Fobi AI Announces Completion of First Tranche Of Non-Brokered Private Placement

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 February 2, 2024 (the “Offering”). The First Tranche was comprised of the issuance of 21,693,370 units of the Company (“Units”) at a price per Unit of C$0.07 for aggregate gross proceeds of $1,518,535.94. Each Unit consisted of one (1) common share in the capital of the Company (a “Common Share”) and one (1) common share purchase warrant (a “Warrant”). Each Warrant entitles the holder to acquire one Common Share at an exercise price of C$0.14 until the earlier of February 23, 2027; 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 $0.21 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.

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 Offering were offered for sale to purchasers’ resident in Canada 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 Units are offered 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.

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In connection with the First Tranche, the Company entered into finder’s fee agreements with Raymond James Ltd., Research Capital Corporation and Canaccord Genuity Corp, each an arm’s length finder. In connection with the closing of the First Tranche, an aggregate of $105,962.88 was paid in cash and a total of 1,513,755 non-transferrable finder warrants (each, a “Finder Warrant”) Each of the Finder Warrants is exercisable to acquire one Common Share at a price of $0.14 per Common Share until February 23, 2027 or as otherwise accelerated as per the Acceleration Right. The Finder Warrants are subject to a hold period of four months from the date of issuance thereof.

The Company intends to use the net proceeds of the Offering for sales and marketing, product expansion and integration, market expansion, and general working capital and corporate expenses.

The Offering is subject to the final approval of the TSX Venture Exchange.

The securities of the Company have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws and may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referenced in this press release, in any jurisdiction in which such offer, solicitation or sale would be unlawful.

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