Liberty Star Uranium & Metals Corp. Announces Entry into Securities Purchase Agreement with 1800 Diagonal Lending LLC

Key Points:

• Liberty Star Uranium & Metals Corp. (OTCQB: LBSR) has entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC.
• The agreement involves the issuance of a convertible promissory note with a principal amount of \$73,700, dated April 15, 2026.
• This promissory note allows for conversion into shares of Liberty Star’s common stock under specific terms and conditions.

Details of the Securities Purchase Agreement:

• The agreement was executed on April 15, 2026, with 1800 Diagonal Lending LLC acting as the investor/buyer.
• The total principal of the note is \$73,700.
• Upon closing, the Company received proceeds in exchange for the convertible note.
• The note is convertible into shares of common stock at predetermined conversion prices and within specific timeframes, subject to various terms and conditions.

Convertible Note Terms and Shareholder Impact:

• The note contains conversion rights allowing the holder to convert the debt into common shares from the date of issuance, subject to the terms outlined in the agreement.
• If Liberty Star fails to pay principal or interest, or fails to deliver shares upon conversion, or in the event of bankruptcy, delisting from OTC markets, or other default triggers, the holder may accelerate repayment and/or convert the debt into common shares at potentially advantageous rates.
• The agreement specifies events of default, including failure to pay, failure to deliver shares, bankruptcy, financial statement restatements, or the replacement of the transfer agent without adequate notice.
• Should a default occur, the holder may require immediate issuance of shares in lieu of cash repayment, potentially causing dilution for existing shareholders.
• The note includes a schedule of prepayment periods and percentages, allowing the company to prepay at a premium depending on the timing. After certain periods, the prepayment amount increases, for example, to 125% of the principal after 151 days from the issue date.

Implications for Shareholders and Potential Price Sensitivity:

• Dilution Risk: The conversion of the note into common shares could result in significant dilution of existing shareholders, especially if the conversion occurs at a discount to the market price or if default provisions are triggered.
• Ongoing Reporting Requirement: The company is required to remain current with its SEC reporting obligations. Any failure in this regard is considered a default and could trigger accelerated conversion or repayment provisions.
• Financial Health Signals: Entering into convertible debt financing may indicate the company is seeking capital for operations or growth, but also signals reliance on potentially dilutive financing.
• Restricted Securities: Shares issued upon conversion of the note are not registered under the Securities Act and will bear restrictive legends, limiting their immediate liquidity.
• Material Adverse Effect Clause: Any material adverse effect on the business, operations, or financial condition can further empower the noteholder’s rights at the expense of common shareholders.

Other Notable Provisions:

• The agreement contains representations and warranties by the company regarding its capitalization, compliance with laws, absence of material adverse changes, and the validity of issued shares.
• The buyer confirms it is an “accredited investor” and is acquiring the securities for investment purposes, not for immediate resale.
• The company asserts that no brokers or finders’ fees are owed in conjunction with this transaction.
• Both parties agree that the buyer is not acting as a “dealer” under securities laws and is not engaging in short selling or hedging activities with respect to the company’s common stock.

Conclusion:

This transaction represents a significant financial obligation and introduces the potential for share dilution. Shareholders are advised to monitor subsequent disclosures and the company’s ability to fulfill its obligations under the note, as any defaults or conversions could impact share value. The funding provides the company with short-term capital but may exert downward pressure on the stock price if conversions occur, especially in the event of adverse developments or defaults.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with financial advisors before making investment decisions. The author and publisher are not responsible for any losses arising from reliance on this content.

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