Mission Ready closes shares for debt transaction
2022-02-08 11:17 ET - News Release
Mr. Buck Marshall reports
MISSION READY ANNOUNCES CLOSING OF SHARES FOR DEBT TRANSACTION
Mission Ready Solutions Inc. has completed the shares for debt transaction first announced in a news release dated Jan. 20, 2022, to settle an aggregate of $1,258,549.60 in trades payable.
Following receipt of final acceptance from the TSX Venture Exchange in connection with the SFD arrangement, the company issued 3,595,856 common shares of the company at a deemed price of 35 cents per share. The settlement shares are subject to a statutory hold period expiring four months and one day from the date of issuance.
Pursuant to the SFD arrangement, Product Source Group LLC. (PSG) and J.D. United Manufacturing Co. Ltd. (JDUMC) agreed to receive the settlement shares in satisfaction of $1,258,549.60 ($1-million (U.S.)) of the outstanding balance payable by the company to the creditor.
"We are sincerely grateful for our partnership with PSG and the trust-based interpersonal relationships that have been cultivated over the past several months. Both the company and PSG have been aligned with a mutual belief that a resolution would be reached and any historical differences would quickly fade into the background relative to the vastness of the opportunities we hope to capture together," said Buck Marshall, president and chief executive officer of Mission Ready. Mr. Marshall continued: "This arrangement further strengthens our financial position by reducing our outstanding debt and, as a result, our monthly payment obligations. Additionally, the arrangement improves the company's balance sheet ratios by correctly positioning a significant portion of our outstanding liabilities from short term to long term. Importantly, this arrangement serves to further align the interests of the partnership, the company and our shareholders as a result of PSG's newly acquired equity position in Mission Ready."
Mission Ready-PSG partnership -- history & timeline
Q2 2020
PSG Engagement Company partners with PSG to help facilitate supply and delivery of personal protective equipment ("PPE") in connection with an anticipated contract award (the "FEMA Contract") from the US Department of Homeland Security ("DHS") Federal Emergency Management Agency ("FEMA").
FEMA Award Company awarded FEMA Contract.
Receipt of Purchase Orders Company receives two individual purchase orders from DHS ("PO 1" and "PO 2", respectively), calling for delivery of 1,000,000 pieces of PPE each (aggregate quantity of 2,000,000), valued at approximately US$14 million, and authorizes PSG to commence fulfillment.
Q3 2020
Fulfillment of PO 1 -- PSG completes fulfillment of PO 1 and Mission Ready remits payment to PSG as agreed.
Fulfillment of PO 2 --Unforeseen issues arise during the fulfillment of PO 2, which result in a subsequent dispute between the Company and PSG in connection with each party's obligations pursuant to the terms of the engagement (the "Dispute").
Q4 2020
Filing of Claim PSG files a claim against Unifire in New York Supreme Court, Monroe County alleging failure to pay.
Q1-Q3 2021
Settlement Discussions The Company disputes PSG's claim and the parties engage in settlement negotiations, working cooperatively to find an amicable and mutually beneficial resolution.
Debt Settlement Arrangement Company and PSG enter into a debt settlement arrangement whereby the principal balance payable 1 by the Company to PSG is reduced from approximately US$7.5 million to approximately US$6 million (the " Discounted Settlement Amount "), subject to certain conditions.
Q4 2021
US$6 million Loan from Northwest Bank Company secures a loan from Northwest Bank of Coeur d'Alene, Idaho to facilitate its payment of US$6 million 1 to PSG on or before March 30, 2022 pursuant to the terms of the discount provision of the Settlement Agreement.
US$1 million Initial Payment -- Company remits an initial payment of US$1 million to PSG in accordance with the terms of the discount provision of the Settlement Agreement, thereby reducing the balance of the Discounted Settlement Amount to US$5 million.
Q1 2022
Shares for Debt Arrangement Further to the Settlement Agreement, PSG agrees to accept 3,595,856 common shares of the Company (the " Shares "), at a deemed price of C$0.35 per Share, in satisfaction of US$1 million of the outstanding balance payable by the Company to PSG, thereby further reducing the balance of the Discounted Settlement Amount to US$4 million.
Additional Cash Payment of US$4 million Company remits payment, in cash, of the remaining US$4 million1 outstanding, thereby capturing the maximum negotiated discount pursuant to the Settlement Agreement, and fully extinguishing the outstanding balance outstanding to PSG.
About Mission Ready Solutions Inc.
Mission Ready Solutions provides comprehensive government contracting solutions with extensive experience in delivering quality, reliable, mission-critical products and services for law enforcement, firefighters, first responders, military, and other governmental agencies.
Through its privileged access to a host of federal contracting vehicles, including Multiple Award Schedule (" MAS ") contracts awarded and administered by the United States General Services Administration, Mission Ready's wholly-owned subsidiary, Unifire, Inc., leverages its robust vendor network, time-proven industry relationships, proprietary technology infrastructure, and industry-leading manufacturing and distribution capabilities to efficiently source and deliver more than 1.5 million products.