C02497-2024

SECURITIES AND EXCHANGE COMMISSIONSEC FORM 17-C

CURRENT REPORT UNDER SECTION 17
OF THE SECURITIES REGULATION CODE
AND SRC RULE 17.2(c) THEREUNDER

1. Date of Report (Date of earliest event reported)
Apr 19, 2024
2. SEC Identification Number
A199908874
3. BIR Tax Identification No.
202955796
4. Exact name of issuer as specified in its charter
DFNN INC.
5. Province, country or other jurisdiction of incorporation
Manila, Philippines
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
L2-L5 14TH Floor Philippine Stock Exchange Tower 5TH Avenue corner 28TH Street Bonifacio Global City Postal Code 1634
8. Issuer's telephone number, including area code
(02) 8396-5270
9. Former name or former address, if changed since last report
Not Applicable
10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA
Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
Common 324,620,008
11. Indicate the item numbers reported herein
None

The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.

DFNN, Inc.DFNN

PSE Disclosure Form LR-1 - Comprehensive Corporate Disclosure on Issuance of Shares (Private Placements, Share Swaps, Property-for-Share Swaps
or Conversion of Liabilities/Debt into Equity) Reference: Rule on Additional Listing of Securities

Subject of the Disclosure

Corporate Comprehensive Disclosure on Issuance of Shares (private placement).

Subscriptions of Nautilus International Management Corporation and Asia Defense and Armament Corporation to unissued common shares of DFNN Inc. (DFNN or the “Corporation)
Background/Description of the Disclosure

On 15 March 2024, the DFNN Board of Directors approved the authority to obtain private placements to raise additional capital of up to PhP 450M for the following: (a) to pay existing debts, (b) to expand the business by venturing into cybersecurity and Artificial Intelligence (AI) business and/or create or acquire new gaming platforms; and (c) to pay taxes and fees for issuance and listing of the new shares arising from the private placements.

The Board further granted exclusive authority to Nautilus International Management Corp. to subscribe and/or designate investors to the Private Placement. The Board authorized the President and/or Treasurer to accept the subscriptions and execute relevant subscription agreements thereto. The Board also delegated the authority to the management to set the price for the subscriptions. On 8 April 2024, the parties executed the Subscription Agreement setting forth the foregoing, including the subscription of 149,142,000 shares.

The Board also set the meeting of the shareholders on 17 May 2024 to ratify the private placements and approve the listing thereof.
Date of Approval by Board of Directors Mar 15, 2024
Comprehensive Corporate Disclosure
Description of the proposed transaction including the timetable for implementation, and related regulatory requirements

On 08 April 2024, the Corporation entered into four (4) subscription agreements as follows:

1. With Nautilus International Management Corp. for 23,863,000 common shares to be issued out of the Issuer’s remaining unissued authorized capital stock
2. With Asia Defense and Armament Corporation for 35,794,000 common shares to be issued out of the Issuer’s remaining unissued authorized capital stock
3. With Nautilus International Management Corp. for 53,691,000 common shares to be issued out of the increase in capital stock.
4. With Asia Defense and Armament Corporation for 35,794,000 common shares to be issued out of the increase in capital stock.

The Issuer shall immediately issue and implement the 1st and 2nd subscriptions as soon as the initial payments are received. Except for the filing of SEC Form 10.1 with the Securities and Exchange Commission (“SEC”), the 1st and 2nd subscriptions are not subject to further regulatory approval. The 3rd and 4th subscriptions shall be issued after approval of the increase in authorized capital stock by the Shareholders and the Securities and Exchange Commission.
Rationale for the transaction including the benefits which are expected to be accrued to the listed issuer as a result of the transaction

The Private Placements shall generate cash in the total amount of PhP 450,006,156.60 which shall be exclusively used for the following purposes: (a) to pay existing debts of the corporation, (b) to expand the business by venturing into cybersecurity and Artificial Intelligence (AI) business and/or create or acquire new gaming platforms and (c) to pay taxes and fees for issuance and listing of the new shares arising from the private placements.
The aggregate value of the consideration, explaining how this is to be satisfied, including the terms of any agreements for payment on a deferred basis

The total aggregate value of the consideration is PhP 450,006,156.60 which shall be paid in cash and on installment basis.
The basis upon which the consideration or the issue value was determined

All the private placements were priced at PhP 3.0173 per share which is 2% premium over the market price, determined by the weighted average of closing prices over a thirty (30) trading day period from February 22, 2024 to April 5, 2024.
Detailed work program of the application of proceeds, the corresponding timetable of disbursements and status of each project included in the work program. For debt retirement application, state which projects were financed by debt being retired, the project cost, amount of project financed by debt and financing sources for the remaining cost of the project

The subscription proceeds shall be exclusively used for payment of the following:

(a) payment of existing debts of the corporation,
(b) Future investment, including ventures into cybersecurity and Artificial Intelligence (AI) sector as well as the development or acquisition of new gaming platforms and
(c) Payment of applicable taxes and fees with the issuance and listing of the new shares resulting from the private placements.
Identity and/or corporate background of the beneficial owners of the shares subscribed, including the following
Beneficial Owners/Subscribers Nature of Business Nature of any material relationship with the Issuer and the parties to the transaction, their directors/officers or any of their affiliates
Nautilus International Management Corp.Beneficial Owners: 1. To act as managers or managing agency of persons, firms, associations, corporations, partnerships and other entities; to provide management and technical advice for commercial, industrial, manufacturing and other kinds of enterprises; and to undertake, carry on, assist or participate in the promotion, organization, management, liquidation or reorganizations or corporations, partnerships and other entities, except the management of funds, securities, portfolio or similar assets of the managed ent Under the Rules, RELATED PARTIES shall mean affiliates of the listed Issuer accounted for by the equity method of accounting; trusts for the benefit of employees such as pension and profit-sharing plans that are managed by or under the trusteeship of the management; directors, major shareholders or principal owners of the listed Issuer; and its management; members of the immediate families of major shareholders, principal owners and management of the listed Issuer. Nautilus International Manage
Beneficial Owners: 1.Lia Marie N. Te (60%) 2.Lia Margarita Te (20%) 3.Nicholas N. Te (20%) - -
Asia Defense and Armament Corporation To operate and maintain the business of manufacturing or otherwise dealing in ammunition and its component and other goods of similar nature. Asia Defense and Armament Corporation is a related party of DFNN through Mr. Ramon C. Garica. Mr. Garcia sits as the President and Chairman of ADAC. He is also the current Executive Chairman of the Board of DFNN.
Beneficial Owner: Ramon C. Garcia, Jr. (99%) - -
Organizational/Ownership Structure of Subscribers
Controlling Shareholders of Subscribers Number of Shares Held %
Nautilus International Management Corp 77,554,000 16.37 Nautilus International Management Corp
Asia Defense and Armament Corporation 71,588,000 15.11 Asia Defense and Armament Corporation
For subscribers with no track record or with no operating history: the Subscriber must present a statement of active business pursuits and objectives which details the step undertaken and proposed to be undertaken by the Issuer in order to advance its business. Projected financial statements shall only be required should there be references made in the Statement to forecasts or targets

Nautilus International Management Corp. was incorporated under the laws of the Republic of the Philippines on March 20, 2023 with a primary purpose to act as managers or managing agency of persons, firms, associations, corporations, partnerships and other entities; to provide management and technical advice for commercial, industrial, manufacturing and other kinds of enterprises; and to undertake, carry on, assist or participate in the promotion, organization, management, liquidation or reorganizations or corporations, partnerships and other entities, except the management of funds, securities, portfolio or similar assets of the managed entities or corporation. As a management consultancy firm, it is capable of providing financial and business support to the strategic direction of DFNN Inc. in venturing into the cybersecurity and Artificial Intelligence (AI) sector. The investment will allow Nautilus to diversify its portfolio investments for future capital appreciation. Being established only last 2023, NIMC has no financial statement as of yet.
The officers and directors of Nautilus International Management Corp. are the following:

Nicholas Anthony Navarro Te - Chairman of the Board & President
Lia Marie Navarro Te - Member of the Board
Lia Margarita Navaro Te - Member of the Board
Daisy Licay Camero - Treasurer & Corporate Secretary

Asia Defense and Armament Corporation (ADAC) was incorporated on December 2, 1993 is a corporation with a primary purpose to operate and maintain the business of manufacturing or otherwise dealing in ammunition and its component and other goods of similar nature.
The officers and directors of Asia Defense and Armament Corporation are the following:

Ramon C. Garcia, Jr. - Chairman of the Board & President
Charina Go Garcia - Member of the Board
Domingo Samuel Jonathan L. Ng. - Member of the Board
Maria Patricia De Las Cagigas - Member of the Board
Patricia Go Garcia - Member of the Board
Atty. Christopher Lawrence C. Ferriols - Corporate Secretary

Asia Defense and Armament Corporation (ADAC) was incorporated on December 2, 1993 is a corporation with a primary purpose to operate and maintain the business of manufacturing or otherwise dealing in ammunition and its component and other goods of similar nature.
The interest which directors of the parties to the transaction have in the proposed transaction

Mr. Ramon Garcia and Mr. Nicholas Te are also directors of the Subscribers. Both Mr. Garcia and Te inhibited during the voting process for approval of the action.
Statement as to the steps to be taken, if any, to safeguard the interests of any independent shareholders

Both Mr. Garcia and Te inhibited during the voting process for approval of the action. All the private placements were priced at PhP 3.0173 per share which is 2% premium over the market price, determined by the weighted average of closing prices over a thirty (30) trading day period from February 22, 2024 to April 5, 2024. The Board also set the meeting of the shareholders on 17 May 2024 to ratify the private placements and approve the listing thereof.
Any conditions precedent to closing of the transaction

The issuance of the shares for the 3rd and 4th tranche is subject to approval of the increase in capital stock by DFNN’s shareholders and the Securities and Exchange Commission
Change(s) in the composition of the Board of Directors and Management

As of the moment, there will be no changes in the composition of the Board of Directors and Management.

Effects on the following

Ownership structure
Principal Shareholders Before After
Number of shares % Number of shares %
Ramon C. Garcia Jr. 44,693,987 13.77% 44,693,987 9.43%
Jean Henri D. Lhullier 248,020,626 5.35% 17,359,053 3.66%
Donald G. Limcaco 1,335,000 0.41% 1,335,000 0.28%
Marco Antonio R. Urera 1,133,501 0.35% 1,133,501 0.24%
Edwin B. Villanueva 1,494,990 0.46% 1,494,990 0.32%
Eric Francis P. Ongkauko 125,001 0.04% 125,001 0.03%
Calvin Lim 672,000 0.21% 0.21% 0.14%
Ricardo F. Banaag 539,994 0.17% 539,994 0.11%
Diversified Securities Inc. 5,764,844 1.78% 5,764,844 1.22%
OCU Group Inc. 2,800,000 0.86% 2,800,000 0.59%
PUBLIC 248,020,626 76.40% 248,020,626 52.35%
Nautilus International Management Corp. - - 77,554,000 16.37%
Asia Defense and Armament Corporation - - 71,588,000 15.11%

Capital structure

Issued Shares
Type of Security /Stock Symbol Before After
COMMON 324,620,008 473,762,008
Outstanding Shares
Type of Security /Stock Symbol Before After
COMMON 324,620,008 473,762,008
Treasury Shares
Type of Security /Stock Symbol Before After
- - -
Listed Shares
Type of Security /Stock Symbol Before After
COMMON 324,620,008 324,620,008
Effect(s) on the public float, if any Public float will decrease from 76.40% to 52.35%
Effect(s) on foreign ownership level, if any The Subscriptions has no effect on foreign ownership level.
Other Relevant Information

The Corporation shall apply with the PSE for the listing of the common shares subscribed by Nautilus International Management Corp. and Asia Defense and Armament Corporation
Filed on behalf by:
Name Cyrus Richard Montesa
Designation Chief Legal Counsel, Chief Compliance Officer, Data Protection Officer, and Assistant Corporate Secretary