Vertiqal Studios closes debenture offering for $2.29M

An anonymous director reports VERTIQAL STUDIOS CLOSES PRIVATE PLACEMENT OF CONVERTIBLE DEBENTURES Vertiqal Studios Corp. has closed a non-brokered private placement through the issuance of unsecured convertible debentures at a price of $1,000 per debenture for aggregate gross proceeds of $2,298,000. The company intends to use the net proceeds from the offering for general working capital purposes. The issuance of the debentures pursuant to the offering was (and, if applicable, the underlying common shares of the company upon conversion of the debentures shall be) completed on a private placement and prospectus exempt basis, as applicable, such that the issuances are (or in the case of any underlying common shares, shall be) exempt from any applicable prospectus and securities registration requirements. The debentures will mature on Oct. 31, 2027, and will bear interest at an interest rate of 15 per cent per annum, payable on the maturity date in arrears. At any time from and including the date that is 18 months prior to the maturity date and up to the close of business on the last business day immediately preceding the maturity date, holders of debentures have the right, at the holder's option, to convert into common shares all or a portion of: (a) the principal amount outstanding under the debentures at 2.5 cents per common share; or (b) the accrued but unpaid interest under the debentures at the greater of: (i) the conversion price; or (ii) the volume weighted average trading price of the common shares on the Toronto Stock Exchange for the five business days preceding the date of conversion, less applicable discounts in accordance with the policies of the Exchange, subject to adjustments. Closing of the offering is subject to receipt of all necessary regulatory approvals, including the final approval of the Toronto Stock Exchange. All securities issued in connection with the offering are subject to a hold period of four months plus a day from the date of issuance and the resale rules of applicable securities legislation. Certain insiders of the company were issued $763,000 principal amount of debentures in the offering, which participation constituted a "related party transaction" as defined under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. Such participation is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the debentures acquired by the Insiders, nor the consideration for the debentures paid by the Insiders, exceed 25 per cent of the company's market capitalization. The company did not file a material change report relating to the offering less than 21 days before completion of the offering, as it was not possible to do so in order to complete the offering in an expeditious manner. About Vertiqal Studios Corp. Vertiqal Studios, owners of North America's largest gaming and lifestyle network on social media, is a digital strategy, creative, and distribution holding company. The company specializes in the creation and distribution of viral videos for brands and advertisers to create always-on digital strategies that live authentically in Gen Z and millennial culture. We seek Safe Harbor.