KELOWNA, BC – August 31, 2018 – ProSmart Enterprises Inc. (TSXV:PROS) (“ProSmart” or the “Company”), the owner of SportgoTM (“Sportgo”), a global online network, connecting sports fans, teams and brands, announces that it is amending the price and expiry date of 2,603,852 warrants (the “Warrants”) issued in connection with the non-brokered private placements that closed on May 3, June 6, and September 21 of 2017, respectively. The number of warrants outstanding has been adjusted to reflect the consolidation of common shares (the “Consolidation”) which was effected on March 6, 2018.

The exercise price of the Warrants is being re-priced to $0.45 from $1.60 and the exercise period is being extended until April 20, 2020, which is consistent with the pricing and exercise period of the warrants issued pursuant to the $1.4 million non-brokered private placement of units that closed April 20, 2018. Finder’s warrants issued in connection with the non-brokered private placements in 2017 are not eligible for amendment.

Upon receipt of regulatory approval for the amendment, the Company has the option to force conversion of the Warrants through an acceleration clause (the “Acceleration Clause”). The Acceleration Clause gives the company the right, in the event that the weighted average daily trading price of the Shares on the TSX Venture Exchange (the “TSXV”) is $0.5625 or more per Share for 10 consecutive trading days, in which case the Company may accelerate the expiry date of the Warrants by giving notice to the holders thereof (by disseminating a press release advising of the acceleration of the expiry date of the Warrants) and, in such case, the Warrants will expire on the thirtieth day after the date of such notice.

The amendment of the Warrants is subject to the approval of the TSX Venture Exchange and the holders of the Warrants.

Background on the Warrants

On May 3, 2017, ProSmart issued 1,500,000 warrants (the “May 2017 Warrants”) in connection with a private placement of units. The May 2017 Warrants had a $0.40 exercise price and expiry date of May 3, 2018. Subsequently, the expiry date was extended until May 3, 2019 and the Consolidation resulted in reducing the number of outstanding May 2017 Warrants to 375,000 and increasing the exercise price to $1.60 per share.

On June 6, 2017, ProSmart issued 3,625,000 warrants (the “June 2017 Warrants”) in connection with a private placement of units. The June 2017 Warrants had a $0.40 exercise price and expiry date of May 3, 2018. Subsequently, the expiry date was extended until June 6, 2019 and the Consolidation resulted in reducing the number of outstanding June 2017 Warrants to 906,250 and increasing the exercise price to $1.60 per share.

On September 21, 2017, ProSmart issued 5,290,411 warrants (the “September 2017 Warrants”) in connection with a private placement of units. The September Warrants had a $0.40 exercise price and expiry date of September 21, 2019. Subsequently, the Consolidation resulted in reducing the number of outstanding September Warrants to 1,322,602 and increasing the exercise price to $1.60 per share.

Combined, the May 2017 Warrants, June 2017 Warrants and September 2017 Warrants represent 10,415,411 Warrants on a pre-Consolidation basis and 2,603,852 Warrants on a post-Consolidation basis. None of the Warrants have been exercised.

Stock Options Grant

The Company also announces that it has granted certain consultants of the Company incentive stock options to purchase up to an aggregate of 364,625 common shares pursuant to the Company’s stock option plan, exercisable at a price of $0.45 per share. The term of the options is 10 years from the date of grant, of which 32,500 will vest immediately with the remaining 332,125 to vest over a period of 3 years, according to the following schedule: one-third shall vest on the first anniversary of the grant date, and the balance will vest in equal monthly installments over the subsequent 24 months. The grant of options remains subject to the approval of the TSXV.

Shares for Debt Settlement

The Company intends to settle a total of $40,000 of debt (the “Debt”) with a former consultant of the Company (the “Shares for Debt Settlement”). The Company will settle the Debt by issuing 177,777 common shares of the Company at a deemed price of $0.225 per common share.

The Company negotiated the Shares for Debt Settlement in light of the Company’s current working capital position and in order to preserve capital to fund the development of the Company’s projects.

All securities issued in connection with the Shares for Debt Settlement will be subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation.

Closing of the Shares for Debt Settlement is subject to a number of conditions, including receipt of all necessary corporate and regulatory approvals, including the TSXV.

On behalf of ProSmart Enterprises Inc.

Alan Schuler
Co-Founder & Chief Executive Officer

About ProSmart Enterprises Inc.

ProSmart Enterprises Inc. (TSX-V:PROS) is the parent company of SportgoTM , a global online network connecting sports fans, teams and brands and is an emerging leader in sports content marketing through online tools and mobile apps. SportgoTM works with over 1,500 governing bodies in more than 100 countries and provides unprecedented access to the $1.3 trillion sports market1 through its proprietary Marketplace Engine. SportgoTM is also the first-and-only online network to provide educational content created exclusively by hall-of-fame and professional athletes, which has been a key driver in user growth.

1Source: Plunkett Research. Ltd.

For more information on ProSmart and SportgoTM, please visit the following links:
ProSmart Enterprises Inc. — http://prosmartinc.com
SportgoTM — https://www.sportgo.com/

For further information please contact:
t: 1-844-927-6278
e: investment@prosmartsports.com

The shares of ProSmart Enterprises Inc. trade publicly on the TSX Venture Exchange under the symbol TSXV:PROS.

“Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.”

Forward-looking Statements: Certain statements in this press release are “forward-looking statements” which reflect the Company’s current expectations and projections about future events and financial trends that it believes might affect its financial condition, results of operations, business strategy and financial needs. In some cases, these forward-looking statements can be identified by words or phrases such as “may”, “might”, “will”, “expect”, “anticipate”, “estimate”, “intend”, “plan”, “indicate”, “seek”, “believe”, “estimates”, “predicts” or “likely”, or the negative of these terms, or other similar expressions intended to identify forward-looking statements. Whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors, including without limitation, those risks and uncertainties discussed elsewhere on the website at www.prosmartinc.com and in the Company’s filings on SEDAR. Investors should not place undue reliance on forward-looking information. The forward-looking information contained herein is made as of the date hereof and is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities issued, or to be issued, under the Offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.