An Ottawa-based cloud security firm is gaining momentum with a pivot to blockchain technology, two proof of concept deals and millions of dollars in freshly acquired capital.
Ottawa-based Leonovus Inc. (TSX-V:LTV) announced Thursday it would raise $10 million in a bought deal placement with Toronto-based Clarus Securities Inc.
The firm will issue 20 million units to Clarus at the price of $0.50 each. All units consist of a common share as well as a warrant to purchase half a common share within the next two years at a price of $0.65.
The deal includes an option to purchase an additional three million units after the anticipated closing date of Nov. 22. If Clarus exercises this option, the full offering will be worth $11.5 million.
The value of Leonovus’ share has skyrocketed since August. Today, shares on the TSX Venture Exchange are worth $0.53, compared to $0.05 a few months ago. In September, the firm issued 30 million units in a similar bought deal, then raising only $1.5 million.
Behind these fundraising rounds and rapid growth is Leonovus’ pivot to developing security applications with blockchain technologies.
“We continue to get significant interest from enterprise customers."
Leonovus develops software that encrypts and stores enterprise data on its cloud, hybrid or on-premise solutions. Now, the metadata generated from that process will be backed up on a blockchain’s ledgers.
“We continue to get significant interest from enterprise customers regarding our core storage, security and compliance architecture and believe that our Blockchain strategy will further enhance our product offering,” said Leonovus CEO and chairperson Michael Gaffney in a statement last September.
While Leonovus hasn’t had a sale in the past six quarters, the firm has signed proof of concept deals with a large international marketing customer and a big six Canadian bank in recent months.
Elsewhere in Ottawa, Intouch Insight also announced its intent to issues shares in a private placement. The firm intends to raise $3 million by issuing six million units in a similar deal to Leonovus.