Advantex Announces Completion of Financing, delay in filing 2019 Annual Financial Statements and Business Update
TORONTO, Oct. 28, 2019 /CNW/ - Advantex Marketing International Inc. (CSE: ADX) ("Advantex"), a leader in the merchant cash advance and loyalty marketing products for merchants, today announced a completion of Financing, a delay in filing 2019 Audited Financial Statements and Business Update.
Financing
Advantex issued 200 units of senior secured non-convertible debentures for aggregate gross proceeds of $200,000 (the "Financing"). Each unit ("Unit") is comprised of (i) $1,000 senior secured non-convertible debentures ("Debentures") bearing interest at 9% per annum and maturing on December 31, 2021; (ii) 108,244 common shares in the capital of Advantex; and (iii) a restructuring bonus payment of $180 for each $1,000 of their debenture payable on the maturity date or earlier required repayment under the Debentures. Pursuant to the Financing an aggregate of 21,648,800 common shares were issued by Advantex, such common shares are subject to a hold period until February 29, 2020.
The Financing will have a positive impact on Advantex as these funds will assist in funding the pivot in its announced business strategy following the termination of the CIBC and TD programs, funding the completion of its 2019 Audited Financial Statements and meeting operational requirements.
Advantex obtained the requisite consents from the holders of the Debentures to complete the Financing and was granted relief from the Canadian Securities Exchange's minimum price requirement set out in Policy 6 - Distributions.
As the Financing may constitute a related party transaction pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, Advantex relied on the financial hardship exemption from the minority approval requirement of such instrument. The Board of Directors unanimously determined that the Financing will improve the financial position of Advantex.
Delay in Filing 2019 Annual Financial Statements
Advantex also announces that it will be delayed in filing its annual financial statements, accompanying management's discussion and analysis and related CEO and CFO certifications for the financial year ended June 30, 2019 (collectively, the "2019 Annual Financial Statements"), within the period prescribed for the filing of such documents under Parts 4 and 5 of Regulation 51-102 respecting Continuous Disclosure Obligations and pursuant to Regulation 52-109 respecting Certification of Disclosure in Issuers' Annual and Interim Filings, namely within 120 days of year-end, being June 30, 2019.
Advantex is currently not in a position to timely file the 2019 Annual Financial Statements, primarily as a result of a lack of financial resources which has been remedied with the completion of the Financing.
Business Update
While Advantex has completed the transition of eligible merchants to its new business model, it needs access to additional capital, in the form of debt and/or equity, to grow both its merchant portfolio and merchant cash advances under management to support financial stability. Advantex believes there is substantial growth potential in this, its core business segment. The Financing enables Advantex to stabilize its merchant portfolio while it pursues efforts to secure new investment in the form of debt, equity, off balance sheet financing and/or monetizing IP of its IT loyalty management system. The system enables targeted promotional marketing initiatives through data mining in a PCI enabled environment.
A significant secondary business segment is the program Advantex operates in partnership with Aeroplan. Advantex continues to operate its program pending finalization of future direction of the program and terms of new multi-year agreement.
About Advantex Marketing International Inc.
Advantex provides working capital to merchants. Advantex also provides specialized marketing programs that enable members of Aeroplan to earn frequent-flyer miles at participating merchants.
Advantex shares trade on the Canadian Securities Exchange under the symbol ADX. For more information go to Advantex's profile on www.sedar.com
Forward-Looking Information
This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the future business and operations of Advantex. Actual results and developments may differ materially from those contemplated by these statements. The business and operations of Advantex described herein is dependent on a number of factors and is subject to a number of risks and uncertainties. Factors that could cause actual results to differ material include, but are not limited to, changes in Advantex's economic and competitive conditions including but not limited to the industry sectors in which Advantex operates.
The statements in this news release are made of the date of this release. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and Advantex undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.
SOURCE Advantex Marketing International Inc.
Mukesh Sabharwal, Vice-President and Chief Financial Officer, Tel: 416-560-5173, Email: [email protected]
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