Alset AI arranges $3-million term loan

Executive Summary

• Alset AI Ventures Inc. has entered into a $3 million unsecured term loan facility with insider Randy Gilling to fund the growth of its flagship cloud compute business, Lyken.AI.
• The facility is structured in four advances totaling $3 million, with proceeds designated for working capital and general corporate purposes to support the company's AI infrastructure strategy.
• The transaction includes the issuance of non-transferrable warrants to the lender, valued at $0.15 per share, and requires TSX Venture Exchange approval to close.

Key Details

• Transaction Structure: Unsecured, non-revolving term loan agreement with a principal amount of up to $3 million.
• Lender: Randy Gilling, an insider holding greater than 10% of the company's common shares.
• Use of Proceeds: Working capital and general corporate purposes to advance Lyken.AI’s AI infrastructure strategy and achieve positive operating income by the end of 2026.
• Disbursement Schedule:
  • Advance 1: $500,000 on or about the execution date.
  • Advance 2: $500,000 on or about October 31, 2025.
  • Advance 3: $1,000,000 on or about December 31, 2025.
  • Advance 4: $1,000,000 at management's discretion until maturity.
• Interest Rate: 6% per annum, payable quarterly.
• Maturity Date: Three years from the effective date.
• Warrant Terms:
  • Issuance: Non-transferrable common share purchase warrants issued upon each advance.
  • Quantity: Calculated as the dollar amount of the advance divided by $0.15.
  • Exercise Price: $0.15 per common share.
  • Expiration: Until the maturity date (subject to reduction if advances are repaid within one year).
• Corporate Governance:
  • The lender receives a right to observe board of directors meetings until the loan is repaid.
  • The transaction is classified as a related party transaction under Multilateral Instrument 61-101.
  • Exemptions from formal valuation and minority approval were relied upon as the fair market value does not exceed 25% of the company's market capitalization.
• Regulatory Status: Subject to approval by the TSX Venture Exchange.

Notable Quotes

• "This strategic term loan facility significantly strengthens our growth path... this financing allows us to strengthen our balance sheet without the need for a dilutive equity raise." — Adam Ingrao, CEO