Birchtree financing plans announced on October 21, 2026, target C$500,000 to C$1.1 million through subscription receipts tied to its proposed acquisition of Digital Motion Corporation. The company also amended the acquisition agreement, extended the completion deadline to December 31, 2026, and advanced a C$150,000 loan to the target. Neither the financing nor the acquisition has been completed.
Key Takeaways
- Subscription receipts priced at C$0.20 would convert into shares only after specified acquisition conditions are met.
- The amended agreement removes minimum working-capital and share-trading-price conditions.
- Digital Motion has received a C$150,000 loan carrying 10% annual interest.
Table of Contents
- Birchtree financing depends on acquisition approvals
- Revised agreement removes two closing conditions
- Loan repayment could involve Digital Motion shares
- Conclusion
Birchtree financing depends on acquisition approvals
The proposed non-brokered placement comprises at least 2.5 million and up to 5.5 million subscription receipts. Each receipt would automatically convert into one Birchtree common share, without additional payment or action by the holder, once the escrow release conditions are satisfied.
Those conditions include required shareholder and Canadian Securities Exchange approvals, plus completion of the acquisition or satisfaction of all remaining closing conditions other than release of the escrowed funds. Gross proceeds would remain in escrow until those requirements are met.
If the conditions are not satisfied by 5 p.m. Vancouver time on December 31, 2026, or the share exchange agreement is terminated, the receipts would be cancelled and subscription payments returned. The financing itself remains subject to necessary regulatory approvals, including CSE approval.
After release from escrow, Birchtree intends to use the net proceeds for acquisition costs, Digital Motion’s business, working capital and general corporate purposes.
| Item | Details |
|---|---|
| Offering closings | Expected in one or more tranches; no closing date announced. |
| Investor eligibility | Private placement in Canada and outside Canada and the United States under available prospectus exemptions. |
| Resale restriction | Receipts and underlying shares subject to a hold period of four months and one day from the applicable offering closing. |
| Placement fees | No finder’s fees or commissions payable. |
Revised agreement removes two closing conditions
Birchtree’s original acquisition agreement, announced on April 1, 2026, provided for the purchase of 100% of Digital Motion, a private Delaware-based developer of Web3 financial technologies. Its platforms address capital formation, credit infrastructure and real-world assets.
The October 21 amendment removes the requirement that Birchtree maintain net working capital of at least C$200,000. It also removes a condition benefiting Digital Motion’s sellers that Birchtree’s common shares trade at no less than C$0.20.
Removing those tests reduces the number of financial conditions that must be met, but does not eliminate the remaining shareholder and regulatory requirements. The parties extended the acquisition completion deadline to December 31, 2026, or a later date agreed in writing.
The amendment was conditional on Birchtree advancing the loan to Digital Motion, which the company said it has done.
Loan repayment could involve Digital Motion shares
The C$150,000 advance is documented by a promissory note and bears interest at 10% annually, payable at maturity. It matures on the earlier of 12 months after the advance or 30 days after termination of the share exchange agreement.
If the acquisition agreement is terminated, Digital Motion may elect to repay principal and accrued unpaid interest in its own shares, based on a US$20 million valuation. That option means repayment would not necessarily be in cash. Digital Motion will use the loan for transaction costs, working capital and general corporate purposes.
Birchtree said its common shares will remain halted on the CSE until the transaction’s listing statement is publicly available on SEDAR+. The company cautioned that completion of the financing and acquisition, as well as repayment of the loan, is not assured.
Conclusion
The next milestones are closing the proposed placement, obtaining the remaining acquisition approvals and publishing the listing statement. December 31, 2026, is both the amended acquisition deadline and the escrow release cutoff, although the parties may agree in writing to extend the acquisition deadline.
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