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Mogo Inc. (NASDAQ:MOGO) (TSX:MOGO) (“Mogo” or the “Company”), a digital payments and financial technology company, today announced that it intends to increase its ownership position in Coinsquare Ltd. (“Coinsquare”), Canada’s leading digital asset trading platform, through the acquisition of an additional 5.4 million common shares of Coinsquare, which would increase Mogo’s ownership in Coinsquare from 19.9% to approximately 37%.
The purchase is expected to be completed in two separate transactions: 1) the exercising of Mogo’s call option on 3.2 million Coinsquare common shares from existing Coinsquare shareholders under the investment agreement between Mogo, Coinsquare and certain shareholders of Coinsquare dated February 10, 2021 (see press release of Mogo dated February 11, 2021); and 2) the purchase of 2.2 million common shares of Coinsquare from Riot Blockchain Inc. (NASDAQ:RIOT) (“Riot”) pursuant to a binding term sheet entered by the parties on May 12, 2021. Purchase consideration for the Coinsquare shares to be acquired under the two transactions is expected to range between $46.9 million and $48.6 million, payable, at Mogo’s option, in cash or common shares. The acquisition from Riot is expected to complete in late May 2021 and the option exercise is expected to complete in early June 2021. The transactions are subject to certain closing conditions customary for transactions of this nature, including regulatory approval, which includes the approval of the Toronto Stock Exchange. Following the closing of this transaction, Mogo will begin accounting for its position in Coinsquare using the equity method in accordance with IAS 28, whereby Mogo would report its proportionate share of Coinsquare’s net income in its own statement of profit and loss.