HS GovTech Solutions Inc. announced a brokered private placement of debenture units for gross proceeds of CAD 2,170,000 and a non-brokered private placement on the same terms as the offering for gross proceeds of CAD 25,000 for total gross proceeds of CAD 2,195,000 on October 18, 2022. Each unit consisted of one CAD 1,000 principal amount unsecured non-convertible debenture bearing 10% annual interest maturing on October 18, 2026, subject to early redemption in accordance with its terms, and 500 common share purchase warrants. The Debentures rank pari-passu as between each other and all other unsecured indebtedness of the company and are to be treated ratably as to repayment.

The first interest payment on the debentures shall be made on September 30, 2023 and shall be made quarterly thereafter to the earlier of maturity or redemption. At any time after October 18, 2023, the company may redeem, in whole or in part, the principal amount of the debentures at a price equal to 100% of the outstanding principal amount of the Debentures plus any accrued and unpaid interest thereon, plus a prepayment penalty equal to 6-months interest, payable in cash. Each Warrant entitles the holder thereof to acquire, subject to adjustment in certain circumstances, one common share of the Company at an exercise price of C$0.60 for a period of 4 years from the date of issuance.

The company issued 25 units to Silas Garrison, Ali Hakimzadeh for 30 units, and to Alnesh Mohan for 10 units. All securities issued in connection with each of the Offering and the Concurrent Private Placement will be subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation, expiring February 19, 2023.