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 closed a debt refinancing transaction with our new strategic lender, Promising Expert Limited (“PEL”) from Hong Kong.
“This was an important first step in the Company’s financing plan, replacing short term debt and increasing working capital with USD$4.0 million (CAD$5.0 million) from the recently closed equity private placement and arranging senior debt financing totaling USD$16.0 million from a strategic investor,” said Guy Nelson, CEO of Dynamic Technologies Group Inc. “We continue to work actively on the second step of our financing plan and expect to provide an update in that regard in the coming months.”
Pursuant to the terms of an assignment and assumption agreement (the “Debt Refinancing”): (i) the Company’s prior senior lender (“Prior Lender”) agreed to exchange USD$4.15 million of the outstanding debt for unsecured vendor credits and discounts applicable to unpaid invoices from prior sales and from future sales from the Company to the Prior Lender; (ii) the Prior Lender agreed to apply certain contract holdbacks in the amount of USD$0.65 million against the outstanding debt; and (iii) PEL purchased the balance of the outstanding debt in the amount of USD$13.55 million and the related security from the Prior Lender for USD$10.4 million representing a discount of USD$3.15 million (the “Discount”). Immediately after completion of the Debt Refinancing, PEL agreed to forgive USD$3.15 million of the debt which matches the Discount (the “Forgiven Debt”). The Company currently owes PEL USD$11.3 million subject 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 amount of USD$16 million of senior credit facilities from PEL that bear a more manageable 6.0% per annum interest rate. The PEL credit facilities include: (i) the outstanding demand term loan facility in the amount of USD$11.3 million repayable in 60 months (the “Term Facility”); (ii) undrawn demand non-revolving term loan in the amount of USD$2.9 million repayable in 12 months (the “Revolving Facilit”); and (iii) undrawn demand subordinated revolving term loan in the amount of USD$1.8 million repayable in 12 months (the “Subordinated Facility” and together with the Term Facility and the Revolving Facility, the “PEL Facilities”). The interest on the PEL Facilities is payable monthly in arrears. The PEL Facilities may be prepaid without penalty on one business days’ prior notice to PEL. The Term Facility and Revolving Facility are secured by a first charge on the Company’s assets, pledges of the shares of the direct subsidiaries of the Company and an assignment of insurance of the Company and subsidiaries to PEL. In addition, PEL has the right, upon written notice at any time while the PEL Facilities are outstanding, to appoint one individual selected by PEL as a non-voting observer entitled to attend meetings of the Board of Directors of the Company. No additional securities will be issued pursuant to the terms of the PEL Facilities.
Although PEL currently owns 16,000,000 common shares of the Company that were purchased by investing CAD$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 Board of Directors of the Company 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 Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Debt Refinancing is not a “related party transaction” because the Company and PEL entered into a Term Sheet with respect to the Debt Refinancing and PEL’s equity subscription when PEL was an arm’s length third party.
As part of the Debt Refinancing, the Company also amended the terms of its lending arrangements with Export Development Canada.
About Dynamic Technologies Group Inc.
Dynamic is a world leader in the design engineering, production, and commissioning of iconic, media-based attractions and ride systems for the global theme park industry and entertainment destinations. It also applies these same engineering integration and problem solving skills for special projects in diversified industries such as alternative energy and large optical telescopes and enclosures. Dynamic also has commenced an initiative to leverage its world class theater products and attraction development capability on a co-venture ownership 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 | Allan Francis |
| Executive Chair & CEO | Vice President – Corporate Affairs and Administration |
| Phone: (416) 366-7977 | Phone: (204) 589-9301 |
| Email: gnelson@dynamictechgroup.com | Email: afrancis@dynamictechgroup.com |
Reader Advisory
This news release contains forward-looking statements, within the meaning of applicable securities legislation, concerning Dynamic’s business and affairs. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “budget”, “booked”, “scheduled”, “positions”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “may be”, “could”, “should”, “would”, “might” or “will”, “occur” or “be achieved”. Such statements include statements with respect to (i) PEL’s ability to transfer funds to Canada; (ii) the Company’s belief it will eventually have access to aggregate amount of USD$16 million of senior credit facilities from PEL; and (iii) the Company’s expectation that it will provide an update regarding the second step of its financing plan. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The forward-looking statements in this news release assume, inter alia, that the conditions for completion of the funding required to implement its co-venture plan and to correct its working capital deficiency, including regulatory approval will be met. Although Dynamic believes these statements to be reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. Actual results could differ materially from those anticipated in these forward-looking statements as a result of prevailing economic conditions, and other factors, many of which are beyond the control of the Company. The forward-looking statements contained in this news 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 statements whether as a result of new information, future events or otherwise, except as may be 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.
