TORONTO, Aug. 08, 2022 (GLOBE NEWSWIRE) — Dynamic Technologies Group Inc. (TSXV: DTG, OTC: ERILF) (the “Company”, “we” and “our”) is pleased to announce that we have entered into a debt refinancing transaction with our new strategic lender, Promising Expert Limited (“ELP“) from Hong Kong.
“This was an important first step in the company’s financing plan, replacing short-term debt and increasing working capital by US$4.0 million (C$5.0 million) from of the recently closed equity private placement and arranging for a senior debt financing aggregating US$16.0 million from a strategic investor. said Guy Nelson, CEO of Dynamic Technologies Group Inc. “We continue to work actively on the second stage of our funding plan and expect to provide an update on this in the coming months.
Under the terms of an assignment and assumption agreement (the “Debt refinancing”): (i) the former main lender of the Company (“Previous lender”) agreed to exchange $4.15 million of the unpaid debt for unsecured supplier credits and discounts applicable to unpaid invoices from past sales and future sales of the Company to the past lender; (ii) the prior lender has agreed to apply certain contractual holdbacks in the amount of US$0.65 million to the outstanding debt; and (iii) PEL purchased the balance of outstanding debt in the amount of US$13.55 million and related security from the prior lender for US$10.4 million, representing a forgiveness of US$3.15 million (the “Delivery”). Immediately upon completion of the debt refinancing, PEL agreed to write off US$3.15 million of debt corresponding to the discount (the “Canceled debt”). The Company currently owes PEL US$11.3 million subject to the terms of the New Term Facility (defined below).
Subject to PEL’s ability to transfer funds to Canada, the Company will have access to an aggregate of US$16 million of PEL’s senior credit facilities which bear a more manageable interest rate of 6.0 % per year. The PEL credit facilities include: (i) the outstanding demand loan facility of US$11.3 million repayable in 60 months (the “Term facility”); (ii) an unused non-revolving demand term loan in the amount of USD 2.9 million repayable in 12 months (the “Rotating installation”); and (iii) an undrawn subordinated demand revolving term loan in the amount of USD 1.8 million repayable in 12 months (the “Subordinate installationand, with the Term Facility and the Revolving Facility, theELP facilities”). Interest on PEL Credits is payable monthly in arrears. PEL Facilities may be prepaid without penalty upon one business day’s notice to PEL. The Term Facility and the Revolving Facility are secured by a first ranking lien on the assets of the Company, pledges of the shares of the Company’s direct subsidiaries and an assignment of insurance from the Company and the subsidiaries to PEL. In addition, PEL has the right, upon written notice at any time while PEL’s facilities are in operation, to appoint a person chosen by PEL as an authorized non-voting observer to attend meetings of the Board of Directors. administration of the Company. No additional securities will be issued under the terms of the PEL Facilities.
Although PEL currently owns 16,000,000 common shares of the Company which were purchased by investing C$5.0 million at $0.3125 per common share, representing 8.91% of the issued and outstanding common shares of Dynamic and has the right to appoint a director to the Company’s board of directors so long as it owns at least 5% of the issued and outstanding common shares of the Company, the Debt Refinancing is not a “related party transaction” within the meaning of TSXV Policy 5.9 or NI 61-101 – Protection of holders of minority securities in special transactions (“MI 61-101”). Debt refinancing is not a “related party transaction” because the Company and PEL entered into a term sheet regarding the debt refinancing and capital subscription of PEL while PEL was an arm’s length third party.
As part of the debt refinancing, the Company also amended the terms of its loan agreements with Export Development Canada.
About Dynamic Technologies Group Inc.
Dynamic is a global leader in the design engineering, production and commissioning of iconic attractions and media ride systems for the global theme park and entertainment destination industry. He also applies these same engineering integration and problem-solving skills for special projects in diverse industries such as alternative energy and large optical telescopes and enclosures. Dynamic also launched an initiative to leverage its world-class theater products and attraction development capability on a joint venture basis. Dynamic’s common shares are listed on the TSX Venture Exchange under the symbol DTG.
For more information about the company, visit www.dynamictechgroup.com or contact:
|Guy Nelson||Francois Allan|
|Executive Chairman and CEO||Vice President – Corporate Affairs and Administration|
|Phone: (416) 366-7977||Phone: (204) 589-9301|
|Email: [email protected]||Email: [email protected]|
Notice to readers
This press release contains forward-looking statements, within the meaning of applicable securities laws, regarding the business and affairs of Dynamic. In some cases, forward-looking statements can be identified by the use of words such as “anticipates”, “anticipates” or “does not expect”, “budget”, “reserved”, “expected”, “positions”, ” estimates”, “plans”, “intends”, “anticipates”, “believes” or variations of these words and expressions or states that certain actions, events or results “could”, “could be”, “could “, “should”, “would”, “could” or “will”, “occur” or “occur”. These statements include statements regarding (i) PEL’s ability to transfer funds to Canada; (ii ) the Company’s belief that it will eventually have access to an aggregate amount of $16 million of senior credit facilities with PEL; and (iii) the Company’s expectation to provide an update regarding the second stage of its financing plan. These statements involve known and unknown risks, uncertainties and other factors that may t cause actual results or events to differ materially from those anticipated in such forward-looking statements. The forward-looking statements contained in this press release assume, among other things, that the conditions for the completion of the financing required to implement its joint venture plan and to correct its working capital deficiency, including regulatory approval, will be satisfied. Although Dynamic believes these statements to be reasonable, no assurance can be given that such expectations will prove to be correct and undue reliance should not be placed on any forward-looking statements included in this press release. Actual results could differ materially from those anticipated in these forward-looking statements due to current economic conditions and other factors, many of which are beyond the Company’s control. The forward-looking statements contained in this press release represent Dynamic’s expectations as of the date hereof and are subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable securities regulations.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.