Mr. Ryan Hamlin reports

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

Further to Posabit Systems Corp.'s previous press release dated Dec. 21, 2023, it has closed a non-brokered private placement of 3,107,142 units of the company at a price of 28 cents per unit, for aggregate gross proceeds of approximately $870,000 or $650,000 (U.S.) to finance the repayment of certain convertible promissory notes at maturity.

In connection with the offering, each unit consists of one common share in the capital of the company and 0.88 common share purchase warrants. Each warrant is exercisable into one common share in the capital of the company at a price of 40 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, convertible into common shares at a conversion price of 12 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 purchased 2,857,929 units for aggregate gross proceeds of approximately $800,220. Perga also entered into a warrant cancellation agreement with the company, pursuant to which Perga agreed to cancel 3.85 million common share purchase warrants previously issued to Perga.

Pursuant to the offering, the company issued 3,107,142 common shares and 2,734,284 warrants, which are partially offset by the cancellation of 3.85 million warrants previously issued to Perga. This compares to the potential issuance of approximately 6.3 million common shares if the 2020 notes had converted under their original terms.

The common shares and warrants issued in connection with the offering are subject to a four-month statutory hold period, in accordance with applicable securities legislation.

Units totalling 2,857,929 were 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 is considered a related party transaction for the purposes of MI 61-101. Such related party transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the securities issued to the related party, nor the consideration 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.