Redwood AI Secures $3.5 Million from U.S. Institutional Investor via Private Placement

Details of Private Placement and Warrant Features

Redwood AI Corp. issued 1,663,000 special warrants priced at $2.11 apiece to a single U.S.-based institutional investor, raising gross proceeds of $3.5 million. The structure enables the investor to acquire common shares while granting Redwood AI flexibility in managing its capital.

These special warrants will convert automatically into units without further action or additional payment. Each unit contains one common share and one common share purchase warrant. The warrants carry a $2.48 exercise price and remain exercisable for 60 months post-closing, offering a five-year exercise window.

Automatic Conversion and Qualification Date Terms

The special warrants convert automatically into units on the qualification date, defined as the earlier of (i) four months and one day after the closing date, or (ii) the filing date of the prospectus supplement with Canadian securities regulators.

Redwood AI has filed a preliminary short form base shelf prospectus in Canada and plans to file a prospectus supplement to qualify the units issuable upon warrant exercise. If the prospectus supplement is not filed within 90 days of closing, each special warrant will be exercisable for 1.10 units instead of one, incentivizing timely regulatory compliance.

Allocation of Proceeds and Capital Usage

The net proceeds from this private placement will fund working capital and general corporate purposes. While Redwood AI has not provided a detailed breakdown of capital deployment, this funding supports ongoing R&D and operational expansion in its AI-driven chemical and pharmaceutical development initiatives.

This $3.5 million capital infusion is a significant milestone, enhancing the company’s financial flexibility to advance its business objectives.

Company Focus and AI-Driven Technology Platform

Redwood AI Corp. specializes in AI-based software and analytics solutions aimed at accelerating chemistry research and development. The company focuses on drug discovery, development, and defense applications, leveraging AI to streamline drug synthesis and scale-up processes.

By integrating chemistry expertise with artificial intelligence and manufacturing insights, Redwood AI positions itself at the forefront of life sciences innovation. The participation of a major institutional investor underscores market confidence in its technology and business strategy.

Regulatory Compliance and Securities Restrictions

The securities issued are subject to Canadian and U.S. resale restrictions. These special warrants and resulting securities are not registered under the U.S. Securities Act of 1933 and cannot be offered or sold in the U.S. or to U.S. persons without registration or applicable exemptions.

The transaction complies with Regulation S under the U.S. Securities Act, permitting offerings to non-U.S. persons outside the U.S. The company’s filing of a preliminary base shelf prospectus in Canada reflects its commitment to regulatory compliance and future equity offerings.

Role of Placement Agent and Market Context

Maxim Group LLC served as the exclusive placement agent, responsible for sourcing investors and managing the transaction. The choice of an experienced institutional placement agent highlights Redwood AI’s professional capital raising approach.

The entire private placement was subscribed by a single institutional investor, indicating a concentrated but strong commitment to the company’s growth and technology.

Trading Listings and Investor Access

Redwood AI Corp. is listed on the Canadian Securities Exchange (CSE) under ticker AIRX, the OTCQB as RDWCF, and Frankfurt Stock Exchange under ticker Y0N with WKN A422EZ. This multi-exchange presence offers investors diverse trading options based on regional preferences.

The CSE listing subjects Redwood AI to Canadian securities regulations. The exchange has not reviewed or taken responsibility for the press release’s content, which is standard regulatory practice.

Forward-Looking Statements and Risk Factors

The announcement includes forward-looking statements about the use of proceeds, regulatory approvals, prospectus filing timelines, and warrant exercise conditions. These statements involve risks, including potential delays or failure to obtain necessary approvals and changes in market or economic conditions.

Management’s expectations assume timely regulatory approvals and stable market conditions. Investors should consider these uncertainties when evaluating Redwood AI’s future prospects.

Qualification Timeline and Incentives for Timely Filing

The qualification date triggers automatic conversion of special warrants into units and is set as the earlier of four months plus one day after closing or the prospectus supplement filing date. This dual-trigger encourages prompt regulatory filing.

If the prospectus supplement is not filed within 90 days, each special warrant converts into 1.10 units instead of one, providing additional value to investors as a penalty for delayed qualification. Investors should monitor this timeline closely to understand when ownership positions will be finalized.