Mr. David MacLaren reports
MEDIAVALET CLOSES OVER-SUBSCRIBED $3.5 MILLION PRIVATE PLACEMENT
MediaValet Inc., further to its press release dated Dec. 30, 2022, has now closed the non-brokered private placement to raise $3.0-million for the company. The private placement, which was oversubscribed by $500,000, consisted of 2,692,315 units at a price of $1.30 per unit, for gross proceeds of $3,500,010.
Each Unit consisted of one common share of the Company (a "Share") and one Share purchase warrant (a "Warrant"). Each Warrant entitles the holder to acquire one Share at a price of $1.50 for a period of 36 months from the closing of the Private Placement. The Warrants have an acceleration clause that provides that if the closing price of the Shares on the TSX is greater than $2.50 for 20 consecutive trading days, then the Company may, within ten (10) days, accelerate the expiry of the Warrants by issuing a press release announcing that any unexercised Warrants will terminate on the 30th day (including non-trading days) after the date on which such notice was given. The Company will also give written notice to the holders of Warrants not less than thirty (30) days prior to the accelerated expiry date of the Warrants.
The net proceeds received from the Private Placement will be used by the Company for general working capital.
The Private Placement, which was negotiated between the Company and Shen Capital, is being subscribed in part by Insiders of the Company. This will result in total potential dilution to Shareholders from the issuance to Insiders of 4,615,400 Shares (2,307,700 Shares comprised in the Units and 2,307,700 Warrant Shares), representing approximately 11.3% of the currently outstanding Shares (approximately 10.0% of the outstanding Shares after the Offering and exercise of the Warrants). Shen Capital Partners Inc. ("Shen Capital") a long-standing shareholder of the Company, has agreed to subscribe, directly or through an affiliate, for 1,923,077 Units and David Miller, the Chief Financial Officer of the Company, has agreed to subscribe for 384,623 Units. Shen Capital held 7,677,786 Shares prior to the Private Placement, representing approximately 18.83% of the then outstanding Shares on an undiluted basis, and has one representative on the Board of Directors, Mr. Francis Shen. Mr. Shen was appointed pursuant to a Board Rights Agreement entered into between the Company and Shen Capital entered into in August, 2019.
The Company now has 43,478,770 Shares outstanding after closing the Private Placement. With its participation in the Offering, Shen Capital will increase its holdings to 9,600,863 Shares, and will hold Warrants that could increase its holdings (if exercised) to 11,523,940 Shares. Accordingly, on completion of the Offering Shen Capital will hold 22.08% of the outstanding Shares (on an undiluted basis) and 25.38% of the outstanding Shares on a partially diluted basis (assuming Shen Capital exercises all of its Warrants and no other Shares are issued).
The TSX requires, under 604(a)(i) of the TSX Company Manual, that any transaction that will materially affect control of a company on the TSX be approved by the security holders of the company. The TSX considers that the acquisition of greater than 20% of the outstanding Shares by Shen Capital will materially affect control of the Company. In addition, the TSX requires shareholder approval pursuant to 607(g)(ii) of the TSX Company Manual for share issuances over 10% to Insiders. The Company obtained written consent from the disinterested shareholders holding more than 50% of the outstanding voting shares, excluding 7,724,786 shares held by Shen Capital and its affiliate, or by David Miller, in accordance with section 604(d) of the TSX Company Manual.
The private placements with Shen Capital and with David Miller are considered related party transactions under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is relying on the exemptions from the formal valuation and minority shareholder approval requirements set out in sections 5.5(a) and 5.7(a) Fair Market Value Not More than 25 Per Cent of Market Capitalization, respectively of MI 61-101.
All securities issued in connection with the Private Placement are subject to a statutory hold period of four months plus a day in accordance with applicable securities legislation.
About MediaValet Inc.
MediaValet stands at the forefront of the enterprise, cloud-based digital asset management and creative operations industries. Built exclusively on Microsoft Azure and available across 61 Microsoft data center regions, covering 140 countries around the world, MediaValet delivers unparalleled enterprise-class security, reliability, redundancy, compliance, and scalability; while offering the largest global footprint of any DAM solution. In addition to providing enterprise DAM capabilities at a global scale, desktop-to-server-to-cloud support for creative teams, and overall cloud redundancy, security and management for all source, WIP and final assets, MediaValet offers industry-leading integrations into Slack, Adobe Creative Suite, Microsoft Office 365, WorkFront, Wrike, Monday.com, Drupal, WordPress and many other best-in-class 3rd party applications.
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