FLYHT Aerospace Solutions Announces Closing of First Tranche of Proposed Debt Financing

FLYHT Aerospace Solutions Ltd. (the “Corporation”) (TSX VENTURE:FLY) is pleased to announce that it has closed the initial tranche of its previously announced debt offering of non-convertible debentures (“Debentures”) (see press release dated March 18, 2013).

Pursuant to this closing, the Corporation will issue an aggregate $1,855,000 of Debentures. The details of the debt financing are as follows: the Debentures will mature on June 30, 2016 and bear interest at a rate of 12% per annum on the contributed amounts, which shall be accrued and paid annually in arrears commencing December 1, 2013. Purchasers of Debentures will receive a capital discount premium of 10% on the financing, meaning that for every $1.00 Debenture acquired, the Corporation shall owe, on the maturity date, principal equal to $1.10 to the Debenture holder. The purchasers of the Debentures will also be issued one bonus common share of the Corporation for every $1.00 principal amount of Debentures acquired pursuant to the offering. A total of 1,855,000 bonus common shares were issued under this tranche. All of the securities issued hereunder are subject to a 4-month hold period. The Debentures will not be listed on any stock exchange and are not convertible into common shares of the Corporation.

The net proceeds of the offering will be used for the completion of key certifications (STC’s) of the Corporation’s next generation product, the AFIRS™ 228 (Automated Flight Information Reporting System), and for working capital and business development objectives.

It is expected that an additional tranche under this financing will close shortly.

The debentures are secured against all personal property of the Corporation, including the Corporation’s intellectual property and are subordinated in right of payment to all existing and future secured bank and/or governmental indebtedness of the Corporation and any existing security already registered against the Corporation’s assets.