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

Rhea-AI Summary

DGTL Holdings (NEX: DGTL.H) has completed several significant transactions announced in June 2025. The company executed a conversion of preferred shares where 3,499,262 preferred shares were converted to 233,284 common shares at a 15:1 ratio. Additionally, DGTL completed a private placement raising C$52,486 through issuing 15,745,800 preferred shares at C$0.05 per share.

The company also settled C$437,500 in debt by issuing 8,750,000 common shares at C$0.05 per share. Notably, CEO John David Belfontaine's ownership increased to 44.73% of outstanding common shares, making him a Control Person of the company. The transactions received necessary shareholder approvals and included related party transactions with directors Christopher Foster, George Kovalyov, and John Belfontaine.

Positive

• Successful debt settlement of C$437,500 through equity issuance
• Completion of private placement raising new working capital of C$52,486
• Simplification of capital structure through conversion of all preferred shares to common shares

Negative

• Significant dilution through issuance of 8,750,000 common shares for debt settlement
• Concentration of control with CEO now holding 44.73% of outstanding shares
• Limited size of private placement (C$52,486) indicates potential funding constraints

Toronto, Ontario--(Newsfile Corp. - August 26, 2025) - DGTL Holdings Inc. (NEX: DGTL.H) ("DGTL" or the "Company"), is pleased to announce the completion of the transactions described in its news release dated June 11, 2025, and management information circular dated June 12, 2025.

Conversion of Preferred Shares

The Company has converted all issued and outstanding preferred shares in the capital of the Company (each a "Preferred Share") into common shares (each a "Common Share") on the basis of fifteen (15) Preferred Shares for one (1) Common Share (the "Conversion"), in accordance with the articles of the Company (the "Articles"). Following the Conversion, 3,499,262 Preferred Shares were converted into 233,284 Common Shares, and no Preferred Shares remain outstanding.

Private Placement

The Company has completed its previously announced non-brokered private placement (the "Private Placement") of Common Shares and Preferred Shares for aggregate proceeds of C$52,486, representing subscription of 15,745,800 Preferred Shares. The Private Placement was offered at a price of $0.05 per Common Share, with fifteen (15) Preferred Shares convertible into one Common Share.

The proceeds of the Private Placement will be used for general working capital purposes. No proceeds representing 10% or more of the gross proceeds are allocated to a specific use, and no proceeds will be used for investor relations activities. No finder's fees were paid in connection with the Private Placement.

Debt Settlement Transaction

The Company also completed a debt settlement transaction (the "Debt Settlement Transaction") to settle an aggregate of C$437,500 indebtedness through the issuance of 8,750,000 Common Shares at a deemed price of $0.05 per Common Share.

Creation of Control Person

John David Belfontaine ("Mr. Belfontaine"), Chief Executive Officer and a director of the Company, directly and indirectly held 1,779,312 Common Shares, representing approximately 16.72% of the issued and outstanding Common Shares. In connection with the Debt Settlement Transaction, Mr. Belfontaine was issued 7,000,000 Common Shares at a deemed price of $0.05 per share. Following the completion of the Conversion, Private Placement, and the Debt Settlement Transaction, Mr. Belfontaine holds 8,779,312 Common Shares, representing approximately 44.73% of the issued and outstanding Common Shares, thereby becoming a Control Person of the Company (as defined under the Policy 1.1 of the TSX Venture Exchange).

Pursuant to Policy 4.1 of the TSX Venture Exchange, shareholder approval is required where a transaction creates a Control Person, being any person that holds or controls 20% or more of an issuer's securities. The Company obtained requisite approval from shareholders holding or controlling more than 50% of its Common Shares to approve the creation of the new Control Person at the Meeting.

Related Party Transaction

The participation of Christopher Foster ("Mr. Foster"), George Kovalyov ("Mr. Kovalyov"), and Mr. Belfontaine, each a director of the Company, in the Debt Settlement Transaction constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101").

The Company obtained minority shareholder approval for the Debt Settlement Transaction in accordance with MI 61-101, excluding the 1,799,312 Common Shares held by Mr. Belfontaine, and the 150,000 Common Shares held by Mr. Kovalyov. Mr. Foster does not hold any Common Shares. Accordingly, an aggregate of 1,949,312 Common Shares was excluded from the vote.

The Company relied on the exemption from the formal valuation requirement set out under section 5.5(b) of MII 61-101 as the Company's securities are not listed on a specified exchange.

All securities issued in connection with the Conversion, the Private Placement, and the Debt Settlement Transaction will be subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation in Canada.

None of the securities issued in the Private Placement will be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), and none of them may be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any state where such an offer, solicitation, or sale would be unlawful.

Additional information is available under the Company's SEDAR+ profile at www.sedarplus.ca.

For more Information

John Belfontaine, Director
Email: IR@dgtlinc.com
Phone: +1 (877) 879-3485
Website: www.dgtlinc.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

Certain information contained herein constitutes forward-looking information or statements under applicable securities legislation and rules. Such statements include, but are not limited to, statements with respect to the Company's business plans, operations, and the ability to attract prospective mergers, acquisitions, or funding opportunities.

Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of DGTL to be materially different from those expressed or implied by such forward-looking statements, including, but not limited to: (i) factors relating to the outcomes of the Conversion, Private Placement, and the Debt Settlement Transaction; and (ii) the ability to attract prospective mergers, acquisitions or funding opportunities on a go forward basis. Although management of DGTL has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate. Accordingly, readers should not place undue reliance on forward-looking statements. Neither party will update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws. The parties caution readers not to place undue reliance on these forward-looking statements and it does not undertake any obligation to revise and disseminate forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of or non-occurrence of any events.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/264036

FAQ

What is the conversion ratio of DGTL Holdings' preferred shares to common shares?

DGTL Holdings converted preferred shares to common shares at a ratio of fifteen (15) preferred shares for one (1) common share, resulting in 3,499,262 preferred shares being converted to 233,284 common shares.

How much debt did DGTL Holdings (NEX: DGTL.H) settle in the August 2025 transaction?

DGTL Holdings settled C$437,500 of debt through the issuance of 8,750,000 common shares at a deemed price of C$0.05 per share.

What percentage of DGTL Holdings does CEO John Belfontaine own after the transactions?

Following the completion of all transactions, CEO John Belfontaine owns 8,779,312 common shares, representing 44.73% of the company's outstanding common shares.

How much did DGTL Holdings raise in their August 2025 private placement?

DGTL Holdings raised C$52,486 through a non-brokered private placement of 15,745,800 preferred shares at C$0.05 per share.

What is the holding period for securities issued in DGTL's conversion and private placement?

All securities issued are subject to a statutory hold period of four months plus one day from the date of issuance in accordance with Canadian securities legislation.