July 15, 2016 08:30 EST
DeepMarkit Business Update
July 15, 2016, DeepMarkit Corp. (“DeepMarkit” or the “Company”) (TSX-V:MKT) is pleased to provide an update on the development of FetchBot™ (“FetchBot”), its SaaS online marketing and promotions platform.
FetchBot is a self-service platform for the creation, customization and operation of promotional campaigns for businesses of all types and sizes.
The FetchBot Platform includes a broad selection of promotion types (instant win, sweepstakes, giveaways, etc.), along with a wide variety of fun and engaging games that clients can add to their promotion. Platform and social media integration, combined with comprehensive reporting and analytics further add to the effectiveness of the FetchBot Platform.
Platform development work and testing has been completed and the Company expects to make the FetchBot Platform available to businesses by the end of July, 2016.
In February, 2016 the Company obtained bridge financing from a related party (news release dated February 18, 2016). $700,000 was advanced under the bridge financing which was in the form of a 10% secured debenture. In order to obtain permanent equity capital to repay the bridge loan and to fund day-to-day operations, the Company announced a $1.3 million private placement of Units consisting of common shares and warrants priced at $0.15 per Unit. (news release dated April 25, 2016). The Company has been unable to complete the Unit private placement and, to date, has also been unable to secure government sponsored initiative grants or loans which had been applied for.
Accordingly, in order to continue its operations, the Company has today completed a new secured Participating Debenture financing with various investors, including two related parties (the “Participating Debentures”) Under this financing the debenture holders have advanced $2,000,000 in long-term debt capital. The aggregate $2,000,000 is made up of the conversion of $700,000 in principal amount of the February, 2016 bridge loan financing into Participating Debentures and $1,300,000 in new debt capital. Of the new capital obtained, $200,000 was advanced from Rupertsland Investment Corp. (“Rupertsland”), a private company controlled by Ranjeet Sundher, an officer, director and shareholder of the Company. Rupertsland was the lender under the original bridge financing. In addition, $800,000 was advanced by Darold H. Parken (and his family members), Mr. Parken is also an officer, director and shareholder of the Company. Rupertsland and Mr. Parken are considered related parties in respect of the transaction.
The Participating Debentures bear both basic and participating interest. Basic interest (“Basic Interest”) on the Participating Debentures will accrue and be paid at the rate of twelve percent (12%) per annum calculated and paid quarterly. Participation interest (“Participation Interest”) will be calculated on the basis of twelve percent (12%) of gross FetchBot campaign sales, if any, and will be paid quarterly, one quarter in arrears. The Participating Debentures have a term of four (4) years.
The Participating Debentures are secured by a fixed and floating first charge on all of the assets of the Company. As additional security, debenture holders have been granted a nonexclusive, unrestricted license to use the FetchBot Platform software in the event of a default in payment of any amounts due under the Participating Debentures or in the event that the Company ceases, for any reason, to diligently pursue the commercial sale of FetchBot campaigns. The license will terminate on payment of all amounts owing under the Participating Debentures, in accordance with the provisions thereof.
DeepMarkit intends to use the proceeds from this financing as follows: (1) to fund the public product launch and marketing of its FetchBot.com promotions platform; (2) for new product and markets development; and (3) for working capital purposes.
The independent directors of DeepMarkit voted unanimously to approve the new debenture financing. Pursuant to Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions, entering into the debenture financing is a related party transaction. Messrs. Sundher and Parken abstained from voting on the matter. The Company is exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the debenture financing in reliance on sections 5.5(a) and 5.7(a), respectively, of MI 61-101, as neither the fair market value of the related party component of the debenture financing, nor the fair market value of the consideration for the related party component of the debenture financing exceeds 25 percent of the Company’s market capitalization as calculated in accordance with MI 61-101.
The material change report in respect of the debenture financing is being filed less than 21 days before the closing of the new debenture financing, as the Company requires the funds it received under the financing immediately to finance its ongoing operating costs.
About the Company
DeepMarkit is a technology company that provides marketing and promotional tools allowing online marketers and business operators to attract customers through online games. DeepMarkit’s customers can easily create their promotional campaigns and customize and brand their games with the FetchBot Platform. The FetchBot Platform includes a full range of features that allow merchants to not only engage their customers and sell more product, but also increase their customer base and build powerful appealing brand awareness.
FetchBot is designed to promote brand awareness, drive lead generation and data acquisition, reward loyalty and generate sales for businesses with physical and/or an online presence.
President & CEO
Darold H. Parken
Exec. VP Corporate Development
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 news release.
There can be no assurance that the products being developed by the Company, including the FetchbotTM Platform will be completed as presently planned, or that, if completed, such products will be accepted in the marketplace. Similarly, there is no assurance that the proposed private placement will be completed or that any government grant financing will be received. Trading in the securities of the Company should be considered highly speculative.
The forward-looking statements contained in this press release are made as of the date of this press release, and DeepMarkit does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.