Prostar Holdings increases debenture financing

Executive Summary

• Prostar Holdings Inc. has upsized its previously announced non-brokered private placement of secured convertible debentures from $500,000 to an aggregate principal amount of up to $675,000 (U.S.).
• The debentures carry a 12.5% annual interest rate, mature in 24 months, and are convertible into units at a price of 10 U.S. cents per unit.
• The offering includes related party participation by certain directors and remains subject to TSX Venture Exchange and other regulatory approvals.

Key Details

• Financing Structure: Non-brokered private placement of secured convertible debentures.
• Principal Amount: Upsized from $500,000 to up to $675,000 (U.S.).
• Interest Rate: 12.5% per annum.
• Maturity: 24 months from the date of issuance.
• Conversion Terms:
  • Conversion price: 10 U.S. cents per unit.
  • Conversion option: Holder may convert at any time prior to maturity.
  • Trigger Events: Automatic conversion into units if the company reaches $2-million (U.S.) in booked annual recurring revenue (ARR) in 2026, or $2.5-million (U.S.) in booked ARR in 2027.
• Unit Composition: Each unit comprises one common share and one-half of one common share purchase warrant.
• Warrant Terms: Each full warrant entitles the holder to purchase one common share at 14 U.S. cents per share for a period of five years from the closing date.
• Interest Settlement: Upon voluntary conversion, maturity, or trigger event, the company may settle accrued interest in cash or via common shares. If settled in shares, the conversion rate is the market price at the time of payment, subject to TSX-V approval.
• Security: First-ranking security interest over all present and after-acquired property and assets of the company.
• Use of Proceeds: General corporate purposes.
• Regulatory Status: Subject to TSX-V approval and other necessary regulatory approvals.
• Hold Period: Four-month hold period from the closing date under applicable Canadian securities laws.
• Related Party Transaction: Certain directors intend to participate in the offering. The company relies on exemptions from formal valuation and minority shareholder approval requirements under Multilateral Instrument 61-101.