Turnium Technology Group's Convertible Debenture Offering: A Strategic Play for Growth and Value Creation

Turnium Technology Group Inc. (TSX.V: TTGI) has positioned itself at a pivotal moment in its evolution, leveraging its convertible debenture offering to fuel growth while embedding catalysts that could unlock significant shareholder value. With a strategic financing structure and a pipeline of innovative products, the company is primed to capitalize on emerging opportunities in the Technology-as-a-Service (TaaS) sector. Here's why investors should pay attention now.

The Convertible Debenture Offering: A Flexible Funding Strategy

Turnium's non-brokered private placement of up to CAD$2 million in convertible debentures is a masterstroke of financial engineering. The terms are designed to align the interests of investors and the company, creating multiple pathways to value creation:

1. Conversion Terms with Upside Potential:
   The debentures convert into Debenture Units at CAD$0.08 per unit for the first 12 months post-closing, rising to CAD$0.10 thereafter. Each unit includes one common share and a warrant exercisable at CAD$0.10 for 36 months. This structure rewards investors with equity upside while allowing Turnium to manage dilution strategically.

1. Forced Conversion Catalyst:
   Turnium retains the right to force conversion if its shares hit a volume-weighted average trading price (VWAP) of CAD$0.30 for 10 consecutive days. This creates a powerful incentive for the company to drive stock appreciation, as conversion would reduce interest obligations and free up capital for growth initiatives.

2. High Interest, High Reward:
   The 15% annual interest rate, while elevated, is offset by the potential equity upside. Investors receive semi-annual interest payments, and the company can redeem the debentures early at 110% of principal after four months—a feature that underscores management's confidence in liquidity and growth prospects.

3. Warrants as a Secondary Lever:
   The attached warrants, exercisable at CAD$0.10, amplify the reward for investors if Turnium's stock rises. This dual mechanism—equity conversion plus warrants—creates a multi-layered upside for participants.

Financial Performance: A Foundation for Growth

Turnium's recent financial results highlight a company in transition:

• Q1 2025 Revenue Surged to CAD$1.97M, a 28% sequential increase, driven by contributions from its Claratti division (now accounting for 40% of total revenue) and operational efficiencies.
• Gross Margin Expanded by 45% to CAD$1.34M, outperforming guidance and signaling stronger product margins.
• Adjusted EBITDA was revised upward, with management correcting prior figures to reflect a more accurate baseline for future performance.

The company's focus on operational cost savings—including a 20% headcount reduction and CAD$1.2M in annualized savings—is critical. These measures position Turnium to scale without over-leveraging its balance sheet, a key consideration for investors wary of debt-heavy growth models.

Strategic Initiatives: Fueling Long-Term Value

Turnium's product roadmap and partnerships are designed to capitalize on the TaaS market's expansion, which is expected to grow at a CAGR of 15% through 2027. Key catalysts include:

1. SD-WAN Version 7 Launch:
   The software is undergoing lab trials with 50 of Turnium's 70+ global channel partners, signaling strong ecosystem adoption. This product, paired with the Next-generation Artificial Intelligence & Automation (NAIA) appliance, could solidify Turnium's position in the cybersecurity and edge computing spaces.

2. Claratti's Global Expansion:
   With Claratti's SD-WAN and security solutions now contributing over 40% of revenue, Turnium is aggressively scaling its direct salesforce and channel partnerships. The division's focus on North American and Canadian MSPs aligns with a CAD$10B+ market opportunity in managed IT services.

3. Long-Term Vision: Base Camp 2027:
   Turnium's goal to achieve CAD$100M in revenue and CAD$20M in EBITDA by 2027 is ambitious but achievable, given its 23% year-over-year revenue growth trajectory and the scalability of its TaaS model.

Why Invest Now?

The convertible debenture offering is more than a financing event—it's a strategic move to accelerate execution while mitigating dilution risks. Here's why investors should act:

1. Near-Term Catalysts:
2. The TSXV-approved offering is expected to close its first tranche “next week”, injecting immediate liquidity for growth initiatives.

3. The CAD$0.30 VWAP trigger creates a clear price target, and with Turnium's recent revenue momentum, hitting this level is within reach.

4. High Upside Potential:
   Investors gain equity and warrants at sub-CAD$0.10, far below the CAD$0.30 conversion threshold. Even modest stock appreciation could lead to outsized returns.

5. Strong Balance Sheet Flexibility:
   The 15% interest is manageable given Turnium's CAD$1.3M+ gross margins, and the ability to redeem debentures early adds a layer of financial agility.

6. Alignment with Market Trends:
   Turnium's focus on AI-driven networking, post-quantum cryptography, and edge computing aligns with Fortune 500 IT spend priorities, positioning it to capture a growing share of the cybersecurity and SD-WAN markets.

Risks and Considerations

• Execution Risk: Scaling Claratti's operations and launching Version 7 require flawless execution.
• Market Volatility: The TSXV's liquidity could impact short-term trading.
• Debt Management: The high interest rate demands strong cash flow discipline.

Conclusion: A Rare Opportunity in the TaaS Space

Turnium Technology Group is at a critical inflection point. Its convertible debenture offering, coupled with strong financials, strategic product launches, and a well-defined growth roadmap, creates a compelling case for investors seeking exposure to the TaaS revolution. With a CAD$0.30 VWAP trigger acting as a near-term catalyst and a long-term vision backed by disciplined cost management, this is a rare opportunity to invest in a company primed to capitalize on a CAD$10B+ market.

Act Now: The convertible debenture offering is open to accredited investors, and the first tranche's closing is imminent. For those willing to take a calculated risk on a high-growth TaaS player, Turnium's offering offers a pathway to outsized returns.

Disclaimer: This article is for informational purposes only. Investors should conduct their own due diligence and consult a financial advisor before making investment decisions.