BAYLIN TECHNOLOGIES ANNOUNCES COMPLETION OF PRIVATE PLACEMENT OF $10.3 MILLION OF SUBSCRIPTION RECEIPTS

Executive Summary

• Baylin Technologies completed a broker‑driven private placement of 41,250,000 subscription receipts at $0.25 each, raising $10,312,500 in gross proceeds.
• Proceeds will be applied toward the cash portion of the pending acquisition of Kaelus AB (≈ $42 million total purchase price) and to repay existing indebtedness.
• The controlling shareholder subscribed for 15,000,000 receipts ($3,750,000), representing ~9.8% of outstanding common shares; post‑closing, control is expected to shift from ~71.6% to ≈50.4% of voting power.

Key Details

• Placement Size & Pricing: 41,250,000 subscription receipts @ $0.25 per receipt → gross proceeds $10,312,500.
• Lead Agent: Paradigm Capital Inc. (the “Agent”).
• Use of Proceeds: Finance a portion of the cash consideration for the Kaelus AB acquisition; repay all outstanding indebtedness to the principal lender; cover third‑party transaction expenses. Total acquisition cost ≈ $42 million.
• Controlling Shareholder Subscription: 2385796 Ontario Inc. purchased 15,000,000 receipts @ $0.25 → $3,750,000; underlying common shares will represent ~9.8% of current outstanding shares.
• Control Impact: Prior to the subscription, Chairman Jeff Royer controlled ~71.6% of voting shares. After escrow release conditions are met (including acquisition closing) and before exercise of 2,006,250 warrants, his control is projected to fall to ≈50.4%.
• Related‑Party Transaction: The subscription by the controlling shareholder qualifies as a related‑party transaction under MI 61‑101 but is exempt from valuation/approval thresholds because neither fair market value nor consideration exceed 25% of market cap. Board approved; Jeff Royer recused.
• Regulatory Conditions: Acquisition subject to TSX approval, Finnish foreign investment authority consent, and shareholder approval (to be satisfied via written consent from controlling shareholder under TSX rule 604(d)).
• Closing Timeline: Subject to satisfaction of financing and other customary conditions, the Kaelus AB acquisition is expected to close in Q1 2026.
• Reporting: A material‑change report on the related‑party transaction will be filed on SEDAR+ within 21 days prior to closing.

Notable Quotes

(No direct quotes were provided in the release.)