Birchtree Investments Announces Execution of the Definitive Agreement for the Acquisition of Digital Motion Corporation

Executive Summary

• Birchtree Investments Ltd. has entered into a definitive share‑exchange agreement to acquire 100 % of Digital Motion Corp., valuing the target at USD $20 million (CAD $27.4 million).
• The consideration will be paid by issuing up to 137,060,000 Birchtree Shares at a deemed price of CAD $0.20 per share; founders Zachary Landau and Robert Polito will each receive ~57.3 million shares (≈20.75 % of post‑closing equity).
• The transaction is subject to customary regulatory, shareholder and board approvals, a minimum net working capital of CAD $200,000, and lock‑up/escrow restrictions on the issued shares.

Key Details

• Transaction Structure: Arm’s‑length definitive share‑exchange; Sellers may elect Birchtree Shares or non‑voting stock of the acquisition subsidiary, with an option to convert the latter into Birchtree Shares post‑closing.
• Consideration: USD $20 million (CAD $27,412,000) payable via up to 137,060,000 Birchtree Shares at CAD $0.20 per share.
• Equity Allocation: Founders Zachary Landau and Robert Polito each to receive 57,255,890 Birchtree Shares (~20.75 % of total post‑closing shares). Remaining shares issued to other sellers. All seller shares subject to a six‑month contractual hold and escrow restrictions per CSE policy.
• Digital Motion Financials (FY2025):
• Current assets: USD $785,198 (cash & equivalents)
• Current liabilities: USD $140,787 (accounts payable)
• No long‑term debt
• Expenses incurred: USD $664,988 (development and professional fees)
• Total capital raised to date: USD $1,351,000; most recent valuation post‑money enterprise value of USD $20 million.
• Equity Incentive Plan: Post‑closing, Birchtree will grant options for up to ~4.8 million Birchtree Shares to Digital Motion employees/consultants; the company may amend its 2024 Equity Incentive Plan to increase the reserve pool, subject to CSE and shareholder approval.
• Closing Conditions:
• Receipt of all required third‑party, regulatory, exchange, board and shareholder approvals.
• Net working capital ≥ CAD $200,000 (including US $100,000 refundable deposit already paid).
• Seller lock‑up agreements (≥ six months).
• Deemed Issue Price not less than CAD $0.20 per share.
• Regulatory Filings: CSE approval contingent on filing a new Form 2A Listing Statement disclosing the transaction and obtaining shareholder majority vote due to dilution and addition of two new control persons.
• Board Representation: Digital Motion will nominate two directors (expected to be Zachary Landau and Robert Polito) to the Birchtree Board upon closing.
• Share Trading Halt: Birchtree Shares will remain halted on the CSE until the Listing Statement is publicly filed on SEDAR+.

Notable Quotes

(No direct quotes were provided in the release.)