BEACN Announces Creation of Loan Program

• BEACN Wizardry & Magic Inc. announced a new shipment-triggered loan program on May 13, 2026.
• The first series of this program closed for an aggregate amount of $338,000.
• Lenders are identified as related parties: Athlone Ltd. and Huang Quian 2008 Revocable Trust.
• Cost of capital is a fixed premium of 10% on all funds advanced.
• Repayment terms allow amounts to be repaid from product sales over the applicable period with maturity up to twelve months following final shipment.
• Obligations are secured by a general security agreement over most of the Company's assets.
• The transaction is exempt from formal valuation and minority shareholder approval under MI 61-101 due to related party status.

• The financing amount ($338,000) is immaterial relative to typical market capitalization for a TSX Venture Exchange issuer of this size, limiting immediate stock price volatility.
• The news follows a significant earnings miss on April 24, 2026, where revenue dropped 21% and gross profits fell 30%.
• Taking on debt shortly after raising $700,000 in equity (January 2026) signals continued liquidity pressure despite recent capital injections.
• The use of related party lenders introduces potential governance risks regarding conflict of interest, although regulatory exemptions were utilized.
• The fixed premium of 10% increases the cost of capital compared to traditional bank financing or equity dilution, impacting future profitability.
• Overall impact is negative as it confirms operational cash flow strain in a company with declining top-line growth and compressed margins.

• BEACN Wizardry & Magic Inc. operates in the consumer electronics sector focusing on audio technology for creators and professionals.
• Flagship products include desktop peripherals such as microphones (BEACN Mic) and mixers (BEACN Mix Create).
• New flagship product is the BEACN Headset featuring proprietary onboard digital signal processing (DSP), expected to ship in Q2 2026.
• The company has pivoted towards voice-first audio solutions for remote work, gaming, and content creation.
• Recent financial results indicate challenges with inventory depletion and tariff impacts on retail pricing.