Groundstar Resources Limited Announces First Closing of Financing

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CALGARY, Alberta, March 23, 2018 (GLOBE NEWSWIRE) -- Groundstar Resources Limited (GSA.V) (the “Company”) is pleased to announce that it has closed on the first tranche of its previously announced non-brokered private placement of a maximum of $70,000 aggregate principle amount of convertible debenture units (the “Convertible Debenture Units” or “CDUs”) at a price of CAD$1,000 per Convertible Debenture Unit. The Company issued a total of $35,000 principle amount of CDUs. Each CDU consists of a debenture in the principal amount of CAD$1,000 (the “Convertible Debenture”) and bears interest at 12% and includes warrants (the “Warrants”) exercisable into 50,000 common shares in the capital of the Company (the “Offering”). Each Warrant will be exercisable to acquire one common share in the capital of the Company (each, a “Warrant Share”) at an exercise price of $0.05 per Warrant Share for a period of two years following the Closing Date (as hereinafter defined).

The Convertible Debentures will bear interest from the Closing Date at 12.0% per annum, payable semi- annually on June 30 and December 31 of each year and will expire on the date that is two years from the applicable closing date (the “Maturity Date”), will be secured by the assets of the Company and be subordinate to any existing secured parties of the Company. The Convertible Debentures are convertible into common shares in the capital of the Company (“Debenture Shares”) at the option of the holder at any time prior to the close of business on the earlier of: (i) the last business day immediately preceding the Maturity Date; and (ii) the date when the Common Shares are consolidated as set forth below, at a conversion price of $0.02 per Common Share (the “Conversion Price”), subject to adjustment in certain events. The Company intends to effect a share consolidation of its common shares at a ratio to be determined in order to ensure that the conversion pricing meets the policies of the TSX Venture Exchange (“TSXV”). All share prices in this press release are pre-consolidation amounts and will be adjusted in accordance with whatever exchange ratio is ultimately approved by the shareholders of the Company at its next annual meeting of shareholders and any such post-consolidation share price will be compliant with the pricing parameters set forth in the policies of the TSXV. Further, the transactions described herein are subject to all necessary approvals of the TSXV.

The Company will utilize the net proceeds from the Offering for general corporate purposes and to seek different corporate opportunities, which may involve drilling new wells, seeking a farm-in opportunity or acquiring producing assets.

The Convertible Debenture Units were issued on a private placement basis and are subject to a statutory hold period of four months and a day from today, being July 23, 2018. Closing of the Offering is subject to final approval of the TSXV.

In addition, the Company is pleased to announce the appointment of Donald Gordon as a member of the board of directors and as Chief Financial Officer. Mr. Gordon holds a Bachelor of Arts and Master of Business Administration Degree from the University of British Columbia and also has the Chartered Financial Analyst designation. Mr. Gordon has over 30 years of experience and expertise in corporate finance analysis, conducting due diligence reviews for regulatory purposes and investment assessment, of public and private companies and has acted as a Consultant and Principal in dozens of reverse takeover transactions on both Canadian Stock Exchanges. Currently he is a Director of numerous public companies and engaged in both public and private company transactions. Following a 17-year career at the Vancouver Stock Exchange mainly as Director Corporate Finance, where he established the Asian Board for listings, Mr. Gordon has been a self-employed consultant to Issuers, Investment Dealers, and stock exchanges since 1999. In the past he served as Senior Advisor to the Canadian National Stock Exchange for 11 years, Executive Director of the Canadian Listed Company Association, an issuer advisory group on regulatory developments, for 14 years, Past President of the Vancouver Society of Financial Analysts, and is currently serving in his 10^th year as Director of Truvera Trust Company, a fully licensed trust company. The board welcomes Mr. Gordon and looks forward to a productive relationship moving forward.