Vertiqal Studios closes debenture offering for $2.29M

Executive Summary

• Vertiqal Studios Corp. has closed a non-brokered private placement of unsecured convertible debentures, raising aggregate gross proceeds of $2,298,000.
• The company intends to utilize the net proceeds for general working capital purposes.
• The transaction involved related party transactions, with insiders participating in the offering, but was exempt from formal valuation and minority shareholder approval requirements under Multilateral Instrument 61-101.

Key Details

• Transaction Structure: Non-brokered private placement of unsecured convertible debentures.
• Price: $1,000 per debenture.
• Gross Proceeds: $2,298,000.
• Use of Proceeds: General working capital.
• Maturity Date: October 31, 2027.
• Interest Rate: 15% per annum, payable in arrears on the maturity date.
• Conversion Rights:
  • Timing: Available from 18 months prior to maturity up to the business day preceding maturity.
  • Principal Conversion Price: 2.5 cents per common share.
  • Accrued Interest Conversion Price: The greater of (i) the conversion price (2.5 cents) or (ii) the volume weighted average trading price (VWAP) of the common shares on the Toronto Stock Exchange for the five business days preceding the conversion date, less applicable discounts.
• Regulatory Status: Completed on a private placement and prospectus exempt basis. Subject to final approval of the Toronto Stock Exchange.
• Hold Period: Four months plus one day from the date of issuance.
• Related Party Transaction: Insiders were issued $763,000 principal amount of debentures. This participation is exempt from formal valuation and minority shareholder approval requirements under MI 61-101 as the value does not exceed 25% of the company's market capitalization. No material change report was filed less than 21 days prior to completion due to the need for an expeditious closing.