Posera - HDX Completes $3.6m Oversubscribed Private Placement of Common Shares


TORONTO, April 27, 2015 /CNW/ - Paul Howell, CEO and Executive Director, is pleased to report that Posera – HDX Limited ("HDX" or the "Company") has closed an oversubscribed private placement of HDX Common Shares. Under the private placement, the Company issued a total of 14,316,000 Common Shares at a price of $0.25 per share (the "Offering") for gross proceeds of $3,579,000. HDX paid a finders fee equal to 7.0% on $3,191,000 of the Offering's gross proceeds, together with finders' warrants to acquire 893,480 Common Shares. The finders' warrants are exercisable for a period of two years at an exercise price of $0.40 per Common Share.

The Company's common shares are listed on the Toronto Stock Exchange (the "TSX") under the symbol "HDX".  The proceeds from the private placement are currently primarily targeted to be utilized to increase the working capital position of the Company.The common shares have been conditionally approved for listing on the Toronto Stock Exchange.

Company Expansion in the United States

Wide-spread credit card security breaches have resulted in a payment industry decision to deploy EMV Chip and PIN technology in the United States. The deployment of EMV Chip and PIN credit cards will make it necessary for table service restaurants to give customers the ability to maintain control of their credit cards by paying for their meals "at the table" and entering their credit card PIN and / or signature into a wireless payment terminal. The current insecure practice, whereby customers place their credit card inside a folio and allow the server to take the credit card elsewhere to be swiped on a magnetic stripe reader, will no longer be allowed without the merchant accepting the liability for fraudulent transactions. Restaurants will require a "pay-at-the-table" device, ideally integrated with their in-house point-of-sale ("POS") solution, in order to correctly identify the table and the appropriate client balances to finalize electronic card payments.

In the United States there are 1.2 billion magnetic stripe cards in circulation, 15 million magnetic stripe POS terminals, and thousands of banking institutions managing electronic payments. As there are over 900,000 restaurants, the opportunity to provide "pay-at-the-table" technology, payment processing solutions, and integrated point-of-sale solutions is enormous.

On January 7, 2015 HDX announced that it had completed the acquisition of all the issued and outstanding shares of Terminal Management Concepts Ltd. ("TMC") of Markham, Ontario and subsequently amalgamated with TMC.

TMC provides wireless EMV Chip and PIN "pay-at-the-table" credit and debit card processing software and hardware solutions to Canadian merchants nationwide. TMC has deployed its payment software solutions through direct sales and strategic partnerships with the world's largest payment terminal manufacturers and TMC's software solutions integrate directly with most of the leading restaurant point-of-sale applications world-wide. Because TMC's middle-ware product is POS solution agnostic, payment processing relationships can be achieved regardless of the POS solution employed by a particular restaurant.

The TMC software product suite will be distributed through the Company's reseller network of approximately 95 dealers, 180 direct sales representatives, and potentially through software licensing agreements with multiple payment processors in the United States who are in need of a pay-at-the-table solution that will allow them to integrate with multiple POS solutions.

While there will eventually be other pay-at-the-table applications available in the United States, payment card industry certified integrations to POS applications are a time consuming endeavour. HDX has a market leading advantage because EMV Chip and PIN integrations are complete and deployed with over 20 of the leading POS applications.

Payment Processing Opportunity

HDX has now completed integration between its POS solutions and its payment processing switch partners. This allows the Company's sales force to offer Payment Processing contracts to existing merchants that utilize the Company's POS solutions. HDX intends to grow its sales force and distribution channels significantly in 2015.

The Company intends improve its payment processing division by owning multiple Bank Identification Numbers ("BIN"), employing multiple payment processing switch partners, owning its merchant contracts directly, and performing its own risk assessment and underwriting. These criteria will allow the Company to be considered a Wholesale Payments ISO which provides the company with significant advantages.

Zomaron, a wholly owned division of HDX, provides credit and debit card payment processing solutions through its sales force of over approximately 170 agents. Zomaron grew its merchant base by more than 37% in 2014 prior to integration with HDX's POS solutions. Zomaron also grew its average payment processing volume per merchant by over 19%.

The integration of TMC's software products with the Zomaron sales team bolsters HDX's strategy of providing integrated payment solutions to new merchants that use competitive POS solutions and existing clients that already utilize HDX POS solutions and services. TMC's software, in conjunction with HDX's intellectual property and services, provides merchants with one-stop-shopping, one monthly payment, and one source for technical support of all of their retail technology solutions. TMC's business model supports HDX's ability to grow payment processing revenue, profitability, and TMC's recurring revenue model is very attractive to HDX. The opportunity for our Company to deploy "pay-at-the-table" solutions with payment processing contracts in the United States is enormous.

The major US credit card companies have announced that the Merchant Liability Shift will take place in October 2015 in the United States. This is an aggressive timeframe and the race to deploy solutions will be highly disruptive. Time-challenged merchants are advised to work with solution vendors that are experienced in facilitating EMV transaction processing.

HDX has developed and deployed POS software solutions at thousands of merchant locations in Europe and Canada and all of our software solutions have been EMV Chip and PIN enabled and certified for many years now. Because of the breadth and quality of our solution and service offerings, our Company is well positioned to take advantage of the market opportunity presented in the United States.

One of the Company's strengths has been its ability to acquire and integrate businesses to build our customer base, and to bolster our superior suite of technologies that can be used by our entire customer base. The Company is dedicated to providing end-to-end solutions for POS, Payments Processing, Enterprise Management, Client Loyalty, and Site Security.

About HDX

HDX is in the business of managing merchant transactions with consumers and facilitating payment. The Company develops and deploys touch screen POS system software, SaaS / Cloud Based labour scheduling and management tools, SaaS / Cloud Based menu, recipe, and inventory management tools, and associated enterprise management tools. HDX also provides system hardware integration services, merchant staff training, system installation services, and post-sale software and hardware support services. 

HDX leading edge technology also includes payment processing solutions, prepaid stored value payments solutions, customer self-serve kiosks and "line buster" mobile point of sale software. These products have been designed to dramatically enhance customer throughput and drastically reduce customer queues. These technologies are especially effective in high foot traffic environments that have limited cash register counter space, limited retail square footage, and the absence of a drive through.

HDX develops, deploys, and supports a restaurant point-of-sale software known as "Maître 'D" which has been deployed in over 20,000 locations worldwide in eight different languages.  The Company sells and services its clients directly, as well as through a network of approximately 95 value added reseller partners in 25 countries.  HDX has offices in Toronto, London, Brantford, Mississauga, Seattle, Montreal, Glasgow (U.K.), and Paris (France)

To find out more about Posera-HDX Ltd., visit our websites at www.hdxsolutions.com, www.maitredpos.com, www.zomaron.com and www.terminalmanagement.ca.

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.

Additional information on Posera-HDX is available in the financial reports filed by the Company with SEDAR at www.sedar.com and posted to the Investor Relations section of the Company's website at www.hdxsolutions.com

Forward-Looking Statements

This press release 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 Posera - 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 31st, 2015 with the regulatory authorities.  Posera - 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.


For further information: Paul K. Howell, Chief Executive Officer, Posera - HDX Limited (HDX), 350 Bay Street, Suite 700, Toronto, Ontario M5H 2S6, (416) 703-6462 ext. 2263


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