2 days ago
CONVERSION OF DEBENTURE INTEREST INTO EQUITY AND AMENDMENT OF DEBENTURES
MONTRÉAL, July 2, 2025 /CNW/ - Geekco Technologies Corporation (the " Corporation" or " Geekco") (TSXV: GKO) is pleased to announce that, in accordance with the terms and conditions of the convertible debenture units issued on March 1, 2021 (the " First Tranche Debentures Units 2021"), April 14, 2021 (the " Second Tranche Debenture Units 2021", and collectively with the First Tranche Debenture Units 2021, the " Debentures Units 2021") and March 1, 2023 (the " Debentures Units 2023"), Geekco has agreed, subject to the approval of the TSX Venture Exchange (the " TSXV"), to issue (i) 1,724,133 class A shares (the " Common Shares") as settlement of payments of interest at a rate of 10% per year on an aggregate principal amount of $1,000,000 of the First Tranche Debentures Units 2021 and equal to $100,000; (ii) 500,000 Common Shares as settlement of payments of interest at a rate of 10% per year on an aggregate principal amount of $250,000 of the Second Tranche Debentures Units 2021 and equal to $25,000; and (iii) 1,293,103 Common Shares as settlement of payments of interest at a rate of 15% per year on an aggregate principal amount of $500,000 of the Debentures Units 2023 and equal to $75,000. The Common Shares will be issued at the price of $0.058 per Common Share with respect to the First Tranche Debentures Units 2021 and Debenture Units 2023, which is equal to the volume-weighted average trading price (" VWAP") of the Common Shares on the TSXV for the last 20 days prior to the respective applicable payment date. The Common Shares will be issued at the price of $0.05 per Common Share with respect to the Second Tranche Debentures Units 2021, which equals the closing price on the applicable payment date, as it exceeded the 20-day VWAP. The Common Shares will also be subject to a statutory four-month hold period beginning on the date of issuance.
Extension and Modifications to Outstanding Convertible Debentures
Geekco also announces modifications to the outstanding First Tranche Debentures Units 2021, Second Tranche Debentures Units 2021 and Debenture Units 2023, representing an aggregate principal amount of $1,720,000. The modifications consist of an extension of their respective maturity dates by 24 months from the current maturity date of March 1, 2025, with respect to the First Tranche Debentures Units 2021 and the Debentures Units 2023 (together representing an aggregate principal amount of $1,470,000), and April 14, 2025, for the Second Tranche Debenture Units (representing an aggregate principal amount of $250,000) (the " Current Maturity Date"). During this extended period, (i) the minimum conversion price of the principal amount in Common Shares by the Corporation will be of $0.15 during the first 12 months from the Current Maturity Date and of $0.30 thereafter; (ii) the VWAP of the Common Shares for the last 20 days on the TSXV which triggers the option by the Corporation to accelerate the conversion is of $0.225 during the first 12 months from the Current Maturity Date and of $0.30 thereafter; and (iii) the conversion rate of the principal amount in Common Shares by the debentures units holders will be of 6,666 Common Shares per $1,000 Debenture if converted during the first 12-month period from the issue date and of 3,333 Common Shares thereafter. All other terms of the debenture units remain unchanged, including those of the attached warrants, which have not been extended and have thus expired at maturity, as well as the respective interest rates of 10% for the 2021 Debenture Units and 15% for the 2023 Debenture Units, except that interests for the latter with respect to its third anniversary year and going forward are now payable at the maturity date (uncompounded and not capitalized).
Each Warrant which were attached to the Debenture Units 2021 and the Debenture Units 2023 (now expired) entitled their holders to acquire one Common Share for a period of 24 months at an exercise price equal to (i) $0.75 during the first year ($0.50 for the Debenture Units 2023) and (ii) $1.00 during the second year ($0.75 for the Debenture Units 2023), provided that if the volume weighted trading price of the Common Shares for the last 20 days on the TSXV is equal to, or greater than the applicable exercise price plus 20% per Common Share, then the Corporation may force the holder to exercise the Warrants into Common Shares within 30 days, after which the Warrants shall automatically expire.
These modifications will take effect as of the respective Current Maturity Date of each set of convertible debentures, subject to the approval of the TSXV. For more details on the Debenture Units 2021 and Debenture Units 2023, please refer to the press releases issued by the Corporation on March 1 and April 14, 2021, as well as March 2 and April 13, 2023.
The Debenture Units 2023 indirectly held by Henri Harland, a holder of more than 10% of the outstanding securities of the Corporation, through Gestion Harland Inc., are now convertible into up to a potential of 3,333,333 Common Shares. In addition, 1,293,103 Common Shares were issued to Gestion Harland Inc. in settlement of interest payments on the Debenture Units 2023. As a result, Mr. Harland's shareholding, directly and indirectly, has increased by 0.69% to reach 21.33% on an undiluted basis after closing of the above repricing of the Debentures Units 2023 (has increased by 1.65% to reach 26.30% on a partly diluted basis). Xavier Harland, a holder of more than 10% of the outstanding securities of the Corporation on a partly diluted basis, has received directly 43,103 Common Shares pursuant to the settlement of the interests in shares and his Debenture Units 2021 are now convertible into up to a potential of 166,666 Common Shares. His shareholding, directly and indirectly, decreased by 0.35% to reach 8.77% on an undiluted basis after closing of the settlement of payments of interests and the above repricing of the First Tranche Debentures Units 2021 (decreased by 0.48% to reach 14.30% on a partly diluted basis). The issuances of the Common Shares to those insiders constitute related party transactions, but which are exempt from the requirement to provide a formal valuation and obtain minority approval under Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions (" Regulation 61-101"), and the board of directors of the Corporation, which includes independent directors in respect of the transactions who are not employees of the Corporation, has unanimously approved the issuances. These transactions are exempt from the formal valuation and minority shareholder approval requirements of Regulation 61-101 as the Corporation is listed on the TSX Venture Exchange and the fair market value of any security issued to, or the consideration paid, does not exceed 25% of the Corporation's market capitalization. Geekco did not file a material change report pertaining to the insiders' interests more than 21 days prior to the closing date, as such insiders' interests were not determined at that time. The board members of the Corporation unanimously reviewed its financial conditions and the state of the financial market and determined that the terms and conditions of the conversion of debenture interest into equity, including the issuance to the related party, were fair and equitable and represented the best strategic option available. In addition, neither the Corporation nor the said related parties have knowledge of any material information concerning the Corporation or its securities that has not been generally disclosed.
ABOUT GEEKCO
Geekco is positioned at the forefront of technological solutions that are evolving the new way of doing marketing while stimulating and energizing the economy of each city and each neighborhood by making consumers and shops interact like never before. Its Tell Me application allows users to discover businesses around them in real time using the interactive map, access exclusive rewards and even find a job. Shops thus increase their traffic and their visibility while recruiting their future employees. All this in the same app.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
