Pegasus Mercantile to issue 3.26 million debt shares

Executive Summary

• Pegasus Mercantile Inc. has provided an update to a previously announced debt settlement, intending to settle an additional $163,430 in outstanding indebtedness by issuing 3,268,600 restricted common shares to creditors.
• The total debt settlement, now inclusive of this update, amounts to $260,400 and remains subject to the approval of the Canadian Securities Exchange (CSE).
• The transaction includes $138,400 owed to the company's directors and CEO for fees, classifying it as a related-party transaction under Multilateral Instrument 61-101, for which the company intends to rely on specific exemptions.

Key Details

• Settlement Amount: $163,430 in outstanding indebtedness is being settled in this specific update.
• Total Debt Settlement: The cumulative total debt settlement is $260,400.
• Consideration: 3,268,600 restricted common shares are being issued to creditors in exchange for accounts payable.
• Deemed Price: The shares are issued at a deemed price of $0.05 per share, in accordance with Canadian Securities Exchange policies.
• Hold Period: The securities are subject to a four-month-and-one-day hold from the date of issuance.
• Related-Party Component: The settlement includes $138,400 owed to directors and the CEO for director fees and consulting fees.
• Regulatory Status: The transaction is a related-party transaction under Multilateral Instrument 61-101. The company intends to rely on exemptions from formal valuation and minority approval requirements, determining that the fair market value of the related-party portion does not exceed 25% of the company's market capitalization.
• Approval: The entire debt settlement is subject to CSE approval.