XTM Announces Completion of Oversubscribed Non-Brokered Secured Convertible Debenture Offering for US $11Million

XTM INC. (CSE: PAID; QB: XTMIF; FSE:7XT) (“XTM” or the “Company”), further to its news releases of December 13, 2023 and February 6, 2024, the Company is pleased to announce that it has completed its previously announced non-brokered private placement offering (the “Offering”) of secured convertible debentures (“Debentures”) for aggregate gross proceeds of US$11,028,468 oversubscribed from the original maximum offering size from US$5 million. The secured convertible debentures will bear interest at the rate of 12.0% per annum from the date of issuance, calculated and payable quarterly beginning on September 30, 2024.

“We are poised and ready to take on the reported 75% of US workers who want same day pay,” said Marilyn Schaffer, XTM, CEO. “We are thankful for the patience and loyalty of our team, our long shareholders and our invaluable partners.”

Secured Convertible Debentures

The Debentures shall be convertible at the option of the holder thereof (“Conversion Date”) into units (“Units”) of the Company at a price of US$0.11 per Unit. Each Unit shall entitle the holder thereof to receive one common share of the Company (“Common Shares”), and one warrant to purchase a Common Share (each a “Warrant”) upon payment of US$0.11 to the Company for a period of 24 months from the date of issuance, provided, however, that if the daily volume-weighted average trading price of the Common Shares on the Canadian Securities Exchange (the “Exchange”) is greater than C$0.50 for any 5 consecutive trading days (the “Acceleration Trigger”), the Company may, within 3 trading days of the Acceleration Trigger, accelerate the expiry date of the Warrants to a date that is at least 30 days following the date of such written notice. The Debentures mature on the date (the “Maturity Date”) that is 24 months from the date of issuance.

The Debentures will be a secured obligation of the Company ranking junior in right of payment to all existing secured credit agreements and financing arrangements of the Company, and senior in right of payment to all current and future unsecured obligations of the Company.

In connection with the Offering, XTM paid a further cash finder’s fee in the amount of US400,000 to a finder (the “Finder”).

The closing of the Offering (the “Closing”) is subject to certain conditions, including, but not limited to, the satisfaction of customary closing conditions and the receipt of regulatory approvals, including the approval of the Exchange. The Company intends to use the proceeds of the Offering for general corporate and working capital purposes, including to satisfy working capital requirements of its U.S. subsidiary, Q-Rails, as well as to as well as to extinguish an obligation of US$1,058,342 concurrently with the Closing. The offering closed in three tranches on January 25, 2024, February 16, 2024 and February 23, 2024. The Company increased the maximum size of the offering from US$5 million to US$12 million to accommodate closing on gross proceeds of US$11 million.