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SOURCE HIVE Blockchain Technologies Ltd.
Trading as "HIVE" expected to commence on the TSXV on Monday, September 18, 2017
VANCOUVER, Sept. 15, 2017 /PRNewswire/ - HIVE Blockchain Technologies Ltd. (formerly, Leeta Gold Corp.) (TSX.V:HIVE) (the "Company" or "HIVE") is pleased to announce that it has completed its previously announced acquisition (the "Acquisition") of a state-of-the-art GPU-based blockchain data centre in Reykjanes, Iceland (the "HIVE Facility") and formed a strategic partnership (the "Partnership") with Genesis Mining Ltd. ("Genesis"), the world's leading cryptocurrency mining hashpower provider, as described in the Company's news releases dated June 14, 2017, August 9, 2017 and September 7, 2017.
Acquisition and Partnership
In accordance with the transaction agreement between the Company and Genesis dated September 13, 2017 and related agreements, the Company completed the Acquisition and entered into the Partnership (collectively, the "Transaction") for total cash proceeds of US$9,000,000 and the issuance of 67,975,428 common shares in the capital of the Company (the "Transaction Shares") to Genesis, with the result that Genesis is a Control Person (as defined in the TSX.V Corporate Finance Policies) of the Company. The Transaction Shares are subject to an escrow agreement, as described below, and are subject to a hold period of four months and one day from the closing date of the Transaction.. The Partnership includes an agreement as to the general terms governing the potential acquisition of further cryptocurrency data centres from Genesis, and a master services agreement dated September 13, 2017 pursuant to which Genesis will provide hosting, maintenance and related ongoing services at the HIVE Facility.
After giving effect to the Transaction, Genesis owns or controls 67,975,428 common shares in the capital of the Company, representing 30% of the issued and outstanding shares of the Company. Prior to the completion of the Transaction, Genesis held no common shares in the capital of the Company. The head office of Genesis is located at Chinachem Century Tower, 31/F, 178 Gloucester Road, Wan Chai, Hong Kong. The Transaction Shares were acquired by Genesis as partial consideration for the Transaction. Genesis may in the future wish to increase or decrease its shareholdings in the Company as circumstances warrant.
Copies of the filing statement of the Company dated September 13, 2017 (the "Filing Statement") and material agreements related to the Transaction, as well as the Early Warning Report filed by Genesis with the applicable securities regulators in respect of the Transaction Shares, are available at www.sedar.com under the Company's profile or by contacting the Company.
Conversion of Subscription Receipts
Following closing of the Transaction, the Company's outstanding subscription receipts (the "Subscription Receipts") issued upon closing of the Company's private placement financing, as described in the Company's news release dated September 7, 2017, automatically converted into an aggregate of 55,000,000 common shares in the capital of the Company. Aggregate proceeds of C$16,500,000, which had been held in escrow in accordance with the terms of the Subscription Receipts, have been released to the Company.
Change of Name and Stock Symbol, Resumption of Trading
In connection with the closing of the Acquisition, the Company changed its name from "Leeta Gold Corp." to "HIVE Blockchain Technologies Ltd." and changed its stock symbol from "LTA" to "HIVE".
Trading in the common shares of the Company which had been halted as of June 5, 2017 is expected to resume on the Exchange under the Company's new stock symbol "HIVE" on September 18, 2017.
New Board, Management and Corporate Matters
At the annual general and special meeting of the Company held on August 23, 2017 (the "Meeting"), Harry Pokrandt, Frank Holmes, Olivier Roussy Newton, Bjoern Arzt and Tobias Ebel were elected as directors of the Company.
In addition, the directors have appointed Jessica Van Den Akker as Chief Financial Officer of the Company and Kristen Reinertson as Corporate Secretary of the Company, who join Harry Pokrandt, President and Chief Executive Officer of the Company, as the management team for the Company going forward.
Biographies of the new board members and management of the Company are available in the Filing Statement and the information circular of the Company dated July 20, 2017 (the "Circular") at www.sedar.com under the Company's profile.
At the Meeting, the shareholders also approved the adoption of new articles for the Company (the "New Articles") as further described in the Circular. A copy of the New Articles has been filed at www.sedar.com under the Company's profile.
In connection with the Transaction, the Company and Olivier Roussy Newton (the "Finder") entered into a finder's agreement on June 8, 2017 (the "Finder's Agreement"). In connection with the Finder's Agreement and as disclosed in the Company's news release dated September 7, 2017, the Company has issued 3,398,771 common shares in the capital of the Company to the Finder (the "Finder's Shares"). The Finder's Shares are subject to an escrow agreement, as described below, and are subject to a hold period of four months and one day from the closing date of the Transaction.
The Company engaged PI Financial Corp. to act as sponsor to the Company in connection with the Transaction.
In accordance with the policies of the Exchange, and as disclosed in the Filing Statement, an aggregate of 75,874,199 common shares in the capital of the Company (the "Escrowed Shares") will be held in escrow pursuant to an escrow agreement (the "Escrow Agreement") among Genesis, Harry Pokrandt, Olivier Roussy Newton and Computershare Investor Services Inc., as escrow agent. The Escrowed Shares will be released from escrow as follows: 10% upon issuance of the Exchange bulletin granting final approval for the Transaction (the "Final Bulletin"); 15% on the date that is six months after the date of the Final Bulletin; 15% on the date that is 12 months after the date of the Final Bulletin; 15% on the date that is 18 months after the date of the Final Bulletin; 15% on the date that is 24 months after the date of the Final Bulletin; 15% on the date that is 30 months after the date of the Final Bulletin; and 15% on the date that is 36 months after the date of the Final Bulletin.
As disclosed in the Filing Statement, 73,910,115 common shares in the capital of the Company are subject to a pooling arrangement.
The Company has entered into an investor relations agreement (the "IR Agreement") with Future Money Trends, LLC, a limited liability company existing under the laws of the State of Texas with an office at 1102 S. Austin Ave, #110-283, Georgetown, Texas, USA.
The initial term of the IR Agreement is for three years. In connection with the IR Agreement, the Company has granted Future Money Trends, LLC and its affiliates an aggregate of 1,333,000 stock options under the Company's stock option plan with an exercise price of $0.30 per stock option, exercisable for a period of five years from the date of grant, vesting as follows: 25% 3 months after the date of grant; 25% 12 months after the date of grant; 25% 24 months after the date of grant; and 25% 36 months after the date of grant.
Stock Option Grants
In addition to the IR Options and concurrently with the closing of the Transaction, the Company has also granted an aggregate of 21,300,000 stock options under the Company's stock option plan to directors, officers, consultants, and charitable organizations with an exercise price of $0.30 per stock option, exercisable for a period of ten years from the date of grant.
Loans and Bonus Warrants
The Company has received Exchange acceptance of the two loan agreements entered into by the Company with a company owned by Harry Pokrandt and has received Exchange approval for the issuance of the bonus warrants issued in connection with such loans, each as previously disclosed in the news releases of the Company dated August 9, 2017 and September 7, 2017.
Additional information on the Company and the Transaction is available at www.sedar.com under the Company's profile.
PI Financial Corp., subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the Transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the Transaction or the likelihood of completion.
Completion of the Transaction and resumption of trading on the Exchange is subject to a number of conditions. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the Filing Statement, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.
The Exchange has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this news release. Neither the Exchange nor its Regulation Services Provider (as that term is defined in policies of the Exchange) accepts responsibility for the adequacy or accuracy of this news release.
On Behalf Of HIVE Blockchain Technologies Ltd.
President, CEO and Director
Except for the statements of historical fact, this news release contains "forward-looking information" within the meaning of the applicable Canadian securities legislation that is based on expectations, estimates and projections as at the date of this news release. The information in this news release about the completion of the Transaction, as well as additional data centres, the business goals and objectives of the Company, any estimate of potential earnings, the execution by Genesis of its duties under the Master Services Agreement and any other obligations of other parties to Transaction agreements, and other forward-looking information includes but is not limited to information concerning the intentions, plans and future actions of the parties to the transactions described herein and the terms thereon.
Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, risks related to the Company's or Genesis' ability to obtain final acceptance from the Exchange for the Transaction, the cryptocurrency market or the Company's ability to successfully mine cryptocurrency, and other risks related to Transaction as more fully set out in the Filing Statement.
The forward-looking information in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. In connection with the forward-looking information contained in this news release, the Company has made assumptions about the Company's and Genesis' ability to complete the Transaction, historical prices of cryptocurrencies and the ability of the Company to mine cryptocurrencies will be consistent with historical prices and there will be no regulation or law that will prevent the Company from operating its business. The Company has also assumed that no significant events occur outside of the Company's normal course of business. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise.
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