DGTL Holdings Inc. Announces Intention to Complete Private Placement and Proposed Creation of New Control Person

Rhea-AI Summary

DGTL Holdings (TSXV: DGTL) has announced a non-brokered private placement offering of common and preferred shares at $0.015 per share, aiming to raise up to $75,750. The placement will consist of up to 5,050,000 common shares, offered either directly or through preferred shares convertible into common shares. CEO John Belfontaine, who currently holds 19.33% of shares, plans to subscribe for up to 4,500,000 common shares, which would increase his ownership to approximately 41.79-43.30% of outstanding shares, creating a new Control Person subject to shareholder and TSXV approval. Additionally, the company announced the appointment of Baigel Corp as Licensed Insolvency Trustee for its subsidiary Engagement Labs Inc's bankruptcy proceedings.

Positive

• None.

Negative

• Small private placement size of only $75,750 indicates limited funding
• Subsidiary Engagement Labs Inc is undergoing bankruptcy proceedings
• Significant share dilution with CEO potentially controlling up to 43.30% of shares
• Very low share price of $0.015 suggests company distress

Toronto, Ontario--(Newsfile Corp. - May 13, 2025) - DGTL Holdings Inc. (TSXV: DGTL) ("DGTL" or the "Company"), reports that the Company intends to complete a non-brokered private placement (the "Private Placement") of common shares ("Common Shares") and preferred shares ("Preferred Shares"). The Private Placement will be offered at a price of $0.015 per one Common Share, and, with fifteen (15) Preferred Shares convertible into one Common Share ("Preferred Share Units"), each Preferred Share Unit will also be offered at a price of $0.015 per unit. The Private Placement is for aggregate gross proceeds of up to $75,750, and will consist of up to a total of 5,050,000 Common Shares, which may be offered through the sale of Common Shares directly or indirectly through the sale of Preferred Shares that convert into Common Shares, or any combination of the two. The Company anticipates that, upon completion of the Private Placement, a new Control Person (as defined below), Mr. John Belfontaine ("Mr. Belfontaine"), will be created, subject to obtaining requisite approval from the shareholders of the Company and the TSX Venture Exchange (the "TSXV").

All securities issued in connection with the Private Placement 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. The Private Placement is subject to all necessary corporate and regulatory approvals, including approval of the TSX Venture Exchange pursuant to TSXV Policy 4.1 - Private Placements ("Policy 4.1"). The use of proceeds will be dedicated to general working capital with no specific use of proceeds representing 10% or more of the gross, nor will any proceeds be used for investor relations activities.

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.

Creation of New Control Person

Mr. Belfontaine, the CEO of the Company, directly and indirectly holds 2,057,090 Common Shares, representing approximately 19.33% of the current issued and outstanding shares of the Company. Mr. Belfontaine intends to subscribe for up to 4,500,000 Common Shares pursuant to the Private Placement. Assuming Mr. Belfontaine is the only subscriber, Mr. Belfontaine will have control or direction over, directly or indirectly, 43.30% of the 15,142,071 issued and outstanding Common Shares on an undiluted basis. If the Private Placement is fully subscribed, Mr. Belfontaine will have control or direction over, directly or indirectly, 41.79% of the 15,692,071 issued and outstanding Common Shares on both an undiluted and partially diluted basis (the " Belfontaine Subscription"). The Belfontaine Subscription will be held in escrow, pending the Company receiving all applicable regulatory approvals and receiving disinterested shareholder approval of the creation of a new Control Person at the next annual shareholder meeting. Should such approvals not be obtained, the funds would be returned to Mr. Belfontaine.

Policy 4.1 of the TSXV Corporate Finance Manual requires shareholder approval where a transaction creates a shareholder that holds or controls 20% or more of an issuer's shares (a "Control Person"). The Company anticipates that the Belfontaine Subscription will create a new Control Person pursuant to Policy 4.1. To fulfil the requirements of Policy 4.1, the Company intends to seek approval of shareholders holding or controlling more than 50% of its Common Shares to approve the creation of the new Control Person at the next shareholder meeting of the Company.

Related Party Transaction

Christopher Foster and George Kovalyov, each a director of the Company, may also elect to participate in the proposed Private Placement. Together with the Belfontaine Subscription, this 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 relies on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(b) and 5.7(1)(b) as no securities of the Company are listed or quoted on the Toronto Stock Exchange, the New York Stock Exchange, the American Stock Exchange, the NASDAQ Stock Market, or a stock exchange outside of Canada and the United States other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc and the fair market value of the securities to be distributed in the Private Placement does not exceed $2,500,000.

Winddown of Engagement Labs Inc.

Finally, the Company reports that it has appointed Baigel Corp ("Baigel") as the Licensed Insolvency Trustee of Engagement Labs Inc ("EL Inc."). This formal appointment was affirmed at a meeting of creditors and Baigel Law is now responsible for the bankruptcy estate of Engagement Labs Inc. and maintains the sole authority for managing the legal affairs of Engagement Labs Inc. This initiative represents the final wind down of wholly owned subsidiaries acquired under former CEO Michael Racic.

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 shareholder meeting, any approval thereof by the TSXV or by shareholders of the Company, and the Belfontaine Subscription. 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) any inability of DGTL to obtain shareholder approval of the proposed creation of a new Control Person; 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/251932

FAQ

What is the size and price of DGTL Holdings (DGTHF) private placement announced on May 13, 2025?

DGTL Holdings announced a private placement for gross proceeds of up to $75,750, offering common and preferred shares at $0.015 per share, consisting of up to 5,050,000 common shares.

How much ownership will CEO John Belfontaine have in DGTL Holdings after the private placement?

After the private placement, CEO John Belfontaine's ownership could increase from 19.33% to between 41.79% and 43.30% of outstanding shares, depending on other subscribers.

What approvals are required for DGTL Holdings' private placement?

The private placement requires TSX Venture Exchange approval and disinterested shareholder approval for creating a new Control Person at the next annual shareholder meeting.

What is happening with DGTL Holdings' subsidiary Engagement Labs Inc?

Engagement Labs Inc is undergoing bankruptcy proceedings, with Baigel Corp appointed as the Licensed Insolvency Trustee responsible for managing the bankruptcy estate.

What will DGTL Holdings use the private placement proceeds for?

The proceeds will be used for general working capital, with no specific use representing 10% or more of the gross proceeds, and no funds allocated for investor relations activities.