/NOT FOR DISTRIBUTION IN THE UNITED STATES WIRE SERVICES OR
DISSEMINATION IN THE UNITED
STATES/
MONTREAL, Nov. 21, 2016
/CNW Telbec/ - EXO U Inc. (TSX Venture Exchange: EXO) ("EXO U"
or the "Corporation"), a software development company focused on
effective collaboration and classroom management, today announced
that it has entered into a letter agreement with Alternative
Capital Group Inc. for a secured credit facility of up to
$4,000,000 (the "Credit Facility"),
to be entered into between Alternative Capital Group Inc. or an
affiliate thereof ("ACG") and EXO U. The Credit Facility will
include an initial facility of up to $2,500,000 and, subject to the approval of ACG,
an additional facility of up to $1,500,000.
The Credit Facility will provide for the disbursement of funds
in tranches to be determined and agreed upon between EXO U and
ACG. The amounts to be disbursed under the Credit Facility will
bear interest at a rate of 14% per annum and will be repayable 24
months after the closing date of the initial disbursement (the
"Initial Disbursement") under the Credit Facility (the "Facility
Term").
The Credit Facility will be secured against all of the assets of
EXO U and will be subject to a subordination of EXO U's 2016
R&D credits. The Credit Facility and the closing of the Initial
Disbursement will be subject to certain conditions, including TSX
Venture Exchange ("TSX-V") and shareholder approval.
In addition, upon any disbursement under the Credit Facility,
EXO U will issue non-transferable common share purchase
warrants (the "Bonus Warrants") to ACG, entitling ACG to purchase
such number of common shares of EXO U that is obtained by
dividing the amount of the disbursement under the Credit Facility
by, (i) as it relates to the Bonus Warrants to be issued in
connection with the Initial Disbursement, $0.085 (the "Initial Exercise Price"), or (ii) as
it relates to the Bonus Warrants to be issued in connection with
the subsequent disbursements under the Credit Facility, the closing
price of the common shares of EXO U on such day to be agreed upon
between EXO U and ACG and subject to compliance with the policies
of the TSX-V (the "Closing Price"), plus a premium of 35% over the
Closing Price (the "Premium Exercise Price"), at an exercise price
equal to the Initial Exercise Price or the Premium Exercise Price,
as the case may be. The Bonus Warrants will expire at the end of
the Facility Term. The common shares of EXO U to be purchased
upon the exercise of the Bonus Warrants to be issued upon each
disbursement under the Credit Facility will be subject to a hold
period expiring four months and a day after the closing date of
such disbursement.
On the basis of an Initial Disbursement of $1,000,000, a total of 11,764,706 Bonus Warrants
at an exercise price of $0.085 would
be issued on closing thereof, representing, if exercised in full,
approximately 13.32% of the issued and outstanding common shares of
EXO U, on a partially-diluted basis.
The proceeds under the Credit Facility will be used primarily by
EXO U to further develop its flagship product Ormiboard, to execute
on its efforts toward building revenues with established
distribution and sales channels in K-12 and Higher Education, where
Ormiboard is combined with large format interactive panels and
student mobile devices, and the remainder for general corporate and
working capital purposes.
Mr. Jim Kirchner, CEO of EXO U,
stated, "This partnership provides us with the team and resources
that enables us to move at a quicker pace on both the product
development and business development plans. This transaction
provides the much-needed short-term capital to fund the
enhancements to Ormiboard that will be marketed with our current
and new partners at a faster pace, and also provides a strategic
partnership with ACG for business advisory services. We are excited
about growing our business in partnership with ACG."
Given that the aggregated number of Bonus Warrants which may be
issued from time to time under the Credit Facility may result in
the issuance of more than 20% of the common shares of EXO U to ACG,
on a partially-diluted basis, the Credit Facility and the issuance
of the Bonus Warrants require the approval of the shareholders of
EXO U pursuant to the policies of the TSX-V. In accordance
with the TSX Venture Corporate Finance Manual, EXO U intends
to obtain such approval by way of written consent of a majority of
EXO U's shareholders. For purpose of such consent, the
Corporation does not intend on excluding common shares held by
insiders of EXO U as it is not anticipated that they will,
directly or indirectly, participate in the Credit Facility or
receive Bonus Warrants.
This press release does not constitute an offer of securities
for sale in the United States. The
securities being offered have not been, nor will they be,
registered under the United States
Securities Act of 1933, as amended, and such securities may
not be offered or sold within the United
States absent U.S. registration or an applicable exemption
from U.S. registration requirements.
About EXO U
At EXO U, we believe that people learn
best with instructional technologies that support and don't
interrupt the momentum of teaching, learning, and
collaboration—whether they are learning in person, remotely, or
across an evolving device landscape. That's why our web-based
whiteboarding and classroom management solutions for educational
institutions and corporations work on any device with any OS,
anytime and anywhere, solving important mobility issues such as
security, privacy, real-time collaboration, and management of
application and content. EXO U's shares trade on the TSX Venture
Exchange under the ticker symbol EXO.V. For more information about
Ormiboard, visit Ormiboard.com and follow us on Twitter
@ormiboard.
About Alternative Capital Group
Alternative Capital
Group is an investment and merchant banking boutique firm providing
services to small and medium-sized businesses across all
industries, which include advisory services in corporate finance
and mergers & acquisitions, institutional capital raising
activities, distribution of investment products in the exempt
market as well as direct and co-lead investments. ACG is registered
as an Exempt Market Dealer with the Autorité des marchés
financiers (Québec), the Ontario Securities Commission and the
Alberta Securities Commission.
Cautionary Note Regarding Forward-Looking
Information
Certain statements included herein, including
those that express management's expectations or estimates of EXO
U's future performance or future events, constitute
"forward-looking information" within the meaning of applicable
securities laws. Such forward-looking information and statements
are often, but not always, identified by the use of words such as
"plans", "expects", "estimates", "intends", "anticipates", or
"believes", or variations of such words and phrases (or the
negative form thereof) or statements that certain actions, events
or results "may", "could", "would", "might", or "will" be taken,
occur or be achieved. Forward-looking information is necessarily
based upon a number of estimates and assumptions that, while
considered reasonable by management at this time, are inherently
subject to significant business, economic, regulator and
competitive risks, uncertainties and contingencies that could cause
actual results, performance or achievements of the Corporation to
be materially different from any future results, performance or
achievements expressed or implied by the forward-looking
information, including, but not limited to, risks related to the
entering into of the Credit Facility by EXO U and ACG or not,
and risks related to EXO U's incapacity to execute on its
business plan. For additional information with respect to certain
of these and other assumptions and risk factors, please refer to
EXO U's management's discussion and analysis for the year ended
March 31, 2016, available under EXO
U's profile on SEDAR at www.sedar.com. Forward-looking information
contained herein is presented as of the date of this news release
and the Corporation disclaims any obligation to update any
forward-looking statements, whether as a result of new information,
future events or results, except as may be required by applicable
securities laws. There can be no assurance that forward-looking
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, readers are cautioned not to place undue
reliance on these forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE EXO U Inc