Fobi AI Modifies Convertible Debenture Terms
Vancouver, BC – March 3, 2025 – FOBI AI Inc. (FOBI:TSXV) (FOBIF:OTCQB), has announced an application to its principal regulator, the British Columbia Securities Commission (BCSC). This application is for a second variation order (the “Second Variation Order”) to the partial revocation order granted by the BCSC on December 30, 2024. The variation aims to amend certain terms of the company’s ongoing failure-to-file cease trade order (“FFCTO”) issued in November 2024. The primary change concerns the conversion price of convertible debentures.
Revised Convertible Debenture Offering
The First Variation Order previously allowed for the sale of up to 1,495 unsecured convertible debentures (each, a “Debenture”) of the Company to a single subscriber. Each debenture has a principal amount of C$1,000, for overall proceeds of up to C$1,495,000 (the “Revised Offering”). These debentures accrue interest at 10.0% per annum, paid semi-annually in cash. The maturity date for the debentures is two years from the Revised Offering’s closing.
According to the policies of the TSX Venture Exchange, or any other public exchange on which the common shares of the Company (“Common Shares”) may trade (the “Exchange”). The debenture holders may convert their principal balance of any outstanding debentures, purchased under the Revised Offering into units of the company (“Units”), and this conversion price has been updated. The conversion price is now proposed as (i) C$0.06 per Unit before one year after the Revised Offering’s closing and (ii) C$0.10 per Unit on or after the one-year anniversary of the closing, but before the Maturity Date, provided these changes align with Exchange policies. Each Unit consists of one Common Share and one Common Share purchase warrant (a “Unit Warrant”). Each Unit Warrant enables the holder to buy one Common Share for two years after the Revised Offering’s closing, at a price of C$0.06 per Common Share.
Fobi retains the discretion to pay any outstanding Debentures in Units, at the Conversion Price, if the Common Shares’ closing price on the Exchange equals or exceeds C$0.12 for ten continuous trading days. All other aspects of the Revised Offering and Debentures remain consistent with the First Variation Order and the February 12, 2025, news release.
Use of Proceeds
The company intends to use the Revised Offering’s proceeds to fulfill its outstanding continuous disclosure obligations, cover operational expenses, and apply for a full FFCTO revocation. The proceeds will be allocated as follows:
Note: Payroll costs include past due amounts, including certain amounts payable in U.S. dollars, converted to CAD at the Bank of Canada exchange rate of 1 USD to 1.4438 CAD as of February 28, 2025.
Based upon the revised conversion price, the subscriber is expected to hold 9.99% of Fobi’s outstanding common shares assuming the conversion of 1,495 Debentures at a conversion price of $0.06. The subscriber’s exercise of Unit Warrants is restricted if it would result in reaching more than 10.0% control of the outstanding voting securities (filed with the Exchange) or 20.0% or more of the outstanding voting securities of the Company (requiring shareholder approval).
Completion of the Revised Offering is still subject to the Second Variation Order and the subscriber’s execution of a subscription agreement, among other conditions. Company management anticipates the proceeds will be sufficient to file the pending continuous disclosure documents and cover all due fees.
Anticipated Filings and FFCTO Revocation
Fobi plans to file audited annual financial statements and related documents for the year ending June 30, 2024 (“Annual Filings”) within 60 days of the Revised Offering’s closing and interim financial statements for the period ended September 30, 2024 (“Interim Filings”) within 15 days of the Annual Filings. Following these filings, the company plans to apply for a full revocation of the FFCTO.
About Fobi AI Inc.
Founded in Vancouver, Canada, in 2017, Fobi provides AI and data intelligence solutions to transform and future-proof businesses. Fobi helps clients leverage and monetize customer data, offers personalized experiences, and supports digital sustainability. Fobi serves large global organizations in various sectors, including retail, insurance, sports and entertainment, and casino gaming. Fobi is recognized as a data intelligence and technology leader in North America and Europe and is a major data aggregator in Canada’s hospitality and tourism industries.
Forward-Looking Statements
This news release contains forward-looking statements regarding the offering’s terms, the Second Variation Order, the intended use of proceeds, and the timing of filings, among other things. Risks include market competition, economic conditions, stock market volatility, regulatory approvals, and access to capital. Actual outcomes could differ significantly due to these factors, including volatility in exchange rates and market conditions. Readers should not place undue reliance on these forward-looking statements.
