ProStar Announces Convertible Debenture Financing and Warrant Repricing - Seite 2

On the Maturity Date, the Principal Amount and all accrued and unpaid interest shall be repaid at the election of the holder, either: (i) in cash; or (ii) subject to the approval of the TSXV, (x) in case of the Principal Amount, through the issuance of Units at the Conversion Price; and (y) in case of the accrued and unpaid interest, through the issuance of Shares at the Interest Conversion Price.

At any time following the issuance of the Convertible Debentures, if the ten (10) day daily moving average is greater than C$0.40 per Share, the Company may, at its discretion, force the conversion of the aggregate Principal Amount, plus any accrued and unpaid interest, of the then outstanding Convertible Debentures on the same terms as applicable to the exercise of the conversion privileges by the holder, by providing each holder with 30 days’ written notice.

The Convertible Debentures will be unsecured obligations of the Company, and will be subordinated in right of payment of principal and interest to all secured debt and to all existing and future senior indebtedness of the Company and senior to any of the Company’s future debt that is expressly subordinated to the Convertible Debentures.

The Company may pay finders’ fees in connection with the Offering to certain eligible finders in the form of a cash commission of up to 5% of the gross proceeds raised under the Offering from subscribers introduced to the Company by the finder.

The net proceeds received by the Company from the Offering are intended to be used for general corporate purposes.

The Offering remains subject to receipt of TSXV approval and all other necessary regulatory approvals. All securities issued in connection with the Private Placement will be subject to a four-month hold period from the closing date under applicable Canadian securities laws, in addition to such other restrictions as may apply under applicable securities laws of jurisdictions outside Canada.

Warrant Repricing

The Company also intends to amend the exercise price of an aggregate of 4,129,630 common share purchase warrants (the “July 2023 Warrants”) from C$0.45 to C$0.30 (the “Repricing”). The July 2023 Warrants were issued on July 21, 2023 and expire on July 21, 2025. In connection with the Repricing, the terms of the July 2023 Warrants will be amended to include an accelerated expiry clause such that the exercise period of the July 2023 Warrants will be reduced to 30 days if, for any ten (10) consecutive trading days during the unexpired term of the July 2023 Warrants, the closing price of the Common Shares exceeds the new exercise price of the July 2023 Warrants by 25% or more. The 30-day expiry period will commence on the day that the Company disseminates a press release announcing the accelerated expiry period. A director of the Company currently holds 2,200,000 July 2023 Warrants and pursuant to TSXV policies, 1,787,037 July 2023 Warrants have been excluded from the Repricing. The Repricing remains subject to receipt of TSXV approval.