Avant Brands Continues to Strengthen Balance Sheet with $1.77 Million Debt Retirement at $0.935 Per Unit

Executive Summary

• Avant Brands entered into a debt settlement agreement to retire approximately $1.77 million of its unsecured convertible debenture by issuing 1,900,000 units at a deemed price of $0.935 per unit (premium to market).
• The transaction will reduce the company’s total outstanding principal on the debenture from ~$3.9 M to ~ $0.9 M and lower overall debt to roughly $1.63 M (including the secured credit facility).
• Units consist of one share plus half a warrant; each full warrant (5‑year term) allows purchase of one share at $0.935, with an acceleration clause tied to the TSX share price.

Key Details

• Debt Reduction: Extinguish $1,776,500 of principal on the amended and restated unsecured convertible debenture.
• Units Issued: 1,900,000 units @ $0.935 per unit (total deemed consideration ≈ $1.777 M).
• Unit Composition: 1 common share + ½ share purchase warrant.
• Warrant Terms: 5‑year term; exercise price $0.935 per share; acceleration to 30 days if TSX VWAP ≥ $1.75 for ten consecutive trading days.
• Post‑Transaction Debt Profile:
• Unsecured convertible debenture principal ≈ $0.9 M (down from ~$3.9 M).
• Secured Credit Facility principal ≈ $728,000 (down from $3.5 M).
• Ownership Cap: Creditor’s beneficial ownership limited to 19.99% post‑issuance.
• Closing Timeline: Expected during March 2026, subject to customary conditions and TSX approval; no shareholder vote required.
• Statutory Hold Period: All securities issued are subject to a four‑month‑plus‑one‑day hold period under Canadian law.

Notable Quotes

“Following a fiscal year defined by record operational performance, strategically reducing our largest debt obligation is a key component of our capitalization strategy…executing this retirement at a premium to market further optimizes our balance sheet efficiently…” – Norton Singhavon, Founder & CEO, Avant Brands Inc.