ADVANTEX Completes $2 Million Private Placement Financing of Units to Grow Advance Purchase Marketing Program
12/24/2007 12:00:00 AM

NEWS RELEASE

 

Advantex Completes $2 Million Private Placement Financing of Units

to Grow Advance Purchase Marketing Program

 

·         Deal is Advantex’s second financing this month to support growth of popular program

·         Expects shortly to close additional placement of Units to private investors

 

 

Toronto, December 24, 2007 - Advantex Marketing International Inc. (TSX: ADX), a leading specialist in merchant funding and loyalty marketing programs, today announced that it has completed the private placement of $2 million of Units comprising $1,000 face value secured non-convertible debentures and 1,975 common share purchase warrants. 

 

Each warrant will be exercisable to acquire one common share of Advantex Marketing at $0.06 per share during the three-year term of the debentures.  The debentures will yield 14.0 percent annually, payable quarterly.  The Units were purchased by a Toronto-based portfolio management firm and private investors.  Advantex said that it expects shortly to close in January the sale to private investors of additional Units for between $0.1 million and $0.7 million.

 

The agreement is the second financing arrangement to fund the growth of its popular Advance Purchase Marketing program that Advantex recently has announced.  On December 18, 2007, the company announced a three-year agreement with Montcap Financial Corporation under which Advantex will be able to draw on at least $1.5 million for immediate deployment as cash advances to merchants participating in the Advance Purchase Marketing Program.  Advantex also said that it will have access to up to an additional $3.5 million as it expands the program by offering participation to retailers across Canada.  Advantex estimates that there are about 100,000 retailers in Canada that would qualify for the program. 

 

Advantex is the originator and leader of Advance Purchase Marketing in Canada.  Under its Advance Purchase Marketing Program, operated with the Visa division of CIBC, Advantex purchases transaction credits from merchants on behalf of Advantex’s customers (premium CIBC Visa cardholders).  Merchants are thus able to obtain cash in advance for working capital based on future sales.  As cardholders make purchases at participating merchants, Advantex collects the funds from the transactions and the merchant’s transaction credit balance declines. 

 

“Our ability to proceed with this private placement is indicative that investors recognize the great, but still largely untapped, growth potential for our Advance Purchase Marketing program,” said Kelly E. Ambrose, President and Chief Executive Officer.  “This is another positive step forward for Advantex and the execution of our growth strategies to create value for our shareholders.  It also will be good news for a broad range of merchants across Canada to whom we will now be able to offer participation in this advance cash program.”

 

About Advantex Marketing International Inc.

 

Advantex is a specialist in the marketing services industry, managing white-labeled rewards accelerator programs for major affinity groups through which their members earn bonus frequent flyer miles and/or other rewards on purchases at participating merchants.  Under the umbrella of each program, Advantex provides merchants with marketing, customer incentives, and secured future sales through its Advance Purchase Marketing model.  Advantex partners include more than 700 restaurants, online retailers, golf courses, small inns and resorts, and major organizations, including CIBC, United Airlines, Delta Airlines, Alaska Airlines, and Lufthansa Airlines.  Advantex is traded on the Toronto Stock Exchange under the symbol "ADX". For additional information on Advantex, please visit www.advantex.com.

 

This news release contains certain "forward-looking statements".  All statements, other than statements of historical fact, that address activities, events or developments that Advantex Marketing International Inc. (“the Company”) believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding financial and business prospects and financial outlook), including, with limitation, with respect to the expansion of the Company’s Advance Purchase Marketing Program to retailers across Canada, are forward-looking statements.  These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company.  Forward-looking statements are subject to a number of risks, uncertainties and assumptions that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company.  Factors that could cause actual results or events to differ materially from current expectations include, among other things, changes in general economic and market conditions, changes to regulations affecting the Company's activities, uncertainties relating to the availability and costs of financing needed in the future, and delays in finalizing the retail contract with CIBC.  Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise.  Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.

 

For further information:

Mukesh Sabharwal

Vice-President, Finance

Tel: (416) 481-5657, ext. 249

E-mail: Mukesh.sabharwal@advantex.com