EdgeTI Announces Debt Conversion, Amended Loan Agreement with Salem, and Amended Related Party Convertible Promissory Notes

Rhea-AI Summary

Edge Total Intelligence (TSXV: CTRL, OTCQB: UNFY) has announced several debt-related transactions. The company will convert US$673,813 of debt owed to CEO Jim Barrett into a subordinated secured convertible promissory note bearing 8% annual interest, maturing October 30, 2026, convertible at CAD$0.63 per share.

Additionally, EdgeTI amended its loan agreement with Salem Investment Partners IV, extending the maturity date from January 1, 2024 to September 30, 2026. The loan terms include an interest rate increase from 6% to 8% effective January 2025, and scheduled repayments of $400,000 upon signing and $600,000 by September 2025. The company also extended the maturity date of related party convertible promissory notes from January 20, 2026 to October 30, 2026.

Positive

• Extended loan maturity with Salem Investment Partners IV from January 2024 to September 2026, improving short-term liquidity
• Structured repayment plan with clear milestones ($400,000 and $600,000)
• Option to repurchase Salem's 7% equity warrant for $350,000

Negative

• Interest rate increase from 6% to 8% on Salem loan effective January 2025
• Additional debt conversion of $673,813 to CEO through new convertible note
• Potential dilution from convertible notes at CAD$0.63 per share

Arlington, Virginia--(Newsfile Corp. - December 31, 2024) - Edge Total Intelligence Inc. (TSXV: CTRL) (OTCQB: UNFY) (FSE: Q5I) ("edgeTI", "Company"), a leading provider of real-time Digital Twin software that enables and safeguards AI adoption, announces a debt conversion and amendments to its loan agreement and related party convertible promissory notes.

DEBT CONVERSION

The Company has reached an agreement to settle US$673,813 of debt (the "Debt") to Jim Barrett, the Company's CEO, through the issuance of subordinated secured convertible promissory note (the "Convertible Note") of the Company (the "Debt Settlement").

The Convertible Note shall bear interest at 8% per annum from the date of issuance and mature on the October 30, 2026 (the "Maturity Date"). At the option of the holder, the Convertible Note will be convertible into subordinate voting shares (each, a "SVS") of the Company, at any time from the date of issuance until the Maturity Date at a price of CAD$0.63 per SVS (the "Conversion Price").

As Mr. Barrett is a director and officer of the Company, the Debt Settlement 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 amendment to the Convertible Note and no materially contrary view or abstention was expressed or made by any director of the Company in relation thereto.

The Debt Settlement is subject to acceptance by the TSX Venture Exchange ("TSXV").

AMENDMENT TO SALEM LOAN AGREEMENT

The Company is a party to an Amended Loan and Purchase Agreement with Salem Investment Partners IV, Limited Partnership ("Salem") in the amount of $2,989,442 (the "Loan") dated January 20, 2023 (the Loan Agreement"). Further to the Company's news release dated January 25, 2023, the Company has entered into an amended loan agreement (the "Amended Loan Agreement") to extend the maturity date of the Loan from January 1, 2024 to September 30, 2026 (the "Loan Extension"). In consideration for the Loan Extension, the terms of the Loan have been further amended as follows:

• Effective January 1, 2025, the interest rate shall be increased from 6% to 8% per annum;
• The Company shall make the following partial repayments on the Loan:
  • $400,000 on the date of signing of the Amended Loan Agreement; and
  • $600,000 on September 30, 2025.
• Upon full settlement of the Loan, the warrant held by Salem that allows for Salem to purchase 7% of all of the issued and outstanding equity of the Company may be repurchased by the Company for $350,000.

RELATED PARTY CONVERTIBLE PROMISSORY NOTES

Further to the Company's news release dated January 25, 2023, the Company has amended the related party convertible promissory notes (the "Convertible Pomissory Notes") held by certain management and directors of the Company to extend the maturity date from January 20, 2026 to October 30, 2026. All other terms of the Convertible Promissory Notes remain the same.

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/235704

FAQ

What are the terms of EdgeTI's (UNFYF) debt conversion with CEO Jim Barrett?

The debt conversion involves US$673,813 being converted into a subordinated secured convertible promissory note bearing 8% annual interest, maturing October 30, 2026, with conversion rights at CAD$0.63 per share.

What are the key changes in EdgeTI's (UNFYF) amended Salem loan agreement?

The loan maturity was extended from January 1, 2024 to September 30, 2026, with interest increasing from 6% to 8% in January 2025. It includes scheduled repayments of $400,000 upon signing and $600,000 by September 2025.

How much is EdgeTI's (UNFYF) total loan amount with Salem Investment Partners?

The loan amount with Salem Investment Partners IV is $2,989,442.

What is the new maturity date for EdgeTI's (UNFYF) related party convertible promissory notes?

The maturity date for the related party convertible promissory notes has been extended from January 20, 2026 to October 30, 2026.