DGTL Closes Previously Announced Conversion of Preferred Shares, Private Placement and Debt Settlement

Executive Summary

• DGTL Holdings Inc. completed a series of interconnected transactions including the conversion of all outstanding preferred shares into common shares, a non-brokered private placement, and a debt settlement transaction.
• The private placement raised C$52,486 through the subscription of 15,745,800 preferred shares, while the debt settlement involved issuing 8,750,000 common shares to settle C$437,500 in indebtedness.
• CEO John David Belfontaine became a "Control Person" holding approximately 44.73% of the issued and outstanding common shares following these transactions, with requisite shareholder approvals obtained for both the control person status and the related party nature of the debt settlement.

Key Details

• Conversion of Preferred Shares: All 3,499,262 outstanding preferred shares were converted into 233,284 common shares on a basis of 15 preferred shares for 1 common share. No preferred shares remain outstanding.
• Private Placement:
  • Structure: Non-brokered private placement of common and preferred shares.
  • Price: $0.05 per common share (with 15 preferred shares convertible into 1 common share).
  • Quantity: Subscription of 15,745,800 preferred shares.
  • Gross Proceeds: C$52,486.
  • Use of Proceeds: General working capital purposes.
  • Fees: No finder's fees were paid.
• Debt Settlement Transaction:
  • Indebtedness Settled: C$437,500.
  • Consideration: Issuance of 8,750,000 common shares.
  • Deemed Price: $0.05 per common share.
• Control Person Status:
  • John David Belfontaine (CEO and Director) increased his holding from 1,779,312 shares (~16.72%) to 8,779,312 shares (~44.73%) of issued and outstanding common shares.
  • This triggers "Control Person" status under TSX Venture Exchange Policy 1.1 (holding >20%).
  • Shareholder approval was obtained from holders of >50% of common shares for the creation of the control person.
• Related Party Transaction (MI 61-101):
  • Directors John David Belfontaine, Christopher Foster, and George Kovalyov participated in the debt settlement.
  • Minority shareholder approval was obtained excluding 1,949,312 shares held by the related parties (1,799,312 by Belfontaine, 150,000 by Kovalyov).
  • The company relied on the exemption from the formal valuation requirement under section 5.5(b) of MI 61-101 as securities are not listed on a specified exchange.
• Regulatory/Restrictions:
  • All securities issued are subject to a statutory hold period of four months plus one day.
  • Securities are not registered under the US Securities Act of 1933.

Notable Quotes

• No direct quotes from the CEO or President were included in the text of the release.