Mr. Mike Pyle reports

EXCHANGE INCOME CORPORATION COMPLETES ACQUISITION OF CANADIAN NORTH

Exchange Income Corp. has successfully closed its acquisition of Bradley Air Services Ltd., operating as Canadian North. The entering into of the agreement to acquire Canadian North was originally announced on Feb. 24, 2025. The purchase price is $205-million, subject to postclosing adjustments, of which $10-million was paid through the issuance of common shares of Exchange Income. The balance was financed through the corporation's credit facility.

The acquisition of Canadian North provides Exchange Income with a unique opportunity to acquire a Northern airline that operates in adjacent regions and on highly complementary routes to those serviced by Exchange Income. Canadian North provides essential passenger and cargo services to 24 remote Canadian Arctic communities in Nunavut and the Northwest Territories, from its southern gateways in Ottawa and Edmonton. This represents two-thirds of its revenues. Canadian North also provides dedicated charters to resource customers in Northern Alberta and British Columbia. These services are delivered with a fleet of 737 jets and ATR turboprops, which are a mix of owned and leased aircraft. Canadian North has significant infrastructure with hangars in Iqaluit, Yellowknife, Ottawa, Edmonton and Calgary. The acquisition excludes the Montreal to Kuujjuaq route, which will be maintained by one of the vendors, Makivik Corp.

Canadian North provides passenger and cargo services in the Eastern and Western regions in Nunavut, while Exchange Income's subsidiary Calm Air services the central region. Canadian North is also active in the Northwest Territories, where Exchange Income has no passenger or cargo presence. This investment also provides Exchange Income passenger and cargo jet service and infrastructure in the North to provide opportunities for the company's other aviation companies. The acquisition of Canadian North will enable Exchange Income to service all regions in the far north for the first time. As an experienced operator who is dedicated to Northern aviation, Exchange Income will provide its customers in these regions with stable and efficient service. Air travel in this region is truly an essential service. There is no road access to Nunavut from the rest of Canada and the introduction of roads will be highly unlikely in the foreseeable future.

Exchange Income has the core expertise in Northern aviation and the company has always been incredibly proud of the services it provides to its community partners. Exchange Income looks forward to building on the work Canadian North has done in servicing the communities, whether it be through community infrastructure investments, training programs such as the Atik Mason Indigenous Pilot Pathway program, enhanced employment opportunities and general investment in the communities.

The acquisition is largely supported by its asset backing across aircraft and infrastructure, however the returns on capital will be below the company's typical thresholds in the first year of ownership. This return will grow steadily based on Exchange Income's operating scope, capability and knowledge to increase the efficiency of the airline, and the company expects to achieve its targeted return on capital by the end of the second year of ownership.

About Exchange Income Corp.

Exchange Income is a diversified acquisition-oriented company, focused in two segments: aerospace and aviation and manufacturing. The corporation uses a disciplined acquisition strategy to identify already profitable, well-established companies that have strong management teams, generate steady cash flow, operate in niche markets and have opportunities for organic growth.

About Canadian North

Canadian North is an airline that connects people and delivers essential goods throughout Northern communities in Canada. With a versatile fleet of Boeing 737s and ATRs, it connects 24 communities within Nunavut and the Northwest Territories, as well as Southern hubs in Ottawa and Edmonton. Canadian North is also the premier provider of air charter services for large resource sector clients requiring dependable, efficient and economical fly-in/fly-out charter services.

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