OTTAWA, May 30, 2019 - 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 (GAAX) to accredited investors to fund the Galaxa project. Entoro is an investment bank and advisory group for digital securities.
“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® or investors can go directly to the investment site galaxa.lp.securitize.io to review the Offering documents and view the investment process. 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, processes their investment and deposits funds with the escrow agent, Signature Bank of New York. The Securitize DS Protocol provides end-to-end seamless token and investor management services for GAAX.
The Offering is being conducted under 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 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 investment amount is 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 on a best efforts basis (the “Offering”). There can be no guarantee of the success of the Offering or any part thereof. This offering is denominated in USD, but the GAAX investment can be paid on the Securitize platform with BTC, ETH,
USD or EUR.
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.
The Galaxa Project
Galaxa is the first cloud XaaS distributed storage and compute marketplace designed to address the unique requirements of enterprise customers for global on-demand, hyper-secure, hybrid and multicloud, storage and compute services. The Galaxa blockchain is powered by a digital security called GAAX. Galaxa is a distributed framework for the exchange of value for services in a secure, thrustless environment with infrastructure that is designed for today’s stringent corporate governance and regulatory environments. The marketplace is a blockchain powered, decentralized network with nonintrusive oversight and governance enabled by a distributed-services brokering engine.
Two companies dominate the cloud services market and control over 73% of the market. This duopoly provides the strategic business opportunity for Galaxa. While the cloud ecosystem expands rapidly, enterprise customers are experiencing exponential growth in their data storage needs and data workload requirements. To meet these needs, enterprise customers increasingly move from their own data centres to the public cloud. With significant prices charged by major Cloud Services Providers (CSPs) for data egress, enterprise customers with growing data footprints are becoming more and more tied to these providers. Many enterprise customers have experienced the pains and costs of vendor lock-in within their data centres and are similarly wary of becoming locked-in to specific CSPs. Galaxa addresses that problem and more.
“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. 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.
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.
The GAAX Digital Security and Monthly Cashflow Distributions to Investors
Galaxa will charge a User Fee of 11% of revenues received in the Galaxa marketplace. GAAX digital security holders will receive monthly distributions of 70% of the User Fee; Galaxa receives 20% of the User Fee; System Moderators (master nodes) and developers receive 10% of the User Fee. These monthly distributions continue until the digital security holders receive a cumulative distribution return of ten times (’10 Threshold’) the initial investment paid by the investors in the first private placement. After reaching the 10 Threshold, GAAX owners will receive 45% of the User Fee in perpetuity with the balance paid to Galaxa and Moderators to maintain and support the marketplace.
Further details about the project and the Offering documents can be found at www.galaxa.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.