Cobalt Blockchain Completes $1 Million First Tranche of Private Placement and Announces Debt Settlement
Cobalt Blockchain Completes $1 Million First
Tranche of Private Placement and Announces
Debt Settlement
Toronto, Ontario--(Newsfile Corp. - August 26, 2020) - Cobalt Blockchain Inc. (TSXV: COBC) (OTC
Pink: COBCF) ("
COBC
" or the "
Company
") announced today that it has completed a first tranche of its
previously announced private placement of up to $4.5 million of units ("
Units
"), raising gross proceeds
of $1,000,000
(the "
First Tranche
"). The First Tranche was completed on a brokered basis with IBK
Capital Corp. acting as Agent (the "
Agent
"). In the First Tranche, the Company issued and sold
20,000,000 Units at a price of $0.05 per Unit, with each Unit consisting of one common share of the
Company and one common share purchase warrant (a "
Warrant
"). Each Warrant entitles the holder to
acquire one additional common share of the Company at a price of $0.20 until August 25, 2022. The
Company is pursuing completion of the balance of the financing, which may be completed on a brokered
or non-brokered basis and in one or more tranches. Insiders of the Company may particpate in some or
all of the further tranches.
In consideration for its services in connection with the First Tranche, the Company paid the Agent a cash
fee of $70,000, reimbursed it for certain expenses and issued to the Agent 2,000,000 non-transferable
broker warrants (the "
Broker Warrants
").
Each Broker Warrant entitles the holder to acquire one Unit of
the Company (having the same terms as those issued in the First Tranche) at a price of $0.05 until
August 25, 2022. The Agent is a "connected issuer" and "related issuer" of the Company, as defined in
Canadian securities legislation, by virtue of the ownership of securities of the Company by its directors
and officers. The Company may pay similar fees to brokers and/or finders, including the Agent, in
connection with further tranches of the private placement.
Net proceeds from the First Tranche will be used for working capital, other general corporate purposes
and to fund the debt settlement referred to below. All securities issued in the First Tranche are subject to
a 4-month hold period in Canada and such longer periods as may be required under other applicable
securties laws.
A greater than 10% shareholder of the Company acquired 3,000,000 Units, or approximately 15% of the
number sold in the First Tranche. As a result of the participation in the First Tranche by the insider, the
First Tranche was considered to be a "related party transaction" as defined under Multilateral Instrument
61-101 ("
MI 61-101
") and TSX Venture Exchange policy 5.9 ("
Policy 5.9
"). The transaction was
however exempt from the formal valuation and minority shareholder approval requirements of MI 61-101
and Policy 5.9, as neither the fair market value of the securities issued to insiders nor the cash
consideration paid for such securities exceeded 25% of the Company's market capitalization at the
relevant time. The participation of the insider in the First Tranche and the extent of such participation was
not finalized until shortly prior to the completion of the First Tranche. Accordingly, it was not possible to
publicly disclose details of the nature and extent of related party participation in the First Tranche at least
21 days prior to the completion date.
Debt Settlement
In connection with the Company's recent restructuring of its board and managemwent team announced
on August 17, 2020, it has also entered into debt settlement agreements with certain directors and
officers and entities related to them for the settlement of accued and unpaid fees owing to them in the
aggreagte amount of $1,480,983.64, by cash payments totalling $144,128. The debt settlements are
conditional upon the reimbursement in full of amounts owed for loans, advances or payments made to or
on behalf of the Company by such parties totalling $279,024. Completion of the the debt settlements, in
conjunction with the completion of the First Tranche of the private placement, will allow the Company to
significantly improve its balance sheet and working capital position.
The securities referred to in this press release have not been and will not be registered under the United
States Securities Act of 1933, as amended (the "
U.S. Securities Act
") or any state securities laws, and
may not be offered or sold in the United States absent registration or an applicable exemption from such
registration requirements. This press release shall not constitute an offer to sell or the solicitation of an
offer to buy the securities in the United States or in any jurisdiction in which such offer, sale or solicitation
would be unlawful.
About Cobalt Blockchain Inc.
Cobalt Blockchain Inc. (TSXV: COBC) (OTC Pink: COBCF) is a Canadian resource company
expanding its exploration and development business to include cobalt assets in the Democratic
Republic of the Congo ("DRC"); it holds export trading licenses for 3T, copper and cobalt from the DRC.
The Company believes that COBC is the first mining and mineral trade company set up specifically to
procure cobalt in compliance with the Organisation for Economic Co-operation and Development
("OECD") due diligence framework. COBC has developed and is implementing a blockchain-based
reporting platform to provide greater certainty of provenance and further assurance that all minerals
procured are ethically-sourced. Senior management have over fifteen years of experience working in the
DRC and a proven international track record in exploration success and the trading of certified conflict-
free, child-labour-free minerals.
For more information on the Company, investors should review the Company's filings at
www.sedar.com
.
For additional information, please contact:
Lance Hooper, President and Chief Operating Officer
Cobalt Blockchain Inc.
Telephone: +1-416-500-3670
Email:
Website:
www.cobc.co
Forward-Looking Statements
This news release includes statements containing certain "forward-looking information" within the
meaning of applicable securities law ("forward-looking statements"). Forward-looking statements are
frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe",
"anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that
certain events or conditions "may" or "will" occur and include, but are not limited to, statements regarding
the possible completion of further tranches of the private placement. Forward-looking statements are
based on the opinions and estimates of management at the date the statements are made, and are
subject to a variety of risks and uncertainties and other factors that could cause actual events or results
to differ materially from those projected in the forward-looking statements, including but not limited to,
uncertainty with respect to the completion of any future tranches, including timing and amounts raised;
market conditions; and the ability to obtain applicable regulatory approvals.
The Company is under no
obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise, except as expressly
required by applicable law.
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
release.
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE
U.S.
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https://www.newsfilecorp.com/release/62563