exactEarth Announces Closing of $13 Million Financing

Investment will help drive commercialization of world's only real-time Satellite AIS service

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/

CAMBRIDGE, ON, Dec. 13, 2018 /CNW/ - exactEarth Ltd. ("exactEarth" or the "Company") (TSX:XCT), a leading provider of satellite Automatic Identification System ("AIS") data services announces that it has closed its previously announced private placement of 13,000 convertible debentures (the "Convertible Debentures") of the Company at a price of $1,000 per Convertible Debenture (the "Offering Price") for aggregate gross proceeds of $13,000,000 (the "Private Placement").

exactEarth Ltd. (CNW Group/exactEarth Ltd.)

"This financing, together with the previously announced $7.2 million Canadian government development financing, provides significant financial flexibility for the Company and demonstrates confidence in our strategy and outlook from new and existing shareholders, as well as other stakeholders," said Peter Mabson, CEO of exactEarth. "With exactView RT already delivering a proven and unique real-time satellite AIS service, we can now further invest in the business to accelerate our growth plans and commercialization activities for the service. Our stronger balance sheet and growing sales pipeline have us well-positioned to capitalize on our core market opportunity and to expand our addressable market through the development and launch of innovative data-driven applications that only our real-time service can enable."  

exactView RT currently consists of 52 high-performance operational satellite payloads, onboard the Iridium NEXT constellation, which are capturing AIS data on more than 300,000 vessels. Already today, exactView RT provides the leading vessel detection, revisit rate and latency performance of any satellite AIS service in the market. exactViewRT is expected to reach its full operational capability of 58 payloads after the successful in-orbit commissioning of the final Iridium NEXT satellites, which are expected to be launched in January 2019.

The $7.2 million to be provided to exactEarth from the Government of Canada's Strategic Innovation Fund (SIF) program is available as reimbursement of eligible expenses. exactEarth has already received $1.4 million and expects, subject to project timelines and applied resources, to claim a further reimbursement of approximately $1.6 million in the first year of the funding, and approximately $2.2 million and $2.0 million in the second and third years of funding, respectively.

Details of the Private Placement
Each Convertible Debenture convertible into 2,000 common shares of the Company (each, a "Common Share"), being an effective conversion price of $0.50 at the option of the holder (subject to customary adjustments from time to time), at any time prior to the fifth anniversary of today's date (the Closing Date).

Holders of the Convertible Debentures will be entitled to interest payments as follows: for the first two years following the Closing Date, interest of 9% (consisting of 3% to be paid in cash semi-annually in arrears and 6% to be accrued and payable at maturity); and for the following three years, interest of 8% (consisting of 4% to be paid in cash semi-annually in arrears and 4% to be accrued and payable at maturity).

In addition, the Company may elect, at its option, to redeem all or part of the Convertible Debentures at any time following the issue date at the redemption price set forth below plus accrued and unpaid interest, if redeemed during the calendar year:

Year

Percentage

2019

110.0%

2020

107.5%

2021

105.0%

2022

102.5%

2023

100.0%

 

The Company will also have the right to redeem the outstanding Convertible Debentures, commencing on the second anniversary of the Closing Date, if the volume weighted average price of the Company's common shares for the preceding 20 trading days is at or above $1.00. The Company may elect to settle the redemption in Common Shares (at its discretion) at a per Common Share amount equal to the volume weighted average price for the preceding 20 trading days prior to the date of the notice of redemption.

The net proceeds of the Private Placement to the Company are approximately $11.5 million after deduction of expenses for the Private Placement. Pursuant to applicable securities laws and the policies of the Toronto Stock Exchange, the Convertible Debentures (and any underlying Common Shares received in exchange for conversion of any Convertible Debentures, as applicable) are subject to a hold period of four months and one day following the Closing Date.

About exactEarth Ltd (www.exactEarth.com)
exactEarth is a leading provider of global maritime vessel data for ship tracking and maritime situational awareness solutions. Since its establishment in 2009, exactEarth has pioneered a powerful new method of maritime surveillance called Satellite AIS ("S-AIS"). This service provides a comprehensive view of the location of AIS-equipped maritime vessels throughout the world, as well as other vital vessel characteristics. Under its alliance with Harris Corporation, exactEarth has launched exactView RT, which is the world's first S-AIS service designed to deliver real-time continuous global coverage of all maritime vessels. This ground-breaking system will allow exactEarth to deliver real-time data and information services characterized by rapid performance, reliability, security and simplicity to large international markets.

Forward Looking Statements
This news release contains statements that, to the extent they are not recitations of historical fact, may constitute "forward-looking statements" within the meaning of applicable Canadian securities laws. Forward-looking statements may include financial and other projections, as well as statements regarding exactEarth's future plans, objectives or economic performance, or the assumptions underlying any of the foregoing, including statements regarding, among other things, the use of proceeds, of the Private Placement, the anticipated impact of the SIF investment on exactEarth's financial position, the amounts to be invested in the first, second and third year of the investment and repayment terms under the SIF,  and the anticipated impact of the Private Placement on exactEarth's financial position. exactEarth uses words such as "may", "would", "could", "will", "likely", "expect", "anticipate", "believe", "intend", "plan", "forecast", "project", "estimate" and similar expressions to identify forward-looking statements. Any such forward-looking statements are based on assumptions and analyses made by exactEarth in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors exactEarth believes are appropriate under the relevant circumstances. However, whether actual results and developments will conform to exactEarth's expectations and predictions is subject to any number of risks, assumptions and uncertainties. Many factors could cause the impact of the Private Placement to differ materially from those expressed or implied by the forward-looking statements contained in this news release. These factors include, without limitation: uncertainty in the global economic environment; fluctuations in currency exchange rates; delays in the purchasing decisions of exactEarth's customers, the competition exactEarth faces in its industry and/or marketplace; the further delayed launch of satellites; the reduced scope of significant existing contracts; the possibility of technical, logistical or planning issues in connection with the deployment of exactEarth's products of services; the ability to refinance the Convertible Debentures on reasonable terms or at all, the ability of the Company to continue as a going concern; and the availability of reimbursable expenses. 

exactEarth does not undertake to update any forward-looking statements; such statements speak only as at the date made. Except as required by applicable law, exactEarth does not assume any obligation to update, or to publicly announce the results of any change to, any forward-looking statement contained herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements.

Disclaimer
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described in this press release in the United States. The securities described in this press release have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, a U.S. Person (as defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

The TSX does not accept responsibility for the adequacy or accuracy of this release.

SOURCE exactEarth Ltd.

For further information: Contact information: INVESTORS: Dave Mason, Investor Relations, Tel: +1 416-247-9652, investors@exactearth.com

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