Mr. Steve Fray reports
GOLDMONEY INC. INVESTEE MENE RAISES EQUITY & GOLD-SECURED NOTE FINANCING
Goldmoney Inc. investee company Mene Inc. has entered into agreements to raise $30-million in equity and gold-secured note financing from Canaccord Genuity Corp. and a private institutional investor, with potential for additional gross financings of over $100-million including potential warrant exercise proceeds and an indication of interest for additional gold note debt financing.
The new round of financing confirms investor confidence in Mene's unique and disruptive business model, which is reinforming the Western consumer of the concept of 24-karat investment jewellery. Mene's on-line platform launched 11 months ago and has already surpassed 10,000 orders from customers in over 50 countries and reached approximately $2-million in revenue (43-per-cent increase quarter over quarter) during the quarter ended Sept. 30, 2018. Goldmoney currently holds 79.8 million Class B subordinate shares of Mene, representing 36.7 per cent of the issued and outstanding shares of Mene on a non-diluted basis.
As previously announced on Nov. 26, Goldmoney will distribute to its shareholders on a pro rata basis of 3.99 million Class B subordinate voting shares of Mene, or approximately 0.05195 of a Mene share for each common share of Goldmoney held as of close of business on Nov. 30, 2018. The distribution of common shares of Mene is payable on Dec. 7, 2018. Postdistribution and financing closing date, Goldmoney will continue to hold approximately 32.7 per cent of the issued and outstanding shares of Mene on a non-diluted basis and intends to distribute additional shares of Mene to Goldmoney shareholders in the future.
"Goldmoney would like to congratulate Mene for a potentially transformational financing," said James Turk, Goldmoney lead director. "With an institutional commitment of up to $100-million through an innovative gold-secured note facility, secured by the company's 24-karat gold and platinum inventory at the company's vaulted fulfilment centre, Mene is now able to accelerate manufacturing with minimal equity dilution and ramp up to the inventory levels required for rapid growth."
"Incubated and launched in just a few short years, Mene is an exemplary product of Goldmoney's mission to democratize access to gold, and to be a continuous innovation leader in the precious metals sector while providing outstanding long-term returns for shareholders," said Goldmoney director Josh Crumb.
Bought deal equity financing
The equity offering contemplates the issuance and sale of 14,286,000 units of Mene at a price of 70 cents per unit, to be qualified by a short form prospectus. Each unit will consist of one subordinate voting Class B common share of Mene and one-half of one common share purchase warrant. Each warrant will entitle the holder to acquire one common share for two years from the closing of the equity offering at a price of $1.
The units issued pursuant to the equity offering will be qualified by a prospectus in such provinces of Canada as Canaccord Genuity may designate, other than Quebec, and otherwise in those jurisdictions where the equity offering can lawfully be made. Canaccord Genuity has been granted an overallotment option to purchase additional units equal to 15 per cent of the units sold pursuant to the equity offering at the offering price, exercisable at any time up to 30 days after the closing date.
3.00 per cent secured gold note debt financing
The debt financing consists of $20-million principal amount of unique secured gold notes secured by, among other things, Mene's 24-karat gold and platinum inventory at Mene's vaulted fulfilment centre in New Jersey and 15 million Series B common share purchase warrants of Mene. Each debt offering warrant will entitle the holder to acquire one Series B common share of Mene for two years from the closing of the debt offering at a price of $1 per share. The debt offering warrants will be qualified by a prospectus.
The gold notes bear an interest rate of 3 per cent per annum payable semi-annually in arrears on June 30 and Dec. 31 of each year, commencing Dec. 31, 2018. Interest shall be computed on the basis of a 360-day year composed of 12 30-day months. The Dec. 31, 2018, interest payment will represent accrued interest for the period from the closing date to Dec. 31, 2018.
Mene has received a binding commitment from the private institutional investor for $20-million aggregate principal amount of gold notes with an indication of interest for an additional $80-million aggregate principal amount of gold notes at Mene's discretion.
The closing date of the equity offering and the debt financing is scheduled to be on or about Dec. 19, 2018, and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of TSX Venture Exchange and the issuance of receipts for the final prospectus by applicable Canadian Securities Administrators.
We seek Safe Harbor.
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