Icesoft extends maturity, amends interest of notes

Mr. Brian McKinney reports ICESOFT TECHNOLOGIES CANADA CORP. REVISES PRIOR SECURED CONVERTIBLE DEBT FINANCING ROUND TERMS On Sept. 21, 2022, and on Feb. 27, 2023, Icesoft Technologies Canada Corp. concluded multiple secured convertible financings, raising gross cash proceeds of $750,175 and converting $150,000 in accrued accounts payable obligations. The issued secured convertible promissory notes bore simple interest at a rate of 15 per cent per annum. The term of the notes was 36 months, and the notes bore a conversion feature allowing the noteholder to convert all or part of the principal balance and accrued interest into common shares in the capital of the company at an exchange rate of five cents per share. Effective Sept. 15, 2025, the notes have been subsequently amended such that: The original maturity date of the notes, Sept. 20, 2025 and Feb. 26, 2026, the time the notes would have become due and payable, has been revised to be March 22, 2027. The interest rate born by the notes has been revised from simple interest at a rate of 15 per cent per annum to simple interest at a rate of 15 per cent per annum for the first three years of the note life and at 21.75 per cent per annum for the balance of the term of the notes. The exchange rate at which the voluntary conversion feature shall occur has been revised from the original five cents per share to six cents per share. Full conversion of the issued note principal and all accrued interest through the end of term of the notes will result in the issuance of 26,258,623 common shares versus 26,105,075 common shares prior to the revision. No finders' fees were paid with respect to the completion of the debt financing or the current revision. The proceeds, net of transaction costs, of the debt financing have been and continue to be used for general working capital and to accelerate sales and finance new market expansion efforts. Participating as part of the original financing and this subsequent revision were company directors Derrick Hunter, Martin Shen, Will Derrick, a related person and observer on the company's board of directors, and Brian McKinney, president and chief executive officer of the company. On the basis that each of Mr. Hunter and Mr. Shen is a director, Mr. Derrick is an observer to the board, and Mr. McKinney is director, president and chief executive officer, and all are beneficial owners of, and/or have control or direction over, directly or indirectly, more than 10 per cent of the common shares, and have each participated in the debt financing directly or indirectly through the sale and issuance of $200,175 worth of notes to Mr. Derrick, $100,000 worth of notes to Mr. Hunter, $350,000 worth of notes to Mr. Shen, $250,000 worth of notes to Mr. McKinney, these are related-party transactions within the meaning of Multilateral Instrument 61-101. In conducting its review and approval process of both the original debt financing and this subsequent revision, the board of directors of the company determined that the preparation and distribution of a formal valuation and the seeking of shareholder approval for, and in connection with, the debt financing were not necessary under MI 61-101 because: (a) for the purposes of sections 5.5(b) and 5.7(1)(a) of MI 61-101, the issuer is not listed on specified markets; (b) at the time the related-party transactions were agreed to, neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the related-party transactions exceeded 25 per cent of the company's market capitalization; and (c) the disinterested directors of the company have approved the debt financing and subsequent revision. The original material change report in relation to the related-party transactions was not filed fewer than 21 days before the closing date of the debt financing as the company wished to complete the debt financing expediently. Following this revision of the debt financing, Mr. Derrick owns or controls 14.25 million common shares, options to purchase 350,000 common shares and $200,175 worth of notes bearing simple interest of 15 per cent per annum for three years, and at 21.75 per cent for subsequent 18 months of the notes through to the end of term of the note, which would be convertible into a maximum of 5,927,008 common shares at the maturity date of the notes assuming all note interest is accrued, carried and converted, being 12.7 per cent of the issued and outstanding common shares and 18.3 per cent assuming conversion or exercise of all securities owned or controlled by Mr. Derrick. Prior to the revision, Mr. Derrick owned or controlled 14.25 million common shares, options to purchase 350,000 common shares, and $200,175 worth of notes bearing simple interest of 15 per cent per annum for a three-year term, being 12.7 per cent of the issued and outstanding common shares prior to the debt financing revision and 18.2 per cent assuming conversion or exercise of all securities owned or controlled by Mr. Derrick at that time. Following this revision of the debt financing, Mr. Hunter owns or controls 15,932,357 common shares, options to purchase 500,000 common shares, and $100,000 worth of notes bearing simple interest of 15 per cent per annum for three years and at 21.75 per cent for the subsequent 18 months of the notes through to the end of term of the notes, which would be convertible into a maximum of 2,960,913 common shares at the maturity date of the notes assuming all note interest is accrued, carried and converted, being 14.2 per cent of the issued and outstanding common shares and 17.3 per cent assuming conversion or exercise of all securities owned or controlled by Mr. Hunter. Prior to the revision, Mr. Hunter owned or controlled 15,932,357 common shares, options to purchase 500,000 common shares, and $100,000 worth of notes bearing simple interest of 15 per cent per annum for a three-year term, being 17.2 per cent of the issued and outstanding common shares prior to the debt financing and 16.1 per cent assuming conversion or exercise of all securities owned or controlled by Mr. Hunter at that time. Following this revision of the debt financing, Mr. Shen owns or controls 26 million common shares, warrants to purchase 500,000 common shares, $100,000 of notes bearing simple interest of 15 per cent per annum for a three-year term, and $350,000 worth of revised notes bearing simple interest of 15 per cent per annum for three years and at 21.75 per cent for subsequent 18 months of the notes through to the end of term of the notes, which would be convertible into a maximum of 13,263,196 common shares at the maturity date of all the notes controlled by Mr. Shen, assuming all note interest is accrued, carried and converted, being 23.2 per cent of the issued and outstanding common shares and 35.5 per cent assuming conversion or exercise of all securities owned or controlled by Mr. Shen. Prior to the revision, Mr. Shen owned or controlled 26 million common shares, options to purchase 500,000 common shares, $100,000 of notes bearing simple interest of 15 per cent per annum for a three-year term, and $350,000 worth of revised notes bearing simple interest of 15 per cent per annum for a three-year term being 23.2 per cent of the issued and outstanding common shares prior to the debt financing and 35.3 per cent assuming conversion or exercise of all securities owned or controlled by Mr. Shen at that time. Following this revision of the debt financing, Mr. McKinney owns or controls 13,093,821 common shares, options to purchase three million common shares, $120,000 of notes bearing simple interest of 15 per cent per annum for a three-year term, and $250,000 worth of revised notes bearing simple interest of 15 per cent per annum for three years and at 21.75 per cent from that point, through to the end of term of the notes, which would be convertible into a maximum of 10,882,283 common shares at the maturity date of all the notes controlled by Mr. McKinney, assuming all note interest is accrued, carried and converted, being 11.7 per cent of the issued and outstanding common shares and 24.1 per cent assuming conversion or exercise of all securities owned or controlled by Mr. McKinney. Prior to the revision, Mr. McKinney owned or controlled 13,093,821 common shares, options to purchase three million common shares, $120,000 of notes bearing simple interest of 15 per cent per annum for a three-year term, and $250,000 worth of revised notes bearing simple interest of 15 per cent per annum for a three-year term being 11.7 per cent of the issued and outstanding common shares prior to the debt financing and 23.9 per cent assuming conversion or exercise of all securities owned or controlled by Mr. McKinney at that time. Each of Mr. Derrick, Mr. Hunter, Mr. Shen and Mr. McKinney advises that the securities have been acquired for investment purposes. Each of Mr. Derrick, Mr. Hunter, Mr. Shen and Mr. McKinney advises that each may, depending on the market and other conditions, increase or decrease his beneficial ownership of the company's securities, whether in the open market, by privately negotiated agreements or otherwise, subject to a number of factors, including general market conditions and other available investment and business opportunities. To obtain a copy of the report filed by each of Mr. Derrick, Mr. Hunter, Mr. Shen or Mr. McKinney, please contact Icesoft investor relations at 403-993-3322. The securities issued pursuant to the original debt financing were subject to a hold period under applicable securities laws, which expired four months plus one day from the date of the applicable closing of the original debt financing. About Icesoft Technologies Canada Corp. Icesoft is a software-as-a-service company. Icesoft's current software, which is available as freeware with a pay to use version, is used by about 150,000 developers, 20,000 companies and about 400 paying customers. Icesoft's newest product Voyent Alert! is an affordable community alerting service specifically designed to meet the needs of small- to medium-sized municipalities, regional governments, and enterprises. The flexible platform serves the dual purpose of alerting and advising residents and employees during a critical incident as well as providing targeted day-to-day communications services. We seek Safe Harbor.