TechFinancials Inc. - Potential Acquisition, Board & Issue of Equity

TechFinancials Inc.

("TechFinancials" or the "Company")

9 July 2025

Potential Acquisition of a High-Grade Iron Ore Project in Kenya

Proposed New Board Appointments

Issue of Equity

TechFinancials Incorporated (AQSE: TECH) is pleased to announce that it has entered into an  Acquistion Agreement  (the "Agreement") with Kenyan-based investment banking and corporate finance company Gathoni Muchai Investment Company Ltd ("GMI") to acquire up to a 60% majority interest in the Dilotiko High-Grade Iron Ore Project ("Dilotiko Project") located in Taita Taveta County in Kenya. 

The Dilotiko Project is located on a 220-acre site, just 20km from Taita Taveta County's largest town of Voi, and close to Kenya's main road and rail infrastructure that extends through to Mombasa Port. A Mining Permit application was accepted in January 2025 and is currently going through final evaluation. The Dilotiko Project is considered an advanced and high-grade hematite and magnetite iron ore project, that has undergone broad historical exploration and which has also included diamond core drilling, sampling for metallurgical analyses and positive mine development and preliminary economic studies. 

Under the terms of the Agreement with GMI, the Company has agreed to acquire an option ("Dilotiko Option") to acquire up to a 60% shareholding in Dilotiko Ltd, the current operator of the Dilotiko Project. In return for the grant of the option, the Company will issue 20,000,000 new ordinary shares of US$0.0005 each ("Ordinary Shares") at a deemed price of 0.25 pence per share, to GMI, as introducer of the Dilotiko Project. 

The Company will then have 60 calendar days to conduct due diligence and enter into formal documentation ("Formal Acquisition Documentation") to acquire a 25% shareholding in Dilotiko Ltd, through the issue of new Ordinary Shares to the Dilotiko Ltd shareholders, at the higher of either, a) a deemed price of 0.25 pence per share, equating to 80,000,000 new Ordinary Shares, or b) the 10 day VWAP prior to the date of signing the Formal Acquisition Documentation ("Acquisition Shares"). Any such acquisition will be subject to shareholder approval at the Company's forthcoming Annual General Meeting ("AGM").

Further Ordinary Shares may also be issued to the Dilotiko Ltd shareholders upon the Dilotiko Project achieving first commercial production and sales, and on the Company exercising an option to increase its commercial interest in the Dilotiko Project to 60%.

GMI is a Kenyan-based investment banking and corporate finance group, committed to driving sustainable growth across key sectors in Africa that extend across mining, property, e-waste recycling, agriculture and the financial technology sectors. Mining executive, Jason Brewer, is a major shareholder and a director of GMI and is responsible for its investments in the mining sector in Africa.

In return for introducing the Company to the Dilotiko Project, the Company has granted GMI the right to appoint an initial two executive directors to the Company's Board of Directors, following execution of the Formal Acquisition Documentation and the holding of the forthcoming AGM. GMI has nominated Mr Collins Aseto as Executive Director and Mr Manish Shavadia as Finance Director. Mr Shavadia is currently a 42% shareholder in Dilotiko Ltd. Further directors are to be appointed to the Company's Board in the event that the Company increases its commercial interest in the Dilotiko Project to 60%. All new director appointments are subject to completion of customary due diligence by the Company's advisors.

If the transaction progresses, GMI has further agreed to underwrite a placement of 100,000,000 Ordinary Shares to raise £250,000 at a price of 0.25p per share ("Placement Shares"), to fund further mine optimisation studies and exploration work at the Dilotiko Project and further to meet working capital requirements of the Company.

The Acquisition and the Placement Shares will be, issued at an approximately 32% premium to the Company's closing price on 8 July 2025, assuming the Acquisition Shares are issued at 0.25 pence per share and not at the VWAP price.

The Company will shortly be issuing a Circular to Shareholders convening an AGM, at which resolutions will be proposed, amongst other things, to approve the proposed acquisition of up to a 60% interest in the Dilotiko Project.

Highlights:

•     Agreement signed under which the Company has the rights to acquire a 60% interest in the Dilotiko Project located in Kenya

•     The Dilotiko Project is an advanced iron ore project that is located close to key existing road and rail infrastructure 

•     A Mining Permit application was lodged and accepted in January 2025 and is currently undergoing final evaluation 

•     Historical exploration work at the Dilotiko Project and regionally has confirmed the presence of high-grade hematite and magnetite ore within consistent and well understood geological structures that are open along strike and demonstrate the potential for a significant mineral resource to be defined

•     Sampling for metallurgical analyses has further been completed with results demonstrating iron grades of up to 63% in the hematite and magnetite ores

•     Diamond core drilling of 25 holes for a total of 1,261m has been completed across the Dilotiko Project, and this has formed the basis of a preliminary and non-JORC compliant mineral resource estimate of an initial 22.2 million tonnes of iron ore across the Dilotiko Project area

•     Positive mine development and preliminary economic studies have also been completed on the Dilotiko Project and which have indicated a financial robust and low operating and capital cost operation

•     Under these studies, the Dilotiko Project is proposed to be developed as a conventional open pit, drill and blast and load and haul mining operation producing at annualised rates of up to 1.1 Mtpa over an initial 20-year mine life with processing of the hematite ore will be a simple dry beneficiation process crushing and screening plant to produce high-grade iron ore products suitable for the domestic market and with the potential to access international export markets

•     A non-binding Letter of Intent has already been received in respect to the purchase of iron ore from the Dilotiko Project from a domestic steel manufacturer following successful metallurgical testing of iron ore samples  

•      As part of the Company's technical due diligence it will complete further sampling, trenching, mapping and metallurgical analyses of the exposed and shallow iron ore mineralisation

•     Further mineral economic assessment studies will also be completed to confirm the capital and operating costs estimates associated with the potential commencement of mining 

Transaction Structure

•     The Agreement allows the Company to acquire an initial 25% interest in the Dilotiko Project with an option to further increase its holding to a 60% interest 

•     Following signing of the Agreement, the Company will now issue 20,000,000 new Ordinary Shares to GMI at a price of 0.25p per share

•     A further 80,000,000 new Ordinary Shares will be issued to the Dilotiko Ltd shareholders at a price of the higher of 0.25p per share or based on a 10-day VWAP on the signing Formal Acquisition Documentation and on receipt by the Company of any applicable shareholder approvals, following which the Company will hold its initial 25% commercial interest in the Dilotiko Project

•     Upon achieving first commercial production and sales of iron ore from the Dilotiko Project, the Company will be required to issue an additional 20,000,000 new Ordinary Shares to the Dilotiko Ltd shareholders ("Milestone Shares")

•     Furthermore, the Agreement provides that the Company will be granted an option ("Option") exercisable for 12 months following the signing of the Formal Acquisition Documentation, to increase its interest in the Dilotiko Project to 60%, through a further issue of new Ordinary Shares to the Dilotiko Ltd shareholders

•     On exercising of the Option, the Company will issue Ordinary Shares to the value of £400,000 at the 10-day volume weighted average price, and the number of Milestone Shares will be increased to 50,000,000 Ordinary Shares

•     GMI has been granted the right to appoint an initial 2 executive directors to the Board of the Company and a further additional 2 Non-Executive Directors upon the Company exercising its option to hold a 60% interest in the Dilotiko Project

Proposed New Director Appointments:

•     The Company will appoint GMI's nominees to the Board and the Company has accepted the proposed appointments of Mr Collins Aseto as Executive Director and Mr Manish Shavadia as Finance Director to the Board, subject to completion of customary due diligence by the Company's advisors, approval of the Acqusition and on signing of the Formal Acquisition Documentation

•     Mr Aseto is a geoscientist based in Nairobi and with over 15 years of experience in mineral exploration, mine geology and project and resource development in East Africa. Mr Aseto is a member of the Geological Society of Kenya and holds a Bachelor of Science degree in Geology from the University of Nairobi, and a Master of Science degree in Economic Geology from Auburn University-Alabama, USA

•     Mr Shavadia is a Chartered Accountant and accomplished finance executive, based in London, andwith over 20 years' experience across multiple industries in Kenya, throughout East Africa and in the UK where he is currently based

Next Steps:

•     The Company has engaged its advisors to finalise an AGM circular that will be sent to its shareholders to approve various resolutions in respect to the Acquisition

•     An AGM to approve these resolutions is planned to be called in July 2025, with a view to approving the Formal Acquisition Documentation

•     The Company will now proceed and finalise its legal and technical due diligence on the Dilotiko Project

•     The Company will further engage its legal advisors to prepare the Formal Acquisition Documentation necessary to complete the acquisition of up to a 60% interest in the Dilotiko Project

Admission

Application has been made for 20,000,000 new ordinary shares to be admitted to trading on the AQSE Growth Market and admission is expected to occur on or around 14 July 2025 ("Admission") and will rank pari passu with the ordinary shares of the Company in issue.

Total Voting Rights

Following Admission, the Company's issued share capital will comprise 105,680,979 ordinary shares of 0.01p each, with each share carrying the right to one vote, therefore the total number of voting rights in the Company will be 105,680,979. This figure may be used by shareholders as the denominator for calculations by which they will determine if they are required to notify their interest in the Company, or a change to their interest in the Company, under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

The Directors of TechFinancials are responsible for the contents of this announcement. This announcement contains inside information for the purposes of UK Market Abuse Regulation.

For further information:

Caution:

Certain statements in this announcement are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.