ARHT Media Announces up to $1,500,000 Private Placement Financing

NOT FOR RELEASE OR DISSEMINATION IN THE UNITED STATES

TORONTO, Jan. 14, 2020 — ARHT Media Inc. (the “Company” or “ARHT”) (TSX-V:ART), a global leader in the development, production and distribution of high-quality hologram content through its patented Holographic Telepresence, is pleased to announce a non-brokered private placement of 2020 Series A Secured Debentures of the Company (each, a “Debenture”), to raise up to $1,500,000 (the “Offering”).

The Debentures will be issued at a price of $0.9175 for each one dollar ($1) of principal amount of Debenture subscribed for, representing a 12% discount to the Debentures’ principal amount over a nine-month period. The Debentures will be redeemed at their principal amount upon maturity, in cash.  If the Offering is fully subscribed, the aggregate principal amount of Debentures issued will be $1,634,877.

The Debentures will mature on that date which is nine months and one day following the initial closing date of the Offering (the “Maturity Date”).  If, prior to the Maturity Date, either the Company completes a private placement financing that raises gross proceeds of no less than $4 million, or if a change of control of ARHT or a sale or disposition by ARHT of all or substantially all of its assets should occur, then the Maturity Date will be accelerated to such earlier date.

The Debentures will be secured by way of a general security agreement made in favour of a collateral agent acting as agent for all of the holders of the Debentures, granting a security interest in substantially all of ARHT’s assets. 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 of the Debentures.

Subscribers for Debentures will receive a one–half common share purchase warrant (each whole warrant, a “Warrant”) for each one dollar ($1) invested.  Each whole Warrant will entitle the holder to purchase one common share of the Company (a “Common Share”), at an exercise price of $0.15 per share for a period of nine months following the initial closing of the Offering.  If at any time after the date that is four months and one day following the initial closing of the Offering, the closing price of the outstanding Common Shares is greater than $0.25 for a period of 20 consecutive trading days, the Company may, at its option, accelerate the expiry date of the Warrants to the date that is 30 days after the Company gives notice to the holders of the Warrants or issues a press release to the effect that it has elected to exercise this acceleration right.

The Debentures and the Warrants will be 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. The Warrants may not be assigned, transferred or resold, except upon the prior written consent of the Company and the TSX Venture Exchange.  The Company may pay finder’s fees in accordance with TSX Venture Exchange policies.

Closing of the Offering may occur in one or more tranches.  The first closing is anticipated to occur on or about January 24, 2020, and is subject to certain conditions, including receipt of the approval of the TSX Venture Exchange.

The Company will use the net proceeds from the sale of the Units to increase sales and marketing activity, to develop and bring to market Holopod, to increase the inventory of event delivery kits to service growing demand, and for general working capital purposes.