- Divestiture will result in net cash savings of
approximately $1.0 million per
year
- Transaction has no impact on Company's Satellite-AIS data
service performance
CAMBRIDGE, ON, March 31, 2020 /CNW/ - exactEarth Ltd. (TSX:XCT)
("exactEarth"), a leading provider of Satellite-AIS data services
for ship tracking and maritime situational awareness solutions,
announces that it has entered into an agreement to divest four
satellites from its first-generation constellation and its ground
station assets to Myriota Canada Inc. ("Myriota Canada"), a
wholly-owned subsidiary of Myriota PTY Ltd. ("Myriota"). All
financial figures are in Canadian dollars unless otherwise
stated.
"This transaction, which is subject to Canadian regulatory
approval, will achieve several strategic objectives," said
Peter Mabson, President and CEO of
exactEarth. "First, it lowers our cost base and reduces our annual
cash outlay by a meaningful amount, which will strengthen our
financial position and move us more rapidly toward our goal of
being cash flow positive. Second, it positions our business and
overall financial profile more in-line with that of a pure-play
data services business, one with stronger margins and significant
recurring revenue. Third, we will maintain access to the AIS data
from the satellites to support our service and by extension we will
continue to maintain a working relationship with Myriota, a company
that exactEarth has invested in and one that we have built a strong
business relationship with over the past several years."
Under the terms of the agreement, Myriota Canada will acquire
the satellites EV1, EV6, EV9 and EV11, exactEarth's ground station
assets and certain related operating contracts. Four of
exactEarth's full-time personnel will cease employment with
exactEarth and will become employees of Myriota Canada. In
consideration for the assets, exactEarth will receive payment of
$600,000, comprised of $150,000 cash and $450,000 in preferred shares of Myriota, and
Myriota Canada will provide exactEarth with Satellite-AIS data
originating from these four satellites as well as the other
satellites in exactEarth's first-generation constellation for their
remaining operating lifetimes. exactEarth will retain ownership of
the EV2 and EV8 hosted AIS satellite payloads from its
first-generation constellation as well as the data license with the
Government of Canada related to
the M3M advanced AIS satellite.
On a net basis, this divestiture is expected to generate cash
savings of approximately $1.0 million
annually for exactEarth. These savings result from the expected
reduction of exactEarth's annual expenses by approximately
$2.45 million which includes
approximately $350,000 of
depreciation expense. The agreement will also see the termination
of a revenue arrangement between the two companies under which
Myriota accounted for approximately $1.1
million of exactEarth's revenue in Fiscal 2019.
The closing of the sale of assets to Myriota Canada is subject
to Canadian Government regulatory approvals involving the
acquisition and/or divestiture of satellite assets and other
customary closing conditions. It is anticipated that the
transaction will close in the third quarter of fiscal 2020.
About Myriota PYT Ltd.
Myriota was founded to revolutionise the Internet of Things
(IoT) by offering disruptively low-cost and long-battery-life
global connectivity. Based in Adelaide, a focal point of the Australian
space industry and home of the Australian Space Agency, Myriota has
a growing portfolio of more than 20 patents, and support from major
Australian and international investors. With deep heritage in
telecommunications research, world-first transmission of IoT data
direct to nanosatellite was achieved in 2013. Myriota has made this
ground-breaking technology commercially available for partners
worldwide. www.myriota.com
About exactEarth Ltd.
Since its formation in 2009, exactEarth has pioneered a powerful
new method of maritime surveillance called Satellite AIS and has
delivered to its clients a view of maritime behaviours across all
regions of the world's oceans unrestricted by terrestrial
limitations. exactEarth's second-generation constellation,
exactView RT, securely relays satellite-detected AIS vessel signals
from any location on the earth's surface to the ground in seconds –
thus enabling global real-time vessel tracking. This unique
capability consists of 58 advanced satellite payloads designed and
built by L3Harris Technologies, Inc. under agreement with
exactEarth and that are hosted onboard the Iridium NEXT
constellation of satellites.
www.exactearth.com
Forward-Looking Statements
This news release contains statements that, to the extent
they are not recitations of historical fact, may constitute
"forward-looking statements" within the meaning of applicable
Canadian securities laws. Forward-looking statements may include
financial and other projections, as well as statements regarding
exactEarth's future plans, objectives or economic
performance, or the assumptions underlying any of the foregoing,
including statements regarding, among other things, expectations
of the anticipated benefits of the sale of certain
assets to Myriota. exactEarth uses words such as "may", "would",
"could", "will", "likely", "expect", "anticipate", "believe",
"intend", "plan", "forecast", "project", "estimate" and similar
expressions to identify forward-looking statements. Any such
forward-looking statements are based on assumptions and analyses
made by exactEarth in light of its experience and its perception of
historical trends, current conditions and expected future
developments, as well as other factors exactEarth believes are
appropriate under the relevant circumstances. However, whether
actual results and developments will conform to exactEarth's
expectations and predictions is subject to any number of risks,
assumptions and uncertainties. Many factors could cause
exactEarth's actual results, historical financial statements, or
future events to differ materially from those expressed or implied
by the forward-looking statements contained in this news release.
These factors include, without limitation: governmental regulatory
approvals, uncertainty in the global economic environment;
anticipated savings as a result of the transaction;
fluctuations in currency exchange rates; delays in the
purchasing decisions of exactEarth's customers, including as a
result of the COVID-19 pandemic; the competition exactEarth faces
in its industry and/or marketplace; the reduced scope of
significant existing contracts; and the possibility of technical,
logistical or planning issues in connection with the
deployment of exactEarth's products or services.
SOURCE exactEarth Ltd.
