Hello Pal Announces Proposed Transaction0 to Acquire Interests in Dogecoin/Litecoin Mining Facility and Mining Assets

Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.

Private Placement to Raise up to C$5 Million by way of Subscription Receipts

Vancouver, BC – March 8, 2021 –Hello Pal International Inc. (“Hello Pal” or the “Company”) (CSE:HP Frankfurt:27H OTC:HLLPF), a provider of rapidly growing international live-streaming, social messaging and language learning mobile apps, is pleased to announce that it has entered into a letter of intent (the “Agreement”) with Shanghai Yitang Data Technology Co. Ltd. (“Yitang”) to acquire:

(a) an initial 15% interest in a cryptocurrency mining facility (the “Mining Facility”) located in North-West China to be dedicated to mining Dogecoin (DOGE) and Litecoin (LTC), with an option to increase such interest to 35%; and

(b) an initial 51% interest in a number of mining rigs also dedicated to mining Dogecoin and Litecoin (the “Mining Assets”), with an option to increase such interest to 100%. The number of mining rigs has been agreed to be a minimum of 12,500, with potentially up to 2,500 more (at no extra cost to the Company), depending on how many more can be secured by Yitang before completion (together, the “Transaction”).

The Transaction:

The Mining Facility, when completed, will be able to house 90,000 mining rigs and have a capacity of 70MW, which the Company believes will make it one of the largest dedicated Dogecoin/Litecoin mining facility in the world. When fully deployed, the Mining Assets are believed to account for 3-5% of the Dogecoin/Litecoin hashrate in the world, which the Company believes would make it the world’s third largest Dogecoin/Litecoin miner.

The Company has agreed to acquire the initial 15% interest in the Mining Facility for a cash payment of RMB 5,000,000 (equal to approximately C$1,000,000) and the Company will have the option to acquire a further 20% interest in the Mining Facility (for a total interest of 35%) for an additional cash payment to be agreed upon between the parties, each acting reasonably, however, not to exceed RMB 8,000,000.

The Company has also agreed to acquire the initial 51% interest in the Mining Assets for C$1,500,000 in cash and 1,800,000 units of the Company (the “Consideration Units”) valued at C$2,250,000. Each Consideration Unit will have a deemed value of C$1.25 and consist of one common share of the Company (each, a “Common Share”) and one-half of one common share purchase warrant of the Company (each whole common share purchase warrant, a “Consideration Warrant”). Each Consideration Warrant will entitle the holder thereof to acquire one Common Share at an exercise price of C$2.00 for a period of two years from the date of issue.

For a period of two years following the acquisition of the initial 51%, the Company will have the option to acquire a further 49% interest in the Mining Assets (for a total interest of 100%) for an additional payment, as to half in cash and half in common shares in the capital of the Company (the number of common shares to be determined in the context of the market), where the valuation of the Mining Assets is dependent on their net profit over a 12-month period immediately preceding the date on which this option is exercised, multiplied by a formulated multiplier.

“We are excited to expand our crypto strategy to also include Dogecoin and Litecoin, which we believe will play an increasingly important role in the cryptocurrency world going forward,” said KL Wong, Founder and Chairman of the Company. “The Hello Pal community, especially what we envision for it to become, is a natural fit with the Dogecoin/Litecoin community, and this deal allows us to become a key player in it,” he added.

The Company also announces that it has entered into an agreement with Canaccord Genuity Corporation (“Canaccord”) in connection with a “best efforts” private placement of up to 4,000,000 subscription receipts of the Company (the “Subscription Receipts”) at a price of C$1.25 per Subscription Receipt (the “Issue Price”) for aggregate gross proceeds of up to C$5,000,000 (the “Offering”). Each Subscription Receipt will be automatically exercised into one unit of the Company (each, a “Unit”) upon completion of the Transaction. Each Unit will consist of one common share of the Company (each, a “Share”) and one-half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”), with each Warrant entitling the holder thereof to purchase one Share (each, a “Warrant Share”) at a price of C$2.00 for a period of two years from the date of issue. The Company has granted to Canaccord an option to sell up to an additional 4,000,000 Subscription Receipts at the Issue Price for additional gross proceeds of up to C$5,000,000, exercisable in whole or in part at any time up to 48 hours prior to the closing of the Offering. The proceeds from the sale of the Subscription Receipts will be held in escrow pending completion of the Transaction and, following completion of the Transaction, are expected to be used towards the purchases of the Mining Facility and the Mining Assets described above, further potential asset acquisitions pursuant to the Company’s cryptocurrency strategy, expansion of its livestreaming operations, and for working capital purposes.

Completion of the Transaction will be subject to certain conditions, including but not limited to: (a) the receipt of all necessary approvals of the boards of directors of the Company and Yitang; (b) the receipt of all required consents and approvals, including without limitation, approval of the Transaction by the CSE; and (c) the completion of satisfactory mutual due diligence. The agreement may be terminated by either party if (a) they mutually agree; or (b) the definitive agreements with respect to the Transaction has not been executed on or before May 31, 2021 or such later date as may be agreed to by the parties.

About Yitang

Yitang, a leading provider of digital wallet services with over USD70 million in crypto-assets under management, is also helping the Company to revamp and reintroduce its digital wallet as well as its own digital token called “Palto”. Upon completion of the revamp, the Company’s current virtual tokens used on its livestreaming platform is expected to be fully enhanced and backed by blockchain technology, with the Palto and popular cryptocurrency such as Bitcoin, Ethereum, Litecoin and Dogecoin accepted throughout the platform. First launched in 2018 (see news release October 9^th, 2018), the Palto (PLT) is a utility token that will be used across the entire Hello Pal suite of apps in order to allow for the borderless transfer of value between Hello Pal users across the world.

“We are particularly bullish about the future of Dogecoin, especially in the potential of it becoming “the currency of the people”,” said Hans Xu, advisor to Hello Pal. “On the back of our previously-announced Bitcoin mining initiative, we expect this deal to help us increase the prominence of cryptocurrencies among our users even further.”

——

To download Hello Pal please visit the IOS or Android store. For information with respect to the Company or the contents of this news release, please contact the Company at (604) 683-0911 or visit the website at hellopal.com. Email inquiries can be directed to: investors@hellopal.com.

About the Hello Pal Platform

The Hello Pal Platform is a proprietary suite of mobile applications built on a user-friendly messaging interface that focus on social interaction, language learning and travel. Hello Pal, has been designed from the ground up to be easy to use and enables users’ the freedom to speak in their own language regardless of the other person’s language they are speaking to. Hello Pal’s overriding mission is to bring the world closer together through social interaction, language learning and travel. By creating a platform where it is easy to instantly interact with others around the world and giving them the tools to communicate with each other in a joyful and fun way, we hope to do our part (however small) in fostering understanding and tolerance between all citizens of the world.

Information set forth in this news release contains forward-looking statements, including expectations regarding completion of the Transaction and the Financing, including the expected use of proceeds from the Financing, as well as statements regarding the expected capacity of the Mining Facility and the Company’s belief that such capacity will make the Company the largest dedicated Dogecoin/Litecoin mining facility in the world, statements regarding the expected percentage of the world’s hashrate the Mining Assets would represent and the Company’s belief that such percentage would make it the world’s third largest Dogecoin/Litecoin miner, and statements with respect to the expected combined value of Dogecoin and Litecoin mined using the Mining Assets over a 12-month period. These statements reflect management’s current estimates, beliefs, intentions, and expectations; they are not guarantees of future performance. Hello Pal cautions that all forward-looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond Hello Pal’s control. Such risks and uncertainties are described in Hello Pal’s annual and interim financial statements available on www.sedar.com. Although Hello Pal is currently generating revenues, Hello Pal remains in the growth stage and such revenues are yet to be profitable. Accordingly, actual, and future events, conditions and results may differ materially from the estimates, beliefs, intentions, and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, Hello Pal undertakes no obligation to publicly update or revise forward-looking information.

THE CSE HAS NEITHER APPROVED NOR DISAPPROVED THE INFORMATION CONTAINED HEREIN AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE

Source: Hello Pal International Inc.