Advantex Announces Fiscal 2020 Third Quarter Results

TORONTO, June 26, 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 nine months ended March 31, 2020.

Highlights of financial results.

	3 months ended March 31				9 months ended March 31
	2020		2019		2020		2019
	$		$		$		$
Revenues	$	741,963	$	1,387,652	$	2,431,942	$	5,046,639
Gross profit	$	577,847	$	992,956	$	1,859,805	$	3,831,370
Earnings from operations before depreciation, amortization and interest	$	(9,102)	$	93,852	$	67,852	$	925,176
Profit (Loss)  from operations before depreciation, amortization and non cash interest on debentures and lease	$	(310,161)	$	(223,291)	$	(991,561)	$	32,661
Loss from Operations	$	(502,130)	$	(366,875)	$	(1,562,341)	$	(396,450)
Gain - Issuance of debentures	$	-	$	-	$	5,479	$	-
Reserve for transaction credits - Covid 19 Pandemic	$	(528,777)	$	-	$	(528,777)	$	-
Net Loss and Comprehensive loss	$	(1,030,907)	$	(366,875)	$	(2,085,639)	$	(396,450)

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 nine months ended March 31, 2020.

Due to COVID-19 Advantex has decided to postpone its annual shareholders meeting originally scheduled for July 13, 2020.  It will be rescheduled in the fall 2020.

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 March  31, 2020			At June 30, 2019
		$			$
Assets
Current assets
Cash and cash equivalents		$	214,512		$	119,636
Accounts receivable		91,329			110,630
Transaction credits	5	4,758,984			9,473,999
Prepaid expenses and sundry assets		61,083			52,232
		$	5,125,908		$	9,756,497
Non-current assets
Right of use asset	15	$	258,969		$	345,294
Property, plant and equipment		-			15,255
		$	258,969		$	360,549
Total assets		$	5,384,877		$	10,117,046
Liabilities
Current liabilities
Loan payable	6	$	4,789,768		$	8,416,076
Lease liability	15	123,247			113,854
Accounts payable and accrued liabilities		2,344,812			2,000,183
9% Non-convertibles debentures payable	7	6,343,136			5,622,595
		$	13,600,963		$	16,152,708
Non-current Liabilities
Lease liability	15	$	171,873		$	266,658
		$	171,873		$	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	(36,961,513)			(34,875,874)
Total deficiency		$	(8,387,959)		$	(6,302,320)
Total liabilities and deficiency		$	5,384,877		$	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 nine months ended March 31, 2020 and 2019
(expressed in Canadian dollars)

	Note		Three months ended March 31						Nine months ended March 31
			2020			2019			2020			2019
			$			$			$			$
Revenues	14
Marketing activities			$	216,843		$	1,103,679		$	633,506		$	4,142,837
Interest income			525,120			283,973			1,798,436			903,802
			$	741,963		$	1,387,652		$	2,431,942		$	5,046,639
Direct expenses	13/14		164,116			394,696			572,137			1,215,269
			577,847			992,956			1,859,805			3,831,370
Operating expenses
Selling and marketing	13/14		203,848			320,156			582,546			1,175,620
General and administrative	13/14		383,101			578,948			1,209,407			1,730,574
Earnings from operations before depreciation, amortization and interest			(9,102)			93,852			67,852			925,176
Interest expense:
Stated interest expense - loan payable, and debentures	6/7		301,059			317,143			1,059,413			892,515
Interest - Lease	15		10,464			-			31,392			-
Non-cash interest expense (accretion charges) and restructuring bonus related to debentures	7		152,100			136,754			437,853			409,315
			(472,725)			(360,045)			(1,460,806)			(376,654)
Depreciation - Right of use asset	15		28,776			-			86,325			-
Depreciation of property, plant and equipment, and amortization of intangible assets			629			6,830			15,210			19,796
Loss and comprehensive loss			$	(502,130)		$	(366,875)		$	(1,562,341)		$	(396,450)
Gain - Issuance of debentures	7		$	-		$	-		$	5,479		$	-
Reserve for transaction credits - Covid 19 Pandemic	5		$	(528,777)		$	-		$	(528,777)		$	-
Net loss and comprehensive loss			$	(1,030,907)		$	(366,875)		$	(2,085,639)		$	(396,450)
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 nine months ended March 31, 2020 and 2019
(expressed in Canadian dollars)

	Class A preference shares			Common shares			Contributed surplus			Accumulated other comprehe - 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 loss and comprehensive loss	-			-			-			-			(396,450)			(396,450)
Balance - March 31, 2019	$	3,815		$	24,526,740		$	4,090,382		$	(47,383)		$	(34,325,161)		$	(5,751,607)
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	-			-			-			-			(2,085,639)			(2,085,639)
Balance - March 31, 2020	$	3,815		$	24,526,740		$	4,090,382		$	(47,383)		$	(36,961,513)		$	(8,387,959)
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 nine months ended March 31, 2020 and 2019
(expressed in Canadian dollars)

	Note	March 31, 2020			March 31, 2019
		$			$
Operational activities
Net loss for the period		$	(2,085,639)		$	(396,450)
Adjustments for:
Interest - Lease	15	31,392			-
Depreciation - Right of use asset	15	86,325			-
Depreciation of property, plant and equipment, and amortization of intangible assets		15,210			19,796
Accretion charge for debentures	7	245,026			222,932
Restructuring bonus for debentures	7	192,827			186,383
Fair value of debentures issued	7	(46,181)			-
		(1,561,040)			32,661
Changes in items of working capital
Accounts receivable		19,301			(163,377)
Transaction credits		4,715,015			(3,711,139)
Prepaid expenses and sundry assets		(8,851)			19,143
Accounts payable and accrued liabilities		344,629			(482,481)
		5,070,094			(4,337,854)
Net cash provided by / (used in) operating activities		$	3,509,054		$	(4,305,193)
Investing activities
Payment for lease	15	$	(116,784)		$	-
Purchase of property, plant and equipment, and intangible assets		45			(2,809)
Net cash (used in) investing activities		$	(116,739)		$	(2,809)
Financing activities
Proceeds - 9% Non-convertible debentures payable	7	$	200,000		$	-
Accrued and unpaid 9% debenture interest	7	$	128,869		$	125,547
Proceeds -  Loan payable	6	(3,626,308)			3,668,917
Net cash generated from / (used in) financing activities		$	(3,297,439)		$	3,794,464
Increase / (decrease) in cash and cash equivalents during the period		$	94,876		$	(513,538)
Cash and cash equivalents at beginning of period		119,636			635,836
Cash and cash equivalents at end of period		$	214,512		$	122,298
Additional information
Interest paid		$	623,091		$	766,969
For purposes of the cash flow statement, cash comprises
Cash		$	214,512		$	122,298
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