DMG Announces Closing of Cdn$70 Million Private Placement Offering with Institutional Investors

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VANCOUVER, British Columbia, March 05, 2021 (GLOBE NEWSWIRE) -- DMG Blockchain Solutions Inc. (TSX-V: DMGI) (DMGGF:OTCQB US) (FRANKFURT:6AX) (“DMG” or the “Company”), a vertically integrated blockchain and cryptocurrency technology company, is pleased to announce that it has closed its previously announced sale to U.S. and foreign institutional investors of its common shares ("Common Shares") and warrants to purchase common shares ("Warrants") for aggregate gross proceeds to the Company of approximately Cdn$70 million (the "Private Placement"). Pursuant to the Private Placement, the Company issued 23,333,334 Common Shares and Warrants to purchase up to 11,666,667 Common Shares at a purchase price of Cdn$3.00 per Common Share and associated half Warrant. Each whole Warrant entitles the holder thereof to purchase one Common Share at an exercise price of Cdn$3.55 per Common Share at any time on or before March 5, 2024 (totaling another Cdn$41.4 million once exercised).

“We are very pleased to complete this equity financing above current market prices. The net proceeds from this financing will allow DMG to rapidly advance its business plan, its operations and pursue a variety of new projects. We are also very pleased to expand our institutional presence in the United States and abroad”, commented Dan Reitzik, CEO and Sheldon Bennett, COO, who jointly managed this process for DMG.

H.C. Wainwright & Co. acted as the exclusive placement agent for the Private Placement.

H.C. Wainwright & Co. received (i) a cash commission of approximately Cdn$3.85 million (equal to 5.5% of the gross proceeds of the Private Placement) and (ii) 1,283,333 non-transferable compensation warrants (the "Agent Warrants"). Each Agent Warrant entitles the holder thereof to purchase one Common Share at an exercise price of Cdn$3.75 per Common Share at any time on or before March 5, 2024.

The Company intends to use the net proceeds of the Private Placement for infrastructure expansion (i.e., continued retrofitting of initially 30 and up to 60 MW capacity from air cooling to immersion cooling and general upgrades to the facility), equipment purchases (i.e., necessary technologies to expand DMG‘s self-mining infrastructure and hashrate at its Christina Lake facility to 2.0 EH/s in 2021 with the first 1.0 EH/s planned by this summer), investment in cryptocurrencies (i.e., buying Bitcoin), potential future acquisitions, equity interests and partnerships, software development (i.e., further advancements of Blockseer and Walletscore as part of DMG’s ongoing Bitcoin mining pool efforts), immersion cooling research and prototyping (i.e., including all required technical components of various suppliers), expansion of marketing and sales activities and working capital and general corporate purposes. Details as to the intended specific allocation of the proceeds are disclosed in the Prospectus Supplement referred to below and further business development announcements will be made by DMG in due course as they arise.