HDX enters into agreement to raise up to $10 million


TORONTO, March 31 /CNW/ - Hosted Data Transaction Solutions Inc. ("HDX" or the "Company") is pleased to announce that it has engaged D&D Securities Inc., as lead agent, with a syndicate including the agent Belweather Capital Partners Inc. to sell, on an agency basis, by way of private placement, subscription receipts ("Subscription Receipts") of the Company at a price of $0.45 per Subscription Receipt for gross proceeds of up to Cdn$10 million (the "Offering") with an overallotment option of up to 15% of the issue, exercisable by notice in writing to HDX within 30 days of the closing. Each Subscription Receipt will entitle the holder to acquire one HDX common share and one-half of one common share purchase warrant of HDX (each common share and half warrant is referred to as a "Unit"), without payment of additional consideration. Each whole HDX share purchase warrant will be exercisable for one HDX common share at a price of $0.65 per warrant share for a period of two years after the closing date unless such date is accelerated in accordance with the terms of the Subscription Receipt. In the event the volume weighted average trading price of the Common Shares exceeds $0.90 for any consecutive 20 trading day period after the Units have been issued, and more than 2,000,000 Common Shares have traded in the aggregate during such period, the Company shall have the right, for a period of three days, to accelerate the expiry date of the Warrants to the date that is 30 days following the final day of the 20 trading day period. The Company's Class A voting common shares are listed on the Toronto Stock Exchange (the "TSX") under the symbol "HDX".

This financing is being undertaken to satisfy the cash components of the recently announced letter of intent to acquire 100% of the shares of Posera Inc. ("Posera") of Seattle, Washington and increase the working capital position of the Company. Upon completion of this acquisition, HDX is expected to have over 26,000 quick service and table service restaurants as customers for its point-of-sale solutions and will be implementing a payment switch to process customer transactions. This is expected to enable HDX to truly serve as a full payments and POS solutions provider, with the opportunity to generate significant, incremental, profitable revenue

Financing Details

Approximately $6 million of the net proceeds will be used to fund the acquisition of Posera and the balance will be used for working capital. The gross proceeds will be held in escrow and released to complete the acquisition following the receipt of all required approvals and consents and the satisfaction of all conditions precedent other than payment of the proceeds for the acquisition (the "Release Conditions"). Unless consent of the Subscription Receipt holders is obtained, in the event that the Release Conditions are not satisfied on or before that date which is 90 days following the closing date (the "Release Deadline"), holders of the Subscription Receipts shall be entitled to receive, in exchange for such holders' Subscription Receipts, an amount equal to the aggregate purchase price paid for their Subscription Receipts.

Completion of the Offering is subject to receipt of all necessary regulatory and other approvals, including TSX approval. Additionally, under Section 611 of the TSX Manual, the Company intends to obtain Shareholder Approval by way of written consent of shareholders holding in excess of 50% of the issued and outstanding shares of HDX, subject to TSX approval. It is anticipated that the closing of the Offering and the acquisition will occur on or about April 15, 2010 and HDX will use its best efforts to qualify, by way of prospectus, the issue of Units upon the exercise or deemed exercise of the Subscription Receipts as soon as possible following the closing of the acquisition.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States.

The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "US Securities Act") or any state securities laws an may not be offered or sold within the United States of to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.


As previously announced, Posera is a private Seattle based company that develops, deploys, and supports a restaurant point-of-sale software known as Maitre 'D which has been deployed in over 20,000 locations worldwide in eight different languages. Posera sells and services its clients directly, as well as through a network of approximately 140 value added reseller partners in 25 countries with approximately 1,100 representatives selling, supporting & installing its software. Posera's customers include Quick, O'briens, St- Hubert, Pita Pit, Popeye's, Dunkin' Donuts, Pizza Delight, Baton Rouge, Scores, Hooters, Casey's, Supermac's, HDOS, KFC, Extreme Pita, Pizza Hut, among many others.

Closing of the Posera transaction is subject to execution of the definitive agreement, completion of satisfactory due diligence and receipt of all requisite regulatory approvals and third party consents, including acceptance by the TSX.

HDX Post-Transaction

On a pro-forma basis, assuming HDX and Posera had been merged already, based on each of their most recently completed fiscal year-ends, the combined entity would have had revenue of approximately $17.6 million and breakeven EBITDA.

Risks and Uncertainties

The Offering and Posera acquisition cannot be completed until the required TSX approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the materials to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of HDX should be considered highly speculative. The TSX has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this management discussion and analysis.

Cautionary Note Regarding Forward-Looking Statements

This discussion includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with our business and the environment in which the business operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", and similar expressions to the extent they relate to the Company or its management. The forward-looking statements are not historical facts, but reflect HDX's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risks and Uncertainties" in the Annual Information Form filed on March 30, 2009 with the regulatory authorities. HDX assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements unless required by security regulation.

About HDX

HDX is a leading provider of point-of-sale software, services and hardware to the restaurant sector in North America. Through the deployment of its proprietary software and national customer service support network, HDX is committed to providing innovation, quality products and superior service to its restaurant customers.

Additional information related to the Company can be found on SEDAR at www.sedar.com.


For further information: For further information: Paul Howell, President/CEO, Hosted Data Transaction Solutions Inc., Phone: (416) 703-6462, extension 2263, Email: Paul.howell@hdxsolutions.com

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