Criterium Energy Ltd. announced that it has entered into a letter of intent and intends to enter into a loan agreement in connection with the convertible loan pursuant to which the strategic investor will agree to advance CAD 10,000,000 in principal amount to the company on September 22, 2023. The company will also issue to the strategic investor 62,500,000 warrants. The convertible loan will be issued on or before the closing of the acquisition and is subject to a number of conditions, including the closing of the Public Offering and the approval of the TSX Venture Exchange.

The convertible loan shall bear interest at a rate of 14.75% per annum from the date of issue, accrued daily and payable monthly in cash. The principal amount of the loan shall be convertible, for no additional consideration, into common shares at the option of the holder at any time prior to the close of business on the third business day preceding the date that is 60 months from the date following the satisfaction or waiver of the escrow release conditions at a conversion price equal to CAD 0.16 per common share, subject to customary adjustments. The convertible loan will be subordinated in right of payment of principal and interest to all senior obligations of the company.

The convertible loan will be secured by a general charge over the company's assets. The outstanding principal amount of the convertible loan will be repaid in full on the Maturity Date in cash. On and following the date that is the second anniversary of the satisfaction of the escrow release conditions, the company shall have the right to partially or fully repay the outstanding principal amount of the loan in cash at a premium of 14.75% to the outstanding principal amount at the time of repayment, plus any unpaid accrued interest, by giving 30-days written notice to the strategic investor.

The company has granted the investor an option, exercisable in whole or in part, at the sole discretion of the strategic investor, to increase the principal amount of the convertible loan by up to an additional 15%. The convertible loan and warrants issuable will be subject to a statutory hold period lasting four months and one day following the closing of the convertible loan pursuant to Canadian securities laws.