/NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH US NEWS WIRE SERVICES/
TORONTO, Oct. 8, 2014 /CNW/ - Posera – HDX Limited ("Posera - HDX" or the "Company") is pleased to announce that it has engaged Global Maxfin Capital Inc., as lead agent, to sell, on an agency basis, by way of private placement, up to 15,625,000 subscription receipts ("Subscription Receipts") of the Company at a price of CDN $0.32 per Subscription Receipt for gross proceeds of up to CDN $5.0 million (the "Offering"). Each Subscription Receipt, upon satisfaction of the Release Conditions (described below) will be automatically exercise into one HDX common share. The Company's common shares are listed on the Toronto Stock Exchange (the "TSX") under the symbol "HDX". The Offering is being undertaken, in part to raise capital to satisfy the cash portion of the purchase price of the recently announced letter of intent to acquire 100% of the shares of Premier Payments Systems Inc. ("Premier"), to retire certain outstanding debt obligations and to increase the working capital position of the Company.
As announced on October 1st, 2014, the Company has signed a letter of intent to acquire Premier Payments Systems Inc. ("Premier"). Founded in 2010, Premier provides payment processing solutions for debit and credit transactions to clients throughout the United States. Based in the Western Suburbs of Chicago, Illinois Premier is superbly situated to fuel HDX's growth strategy in the United States.
There are over 1.2 billion magnetic stripe cards in circulation, 15 million magnetic stripe point-of-sale ("POS") terminals, and approximately 8000 banking institutions managing electronic payments, yet the United States is one of the last jurisdictions in the world to implement EMV chip and PIN technology.
EMV ("Europay/MasterCard/Visa"), formed in 1993, manages the standards by which the world's point of sale solutions and ATM's meet security standards and achieve interoperability related to the acceptance of payment via chip based credit cards.
Cardholder signatures are not a reliable method of identification and magnetic stripe data is easily copied, reproduced, and distributed. By the end of 1992, in order to address the problem of fraud related to magnetic-stripe credit cards, France had already converted all of the country's point of sale equipment and consumer credit cards to chip and PIN technology.
On March 31st 2011, Visa Canada, MasterCard Canada and their card issuing partners implemented a domestic card Liability Shift whereby the liability for fraudulent transactions shifted to merchants that had not implemented Chip and PIN technology.
The major US credit card companies have announced that this 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 will ramp quickly to offer merchants best-in-breed payment processing and point-of-sale solutions in time for the upcoming liability shift. HDX has developed and deployed EMV Chip and PIN enabled solutions at thousands of merchant locations throughout Europe and Canada over many years and believes that upon completion of the Premier acquisition it will be well prepared to scale the combined organization to address deployment of EMV and PIN solutions in the United States.
Premier has established its own BIN ("Bank Identification Number"), maintains multiple front-end authorization network agreements, holds its payment processing agreements directly with its merchants, performs its own ongoing risk monitoring and underwriting, and has the ability to transfer its merchant processing base from one back-end settlement network and sponsor bank to another if necessary.
The gross proceeds from the Offering will be held in escrow and released to be applied in part to complete the Premier 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 Premier 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 January 15, 2015 (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. It is anticipated that the closing of the Offering will occur on or about October 23, 2014 and the completion of the Premier acquisition will occur on or about January 15th, 2015
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 and may not be offered or sold within the United States of America 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.
About the Company
HDX is in the business of managing merchant transactions with consumers and facilitating payment. The company develops and deploys touch screen POS system software and associated enterprise management tools and has developed and deployed numerous POS applications. 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 prepaid stored value payments solutions, customer self-serve kiosks and "line buster" mobile point of sale terminals. 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 99 value added reseller partners in 25 countries with approximately 550 reseller representatives selling, supporting & installing its software. HDX has offices in Toronto, London, Brantford, Mississauga, Seattle, Montreal, Glasgow (U.K.), Paris (France) and Singapore.
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 to be filed on March 27th 2014 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.
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