FRNT FRNT Financial Inc

FRNT Financial Inc. (TSXV:FRNT) (OTCQB:FRFLF) (FSE:XZ3) (the “Company” or “FRNT”) today announces the closing of its previously announced brokered private placement offering (the “Offering”) for aggregate gross proceeds of approximately $1.24 million.

Under the terms of the Offering, the Company issued 2,070,000 units (“Units”), at a price of C$0.60 per Unit, for aggregate gross proceeds of approximately $1.24 million. Fort Capital Securities Ltd. (the “Agent”) acted as sole agent and bookrunner in connection with the Offering.

Each Unit consists of one common share of the Company (a “Common Share”) and one-half of one Common Share purchase warrant (each whole warrant, a “Warrant”). Each Warrant entitles the holder thereof to purchase one Common Share (each, a “Warrant Share”) at an exercise price of C$0.90 until May 21, 2027, subject to accelerated expiry in the event the volume-weighted average closing price of the Common Shares on the TSX Venture Exchange (the “TSXV”) is $1.20 or more for ten (10) consecutive trading days, in which case the Company may accelerate the expiry date of the Warrants to the date that is thirty (30) days following the issuance of a news release by the Company announcing such acceleration.

The Company intends to use the net proceeds of the Offering to continue scaling its business and building out its capital base, and for working capital and general corporate purposes.

In connection with the Offering and as consideration for their services, the Company paid to the Agent a cash commission of $74,520 and issued to the Agent 124,200 warrants of ‎the Company (the “Broker Warrants”). Each Broker Warrant entitles the holder thereof to acquire one Unit at a price of C$0.60 at any time on or before May 21, 2027.

The Units were offered pursuant to the listed issuer financing exemption (the “Listed Issuer Financing Exemption”) as outlined in Part 5A of National Instrument 45-106 -- Prospectus Exemptions (“NI 45-106”) in the provinces of Alberta, British Columbia and Ontario as well as certain offshore jurisdictions. An offering document related to the portion of the Offering conducted under the Listed Issuer Financing Exemption has been filed on the Company’s profile on SEDAR+ at www.sedarplus.com.

The Common Shares and Warrants issuable from the sale of Units under the Listed Issuer Financing Exemption are not subject to a hold period in accordance with Canadian securities laws and are immediately freely tradeable, while the Broker Warrants and underlying securities are subject to a four-month hold period.

The securities offered pursuant to the Offering 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” or to, or for the account or benefit of, “U.S. persons” (as such terms are defined in Regulation S under the U.S. Securities Act) absent registration under the U.S. Securities Act and any applicable U.S. state securities laws or compliance with an applicable exemption from such registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

David Washburn, President of the Company, and Alex McAulay, Chief Financial Officer of the Company each participated in the Offering, purchasing 100,000 Units and 41,667 Units, respective, and the Offering accordingly constitutes a “related party transaction” pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Offering is exempt from (i) the formal valuation requirement of MI 61-101 pursuant to the Section 5.5(b) of MI 61-101, as the common shares are not listed or quoted on any of the stock exchanges or markets listed in Section 5.5(b) of MI 61-101, and (ii) the minority shareholder approval requirement of MI 61-101 pursuant to Section 5.7(1)(a) of MI 61- 101, as the fair market value of the Units issued does not exceed 25% of the Company’s market capitalization. A material change report was not filed by the Company at least 21 days before the closing of the Offering, as the participation of such insiders was not determined until shortly prior to closing and the Company wished to close expeditiously to confirm funds for the Offering. The Offering was approved by all of the independent directors of the Company.

Upon completion of the Offering:

	(a)		Mr. Washburn owns and controls an aggregate of 593,198 Common Shares and convertible securities entitling him to acquire an additional 1,853,930 Common Shares representing approximately 1.59% of the issued and outstanding Common Shares as of May 21, 2024 (or approximately 6.26% calculated on a partially diluted basis, assuming the exercise of the 1,853,930 convertible securities only); and
	(b)		Mr. McAulay owns and controls an aggregate of 41,667 Common Shares and convertible securities entitling him to acquire an additional 520,833 Common Shares representing approximately 0.11% of the issued and outstanding Common Shares as of May 21, 2024 (or approximately 1.49% calculated on a partially diluted basis, assuming the exercise of the 520,833 convertible securities only).

About FRNT FRNT is an institutional capital markets and advisory platform focused on digital assets. FRNT, through a technology-forward and compliant operation, aims to bridge the worlds of traditional and web-based finance. Partnering with both financial institutions and crypto native firms, FRNT operates 5 synergistic business lines including deliverable trading services, institutional structured derivative products, merchant banking, advisory and consulting, and principal investments & trading. Co-founded in 2018 by CEO Stéphane Ouellette, FRNT is a global firm headquartered in Toronto, Canada.

FRNT Financial Inc. Chief Executive OfficerStéphane Ouelletteinvestors@frnt.io833 222-3768https://frnt.io

Neither the TSXV nor its regulation services provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.

FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” and “forward-looking information” within the meaning of applicable law which may include, without limitation, statements relating to the use of proceeds of the Offering, the receipt of final TSXV approval in respect of the Offering, acceleration of the expiry date of the Warrants, the technical, financial and business prospects of the Company, its assets and other matters. Generally, forward-looking statements and forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. All forward-looking statements and forward-looking information are based on reasonable assumptions that have been made by the Company as at the date of such information. Forward-looking statements and forward-looking information are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements and forward-looking information, including but not limited to: the general risks associated with the speculative nature of the Company’s business, current global financial conditions, uncertainty of additional capital, price volatility, no history of earnings, government regulation in the industries in which the Company operates, political and economic risk, absence of public trading market, arbitrary offering price, dilution to the Company’s common shares, dependence on key personnel, currency fluctuations, insurance and uninsured risks, competition, legal proceedings, conflicts of interest and lack of dividends. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements and forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or forward-looking information. The Company does not undertake to update any forward-looking statement or forward-looking information that is included herein, except in accordance with applicable securities laws.