Clean Seed completes restructuring of liabilities

Executive Summary

• Clean Seed Capital Group Ltd. has completed significant restructuring activities aimed at reactivating its listing on the TSX Venture Exchange, resulting in a substantial improvement to its balance sheet and working capital position.
• The company addressed approximately $13.15 million in total liabilities through a combination of debt-for-equity swaps, reclassification of liabilities from current to non-current, and settlement of accrued interest via share issuance.
• Subsequent to the September 30, 2025 reporting period, the company extinguished an additional $150,000 in liabilities and completed a $1.25 million non-brokered private placement.

Key Details

• Liability Reduction: Addressed $13,153,565 of total liabilities (out of $14,711,829 reported as of Sept. 30, 2025).
• Debt-for-Equity Swaps: Settled $1,954,325 of liabilities by issuing common shares.
• Reclassification: Reclassified $11,930,597 of liabilities from current to non-current, significantly improving working capital and reducing near-term liquidity risk.
• Post-Period Activity: Extinguished an additional $150,000 of liabilities in the normal course of operations after Sept. 30, 2025.
• Private Placement: Completed a non-brokered private placement for gross proceeds of $1.25 million via unit issuance (disclosed Oct. 23, 2025).
• Promissory Notes: Extended promissory notes with an aggregate principal amount of $4,670,759; maturity dates extended to Dec. 31, 2026.
• Interest Settlement (Promissory Notes): Settled $904,325 of accrued interest on promissory notes through the issuance of common shares (disclosed Oct. 31, 2025).
• Convertible Debentures: Restructured convertible debentures totaling $630,000:
  • One debenture ($300,000) had its maturity extended to Dec. 31, 2026, with interest payable at maturity.
  • One debenture ($330,000, originally maturing Aug. 2025) was reissued with a maturity date of Dec. 31, 2026, with interest payable at maturity.
  • Settled $50,000 of accrued interest on these debentures via share issuance.
• Government Contributions: Restructured three repayable contribution agreements totaling $2,177,000:
  • Liability deferred until 2027 with future negotiation of repayment terms.
  • Two loans ($1,486,000 total): No repayments for six months; interest-only payments from June 2026 to January 2027.
  • One agreement ($691,000): Nominal interest from Dec. 2025 to June 2026; monthly interest-only payments from July 2026 to Jan. 2027.
  • All three bear interest at prime plus 3%.
• Accounts Payable: Restructured $2,609,860 in accounts payable, postponing settlement to Dec. 31, 2026.
  • Included a settlement agreement for $206,121 bearing 12% annual interest, secured by a general security interest in company assets.
• Legal Claims: Received two statements of complaint from former employees for historical unpaid wages aggregating $301,000, recorded as accounts payable; legal counsel retained for settlement.
• Related Party Payables: Restructured $1,453,316 in related party payables:
  • $1,000,000 settled via share issuance (disclosed Nov. 7, 2025, and Jan. 8, 2026).
  • $453,316 payment postponed to Dec. 31, 2026.