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DMG Blockchain Solutions Announces Closing of CDN$28.1 Million Private Placement Offering with Institutional Investors

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED STATES

DMG Blockchain Solutions Inc., a vertically integrated blockchain and cryptocurrency technology company is pleased to announce that it has closed its previously announced private placement to institutional investors of its common shares (“Common Shares”) and warrants to purchase common shares (“Warrants”) for aggregate gross proceeds to the Company of approximately Cdn$28.1 million (the “Private Placement”). Pursuant to the Private Placement, the Company issued 22,297,644 Common Shares and Warrants to purchase up to 22,297,644 Common Shares at a purchase price of Cdn$1.26 per Common Share and associated Warrant. Each Warrant entitles the holder thereof to purchase one Common Share at an exercise price of Cdn$1.50 per Common Share at any time on or prior to May 3, 2024.

H.C. Wainwright & Co. acted as the exclusive placement agent for the private placement in the United States. H.C. Wainwright & Co. received: (i) a cash commission of approximately Cdn$1.54 million (equal to 5.5% of the gross proceeds of the Private Placement), and (ii) 1,226,370 non-transferable compensation warrants (the “Agent Warrants”). Each Agent Warrant entitles the holder thereof to purchase one Common Share at an exercise price of Cdn$1.575 per Common Share at any time on or before May 3, 2024.

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The Company intends to use the net proceeds of the Private Placement for infrastructure expansion, equipment purchases, software development, expansion of marketing and sales activities, working capital and general corporate purposes. Details as to the intended specific allocation of the proceeds are disclosed in the Prospectus Supplement referred to below and further business development announcements will be made by DMG in due course as they arise.

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The Common Shares and Warrants issued under the Private Placement were qualified by way of a prospectus supplement under the Company’s base shelf prospectus dated March 1, 2021 (collectively, the “Prospectus Supplement”) which was filed in each of the provinces of Canada, except Québec, copies of which are available under the Company’s profile at www.sedar.com. The Common Shares and Warrants were offered and sold in the United States on a private placement basis pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and all applicable state securities laws, and in certain other jurisdictions in accordance with applicable securities laws. No securities were offered or sold to Canadian purchasers.

The securities issued under the Private Placement are subject to resale restrictions in the United States under applicable U.S. federal and state securities laws with no resale restrictions in Canada.

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This news release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in Canada in connection with the Private Placement.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This news release shall not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the U.S. Securities Act and such securities may not be offered or sold within the United States absent registration under U.S. federal and state securities laws or an applicable exemption from such U.S. registration requirements.

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