Snipp Interactive Inc. Closes $4.5 Million Secured Convertible Debenture Financing Led by Shen Capital

Executive Summary

• Snipp Interactive Inc. completed its previously announced non‑brokered private placement, raising C$4.5 million in gross proceeds from strategic investors led by Shen Capital and Lark Investments.
• The senior secured convertible debentures bear 3.45% simple interest, mature in three years, and are convertible into units (one common share plus one warrant) at $0.08 per unit until 23 Feb 2027, thereafter $0.10 per unit with adjustment provisions for a planned reverse split.
• The financing triggers the appointment of Martin Shen to the board, shareholder approval of two new “Control Persons,” and a planned 1‑for‑10 share consolidation within 12 months, subject to TSX‑V approval.

Key Details

• Gross proceeds: C$4,500,000; net proceeds to be used for growth initiatives and general working capital.
• Lead investors:
• Shen Capital – C$3,500,000 (≈ 77.8% of the offering).
• Lark Investments – C$900,000 (≈ 20%).
• Atul Sabharwal (CEO & director) – C$100,000 (≈ 2.2%).
• Debenture terms:
• Interest rate: 3.45% per annum (simple), payable quarterly; first four payments deferred and paid in a lump sum on the 12‑month anniversary of closing.
• Maturity: 3 years from issuance date.
• Security: First‑ranking security interest over all present and after‑acquired assets; guaranteed by Snipp Interactive Inc. (Delaware) and Snipp Interactive Limited (Ireland).
• Conversion terms:
• Conversion price = $0.08 per unit until 23 Feb 2027, then $0.10 thereafter.
• Post‑consolidation adjustment: conversion price multiplied by the ratio of pre‑ to post‑consolidation common shares; units issuable adjusted reciprocally.
• Unit composition: 1 Common Share + 1 Common Share purchase warrant.
• Warrant terms: One additional common share at $0.12 exercise price, exercisable for 60 months from debenture issuance date.
• Forced conversion / acceleration provisions:
• Debentures may be forced into units if TSX‑V VWAP ≥ $0.20 for 30 consecutive trading days, starting 12 months after closing.
• Warrants may have expiry accelerated if TSX‑V VWAP ≥ $0.25 for 30 consecutive trading days, starting 9 months after issuance, provided the price does not fall below $0.23 during the notice period.
• Ownership impact (early warning reports):
• Shen Capital could own up to ~23.36% of diluted common shares post‑conversion/exercise (87.5 M shares).
• Lark Investments could own up to ~24.43% of diluted common shares post‑conversion/exercise (22.5 M shares).
• Shareholder approvals:
• Disinterested shareholders approved creation of two new “Control Persons” at the Annual General & Special Meeting on 9 Jan 2026.
• Board appointment: Martin Shen (Co‑Founder & GP, Shen Capital) appointed to Snipp’s Board of Directors effective closing date.
• Share consolidation: Planned reverse split of at least 1 post‑consolidation share for every 10 pre‑consolidation shares, to be implemented within 12 months pending TSX‑V approval; shareholders approved the proposal at the same meeting.
• Related party transaction: Participation by Lark Investments (≥ 10% holder) and CEO Atul Sabharwal qualifies as a related‑party transaction; exemptions from formal valuation/minority‑shareholder approval were relied upon because the fair market value did not exceed 25% of market cap.
• Regulatory matters: Conditional acceptance from TSX‑V received; securities subject to a four‑month plus one day statutory hold period; not registered under U.S. securities laws.

Notable Quotes

• “We’re pleased to welcome Shen Capital as a strategic sponsor… we look forward to working closely with Martin and the Shen Capital team as we continue to scale Snipp.” – Atul Sabharwal, CEO
• “Snipp has earned the trust of leading global brands… we’re excited to support management as an active, long‑term partner…” – Martin Shen, General Partner, Shen Capital