Katipult Announces $3,000,000 Convertible Debenture Financing

Interest on the Debentures will accrue at a rate of 8.5% (the “Interest“), subject to adjustments, compounded quarterly until redeemed or converted in accordance with the terms of the Debentures.

Subject to the Company satisfying certain milestones, the Company has the option to convert all outstanding Principal into Common Shares at the Principal Conversion Price and to convert all accrued Interest under the Debentures into Common Shares at the Interest Conversion Price (the “Forced Conversion“). The Company also has the right to repay the Principal at any time in cash and accrued Interest in Common Shares.

In the event the Debentures have not been converted or redeemed within five (5) years from the date of issue, the Debenture holder may call the Debenture by providing the Company with twelve (12) months’ written notice (the “Notice Date“), after which, if a Forced Conversion has not occurred on the date that is twelve (12) months from the Notice Date (the “Retraction Deadline“), the total Principal will be due and payable by the Company in cash and the Interest under the Debentures accrued as of the Retraction Deadline will be converted into Common Shares at the Interest Conversion Price calculated from the date the Principal is repaid.

The Company intends to use the proceeds from the Private Placement to execute its sales and marketing strategy and for general working capital.

Closing of the Private Placement is subject to all necessary regulatory and stock exchange approvals and execution of final documentation.  All securities issued in connection with the Private Placement will be subject to a four-month hold period from the date of issue under applicable Canadian securities laws, in addition to such other restrictions as may apply under applicable securities laws of jurisdictions outside Canada.

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