Joint News Release Smartset Services Inc. and FinCard Financial Services Inc. Announce Binding Letter of Intent for Qualifying Transaction

This is a high-dilution, early-stage deal with no financials and long-term uncertainty.

Risk flags

• ●Operational risk is high because the announcement provides no information about FinCard’s business model, revenue, profitability, or operational track record. Investors have no way to assess whether the acquired assets are viable or valuable.
• ●Financial risk is acute due to the absence of any financial statements, cash flow data, or pro forma earnings. The only numbers disclosed relate to share counts and financing mechanics, leaving investors blind to the company’s financial health.
• ●Disclosure risk is significant: the company explicitly states that audited financials and key business details will only be provided in future filings. This lack of transparency makes it impossible to perform due diligence at this stage.
• ●Pattern-based risk is present because the structure—a capital pool company executing a Qualifying Transaction with massive dilution and no disclosed business fundamentals—is a classic setup for value destruction if the underlying business is weak.
• ●Timeline and execution risk is high: the transaction is only at the LOI stage, with multiple approvals outstanding, including a critical EPF shareholder vote and TSXV acceptance. Any delay or failure at these steps could scuttle the deal.
• ●Capital intensity risk is flagged by the need for up to $16.5 million in new capital (across equity and convertible debenture), with no evidence that these funds will generate returns. High capital requirements with distant or unproven payoff are a red flag for dilution and value leakage.
• ●Forward-looking risk is extreme: nearly all claims are about future intentions, not completed actions. With a forward-looking ratio of 0.9, investors are being asked to buy into a vision, not a proven business.
• ●Geographic and structural complexity adds risk: the transaction involves entities and approvals across Alberta, British Columbia, and Georgia, as well as multiple layers of share exchanges and subsidiary acquisitions, increasing the chance of unforeseen complications or regulatory hurdles.

Bottom line

For investors, this announcement is a procedural step in a high-dilution, capital-intensive transaction with no disclosed business fundamentals. The company is asking shareholders to approve a deal that will leave them with just 2.2% of the Resulting Issuer, while providing no information about what the acquired business actually does, how it performs, or what its prospects are. The narrative is credible only in the sense that it does not overstate progress or make unsupported claims, but it is also almost entirely devoid of substance. The presence of named executives does not provide comfort, as their institutional roles and track records are not explained, and there is no evidence of meaningful third-party validation or institutional participation. To change this assessment, the company would need to disclose audited financial statements, detailed business plans, and clear operational milestones, as well as evidence that the contemplated financings have been completed on acceptable terms. Key metrics to watch in the next reporting period include the outcome of the EPF shareholder vote, regulatory approvals, completion of financings, and—most importantly—the release of financial statements and business details for FinCard and the acquired subsidiaries. At this stage, the information is not actionable for a prudent investor; it is a signal to monitor, not to act on, until much more detail is provided. The single most important takeaway is that this is a high-risk, long-dated, and highly dilutive transaction with no disclosed business fundamentals—investors should demand full transparency before considering any commitment.

Announcement summary

(TSXV:SMAR.P) Smartset Services Inc. announced it has entered into a binding letter of intent dated June 12, 2026, to acquire all of the issued and outstanding securities of FinCard Financial Services Inc. in a transaction expected to constitute Smartset's Qualifying Transaction under TSXV Policy 2.4. The acquisition will be completed by way of a three-cornered amalgamation, with Smartset issuing an aggregate of 139,581,636 Resulting Issuer Shares to existing FinCard Shareholders on a one-for-one share-for-share exchange basis. Prior to closing, Smartset will consolidate its outstanding common shares on a 4:1 basis, reducing 15,800,000 shares to 3,950,000 post-consolidation shares, and adjust 1,580,000 stock options to 395,000 options exercisable at $0.40 per share. Financing includes a current financing of up to 12,000,000 FinCard Shares at $0.25 per share for up to $3,000,000, a convertible debenture of up to $11,000,000 convertible at $0.50 per share, and a second financing of up to 5,000,000 FinCard Shares at $0.50 per share for up to $2,500,000. The pro forma share capital of the Resulting Issuer is expected to be 182,926,636 shares on a fully diluted basis, with 76.3% held by FinCard Shareholders. The company projects that the Resulting Issuer will be listed as a Tier 2 Technology issuer on the TSXV and that certain shares will be subject to escrow requirements and resale restrictions.

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