Baylin Technologies Confirms Payment of Debentures in Common Shares at Maturity and Exchange of Preferred Shares

Executive Summary

• Baylin Technologies confirms the repayment of its $5.115M convertible debentures through the issuance of approximately 18.2M common shares.
• The company is executing a related-party exchange of $3.95M in preferred shares held by its controlling shareholder for approximately 16.17M common shares and a nominal cash payment.
• Following the transactions, the controlling shareholder's ownership stake is expected to increase from ~50.3% to ~53.4%, pending TSX approval and customary closing conditions.

Key Details

• Debenture Repayment: Principal amount of $5,115,000 repaid via issuance of 18,202,846 common shares.
• Share Calculation: Number of shares equals the principal amount divided by 95% of the VWAP of $0.296 per share (calculated based on the 20 consecutive trading days ending five trading days before the June 30, 2026 maturity date).
• Preferred Share Exchange: $3,950,000 in 10% Cumulative Redeemable Retractable Series A & B Preferred Shares exchanged for 16,171,876 common shares.
• Exchange Pricing: Private placement at $0.281 per common share, plus a cash payment of approximately $0.25 in lieu of fractional shares.
• Ownership Impact: Controlling shareholder (2385796 Ontario Inc./Jeffrey C. Royer) ownership increases from ~50.3% to ~53.4% of issued and outstanding common shares.
• Regulatory Classification: Treated as a "related-party transaction" under MI 61-101 but exempt from formal valuation and minority shareholder approval requirements, as neither the fair market value of the preferred shares nor the total consideration exceeds 25% of the company's market capitalization.
• Conditions & Timeline: Subject to TSX approval and customary conditions; expected completion on or about June 26, 2026.
• Debenture Terms: 8.5% Convertible Unsecured Debentures with a maturity date of June 30, 2026.