Deploy Technologies Inc.
CSE : DEP
CSE : DEP.CN
CNSX : DEP

August 16, 2017 08:00 ET

Deploy Closes First Tranche of Previously Announced Concurrent Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 16, 2017) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Deploy Technologies Inc. (CSE:DEP)(CSE:DEP.CN)(CNSX:DEP) ("Deploy" or the "Company") is pleased to announce that it has closed the first tranche of its previously announced private placement (the "Offering"), disclosed in the news release of the Company dated May 25, 2017 and May 16, 2017, the Company issued 22,389,477 subscription receipts (the "Subscription Receipts") at a price of CDN $0.22 per Subscription Receipt (the "Purchase Price") for aggregate gross proceeds of CDN $4,925,685. The Offering is being conducted in connection with its previously announced proposed reverse takeover transaction with Nevada Medical Group LLC (the "RTO"). The Company anticipates closing additional tranches of the Offering.

The Offering was completed on a non-brokered basis, and the Company paid finder's fees in accordance with applicable securities laws and the policies of the Canadian Securities Exchange (the "Exchange" or the "CSE") to eligible finders. All securities issued in connection with the Concurrent Financing are subject to hold periods under applicable Canadian and United States securities laws for a minimum of four months and a day.

The gross proceeds of the Offering, less 50% of the fees of eligible finders in connection with the Offering (the "Finders"), have been paid to such recipients with the remainder (the "Escrowed Funds") having being delivered into escrow on behalf of the purchasers of Subscription Receipts, to be held by a third party subscription receipt agent (the "Subscription Receipt Agent") from the date hereof until the date on which the Escrow Release Conditions (as defined herein) are satisfied (the "Escrow Release Date") pursuant to a subscription receipt escrow agreement dated August 15, 2017 among the Subscription Receipt Agent, the Company and the purchasers of Subscription Receipts (the "Escrow Agreement").

Pursuant to the terms of the certificates evidencing the Subscription Receipts, each Subscription Receipt shall be automatically converted, at no additional cost to the subscriber, upon the completion of the RTO for one common share in the capital of Deploy (the "Deploy Share") and one Deploy Share purchase warrant (the "Warrant, and collectively with the Deploy Share, the "Underlying Securities") exercisable at a price of CDN $0.30 for a period of 24 months from the date of issuance. Each Warrant is subject to acceleration provisions following the six-month anniversary of the date of Closing, if the closing trading price of the Deploy Shares on the Exchange is equal to or greater than CDN $0.40 for seven consecutive trading days, at which time the Company may accelerate the expiry date of the Warrants by issuing a press release announcing the reduced warrant term whereupon the Warrants will expire 21 calendar days after the date of such press release.

The Finders received a cash commission of 8% of the aggregate gross proceeds of the Offering attributable to the Finder, 50% of which was paid to the Finders on closing. The balance of such fees to the Finders has been deposited into escrow with the Subscription Receipt Agent and shall be payable by the Company to the Finders upon the satisfaction of the Escrow Release Conditions (as hereinafter defined). Additionally, the Finders were granted compensation warrants (the "Compensation Warrants") equal to 8% of the total Subscription Receipts attributable to the Finder, equal to 372,532 Compensation Warrants, that will entitle the holder thereof to acquire that number of common shares in the capital of the Company (the "Common Shares") pursuant to the Offering at an exercise price of CDN $0.22 per Common Shares at any time on or prior to August 15, 2019.

The following are conditions precedent (the "Escrow Release Conditions") to the conversion of the Subscription Receipts: (i) all conditions precedent to the closing of the RTO shall have been satisfied, except for those conditions that have been waived by the Company in its sole discretion and (ii) the Common Shares shall have been conditionally approved for listing on the CSE.

Pursuant to the terms of the Subscription Receipts, the Escrow Release Conditions are to be satisfied on or before 5:00 p.m. (Toronto time) on the date that is 12 months from the issuance of such Subscription Receipts (the "Escrow Deadline"). If the Escrow Release Conditions are not satisfied on or before the Escrow Deadline, then pursuant to each of the Escrow Agreement and the certificates evidencing the Subscription Receipts: (i) the Subscription Receipts shall be automatically cancelled without any further action or formality; and (ii) Escrowed Funds returned to the holders of Subscription Receipts in an amount per Subscription Receipt equal to: (i) the Subscriber's aggregate subscription price; and (ii) a pro rata share of interest, if any, actually earned thereon to the date of the Escrow Deadline (less any applicable withholding taxes). To the extent that the Escrowed Funds and accrued interest are insufficient to refund to each holder of Subscription Receipts an amount equal to the aggregate subscription price for each such holder's Subscription Receipts, the Company shall contribute such amounts as are necessary to satisfy any shortfall.

The RTO is subject to a number of conditions precedent, including CSE approval.

All securities issued pursuant to the Offering, including the Underlying Securities and all shares issuable pursuant to the exercise of Compensation Warrants, will be subject to a four month and one day hold from the date of issuance of the Subscription Receipts.

The Company will use the net proceeds of the Offering to complete the RTO and for general working capital purposes of the resulting issuer.

The securities referenced herein have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registrations or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Completion of the RTO is subject to a number of conditions, including receipt of appropriate regulatory approvals. The RTO cannot close until all such conditions are satisfied. There can be no assurance that the RTO will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the disclosure document to be prepared in connection with the transaction, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in securities of Deploy Technologies Inc. should be considered highly speculative.

This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectations. Important factors - including the availability of funds, the results of financing efforts and the parties' due diligence reviews, and general market conditions - that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on SEDAR (see www.sedar.com).

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

We seek safe harbour.

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