ProStar Announces Convertible Debenture Financing

Executive Summary

• ProStar Holdings Inc. announced a non‑brokered private placement of up to US $500,000 in secured convertible debentures with a director of the company.
• Each debenture bears 12.5% annual interest, matures in 24 months, and is convertible at US $0.10 per unit (one common share plus half a warrant).
• Proceeds are intended for general corporate purposes; conversion may be triggered automatically upon reaching specified ARR milestones ($2 M in 2026 or $2.5 M in 2027).

Key Details

• Offering Size: Up to US $500,000 principal amount of convertible debentures.
• Interest Rate: 12.5% per annum.
• Maturity: 24 months from issuance date.
• Conversion Price: US $0.10 per unit (each unit = 1 common share + ½ warrant).
• Warrant Terms: Full warrant allows purchase of one common share at US $0.14 for five years from closing; each unit includes half a warrant.
• Trigger Events for Automatic Conversion:
• ARR ≥ US $2,000,000 in 2026, or
• ARR ≥ US $2,500,000 in 2027.
• Interest Settlement Option: Company may settle accrued interest in cash or by issuing common shares at the lower of discounted market price or conversion price, subject to TSXV approval.
• Security: Debentures secured by a first‑ranking security interest over all present and after‑acquired assets.
• Use of Proceeds: General corporate purposes.
• Regulatory Conditions: Subject to TSXV and other regulatory approvals; securities carry a four‑month hold period under Canadian law.
• Related Party Transaction: Director intends to take the full offering amount; company will rely on MI 61‑101 exemptions for valuation and minority shareholder approval.

Notable Quotes

• “The private placement provides us with flexible, non‑dilutive capital to accelerate our growth initiatives while aligning incentives with a key insider who believes in ProStar’s long‑term vision.” – Page Tucker, CEO & Director.