Mr. Anoosh Manzoori reports

SPARC AI INC. ANNOUNCES CLOSING OF FIRST TRANCHE OF BROKERED LIFE FINANCING FOR $4.34 MILLION FROM AN INSTITUTIONAL INVESTOR

Sparc AI Inc. has completed the first tranche of its previously announced brokered private placement for gross proceeds of $4,340,002.25, consisting of the issuance of 1,021,177 units of the company at a price of $4.25 per unit. The offering was conducted on a commercially reasonable best effort basis by A.G.P. Canada Investments ULC, acting as sole agent and sole bookrunner for the offering and A.G.P./Alliance Global Partners acting as sole U.S. placement agent for the offering.

A second tranche closing for the private placement for the remaining amount of approximately $1,122,199.75 is expected to close on June 4, 2026, and is from existing supporting shareholders and being done to accommodate subscribers settling directly with the company.

Each unit in the offering consisted of one common share of the company and one share purchase warrant. Each warrant entitles the holder to acquire one additional share at a price of $5.25 for a period of 60 months from the closing date of the offering.

The units were offered by way of the listed issuer financing exemption under Part 5A of National Instrument 45-106 (Prospectus Exemptions), as amended by Coordinated Blanket Order 45-935 (Exemptions from Certain Conditions of the Listed Issuer Financing Exemption), in all the provinces of Canada except Quebec. Pursuant to NI 45-106 and the order, the securities issued to purchasers resident in the Canadian selling jurisdictions under the offering, including the shares and the warrants underlying the units, and, upon exercise of the warrants, the warrant shares, are not subject to a hold period under applicable Canadian securities laws. The company relied on the exemptions in Part 5A of NI 45-106 and the order, and was qualified to distribute securities in reliance on the exemptions included therein.

In connection with the offering, the agent received a cash commission equal to 7.0 per cent of the gross proceeds of the offering, and the company issued to the agent non-transferable warrants, representing 3.0 per cent of the aggregate number of units sold pursuant to the offering. Each broker warrant entitles the holder to purchase one share of the company at a price of $5.25 for a period of 60 months from the closing date of the offering. The company intends to use the net proceeds raised from the offering for: (a) further development of the Overwatch platform (including new features and defence-specific capability); (b) customization of the Overwatch platform for specific geographic markets; (c) product marketing, trade shows and demonstrations; and (d) working capital and general corporate purposes.

About Sparc AI Inc.

Sparc AI is a defence technology company solving one of the most critical challenges in modern autonomous systems: accurate navigation and targeting when GPS is unavailable. The company's artificial-intelligence-powered platform transforms the low-cost inertial sensors already inside commercial drones into precision instruments without additional hardware, external signals or complex integration. Sparc AI's software-only approach enables GPS-denied capability at the scale and cost required for modern drone operations.

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