VANCOUVER, BRITISH COLUMBIA, February 21, 2013 - Delon Resources Corp. (CNSX: DLN) ("Delon" or the "Company") is pleased to announce that it has closed the first tranche of its $3,500,000 private placement (the "First Tranche") previously announced on October 19, 2012 and updated on November 8, 2012. The First Tranche of the private placement consisted of 2,675,700 subscription receipts at a price of $0.60 per subscription receipt for gross proceeds of $1,605,420, and the Company expects to complete the balance of the private placement in early March, 2013 for aggregate proceeds of $3,500,000.
Following completion of Delon's acquisition (the "Transaction") of all of the issued and outstanding shares of common stock of Gener8 Digital Media Corp. ("Gener8"), the proceeds from the private placement will be utilized to develop Gener8's industry leading technologies.
Concurrent with the closing of the Transaction and the consolidation of the common shares of Delon on the basis of 1 new Delon common share for each 2 pre-existing Delon common shares, each subscription receipt will be automatically converted into one unit (each a "Unit") for no additional consideration. Each Unit will consist of one post-consolidated common share of Delon (each a "Share") and one-half of one share purchase warrant (each a "Warrant"). Each whole Warrant will entitle the holder to purchase one additional post-consolidated Share at a price of $0.80 for a period of three years from the closing of the First Tranche. The Warrants are subject to an accelerated expiry whereby if the volume weighted average trading price of Delon's common shares exceeds $1.00 for a period of 20 consecutive trading days, Delon may provide notice to the Warrant holders of early expiry and the Warrants will expire on the date which is 30 days after the date of such notice.
The securities issued under the First Tranche are subject to a four month hold period which will expire on June 21, 2013. Upon completion of the Transaction, Delon has agreed to pay compensation to certain finders in connection with the private placement as follows (i) aggregate cash commissions of $128,434 representing 8% of the gross proceeds received by Delon from the sale of subscription receipts to purchasers introduced to Delon by the finders and (ii) share purchase warrants, having the same attributes as the Warrants, for the purchase of an aggregate of 214,056 common shares representing 8% of the number of subscription receipts sold to purchasers introduced to Delon by the finders. The share purchase warrants issued to the finder's, and any underlying securities, will be subject to a four month hold period.
The completion of the Transaction is subject to a number of additional conditions, including, but not limited to, approval of the Transaction by the board of directors and securityholders of each of the Company and Gener8, receipt of an order of the Supreme Court of British Columbia, if applicable, completion of the Concurrent Financing, the receipt of a fairness opinion and the approval of the CNSX. There can be no assurance that the Transaction will be completed as proposed, or at all and trading in the Company's securities should be considered highly speculative.
ON BEHALF OF THE BOARD
Chief Executive Officer and Director
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The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This news release does not constitute an offer for sale of securities for sale, nor a solicitation for offers to buy any securities.
The CNSX does not accept responsibility for the adequacy or accuracy of this release.
Forward Looking Statements
This press release contains forward-looking statements concerning the issue of subscription receipts and the acquisition of Gener8. These forward-looking statements are based on assumptions and judgments of management regarding the sale of the subscription receipts and the acquisition that may prove to be inaccurate due to factors beyond Delon's control, including the satisfaction of conditions to the closing of the acquisition and the offering of subscription receipts. Although Delon has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking statements, there may be other factors that cause results not to be as anticipated or intended. There is no assurance that such information will prove to be accurate, as future events could differ materially from those anticipated in such information and accordingly, there is no assurance that the acquisition of Gener8 and the completion of the offering of subscription receipts will be completed as anticipated. Readers should not place undue reliance on forward-looking statements.
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