DEALNET ANNOUNCES FINANCING UPDATE AND ISSUANCE OF STOCK OPTIONS
DealNet Capital Corp. (DLS: CSE) has completed the fourth and final tranche of its private placement that was announced on Nov. 25, 2014.
The closing today resulted in the issuance of 8,015,836 units, consisting of 8,015,836 common shares and 8,015,836 common share purchase warrants. As consideration for the units issued in this closing, the company received subscriptions of $1,019,837 in cash and $503,174 from the full and final settlement of various liabilities owing by the company. The securities issued today will be subject to a hold period until Oct. 18, 2015.
Included in the closing today were subscriptions from insiders totalling $645,000, as well as employees of the company for $46,000. The insiders are related parties of the company under Multilateral Instrument 61-101. The company is exempt from the formal valuation requirement and shareholder approval requirement of MI 61-101, as described in more detail in the material change report to be filed in connection with these financings. Having regard to these exemptions and the company’s desire to close the financings described herein as soon as possible, the company believes that it is reasonable to have closed the private placement fewer than 21 days after the date of this news release.
In connection with this closing, the company incurred finders’ fees of approximately $9,706 and issued 51,086 broker warrants to registered brokers.
The company is also announcing that it intends to complete a non-brokered private placement for up to $1.5-million of convertible debentures. The debentures will mature two years from the date of issue, bear interest at the rate of 12 per cent per annum, payable quarterly, and be secured by the assets of Impact Mobile Inc., a wholly owned subsidiary of the company, subordinated to the secured line of credit of Impact Mobile. The principal amount of the debentures will be convertible at the holder’s option into common shares of the company at a conversion price of 19 cents for each common share. The company may, at its option, redeem any or all of the debentures at any time prior to maturity for the unpaid principal plus accrued but unpaid interest. If the current market price of the common shares on the date which the company provides the redemption notice is not at least 125 per cent of the conversion price, the company must also pay an additional amount equal to 20 per cent of the interest the holder would have received if held until maturity.
The company will use the proceeds of the debenture offering to redeem all its current secured subordinated debentures, which mature on July 29, 2015, along with accrued but unpaid interest, for approximately $1.15-million. The balance will be used for general working capital purposes.
In connection with the debenture offering, the company will pay a finder’s fee, when applicable, of 7 per cent in cash and 7 per cent in warrants (with a term of 18 months and an exercise price of 30 cents) to registered holders.
The company is also announcing, in accordance with the terms of the company’s stock option plan, the issuance of an aggregate 2.55 million stock options to directors of the company. The options will vest over a period of three years and will be exercisable for a period of five years at an exercise price of 21 cents per stock option.
We seek Safe Harbor.