Secures 100 MW of Renewable Power and 10,000 Machine Hosting Contract
Transformational Agreement Includes 10 Year Lease and Power Purchase Agreement (PPA) on a 40,000 sq ft Facility with 16 Acres for Modular Mining
/NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH US NEWSWIRE SERVICES/
TORONTO, Feb. 26, 2018 /CNW/ - (TSXV: CPTO) CryptoGlobal Corp. is powering into Spring with the news it has agreed to acquire BitCity Group along with a transformational 100 MW, ten year Power Purchase Agreement (PPA) and hosting agreement to build out a 40,000 sq foot cryptocurrency mine in Ontario.
The acquisition will consist of $39,000,000 common shares to be paid in four installments and a $1 million cash payment to be paid between closing and June 1, 2018. [see detailed terms below]
Fully Powered for the Future
"With this agreement to acquire BitCity Group, CryptoGlobal is fully-powered for the future, says CryptoGlobal CEO Rob Segal. "For our investors, this agreement marks a pivotal moment in the company's maturation and ensures expanded hosting and mining revenue streams to continue to fuel our growth," he explains.
35 MW of Immediate Power – 100 MW Long-Term Potential
Under the terms of the acquisition agreement, CryptoGlobal and BitCity have reached a five year Power Purchase Agreement (PPA) that includes a further five year extension option with one of Canada's leading power companies. The power and lease deal secures 40,000 sq. feet of building space with 35 MW of immediate power capacity and the potential to scale to 100 MW, confirms CryptoGlobal President James Millership.
Millership says the company has an option on an additional 16 acres of land, which is "tailor-made" for CryptoGlobal's innovative mobile mining units. CryptoGlobal will also acquire a 10,000 machine hosting contract, under the terms of the deal, which Millership says the company expects to operate under the long-term PPA at a current price per KW hour of 6 cents or less.
CryptoGlobal to Acquire BitCity Group
Segal says additional financial details about the deal will be shared when the company releases its first quarter financials later this Spring — adding he is delighted to welcome BitCity Group CEO Brandon Keks, COO Jill Javier and CTO Jordan Black to the CryptoGlobal leadership team.
"Our team shares CryptoGlobal's vision and we believe there are great synergies between the two companies," explains BitCity Group CEO Brandon Keks. "We're excited to work together and bring our expertise to the CryptoGlobal team," he says.
Summary of the Consideration Paid for the Acquisition Agreement
The purchase price for the pending acquisition consists of $1 million in cash, of which $500,000 is payable on closing of the acquisition and $500,000 is payable on June 1, 2018, and the issuance of:
- $9 million of CryptoGlobal shares on the closing date of the acquisition at a price of $1.80 per CryptoGlobal Share (the "Current FMV");
- $10 million of CryptoGlobal shares on September 1, 2018;
- $10 million of CryptoGlobal shares on March 1, 2019; and
- $10 million of CryptoGlobal shares on September 1, 2019.
The number of CryptoGlobal shares to be issued in instalments two, three and four noted above shall be based on the greater of: (a) the fair market value of the CryptoGlobal shares on the date of issuance; and (b) the Current FMV.
The acquisition is subject to CryptoGlobal completing its due diligence in respect of BitCity and standard closing conditions, including the approval of the shareholders of BitCity; the directors of CryptoGlobal and the TSX Venture Exchange ("TSXV"). Haywood Securities acted as CryptoGlobal's advisor during negotiations. BitCity Group was represented by VIII Capital.
CryptoGlobal – We Power the Blockchain
CryptoGlobal is a leading Canadian blockchain and financial technology company with facilities in Ontario and Quebec. Our team mines a diverse portfolio of cryptocurrencies from one of Canada's largest and most efficient mining operations. Currently, CryptoGlobal focuses on mining Bitcoin, DASH, Ether and Litecoin – using a mix of custom-tuned mining technologies.
Learn more about CryptoGlobal and the future of mining at www.cryptoglobal.io
Cautionary Note Regarding Forward Looking Information
This news release contains certain forward-looking information and forward-looking statements within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the completion of the acquisition; the anticipated benefits of the acquisition to the company and its shareholders; the timing and receipt of the required regulatory approvals for the acquisition; the timing and ability of the company to satisfy the conditions precedent to completing the acquisition; and future growth potential of the company on a post-acquisition basis.
These forward-looking statements are based on reasonable assumptions and estimates of management of the company at the time such statements were made. Actual future results may differ materially as forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors, among other things, include: satisfaction or waiver of all applicable conditions to the completion of the acquisition (including receipt of all necessary regulatory approvals or consents, and the absence of material changes with respect to the parties and their respective businesses, all as more particularly to be set forth in a definitive agreement with respect to the acquisition); the results expected from the acquisition not being realized; business integration risks; fluctuations in general macroeconomic conditions; fluctuations in securities markets; fluctuations in the prices of cryptocurrencies mined by the company; historical prices of cryptocurrencies and the ability of the company to mine cryptocurrencies consistent with historical prices; the presence of laws and regulations that may impose restrictions on the ability of the company to operate it business; the speculative nature of cryptocurrency mining and blockchain operations; changes in project parameters as plans continue to be evaluated; and those factors described under the heading "Risks Factors" in the company's most filing statement dated January 17, 2018 available on SEDAR. Although the forward-looking statements contained in this news release are based upon what management of the company believes, or believed at the time, to be reasonable assumptions, the company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking statements and information. There can be no assurance that forward-looking information, or the material factors or assumptions used to develop such forward-looking information, will prove to be accurate. The company does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.
SOURCE CryptoGlobal Corp.
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