Nextech3D.AI corrects warrants, shares for Krafty buy

Executive Summary

• Nextech3D.AI Corp. is correcting the number of warrants and common shares underlying convertible notes issued for the acquisition of Krafty Labs, reducing the count from 2,299,412 to 1,951,012 shares/warrants at a price of 16.5 cents per share.
• CEO Evan Gappelberg invested $321,917 into the company via an 18-month convertible note bearing 12% annual interest, which converts into 1,951,012 common shares and includes 1,951,012 warrants exercisable at 16.5 cents per share for three years.
• The company announced a 12-month marketing and investor relations campaign with Agoracom, valued at $150,000 (including HST), to be paid entirely in shares issued in five installments, with no cash consideration.

Key Details

• Krafty Labs Acquisition Correction:
  • Original reported securities: 2,299,412 warrants and common shares.
  • Corrected securities: 1,951,012 warrants and common shares.
  • Warrant exercise price: 16.5 cents per share.
  • Conversion price: 16.5 cents per share.
  • Statutory hold period: Four months and one day from issuance, expiring May 6, 2026.
• CEO Investment Terms:
  • Investor: Evan Gappelberg, CEO.
  • Investment amount: $321,917.
  • Instrument: 18-month convertible note.
  • Interest rate: 12% per annum.
  • Conversion option: At CEO's sole discretion, convertible into 1,951,012 common shares at 16.5 cents per share.
  • Warrant compensation: 1,951,012 common share purchase warrants issued to CEO.
  • Warrant terms: Exercise price of 16.5 cents per share; term of three years.
  • Post-transaction ownership: CEO remains largest shareholder with 32,757,017 common shares.
• Regulatory Status:
  • Transaction classified as a related-party transaction under Multilateral Instrument 61-101.
  • Exemptions relied upon: Formal valuation and minority shareholder approval requirements (transaction does not exceed 25% of market capitalization).
  • Subject to approval by the Canadian Securities Exchange.
• Agoracom Marketing Campaign:
  • Duration: 12 months.
  • Services: AI-generated content marketing campaign and verified shareholder forum.
  • Value: $125,000 in shares plus $25,000 in HST (Total $150,000).
  • Payment method: Cashless shares-for-services program.
  • Payment Schedule:
    • 1. $25,000 + HST at commencement.
    • 2. $25,000 + HST at end of month 3 (March 8, 2026).
    • 3. $25,000 + HST at end of month 6 (June 8, 2026).
    • 4. $25,000 + HST at end of month 9 (Sept. 8, 2026).
    • 5. $25,000 + HST at end of term (Jan. 31, 2027).
  • Pricing mechanism: Deemed price determined after services provided, based on CSE closing price on the respective payment dates.

Notable Quotes

• "Management believes this insider investment reflects confidence in Nextech3D.AI's strategy, execution and long-term growth prospects."
• "The combination of Krafty Labs' enterprise-grade engagement capabilities with Nextech3D.AI's existing event technology stack is expected to drive increased average contract values, deeper customer relationships and enhanced monetization opportunities across in-person, virtual and hybrid events."