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VANCOUVER, BC, September 1, 2023, Fobi AI Inc. (FOBI:TSXV) (FOBIF:OTCQB) (the "Company" or "Fobi"), an industry leader in harnessing AI and data intelligence to enable digital transformation, is pleased to announce the completion of its first tranche closing (the “First Tranche”) of a non-brokered private placement financing previously announced on August 22, 2023 (the “Offering”). The First Tranche was comprised of the issuance of 4,651,681 units of the Company at a price per Unit of C$0.22 for aggregate gross proceeds of $1,023,370. Each Unit consisted of one (1) common share in the capital of the Company (a “Common Share”) and one-half of one (1/2) common share purchase warrant (each whole warrant, a “Warrant”). Each Warrant entitles the holder to acquire one Common Share at an exercise price of C$0.30 until the earlier of: (i) August 31, 2026; and (ii) in the event the volume weighted average price of the Common Shares on the TSX Venture Exchange (the “TSXV”) for any continuous 10 trading day period meets or exceeds $0.50 following the closing of the Offering (the “Acceleration Condition”), the date that is thirty (30) days following the issuance of a news release by the Company announcing the acceleration of the expiry of the Warrants, which such news release may be issued at any time following the trigger of the Acceleration Condition (the “Acceleration Right”). For avoidance of doubt, the Company shall not be obligated to exercise the Acceleration Right at any time. 

Subject to compliance with applicable regulatory requirements and in accordance with National Instrument 45-106 – Prospectus Exemptions (“NI 45-106”), the Units issued pursuant to the First Tranche were offered for sale to purchasers resident in Canada (other than Quebec) and/or other qualifying jurisdictions pursuant to the listed issuer financing exemption under Part 5A of NI 45-106 (the “Listed Issuer Financing Exemption”). As the First Tranche was completed pursuant to the Listed Issuer Financing Exemption, the securities issued under the Offering are not subject to a hold period pursuant to applicable Canadian securities laws.

There is an offering document related to the Offering that can be accessed under the Company’s profile at www.sedarplus.ca and on the Company’s website at www.investors.fobi.ai. Prospective investors should read this offering document before making an investment decision.

Rob Anson, Chief Executive Officer of the Company participated in the First Tranche for $65,000 or 295,454 Units. The participation of Mr. Anson in the First Tranche constituted a “related party transaction,” within the meaning of TSX Venture Exchange Policy 5.9 Protection of Minority Security Holders in Special Transactions and Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company has relied on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of the related party participation in the First Tranche as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involved the interested party, exceeded 25% of the Company’s market capitalization (as determined under MI 61-101). Further details will be included in the material change report. The material change report will not be filed more than 21 days prior to the closing of the insider’s subscription due to the timing of the accepted subscription and closing having occurred in less than 21 days.

In connection with the First Tranche, the Company entered into finder’s fee agreements with each of Raymond James Ltd. and Echelon Wealth Partners Inc. and pursuant to each agreement, respectively, paid a cash commission in the amount of $31,423.70 and issued 142,835 non-transferable broker warrants (“RJ Broker Warrants”) to Raymond James Ltd., an arm’s length finder, and a cash commission in the amount of $7,592.20 and issued 34,510 non-transferable broker warrants (“Echelon Broker Warrants”) to Echelon Wealth Partners Inc., an arm’s length finder. Each of the RJ Broker Warrants and Echelon Broker Warrants is exercisable to acquire one Common Share at a price of $0.30 per Common Share until August 31, 2026, and are subject to a hold period of four months from the date of issuance thereof.

The Company intends to use the net proceeds of the Offering for product expansion and integration, market expansion, and general working capital and corporate expenses.

The Offering is subject to final approval of the TSX Venture Exchange.

The securities of the Company 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 absent registration or an available exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referenced in this press release, in any jurisdiction in which such offer, solicitation or sale would be unlawful. 

Early Warning

Rob Anson (“Anson”), Chief Executive Officer and a Director of the Company, reports that on August 31, 2023, Anson acquired 295,454 Units at a price per Unit of $0.22 for an aggregate purchase price of approximately $65,000.00 pursuant to a non-brokered private placement financing previously announced on August 22, 2023, under the listed issuer financing exemption under Part 5A of National Instrument 45-106 – Prospectus Exemptions. The acquired Units comprise an aggregate of 295,454 common shares (“Shares”) and 147,727 Share purchase warrants (“Warrants”) of the Company. Each Warrant is exercisable to acquire one additional share at an exercise price of $0.30 until the earlier of (i) August 31, 2026, and (ii) in the event the Acceleration Condition is met, the date that is thirty (30) days following the issuance of a news release by the Company announcing the acceleration of the expiry of the Warrants pursuant to the Acceleration Right. The acquisition of the Shares and Warrants did not take place across the facilities of any market.

Immediately prior to the closing of the First Tranche (“Closing”), Anson held, directly or indirectly, 34,912,567 Shares representing approximately 20.87% of the then-issued and outstanding Shares of the Company, 1,388,008 Options representing approximately 7.83% of the then-issued and outstanding Options prior to the Closing and no other securities of the Company.

Immediately following the Closing, Anson, directly or indirectly, held 35,208,021 Shares representing approximately 20.48% of the issued and outstanding Shares on a non-diluted basis immediately following the Closing, 147,727 Warrants representing approximately 1.63% of the issued and outstanding Warrants immediately following the Closing and 1,388,008 Options representing approximately 7.83% of the issued and outstanding Options immediately following the Closing and no other securities of the Company.

As a result of the Closing, the security holding percentage of Anson decreased by approximately 0.39% in respect of the Shares. Anson did not hold any Warrants before the Closing.

Anson has acquired the Shares and Warrants for investment purposes. Anson may in the future take such actions in respect of its holdings in the Company as Anson may deem appropriate in light of the circumstances then existing, including the purchase of additional securities of the Company through open market purchases or privately negotiated transactions or the sale of all or a portion of Anson’s holdings in the open market or in privately negotiated transactions to one or more purchasers, subject in each case to applicable securities law.

Rob Anson, CEO of Fobi AI, states: “As this is the last week of the summer holidays, I am very pleased with the positive reception and strong support we have received from our existing shareholders. I am also excited to see a new surge of enthusiasm from entirely new investor groups who have also made significant investments in our Fobi story.

Ideally, I would have liked to close everything in one go with the interest shown, but due to it being the end of summer, collecting sub-agreements and organizing back offices to close ahead of the long weekend was simply not realistic. As a result of the upcoming holiday weekend, we will aim to finalize everything after everyone returns to the office.”

A copy of the early warning report to which this news release relates can be obtained from Anson at +1 877-754-5336 Ext. 3, or on the Company’s SEDAR+ profile at www.sedarplus.ca.

This press release is available on the Fobi website.

To download the Fobi Investor Experience Wallet Pass to get enhanced access to investor information about Fobi, please visit our Investor Experience page.

About Fobi AI

Founded in 2017 in Vancouver, Canada, Fobi is a leading AI and data intelligence company that provides businesses with real-time applications to digitally transform and future-proof their organizations. Fobi enables businesses to action, leverage, and monetize their customer data by powering personalized and data-driven customer experiences, and drives digital sustainability by eliminating the need for paper and reducing unnecessary plastic waste at scale.

Fobi works with some of the largest global organizations across retail & CPG, insurance, sports & entertainment, casino gaming, and more. Fobi is a recognized technology and data intelligence leader across North America and Europe, and is the largest data aggregator in Canada's hospitality & tourism industry.

On behalf of the Board of Directors of the Company

“Rob Anson”

For more information, please contact:

Cautionary Statement Regarding Forward Looking Information

This news release contains forward looking information or statements within the meaning of applicable securities laws, which may include, without limitation, statements relating to the terms and completion of the Offering, the use of proceeds of the Offering, the receipt of TSXV approval in respect of the Offering, the technical, financial and business prospects of the Company, its assets and other matters. All statements in this news release, other than statements of historical facts, that address events or developments that the Company expects to occur, are forward looking information or statements. Although the Company believes the expectations expressed in such forward looking information or statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward looking information or statements. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the price of inputs including labour costs, the ability to achieve its goals, expected costs and timelines to achieve the Company’s goals, that general business and economic conditions will not change in a material adverse manner, and that financing will be available if and when needed and on reasonable terms. Such forward looking information or statements reflects the Company’s views with respect to future events and is subject to risks, uncertainties and assumptions, including the risks and uncertainties relating to litigation and arbitration and the costs and timelines associated with the same, the potential for unexpected costs and expenses and those other risks filed under the Company’s profile on SEDAR+ at www.sedarplus.ca. While such estimates and assumptions are considered reasonable by the management of the Company, they are inherently subject to significant business, economic, competitive and regulatory uncertainties and risks. Factors that could cause actual results to differ materially from those in forward looking information or statements include, but are not limited to, the ability of the Company to complete the Offering on the terms described herein, including obtaining the requisite approval of the TSXV, continued availability of capital and financing and general economic, market or business conditions, failure to compete effectively with competitors, failure to protect the Company’s intellectual property, failure to maintain or obtain all necessary permits, approvals and authorizations, failure to comply with applicable laws, risks relating to unanticipated operational difficulties (including failure of equipment or processes, cost escalation, unavailability of personnel, materials and equipment, regulatory action or delays in the receipt of regulatory approvals, work stoppages or disturbances or other job action, and unanticipated events related to health, safety and other legal matters), decreases in demand for the Company’s products and services, the impact of COVID-19 or other viruses and diseases on the Company’s ability to operate, an inability to predict and counteract the effects of COVID-19 on the business of the Company, including but not limited to, the effects of COVID-19 on the price of inputs, capital market conditions, restriction on labour and international travel and supply chains, loss of key employees, consultants, or directors, increase in costs, delayed results, litigation, and failure of counterparties to perform their contractual obligations. The Company does not undertake to update forward looking statements or forward looking information, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.