Refinancing at 6%Not out of the woods yet but looking up
TORONTO – August 8, 2022 - 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.