EXO U Enters into a Letter Agreement for a Secured Credit Facility of Up to $4 Million

/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

For further information: For investor or media inquiries, please contact: Jim Kirchner, CEO, EXO U Inc., 1-704-293-5461, jkirchner@exou.com; Shan Ahdoot, President, EXO U Inc., 1-480-313-5983, sahdoot@exou.com

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