Kadestone Capital Corp. Closes First Tranche of Convertible Note Financing

Executive Summary

• Kadestone Capital Corp. closed the first tranche of its non‑brokered private placement, issuing $1.65 M of secured convertible notes and 3.3 M common share purchase warrants.
• The notes bear 10% annual interest (compounded monthly), mature in 36 months, and are convertible at $0.50 per share (or at a 20% discount in a qualifying equity financing).
• Proceeds will be used to pay down debt and for general corporate purposes.

Key Details

• First Tranche Size: $1.65 million principal amount of secured convertible notes.
• Warrants Issued: 3,300,000 warrants, each exercisable at $0.60 per common share for 36 months.
• Interest Rate: 10% per annum, compounded monthly; payable on redemption or conversion.
• Maturity: 36 months from issuance; convertible into common shares at a fixed price of $0.50 per share (subject to TSXV approval).
• Automatic Conversion Triggers:
• Equity financing with gross proceeds ≥ $25 million → conversion at 20% discount to the transaction price.
• Change‑of‑control transaction → conversion at the $0.50 price (interest component subject to TSXV approval).
• Redemption Rights: Company may repay principal and accrued interest at any time without penalty upon notice.
• Use of Proceeds: Debt repayment and general corporate purposes.
• Related Party Transaction: Insider subscribed for $1 million of the notes; exemption relied on under TSXV Policy 5.9 and MI 61‑101 (fair market value ≤ 25% of market cap). No material change report filed within the usual 21‑day window, deemed reasonable for expeditious completion.
• Statutory Hold Period: Securities subject to a four‑month hold period under Canadian securities law.

Notable Quotes

(No direct quotes were provided in the release.)