Advantex Announces Fiscal 2021 Second Quarter Results

TORONTO, March 31, 2021 /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, 2020.

Highlights of financial results for three and six months ended December 31, 2020 compared to three and six months ended December 31, 2019:

	Three months					Six months				Three months			Six months
	December 2020		December 2019			December 2020		December 2019		Inc./(Dec)			Inc./(Dec)
	$		$			$		$		$			$
Revenues	$	386,926	$		890,936	$	698,698	$	1,689,979	$		(504,010)	$		(991,281)
Direct expenses
Cost of cardholder rewards and marketing in connection with merchant based loyalty program	$	122,133	$		121,159	$	183,850	$	218,923	$		974	$		(35,073)
Expense for provision against delinquent accounts	$	44,015	$		122,972	$	72,742	$	189,098	$		(78,957)	$		(116,356)
Gross profit	$	220,778	$		646,805	$	442,106	$	1,281,958	$		(426,027)	$		(426,027)
Selling and General & Administrative expenses	$	330,348	$		646,786	$	640,210	$	1,244,024	$		(316,438)	$		(603,814)
Earnings/(loss) from operations before depreciation, amortization and interest	$	(109,570)	$		19	$	(198,104)	$	37,934	$		(109,589)	$		(236,038)
Stated interest expense - loan payable, and debentures	$	225,124	$		357,157	$	471,965	$	758,354	$		(132,033)	$		(286,389)
(Loss) from operations before depreciation, amortization, non cash interest and non cash items	$	(334,694)	$		(357,138)	$	(670,069)	$	(720,420)	$		(22,444)	$		(50,351)
Interest - Lease	$	3,532	$		4,976	$	7,492	$	9,952	$		(1,444)	$		(2,460)
Interest expense - Accretion charges, restructuring bonus and amortization of transaction costs related to non-convertible debentures payable	$	159,539	$		147,524	$	317,652	$	288,158	$		12,015	$		29,494
Depreciation of right of use asset	$	11,373	$		16,333	$	22,746	$	32,668	$		(4,960)	$		(9,922)
Depreciation of property, plant and equipment	$	-	$		5,821	$	-	$	14,581	$		(5,821)	$		(14,581)
Net (loss) and comprehensive (loss)	$	(509,138)	$		(531,792)	$	(1,017,959)	$	(1,065,779)	$		(22,654)	$		(47,820)
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, 2020.

About Advantex:

Advantex provides working capital to merchants. Advantex also provides specialized marketing programs that enable members of Aeroplan to earn Aeroplan points 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, 2020		At June  30, 2020
		$		$
Assets
Current assets
Cash		$	39,585	$	166,601
Accounts receivable		228,893		118,901
Transaction credits	5	2,250,789		3,923,917
Prepaid expenses and sundry assets		57,383		58,781
		$	2,576,650	$	4,268,200
Non-current assets
Right of use asset	15	$	75,816	$	98,562
		$	75,816	$	98,562
Total assets		$	2,652,466	$	4,366,762
Liabilities
Current liabilities
Loan payable	6	$	2,843,889	$	4,369,006
Lease liability		68,078		64,452
Loan	16	60,000		40,000
Accounts payable and accrued liabilities		2,626,661		2,364,759
9% Non convertible debentures payable	7	7,189,799		6,611,576
		$	12,788,427	$	13,449,793
Non-current Liabilities
Lease liability	15	$	49,708	$	84,679
		$	49,708	$	84,679
Shareholders' deficiency
Share capital	8	$	24,530,555	$	24,530,555
Contributed surplus		4,117,170		4,117,170
Accumulated other comprehensive loss		(47,383)		(47,383)
Deficit		(38,786,011)		(37,768,052)
Total deficiency		$	(10,185,669)	$	(9,167,710)
Total liabilities and deficiency		$	2,652,466	$	4,366,762
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) 
(expressed in Canadian dollars)

	Note	Three months ended December 31				Six months ended December 31
		2020		2019		2020		2019
		$		$		$		$
	18			Amended				Amended
Revenues	14
Marketing activities		$	194,122	$	237,081	$	307,080	$	416,663
Interest income		192,804		653,855		391,618		$	1,273,316
		$	386,926	$	890,936	$	698,698	$	1,689,979
Direct expenses	13/14	166,148		244,131		256,592		408,021
		220,778		646,805		442,106		1,281,958
Operating expenses
Selling and marketing	13/14	109,795		190,835		256,960		378,698
General and administrative	13/14	220,553		455,951		383,250		865,326
Earnings/(Loss) from operations before depreciation, amortization and interest		(109,570)		19		(198,104)		37,934
Stated interest expense - loan payable, and debentures	6/7	225,124		357,157		471,965		758,354
Interest - Lease	15	3,532		4,976		7,492		9,952
Non-cash interest expense (accretion charges), restructuring bonus and amortization of transaction costs	7	159,539		147,524		317,652		288,158
Depreciation of right of use asset	15	11,373		16,333		22,746		32,668
Depreciation of property, plant and equipment		-		5,821		-		14,581
Net (loss) and comprehensive (loss)		$	(509,138)	$	(531,792)	$	(1,017,959)	$	(1,065,779)
(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) 
(expressed in Canadian dollars)

	Class A preference shares		Common shares		Contributed surplus		Accumulated other comprehen - sive loss		Deficit		Total
	$		$		$		$		$		$
Balance - July 1, 2019	$	3,815	$	24,526,740	$	4,090,382	$	(47,383)	$	(34,840,656)	$	(6,267,102)
Reported at December 31, 2019 as adjustment to deficit on account of adoption of IFRS 16 Leases at July 1, 2019	-		-		-		-		(35,218)		(35,218)
Reported Net (loss) and comprehensive (loss)	-		-		-		-		(1,054,733)		(1,054,733)
Reported as balance at December 31, 2019	3,815		24,526,740		4,090,382		(47,383)		(35,930,607)		(7,357,053)
Adjustments on account of amendments made at year end June 30, 2020 to initial computations on adoption of IFRS 16 Leases at July 1, 2019, and initial recording on issuance of $200,000 9% debentures in October 2019
Reversal of adjustment made to deficit at July 1, 2019 - IFRS 16 Leases	-		-		-		-		35,218		35,218
Recording of contributed surplus - 9% debentures	-		-		26,788		-		-		26,788
Increase in Reported Net (loss) and comprehensive (loss)	-		-		-		-		(11,046)		(11,046)
Amended Balance - December 31, 2019	$	3,815	$	24,526,740	$	4,117,170	$	(47,383)	$	(35,906,435)	$	(7,306,093)
Balance - July 1, 2020	$	3,815	$	24,526,740	$	4,117,170	$	(47,383)	$	(37,768,052)	$	(9,167,710)
Net (loss) and comprehensive (loss)	-		-		-		-		(1,017,959)		(1,017,959)
Balance - December 31, 2020	$	3,815	$	24,526,740	$	4,117,170	$	(47,383)	$	(38,786,011)	$	(10,185,669)
The accompanying notes are an integral part of these consolidated financial statements

Advantex Marketing International Inc.
Consolidated Statements of Cash Flow (unaudited)
(expressed in Canadian dollars)

	Note	Six months ended December 31, 2020		Six months ended December  31, 2019
		$		$
	18			Amended
Operational activities
Net (loss) for the period		$	(1,017,959)	$	(1,065,779)
Adjustments for:
Accrued and unpaid 9% debentures interest		260,571		255,022
Interest - Lease	15	7,492		9,952
Depreciation of right of use asset	15	22,746		32,668
Depreciation of property, plant and equipment		-		14,581
Loss on disposal of property, plant & equipment		-		45
Accretion charge - non-convertible debentures payable	7	174,404		158,400
Restructuring bonus - non-convertible debentures payable	7	133,855		126,627
Amortization of transaction costs - non-convertible debentures payable	7	9,393		3,131
		(409,499)		(465,353)
Changes in items of working capital
Accounts receivable		(109,992)		965
Transaction credits		1,673,128		2,652,085
Prepaid expenses and sundry assets		1,398		1,600
Accounts payable and accrued liabilities		261,902		(9,180)
		1,826,436		2,645,470
Net cash provided by operating activities		$	1,416,938	$	2,180,117
Financing activities
Payment for lease	15	$	(38,837)	$	(38,835)
Gross proceeds - non-convertible debentures payable	7	-		200,000
Transaction costs - non-convertible debentures payable		-		(40,703)
Proceeds from loan - Canada Emergency Business Account		20,000		-
(Decrease) of loan payable	6	(1,525,117)		(2,366,007)
Net cash (used in) financing activities		$	(1,543,954)	$	(2,245,545)
(Decrease) in cash during the period		$	(127,016)	$	(65,428)
Cash at beginning of period		166,601		119,636
Cash at end of period		$	39,585	$	54,208
Additional information
Interest paid		$	211,394	$	503,332
Cash		$	39,585	$	54,208
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