Kadestone Capital Corp. Closes First Tranche of Convertible Note Financing

Core Viewpoint - Kadestone Capital Corp. has successfully closed the first tranche of a non-brokered private placement, raising $1.65 million through secured convertible notes and issuing 3,300,000 warrants, with further tranches expected pending regulatory approvals [1][3]. Group 1: Financial Details - The convertible notes will mature in 36 months and bear an interest rate of 10% per annum, compounded monthly, with the principal convertible into common shares at a price of $0.50 per share [2]. - Each warrant allows the holder to purchase one common share at a price of $0.60 for a period of 36 months [3]. - The proceeds from this tranche will be utilized to pay down debt and for general corporate purposes [3]. Group 2: Conversion and Repayment Terms - The convertible notes will automatically convert into common shares upon certain events, such as an equity financing yielding at least $25 million or a change of control transaction [4]. - The company can repay the principal amount of the convertible notes at any time without penalty [5]. Group 3: Insider Participation and Regulatory Compliance - An insider subscribed for $1 million of convertible notes, which is classified as a related party transaction, and the company has relied on exemptions from formal valuation and minority shareholder approval requirements [6]. - The securities issued will be subject to a four-month statutory hold period in accordance with Canadian securities laws [7]. Group 4: Company Overview - Kadestone focuses on investment, acquisition, development, and management of residential and commercial income-producing properties, as well as procurement and sale of building materials in urban centers and emerging markets in Canada [8].