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Hive Blockchain Technologies Ltd
Symbol HIVE
Shares Issued 346,308,064
Close 2020-12-23 C$ 2.47
Recent Sedar Documents

Hive arranges $15M (U.S.) debenture private placement

2020-12-24 02:43 ET - News Release

Mr. Frank Holmes reports

HIVE BLOCKCHAIN ANNOUNCES PRIVATE PLACEMENT OF CONVERTIBLE DEBENTURES

Subject to regulatory approval, Hive Blockchain Technologies Ltd. intends to complete a non-brokered private placement of unsecured debentures for aggregate gross proceeds of $15-million (U.S.) with U.S. Global Investors Inc.

The debentures will mature on the date that is 60 months from the date of issuance, bearing interest at a rate of 8 per cent per annum. The debentures will be issued at par, with each debenture being redeemable by Hive at any time and convertible at the option of the holder into common shares in the capital of the company at a conversion price of $3 per share. Interest will be payable monthly, and principal will be payable quarterly. In addition, U.S. Global will be issued 5.0 million common share purchase warrants. Each whole warrant will entitle U.S. Global to acquire one common share at an exercise price of $3 per share for a period of three years from closing.

The company intends to use the proceeds from the transaction for general corporate purposes and working capital.

Frank Holmes, interim executive chairman of Hive, commented: "The transaction is an excellent opportunity for Hive to enhance liquidity, maintain momentum, and deploy capital into additional miners and infrastructure. U.S. Global has recently sold shares of Hive in order to redeploy capital back into Hive. No shares have been sold by me personally. The purchase of an 8-per-cent debt instrument by U.S. Global is consistent with its investment criteria and assists Hive by providing working capital for its growth strategy. The financing is being completed without the usual 6-per-cent broker fees, and the cost of capital is much less than the 16-per-cent cost of capital associated with leasing equipment for crypto mining.

"The issuance of the debentures is subject to TSX Venture Exchange approval, and is expected to close on or about Dec. 31, 2020."

The issuance of the debentures to U.S. Global Investors is considered a related-party transaction within the meaning of TSX-V Policy 5.9 and Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) as Mr. Holmes is a director, officer and controlling shareholder of U.S. Global Investors. Hive intends to rely on the exemptions from the formal valuation and minority approval in sections 5.5(b) and 5.7(1)(a) of MI 61-101 in respect of the company not listed on specific markets and the transaction fair market value not exceeding 25 per cent of the company's market capitalization. The transaction was approved by the independent directors of Hive and U.S. Global Investors.

The company expects to file a material change report in respect of the related-party transaction fewer than 21 days prior to the closing of the transaction, which the company deems reasonable in the circumstances as the details of the transaction and the participation by U.S. Global Investors were not settled until shortly before the expected closing of the transaction and the company wished to complete the transaction in an expeditious manner.

About Hive Blockchain Technologies Ltd.

Hive is a growth-oriented, TSX-V-listed company, building a bridge from the blockchain sector to traditional capital markets. Hive owns state-of-the-art green-energy-powered data centre facilities in Canada, Sweden and Iceland, which produce newly minted digital currencies like Bitcoin and Ethereum continuously on the cloud. Its deployments provide shareholders with exposure to the operating margins of digital currency mining, as well as a portfolio of crypto-coins.

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