BitGold Secures $14.6M Financing After $42.4M Acquisition of

Blockchain-based gold trading platform BitGold has secured financing of Canadian $18.2 million from a syndicate of underwriters led by GMP Securities L.P. and including Clarus Securities Inc., Canaccord Genuity Inc. and Dundee Securities Ltd. The deal is for 5 million shaes at a price of C$3.65 per share, for aggregate gross proceeds of 18,250,000 Canadian dollars.

The TSX Ventures-listed company recently announced a Canadian $51.9 million acquisition of online precious metals trading platform

According to BitGold, the proceeds from the financing are expected to be used for brand development, customer acquisition through online marketing, event marketing, ATM development and deployment, user interface development across platforms – desktop, mobile, ATM, servicing of customers and working capital.

The shares will apparently be offered by way of private placement to “accredited investors” in all of the provinces of Canada (other than the Province of Quebec) pursuant to National Instrument 45-106 – Prospectus Exempt Distributions and in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended. The Shares will be subject to a four-month hold period in Canada.

The shares have also not been registered under the United States Securities Act of 1933, as amended, or applicable state securities laws, and the shares may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.

The offering is expected to close on or about June 16, 2015, and closing of the offering is subject to certain conditions typical for a transaction of this nature and the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange.

Consideration for the acquisition of GoldMoney was the issuance of 11.1 million common shares in BitGold which will be distributed to the shareholders of GoldMoney with apparently no new insiders of BitGold. GoldMoney holds CAD$1.5 billion in vault assets of gold, silver, platinum and palladium on behalf of customers.

In addition to the operating assets and intellectual property assets to be acquired in the GoldMoney deal, BitGold will assume USD$3.0 million in working capital. The pro forma entity is expected to have approximately CAD$12.5 million in working capital and no debt, with up to CAD$5.5 million in additional capital to be received from the conversion of in the money warrants outstanding. At the time of closing a special distribution will be made to GoldMoney shareholders for the remaining GoldMoney working capital.

GoldMoney will also have the right to appoint three directors for a period of three years immediately after closing. Mahendra Naik will join the board of directors of BitGold immediately upon the closing of the GoldMoney acquisition, and James Turk and Hector Fleming will be nominees for election of directors at a shareholder meeting of BitGold to be held within ninety days of closing.

Biographies of GoldMoney principals

James Turk has over 40 years’ experience in international banking, finance and investments. He began his career at The Chase Manhattan Bank where he worked on assignments in Thailand, the Philippines and Hong Kong. In 1983, he was appointed as manager of the Commodity Department of the Abu Dhabi Investment Authority. After leaving that post in 1987, he went on to hold various advisory roles in money management. In 2001 he co-founded GoldMoney and remains a director of the group. James makes regular conference appearances around the world, provides commentary for numerous publications and newswires as well as producing articles for his website and GoldMoney.

Nahendra Naik, CA, CPA, is a Chartered Professional Accountant with more than 32 years of financial accounting, mining and investment company experience. Mr. Naik is President & CEO of FinSec Services Inc., a private management services company, and a director of GoldMoney. He holds a Bachelor of Commerce degree from the University of Toronto. He practiced as a Chartered Professional Accountant for nine years with a major Canadian accounting firm. Mr. Naik is a director and member of the Audit and Finance Committee of IAMGOLD Corporation, and Chairman of the Board, Chairman of the Audit Committee and member of the Compensation Committee of Fortune Minerals Inc., both diversified public minerals and resources companies. In addition, Mr. Naik is a member of the Compensation Committee of FirstGlobal Data Limited and of several large private companies including GoldMoney Network Limited. Mr. Naik will be appointed as Chair of the Audit Committee of BitGold.

Hector Fleming is a founder of Fleming Wulfsohn Africa Limited, a private investment company, and has over 10 years of private equity experience across Africa and other emerging markets. He is a director of The Johannesburg Land Company Limited, Clover Alloys SA Limited, GoldMoney Network Limited and Netagio Holdings Limited. Mr Fleming is a former director of Standard Chartered Bank’s private equity coverage team out of London with a central focus on Sub-Saharan Africa and was previously in the banks’ private equity group, investing growth capital from the bank’s balance sheet and third party funds into private equity opportunities in the emerging Asian economies. He holds a BA (Hons) from the University of Newcastle upon Tyne.

Goldmoney Financial Performance

Journalist, policy analyst, and evangelist of new, disruptive technologies including big data analytics, Internet of Things, and cryptocurrencies. Internet industry veteran with regional c-suite experience, and journalist credentials earned at, Internet World magazine, and Mecklermedia Corporation.
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