Comvest Capital, LLC refinances indebtedness of Atlantis Systems Corp.

WEST PALM BEACH AND PALM BEACH, FL, Nov. 17, 2011 /CNW/ - On November 17, 2011, Comvest Capital, LLC ("Comvest") and the Robert A. Garvy Restated Revocable Trust (the "Participant") jointly made the following announcement.  On November 9, 2011, Comvest issued a press release regarding a refinancing transaction entered into with Atlantis Systems Corp. (the "Corporation").  The following text updates certain of the disclosure in that press release to reflect a pre-existing participation agreement (the "Participation Agreement") between Comvest and the Participant pursuant to which, among other things, the Participant has a one-sixth interest in the Convertible Note referred to below.

On November 9, 2011, the Corporation and Comvest entered into a refinancing transaction in respect of existing indebtedness (the "Existing Indebtedness") owed by the Corporation to Comvest (and in which the Participant has a participatory interest under the Participation Agreement).  Under the refinancing transaction, the Corporation and Comvest entered into an amendment agreement (the "Amendment") to the amended and restated revolving credit and term loan agreement dated as of February 24, 2010, as amended, between the parties.  Pursuant to the Amendment, inter alia, the Existing Indebtedness was consolidated into (i) a convertible term note (the "Convertible Note") in the principal amount of US$6,000,000, (ii) a term note (the "Term Note") in the principal amount of approximately US$6,537,000, and (iii) a short-term payment obligation (the "Payment Obligation") in the principal amount of approximately US$302,598.  The Convertible Note is convertible into common shares of the Corporation at any time prior to the maturity thereof at the option of Comvest (and, in respect of the Participant's one-sixth interest, subject to the direction of the Participant) at a conversion price of US$0.30 per common share, which is equivalent to CDN$0.30 based on the exchange rate in effect on October 31, 2011.  Under the terms of the Participation Agreement, the Participant has a one-sixth interest in the Convertible Note and a 50% interest in the Payment Obligation.

Comvest owns 6,769,174 common shares of the Corporation representing approximately 66.1% of the outstanding common shares of the Corporation as at November 9, 2011.  Further, Comvest is deemed to own the 16,666,667 common shares of the Corporation (approximately 61.96% on a post-conversion basis) issuable upon conversion of Comvest's interest in the Convertible Note (excluding the conversion of any accrued interest subsequently added to the principal amount).  Accordingly, Comvest is deemed to have aggregate ownership of 23,435,841 common shares of the Corporation representing approximately 87.12% of the outstanding common shares of the Corporation as at November 9, 2011, assuming the conversion of Comvest's interest in the Convertible Note.

The Participant owns 709,776 common shares of the Corporation representing approximately 6.9% of the outstanding common shares of the Corporation as of November 9, 2011.  Further, the Participant is deemed to own the 3,333,333 common shares of the Corporation (approximately 24.57% on a post-conversion basis (assuming that only the Participant converts its interest in the Convertible Note)) issuable upon conversion of the Participant's interest in the Convertible Note (excluding the conversion of any accrued interest subsequently added to the principal amount).  Accordingly, the Participant is deemed to have aggregate ownership of 4,043,109 common shares of the Corporation representing approximately 29.80% of the outstanding common shares of the Corporation, assuming the conversion of the Participant's interest in the Convertible Note (in accordance with a direction by the Participant to Comvest in respect of such conversion).

The principal terms of the Amendment include the issuance of the Convertible Note and the Term Note, each maturing three years from issuance or earlier in the event of a change of control, and secured by a first charge on the assets of the Corporation.

The principal terms of the Convertible Note include (a) payment-in-kind interest of 12% per annum on outstanding principal, with interest increasing to 17% during the continuance of an event of default; (b) no principal payments required until maturity; (c) convertible at any time and from time to time prior to maturity by Comvest (and, in respect of the Participant's one-sixth interest, subject to the direction of the Participant), into common shares of the Corporation with payment-in-kind interest added to principal and also subject to conversion to common shares of the Corporation; (d) a conversion price equal to US$0.30 per common share, which is equivalent to CDN$0.30 based on the exchange rate in effect on October 31, 2011; (e) to the extent that the Convertible Note is not converted on or before maturity, payment of the outstanding principal and payment-in-kind interest to be paid in cash; and (f) not redeemable by the Corporation during its term and not open for pre-payment.

The principal terms of the Term Note include: (a) cash interest payable at the rate of 12% per annum, payable monthly on the outstanding principal amount commencing three months after closing of the refinancing transaction, with interest increasing to 17% during the continuance of an event of default; (b) no principal payments required until maturity; and (c) repayable in whole or part at any time without penalty.

Under the Payment Obligation, the Corporation will be obligated to pay Comvest (which in turn has agreed to pay over to the Participant 50% of such amounts received) approximately US$302,598 in principal and accrued interest owed under the Existing Indebtedness.  This amount is due and payable by the Corporation on or prior to December 31, 2011 and will accrue interest at the rate of 12% per annum, increasing to 17% in the event that the amount is not paid on or prior to December 31, 2011.

The transactions referred to herein were entered into in connection with a refinancing of the Existing Indebtedness owed to Comvest by the Corporation.

Comvest may, subject to market conditions, make investments in or dispositions of securities of the Corporation.

The Participant may, subject to market conditions, make investments in or dispositions of securities of the Corporation.  The Participant's address is 200 Esplanade Way, Palm Beach, Florida USA  33480.

SOURCE ComVest Capital, LLC

For further information:

Comvest Capital, LLC
Robert O'Sullivan or Louis Colosimo
525 Okeechobee Blvd., Suite 1050
West Palm Beach, Florida
USA  33401

Tel: (561) 727-2000
Fax: (561) 727-2100

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ComVest Capital, LLC

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