TORONTO, ON -- (Marketwired) -- 12/01/15 -- First Global Data Limited (TSX VENTURE: FGD) ("First Global" or the "Company") is pleased to announce that it has restructured its debt, has secured various financings and has released its Q3, 2015 financials.
The debt restructuring undertaken by the Company has the net effect of significantly reducing its debt obligations, reducing debt servicing, and significantly improving cash flows. The capital injections have provided the company with working capital while it continues to focus on implementing business deals and to source additional financing.
On February 11, 2013, the Company issued an aggregate of CDN$4 million of Series "A" 10% senior secured debentures to an institutional investor, which matured on February 7, 2015. On July 30, 2013, the Company issued an aggregate of CDN$4 million of Series "B" 10% senior secured debentures to the same institutional investor which matured on July 30, 2015. Both debentures bore interest at 10% per annum, payable quarterly, and the institutional investor held a first position general security agreement ("GSA") secured against all of the assets of the Company. Repayment of both debentures was renegotiated where the Company agreed to pay the debenture holder an aggregate amount of CDN$2,500,000 in full and final settlement of all amounts owing under the debentures. The Company paid CDN$250,000 as an initial payment on June 22, 2015. The balance of the settlement amount was to be paid to the debenture holders on or before September 30, 2015.
The Company successfully negotiated the purchase of the Series A and B debentures by 7159618 Manitoba Ltd. ("715Manitoba"), an arm's length party to the Company, including the principal amount, all accrued and unpaid interest, a total of CDN$8,517,795, and associated GSA . Settlement of both debentures occurred on October 2, 2015.
On May 12, 2015 the Company entered into an agreement with a lender for bridge financing for CDN$812,000 (the "Short Term Loan"). The Short Term Loan bore interest of 3% per month for a period of three months ending August 12, 2015. The lender was provided a second ranking general security agreement on all present and future property of the Company. The Company's C.E.O., C.F.O. and a third party provided their personal guarantees to secure this bridge financing.
On October 15, 2015 715Manitoba also purchased the Short Term Loan and all accrued and unpaid interest and fees, a total of balance of CDN$756,944 and the associated second ranking general security agreement.
On November 15, 2015 the Company entered into an agreement with 715Manitoba for the settlement of the Series A and B debentures and Short Term Loan (collectively, (the "Loans"), an aggregate amount of approximately $8.8M in value (the "Settlement Agreement"). The Settlement Agreement replaces the Loans with a new loan agreement (the "New Loan Agreement"). The New Loan Agreement is for a 3 year term, will accrue interest at a rate of 10% per annum, and interest will be payable only on an event of default. The cash amount payable is $2,100,000 (the "Cash Amount"). This Cash Amount may be repaid at any time in the 3 year term. The Company shall issue approximately $2.23 million in common shares of the Company for each year the debt is unpaid. The first 44,600,000 common shares, representing the first year debt repayment of $2.23 million, will be issued a deemed price of $0.05 per share (the "First Year Shares").
The Company will also issue an additional 44,600,000 common shares, at a deemed price of $0.05 per share, for the payment of approximately $2.23 million, representing the second year debt payment (the "Second Year Shares"). In the event that the Company pays the Cash Amount before the first anniversary date of the Settlement Agreement, the Second Year Shares are to be returned to the Company for cancelation. Should repayment of the Cash Amount occur after the first anniversary date of the Settlement Agreement but before the second anniversary of the Settlement Agreement, the equivalent amount of Second Year Shares, calculated on a pro rata basis, shall be returned to the Company for cancelation. Additional detail is contained in the Company's Q3, 2015 Financial Statements and MD&A.
As the First Year Shares will result in the creation of a control person, as such term is defined by the TSX Venture Exchange; the Company will seek shareholder approval for the issuance of the First Year Shares.
The First Year Shares and Second Year Shares and any subsequent share issuances (collectively the "Share Debts") will be placed into escrow until such time that the Cash Amount has been paid. In the event that the Cash Amount has not been paid by the maturity date or an event of default occurs, the Share Debts will be returned to the Company for cancelation and the amount of debt canceled through the issuance of the Debt Shares will be added back onto the loan.
The net effect of this financing is that where First Global would have been obligated to repay a principal cash amount of approximately $9,274,739, it is now obligated to repay a principal cash amount of $2,100,000 and the Company is no longer subject to interest payments for the previous $9,274,739 or new $2,100,000 cash amounts. This significantly improves the Company's debt obligations and cash flows.
In addition to the above, First Global is also pleased to announce the completion of the following financings, debt conversions and other transactions:
- On January 30, 2015, the Company negotiated a debt conversion agreement (the "Debt Agreement") with two debt holders (the "Creditors"). The Company has agreed to issue an aggregate of 937,500 common shares (the "Debt Shares") to the Creditor in exchange for the cancellation of debt owning to the Creditor. The Debt Shares were issued at a deemed price of $0.08 per common share.
- On February 9, 2015 the Company issued 10% convertible debentures (the "Debentures") in the aggregate principal amount of CDN$400,000 on a non-brokered private placement basis to an arm's length party. The Debentures bear interest at 10% per annum, such interest to be accrued until maturity. The Debenture matures on February 8, 2017 and is convertible, at the option of the holder, at a price of CDN$0.12 per share at any time. The debentures are unsecured and carries an equity component of CDN$61,111. No finder's fee was paid for this transaction.
- On March 13, 2015 the Company negotiated a debt conversion agreement (the "Debt Agreement") with a director of the Company (the "Creditor"). The Company has agreed to issue an aggregate of 127,505 common shares (the "Debt Shares") to the Creditor in exchange for the cancellation of debt owning to the Creditor. The Debt Shares were issued at a deemed price of $0.095 per common share.
- On March 25, 2015 the Company completed the conversion of three (3) promissory notes, which matured on December 27, 2014, in aggregate amount of CDN$500,000 into three convertible debentures (the "Debt Debentures"). The Debt Debentures bear interest at a rate of 10% per annum, such interest to be paid on a quarterly basis. The term of the Debt Debentures is 24 months from the date of issuance and are convertible, at the option of the holder, at a price of CDN$0.12 per share at any time on or before maturity date.
- On April 8, 2015 the Company issued an aggregate of CDN$570,000 of Series "E" 10% Convertible Debenture (the "Debentures"). The Debentures bear interest at 10% per annum, such interest to be payable on a semiannual basis. The Debentures have a maturity date of April 8, 2018. The Debenture is convertible, at the option of the holder, at a price of $0.15 per share after the expiration of the statutory four (4) month hold period. In addition, the Debentures are automatically convertible into common shares of the Company in the event that the common shares of the Company closes at or above $0.40 per share on the TSX Venture Exchange for a period of five (5) consecutive days. An aggregate of 760,000 warrants (the "Warrants") were issued in conjunction with the issuance of the Debentures. Each Warrant entitles the holder thereof to acquire one (1) common share in the capital of the Company at an exercise price of $0.20 at a time until October 8, 2016. The Company also paid a finder's fee of $45,600 to an arm's length third party. In addition to the finder's fee, the Company issued an aggregate of 304,000 broker warrants (the "Broker Warrants") to the arm's length third party. Each Broker Warrant entitles the holder thereof to acquire one (1) common share in the capital of the Company at an exercise price of $0.15 at any time until April 8, 2018.
- On June 12, 2015 the Company completed a private placement of units of stock with investors for CDN$529,400 at an issue price of CDN$0.12 per Unit. Under the terms of the placement each Unit comprise one (1) common share and one (1) share purchase warrant. Each whole warrant entitles the holder to acquire one common share in the capital of the Company at an exercise price of CDN$0.25 per share for a period of twenty four (24) months from the date of issuance. The net proceeds of the offering will be used for general working capital and float.
- On July 9, 2015, the holders of the Debentures agreed to cancel the Series "E" 10% Convertible Debentures and the Debenture Warrants in exchange for the issuance of an aggregate of 4,750,000 units (the "Debt Units") of the Company at a deemed price of $0.12 per Debt Unit. Each Debt Unit will consist of one (1) common share and one (1) common share purchase warrant ("Debt Warrant"). Each Debt Warrant will entitle the holder to purchase one common share at a price of $0.25 for a period of two (2) years from date of issuance.
- On August 19, 2015 the Company issued 14% debentures (the "Debentures") in the aggregate principal amount of CDN$1,452,687 on a non-brokered private placement basis. First Global through its agreement with a Latin American based entity was able to secure the funds through their investors. The Company loaned CDN$550,000 to the Latin America company, this debenture are secured by a charge on the assets of the Latin American company and its affiliates. The Debentures bear interest at 14% per annum, such interest to be paid monthly until maturity. The Debenture matures on August 18, 2018.
- On September 30, 2015 Finsec Financial Services Inc. agreed to capitalise all outstanding interest payable and carry a conversion feature for both loans which will bring the new convertible debt to US$1,700,000 and CDN$500,000. The convertible debt were extended by two year expiring on August 31, 2017 at interest rate of 12% per annum payable monthly and to be converted at CDN$0.05 per share. Also, if the debt is not repaid at the end of the Term FINSEC has the right to convert to equity, also if interest payments are not made then FINSEC has the right to accelerate the conversion feature. As at September 30, 2015 the convertible debt has a balance of US$1,700,000 and CDN$500,000.
The reader is encouraged to review the Company's Q3, 2015 Financial Statements and MD&A for additional detail.
About First Global
First Global is an international financial services technology company operating in the payments sector. First Global's services are designed primarily for the domestic and international unbanked and under banked markets. Its two main lines of business are mobile payments and international money transfers. First Global's leading edge technology core enables mobile and online: payments, money transfers, shopping and peer to peer services.
First Global enables its strategic partners and clients around the world with its leading edge financial services technology platform. The Company facilitates the movement of money domestically and internationally in full compliance with regulatory guidelines, maintain a strong focus on compliance.
Neither 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.
This press release contains forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. Actual results may differ materially from those currently anticipated. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements are detailed from time to time in the Corporation's periodic reports filed with the Ontario Securities Commission and other regulatory authorities. The Corporation has no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For further information, please contact:Andre ItwaruChief Executive Officer and PresidentTelephone: 416.504.3813Facsimile: 416.504.7092Email: Email contact
Source: First Global Data Limited
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