Legend Power Systems Inc. — Capital/Financing Update 2021

Jun 1, 2021

TERM SHEET LEGEND POWER SYSTEMS INC.

BOUGHT DEAL TREASURY OFFERING OF UNITS

May 26, 2021

A preliminary short form prospectus containing important information relating to the securities described in this document has not yet been filed with the applicable Canadian securities regulatory authorities in each of the provinces of Canada, except Quebec. A copy of the preliminary short form prospectus is required to be delivered to any investor that received this document and expressed an interest in acquiring the securities. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final short form prospectus has been issued. This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the preliminary short form prospectus, final short form prospectus and any amendment, for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.

The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This term sheet 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.

**ISSUER: **		Legend Power Systems Inc. (the “Company”).
OFFERING:		Bought-deal short form prospectus offering (the “Offering”) of 12,000,000 units
		(the “Units”) of the Company.
AMOUNT:		$9,000,000 prior to the Over-Allotment Option.
**ISSUEPRICE: **		$0.75 per Unit (the “Issue Price”).
**UNITS: **		Each Unit consists of one common share of the Company (a “Common Share”)
		and one-half of one Common Share purchase warrant (each whole warrant, a
		“Warrant”).
ORDINARY	SHARE	Each Warrant will entitle the holder to acquire one Common Share at a price of
PURCHASE		$0.95 per share for a period of 24 months following the Closing Date.
**WARRANTS: **
OVER-ALLOTMENT		Up to 15% of the number of Units (which may be comprised of additional Units,
**OPTION: **		Common Shares and / or Warrants) issued under the Offering, exercisable at the
		Issue Price for a period of 30 days following the Closing Date, to cover over-
		allotments, if any and for market stabilization purposes (the “Over-Allotment-
		Option”).
**USE OFPROCEEDS: **		The Company intends to use the net proceeds from the Offering for future growth
		opportunities, working capital and general corporate purposes.
OFFERING		The Units will be (i) distributed to the public in Canada through the filing of a
**PROCEDURE: **		short form prospectus with the appropriate securities authorities in all of
		the provinces of Canada, except Quebec (ii) offered and sold in the United
		States to “Qualified Institutional Buyers” pursuant to Rule 144A of the United
		States Securities Act of 1933, as amended, if the Lead Underwriter determines
		it is of advantage to do so; and (iii) in jurisdictions outside of Canada and the
		United States, in each case in accordance with all applicable laws provided that
		no prospectus, registration statement or similar document is required to be filed
		in such jurisdiction.

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LISTING: Application will be made to list the Common Shares comprising the Units and issuable upon exercise of the Warrants and the Compensation Options (as defined below) on the TSX Venture Exchange (“ TSXV ”). Listing will be subject to fulfilling all listing requirements. The existing Common Shares of the Company are listed and trade on the TSXV under the symbol “LPS”. In addition, the Company shall use its best efforts, subject to meeting the listing requirements of the TSXV, to obtain the necessary approvals to list the Warrants forming part of the Units on the TSXV. FORM OF “Bought deal” basis subject to conventional bought deal termination provisions and UNDERWRITING: closing conditions to be included in a definitive underwriting agreement. ELIGIBILITY FOR Eligible under the usual Canadian statutes as well as for RRSPs, RESPs, RRIFs, INVESTMENT: RDSPs, TFSAs and DPSPs. UNDERWRITERS: Stifel GMP, as sole lead underwriter (the “ Lead Underwriter ”), along with Cormark Securities Inc. and Desjardins Securities Inc. (collectively with the Lead Underwriter, the “ Underwriters ”). UNDERWRITING A cash commission equal to 7.0% of the aggregate gross proceeds from the Offering FEE: (including the Over-Allotment Option) payable at closing (the “ Cash Commission ”).

As additional consideration, the Underwriters will receive compensation options (the “ Compensation Options ”) equal to 6.0% of the number of Units sold pursuant to the Offering, including any Units sold in connection with any exercise of the Over-Allotment Option, payable on the Closing Date. Each Compensation Option will be exercisable to acquire one common share at a price equal to the Issue Price for a period of 24 months following the Closing Date.

The Cash Commission and Compensation Options shall be reduced by 50% for any subscriptions made by directors, officers or insiders of the Company (the “ President’s List ”). CLOSING DATE: On or about June 11, 2021 or such other date as the Company and Lead Underwriter may agree (the “ Closing Date ”).

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