Advantex Announces Fiscal 2020 Second Quarter Results

TORONTO, May 21, 2020 /CNW/ - Advantex Marketing International Inc. (CSE: ADX) ("Advantex"), a leader in the merchant cash advance and loyalty marketing products for merchants, announced its results for the three and six months ended December 31, 2019.

Highlights of financial results.

	3 months ended December 31				6 months ended December 31
	2019		2018		2019		2018
	$		$		$		$
Revenues	$	890,936	$	1,812,853	$	1,689,979	$	3,658,987
Gross profit	$	646,805	$	1,436,791	$	1,281,958	$	2,838,414
Earnings from operations before depreciation, amortization and interest	$	19,530	$	435,237	$	76,953	$	831,324
Profit (Loss)  from operations before depreciation, amortization and non cash interest on debentures	$	(337,627)	$	139,076	$	(681,401)	$	255,952
Net Loss and Comprehensive loss	$	(522,327)	$	(4,828)	$	(1,054,733)	$	(29,575)
Fuller details available in the Consolidated Financial Statements and MD&A available under Advantex's profile on www.sedar.com

The above tabulation is a non-GAAP presentation and is provided to assist readers in understanding Advantex's financial performance.
The information is extracted from consolidated financial statements for three and six months ended December 31, 2019.

Advantex is now current with its annual and interim filings.

About Advantex:

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

Advantex Marketing International Inc.
Consolidated Statements of Financial Position (unaudited)
(expressed in Canadian dollars)

	Note		At December 31, 2019			At June 30, 2019
			$			$
Assets
Current assets
Cash and cash equivalents		$	54,208			$	119,636
Accounts receivable			109,665			110,630
Transaction credits	5		6,821,914			9,473,999
Prepaid expenses and sundry assets			50,632			52,232
		$	7,036,419			$	9,756,497
Non-current assets
Right of use asset	15	$	287,745			$	345,294
Property, plant and equipment			629			15,255
		$	288,374			$	360,549
Total assets		$	7,324,793			$	10,117,046
Liabilities
Current liabilities
Loan payable	6	$	6,050,069			$	8,416,076
Lease liability			120,116			113,854
Accounts payable and accrued liabilities			2,772,671			2,526,829
9% Non-convertibles debentures payable	7		5,535,522			5,095,949
		$	14,478,377			$	16,152,708
Non-current Liabilities
Lease liability	15	$	203,469			$	266,658
		$	203,469			$	266,658
Shareholders' deficiency
Share capital	8	$	24,530,555			$	24,530,555
Contributed surplus			4,090,382			4,090,382
Accumulated other comprehensive loss			(47,383)			(47,383)
Deficit	15		(35,930,607)			(34,875,874)
Total deficiency		$	(7,357,053)			$	(6,302,320)
Total liabilities and deficiency		$	7,324,793			$	10,117,046
Going concern (note 2), Commitments and contingencies (note 11)
The accompanying notes are an integral part of these consolidated financial statements
Approved by the Board
Director: Signed "Marc Lavine"			Director: Signed "Kelly Ambrose"
Marc Lavine			Kelly Ambrose

Advantex Marketing International Inc.
Consolidated Statements of Loss and Comprehensive Loss (unaudited)
For the three and six months ended December 31, 2019 and 2018
(expressed in Canadian dollars)

	Note		Three months ended December 31						Six months ended December 31
			2019			2018			2019			2018
			$			$			$			$
Revenues	14
Marketing activities		$	237,081			$	1,493,769		$	416,663		$	3,039,158
Interest income		$	653,855			$	319,084		1,273,316			$	619,829
		$	890,936			$	1,812,853		$	1,689,979		$	3,658,987
Direct expenses	13/14		244,131			376,062			408,021			820,573
			646,805			1,436,791			1,281,958			2,838,414
Operating expenses
Selling and marketing	13/14		190,835			388,045			378,698			855,464
General and administrative	13/14		436,440			613,509			826,307			1,151,626
Earnings from operations before depreciation, amortization and interest			19,530			435,237			76,953			831,324
Interest expense:
Stated interest expense - loan payable, and debentures	6/7		357,157			296,161			758,354			575,372
Interest - Lease			10,464			-			20,928			-
Non-cash interest expense (accretion charges) and restructuring bonus related to debentures	7		145,120			136,886			285,753			272,561
			(493,210)			2,190			(988,083)			16,609
Depreciation - Right of use asset			28,775			-			57,549			-
Depreciation of property, plant and equipment, and amortization of intangible assets			5,821			7,018			14,581			12,966
Loss and comprehensive loss		$	(527,806)			$	(4,828)		$	(1,060,212)		$	(29,575)
Issuance of debentures	7	$	5,479			$	-		$	5,479		$	-
Net loss and comprehensive loss		$	(522,327)			$	(4,828)		$	(1,054,733)		$	(29,575)
Profit/(Loss) per share
Basic and Diluted	12	$	(0.00)			$	(0.00)		$	(0.00)		$	(0.00)
The accompanying notes are an integral part of these consolidated financial statements

Advantex Marketing International Inc.
Consolidated Statements of Changes in Shareholders' Deficiency (unaudited)
For the three and six months ended December 31, 2019 and 2018
(expressed in Canadian dollars)

		Class A preference shares		Common shares			Contributed surplus			Accumulated other comprehen - sive loss			Deficit			Total
		$		$			$			$			$			$
Balance - July 1, 2018	$	3,815		$	24,526,740		$	4,090,382		$	(47,383)		$	(33,928,711)		$	(5,355,157)
Net profit and comprehensive profit		-		-			-			-			(29,575)			(29,575)
Balance - December 31, 2018	$	3,815		$	24,526,740		$	4,090,382		$	(47,383)		$	(33,958,286)		$	(5,384,732)
Balance - July 1, 2019	$	3,815		$	24,526,740		$	4,090,382		$	(47,383)		$	(34,875,874)		$	(6,302,320)
Net loss and comprehensive loss		-		-			-			-			(1,054,733)			(1,054,733)
Balance - December 31, 2019	$	3,815		$	24,526,740		$	4,090,382		$	(47,383)		$	(35,930,607)		$	(7,357,053)
The accompanying notes are an integral part of these consolidated financial statements

Advantex Marketing International Inc.
Consolidated Statements of Cash Flow (unaudited)
For the three and six months ended December 31, 2019 and 2018
(expressed in Canadian dollars)

	Note		At December 31, 2019			December 31, 2018
			$			$
Operational activities
Net profit/(loss) for the period		$	(1,054,733)			$	(29,575)
Adjustments for:
Interest - Lease			20,928			-
Depreciation - Right of use asset			57,549			-
Depreciation of property, plant and equipment, and amortization of intangible assets			14,581			12,966
Accretion charge for debentures	7		159,126			147,398
Restructuring bonus for debentures	7		126,627			125,163
Fair value of debentures issued			(46,181)			-
			(722,103)			255,952
Changes in items of working capital
Accounts receivable			965			(64,053)
Transaction credits			2,652,085			(1,063,643)
Prepaid expenses and sundry assets			1,600			(3,687)
Accounts payable and accrued liabilities			245,842			(676,430)
			2,900,492			(1,807,813)
Net cash provided by / (used in) operating activities		$	2,178,389			$	(1,551,861)
Investing activities
Payment for lease		$	(77,855)			$	-
Purchase of property, plant and equipment, and intangible assets			45			(2,810)
Net cash (used in) investing activities		$	(77,810)			$	(2,810)
Financing activities
Proceeds - 9% Non-convertible debentures payable	7	$	200,000			$	-
Proceeds -  Loan payable	6		(2,366,007)			1,055,246
Net cash generated from / (used in) financing activities		$	(2,166,007)			$	1,055,246
Increase / (decrease) in cash and cash equivalents during the period		$	(65,428)			$	(499,425)
Cash and cash equivalents at beginning of period			119,636			635,836
Cash and cash equivalents at end of period		$	54,208			$	136,411
Additional information
Interest paid		$	503,332			$	333,580
For purposes of the cash flow statement, cash comprises
Cash		$	54,208			$	136,411
The accompanying notes are an integral part of these consolidated financial statements

SOURCE Advantex Marketing International Inc.

Mukesh Sabharwal, Vice-President and Chief Financial Officer, Tel: [phone], Email: [email protected]

Related Links

http://www.advantex.com