Prostar Announces Upsizing of Convertible Debenture Financing

Executive Summary

• ProStar Holdings Inc. upsized its previously announced private placement, increasing the maximum principal amount from US $500,000 to up to US $675,000.
• Each convertible 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; the offering remains subject to TSXV and other regulatory approvals and includes a four‑month hold period.

Key Details

• Offering Size: Increased from US $500,000 to up to US $675,000 total principal amount.
• Interest Rate: 12.5% per annum on each convertible debenture.
• Maturity: 24 months from the issuance date.
• Conversion Price: US $0.10 per unit (one common share + ½ warrant).
• Unit Composition: 1 Common Share + ½ of a Warrant; each full warrant allows purchase of one Common Share at US $0.14 for five years from closing.
• Trigger Events for Automatic Conversion:
• Reaching US $2,000,000 booked Annual Recurring Revenue (ARR) in 2026, or
• Reaching US $2,500,000 booked ARR in 2027.
• Interest Settlement Option: Company may settle accrued interest in cash or by issuing Common Shares at market price, subject to TSXV approval.
• Security: Debentures are secured by a first‑ranking security interest over all present and after‑acquired property and assets of the company.
• Use of Proceeds: General corporate purposes.
• Regulatory Conditions: Subject to TSXV approval; securities will have a four‑month hold period under Canadian securities law and may be subject to additional restrictions abroad.
• Related Party Participation: Certain directors intend to participate, qualifying as a related‑party transaction; the company will rely on MI 61‑101 exemptions for valuation and minority shareholder approval.

Notable Quotes

• Page Tucker, CEO & Director: “The upsized financing provides us with additional flexibility to accelerate product development and expand our market reach while aligning investor interests through conversion features tied to ARR milestones.”