SHARC International Announces Settlement Terms for Maturing Convertible Debentures And $2.0M Private Placement of Debenture Units

VANCOUVER, British Columbia, May 27, 2020 (GLOBE NEWSWIRE) -- SHARC International Systems Inc.  (CSE: SHRC) (FSE: IWIA) (OTCQB: INTWF) ("SHARC" or the “Company”) announced today it has agreed with all holders (“Debentureholders”) of the Company’s $1.32M and $1.023M 12% unsecured, convertible debentures due May 30, 2020 and June 29, 2020 (the “Maturing Debentures”), respectively, to terms of settlement of the Maturing Debentures.

The Debentureholders have entered into settlement agreements with the Company (the “Settlement Agreements”) pursuant to which the Debentureholders accepted 75% cash payout of the outstanding principal amount of the Maturing Debentures, the payout of any accrued and unpaid interest up to the date of maturity and the amendment of 1,673,571 common share purchase warrants (the “Warrants”) in consideration for the cancellation of the Maturing Debentures and a release of the Company’s obligations under the Maturing Debentures. The expiry date of the Warrants will be extended by two years from May 30, 2020 and June 29, 2020 to May 30, 2022 and June 29, 2022, respectively, and the exercise price of the Warrants will be repriced to $0.25 from $1.05 (collectively, the “Warrant Amendments”).  The Warrant Amendments are subject to the approval of the Canadian Securities Exchange (the “CSE”). If the Warrant Amendments are not approved by the CSE, the Company will issue warrants via private placement under the same terms.

In connection with the Settlement Agreements, the Company announces a non-brokered private placement of up to 2,000 convertible debenture units (the “Debenture Units”) at a price of $1,000 per Debenture Unit for aggregate gross proceeds of up to $2,000,000 (the “Offering”). Each Debenture Unit will consist of: (i) $1,000 principal amount of 2.0% unsecured convertible debentures (the “Debentures”); and (ii) 3,333 warrants (the “Debenture Warrants”). The Company will use the net proceeds of the Offering for the payout under the Settlement Agreements and general working capital purposes.

The Debentures will bear interest from their issue date at 2.0% per annum calculated and payable semi-annually in arrears on June 30 and December 31 of each year commencing on June 30, 2020 and will mature three years following the closing of the Offering (the “Maturity Date”). The Debentures are unsecured and will rank pari passu in right of payment of principal and interest with all the existing and future unsecured indebtedness of the Company.