Engagement Labs Inc. (TSXV: EL OTCQB: ELBSF) (“Engagement Labs” or the “Company”) which through its data and analytics platform, online (social media) and offline (word of mouth) data, provides some of the world’s largest brands with unique insights into consumer sentiment in real time, improving marketing ROI and strategies to grow revenue, is pleased to announce that it has closed its previously announced short form prospectus offering of 40,000,000 Units (the “Units”) at $0.05 per Unit, including the full exercise of the over-allotment option (the “Offering”). The Company issued 46,000,000 Units and 23,000,000 common share purchase warrants under the Offering for aggregate gross proceeds of CAD$2,300,000, and also completed its previously-announced concurrent non-brokered private placement of US$500,000, for total gross proceeds of approximately CAD$2,960,000. Gravitas Securities Inc. and Echelon Wealth Partners Inc. (together, the “Agents”) brokered the Offering on a commercially reasonable efforts basis.
G. Scott Paterson, Chairman of Engagement Labs, purchased 4,000,000 Units under the Offering and Loeb Holding Corp., the Company’s largest shareholder, purchased 6,600,000 Units under the previously-announced concurrent U.S. non-brokered private placement, for a total aggregate investment by these shareholders of CAD$200,000 and US$250,000, respectively.
Each Unit consists of one common share in the capital of the Company and one-half of one common share purchase warrant (each, a “Warrant”). Each whole Warrant will entitle the holder thereof to acquire one common share of the Company at a price of $0.08 per share for a period of two years following closing.
Subscriptions by insiders of the Company accounted for approximately CAD$530,000 of the gross proceeds of the Offering. Participation by the insiders in the Offering is exempt from the valuation and minority shareholder approval requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) by virtue of the exemptions contained in Sections 5.5(b) and 5.7(1)(b) of MI 61-101.
The net proceeds from the Offering and the concurrent non-brokered private placement are expected to be used to fund (i) sales and marketing; (ii) product development; and (iii) working capital and general corporate purposes. For additional details regarding the use of proceeds of the Offering, please see the Company’s final short form prospectus dated August 10, 2018, which is available under the Company’s profile on SEDAR at www.sedar.com.
The Company paid to the Agents a cash commission of $184,000 and issued 3,680,000 broker’s warrants exercisable at $0.05 per share for a period of two years following closing, and a corporate finance fee of 1,300,000 fully paid Units.