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Shell Summary for April 15, 2020

2020-04-15 20:06 ET - Market Summary

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by Stockwatch Business Reporter

The TSX Venture Exchange lost 2.54 points to 442.71 Wednesday. John-David Belfontaine and Michael Racic's first capital pool shell, Conscience Capital Inc. (DGTL: halted), has two brief updates on its qualifying transaction with Hashoff LLC, a U.S. advertising technology firm. First, Hashoff has closed a $1.32-million private placement at 35 cents. Completing this financing is a condition for closing the QT. Second, the shell has received an independent valuation report from a Vancouver firm called Evans & Evans Inc., which estimates the value of Hashoff at $6.6-million to $7.1-million. Conscience Capital, which has 22,063,000 shares issued, will issue 8,270,241 shares and pay $500,000 (U.S.) to Hashoff's unitholders to close the QT. Then, over the next 30 months, the resulting issuer will pay $1.5-million (U.S.) in stages to those unitholders.

Hashoff offers a software platform that enables advertisers to hire social media "influencers" (people whose social media accounts have hundreds of thousands of followers) to name-drop their brands or give flattering reviews of their products. So far, this business is not profitable for Hashoff. In the first nine months of 2019, it lost $564,300 (U.S.) on revenue of $1.42-million (U.S.). It ended that period with a working capital deficit of $1.5-million (U.S.). The money that it has raised in its private placement is not enough to cover that deficit. (It had hoped to raise up to $4-million in the private placement, but the $1.32-million that it raised meets the bare minimum that it was required to bring in.)

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