Fobi AI, an industry leader in harnessing AI and data intelligence to enable digital transformation, is pleased to announce the completion of its first tranche closing (the “First Tranche”) of a non-brokered private placement financing previously announced on August 22, 2023 (the “Offering”). The First Tranche was comprised of the issuance of 4,651,681 units of the Company at a price per Unit of C$0.22 for aggregate gross proceeds of $1,023,370. Each Unit consisted of one (1) common share in the capital of the Company (a “Common Share”) and one-half of one (1/2) common share purchase warrant (each whole warrant, a “Warrant”). Each Warrant entitles the holder to acquire one Common Share at an exercise price of C$0.30 until the earlier of: (i); and (ii) in the event the volume weighted average price of the Common Shares on the TSX Venture Exchange (the “TSXV”) for any continuous 10 trading day period meets or exceeds $0.50 following the closing of the Offering (the “Acceleration Condition”), the date that is thirty (30) days following the issuance of a news release by the Company announcing the acceleration of the expiry of the Warrants, which such news release may be issued at any time following the trigger of the Acceleration Condition (the “Acceleration Right”). For avoidance of doubt, the Company shall not be obligated to exercise the Acceleration Right at any time.
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Subject to compliance with applicable regulatory requirements and in accordance with National Instrument 45-106 – Prospectus Exemptions (“NI 45-106”), the Units issued pursuant to the First Tranche were offered for sale to purchasers resident in Canada (other than Quebec) and/or other qualifying jurisdictions pursuant to the listed issuer financing exemption under Part 5A of NI 45-106 (the “Listed Issuer Financing Exemption”). As the First Tranche was completed pursuant to the Listed Issuer Financing Exemption, the securities issued under the Offering are not subject to a hold period pursuant to applicable Canadian securities laws.
Rob Anson, Chief Executive Officer of the Company participated in the First Tranche for $65,000 or 295,454 Units. The participation of Mr. Anson in the First Tranche constituted a “related party transaction,” within the meaning of TSX Venture Exchange Policy 5.9 Protection of Minority Security Holders in Special Transactions and Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company has relied on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of the related party participation in the First Tranche as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involved the interested party, exceeded 25% of the Company’s market capitalization (as determined under MI 61-101). Further details will be included in the material change report. The material change report will not be filed more than 21 days prior to the closing of the insider’s subscription due to the timing of the accepted subscription and closing having occurred in less than 21 days.
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In connection with the First Tranche, the Company entered into finder’s fee agreements with each of Raymond James Ltd. and Echelon Wealth Partners Inc. and pursuant to each agreement, respectively, paid a cash commission in the amount of $31,423.70 and issued 142,835 non-transferable broker warrants (“RJ Broker Warrants”) to Raymond James Ltd., an arm’s length finder, and a cash commission in the amount of $7,592.20 and issued 34,510 non-transferable broker warrants (“Echelon Broker Warrants”) to Echelon Wealth Partners Inc., an arm’s length finder. Each of the RJ Broker Warrants and Echelon Broker Warrants is exercisable to acquire one Common Share at a price of $0.30 per Common Share until August 31, 2026, and are subject to a hold period of four months from the date of issuance thereof.
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