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Oslo, 17 February 2021. Element ASA (“Element” or the “Company”) has entered into a share exchange agreement (the “SEA”) with Distributed Ledger Technologies, LLC (“Seller”), Yeoman’s Capital LLC, Yeoman’s Capital LP, DLT Data Centers LLC, and DLT Element LLC (together the “Principals”) regulating the acquisition by Element of 100% of the shares of Distributed Ledger Technologies Ireland, Ltd, a company under incorporation (the “DLT Ireland”) on a fully diluted basis (the “Acquisition”).
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Element has further raised approximately NOK 35 million in gross proceeds through a conditional offering of 7 million new shares (the “Offer Shares”) at a subscription price of NOK 5.04 per Offer Share (the “Offering”). The net proceeds from the issuance of the Offer Shares in the Offering will be used for general corporate purposes.
Pursuant to the SEA, the shares in DLT Ireland will be acquired in exchange for (i) 27,000,000 new consideration shares valued in aggregate at NOK 135 million (“Consideration Shares”), and (ii) 3,000,000 warrants with strike price of NOK 12 per share (“Warrants”). Prior to closing of the Acquisition, the ultimate owners of the Seller will contribute and transfer certain assets consisting of contracts, securities, and tokens (the “Assets”) to the Seller and the Seller will contribute and transfer such assets to DLT Ireland. The Consideration Shares and Warrants will be issued to the Seller, and thereafter distributed to the ultimate owners of the Seller.
Upon closing of the Acquisition, the Assets to be held by DLT Ireland will consist of; (i) equity and debt interests in existing, profitable bitcoin mining operations located in the United States, and (ii) equity and debt interests and cryptocurrency tokens in a portfolio of businesses and assets which leverage distributed ledger technologies. The Company intends to invest in and operate further bitcoin mining businesses and will continue to develop its portfolio of investments in the platforms, protocols, exchanges, and wallets which define the new digital economy. Through the acquisition, the Company will engage a new management team (as further described below) of well-seasoned professionals in the digital economy and the public markets with over 40 years of collective investment banking and entrepreneurial experience relating to the digitization of information and value and public and private fundraising and corporate management.
- About the Acquisition -
Pursuant to the SEA, Element will exchange the Consideration Shares and the Warrants against the shares in DLT Ireland. DLT Ireland shall at closing be the legal and beneficial owner of the Assets.
The Warrants will become exercisable one year after an extraordinary shareholders meeting of Element (“EGM”) has approved the issuance of the Warrants, and expire three years after the date of the EGM. Pursuant to the SEA, Element shall also (i) issue 1,400,000 warrants to the members of a new advisory board of Element, with a strike price of NOK 12.00, which shall be exercisable from the date of the EGM and expire five years thereafter (“Advisory Warrants”), (ii) enter into (a) an executive chairman contract with James Haft (“Executive Chairman Contract”), (b) an employment agreement with Thomas Christensen as the new CEO of Element, and © consulting agreements with David A. Johnston (COO), Tim Furey (CFO) and Jonas Norr (Global Strategist), and (iii) grant James Haft and David A. Johnston (together “Management Principals”) 1,000,000 share options each (“Share Options”). The current CEO of Element, Geir Johansen will as a result of the foregoing step down from his position in Element, effective from 1 March 2021. It is further agreed that James Haft shall be appointed as executive chairman, and Viggo Leisner and Kari Mette Toverud shall continue as ordinary board members of Element. Chairman of the Board of Directors of Element, Thomas Christensen, is one of the ultimate owners of the Seller, and will receive 2.5 million Consideration Shares and 500,000 Warrants as a result of the Acquisition.
The Management Principals have agreed not to sell or otherwise dispose of their shares in Element (including the Consideration Shares and any shares acquired pursuant to the Warrants and/or Share Options) for a period of 12 months after the closing date of the Acquisition. After the period of 12 months, the Management Shareholders may sell shares if the per share sales price is at or above NOK 10.00. After a period of 18 months, the Management Shareholders are free to sell their shares in Element. The Management Shareholders have further, subject to customary terms and conditions, agreed to a non-compete with Element for a period ending two years after the Closing Date.
Completion of the SEA is subject to certain terms and conditions, including, but not limited to, (i) that the EGM has validly resolved certain resolutions, including but not limited to approval of the issuance of the Consideration Shares, Warrants, Advisory Warrants, the Offer Shares and the Cornerstone Warrants, authorisation of issuance of the Share Options, election of James Haft as executive chairman, and changes of the Articles of Association of Element, including change of the corporate name to DLT ASA, (ii) that no decision has been made, threatened or initiated by the Oslo Børs or Element which may result in Element no longer being listed on Oslo Børs, and (iii) all required third parties consents have been obtained.
- About the Offering -
The conditional Offering has been subscribed by the following investors:
Name
Tigerstaden AS Cornerstone 1,000,000 500,000
Middelborg AS Cornerstone 1,000,000 500,000
Arne Blystad AS Cornerstone 1,000,000 500,000
Camaca AS Cornerstone 1,000,000 500,000
Silvercoin Industries AS Cornerstone 1,000,000 500,000
Tycoon Industrier AS Cornerstone 1,000,000 500,000
Thomas Christensen Chairman 300,000 NA
Viggo Leisner Board member 500,000 NA
Kari Mette Toverud Board member 100,000 NA
Geir Johansen CEO 100,000 NA
Total 7,000,000 3,000,000
The Cornerstone investors have in addition each been conditionally granted 500,000 warrants (in total 3 million warrants), each with a strike price of NOK 10 per share, all of which shall expire on the date three years after the EGM (“Cornerstone Warrants”).
The completion of the Offering by delivery of the Offer Shares and Cornerstone Warrants are subject to (i) all necessary corporate resolutions for consummating the Offering and the Acquisition, including without limitation the issuance of the Offer Shares, the Cornerstone Warrants, the Consideration Shares, the Warrants and the Advisory Warrants, being validly made by the Company’s Board of Directors and the EGM, (ii) completion of the SEA, i.e. completion of the Acquisition including delivery of listed Consideration Shares to the Seller, and (iv) the allocated Offer Shares having been fully paid, validly issued (by way of registration of the share capital increase pertaining to the issuance of the Offer Shares in the Norwegian Register of Business Enterprises) and registration of the New Shares in VPS. Neither the Company nor the Manager shall have any liability towards the applicants should one or more of the conditions not be satisfied.
The final allocation of the Offer Shares and Cornerstone Warrants are however subject to approval by the EGM. The EGM is expected to be held on or about 17 March 2021. Payment and delivery of the Offer Shares will be following the EGM and completion of the Acquisition. More detailed information on settlement will be distributed as soon as the final payment date has been set.
The Board of Directors of the Company will propose to the EGM to carry out a repair offering of up to 1,800,000 new shares towards the Company’s shareholders as of 17 February 2021 (as documented by the shareholder register in the Norwegian Central Securities Depository (VPS) as of the end of 19 February 2021) except (i) shareholders who were allocated Offer Shares in the Offering, and (ii) shareholders who are resident in a jurisdiction where such offering would be unlawful or would require any filing, registration or similar action (other than publishing of a prospectus in Norway) (the “Repair Offering”). The subscription price in the Repair Offering will be equal to the subscription price in the Offering. The Board of Directors may at its discretion decide not to proceed with the Repair Offering.
under the Norwegian Securities Trading Act and Oslo Børs’ Circular no. 2/2014. The Board of Directors of Element considered alternative structures for the raising of new equity. Following careful considerations, the Board of Directors resolved that it was in the common interest of the Company and its shareholders to raise equity through a private placement setting aside the pre-emptive rights of the shareholders. By structuring the transaction as a private placement, the Company was in a position to raise capital in an efficient manner, with a lower discount to the current trading price and with significantly lower risks compared to a rights issue.
Pareto Securities AS is acting as sole manager of the Offering. Procorp AS is acting as financial advisor to the Company in connection with the Acquisition. Advokatfirmaet CLP DA is acting as legal advisor to the Company in connection with the Offering and the Acquisition.
For further information, please contact:
Geir Johansen CEO E-mail: gj@elementasa.com +47 4771 0451
Thomas Christensen Chairman +47 9225 5444
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company.
Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures.
These materials do not constitute an offer of securities for sale or a solicitation of an offer to purchase securities of the Company in the United States or any other jurisdiction. The securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”). The securities of the Company have not been, and will not be, registered under the U.S. Securities Act. Any sale in the United States of the securities mentioned in this communication will be made solely to “qualified institutional buyers” as defined in Rule 144A under the U.S. Securities Act. No public offering of the securities will be made in the United States.
In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression “Prospectus Regulation” means Regulation (EU) 2017/1129 (together with any applicable implementing measures in any Member State).
In the United Kingdom, this communication is only addressed to and is only directed at Qualified Investors who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Order”) or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as “Relevant Persons”). These materials are directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as “anticipate”, “believe”, “continue”, “estimate”, “expect”, “intends”, “may”, “should”, “will” and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The information, opinions and forward-looking statements contained in this announcement speak only as at its date and are subject to change without notice.
This announcement is made by and is the responsibility of, the Company. The Manager is acting exclusively for the Company and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, or for advice in relation to the contents of this announcement or any of the matters referred to herein.
Neither the Manager nor any of its affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.
This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. Neither the Manager nor any of its affiliates accepts any liability arising from the use of this announcement.
This announcement is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on prospectuses to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (as amended) as implemented in any Member State.
Each of the Company, the Manager and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any statement contained in this announcement whether as a result of new information, future developments or otherwise.
The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.
Kilde
