Baylin Completes Second Tranche of $15 Million Private Placement

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TORONTO, Oct. 21, 2021 /CNW/ - Baylin Technologies Inc. (TSX: BYL) (the "Company") announces that it has completed the second and final tranche (the "Final Tranche") of its previously announced private placement (the "Offering") of a minimum of 11,765,000 common shares of the Company ("Common Shares") and a maximum of 17,648,000 Common Shares at a price of $0.85 per Common Share. The Company completed the first tranche of the Offering (the "First Tranche") on September 1, 2021, issuing 11,765,000 Common Shares for gross proceeds of $10,000,250. The Final Tranche comprised the remaining 5,883,000 Common Shares, resulting in gross proceeds to the Company of an additional $5,000,550.

Pursuant to an agreement dated October 12, 2021 with 2385796 Ontario Inc. (the "Insider"), the Company's largest shareholder, in which the Insider agreed to purchase Common Shares in an amount equal to the difference between (i) $5,000,550 and (ii) the aggregate purchase price paid by all other investors (if any) in the Final Tranche, the Insider purchased 5,460,192 Common Shares. The remaining 422,808 Common Shares were purchased by other insiders of the Company. The Common Shares sold in the Final Tranche are subject to a hold period until February 22, 2022. The Insider purchased all 11,765,000 Common Shares in the First Tranche.

The net proceeds from the Offering will be used for general working capital purposes and for the repayment of outstanding debt.

Paradigm Capital Inc., as lead agent and bookrunner, and Raymond James Ltd. received a cash commission of $100,011 for their services in connection with the Final Tranche.

Financial Hardship

As previously disclosed in its press releases dated August 11 and 20, September 1 and October 12, 2021, and material change report dated September 1, 2021, the Company is relying on the "financial hardship" exemption available to it under the rules of the Toronto Stock Exchange to permit the Insider to purchase the Common Shares.

Insider Holdings

Immediately prior to the closing of the Final Tranche, the Insider held 38,418,122 Common Shares, representing approximately 51.8% of the 74,212,014 Common Shares then outstanding (on an undiluted basis) and an associate (as defined in the Securities Act (Ontario)) of Jeffrey C. Royer, Chairman of the Board of Directors of the Company, held 2,748,450 Common Shares. Mr. Royer exercises exclusive control over the Common Shares held by the associate and, by virtue of an agreement with the associate, over the Common Shares held by the Insider. Immediately prior to closing of the Final Tranche, together, the Insider and the associate (the "Insider Group"), held 41,166,572 Common Shares, representing approximately 55.5% of the Common Shares then outstanding (on an undiluted basis).

As a result of the closing of the Final Tranche, the Insider holds 43,878,314 Common Shares, representing approximately 54.8% of the 80,095,014 Common Shares currently outstanding (on an undiluted basis), and the Insider Group holds 46,626,764 Common Shares, representing approximately 58.2% of the Common Shares currently outstanding (on an undiluted basis).

The Insider's purchase of Common Shares (and the purchase of Common Shares by the other insiders of the Company) constitute related party transactions under Multilateral Instrument 61-101 – Protection of Security Holders in Special Transactions ("MI 61-101"). However, such purchases are exempt from the formal valuation and minority approval requirements of MI 61-101 on the basis of the financial hardship exemption in MI 61-101, which provides an exemption where the financial hardship criteria set out in Subsection 5.5(g) of MI 61-101 are met and where there is no other requirement, corporate or otherwise, to hold a meeting to obtain any approval of the holders of any class of affected securities.

The Company did not file a material change report related to the Final Tranche more than 21 days before the closing of the Final Tranche, as required by MI 61-101, because the timing of the announcement of the Final Tranche and the closing of the Final Tranche were less than 21 days apart.

US Securities Laws Disclaimer

The Common Shares have not been, and will not be, registered under the United States 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 without registration under the U.S. Securities Act and all applicable state securities laws or compliance with the requirements of an applicable exemption therefrom. This press release does not constitute an offer to sell or the solicitation of an offer to buy Common Shares in the United States, nor may there be any sale of these Common Shares in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Baylin

The Company is a leading, diversified, global technology company. It focuses on research, design, development, manufacturing, and sales of passive and active radio-frequency products, terrestrial microwave products, and services. We strive to meet our customers' needs and anticipate the direction of the market.

Forward-looking Information Cautionary Statement

This press release contains forward-looking statements and forward-looking information, including statements related to the intended use of proceeds. The intended use of the net proceeds of the Offering might change if the board of directors of the Company determines that it would be in the best interests of the Company to deploy the proceeds for some other purpose. The forward-looking statements are founded on the basis of expectations and assumptions made by the Company.

SOURCE Baylin Technologies Inc.

Investor Relations: Kelly Myles, Marketing and Communications Manager, Baylin Technologies Inc., [email protected]