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DeepMarkit Corp (3)
Symbol MKT
Shares Issued 3,549,193
Close 2021-09-13 C$ 0.27
Recent Sedar Documents

DeepMarkit to convert debt, arranges $750,000 placement

2021-09-14 21:57 ET - News Release

Mr. Darold Parken reports

DEEPMARKIT ANNOUNCES DEBENTURE CONVERSION AND PRIVATE PLACEMENT

DeepMarkit Corp. has entered into an agreement to convert the company's $2-million of 12 per cent secured participating debentures (plus accrued interest of approximately $700,000) at a conversion price of 20.5 cents per share resulting in the issuance of approximately 13,170,731 shares. All of the debentures are held by 1323552 B.C. Ltd., a private company controlled by Ranjeet Sundher, a director and founder of the company. The company has also reached an agreement to convert approximately $40,000 of debt owed personally to Mr. Sundher at the same conversion price resulting in an additional 195,121 shares to be issued.

The debentures were originally issued by the company on July 15, 2016, and matured on July 14, 2020. Interest under the debentures has not been paid since March 31, 2019. The debentures provide a fixed and floating charge over all of the assets of the company. 1323552 B.C. completed the acquisition of all of the debentures of the company through multiple purchase agreements with the previous holders on Sept. 14, 2021.

The debt conversion constitutes a related-party transaction under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) and Policy 5.9 of the TSX Venture Exchange, and the issuance of shares pursuant to the debt conversion would create a new control person of the company. Accordingly, the conversion of the debentures and the creation of the new control person require regulatory and minority shareholder approval, as well as approval from the exchange. For this purpose, the company has scheduled an annual general and special meeting of shareholders for Oct. 29, 2021. The company has set the record date for the meeting as Sept. 29, 2021. The company intends to rely upon the exemption to the formal valuation requirement under Section 5.5(b) of MI 61-101 for the debt conversion (Issuer Not Listed on Specified Markets).

At the meeting, shareholders will be asked to consider and, if thought fit, approve the regular items of business being the election of directors, appointment of auditor and the approval of the company's stock option plan, as well as the conversion of the debentures and the creation of a new control person. It is expected that the debt conversion will be completed directly following the meeting if the resolutions relating to the debt conversion are approved by shareholders. The common shares issued pursuant to the debt conversion will be subject to a four-month hold period required under applicable securities laws and the policies of the exchange.

Private placement

DeepMarkit also announces a non-brokered private placement of $750,000. Under the private placement, which is subject to acceptance by the exchange, DeepMarkit intends to issue, pursuant to applicable exemptions from prospectus requirements of Canadian securities laws, 3,658,537 units at a price of 20.5 cents per unit. Each unit comprises one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share of DeepMarkit at an exercise price of 75 cents for a period of two years from the date of issuance of the units.

DeepMarkit may pay a finder's fee of up to 7 per cent in cash 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 finance continued business operations of DeepMarkit and for the company's continued search for new business opportunities. Insiders of the company may participate for up to 25 per cent of the total offering. Common shares issued pursuant to the private placement will be subject to a four-month hold period required under applicable securities laws.

The private placement is not conditional on completion of the debt conversion, and the debt conversion is not conditional upon completion of the private placement.

About DeepMarkit Corp.

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 under the symbol MKT.

We seek Safe Harbor.

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