Maritime Launch Services Announces Completion of Extension of Convertible Debentures Agreement

Rhea-AI Summary

Maritime Launch Services Inc. (Cboe CA: MAXQ, OTCQB: MAXQF) has extended the maturity date of its outstanding convertible debentures from May 7, 2024, to December 7, 2024. The agreement includes issuing 2,250,000 common shares as an extension fee. The interest rate has increased from 9% to 10% payable in cash upon maturity, plus an additional 5% PIK interest payable in shares at a conversion rate of CDN $0.12 per share. This extension has been approved by the Company's Board and majority shareholders. The debentures, originally issued in May 2021 for CDN$ 7,500,000, have undergone multiple amendments, including interest rate changes and maturity date extensions.

Positive

• Extension of convertible debentures maturity provides additional time for the company to meet financial obligations
• Approval from Board of Directors and majority shareholders indicates support for the extension

Negative

• Increase in interest rate from 9% to 10% plus 5% PIK interest raises the cost of debt for the company
• Issuance of 2,250,000 common shares as extension fee may lead to dilution for existing shareholders
• Multiple amendments to debenture terms since 2021 suggest ongoing financial challenges

HALIFAX, Nova Scotia--(BUSINESS WIRE)-- Maritime Launch Services Inc. (Cboe CA: MAXQ, OTCQB: MAXQF) (the “Company”) has signed binding agreements with the holders of its outstanding convertible debentures to extend the maturity date from May 7, 2024, to December 7, 2024. The agreements are subject to conditions expected to be completed on or about August 14, 2024, including the issuance of 2,250,000 common shares in settlement of an extension fee. The agreement terms are the same as those announced in principle by press release on May 8, 2024 and reported in the Company’s Q1 2024 Financial Statements available on SEDAR+.

In accordance with Cboe Exchange rules, the extension of the convertible debentures has been approved and confirmed by the Company’s Board of Directors and by an instrument in writing signed by holders of more than 50% of the Common Shares of the Company that would have been eligible to vote thereon if a meeting of the shareholders had been called for such purpose. The Company is making this disclosure as a condition of an exemption under rules of the Exchange from having the extension approved at a meeting shareholders.

Effective as of May 7, 2024, the interest rate on the debentures increased from 9% to 10% payable in cash upon maturity plus an additional 5% in PIK interest, payable on maturity in shares based upon a conversion rate of CDN $0.12 per share, matching the terms of the debentures issued by the Company in December 2023.

Background on the Debentures

On May 7, 2021 the Company issued unsecured convertible debentures for gross proceeds of CDN$ 7,500,000 bearing interest at a rate of 4% with a maturity date of May 7, 2022.

On March 29, 2022, the terms of the debentures were amended in contemplation of the Company’s reverse-takeover transaction of Jaguar Financial Corporation (completed April 27, 2022) and the maturity date was extended to May 7, 2023.

On May 5, 2023 the terms of the debentures were amended a second time. The interest rate on the debentures was increased from 4% to 9% and the maturity date extended to May 7, 2024.

About Maritime Launch Services

Maritime Launch is a Canadian-owned commercial space company based in Nova Scotia. Maritime Launch is developing Spaceport Nova Scotia, a launch site that will provide satellite delivery services to clients in support of the growing commercial space transportation industry over a wide range of inclinations. Spaceport Nova Scotia will allow launch vehicles to place their satellites into low-earth orbit. Spaceport Nova Scotia is Canada’s first commercial orbital launch complex.

For more information about Maritime Launch and Spaceport Nova Scotia, visit www.maritimelaunch.com

Forward Looking Statements

This news release contains "forward-looking statements" within the meaning of applicable securities laws. All statements contained herein that are not clearly historical in nature may constitute forward-looking statements. The forward-looking information and forward-looking statements contained herein include, but are not limited to, statements regarding: the closing of the extension agreements with the holders of the debentures and consideration payable in connection with the extension of the debentures.

Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved".

Forward-looking statements in this news release are based on certain assumptions and expected future events, namely: the Company’s ability to continue as a going concern; continued approval of the Company’s activities by the relevant governmental and/or regulatory authorities; the Company’s ability to finance its operations until profitability of the Company can be achieved and sustained.

These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements, including but not limited to: the potential inability of the Company to continue as a going concern; risks associated with potential governmental and/or regulatory action with respect to the Company’s operations.

Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.

Forward-looking statements contained in this news release are expressly qualified by this cautionary statement and reflect the Company’s expectations as of the date hereof and are subject to change thereafter. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240812238505/en/

Maritime Launch Services

Sarah McLean

Vice President of Communications and Corporate Affairs

sarah.mclean@maritimelaunch.com

www.maritimelaunch.com

902.402.6947

Source: Maritime Launch Services Inc.

FAQ

What is the new maturity date for Maritime Launch Services' convertible debentures (MAXQF)?

The new maturity date for Maritime Launch Services' convertible debentures has been extended to December 7, 2024.

How many common shares will Maritime Launch Services (MAXQF) issue as an extension fee?

Maritime Launch Services will issue 2,250,000 common shares as an extension fee for the convertible debentures agreement.

What is the new interest rate for Maritime Launch Services' (MAXQF) convertible debentures?

The new interest rate is 10% payable in cash upon maturity, plus an additional 5% PIK interest payable in shares at a conversion rate of CDN $0.12 per share.

When were Maritime Launch Services' (MAXQF) convertible debentures originally issued?

The convertible debentures were originally issued on May 7, 2021, for gross proceeds of CDN$ 7,500,000.