TORONTO, ONTARIO--(Marketwired - June 4, 2013) - Matrix Asset Management Inc. (TSX:MTA) ("Matrix") announces that, further to its announcement on May 25, 2013, the terms of the sale of assets to Marquest Asset Management Inc. ("Marquest") have been revised. Marquest will purchase 100% of the portfolio management, custodian and related contracts of the Matrix Group of Investment Funds, and jointly with certain members of management (the "Purchasing Seamark Management Group") of SEAMARK Asset Management Inc. ("Seamark"), all of the operational assets (excluding working capital) of Seamark. Each of the members of the Purchasing Seamark Management Group is an officer and/or director of Seamark but is not on the board of directors of Matrix and does not serve as an officer of Matrix.
The asset transaction, now with two separate closings, has a combined value of approximately $8.75 million. The consideration is to be comprised of (i) the $1 million loan advanced by Marquest to Matrix on April 15, 2013, (ii) $900,000 advanced by the Purchasing Seamark Management Group on May 31, 2013, (iii) the forgiveness on May 31, 2013 of indebtedness owed by Seamark to a company related to the Purchasing Seamark Management Group of $218,739, (iv) $200,000 advanced by Marquest to Matrix today, (v) $200,000 advanced by the Purchasing Seamark Management Group to Seamark today, (vi) $100,000 advanced by the Purchasing Seamark Management Group to Matrix today, (vii) $130,000 to be advanced by Marquest to Matrix on closing of the sale of the Matrix Investment Funds, and (viii) the assumption of subordinated indebtedness owed by a Matrix subsidiary in the principal amount of $6 million on closing of the sale of the Matrix Investment Funds. Binding promissory notes and binding asset sale term sheets were executed by the parties today and the terms of the loans are the same as previously announced in the May 25, 2013 release. The agreements are held in escrow pending the receipt of wired funds, which is expected to occur on June 5, 2013. Other terms of the asset transaction are as previously announced in the May 25, 2013 release. Closing of the transactions remains subject to customary closing conditions, including obtaining necessary stock exchange and regulatory approvals. It is unknown at this time if these conditions will be satisfied or waived.
With the advance of funds to date and the forgiveness of the indebtedness owed by Seamark to the Purchasing Seamark Management Group, the previously announced regulatory working capital deficiency in Seamark was rectified. While Matrix, Marquest and Seamark senior management have entered into binding term sheets providing for further loan advances and for the asset transaction, there can be no assurance that the pending loan advances or the asset transactions will be completed on the terms proposed or at all.
Forward-looking statements: Certain statements in this press release are forward-looking statements including the statements about the pending loan advances by and asset purchase transactions with Marquest and the Purchasing Seamark Management Group, employment and other arrangements associated with the asset transactions and closing of the asset transactions. Forward-looking statements are based on beliefs and assumptions at the time the statements are made, including beliefs and assumptions about the satisfaction or waiver of conditions to the closing of the asset transactions, including regulatory, stock exchange and third party approvals. While management considers these beliefs and assumptions to be reasonable based on information currently available to it, they are subject to numerous risks and uncertainties and no assurance can be given that such beliefs and assumptions will prove to be correct. Accordingly, actual results may differ significantly from those expressed or implied by forward-looking statements due to many factors including, but not limited to, risks associated with securing necessary regulatory, stock exchange and third party approvals for the asset transactions, satisfying other conditions to the asset transactions, risks associated with completing the asset transactions and risks associated with Matrix's ability to continue to operate as a going concern and maintain compliance with minimum working capital and other regulatory requirements. Many of these risks are beyond the control of Matrix. Other than as specifically required by law, Matrix undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements are made, or to reflect or to reflect new information, future unanticipated events or results or other factors.