TORONTO, Oct. 7, 2020 /CNW/ - CryptoStar Corp. (TSXV: CSTR) ("CryptoStar" or the "Company"), a cryptocurrency mining and data centre operator, today announced that it has closed the private placement announced on September 10, 2020, consisting of the issuance of 5,000,000 units ("Units") of the Company at a price of $0.05 per Unit by way of a non-brokered private placement (the "Offering").
Each Unit consists of one common share of CryptoStar (a "Common Share") and one common share purchase warrant of CryptoStar (a "Warrant"). Each Warrant entitles the holder to acquire one Common Share at a price of CAD $0.075 per Common Share for a period of 18 months from the date of issue.
The securities issued in connection with the Offering will be subject to a four-month hold period, in accordance with applicable securities laws.
A.C.N. 117 402 838 PTY LTD ("ACN"), an insider of the Company, participated in the Offering, thereby making the Offering a "related party transaction" as defined under Multilateral Instrument 61–101 ̶ Protection of Minority Security Holders in Special Transactions ("MI 61-101"). ACN purchased 1,061,735 Units, and after the completion of the Private Placement will own 102,624,235 common shares or approximately 46.9% of the total common shares issued and outstanding. The Offering is exempt from the need to obtain minority shareholder and a formal valuation as required by MI 61-101 as neither the fair market value of any units to insiders nor the consideration paid by insiders of the Company exceeds 25% of the Company's market capitalization. No new insiders were created, nor did any change of control result from the Offering.
The Company notes that it has not filed a material change report in connection with the Offering 21 days prior to closing date of Offering. The Company believes this shorter period was reasonable and necessary in the circumstances as the Company wished to complete the Offering in a timely manner.
CryptoStar intends to use the net proceeds from the Offering for business operations and expansion of its business, and for general working capital purposes.
The Company also announced that, further to its news release dated September 29, 2020, the Company and Tandem Innovation Group Inc. ("Tandem") have agreed to amend the consulting agreement relating to the engagement of Mr. Mason M. Darabi as Chief Financial Officer of the Company. Under the amended consulting agreement, the Company will pay Tandem the monthly consulting fee entirely in cash.
About CryptoStar Corp.:
CryptoStar has cryptocurrency mining operations with data centres located in the U.S.A. and Canada. CryptoStar is currently dedicated to becoming one of the lowest cost cryptocurrency producers in North America and a major supplier of GPU and ASIC miners worldwide.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.
This news release contains forward-looking statements. Forward-looking statements can be identified by the use of words such as, "expects", "is expected", "anticipates", "intends", "believes", or variations of such words and phrases or state that certain actions, events or results "may" or "will" be taken, occur or be achieved. Forward-looking statements include those relating to the use of net proceeds from the Offering. Forward-looking statements are not a guarantee of future performance and are based upon a number of estimates and assumptions of management in light of management's experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances. Actual results, performance or achievement could differ materially from that expressed in, or implied by, any forward-looking statements in this press release, and, accordingly, you should not place undue reliance on any such forward-looking statements and they are not guarantees of future results. Forward-looking statements involve significant risks, assumptions, uncertainties and other factors that may cause actual future results or anticipated events to differ materially from those expressed or implied in any forward looking statements. Except as required by law, CryptoStar undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE CryptoStar Corp.
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