Mr. Kalvie Legat reports

VITALIST INC. ANNOUNCES $5 MILLION EQUITY FINANCING, LAUNCH OF $5 MILLION DEBENTURE OFFERING, AND RENEWAL OF C$12 MILLION REVOLVING CREDIT FACILITY

Vitalist Inc. has arranged a proposed non-brokered equity financing for total gross proceeds of $5-million, has opened a non-brokered private placement of convertible debentures, for total gross proceeds of $5-million, which is anchored by its two largest shareholders, for $2,546,000, and has renewed Vitalist's $12-million revolving credit facility.

Equity financing

Under the equity financing, Vitalist intends to issue approximately 5,882,353 units of Vitalist at a price of 85 cents per unit. Each unit consists of one common share in the capital of Vitalist and one common share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share at an exercise price of $1.00 per share for a period of 24 months following the date of issuance.

Substantially all of the equity financing was subscribed to by existing major institutional shareholders Vesta Wealth Partners Ltd. and The John Hantz Trust (Hantz Group), which currently hold approximately 57.3 per cent and 15.5 per cent of Vitalist's outstanding common shares, respectively. Completion of the equity financing remains subject to the receipt of all necessary regulatory approvals, including the acceptance of the TSX Venture Exchange.

debenture offering

Subject to exchange approval, Vitalist is offering convertible debentures for gross proceeds of up to $5-million, which is expected to include subscriptions by existing major shareholders Vesta Wealth ($2-million) and Hantz Group ($546,000), together representing approximately 51 per cent of the maximum size of the debenture offering, with the balance expected to be subscribed for by other investors.

The debentures will mature three years from the date of issuance and bear interest at 12 per cent per annum, accruing and compounding annually as paid-in-kind (PIK) interest rather than in cash. Upon the closing of an underwritten public offering on the Nasdaq Capital Market or another recognized United States national exchange under an effective Form F-1 registration statement, the principal amount of the debentures will automatically convert into common shares. Any accrued or capitalized PIK interest will not automatically convert, and its conversion remains subject to separate exchange acceptance.

The conversion price per common share upon an automatic conversion will be equal to 80 per cent of the price per common share offered to the public in the qualified public offering, provided that the conversion price will not be less than 68 cents, as required under TSX Venture Exchange Policy 4.1. If no qualified public offering has closed by the maturity date, the holder may elect either cash repayment or conversion into common shares at 80 per cent of the volume-weighted average trading price (VWAP) of the common shares on the exchange for the ten consecutive trading days immediately prior to the maturity date, subject to the TSX-V price floor.

Prior to the closing of a qualified public offering and prior to the maturity date, if the VWAP of the common shares on the exchange equals or exceeds 200 per cent of the TSX-V price floor for 20 consecutive trading days, Vitalist may require the holder to convert the debenture into common shares at 80 per cent of the VWAP for the 10 consecutive trading days immediately prior to the forced conversion date, subject to the TSX-V price floor.

Notwithstanding the foregoing, if exchange rules or policies require accrued or capitalized PIK interest to be converted at a price different from the applicable conversion price, such PIK interest shall be converted into common shares at the lowest price permitted by exchange policies or, at the election of Vitalist, paid in cash.

In connection with the debenture offering, the company may pay finders' fees or commissions in cash and/or securities to eligible arm's-length finders, subject to exchange policies and applicable securities laws.

Completion of the debenture offering remains subject to the receipt of all necessary regulatory approvals, including the acceptance of the exchange.

Renewed credit facility

Vitalist has also entered into an agreement with Vesta Wealth to renew and extend its existing $12-million revolving credit facility. The renewed credit facility maintains vitalist's access to up to $12-million in operational credit on a non-committed basis to support continuing commercial growth, scale the VitalOS platform and provide general working capital. Under the terms of the renewed credit facility, the facility's maturity date has been extended to Sept. 30, 2029, and outstanding draws will bear interest at a rate of 12 per cent per annum, compounded monthly and payable in kind at maturity. In consideration of the extension, Vitalist has agreed to pay Vesta Wealth a one-time financing fee of 1.5 per cent of the facility limit ($180,000) upon closing. The facility is secured by a general security agreement (GSA) over the assets of Vitalist. At the effective renewal date of Sept. 30, 2026, $3,292,683 and $1,233,422 (U.S.) in principal and accrued, but unpaid, interest will be outstanding on the renewed credit facility.

Completion of the renewed credit facility remains subject to the receipt of all necessary regulatory approvals, including acceptance by the exchange.

Related party disclosure

Vesta Wealth and Hantz Group are each a related party of Vitalist by virtue of holding more than 10 per cent of the outstanding common shares. Accordingly, the participation of Vesta Wealth and Hantz Group in the equity financing and the debenture offering, and the renewed credit facility with Vesta Wealth, each constitutes a related party transaction as defined under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. Vitalist is relying on the exemption from the formal valuation requirement of MI 61-101 contained in Section 5.5(b) for each of the transactions, as no securities of Vitalist are listed or quoted on any of the specified markets set out in that section. In addition, a formal valuation is not required for the renewed credit facility under Section 5.4 of MI 61-101. Vitalist is relying on the exemption from the minority shareholder approval requirement of MI 61-101 contained in Section 5.7(1)(a) for the equity financing and the debenture offering, as neither the fair market value of the securities to be issued to, nor the consideration to be paid by, the related parties exceeds 25 per cent of Vitalist's market capitalization, and on the exemption contained in Section 5.7(1)(f) for the renewed credit facility, as it is a loan from a related party on reasonable commercial terms that are not less advantageous to Vitalist than if obtained from a person dealing at arm's length, and it is not convertible into, or repayable as to principal or interest in, equity or voting securities of Vitalist. Vitalist did not file a material change report more than 21 days before the expected closing of the transactions because the details of the participation of the related parties were not settled until a short time ago and Vitalist wishes to close the transactions on an expedited basis for sound business reasons.

Use of proceeds

Net proceeds from the equity financing and the debenture offering are expected to be used to support continuing commercial growth, further scale Vitalist's proprietary VitalOS platform, expand strategic brand partnerships, debt repayment, and for general working capital and corporate purposes. Any repayment of amounts outstanding under the renewed credit facility will be at Vitalist's discretion and is not a condition of, or required by, any subscription by Vesta Wealth or the terms of the renewed credit facility.

"The continued commitment from our core investment partners, Vesta Wealth and Hantz Group, demonstrates profound confidence in our vision and operational momentum," said Kalvie Legat, chief executive officer of Vitalist. "This proposed $5-million equity financing, alongside the launch of our $5-million convertible debenture offering, anchored by continued investment from Vesta Wealth and Hantz Group, strengthens our balance sheet and provides the financial runway needed to execute our long-term strategic initiatives and scale VitalOS."

About Vitalist Inc.

Vitalist is an innovative technology provider that helps brands build better products. Through VitalOS, brands create seamlessly connected devices and applications that adapt to each user. By uniting hardware and software with intelligent analytics, Vitalist is building an ecosystem of personalized solutions that enhance human potential.

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