Advantex Announces Fiscal 2021 First Quarter Results

TORONTO, March 31, 2021 /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 the three months ended September 30, 2020.

Highlights of financial results for three months ended September 30, 2020 compared to three months ended September 30, 2019:

	September 2020		September 2019		Inc./(Dec)		Inc./(Dec)
	$		$		$		%
Revenues	$	311,772	$	799,043	$	(487,271)	-61.0%
Direct expenses
Cost of cardholder rewards and marketing in connection with merchant based loyalty program	$	61,717	$	97,764	$	(36,047)
Expense for provision against delinquent accounts	$	28,727	$	66,126	$	(37,399)
Gross profit	$	221,328	$	635,153	$	(413,825)	-65.2%
Selling and General & Administrative expenses	$	309,862	$	597,239	$	(287,377)
Earnings/(loss) from operations before depreciation, amortization and interest	$	(88,534)	$	37,914	$	(126,448)	-333.5%
Stated interest expense - loan payable, and debentures	$	246,841	$	401,197	$	(154,356)
(Loss) from operations before depreciation, amortization, non cash interest and non cash items	$	(335,375)	$	(363,283)	$	(27,908)	-7.7%
Interest - Lease	$	3,960	$	4,976	$	(1,016)
Interest expense - Accretion charges,  restructuring bonus and amortization of transaction costs related to non-convertible debentures payable	$	158,113	$	140,634	$	17,479
Depreciation of right of use asset	$	11,373	$	16,334	$	(4,961)
Depreciation of property, plant and equipment	$	-	$	8,760	$	(8,760)
Net (loss) and comprehensive (loss)	$	(508,821)	$	(533,987)	$	(25,166)	-4.7%
Fuller details available in the Consolidated Financial Statements and MD&A available under Advantex's profile on www.sedar.com

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 three months ended September 30, 2020.

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         

Advantex Marketing International Inc.
Consolidated Statements of Financial Position (unaudited)
(expressed in Canadian dollars)

	Note	At September 30, 2020		At June 30, 2020
		$		$
Assets
Current assets
Cash		$	56,799	$	166,601
Accounts receivable		113,572		118,901
Transaction credits	5	3,190,042		3,923,917
Prepaid expenses and sundry assets		52,687		58,781
		$	3,413,100	$	4,268,200
Non-current assets
Right of use asset	15	$	87,189	$	98,562
		$	87,189	$	98,562
Total assets		$	3,500,289	$	4,366,762
Liabilities
Current liabilities
Loan payable	6	$	3,661,636	$	4,369,006
Lease liability		66,240		64,452
Loan	16	40,000		40,000
Accounts payable and accrued liabilities		2,441,536		2,364,759
9% Non convertible debentures payable	7	6,899,975		6,611,576
		$	13,109,387	$	13,449,793
Non-current Liabilities
Lease liability	15	$	67,433	$	84,679
		$	67,433	$	84,679
Shareholders' deficiency
Share capital	8	$	24,530,555	$	24,530,555
Contributed surplus		4,117,170		4,117,170
Accumulated other comprehensive loss		(47,383)		(47,383)
Deficit		(38,276,873)		(37,768,052)
Total deficiency		$	(9,676,531)	$	(9,167,710)
Total liabilities and deficiency		$	3,500,289	$	4,366,762
Going concern (note 2), Commitments and contingencies (note 11)
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 (unaudited)
For the three months ended September 30, 2020 and 2019
(expressed in Canadian dollars)

	Note	2020		2019
		$		$
	18			Amended
Revenues	14
Marketing activities		$	112,958	179,583
Interest income		198,814		619,460
		$	311,772	$	799,043
Direct expenses	13/14	90,444		163,890
		221,328		635,153
Operating expenses
Selling and marketing	13/14	147,165		187,863
General and administrative	13/14	162,697		409,376
Earnings/(loss) from operations before depreciation, amortization and interest		(88,534)		37,914
Stated interest expense - loan payable, and debentures	6/7	246,841		401,197
Interest - Lease	15	3,960		4,976
Non-cash interest expense (accretion charges), restructuring bonus and amortization of transaction costs related to non-convertible debentures payable	7	158,113		140,634
Depreciation of right of use asset	15	11,373		16,334
Depreciation of property, plant and equipment		-		8,760
Net (loss) and comprehensive (loss)		$	(508,821)	$	(533,987)
(Loss) per share
Basic and Diluted	12	$	(0.00)	$	(0.00)
The accompanying notes are an integral part of these consolidated financial statements

Advantex Marketing International Inc.
Consolidated Statements of Changes in Shareholders' Deficiency (unaudited)
For the three months ended September 30, 2020 and 2019
(expressed in Canadian dollars)

	Class A preference shares		Common shares		Contributed surplus		Accumulated other comprehen - sive loss		Deficit		Total
	$		$		$		$		$		$
Balance - July 1, 2019	$	3,815	$	24,526,740	$	4,090,382	$	(47,383)	$	(34,840,656)	$	(6,267,102)
Reported at September 30, 2019 as adjustment to deficit on account of adoption of IFRS 16 Leases at July 1, 2019	-		-		-		-		(35,218)		(35,218)
Reported Net (loss) and comprehensive (loss)	-		-		-		-		(532,406)		(532,406)
Reported as balance at September 30, 2019	3,815		24,526,740		4,090,382		(47,383)		(35,408,280)		(6,834,726)
Adjustments on account of amendments made at year end June 30, 2020 to initial computations on adoption of IFRS 16 Leases at July 1, 2019
Reversal of adjustment made to deficit at July 1, 2019	-		-		-		-		35,218		35,218
Increase in Reported Net (loss) and comprehensive (loss)	-		-		-		-		(1,581)		(1,581)
Amended Balance - September 30, 2019	$	3,815	$	24,526,740	$	4,090,382	$	(47,383)	$	(35,374,643)	$	(6,801,089)
Balance - July 1, 2020	$	3,815	$	24,526,740	$	4,117,170	$	(47,383)	$	(37,768,052)	$	(9,167,710)
Net (loss) and comprehensive (loss)	-		-		-		-		(508,821)		(508,821)
Balance - September 30, 2020	$	3,815	$	24,526,740	$	4,117,170	$	(47,383)	$	(38,276,873)	$	(9,676,531)
The accompanying notes are an integral part of these consolidated financial statements

Advantex Marketing International Inc.
Consolidated Statements of Cash Flow (unaudited)
For the three months ended September 30, 2020 and 2019
(expressed in Canadian dollars)

	Note	2020		2019
		$		$
	18			Amended
Operational activities
Net (loss) for the period		$	(508,821)	$	(533,987)
Adjustments for:
Accrued and unpaid 9% debentures interest		130,286		126,106
Interest - Lease	15	3,960		4,976
Depreciation of right of use asset	15	11,373		16,334
Depreciation of property, plant and equipment		-		8,760
Loss on disposal of property, plant & equipment		-		45
Accretion charge - non-convertible debentures payable	7	86,488		78,053
Restructuring bonus - non-convertible debentures payable	7	66,928		62,581
Amortization of transaction costs - non-convertible debentures payable	7	4,697		-
		(205,089)		(237,132)
Changes in items of working capital
Accounts receivable		5,329		28,808
Transaction credits		733,875		1,424,048
Prepaid expenses and sundry assets		6,094		2,934
Accounts payable and accrued liabilities		76,777		(67,104)
		822,075		1,388,686
Net cash generated by operating activities		$	616,986	$	1,151,554
Financing activities
Payment for lease	15	$	(19,418)	$	(19,418)
(Decrease) of loan payable	6	(707,370)		(1,178,355)
Net cash (used in) financing activities		$	(726,788)	$	(1,197,773)
(Decrease) in cash during the period		$	(109,802)	$	(46,219)
Cash at beginning of the period		166,601		119,636
Cash at end of the period		$	56,799	$	73,417
Additional information
Interest paid		$	116,555	$	275,091
Cash		$	56,799	$	73,417
The accompanying notes are an integral part of these consolidated financial statements

SOURCE Advantex Marketing International Inc.

Mukesh Sabharwal, Vice-President and Chief Financial Officer, Tel: [phone], Email: [email protected]

Related Links

http://www.advantex.com