TORONTO, July 3, 2018 /CNW/ - Datametrex AI Limited (the
"Company" or "Datametrex") (TSXV: DM, FSE:
D4G) is pleased to announce that its wholly-owned subsidiary,
Ronin Blockchain Corp. ("Ronin"), has entered into a binding
letter of intent (the "LOI") dated June 26, 2018 with Cluny Capital Corp.
("Cluny") (TSXV:CLN.H), a
capital pool company pursuant to Policy 2.4 of the TSX Venture
Exchange (the "TSXV"), to combine the businesses of the two
companies (the "Proposed Transaction"). The Proposed
Transaction will result in a reverse takeover of Cluny by Ronin and its shareholders.
Cluny intends for the acquisition
of Ronin to constitute its Qualifying Transaction (as such term is
defined in the policies of the TSXV.
The Proposed Transaction
It is currently anticipated that Cluny will acquire Ronin by way of a share
exchange, merger, amalgamation, arrangement or other similar form
of transaction as agreed by the parties, which will result in
Datametrex holding the majority of outstanding shares of Cluny upon
closing of the Proposed Transaction (the "Resulting
Issuer").
Prior to the closing of the Proposed Transaction, Ronin will
effect a subdivision of the 80,000,000 issued and outstanding Ronin
Common Shares (as defined below) on the basis of 1.6 Ronin Common
Shares for each Ronin Common Share held on the effective date of
the subdivision (the "Subdivision") resulting in 128,000,000
Ronin Common Shares. Pursuant to the Subdivision, the currently
outstanding Ronin stock options exercisable at $0.10 per share for up to 8,000,000 Ronin Common
Shares for 24 months will be adjusted on a similar basis and
subsequently re-priced prior to closing which will result in there
being stock options exercisable for up to 12,800,000 Ronin Common
Shares at $0.1125 per share.
Pursuant to the Proposed Transaction, each one Ronin Common
Share will be exchanged for one common share of the Resulting
Issuer resulting in the issuance of an aggregate of 128,000,000
common shares of the Resulting Issuer to Datametrex at a deemed
value of $0.15 per share in exchange
for all the issued and outstanding common shares of Ronin (the
"Ronin Common Shares"). In addition, the Ronin stock options
exercisable for up to 12,800,000 Ronin Common Shares that will be
issued and outstanding on closing of the Proposed Transaction,
shall be exchanged for options of the Resulting Issuer exercisable
for up to 12,800,000 common shares of the Resulting Issuer at
$0.1125 per share for 24 months.
The Proposed Transaction is subject to a number of conditions
precedent, including:
a)
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execution of a
definitive agreement;
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b)
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completion of the
Subdivision;
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c)
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the re-pricing of the
Ronin stock options to $0.1125 per share;
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d)
|
Ronin shall have
completed the Private Placement (as defined herein) for gross
proceeds of a minimum of $3,000,000 at an issuance price per share
of $0.15;
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e)
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completion of mutual
satisfactory due diligence investigations of Ronin and
Cluny;
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f)
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receipt of all
applicable regulatory, shareholder and third party approvals,
including approval of the TSXV;
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g)
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the listing of the
Resulting Issuer's common shares on the TSXV; and
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h)
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confirmation of no
adverse material change of Ronin or Cluny.
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Subject to certain conditions, Ronin shall pay an advisory fee
to a third party in Ronin Common Shares, prior to the closing of
the Proposed Transaction, in an amount equal to 1% of the initial
aggregate Proposed Transaction value of Ronin ($19,200,000), representing $192,000 or 1,280,000 Ronin Common Shares, as
consideration for assisting Ronin with structuring the Proposed
Transaction. Pursuant to the Proposed Transaction, the 1,280,000
Ronin Common Shares will be exchanged for 1,280,000 common shares
of the Resulting Issuer upon closing of the Proposed
Transaction.
Following completion of the Proposed Transaction, and assuming
the maximum Private Placement of $3,750,000 (25,000,000 Ronin Common Shares) is
achieved, the current shareholders of Cluny will hold approximately 5.7% of the
common shares of the Resulting Issuer, Datametrex will hold
approximately 78.9% of the common shares of the Resulting Issuer,
and subscribers in the Private Placement will hold approximately
15.4% of the common shares of the Resulting Issuer.
The Proposed Transaction and the Private Placement shall
constitute a reviewable transaction for Datametrex pursuant to
Policy 5.3 of the TSXV and shall be subject to the approval of the
TSXV.
Shareholder Approval
Since the Proposed Transaction is not a Non-Arm's Length
Qualifying Transaction (as such term is defined by the TSXV),
Cluny will not be required to
obtain shareholder approval of the Proposed Transaction. In
addition, the Proposed Transaction is not "related party
transaction" as such term is defined by Multilateral Instrument
61-101 – Protection of Minority Security Holders in Special
Transactions and is not subject to Policy 5.9 of the TSXV. As a
result, no meeting of the shareholders of Cluny is required pursuant to Policy 2.4 of
the TSXV or securities laws; however one will be required pursuant
to corporate law as the shareholders of Cluny will have to approve certain ancillary
matters, including an anticipated continuation into British Columbia and a name change.
Private Placement
In conjunction with, or prior to the closing of the Proposed
Transaction, Ronin expects to complete a private placement of Ronin
Common Shares at an issue price of $0.15 per share to raise minimum gross proceeds
of $3,000,000 (20,000,000 Ronin
Common Shares) and maximum gross proceeds of $3,750,000 (25,000,000 Ronin Common Shares) (the
"Private Placement"). The net proceeds from the Private
Placement are anticipated to be used for general working capital
expenses. Pursuant to the Proposed Transaction, each one Ronin
Common Share issued pursuant to the Private Placement will be
exchanged for one common share of the Resulting Issuer.
Ronin
Ronin was incorporated on November 21,
2017 under the Business Corporations Act
(British Columbia) as Gosun
Blockchain Inc. On January 15, 2018,
Datametrex acquired all of the issued and outstanding shares of
Ronin. Pursuant to its acquisition of Ronin, on or before
January 15, 2019, Datametrex shall
issue CAD$2,500,000 worth of common
shares of Datametrex to the vendors of Ronin at a deemed issue
price per share equal to the volume weighted average price of
Datametrex's common shares on the TSXV for the twenty (20) days
prior to the issuance of the Datametrex shares.
Ronin operates in the distributed ledger technology space,
utilizing specialized equipment ("miners") to perform
computationally intensive cryptographic operations to validate
transactions on the blockchain (a process known as
"mining"), receiving digital currencies.
Ronin's current business is principally conducted in
Quebec, where Ronin has secured
reliable access to renewable sourced energy in a beneficial
business environment. As of the date hereof, Ronin has 40 graphics
processing units ("GPU")-based mining machines operating in
Quebec which are focused on mining
Ethereum, although such machines have the ability to mine other
altcoins as well.
Ronin also has a footprint in Asia. On February 14,
2018, Ronin entered into a hosting service agreement
("Hosting Service Agreement") with HongKong Gosun Technology
Limited ("Gosun"), one of China's largest infrastructure and networking
companies. Pursuant to the Hosting Service Agreement, Gosun
provides rack space, electrical power, internet connectivity and
other ancillary services to support the operation of Ronin miners.
Specifically, Ronin obtained the right to host up to 50,000 servers
or 100 megawatts in 2018 and up to 75,000 servers or 150 megawatts
in 2019, with an effective term until December 31, 2019. On May
21, 2018, Ronin successfully renegotiated certain terms and
conditions of the Hosting Service Agreement which included more
favourable hosting rates, an extension of the effective term to
May 21, 2023 and the right to host up
to 150,000 servers or 300 megawatts starting in 2020. The revised
agreement with Gosun is set to automatically renew for successive
periods of one year starting in 2023 at no additional cost to
Ronin. As of the date hereof, Ronin has 20 GPU-based mining
machines operating in Mongolia
pursuant to the Hosting Service Agreement.
Ronin is currently working on significantly expanding its
presence in Quebec as well on
identifying additional jurisdictions for mining opportunities,
including British Columbia and
Eastern Europe, as it develops its
international footprint.
Insiders, Board of Directors and Management of the
Resulting Issuer
Datametrex is expected to own more than 10% of the common shares
of the Resulting Issuer after giving effect to the Proposed
Transaction, and therefore Datametrex is expected to become an
insider of the Reporting Issuer by virtue of its share holdings. In
addition, Michael Frank, an officer
and director of Cluny, is an
officer and director of Ronin and an officer of Datametrex.
Michael Frank currently holds
100,000 common shares in the capital of Cluny and 3,220,847 common shares in the
capital of Datametrex (on a fully diluted basis).
At closing of the Proposed Transaction, all of the existing
directors and officers of Cluny,
with the exception of Michael Frank,
will resign and the board of directors of the Resulting Issuer
shall be composed of minimum of three and a maximum of ten
directors, all of whom shall be nominated by Ronin. It is
anticipated that the persons identified below will serve as
directors and officers of the Resulting Issuer:
Michael Frank – Chief
Executive Officer and Director
Mr. Frank, a graduate of McGill
University, brings over 30 years of experience in the high
technology sector in operations, business development, mergers /
acquisitions, and raising funding in the capital markets. As
President of Mifran Consulting, he focused on strategic planning
and business development for emerging companies. From 2007 to 2011,
he was the Chief Executive Officer of Sprylogics International
Corporation, a software company focused on semantic and local
search and also served as a consultant until March 2014. Additionally, he was Executive Vice
President of Hutchison Avenue Software, one of the first real-time
online stock quote platforms, where he was instrumental in the sale
of the company to Intuit Corporation. He also served as Vice
President of Business Development at BrandEra.com, a Nasdaq-listed
online marketplace for the advertising community.
Early in his career, Mr. Frank started as a Principal with Woods
Gordon (Ernst Young), where he
managed a variety of projects and consulting assignments across key
vertical markets. As Vice President of Strategic Alliances at
Medcomsoft Inc., he developed and managed all strategic
partnerships to accelerate market penetration in the healthcare
industry. Mr. Frank has held senior sales/marketing roles at Data
General and NCR. He currently serves as the Chief Strategy Officer
of Datametrex, Chief Executive Officer of The Internet of Things
Inc. and the Chief Executive Officer of Ronin Blockchain Corp.
Andrew Ryu– Executive Chairman
Mr. Ryu, a graduate of McMaster
University and University of
Toronto, is an entrepreneur and operator in public and
private companies. He was a founder and CEO of TLA Inc., president
of business development of Archer Group Inc., founder and CEO of
Loyalist Group Limited, which was nominated as the top TSXV company
in 2013, and pick of the street in 2014. He served as CEO of Cozumo
Inc. in 2015 and 2016. He was nominated by EY entrepreneur of the
year in 2014. He has been the Chief Executive Officer and Chairman
of Datametrex since September 2016,
CEO of Nexalogy Environics since July
2017, and CEO and Chairman of Graph Blockchain Limited since
December 2017.
Jeff Stevens– Director
Mr. Stevens brings over 18 years of professional experience in
the Canadian Capital Markets, largely focusing on raising capital
for micro-cap and small cap companies. He currently sits on the
board of two public companies assisting with project selection and
financing. He has worked on the retail, buy, and sell sides of the
industry, having held positions as Assistant Investment Advisor,
Arbitrage Trader, as well as having been the head of two Sales and
Trading desks for a US-based investment bank in Toronto. During his tenure, Mr. Stevens was
involved in raising capital for public and private companies with a
client base including Institutional Money Managers, Hedge Funds,
Mutual Funds and Family Offices in Canada, US and Europe. He is currently the President and
Chief Operating Officer of Datametrex.
More details of the proposed Chief Financial Officer and the
additional directors of the Resulting Issuer will be disclosed in a
further news release.
Sponsorship for Qualifying Transaction
Sponsorship of a qualifying transaction of a capital pool
company is required by the TSXV unless exempt in accordance with
the policies of the TSXV. Subject to applying and receiving a
waiver, Cluny will engage a
sponsor to satisfy the sponsorship requirements pursuant to the
policies of the TSXV.
Filing Statement
In connection with the Proposed Transaction and pursuant to the
requirements of the TSXV, Cluny
anticipates filing a filing statement on its issuer profile on
SEDAR (www.sedar.com), which will contain details regarding the
Proposed Transaction, the Private Placement, Cluny, Ronin and the Resulting Issuer.
About Datametrex AI Limited
Datametrex AI Limited is a technology focused company with
exposure to four exciting verticals. Big Data, collecting data from
retail point of sales environments. Artificial Intelligence and
Machine Learning through its wholly owned subsidiary, Nexalogy
(www.nexalogy.com). Implementing Blockchain technology for secure
Data Transfers through its joint venture company, Graph Blockchain
(www.graphblockchain.com). Industrial scale Cryptocurrency Mining
through its wholly owned subsidiary, Ronin Blockchain Corp
(www.roninblockchain.com).
Additional information on Datametrex is available at:
www.datametrex.com
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upcoming news releases, articles comments and questions.
Neither the TSX Venture Exchange nor its Regulation Service
Provider (as that term is defined in the policies of the Exchange)
accepts responsibility for the adequacy or accuracy of this
release.
Cautionary Statement Regarding Forward-Looking
Information
This news release contains
"forward-looking information" within the meaning of Canadian
securities legislation. Forward-looking information generally
refers to information about an issuer's business, capital, or
operations that is prospective in nature, and includes
future-oriented financial information about the issuer's
prospective financial performance or financial position.
The forward-looking information in this news release includes
disclosure about the terms of the Proposed Transaction, the
proposed structure of the Proposed Transaction, the terms of the
Private Placement and Ronin's business operations, prospects and
expansion plans.
Cluny and Ronin made certain
material assumptions, including but not limited to: prevailing
market conditions; general business, economic, competitive,
political and social uncertainties; delay or failure to receive
board, shareholder or regulatory approvals; the terms of the
Private Placement; and the ability of the Resulting Issuer to
execute and achieve its business objectives, to develop the
forward-looking information in this news release. There can be no
assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements.
Actual results may vary from the forward-looking information
in this news release due to certain material risk factors. These
risk factors include, but are not limited to: adverse market
conditions; the inability of Cluny
or Ronin to complete the Proposed Transaction on the terms
disclosed in this news release, or at all; the unavailability of
exemptions from prospectus requirements for the issuance of Ronin
Common Shares; the risks associated with the marketing and sale of
Ronin Common Shares; refusal of the proposed directors or officers
to act for any reason, including conflicts of interest; reliance on
key and qualified personnel; regulatory and other risks associated
with the cryptocurrency industry in general, as well as those risk
factors discussed or referred to in disclosure documents filed by
the Company with the securities regulatory authorities in certain
provinces of Canada and available
at www.sedar.com. The foregoing list of material risk factors and
assumptions is not exhaustive. Should any factor affect the Company
in an unexpected manner, or should assumptions underlying the
forward looking information prove incorrect, the actual results or
events may differ materially from the results or events predicted.
Any such forward-looking information is expressly qualified in its
entirety by this cautionary statement. Moreover, the Company does
not assume responsibility for the accuracy or completeness of such
forward-looking information. The forward-looking information
included in this news release is made as of the date of this news
release and the Company undertakes no obligation to publicly update
or revise any forward-looking information, other than as required
by applicable law.
The securities referred to in this news release have not
been, nor will they be, registered under the United States
Securities Act of 1933, as amended, and may not be offered or sold
within the United States or to, or
for the account or benefit of, U.S. persons absent U.S.
registration or an applicable exemption from the U.S. registration
requirements. This news release does not constitute an offer for
sale of securities, nor a solicitation for offers to buy any
securities. Any public offering of securities in the United States must be made by means of a
prospectus containing detailed information about the company and
management, as well as financial statements.
SOURCE Datametrex AI Limited