CO2 Gro Inc. announced a a non-brokered private placement of 13.5% unsecured convertible debentures for the gross proceeds of CAD 2,500,000 on December 5, 2023. The Debentures will bear interest at a rate of 13.5% per annum and will have a three-year term. During the first year of the Term, quarterly interest payments on the Debentures will be paid in cash.

In the remaining two years of the Term, the Company will have the option to pay further interest payments in cash or make payments-in-kind by way of issuance of common shares of the Company at a price equal to the market price of the Common Shares at the time the accrued interest becomes payable. At any time during the Term, each holder of a Debenture may elect to convert the outstanding principal amount, or any portion thereof, into units of the Company at a conversion price of CAD 0.12 per Unit. Each Unit shall consist of one Common Share and one Common Share purchase warrant, with each Warrant entitling the holder thereof to acquire a Common Share at an exercise price of CAD 0.15 per Common Share for a period of 48 months following the Issue Date.

The Debentures will be subject to a forced conversion provision whereby, upon delivery of such notice to holders of the Debentures, the Company is permitted convert the principal amount of all outstanding Debentures into Units in the event that the average closing price of the Common Shares listed on the TSX Venture Exchange is greater than CAD 0.20 for twenty consecutive trading days. In connection with the Offering, the Company may pay a finder's fee in cash or securities or a combination of both, as permitted under the policies of the TSXV. Closing of the Offering is expected to occur in one or more tranches, with the first tranche expected to close on or about December 18, 2023.

The Debentures and any securities issuable upon conversion thereof will be subject to a statutory hold period of four months and one day from the date of issuance of the Debentures. The Offering is subject to the acceptance by the TSXV.