Significant improvements in operational metrics reflect acceleration of business re-build versus same period year ago
- Revenues from core activity – Merchant Cash Advance program – increased $272,460 (23.3%) to $1,440,458.
- Advantex Revenues increased $371,022 (21.3%) to $2,110,719.
- Gross Profit, prior to one-time write-back of direct costs, increased $506,688 (50.8%) to $1,504,576.
- Reduction in SG&A. Prior to one-off SG&A comprising expenses and federal pandemic subsidies, a decrease of $156,539 (8.5%) to $1,680,872.
- Decrease in Loss from operations before depreciation, amortization and interest, and one-off direct costs & SG&A. Reduction of $663,227 (79.0%) to $176,296.
- Decrease in Loss from operations before one-off direct costs & SG&A, and non-cash expenses. Reduction of $420,888 (20.1%) to $1,669,329
TORONTO, Oct. 30, 2023 /CNW/ - Advantex Marketing International Inc. (CSE: ADX) ("Advantex"), a leader in the merchant cash advance and loyalty marketing products for merchants, announced its results for fiscal year ended June 30, 2023 ("Fiscal 2023").
Improvements in financial performance reflected execution of strategies identified and implemented during year ended June 30, 2022 ("Fiscal 2022"). The goal was to re-build Advantex business levels, initially to pre-pandemic levels and then to capitalize on a strengthening economy to achieve double digit growth. Advantex raised $1.0 million capital during Fiscal 2023. This enabled funds to be put towards accelerating the re-build of the MCA portfolio. Loyalty marketing program benefited from increase in spending on marketing activities by businesses and rebound in travel post pandemic. The outcome was evident in double digit increase in revenues of 21.3% and gross profit, prior to one-time write-back of direct costs, of 50.8% in Fiscal 2023.
Impressively, save for one off Selling, General & Administrative expense ("SG&A"), SG&A in Fiscal 2023 was reduced because of key initiatives, including closure of the corporate office. As a result, Loss from operations before depreciation, amortization and interest, and one-off direct costs & SG&A was sharply down (79.0%).
In Fiscal 2023 Advantex carried higher debt to support re-build of its business level and for general corporate purposes. Furthermore, there was increase in the interest rate on loan payable consequent to increase in prime rate. The impact of the foregoing two factors was reflected in higher cash interest cost. Despite increase in cash interest costs there was a commendable decrease in Loss from operations before one-off direct costs & SG&A, and non-cash expenses of 20.1%.
The above improvement in Loss from operations before one-off direct costs & SG&A, and non-cash expenses (20.1%) was masked by increase during Fiscal 2023 in non-cash expenses and one-off SG&A. Increase in non-cash expenses is primarily on account of accretion charges which reflect outcome of prescribed accounting connected to the non-convertible debentures. Impact of one-off direct costs & SG&A on Fiscal 2023 compared to Fiscal 2022 is set out in below tabulation.
Additional financial information is provided in the tabulation in this news release.
|
|
Fiscal 2023
|
|
Fiscal 2022
|
|
Inc./(Dec)
|
Inc./(Dec)
|
|
|
$
|
|
$
|
|
$
|
%
|
|
Revenues
|
|
|
|
|
|
|
|
|
Merchant Cash Advance ("MCA") program
|
|
1,440,458
|
|
1,167,998
|
|
272,460
|
23.3 %
|
|
Reseller - Aeroplan program - Loyalty marketing
|
|
670,261
|
|
571,699
|
|
98,562
|
17.2 %
|
|
|
2,110,719
|
|
$ 1,739,697
|
|
$ 371,022
|
21.3 %
|
|
|
|
|
|
|
|
|
|
Gross Profit prior to one-off write-back of direct costs
|
|
$ 1,504,576
|
|
$ 997,888
|
|
$ 506,688
|
50.8 %
|
|
|
|
|
|
|
|
|
|
Selling, General & Administrative ("SG&A") - Regular
|
|
1,680,872
|
|
1,837,411
|
|
(156,539)
|
-8.5 %
|
|
|
|
|
|
|
|
|
|
(Loss) from operations before depreciation, amortization and interest, and one-
off direct costs & SG&A
|
|
$ (176,296)
|
|
$ (839,523)
|
|
$ (663,227)
|
-79.0 %
|
|
|
|
|
|
|
|
|
|
Interest - Loan payable
|
|
611,010
|
|
476,961
|
|
134,049
|
|
|
Interest - 9% non-convertible debentures payable ("9% 2025 debentures")
|
|
872,689
|
|
773,733
|
|
98,956
|
|
|
Interest - 12% non-convertible debentures payable ("12% debentures")
|
|
9,334
|
|
-
|
|
9,334
|
|
|
|
|
|
|
|
|
|
|
(Loss) from operations before one-off direct costs, SG&A and non-cash
expenses
|
|
$ (1,669,329)
|
|
$ (2,090,217)
|
|
$ (420,888)
|
-20.1 %
|
|
|
|
|
|
|
|
|
|
One-off write-back of direct costs
|
|
(149,450)
|
|
-
|
|
149,450
|
|
|
One-off SG&A
|
|
|
|
|
|
|
|
|
Expenses
|
|
77,400
|
|
(35,063)
|
|
112,463
|
|
|
Federal pandemic subsidies
|
|
(1,888)
|
|
(152,034)
|
|
(150,146)
|
|
|
(Loss) non-cash expenses
|
|
$ (1,595,391)
|
|
$ (1,903,120)
|
|
$ (307,729)
|
-16.2 %
|
|
|
|
|
|
|
|
|
|
Non-cash interest expense - 1) accretion charges and restructuring bonus
respecting 9% 2025 debentures, 2) amortization of transaction costs related to
9% 2025 debentures and 12% debentures, and 3) interest on lease
|
|
$ 931,762
|
|
$ 804,718
|
|
$ 127,044
|
15.8 %
|
|
|
|
|
|
|
|
|
|
Net (loss) and comprehensive (loss)
|
|
$ (2,527,153)
|
|
$ (2,707,838)
|
|
$ (180,685)
|
-6.7 %
|
The above tabulation is a non-GAAP presentation and is provided to assist readers in understanding Advantex's financial performance. The information is extracted from consolidated financial statements for years ended June 30, 2023, and June 30, 2022.
About Advantex
Advantex provides working capital to merchants. Advantex also provides specialized marketing programs that enable members of Aeroplan to earn Aeroplan points at participating merchants.
Advantex shares trade on the Canadian Securities Exchange under the symbol ADX. For more information go to Advantex's profile on www.sedar.com
Forward-Looking Information
This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the future business and operations of Advantex. Actual results and developments may differ materially from those contemplated by these statements. The business and operations of Advantex described herein is dependent on a number of factors and is subject to a number of risks and uncertainties. Factors that could cause actual results to differ material include, but are not limited to, changes in Advantex's economic and competitive conditions including but not limited to the industry sectors in which Advantex operates.
The statements in this news release are made of the date of this release. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and Advantex undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.
Advantex Marketing International Inc.
Consolidated Statements of Financial Position
(expressed in Canadian dollars)
|
Note
|
June 30,
2023
|
|
June 30,
2022
|
|
|
$
|
|
$
|
|
Assets
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash
|
|
$ 340,427
|
|
$ 93,185
|
|
Accounts receivable
|
11 a
|
84,917
|
|
83,320
|
|
Transaction credits
|
11 a
|
5,641,940
|
|
3,312,268
|
|
Prepaid expenses and sundry assets
|
|
1,416
|
|
41,589
|
|
|
$ 6,068,700
|
|
$ 3,530,362
|
|
|
|
|
|
|
Total assets
|
|
$ 6,068,700
|
|
$ 3,530,362
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Loan payable
|
5
|
$ 5,992,287
|
|
$ 4,019,685
|
|
Lease liability
|
18
|
-
|
|
12,768
|
|
Loan
|
19
|
60,000
|
|
60,000
|
|
Accounts payable and accrued liabilities
|
|
3,590,699
|
|
2,825,914
|
|
|
$ 9,642,986
|
|
$ 6,918,367
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
9% non-convertible debentures payable
|
6
|
$ 8,765,806
|
|
$ 6,953,878
|
|
12% non-convertible debentures payable
|
7
|
278,136
|
|
-
|
|
Deferred fair value adjustment on 12% non-convertible
debentures payable
|
7
|
91,993
|
|
-
|
|
|
$ 9,135,935
|
|
$ 6,953,878
|
|
|
|
|
|
|
Total liabilities
|
|
$ 18,778,921
|
|
$ 13,872,245
|
|
|
|
|
|
|
Shareholders' deficiency
|
|
|
|
|
|
Share capital
|
8
|
$ 24,530,555
|
|
$ 24,530,555
|
|
Contributed surplus
|
|
7,901,617
|
|
7,742,802
|
|
Accumulated other comprehensive loss
|
|
(47,383)
|
|
(47,383)
|
|
Deficit
|
|
(45,095,010)
|
|
(42,567,857)
|
|
Total deficiency
|
|
$ (12,710,221)
|
|
$ (10,341,883)
|
|
|
|
|
|
|
Total liabilities and deficiency
|
|
$ 6,068,700
|
|
$ 3,530,362
|
|
|
|
|
|
|
Going concern (note 2a) and Commitments and contingencies (note 13)
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements
|
|
|
|
|
|
|
|
|
|
|
Approved by the Board
|
|
|
|
|
|
Director: Signed "Marc Lavine"
|
|
Director: Signed "Kelly Ambrose"
|
|
Marc Lavine
|
|
Kelly Ambrose
|
|
|
|
|
|
Advantex Marketing International Inc.
Consolidated Statements of (Loss) and Comprehensive (Loss)
For the years ended June 30, 2023 and 2022
(expressed in Canadian dollars)
|
Note
|
|
2023
|
|
2022
|
|
|
|
$
|
|
$
|
|
|
|
|
|
|
|
Revenues
|
17
|
|
|
|
|
|
Marketing activities
|
|
|
$ 670,261
|
|
$ 571,699
|
|
Interest income
|
|
|
1,440,458
|
|
1,167,998
|
|
|
|
2,110,719
|
|
1,739,697
|
|
Direct expenses
|
16/17
|
|
456,693
|
|
741,809
|
|
|
|
1,654,026
|
|
997,888
|
|
Operating expenses
|
|
|
|
|
|
|
Selling and marketing
|
16/17
|
|
551,182
|
|
636,480
|
|
General and administrative
|
16/17
|
|
1,205,202
|
|
1,013,834
|
|
(Loss) from operations before depreciation, amortization and
interest
|
|
|
(102,358)
|
|
(652,426)
|
|
|
|
|
|
|
|
Stated interest expense
|
|
|
|
|
|
|
Loan payable
|
5
|
|
611,010
|
|
476,961
|
|
9% non-convertible debentures payable
|
6
|
|
872,689
|
|
773,733
|
|
12% non-convertible debentures payable
|
7
|
|
9,334
|
|
-
|
|
Interest - Lease
|
18
|
|
177
|
|
5,760
|
|
Non-cash interest expense - accretion charges, restructuring
bonus and amortization of transaction costs related to 9%
non-convertible debentures payable
|
6
|
|
929,641
|
|
798,958
|
|
Non-cash interest expense - amortization of transaction costs
related to 12% non-convertible debentures
|
7
|
|
1,944
|
|
-
|
|
Non-cash interest expense - accretion charges related to 12%
non-convertible debentures payable
|
7
|
|
6,788
|
|
-
|
|
Non-cash interest expense - accretion of deferred gain
related to 12% non-convertible debentures payable
|
7
|
|
(6,788)
|
|
-
|
|
Net (loss) and comprehensive (loss)
|
|
|
$ (2,527,153)
|
|
$ (2,707,838)
|
|
|
|
|
|
|
|
(Loss) per share
|
|
|
|
|
|
|
Basic and Diluted
|
15
|
|
$ (0.01)
|
|
$ (0.01)
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements
|
|
|
|
|
|
|
|
|
|
|
|
Advantex Marketing International Inc.
Consolidated Statements of Changes in Shareholders' Deficiency
For the years ended June 30, 2023 and June 30, 2022
(expressed in Canadian dollars)
|
Class A
preference
shares
|
|
Common
shares
|
|
Contributed
surplus
|
|
Accumulated
other
comprehen -
sive loss
|
|
Deficit
|
|
Total
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - July 1, 2021
|
$ 3,815
|
|
$ 24,526,740
|
|
$ 7,364,720
|
|
$ (47,383)
|
|
$ (39,860,019)
|
|
$ (8,012,127)
|
|
Issuance of 9% non-
convertible debentures
payable (note 6)
|
-
|
|
-
|
|
378,082
|
|
-
|
|
-
|
|
378,082
|
|
Net (loss) and
comprehensive (loss)
|
-
|
|
-
|
|
-
|
|
-
|
|
(2,707,838)
|
|
(2,707,838)
|
|
Balance - June 30, 2022
|
$ 3,815
|
|
$ 24,526,740
|
|
$ 7,742,802
|
|
$ (47,383)
|
|
$ (42,567,857)
|
|
$ (10,341,883)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - July 1, 2022
|
$ 3,815
|
|
$ 24,526,740
|
|
$ 7,742,802
|
|
$ (47,383)
|
|
$ (42,567,857)
|
|
$ (10,341,883)
|
|
Issuance of 9% non-
convertible debentures
payable (note 6)
|
-
|
|
-
|
|
158,815
|
|
-
|
|
-
|
|
158,815
|
|
Net (loss) and
comprehensive (loss)
|
-
|
|
-
|
|
-
|
|
-
|
|
(2,527,153)
|
|
(2,527,153)
|
|
Balance - June 30, 2023
|
$ 3,815
|
|
$ 24,526,740
|
|
$ 7,901,617
|
|
$ (47,383)
|
|
$ (45,095,010)
|
|
$ (12,710,221)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advantex Marketing International Inc.
Consolidated Statements of Cash Flow
For the years ended June 30, 2023 and 2022
(expressed in Canadian dollars)
|
Note
|
June 30,
2023
|
|
June 30,
2022
|
|
|
$
|
|
$
|
|
Operational activities
|
|
|
|
|
|
Net (loss) for the year
|
|
$ (2,527,153)
|
|
$ (2,707,838)
|
|
Adjustments for:
|
|
|
|
|
|
Accrued and unpaid 9% non-convertible debentures payable
interest - current and non-current payable
|
6
|
872,689
|
|
773,733
|
|
Accrued and unpaid 12% non-convertible debentures
payable interest - current payable
|
7
|
9,334
|
|
-
|
|
Interest - Lease
|
18
|
177
|
|
5,760
|
|
Accretion charge - 9% non-convertible debentures payable
|
6
|
810,924
|
|
710,452
|
|
Restructuring bonus - 9% non-convertible debentures
payable
|
6
|
95,216
|
|
73,063
|
|
Amortization of transaction costs - 9% non-convertible
debentures payable
|
6
|
23,501
|
|
15,443
|
|
Amortization of transaction costs - 12% non-convertible
debentures payable
|
7
|
1,944
|
|
-
|
|
Non-cash interest expense - accretion charges related to 12%
non-convertible debentures payable
|
7
|
6,788
|
|
-
|
|
Non-cash interest expense - accretion of deferred gain
related to 12% non-convertible debentures payable
|
7
|
(6,788)
|
|
-
|
|
|
(713,368)
|
|
(1,129,387)
|
|
Changes in items of working capital
|
|
|
|
|
|
Accounts receivable
|
|
(1,597)
|
|
9,770
|
|
Transaction credits
|
|
(2,329,672)
|
|
(1,585,605)
|
|
Prepaid expenses and sundry assets
|
|
40,173
|
|
2,086
|
|
Accounts payable and accrued liabilities excluding current
portion of accrued and unpaid interest on 9% non-convertible
debentures payable and 12% non-convertible debentures payable
|
|
344,576
|
|
94,756
|
|
|
(1,946,520)
|
|
(1,478,993)
|
|
Net cash (used) - operating activities
|
|
$ (2,659,888)
|
|
$ (2,608,380)
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
Gross proceeds - 9% non-convertibles debentures payable
|
6
|
$ 600,000
|
|
$ 1,150,000
|
|
Transaction costs - 9% non-convertible debentures payable
|
6
|
(20,710)
|
|
(85,616)
|
|
Gross proceeds - 12% non-convertibles debentures payable
|
7
|
400,000
|
|
-
|
|
Transaction costs - 12% non-convertible debentures payable
|
7
|
(31,815)
|
|
-
|
|
Payment for lease
|
|
(12,945)
|
|
(77,671)
|
|
Proceeds of loan payable
|
5
|
10,235,989
|
|
8,868,861
|
|
(Repayment) of loan payable
|
(8,263,388)
|
|
(7,236,615)
|
|
Net cash generated - financing activities
|
|
$ 2,907,131
|
|
$ 2,618,959
|
|
|
|
|
|
|
Increase in cash during the year
|
|
$ 247,242
|
|
$ 10,579
|
|
Cash at beginning of the year
|
|
93,185
|
|
82,606
|
|
Cash at end of the year
|
|
$ 340,427
|
|
$ 93,185
|
|
|
|
|
|
|
Additional information
|
|
|
|
|
|
Interest paid
|
|
$ 611,010
|
|
$ 476,961
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements
|
|
|
|
|
SOURCE Advantex Marketing International Inc.
View original content: http://www.newswire.ca/en/releases/archive/October2023/30/c6886.html