each finder's warrant entitles the holder to purchase one common share of DGTL at a price of $0.40 for a period of 36 months following the date on which the escrow release conditions are satisfied.
The subscription receipts and any underlying securities issued under the final tranche are subject to a statutory hold period of four months and one day from the date.
The company also said 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 items, the arrangement.
DGTL - Digital Growth Technologies and Licensing - acquires and accelerates transformative digital media, marketing and advertising software technologies, powered by Artificial Intelligence (AI).
The company specializes in accelerating commercialized enterprise-level SaaS (software-as-a-service) companies in the sectors of content, analytics and distribution, via a blend of unique capitalization structures.
Contact the author at jon.hopkins@proactiveinvestors.com