OTTAWA, May 30, 2019 /CNW/ - Leonovus Inc.,
("Leonovus, the Company, we and our") (TSXV: LTV) (OTC:
LVNSF) today announced that it has engaged Entoro
Securities, LLC ("Entoro" or the "Placement Agent")
of Houston, Texas to act as the
lead placement agent for the offer and sale of the Company's
digital security called GAAX. Entoro is an investment bank and
advisory group for digital securities. The Galaxa project and the
offering of GAAX were previously disclosed in news releases dated
December 21, 2017, September 4, 2018, November 2, 2018, November
12, 2018, and January 16,
2019.
The Offering
GAAX will be sold in the offering at two prices. The first
USD$5,000,000 of GAAX will be sold at
a price of USD$0.00075 each, with the
remainder being sold at a price of USD$0.001 each. The minimum subscription amount
will be USD$25,000. The Placement
Agent will build a syndicate of broker dealers to raise a minimum
of US$10,000,000 and a maximum of
US$25,000,000 paid in USD, EUROS,
Bitcoin (BTC) or Ethereum (ETH) on a best efforts basis (the
"Offering"). Regardless of payment by the investor in
fiat or cryptocurrency, it will be immediately converted into USD
at the prevailing market rate. There can be no guarantee of the
success of the Offering or any part thereof including the ability
to convert investments from BTC or ETH into USD.
Proceeds of the Offering will be deposited by the Placement
Agent in escrow at Signature Bank of New
York pending completion of the Offering, upon which the
gross proceeds will be delivered to the Company less the fees
payable to advisors as disclosed below.
GAAX will not be tradeable upon the closing of the Offering. The
Offering is being conducted under exemptions from the prospectus
requirement of Ontario securities
law, and, in the United States,
under comparable exemptions. In Ontario, GAAX will not be tradeable until it
has been qualified by a prospectus, or an exemption from the
prospectus requirement applies. The Company does not have any
current plans to file a prospectus with the Ontario Securities
Commission, however it aspires to do so in the future.
Closing of the Offering is subject to TSX Venture Exchange
approval. The distribution of GAAX is being handled by the
Company.
Rights of GAAX holders are set forth on page 18 of the Business
Plan. There are no traditional share rights attributable to GAAX or
GAAX holders. GAAX holders will not rank in priority to any
debtholders or sharehodlers of the Company. Funds raised from the
Offering will be used by the Company to continue product
development, marketing, administration, and other costs arising
from the Galaxa project. The Company is currently in
discussions with its auditors regarding the accounting treatment of
this transaction.
Advisors
The Offering is being conducted on a best efforts basis by the
Placement Agent. The Placement Agent will receive as compensation
for the services provided by the Placement Agent an amount of cash
equal to 1.75% of the fiat and cryptocurrency received by the
Company through the sale of the GAAX. Additionally, the Placement
Agent shall receive as compensation for fiat or cryptocurrency
received by the Issuer from an investor identified by the Placement
Agent an additional amount of cash equal to 5.00% of fiat or
cryptocurrency received.
"We believe this is an excellent opportunity for investors in
the data center or related businesses as the Galaxa project will
take cloud computing to the next level of service globally," said
James C. Row, CFA, Managing Partner
of Entoro Capital. The project will be listed on Entoro's
proprietary offerings platform OfferBoard®.
The Company has retained Securitize Inc. ("Securitize")
to provide hosted software as a service that enables the Company to
prepare, facilitate, and manage the Offering (the "Portal").
Securitize provides the compliance platform that electronically
qualifies GAAX investors. The Securitize DS Protocol provides
end-to-end seamless token and investor management services for
GAAX.
The Company has paid to Securitize a one-time setup fee of
US$60,000. Securitize will be
entitled to receive a warrant to purchase US$150,000 of GAAX at a price equal to the lowest
price paid by investors for GAAX in the Offering for 18 months from
the closing of the Offering. The Company is paying Securitize a
monthly fee of US$5,000 per month for
ongoing use of the Portal.
The Company has retained Digimax Capital Inc. ("Digimax")
to provide services in connection with the Offering, including
assistance with due diligence and negotiation of commissions paid
to all parties. The fees payable to Digimax are as follows: a work
fee of US$15,000 plus applicable
taxes, a consulting fee of US$437,500
plus applicable taxes payable against the raising of US$25,000,000 through the sale of any form of
securities of the Company on a percentage-of-completion basis
equivalent to the percentage of amounts closed by the Placement
Agent and received by the Company.
The Company has retained RockTree LEX Limited
("RockTree") to assist the Company with identifying
subscribers in Singapore and
Hong Kong on a best efforts basis
("Offshore Subscribers"). The Company will pay RockTree a
work fee of CAD$7,500 per month
during the engagement up to a maximum of CAD$30,000. The Company will pay RockTree a fee
equal to 6.5% of the gross proceeds received from Offshore
Subscribers. The Company has granted RockTree the option to
purchase GAAX in an amount up to 2% of the total amount of GAAX
sold by the Company to Offshore Subscribers, at a price equal to
the lowest price paid by investors for GAAX in the Offering,
exercisable on a cashless basis for a period of 5 years following
the closing of the Offering.
The Company has also retained RockTree to provide advisory
services in connection with the Offering. The Company will pay
RockTree a commencement fee of CAD$20,000, as well as CAD$10,000 per month for a maximum of 5 months.
The Company will pay RockTree a cash commission equal to 0.5% of
the total number of GAAX sold in the Offering for its advisory
services.
Galaxa
The Galaxa blockchain platform incorporates the patented
distributed storage and compute technology developed by Leonovus
Inc. Galaxa will be the first blockchain-enabled, enterprise-class,
Anything-as-a-Service (XaaS) distributed storage and compute
marketplace. The Galaxa blockchain protocol will be powered by a
native utility token. These utility tokens are separate from
the investment digital securities named GAAX.
Annually, new GAAX will be created at the rate of 2% of the
previous year's total issued and outstanding digital securities.
These new GAAX will be issued quarterly. 30% of these securities
will be issued to current digital security holders and the balance
will be issued to Leonovus Inc. to continuously fund the
development of the marketplace.
GAAX is a Digital Security because the owners of the digital
security will receive regular distributions most likely in the form
of BTC or ETH. Because GAAX is a digital security, a Regulated
Digital Security Exchange ("DSE") is required to buy and sell GAAX
if and when it becomes tradeable. At the beginning of 2019 there
are Digital Security Exchanges being developed in Canada, the USA, Singapore, Hong
Kong, Gibraltar,
Switzerland, the Bahamas and Malta.
Further details of Galaxa and GAAX are set forth in the
Company's business plan, available at www.galaxa.com (the
"Business Plan") and available on www.sedar.com.
"Our vision is for Galaxa to become one of the largest data
centers and cloud service providers in the world without owning any
data centers. We estimate that it will take 12 to 24 months to
build Galaxa and generate initial revenues. The GAAX digital
security offering, to accredited investors only, is a rather unique
investment instrument as the holder of GAAX will receive monthly
distributions as a percentage of the top line Galaxa revenues,"
said Michael Gaffney, Chair and
CEO.
Galaxa will be the first cloud Anything as a Service
("XaaS") distributed storage and compute shared economy
marketplace designed to address the unique requirements of
enterprise customers for global on-demand, hyper-secure, hybrid and
multi-cloud, storage and compute services.
"The data storage and compute needs of large enterprises is
growing. Enterprises are searching for solutions other than the
current oligopoly that controls 72% of the cloud market. CIO's and
IT Managers want to purchase cloud storage, compute and other
distributed services just like they call an UBER rideshare or book
an Airbnb lodging. They need security and compliance in the cloud,
but they also want to be cloud agnostic and not locked in to one or
few vendors. The shared economy is coming to the enterprise and to
the cloud," said Gaffney.
Leonovus has invested over US$33,000,000 to date in building a robust and
secure digital storage platform technology, including a unique
blockchain-based compliance feature, that will form the foundation
of the Galaxa marketplace. GAAX are not convertible or exchangeable
into shares of Leonovus. Holders of GAAX are not entitled to vote
at meetings of the Company. Pursuant to continuous disclosure
regulations, Leonovus will provide timely disclosure on its
progress and use of proceeds to develop and deploy the Galaxa
marketplace within the twenty-four month target as well as material
event disclosure.
The Offering is being conducted under exemptions from the
prospectus requirements of Ontario
securities law and under comparable exemptions in the United States including pursuant to
Rule 506(c) of Regulation D
("Regulation D") promulgated by the U.S. Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "1933
Act"), and Regulation S under the 1933 Act. Sales of the Digital
Securities will only be made to (a) Offerees in the United States
who are "accredited investors," as such term is defined in Rule
501(a) of Regulation D, and (b) Offerees outside the United States
who are not "US Persons," as defined in Regulation S under the 1933
Act and are accredited investors pursuant to the applicable laws of
the jurisdiction of residence of such Offerees. Only qualified
investors acceptable to the Company will be permitted to
participate in the Offering.
GAAX are not and will not be tradeable on the closing of the
Offering. Currently, there are no regulated exchanges in
Canada to trade digital securities
like GAAX. Once the statutory hold periods have ended the Open
Finance Network in the USA is
approved to trade digital securities such as GAAX. The Company
expects several regulated digital security exchanges to launch in
various global jurisdictions in the next one to three years. In
Ontario, GAAX will not be
tradeable until it has been qualified by a prospectus, or an
exemption from the prospectus requirement applies. The Company does
not have any current plans to file a prospectus with the Ontario
Securities Commission or the SEC.
More information can be found at www.galaxa.com.
About Leonovus
Leonovus is a cloud solutions software provider that offers the
leading blockchain hardened hyper-secure software-defined object
storage solution. Designed with the IT manager in mind,
Leonovus' patented algorithms encrypt, shred and spread data across
a network of on-premises, hybrid or multi-cloud storage nodes –
allowing for the most secure yet internally accessible form of
object-based data storage across the entire solution. The advanced
geo-distributed architecture minimizes latency, optimizes
geo-availability, reduces remote backup costs and meets data
sovereignty requirements. With its software and hardware agnostic
design, Leonovus provides petabyte scalability and allows the
enterprise to utilize its existing idle storage resources, extend
the useable lifespan of depreciated resources and improve the
enterprise's overall ROI. To learn more, please visit
www.leonovus.com and www.galaxa.com.
LinkedIn: https://ca.linkedin.com/company/leonovus-inc./
Twitter: https://twitter.com/LeonovusInc
Facebook: https://www.facebook.com/LeonovusInc/
Galaxa
LinkedIn: https://www.linkedin.com/company/galaxaxaas
Twitter: https://twitter.com/GalaxaXaaS
Facebook: https://www.facebook.com/GalaxaXaaS
About Entoro Capital
Entoro uses its proprietary online private securities
syndication platform OfferBoard® for accredited
investors to analyze and review projects and opportunities.
Entoro's strength is in bringing highly vetted projects to
investors globally, with maximum efficiency, end-to-end security,
and with seamless execution, delivering total confidence in each
investment. Entoro's investment platform combined with blockchain
technology provides Companys and investors access, flexibility and
transparency throughout the investment process. Securities are
offered through Entoro Securities, LLC, member FINRA/SIPC.
LinkedIn: https://www.linkedin.com/company/entoro/
Twitter: https://twitter.com/EntoroCapital
Entoro News: https://www.entoro.com/news
Contact: Morgan Williams
mwilliams@entoro.com
Cautionary Note Regarding Forward Looking Statements
This press release contains "forward-looking statements" within
the meaning of applicable securities laws. Forward-looking
statements can be identified by words such as: "anticipate,"
"intend," "plan," "goal," "seek," "believe," "project," "estimate,"
"expect," "strategy," "future," "likely," "may," "should," "will"
and similar references to future periods.
The results or events predicted in these statements may differ
materially from actual results or events. Factors that might cause
a difference include, but are not limited to, competitive
developments, risks associated with Leonovus' growth, the state of
the financial markets, regulatory risks and other factors. There
can be no assurance or guarantees that any statements of
forward-looking information contained in this release will prove to
be accurate. Actual results and future events could differ
materially from those anticipated in such statements. These
and all subsequent written and oral statements containing
forward-looking information are based on the estimates and opinions
of management on the dates they are made and expressly qualified in
their entirety by this notice. Unless otherwise required by
applicable securities laws, Leonovus disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise. Readers should not place undue reliance on any
statements of forward-looking information that speak only as of the
date of this release. Further information on Leonovus' public
filings, including its most recent audited consolidated financial
statements, are available at www.sedar.com.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Leonovus Inc.
