Mr. Ryan Hamlin reports

POSABIT ANNOUNCES NON-BROKERED UNIT OFFERING TO FUND CONVERTIBLE UNSECURED NOTE MATURITY

Posabit Systems Corp. intends to complete a non-brokered private placement of up to 3,107,142 units of the company at a price of 28 Canadian cents per unit for aggregate gross proceeds of up to approximately $870,000 (Canadian) (or $650,000 (U.S.)) to finance the repayment of certain convertible promissory notes at maturity. The units have been priced at the closing price of the company's common shares on the Canadian Securities Exchange on Dec. 20, 2023.

In connection with the offering, each unit will comprise one common share and 0.88 common share purchase warrant. Each warrant will be exercisable into one common share in the capital of the company at a price of 40 Canadian cents per warrant share for a period of 60 months.

On Nov. 13, 2020, the company announced the close of $1.04-million (U.S.) principal amount of 12 per cent convertible unsecured notes due Dec. 31, 2023 (the 2020 notes), convertible into common shares at a conversion price of 12 Canadian cents per common share. As of the conversion deadline, $565,000 (U.S.) principal amount of 2020 notes did not convert and such notes will be repaid at maturity.

In connection with the offering, Perga Capital Partners LP has entered into a subscription agreement with the company, pursuant to which Perga has committed to purchase 2,857,929 units under the offering, for aggregate gross proceeds of approximately $800,220. Perga has also entered into a warrant cancellation agreement with the company, pursuant to which Perga has agreed to cancel 3.85 million common share purchase warrants previously issued to Perga.

Pursuant to the offering, the company intends to issue approximately 3.1 million common shares and approximately 2.7 million warrants, which will be partially offset by the cancellation of 3.85 million warrants previously issued to Perga. This compares with the potential issuance of approximately 6.3 million common shares if the 2020 notes were converted under their original terms.

The offering is expected to close on or about Dec. 29, 2023, and is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals. The common shares issued in connection with the offering are expected to be subject to a four-month statutory hold period, in accordance with applicable securities legislation.

It is expected that at least 2,857,929 units will be issued to Perga, which is a related party (within the meaning of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions), and such issuance will be considered a related party transaction for the purposes of MI 61-101. It is expected that such related party transaction will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the securities being issued to the related party nor the consideration being paid by the related party exceeds 25 per cent of the company's market capitalization. The purchasers of the units and the extent of such participation were not finalized until shortly prior to the completion of the offering. Accordingly, it was not possible to publicly disclose details of the nature and extent of related party participation in the transactions contemplated hereby pursuant to a material change report filed at least 21 days prior to the completion of such transactions.

About Posabit Systems Corp.

Posabit is a fintech (financial technology) company, working exclusively within the cannabis industry. The company provides a best-in-class point-of-sale solution and is the leading cashless payment provider for cannabis retailers. It works tirelessly to build better financial services and transaction methods for merchants. It brings cutting-edge software and technology to the cannabis industry so that all merchants can have a safe and compliant set of services to solve the problems of a cash-only industry.

We seek Safe Harbor.