DGTL Holdings Inc. (TSXV:DGTL) entered into a definitive arrangement agreement to acquire Engagement Labs Inc. (TSXV:EL) from Loeb Holding Corporation and others for CAD 1.8 million on August 11, 2021. Under the agreement, each Engagement Labs shareholder is expected to receive 0.1136 of a DGTL share in exchange for each Engagement Labs share held. DGTL will issue a total of approximately 5,320,000 shares to the shareholders of Engagement. DGTL will use its reasonable commercial efforts to conduct a financing of subscription receipts to be priced within the context of the market for gross proceeds of a minimum of CAD 2.502990 million ($2 million) on or before October 1, 2021. As per the amending agreement executed on November 29, 2021, deadline for completing arrangement is extended to reduce the size of financing and to extend deadline for completion of Concurrent Financing to December 15, 2021. Subscription Receipt Proceeds will be used to fund operations of Engagement following completion. There is a termination fee commensurate with a transaction of this size being CAD 250,000 payable by either DGTL or EL.

Under the terms of the arrangement, EL Chief Financial Officer and President/ Chief Revenue Officer will remain with the company following the merger. Ed Keller, the Company's Chief Executive Officer will remain with EL through the completion date of the transaction after which he is expected to depart based on mutually negotiated terms. Completion of the arrangement is subject to a number of conditions being satisfied or waived by either or both of DGTL and EL at or prior to closing of the arrangement, including: approval of EL shareholders, together with any requisite minority approvals if applicable, the completion of the Concurrent Financing, receipt of all necessary regulatory and court approvals, third party consents, limitation of dissent rights, resignation of EL directors, execution of employment and consulting agreements, DGTL satisfying or waiving its financing condition, which expired on October 8, 2021 and which DGTL indicates has delayed its ability to close its financing, EL shall have cash of at least CAD 280,000 and net working capital of at least CAD 110,000 at closing, ability of DGTL to complete the Escrow Release Conditions and the satisfaction of certain other closing conditions customary for a transaction of this nature. DGTL has applied to the TSX Venture Exchange for conditional acceptance of Concurrent Financing and anticipates closing an initial tranche of Concurrent Financing for aggregate gross proceeds sufficient to satisfy Financing Condition on or about December 2, 2021. As per the article of November 1, 2021, the delay in DGTL's year-end financial filing has also postponed EL's completion of its valuation and fairness opinion of the merger, which must be included with any documentation submitted to shareholders to consider approval of transaction. Board of Directors of DGTL, and Board of Directors of EL have both unanimously approved arrangement. The board of directors of Engagement Labs (the “Engagement Labs Board”) unanimously recommends that Engagement Labs Shareholders vote FOR the Arrangement. The transaction received final court approval and EL shareholders approvals. As on November 25, 2021, toward this end, DGTL has lowered the financing condition for closing to CAD 1 million and indicated it expects to close financing in early December. As of December 7, 2021, the private placement for first tranche was completed and minimum financing condition was satisfied. The proposed shareholders meeting date is presently scheduled for February 14, 2022. On February 14, 2022, the shareholders of Engagement Labs approved the transaction at the annual General and special Meeting. The Ontario Superior Court of Justice (Commercial List) issued a Final Order on February 16, 2022, allowing the Arrangement to proceed. It is expected that the arrangement would close in the fourth quarter of 2021. As of November 11, 2021, the transaction is expected to be completed in early 2022. As of November 25, 2021, merger is expected to close in first quarter of 2022. The parties have committed to using their commercially reasonable efforts to complete the arrangement by mid-February 2022. As of December 22, 2021, the closing of the arrangement is expected on or about February 18, 2022. As of February 17, 2022, the parties anticipate that the closing will occur on February 25, 2022.

Grant Duthie of Garfinkle Biderman LLP is acting as legal counsel to DGTL. Oberon Securities is acting as financial advisor to EL. Robert N. Spiegel of Spiegel Securities & Corporate Law and Roy O'Connor LLP are acting as legal counsel to EL. IJW&Co. will provide a fairness opinion to the Board of Directors of EL. On closing, DGTL will issue 280,000 DGTL shares and 13,750 DGTL compensation warrants to Oberon Securities, LLC. Computershare Trust Company of Canada acted as transfer agent to Engagement Labs.

DGTL Holdings Inc. (TSXV:DGTL) completed the acquisition of Engagement Labs Inc. (TSXV:EL) from Loeb Holding Corporation and others for CAD 1.8 million on March 1, 2022. The TSXV has approved the listing of the DGTL Shares issued in connection with the arrangement on the TSXV.