Maritime Launch Services Announces Approval of Financing and Two-Year Debenture Extension

Maritime Launch Services Announces Approval of Financing and Two-Year Debenture Extension

Maritime Launch Services
Sarah McLean
Vice President of Communications and Corporate Affairs
sarah.mclean@maritimelaunch.com
www.maritimelaunch.com

Maritime Launch Services Inc. (Cboe CA: MAXQ, OTCQB: MAXQF) (the “Company”) is pleased to confirm it has secured agreements and regulatory approval to complete its previously announced financing valued at approximately $1,600,000 in cash proceeds at a price of $0.05 per share, of which $331,525 was previously released to the Company over the preceding five months from existing shareholders, as short-term interest free loans. The Company has incurred finder’s fees associated with the financing of $128,000 to be settled in shares ($0.05 per share totalling 2,560,00) and 2,560,000 broker warrants at a strike price of $0.05 per warrant, expiring in two years, as a further finder’s fee.

As a further component of the financing, the Company expects to issue 4,170,000 shares ($208,500 at $0.05 per share) to certain officers, directors and employees as payment for previously unpaid fees and salaries owed from 2024, subject to regulatory approval.

Total shares to be issued per above in conjunction with the equity financing, including fees, are approximately 38,730,000 (plus 2,560,000 warrants).

A portion of the proceeds will be used for the redemption of previously issued debentures (see below), and the remaining will be used for vendor payments and ongoing operations.

Debenture Extension

The Company has received conditional regulatory approval to close the two-year extension agreement (previously announced as an agreement in principle on November 13, 2024) with the holders of its outstanding convertible debentures dated May 7, 2021 (as amended) and the holders of its outstanding convertible debentures dated December 7, 2023. This will extend the maturity date of all outstanding convertible debentures from December 7, 2024, to December 7, 2026.

As a condition of the extension, the Company will be using $500,000 of the proceeds from the financing to settle $500,000 of the outstanding convertible debentures in accordance with their terms. In addition, the Company will issue 4,830,105 common shares, in aggregate, from Treasury to the debenture holders as an extension fee.

On or about February 18, 2025, the Company will issue 2,706,978 shares as payment for $324,837 of payment-in-kind (“PIK”) interest owing at December 7, 2024 (share price of $0.12 per share) in accordance with the pre-extension convertible debenture terms.

Total shares issued in payment of outstanding PIK interest and the extension fee are a combined total of 7,537,083.

The cash interest rate of 10% plus an additional PIK interest rate of 5%, payable in common shares, remains unchanged. All cash interest will compound annually, and all principal and cash interest will be payable on the maturity of the convertible debentures. The 5% PIK interest, payable in common shares, will now be paid semi-annually, starting June 7, 2025 and every six months thereafter until maturity. Under the previously existing terms of the convertible debentures, the conversion rate on all principal and interest will be adjusted to $0.05 to match the pricing of the equity financing.

The debenture extension was approved in writing by a majority of non-debenture holding shareholders.

Two of the holders of the convertible debentures are “related parties” and, accordingly, the debenture extension will be considered a “related party transaction” under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is relying on the exemption from the formal valuation and minority approval requirements of MI 61-101 on the basis that the Company is (i) in a situation of serious financial difficulty as it is not currently in a position to repay the convertible debentures on their maturity, (ii) the Debenture Extension is designed to improve the financial position of the Company, (iii) the independent members of the board of directors have, acting in good faith, determined that (i) and (ii) apply and the terms of the Debenture Extension are reasonable in the circumstances of the Company. The debenture extension is expected to close on or about the week of February 24, 2025, per the regulatory approval conditions. The Company did not announce the closing of the related party debenture extension 21 days in advance because the terms of the extension require completion of the financing that was only secured on or about February 18, 2025.

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 to support 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 (i) the Company’s ability to finalize and carry out the transactions referred to in this press release which may be impacted by negotiation with proposed purchasers and the ability of the Company to implement its business strategy and final regulatory approval, (ii) the closing of the extension agreements with the holders of the debentures and consideration payable in connection with the extension of the debentures which may be impacted by the negotiation of a final agreement with the holders of the debentures and the possibility that the extension may not be completed on the terms and conditions as disclosed in this release; and (iii) the expected principal amount of convertible debentures outstanding which assumes completion of the transactions disclosed in this document and no conversion of the convertible debentures.

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.