Calgary, Canada – TheNewswire - November 23, 2021 – DeepMarkit Corp. , (" DeepMarkit " or the " Company ") ( TSXV:MKT ) ( OTC:MKTDF ) is pleased to announce that it has entered into a non-binding letter of intent (the "LOI") to acquire all of the issued and outstanding shares of First Carbon Corp. ("FCC"). The LOI sets forth the general terms and conditions of the Acquisition, pursuant to which shareholders of FCC will receive an aggregate of approximately 15,000,000 common shares of DeepMarkit ("Common Shares") issued at a deemed price of $0.50 per Common Share, for deemed consideration of approximately $7,500,000 (the "Acquisition").
DeepMarkit also announces a non-brokered private placement (the "Private Placement"). Under the Private Placement, which is subject to acceptance by the TSX Venture Exchange (the "Exchange"), DeepMarkit intends to issue, pursuant to applicable exemptions from prospectus requirements of Canadian securities laws, up to 4,000,000 units ("Units") at a price of $0.50 per Unit, for gross proceeds of up to $2,000,000. Each Unit comprises one Common Share and one Common Share purchase warrant (each, a "Warrant"). Each Warrant will entitle the holder to purchase one additional Common Share of DeepMarkit at an exercise price of $1.25 for a period of three (3) years from the date of the issuance of the Units.
DeepMarkit may pay a finder's fee of up to 7% cash and 7% compensation warrants to eligible finders in connection with the issue and sale of any or all of the Units under the Private Placement. The net proceeds from the Private Placement will be used to fund continued business and corporate operations of DeepMarkit (for which it is estimated that approximately 40% of the net proceeds will be allocated), as well as the operations of FCC (for which it is estimated that approximated 60% of the net proceeds will be allocated). Insiders of the Company may participate for up to 25% of the total offering. The Common Shares and Warrants issued pursuant to the Private Placement will be subject to a four month hold period required under applicable securities laws. Closing of the Private Placement is not a condition to completion of the Acquisition.
Overview of FCC
FCC is a software infrastructure company operating in the tokenization vertical of blockchain. FCC's primary asset, MintCarbon.io, is an SaaS, web-based platform which facilitates the minting of carbon credits into re-saleable tokens. MintCarbon.io is currently undergoing beta testing and FCC anticipates an official launch in Q1 2022. FCC is a private company incorporated under the laws of Canada. FCC currently has 39,474,999 common shares issued and outstanding.
The LOI serves as an agreement in principle concerning the Acquisition, which is expected to be completed pursuant to the terms of a share purchase agreement or share exchange agreement entered into among DeepMarkit, FCC and each shareholder of FCC. The final structure of the Acquisition is subject to receipt by all parties of tax, corporate and securities law advice and will be agreed to and superseded by a definitive agreement (the "Definitive Agreement"). Other terms of the Acquisition include the right of FCC to appoint a director (the "FCC Director Nominee") upon closing, and the agreement by DeepMarkit to use its best efforts to adopt a long-term equity incentive compensation plan, subject to approval of the Exchange and DeepMarkit's disinterested shareholders.
The completion of the Acquisition is also subject to several other conditions set out in the LOI, including approval by the directors of DeepMarkit and FCC, satisfactory completion of due diligence, the execution of the Definitive Agreement by all parties, including the FCC shareholders, and regulatory approval. A more comprehensive news release will be issued by DeepMarkit disclosing details of the Acquisition, including information about the FCC Director Nominee, and other information relevant to the Acquisition.
DeepMarkit views the business of FCC as highly synergetic. The MintCarbon.io platform is a powerful tool which enables businesses to monetize and manage carbon credits to achieve various business objectives. DeepMarkit expects to leverage its extensive investment in its existing platform and intellectual property for the benefit of FCC's business. The Acquisition will give DeepMarkit the opportunity to expand its business of providing software tools into a unique new and quickly expanding market.
The Acquisition is expected to constitute a "Fundamental Acquisition" transaction pursuant to Exchange Policy 5.3 Acquisitions and Dispositions of Non-Cash Assets and will be subject to Exchange review in accordance with that policy . No "Control Person" will be created as a result of the Acquisition or the Private Placement, and the Acquisition will be an "Arm's Length Transaction" as such terms are defined in Policy 1.1 of the Exchange. There are no finder's fees payable in connection with the Acquisition.
Trading in the Common Shares of DeepMarkit is currently halted. While there is no certainty that the Common Shares of the Company will resume trading until the Acquisition is completed and approved by the Exchange, the Exchange may allow trading to resume after it has reviewed initial filings by DeepMarkit with respect to the Acquisition.
DeepMarkit is a technology company focused on creating new tools and technologies to aid businesses in sales development and increasing profitability.
DeepMarkit’s Common Shares are listed on the TSX Venture Exchange, symbol MKT.
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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.
Statements in this press release may contain forward-looking information. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements, including statements relating to the completion of the Acquisition and the Private Placement, the use of proceeds from the Private Placement, and the expectation that the Exchange will apply the rules of Exchange Policy 5.3 in reviewing the Acquisition. 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 FCC shareholder and regulatory approvals required for Acquisition, inability to complete the Private Placement, or failure to complete the Acquisition on the terms described herein, or at all. The reader is cautioned not to place undue reliance on any forward-looking information. Completion of the Acquisition is subject to a number of conditions, including but not limited to, execution of a binding Definitive Agreement and acceptance by the Exchange.
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.