Pulsar Helium firms up deal for Quantum Hydrogen

Executive Summary

• Pulsar Helium Inc. has signed a definitive agreement to acquire up to 100% of Quantum Hydrogen Inc. (a wholly owned subsidiary of Oscillate PLC) in an all-share transaction, superseding a previous non-binding term sheet.
• The acquisition grants Pulsar exclusive mineral rights for non-hydrocarbon gases on 59,100 gross acres in Minnesota, located to the west of Pulsar's flagship Topaz project, effectively doubling its gross acreage in the region.
• The transaction involves the issuance of Pulsar common shares valued at $400,000 (U.S.) for an initial 80% stake, with an option to acquire the remaining 20% for an additional $400,000 (U.S.) within 18 months.

Key Details

• Transaction Structure: All-share transaction where Pulsar acquires 80% of Quantum Hydrogen Inc. from Oscillate PLC.
• Initial Consideration: Issuance of new Pulsar common shares with an aggregate value of $400,000 (U.S.).
• Issuance Schedule: The initial 80% consideration is to be issued in five equal monthly tranches of $80,000 (U.S.) each, commencing upon receipt of TSX Venture Exchange (TSX-V) approval.
• Pricing Mechanism: The number of shares per tranche is determined by the 30-day volume-weighted average price (VWAP) of Pulsar's shares on the TSX-V prior to each issuance (subject to TSX-V minimum price rules).
• Hold Period: Pulsar shares issued are subject to a four-month-and-one-day hold period from the date of issuance.
• Option to Acquire Remaining Interest: Pulsar has the option to acquire the remaining 20% of Quantum shares from Oscillate within 18 months for an additional $400,000 (U.S.) in Pulsar shares, under the same terms and pricing mechanism as the initial issuance.
• Assets Acquired: Quantum holds exclusive mineral rights for non-hydrocarbon gases on 59,100 gross acres in St. Louis and Itasca counties, Minnesota.
• Strategic Impact: The acquisition represents an approximate 1,000% increase to Pulsar's gross acreage in Minnesota. The assets are proximal and prospective for helium and hydrogen, featuring geological traits analogous to the Topaz project but representing a more conventional gas reservoir (helium migrating from Archean basement into overlying sedimentary reservoirs).
• Valuation of Assets: Quantum’s lease option for the assets is held on its balance sheet with a value of approximately $296,000 (U.S.). Quantum has not yet produced financial statements.
• Regulatory Conditions: The transaction is subject to TSX-V acceptance and approval.
• Conflict of Interest: Neil Herbert, a director of Pulsar, is a minority shareholder in Oscillate and has abstained from board deliberations and voting on the transaction.

Notable Quotes

• "Pulsar will have the opportunity to apply Pulsar's extensive subsurface knowledge to the assets, which represent a more conventional gas reservoir."
• "Pulsar remains focused on achieving its core objective of becoming a major helium producer at Topaz, with this additional acreage being a low-cost, long-term addition intended for future exploration activities."
• "Pulsar's board believes this represents a logical and low-risk way to expand its exploration portfolio while remaining firmly within the company's core technical focus."