Redwood AI Announces Definitive Agreement with Quantum.IQ and Expands into Quantum Resistant Cyber Security

Executive Summary

• Redwood AI Corp. has entered into a share purchase agreement to acquire 100% of Quantum.IQ Technologies Inc., a Vancouver-based AI-driven quantum cybersecurity company.
• The acquisition will be funded through the issuance of up to 14,033,558 common shares of Redwood, valued at a deemed price of approximately $2.98 per share.
• The transaction structure includes a base share component and milestone-based shares tied to specific revenue and EBITDA targets, with all shares held in escrow subject to staged release schedules and acceleration conditions.

Key Details

• Transaction Structure: Acquisition of all issued and outstanding shares of Quantum.IQ Technologies Inc.
• Consideration: Aggregate of 14,033,558 common shares of Redwood (deemed price ~$2.98/share).
• Share Breakdown: 7,033,558 Base Shares + up to 7,000,000 Milestone Shares.
• Base Share Escrow Schedule: 10% released 4 months post-closing, 15% at 6 months, 25% at 12 months, 25% at 18 months, and 25% at 24 months.
• Milestone Shares & Criteria:
• 1,000,000 shares: Execution of an initial customer pilot agreement.
• 2,000,000 shares: Achievement of $2,000,000 annualized revenue with a minimum 10% EBITDA.
• 2,000,000 shares: Achievement of $10,000,000 annualized revenue with a minimum 10% EBITDA.
• 2,000,000 shares: Achievement of $20,000,000 annualized revenue with a minimum 10% EBITDA.
• Secondary Escrow & Acceleration: Milestone shares released from primary escrow enter a secondary escrow schedule. Acceleration occurs if Redwood shares maintain a VWAP of at least $7.00 for 21 consecutive trading days with a minimum daily volume of 1,000,000 shares.
• Unachieved Milestones: Any milestone criteria not met by the deadline results in the corresponding shares being released to Redwood for cancellation.
• Closing Conditions: Subject to customary conditions including CSE approval, regulatory approvals, execution of escrow agreements, and absence of material adverse changes.
• Finder’s Fee: $298,000 payable in 100,000 common shares of Redwood to an independent third party (split between Redwood and Quantum.IQ).
• Strategic Rationale: Expands Redwood’s technology platform into quantum-resistant cybersecurity, cryptographic intelligence, and enterprise security infrastructure modernization, complementing its existing AI and advanced computational technology focus.

Notable Quotes

• Louis Dron, CEO of Redwood AI Corp.: “As our platform expands into increasingly mission-critical environments, quantum resistant cybersecurity becomes a natural extension of our strategy. Quantum.IQ fits that direction by adding a cybersecurity platform focused on one of the next major infrastructure challenges facing governments and enterprises. We believe this acquisition will strengthen Redwood’s position in security-sensitive technology markets while expanding the range of problems our platform can help address.”
• Kevin O'Neill, CEO of Quantum.IQ Technologies Inc.: “Quantum computing presents one of the most significant cybersecurity transitions organizations will face over the coming decade. We believe Redwood is the right long-term home for Quantum.IQ because of its vision for applying advanced AI and computational technologies to complex, mission-critical challenges. By combining our post-quantum cryptography platform with Redwood's broader AI capabilities, we believe we can accelerate commercialization while delivering greater value to governments, critical infrastructure operators and enterprise customers preparing for the quantum era.”