Vertiqal Studios Closes Private Placement of Convertible Debentures, Co-Led by Globacor and Carriage House Wealth, PJ Bujouves to Join Board

Rhea-AI Summary

Vertiqal Studios (TSX: VRTS, OTC: VERTF) has successfully closed a $1.55 million private placement of convertible debentures, co-led by Globacor Capital and Carriage House Wealth. The debentures, priced at $1,000 each, will mature on May 1, 2027 with a 15% annual interest rate. Both Globacor and The Aune Foundation subscribed for $750,000 each. The debentures are convertible into common shares at $0.025 per share during the six months prior to maturity. Additionally, the company announced the appointment of PJ Bujouves, a Notre Dame Business School graduate and former Division I athlete, to its Board of Directors. The proceeds will be used for general working capital purposes.

Positive

• Secured $1.55 million in funding through convertible debentures
• Addition of PJ Bujouves to Board of Directors brings fresh industry perspective
• Strong institutional backing with equal participation from Globacor Capital and The Aune Foundation

Negative

• High interest rate of 15% on debentures indicates expensive financing terms
• Potential significant dilution with conversion price set at $0.025 per share
• Related party transaction with insider participation may raise governance concerns

Toronto, Ontario--(Newsfile Corp. - May 1, 2025) - Vertiqal Studios Corp. (TSX: VRTS) (OTC Pink: VERTF) (FSE: 9PY0) (the "Company" or "Vertiqal Studios") - Vertiqal Studios, one of North America's largest owners of gaming and lifestyle social media channels, is pleased to announce the closing of a non-brokered private placement co-led by Globacor Capital Inc. ("Globacor") and Carriage House Wealth on behalf of The Aune Foundation ("TAF") and through the issuance of unsecured convertible debentures (each, a "Debenture") at a price of $1,000 per Debenture for aggregate gross proceeds of $1,550,000 (the "Offering"). Each of Globacor and TAF subscribed for $750,000 principal amount of Debentures. The Company intends to use the net proceeds from the Offering for general working capital purposes.

The issuance of the Debentures pursuant to the Offering was (and, if applicable, the underlying common shares of the Company ("Common Shares") upon conversion of the Debentures shall be) completed on a private placement and prospectus exempt basis, as applicable, such that the issuances are (or in the case of any underlying Common Shares, shall be) exempt from any applicable prospectus and securities registration requirements.

The Debentures will mature on May 1, 2027 (the "Maturity Date") and will bear interest at an interest rate of fifteen percent (15%) per annum, payable on the Maturity Date in arrears.

At any time from and including the date that is six months prior to the Maturity Date and up to the close of business on the last business day immediately preceding the Maturity Date, holders of Debentures have the right, at the holder's option, to convert into Common Shares all or a portion of: (A) the principal amount outstanding under the Debentures at $0.025 per Common Share (the "Conversion Price"); or (B) the accrued but unpaid interest under the Debentures at the greater of: (i) the Conversion Price; or (ii) the volume weighted average trading price of the Common Shares on the Toronto Stock Exchange for the five business days preceding the date of conversion, less applicable discounts in accordance with the policies of the Exchange, subject to adjustments.

Closing of the Offering is subject to receipt of all necessary corporate and regulatory approvals, including the approval of the Toronto Stock Exchange. All securities issued in connection with the Offering will be subject to a hold period of four months plus a day from the date of issuance and the resale rules of applicable securities legislation.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

The Aune Foundation, an insider of the Company (the "Insider"), was issued $750,000 principal amount of Debentures in the Offering, which participation constituted a "related party transaction" as defined under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Such participation is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the Debentures acquired by the Insider, nor the consideration for the Debentures paid by the Insider, exceed 25% of the Company's market capitalization. The Company did not file a material change report relating to the Offering less than 21 days before completion of the Offering, as it was not possible to do so in order to complete the Offering in an expeditious manner.

In addition, Vertiqal Studios would like to announce the appointment of PJ Bujouves to its Board of Directors. A Notre Dame Business School graduate and former Division I athlete, PJ pairs sharp business analysis skills with an insider's understanding of the industry. His drive for operational excellence and fresh perspective will be a powerful asset as Vertiqal Studios enters its next phase of growth.

About Vertiqal Studios

Vertiqal Studios, owners of North America's largest gaming and lifestyle network on social media, is a digital strategy, creative, and distribution holding company. The Company specializes in the creation and distribution of viral videos for brands and advertisers to create always-on digital strategies that live authentically in Gen Z and Millennial culture. Vertiqal Studios partners with leading brands to develop strategic solutions, creative ideation, and content production, while also providing distribution and amplification through its owned & operated channels - all delivered with boutique, white-glove service. Its expertise lies in managing over 130 channels across TikTok, Instagram, and Snapchat, while producing over 100+ pieces of content a day for a growing audience of 52 million-plus followers. By having such robust ownership of culture and communities on social, Vertiqal Studios provides innovative advertising solutions for brands such as RBC, Samsung, White Castle, Coca-Cola, ESPN, Chili's, and more. For more information and to join our email subscriber list for direct press releases and newsletters, visit https://vertiqalstudios.com/.

For media inquiries, please contact:

Jon Dwyer
Chairman and Chief Executive Officer

+1 (416) 627-8868;
Email: jon@vertiqalstudios.com;

Investor Relations
Email: ir@vertiqalstudios.com

Forward-Looking Information

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward-looking statements or information. The forward-looking statements and information are based on certain key expectations and assumptions made by management of the Company. Although management of the Company believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information since no assurance can be given that they will prove to be correct.

Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Company relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward-looking statements and information address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release.

The forward-looking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/250369

FAQ

What are the key terms of VERTF's convertible debenture offering?

The offering raised $1.55M with debentures priced at $1,000 each, carrying a 15% annual interest rate, maturing May 1, 2027. They're convertible into shares at $0.025 per share within 6 months of maturity.

Who are the main investors in Vertiqal Studios' private placement?

The private placement was co-led by Globacor Capital Inc. and Carriage House Wealth, with each investing $750,000 in convertible debentures.

Who is PJ Bujouves and what is his role at Vertiqal Studios (VERTF)?

PJ Bujouves is a Notre Dame Business School graduate and former Division I athlete who has been appointed to Vertiqal Studios' Board of Directors to bring operational excellence and industry perspective.

How will Vertiqal Studios use the proceeds from the convertible debenture offering?

Vertiqal Studios intends to use the net proceeds from the $1.55M offering for general working capital purposes.

What is the conversion price for VERTF's convertible debentures?

The debentures can be converted into common shares at $0.025 per share during the six months prior to the maturity date of May 1, 2027.