Kadestone Capital Corp. Closes First Tranche of Convertible Note Financing

Vancouver, British Columbia--(Newsfile Corp. - March 11, 2026) - Kadestone Capital Corp. (TSXV: KDSX) ("Kadestone" or the "Company") is pleased to announce that it has closed the first tranche of its previously announced non-brokered private placement ("First Tranche Closing") of secured convertible notes ("Convertible Notes") and common share purchase warrants ("Warrants"). The First Tranche Closing of the private placement is comprised of the issuance of Convertible Notes in the aggregate principal amount of $1.65 million. The Company also issued 3,300,000 Warrants under the First Tranche Closing. The private placement is expected to close in one or more tranches, subject to, among other things, receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange (the "TSXV").

The Convertible Notes issued pursuant to the First Tranche Closing will mature on the date that is 36 months after issuance (the "Maturity Date"), subject to acceleration upon the occurrence of an event of default, and will bear interest at a rate of 10% per annum, compounded monthly and payable on redemption or conversion. On the Maturity Date, the principal amount of the Convertible Notes, together with accrued and unpaid interest, will be convertible into common shares in the capital of Kadestone ("Common Shares") at the option of the holder at a conversion price of $0.50 per Common Share (the "Conversion Price"). Notwithstanding the foregoing, any conversion of interest accrued on the Convertible Notes, including the conversion price applicable thereto, will be subject to the prior approval of the TSXV.

Each Warrant will entitle the holder to purchase one Common Share at a price of $0.60 per Common Share for a period of 36 months, subject to customary adjustments.

The proceeds of the First Tranche Closing will be used to pay down debt and for general corporate purposes.

The Convertible Notes will automatically convert into Common Shares upon the occurrence of certain events (each, an "Automatic Conversion"), including upon the closing of an equity financing resulting in gross proceeds to the Company of not less than $25 million (a "Qualifying Transaction") and completion of a sale or other disposition of all or substantially all of the Company's assets (a "Change of Control Transaction"). Where an Automatic Conversion occurs pursuant to a Qualifying Transaction, the principal amount of Convertible Notes, together with accrued and unpaid interest, will automatically convert into Common Shares at a 20% discount to the applicable price per security payable in the Qualifying Transaction, subject to the prior approval of the TSXV. In the event of a Change of Control Transaction, the applicable conversion price will be equal to the Conversion Price, subject to, in the case of accrued and unpaid interest, the prior approval of the TSXV.