05:37 AM EST, 11/29/2024 (MT Newswires) -- Prospera Energy ( GXRFF ) late on Thursday said it expects to close the first tranche of its non-brokered unit offering, raising $500,000, and amended a promissory note to increase the principal balance by $500,000 to $11.5 million.

Each unit is priced at $1,000 and consists of a one-year secured promissory note worth $1,000 and carrying a 12% annual interest rate; and 5,000 common share purchase warrants exercisable at $0.05 for a three-year period.

Subscribers are entitled to a 5% gross overriding royalty for every $1 million of principal investment on revenue from all Prospera properties on incremental production above 1,363 barrels per day.

The company plans to use the net proceeds for production optimization and general working capital.

The promissory note amended to increase its principal balance retains its original terms, including a 12% interest rate and two-year maturity.

Prospera previously acquired an additional 10% working interest in the Hearts Hill, Luseland and Cuthbert properties from an arms' length joint venture partner for $1.8 million.

The purchase price consists of $400,000 in cash to be paid over 16 months and $200,000 in equity through the issuance of 3.1 million Prospera common shares at $0.065 per share.

Prospera will also issue 3.1 million warrants allowing the holder to acquire one Prospera common share at $0.10 per share in the first year and $0.15 in the second year until expiry.

As part of the agreement, Prospera has agreed to forgive all outstanding debts totaling $1.2 million owed by the joint venture partner.

The offering, loan amendment and acquisition is subject to acceptance by the TSXV.