Turnium gets conditional TSX-V OK for loan extension

Executive Summary

• Turnium Technology Group Inc. has received conditional approval from the TSX Venture Exchange to extend promissory notes totaling $1,073,000 through new unsecured loan agreements.
• The financing includes the issuance of 9.5 million non-transferable common share purchase warrants as a bonus to lenders, exercisable at $0.10 per share.
• The transaction involves four creditors, including one insider/director, and is structured as a related party transaction relying on specific exemptions from valuation and minority shareholder approval requirements.

Key Details

• Loan Principal and Structure: The loans represent the extension of previously issued agreements with a total principal amount of $1,073,000 (comprising $950,000 in original principal and $123,000 in accumulated interest).
• Interest Rate: Interest accrues at 1.33% per month, payable quarterly in arrears, commencing after the quarter ending December 31, 2025.
• Maturity and Repayment: The loans mature on December 31, 2027. The borrower may prepay the loan in full at any time prior to maturity, plus accrued interest and an additional three months of interest.
• Warrant Issuance: As consideration, the company will issue 9.5 million non-transferable common share purchase warrants to the lenders.
  • Exercise Price: $0.10 per share.
  • Quantity Calculation: Equal to 100% of the principal amount of the loans divided by $0.10 per share, rounded up to the nearest whole share.
  • Term: Up to 24 months, with an expiry date of December 9, 2027.
  • Status: Issuance is subject to final acceptance by the TSX Venture Exchange.
• Acceleration Clauses: The warrants are subject to two acceleration provisions:
  1. If the common share closing price is $\ge$ $0.30 for 10 consecutive trading days, the borrower must provide notice 30 days after the threshold date, causing warrants to expire 60 days from that notice.
  2. If the loan is prepaid prior to the first anniversary of the closing date, the warrant term is reduced to the later of one year from issuance or 30 days from the loan reduction.
• Related Party Transaction: The issuance of 2 million warrants to an insider is classified as a related party transaction under TSX-V Policy 5.9 and Multilateral Instrument 61-101. The company relied on exemptions from valuation and minority shareholder approval requirements under sections 5.5(b) and 5.7(1)(b) of MI 61-101.
• Previous Warrants: Warrants associated with the original loans have either expired or were not issued, leaving no outstanding warrants from the original agreements.