Brandpilot closes private placement, amends debenture

Executive Summary

• Brandpilot AI Inc. closed a non-brokered private placement raising $1.1 million in gross proceeds through the issuance of 44 million units at $0.025 per unit.
• The company amended a secured convertible debenture, extending the maturity date to September 15, 2026, reducing the principal balance, and establishing a payoff incentive.
• The company intends to use the net proceeds for general corporate expenses and working capital.

Key Details

• Private Placement Structure:
  • Aggregate gross proceeds: $1,100,000.
  • Units issued: 44,000,000 units.
  • Price per unit: $0.025.
  • Unit composition: One common share and one common share purchase warrant per unit.
  • Warrant terms: Exercisable after November 5, 2025 (60th day post-issuance) until September 5, 2030.
  • Warrant exercise price: $0.05 per share.
  • Acceleration clause: If VWAP is at least $0.15 for 10 consecutive trading days, expiry may be accelerated to no less than 30 days after notice.
  • Exemption: Listed Issuer Financing Exemption (LIFE) under National Instrument 45-106; no hold period.
• Insider Participation:
  • Total insider purchases: 5,600,000 units.
  • Andres Tinajero (Director): 2,000,000 units.
  • Adam Szweras (Chairman/Director): 2,000,000 units.
  • Brandon Mina (CEO/Director): 400,000 units.
  • Kyle Appleby (CFO): 400,000 units.
  • 2674779 Ontario Inc. (Entity controlled by Director Brian Presement): 800,000 units.
  • Related party transaction status: Exempt from valuation and minority approval requirements under MI 61-101 as insider participation is less than 25% of market capitalization.
• Finder’s Fees:
  • Cash paid to finders: $88,000.
  • Broker warrants issued: 3,520,000 warrants.
  • Broker warrant terms: Exercisable at $0.025 per unit until September 5, 2030.
• Warrant Price Reduction:
  • Application to CSE to reduce exercise price of 56,168,000 outstanding warrants to $0.05.
  • Breakdown:
    • 49,418,000 warrants (currently exercisable at $0.10).
    • 6,750,000 warrants (currently exercisable at $0.06667).
• Secured Convertible Debenture Amendment:
  • Original principal: $352,800.
  • Current principal post-amendment: $134,000.
  • Principal reduction: $5,600 paid upon execution.
  • Extension consideration: $34,400 payable to debentureholder on or before September 15, 2025.
  • New maturity date: September 15, 2026 (extended from September 15, 2025).
  • Conversion price: $0.04444 per common share.
  • Conversion blocker: Applies if conversion results in holder owning 10% or more of issued/outstanding shares.
  • Interest: 0% until default; 18% per annum after default.
  • Payoff Incentive: If $114,000 of principal is paid on or before March 15, 2026, the entire outstanding principal and other amounts are deemed extinguished in full.
• Use of Proceeds: General corporate expenses and working capital.