Mr. Gord Breese reports

KATIPULT ANNOUNCES AMENDMENTS TO CONVERTIBLE DEBENTURES

The terms of Katipult Technology Corp.'s convertible debentures, originally issued on May 30, 2018, as amended on Aug. 11, 2023, and Nov. 30, 2023, in the total initial principal amount of $3.05-million, now in the total principal amount of $3-million, have been amended by the holders of the convertible debentures and the corporation through the entering into of amended and restated convertible debentures.

The key changes represented by the amended convertible debentures are as follows:

• Term extension: The maturity date of the amended convertible debentures has been extended to May 30, 2027.
• Security: The amended convertible debentures are secured against all the present and after-acquired personal property of the corporation.
• Interest: The base interest rate has been reduced from 8.5 per cent to 4 per cent. The amended convertible debentures are subject to interest rate adjustments if the corporation fails to maintain a cash balance equal to its 12-month burn rate whereby the interest rate increases by 0.5 per cent for each month of inadequate cash balance. The maximum interest rate, which was formerly 12 per cent per annum compounded quarterly, is adjusted to a maximum of 10 per cent per annum compounded quarterly.
• Interest grace period: Interest will not accrue during the period from April 15, 2024, until Nov. 30, 2024.
• Conversion price: The conversion price has been reduced to 20 cents per common share of the corporation.

Brian Craig is one of the holders and is a director of the corporation. Accordingly, the convertible debenture amendments are considered a related-party transaction pursuant to Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). The corporation intends to rely on exemptions from the valuation and the minority approval requirements of MI 61-101 provided for in subsections 5.5(a) and 5.7(1)(a) of MI 61-101, respectively, as the convertible debenture amendments do not represent additional consideration of a market value exceeding more than 25 per cent of the corporation's market capitalization as determined in accordance with MI 61-101. The convertible debenture amendments have been approved by the directors of the corporation who are independent in connection with the convertible debenture amendments.

The corporation did not file a material change report more than 21 days before the expected closing of the convertible debenture amendments, as the details of the convertible debenture amendments were not finalized until immediately prior to the closing and the corporation wished to close the transaction as soon as practicable for sound business reasons.

About Katipult Technology Corp.

Katipult is a provider of industry-leading and award-winning software infrastructure for powering the exchange of capital in equity and debt markets. Its cloud-based platform and solutions digitize investment workflow by eliminating transaction redundancy, strengthening compliance, delighting investors and accelerating deal flow. Katipult provides unparalleled adaptability for regulatory compliance, asset structure, business model and localization requirements.

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