The Limestone Boat Company Limited Provides Market Update with Respect to Restructuring Proposal

Limestone ® Boat © Limestone Boat Company

The Limestone Boat Company Limited ("Limestone" or the "Company") (TSXV: BOAT) - has entered into negotiations with its creditors to facilitate the restructuring of the Company's balance sheet (the "Proposed Restructuring").

In general, the Company has proposed to convert all of the outstanding interest and principle owing under the 10% debentures issued by the Company in May of 2021, May of 2022, and June of 2022 (collectively, the "Debentures") into common shares of the Company ("Common Shares") at a conversion price equal to approximately $0.071 per Common Share. At present, the Company has received indicative support for the Proposed Restructuring from a majority of Debenture holders.

The Company also expects to raise additional working capital through a proposed private placement issuance (the "Private Placement") of up to 120,000,000 subscription receipts ("Subscription Receipts") at a price of $0.05 per Subscription Receipt for gross proceeds of approximately $6.0 million. Upon satisfaction of certain escrow release conditions, to be negotiated in connection with the Private Placement (the "Escrow Release Conditions"), and without the payment of any additional consideration, each Subscription Receipt will convert into one Common Share. The gross proceeds from the sale of the Subscription Receipts will be held in escrow and released to the Company only upon the satisfaction or waiver of the Escrow Release Conditions. All securities issued in connection with the proposed Private Placement will be subject to a hold period expiring four months and a day from the date of their issuance.

The Company intends to use the net proceeds from the Private Placement for general working capital purposes including repayment of certain existing indebtedness of the Company.

Each of the Proposed Restructuring and the Private Placement remain subject to all applicable approvals, including those required from the TSX Venture Exchange and under corporate and securities laws. The Company confirmed that it has received notice from the TSX Venture Exchange that its Common Shares could be moved to the NEX board of the Exchange, subject to the outcome of the Proposed Restructuring, if the Company is not able to meet the tier two continued listing requirements for the TSX Venture Exchange on or before June 30, 2023.

The Company also expects to undertake a relocation of its manufacturing operations for its Limestone boats to New Brunswick, Canada. The Company is pursuing a new, purpose-built, state of the art plant focused on the Limestone brand and expects to re-commence manufacturing operations in 2024. Limestone expects that the new facility will be used to produce the Limestone L200 Centre Console and Runabout models, and new fully-electric EV model. The Company has also completed tooling for its new L290 Dual Console boat which is expected to commence in 2024. Its L270 Dual Console boat, presently in development, is expected to follow within the first year.

In connection with the relocation of its manufacturing operations to New Brunswick, Canada, Limestone anticipates participation in certain Provincial and Federal development support initiatives including those offered by Opportunities New Brunswick and the Atlantic Canada Opportunities Agency.

The Company continues to have strong dealer support throughout New England, the Great Lakes, and beyond. These are markets that can be effectively serviced from Atlantic Canada. More detailed announcements are expected in May of this year.