ARHT Media Announces Closing of a $250,000 Private Placement of Secured Subordinated Debentures

TORONTO, Feb. 20, 2024 (GLOBE NEWSWIRE) -- ARHT Media Inc. ("ARHT" or the "Company") (TSXV:ART), (OTCQB:ARHTF) the global leader in the development, production and distribution of high-quality, low latency hologram and digital content, is pleased to announce that the Company has successfully closed a private placement (the “Private Placement”) of 2024 Series A secured subordinated debentures (the “Debentures”) for an aggregate principal amount of $250,000 (the "Principal Amount").

The Debentures mature on August 3, 2025 (the "Maturity Date") and carry an annual interest rate of 15%, accrued and payable semi-annually on each of June 30 and December 31, in cash or shares at the option of the Company and subject to the approval of the TSX Venture Exchange (the "TSXV"). Subject to certain conditions, the Company will have the right to prepay any or part of the Debentures at any time prior to the Maturity Date by paying the Principal Amount. The Principal Amount of the Debentures is not convertible into common shares or any other securities of the Company.

The Debentures are secured by substantially all of ARHT's assets pursuant to an amended and restated general security agreement effective as of the February 16, 2024, in favor of the collateral agent on behalf of the existing debenture holders ("GSA"). The Principal Amount of Debentures rank pari passu with the $2,029,666 of principal amount of existing secured subordinated debentures of the Company with substantially the same terms (other than with respect to date of issue and commencement of interest accrual) as the Debentures for an aggregate of approximately $2,279,666 of secured subordinated debentures secured against all of the assets of the Company pursuant to the GSA. The security interest in collateral comprising of accounts receivable and inventory are subordinated to the Company's current senior lender's security interest.

The Debentures are subject to a four-month statutory hold period commencing on the date of their issuance. Subject to the foregoing, the Debenture may not be assigned, transferred or resold, except upon the prior written consent of the Company. An aggregate of $125,000 principal amount of the Debentures were purchased by officers and directors of the Company and are exempt from the formal valuation and minority approval provisions of National Instrument 61-101 – Protection of Minority Security Holder in Special Transactions. The Company has paid an aggregate of $2,250 in cash as finders' fees to a finder in accordance with TSX Venture Exchange policies.