EdgeTI Announces Loan Restructuring

Rhea-AI Summary

EdgeTI (TSXV: CTRL, OTCQB: UNFYF) announced a loan restructuring with CEO Jim Barrett's company, ConnertonA The original unsecured subordinated promissory note of US$550,055 from February 2021, amended in January 2023, has been converted into a new convertible note worth US$673,813 (including US$123,758 in accrued interest).

The new convertible note maintains an 8% annual interest rate and extends maturity to October 30, 2026. Notably, the note can be converted into subordinate voting shares at CAD$0.63 per share until maturity. This restructuring represents a Related Party Transaction under MI 61-101, though the company is exempt from formal valuation and minority approval requirements. The transaction requires TSXV approval, and issued securities will have a four-month and one-day hold period.

Positive

• Extended loan maturity from January 2026 to October 2026
• Added share conversion option at CAD$0.63 per share, providing flexibility in debt management

Negative

• Increased total debt obligation from US$550,055 to US$673,813 due to accrued interest
• Related party transaction with CEO indicates potential conflict of interest
• No new funds provided to company through this restructuring

Arlington, Virginia--(Newsfile Corp. - January 28, 2025) - Edge Total Intelligence Inc. (TSXV: CTRL) (OTCQB: UNFYF) (FSE: Q5i) ("edgeTI", "Company"), a leading provider of real-time Digital Twin software that enables and safeguards AI adoption, announces that further to its news release dated December 31, 2024, the Company is proceeding with the loan amendment with the Company's CEO, Jim Barrett, pursuant to which the Company is adding a conversion feature to the loan.

The Company originally entered into an unsecured subordinated secured promissory note (the "Promissory Note") dated February 3, 2021, as amended on January 20, 2023, with ConnertonA LLC ("ConnertonA"), a company controlled by Jim Barrett, in the principal sum of US$550,055 (the "Loan"). The Promissory Note accrued interest at 8% per annum and was set to mature on January 30, 2026.

The Company has issued an unsecured subordinated convertible promissory note (the "Convertible Note") to ConnertonA in the principal sum of US$673,813, comprising the Loan and accrued interests of US$123,758. The Convertible Note shall bear interest at 8% per annum and will mature on the October 30, 2026 (the "Maturity Date"). At the option of the holder, the Convertible Note may be converted into subordinate voting shares (each, a "SVS") of the Company, at any time from the date of issuance until the Maturity Date, at a conversion price of CAD$0.63 per SVS. This is not new funds to the company.

As Mr. Barrett is a director and officer of the Company, the Convertible Note is considered a "Related Party Transaction" as defined in Multilateral Instrument 61-101- Protection of Minority Securityholders in Special Transactions ("MI 61-101"). The Company is relying on the exemptions from (i) the formal valuation provisions of MI 61-101 as set out in section 5.5(b) of MI 61-101 (Issuer Not Listed on Specified Markets) on the basis that the Company is a TSX Venture Exchange listed issuer and (ii) the minority approval provisions of MI 61-101 as set out in section 5.7(1)(a) of MI 61-101 (Fair Market Value Not More than 25% of Market Capitalization) on the basis that the fair market value of the Convertible Note will not exceed 25% of the market capitalization of the Company. The disinterested directors of the Company approved the Convertible Note, with no materially opposing views expressed or abstentions made by any director in relation to the matter.

All securities issued in connection with the Loan will be subject to a four-month and one day hold period, in accordance with applicable Canadian securities law. This transaction remains subject to acceptance by the TSX Venture Exchange ("TSXV").

About edgeTI

edgeTI helps customers sustain situational awareness and accelerate action with its real-time digital operations software, edgeCore™ that unites multiple software applications and data sources into one immersive experience. Global enterprises, service providers, and governments are more profitable when insight and action are united to deliver fluid experiences via the platform's low-code development capability and composable operations. With edgeCore, customers can improve their margins and agility by rapidly transforming their siloed systems and data across continuously evolving situations in business, technology, and cross-domain operations - helping them achieve the impossible.

Website: https://ir.edgeti.com/
LinkedIn: www.linkedin.com/company/edgeti
YouTube: www.youtube.com/user/edgetechnologies

For more information, please contact:
Nick Brigman, Corporate Secretary
Phone: 888-771-3343
Email: ir@edgeti.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Information and Statements

Certain statements in this news release are forward-looking statements or information for the purposes of applicable Canadian and US securities law. Forward-looking statements include but are not limited to statements regarding the completion of the Debt Settlement, issuance of the Convertible Note and amended loan agreements, and the expected benefits to the Company. These statements are based on assumptions and expectations as of the date hereof and are subject to risks and uncertainties. Such risks and uncertainties include, but are not limited to: the ability to secure all necessary regulatory approvals, including TSXV approval; potential dilution to shareholders resulting from the conversion of the Convertible Debenture; fluctuations in the Company's stock price; broader market conditions affecting investor sentiment; and the Company's financial condition and ability to fulfill obligations under the Convertible Debenture.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, including but not limited to, business, economic and capital market conditions.

Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the demand for its products, anticipated costs, and the ability to achieve goals. Factors that could cause the actual results to differ materially from those in forward-looking statements include the continued availability of capital and financing, the impact of viruses and diseases on the Company's ability to operate, competition and general economic, and market or business conditions. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The reader is cautioned not to place undue reliance on any forward-looking information. The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/238752

FAQ

What are the terms of UNFYF's new convertible note announced in January 2025?

The new convertible note is worth US$673,813, bears 8% annual interest, matures on October 30, 2026, and can be converted to subordinate voting shares at CAD$0.63 per share.

How much interest has accrued on UNFYF's original loan from ConnertonA ?

The original loan of US$550,055 accrued US$123,758 in interest, bringing the total to US$673,813 in the new convertible note.

What is the conversion price for UNFYF's new convertible note?

The conversion price is set at CAD$0.63 per subordinate voting share.

How long is the hold period for securities issued under UNFYF's loan restructuring?

All securities issued in connection with the loan will have a four-month and one-day hold period, as per Canadian securities law.