DeepMarkit Announces Strategic Investment
(TheNewswire)
Calgary, Canada – TheNewswire - October 7, 2019 – DeepMarkit Corp., ("DeepMarkit" or the "Company") (TSXV:MKT) is pleased to provide an update with respect to its previously announced (June 24, 2019 and August 22, 2019) investment transaction with HK Datang Investment Holding Group Co. Limited ("HK Datang").
Private Placement
As previously announced, the Company entered into an investment agreement, as amended, (the "Investment Agreement") with HK Datang, an arm's length private Hong Kong company. The Company and HK Datang agreed to simplify the investment arrangement to allow the parties to complete the private placement transaction for the total amount of 10,000,000 Units (as defined below) for total gross proceeds of $750,000, to be provided in two tranches (the "Private Placement").
The Company has closed the first tranche of the Private Placement of 6,263,194 Units of the Company to HK Datang for gross proceeds of $469,739.55. Each Unit consists of one (1) common share of the Company (each, a "Common Share") and one (1) of a warrant to purchase a common share at an exercise price of $0.10 per Common Share (the "Units"). The warrants are exercisable for one year following the date of issuance. The second tranche of the Private Placement, representing 3,736,806 Units, is expected to close on or before November 4, 2019.
The Company has also applied and received approval for the amendment to the terms of the private placement and an extension from the TSX Venture Exchange (the "Exchange") to further extend the closing date of the Private Placement until November 5, 2019. Completion of the Private Placement is subject to regulatory approval, including approval of the Exchange. All Common Shares and warrants issued pursuant to the Private Placement, and any Common Shares issued in connection with the exercise of warrants, will be subject to a four month hold period expiring four months and one day from the date of issuance, in accordance with the policies of the Exchange and applicable securities laws.
In addition, HK Datang has agreed to certain voting restrictions which will apply until such time as the Company has repaid one-half ($1,000,000) of the principal under the existing debentures of the Company. Upon completion of the second tranche closing, HK Datang will have the right to appoint one (1) nominee to the Company's board of directors.
"Although it has been a long and sometimes complicated process, we are very excited to now have HK Datang as a major shareholder and we are very much looking forward to working with them to capitalize on the many opportunities available to us in Asia through their extensive network of ecommerce merchants and their broad base of ecommerce expertise." stated Darold H Parken, President and CEO of DeepMarkit.
No finder’s fees were paid in connection with the closing of the first tranche of the Private Placement.
The net proceeds from the Private Placement will be used to continue DeepMarkit’s ecommerce technology business, to pursue ecommerce opportunities in Asia where HK Datang operates and for general working capital purposes.
Consolidation
The Company is also pleased to announce that it has completed the previously announced consolidation of its Common Shares on the basis of one (1) post-consolidation Common Share for every ten (10) pre-consolidation Common Shares (the "Consolidation"). The Consolidation was approved by special resolution of the Company's shareholders on August 1, 2019. Registered shareholders will receive a letter of transmittal with instructions for replacing their share certificates to reflect the Consolidation. No name change was completed or will be completed in connection with the Consolidation.
Early Warning
Following the acquisition of 6,263,194 Units, HK Datang owns approximately 35.2% of the issued and outstanding Common Shares of DeepMarkit on an undiluted basis, and 52.1% of the issued and outstanding Common Shares on a fully diluted basis, assuming the full exercise of the warrants held by them. Prior to completing the Private Placement, HK Datang did not own any securities of DeepMarkit. Upon the expected completion of the second tranche of the Private Placement, HK Datang will hold 10,000,000 Common Shares and 10,000,000 warrants assuming no additional Common Shares are purchased by HK Datang in the open market (or otherwise), which will represent approximately 46.5% of the issued and outstanding Common Shares of DeepMarkit on a non-diluted basis and 63.5% on a fully diluted basis, assuming DeepMarkit has not issued additional securities prior to then.
HK Datang's acquisition of the Units was made for investment purposes and HK Datang intends to increase its holdings in DeepMarkit as described in this news release. HK Datang may also further increase its holdings in DeepMarkit depending on market or other conditions and as circumstances warrant, whether in the open market, by private placement issuance, by privately negotiated agreement or otherwise.
A report respecting this acquisition of Units by HK Datang will be filed with the applicable securities commissions using the System for Electronic Document Analysis and Retrieval (SEDAR) and will be available for viewing on DeepMarkit's profile at www.sedar.com or may be obtained from Darold Parken, President & CEO of DeepMarkit, upon request at the telephone number or email address below.
About HK Datang
HK Datang is a Hong Kong headquartered investment holdings company focused on investment and business incubation as well as brand growth and expansion. HK Datang is controlled by Chongqing Tangsen Network Technology Ltd., a private Chinese company ("Tangsen"). Tangsen is a software, technology and R&D company which, among other activities, operates a China-focused e-commerce platform posed to become a cross-border e-commerce platform. Tangsen is controlled by two individuals, Yanyan Cai and Shouying He.
About DeepMarkit
DeepMarkit is a technology company focused on creating new tools and technologies to aid ecommerce transactions for the benefit of both consumers and online merchants.
DeepMarkit’s Common Shares are listed on the TSX Venture Exchange, symbol MKT. To try out our games and see the power of the platform, please visit www.deepmarkit.com
For more information, please contact:
President & CEO
Darold H. Parken
Tel: 403-537-0067
Email: [email protected]
Neither the TSX Venture Exchange nor its Regulation Services 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 STATEMENT
Statements in this press release may contain forward-looking information including, statements regarding the potential further investment by HK Datang, the development of business opportunities in Asia or the required regulatory approvals. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. 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 DeepMarkit. Factors that could cause the actual results to differ materially from those in forward-looking statements include, but are not limited to, failure to obtain necessary regulatory approvals and the failure to close the remaining investment transaction. The reader is cautioned not to place undue reliance on any forward-looking information.
The forward-looking statements contained in this press release are made as of the date of this press release and DeepMarkit does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.
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