Shareholder Increases Interest in Baylin Technologies

Executive Summary

• 2385796 Ontario Inc., controlled by Chairman Jeffrey C. Royer, acquired an additional 17,139,616 common shares through a preferred share conversion and a separate private purchase.
• The transactions increased the combined voting control of Mr. Royer and his associate to approximately 53.7% of the post-transaction outstanding common shares.
• An early warning report under National Instrument 62-103 has been filed, and the acquired shares were purchased for investment purposes.

Key Details

• Exchange Transaction: 2385796 Ontario Inc. exchanged $3,950,000 in outstanding 10% Cumulative Redeemable Retractable Series A and Series B Preferred Shares, plus $594,297.41 in accrued and unpaid dividends, for 16,171,876 common shares issued at $0.281 per share, plus approximately $0.25 cash in lieu of fractional shares.
• Private Agreement Transaction: 2385796 Ontario Inc. acquired 967,740 common shares from a third party at $0.335 per share.
• Total Acquisition: 17,139,616 common shares, representing approximately 6.94% of the 246,933,341 common shares outstanding prior to the transactions.
• Pre-Transaction Control: Mr. Royer exercised control and direction over approximately 50.3% of the outstanding common shares.
• Post-Transaction Ownership: 2385796 Ontario Inc. will hold 135,896,242 common shares, representing approximately 51.7% of the 263,105,217 shares outstanding after the exchange.
• Combined Control: An associate of Mr. Royer holds an additional 5,496,900 common shares. Together, they will control 141,393,142 common shares, representing approximately 53.7% of the post-transaction outstanding shares.
• Purpose & Intent: Shares were acquired for investment purposes; Mr. Royer retains discretion to direct future purchases or sales based on market conditions.
• Regulatory Filing: An early warning report pursuant to National Instrument 62-103 has been filed and is available on SEDAR+.