QYOU Media Inc. (TSXV: QYOU) (OTCQB: QYOUF) says it has completed its previously announced non-brokered private placement of Units. The transaction remains subject to final approval from the TSX Venture Exchange.
#Offering raises $750,000 in gross proceeds
The company issued 25,000,000 Units at $0.03 per Unit, generating aggregate gross proceeds of $750,000.
Each Unit consists of one Common Share and three-quarters (3/4) of one common share purchase Warrant. Every whole Warrant allows its holder to purchase one Common Share at $0.06 per Common Share until September 12, 2027.
#Planned use of proceeds
QYOU Media said the net proceeds will be allocated toward the partial repayment of outstanding loans, the partial payment of amounts due from the original acquisition of its subsidiary Chatterbox Technologies Limited, as well as working capital and general corporate purposes.
The company identifies statements about the use of proceeds and the receipt of regulatory approvals as forward-looking information. It cautions that these statements are subject to assumptions, risks and uncertainties, and that actual outcomes may differ materially from those anticipated.
#Finder compensation and warrant terms
QYOU Media paid an aggregate of $30,551.73 in finder's fees and issued Finder's Warrants to acquire up to an additional 991,711 Units to persons who assisted with the offering.
Each Finder's Warrant permits the holder to acquire one Unit at $0.05 per Unit until September 12, 2027. A Unit acquired through a Finder's Warrant consists of one Common Share and three-quarters (3/4) of one Warrant. The Warrants issued upon exercise of the Finder's Warrants allow the holder to acquire one Common Share at $0.06 per Common Share until September 12, 2027.
#Insider participation classified as related-party transaction
Directors, officers and insiders subscribed for 3,334,000 Units. The company said this participation constitutes a related-party transaction under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.
QYOU Media said the related-party issuance is exempt from the formal valuation and minority approval requirements under MI 61-101 and TSX Venture Exchange Policy 5.9. The stated exemptions apply because the Common Shares trade on the TSXV and neither the fair market value of the Units issued to related parties nor the consideration paid by those parties exceeds 25% of the company's market capitalization as calculated for MI 61-101 purposes.
The company said no new insiders were created and no Change of Control under TSXV rules resulted from the subscriptions. It also said it did not file a material change report more than 21 days before the expected closing because the details and amounts of related-party participation were not finalised until closer to closing, and it wished to close the offering as soon as practicable for sound business reasons.
#Trading restrictions and regulatory status
All securities issued in the offering, including the Finder's Warrants and the Common Shares and Warrants underlying the Units issuable upon exercise of the Finder's Warrants, will be subject to a four-month plus one day hold period under applicable Canadian securities laws.
The securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or under state securities laws. They may not be offered or sold to, or for the account or benefit of, persons in the United States or U.S. persons without registration under the U.S. Securities Act and all applicable state securities laws, or compliance with the requirements of an exemption.
The offering remains subject to the final approval of the TSX Venture Exchange. QYOU Media operates in India and the United States through subsidiaries that produce, distribute and monetise content created by social media influencers and digital content creators.
#Key Takeaways
- QYOU Media issued 25,000,000 Units at $0.03 per Unit for aggregate gross proceeds of $750,000.
- Each Unit includes one Common Share and three-quarters (3/4) of one Warrant, with each whole Warrant exercisable at $0.06 per Common Share until September 12, 2027.
- Net proceeds are designated for partial loan repayment, amounts due from the original acquisition of Chatterbox Technologies Limited, working capital and general corporate purposes.
- Directors, officers and insiders subscribed for 3,334,000 Units in a related-party transaction.
- The offering remains subject to final TSX Venture Exchange approval, and the issued securities carry a four-month plus one day hold period.
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