Biotricity, Inc. Announces Exchange of Common Shares, Warrants, and Options for Series C Preferred Stock

Key Highlights

• Biotricity, Inc. (Nevada corporation, EIN: 47-2548273) has adopted a significant change to its capital structure by designating 2,100,000 shares of Series C Preferred Stock.
• Existing shareholders holding common shares, warrants, and options (“Exchangeable Securities”) are being offered the opportunity to exchange these securities for newly issued Series C Preferred Shares.
• Exchange Ratio: 10 Exchangeable Securities for each 1 Series C Preferred Share.
• The Series C Preferred Stock has unique rights, including dividend and conversion features.
• This exchange is being conducted via private agreements and is not registered under the Securities Act of 1933, relying on exemptions for private transactions.
• No obligation for the company to redeem the Series C Preferred Shares for cash.

Details of the Series C Preferred Stock

• Dividend Rights: Holders of Series C Preferred Stock will be entitled, should dividends be declared on common stock, to receive dividends as if they held 10 common shares for every 1 Series C Preferred share (subject to adjustment for stock splits and similar events).
• Conversion Feature:
  • Series C Preferred Stock is not convertible into common stock or other capital stock prior to March 31, 2028, except under certain conditions.
  • Qualified Financing Exception: If the company completes a “Qualified Financing” before March 31, 2028, conversion may be triggered as described in the Certificate of Designation.
  • Fundamental Transaction Clause: If the company undergoes a merger, sale of all or substantially all assets, or similar major transaction prior to a Qualified Financing, each Series C Preferred share will automatically convert into 10 common shares immediately prior to the closing of such transaction.
• No Trading Market: There is currently no public market for the Series C Preferred Shares, and none is anticipated.

Important Shareholder Considerations

• This transaction could substantially alter the ownership structure of Biotricity, Inc., concentrating equity rights in the hands of those who hold Series C Preferred Stock.
• The Series C Preferred Shares are not immediately dilutive, as they are not convertible into common stock except upon a Qualified Financing or in the event of a major corporate transaction.
• Shareholders exchanging their common shares, options, or warrants for Series C Preferred lose immediate liquidity and voting rights associated with common shares but may gain enhanced dividend rights and potential upside in the event of a corporate sale or financing event.
• The company is not obligated to redeem the Series C Preferred Shares for cash, which means holders bear market and liquidity risk.
• The exchange is being offered only to accredited investors as per SEC definitions, and participants are required to certify their status.

Potential Share Price Sensitivity

• Capital Structure Change: The exchange could be price sensitive as it alters the equity base and preferences of the company, potentially affecting future financing, merger negotiations, or dividend policies.
• Conversion Triggers: The automatic conversion of Series C Preferred Stock upon a “Fundamental Transaction” could have significant implications for the distribution of equity and control in the event of a sale or merger.
• Dividend Rights: Enhanced dividend rights for Series C Preferred holders could affect the attractiveness of common stock and the company’s future cash outflows.

Additional Details

• The exchange is governed by detailed agreements specifying the number of securities involved and the accredited investor status of the participants.
• The full text of the exchange agreements and the Certificate of Designation are filed as exhibits to the company’s Form 8-K and are available for review by interested parties.
• Biotricity, Inc. confirms the exchange was conducted relying on Section 4(a)(2) of the Securities Act of 1933, i.e., for transactions not involving a public offering.
• There are no securities registered under Section 12(b) of the Exchange Act in connection with this transaction.

Conclusion

This restructuring of Biotricity, Inc.’s equity through the issuance of Series C Preferred Stock in exchange for existing securities is a material event for shareholders and investors. It has the potential to impact current and future company valuation, control, and capital raising efforts. Shareholders should carefully consider the implications of exchanging their existing equity positions for Series C Preferred Shares, especially given the conversion limitations, lack of immediate liquidity, and enhanced dividend rights.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should review the full Form 8-K filing and consult with their financial advisors before making any investment decisions related to Biotricity, Inc. The information herein is based on public filings and is subject to change without notice.

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