Mr. Ryan Hamlin reports

POSABIT ANNOUNCES ~$20MM USD GUARANTEED MINIMUM REVENUE SOFTWARE LICENSE AGREEMENT WITH CANNABIS TECHNOLOGY PROVIDER

Posabit Systems Corp. signed a software licence agreement after market close on Aug. 22, 2022, pursuant to which Posabit granted a non-exclusive, worldwide licence to a large cannabis technology partner to commercialize the corporation's point-of-sale technology. All dollar figures referenced herein are quoted in United States dollars.

Under the terms of the licence agreement, the licensee has paid to the corporation a one-time fee of $500,000 (U.S). Additionally, in consideration for the license, the licensee will be required to pay to the corporation $20-million (U.S.) guaranteed over four years. The fee will be a monthly royalty paid per point-of-sale device deployed by the licensee or its affiliates during the applicable month, subject to a minimum royalty monthly payment of between $325,000 (U.S.) to $512,500 (U.S.) for the first four years of the term. In accordance with the licence agreement, the licensee has prepaid the aggregate minimum royalty fees for the first year of the term, which are equal to $3,900,000 (U.S.).

The licensee will have the right, exercisable at any time after the third anniversary of the license agreement, to buy-out its royalty payment obligations by paying the corporation an amount equal to the greater of (i) $30.75-million (U.S.); and (ii) five times the royalty payments payable by the licensee for the previous 12 calendar months. The corporation has also granted the licensee a right of first refusal with respect to any exclusive license or third-party sale of the licenced property. The licence agreement may be terminated by the licensee on 180 days' notice, provided that notice may not be given within the first four years of the term of the licence agreement.

About Posabit Systems Corp.

Posabit is a financial technology company that delivers unique and innovative payment processing and point-of-sale systems for cash-only businesses. Posabit specializes in resolving pain points for complex, high-risk, emerging industries like cannabis with an all-in-one solution that is compliant, user-friendly and utilizes top-of-the-line hardware. Posabit's unique solution provides a safe and transparent environment for merchants while creating a better overall experience for the consumer.

We seek Safe Harbor.