Kadestone Capital Corp. Announces Private Placement of Convertible Notes and Warrants

Executive Summary

• Kadestone Capital Corp. announced a non‑brokered private placement to raise up to ≈ $5.0 million through secured convertible notes and common share purchase warrants.
• The convertible 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 of ≥ $25 M).
• Warrants equal to the principal amount divided by the conversion price grant holders the right to purchase one common share at $0.60 for 36 months.

Key Details

• Offering Size: Up to $5.0 million aggregate gross proceeds.
• Notes Terms:
• Secured convertible notes, 10% per annum interest, compounded monthly.
• Maturity: 36 months from issuance; early repayment allowed without penalty.
• Conversion price: $0.50 per common share (subject to TSXV approval for interest conversion).
• Warrant Terms:
• Number of warrants = principal amount ÷ $0.50.
• Exercise price: $0.60 per share.
• Exercise period: 36 months from issuance, with customary adjustments.
• Automatic Conversion Triggers:
• Closing of an equity financing raising ≥ $25 million (qualifying transaction) – notes convert at a 20% discount to the price paid in that financing.
• Sale or disposition of all/substantially all assets (change‑of‑control) – conversion at the $0.50 price.
• Use of Proceeds: Pay down existing debt and for general corporate purposes.
• Closing Timeline: Expected within 21 days of announcement; multiple tranches possible pending regulatory approvals (TSXV).
• Related Party Participation: Insiders expected to subscribe; transaction qualifies for exemption under TSXV Policy 5.9 and MI 61‑101 because fair market value ≤ 25% of market cap. No material change report will be filed ≥21 days before closing.
• Statutory Hold Period: Underlying common shares subject to a four‑month hold period per Canadian securities law.

Notable Quotes

(No executive quotes were provided in the release.)