Axis Announces Closing of Private Placement with Westlake Financial Services and Nowcom Corporation
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MISSISSAUGA, ON, Sept. 13, 2019 /CNW/ - Axis Auto Finance Inc. ("Axis" or the "Company") (TSXV: AXIS) is pleased to announce it has completed its previously announced private placement financing of convertible unsecured subordinated debentures ("Debentures") with Westlake Financial Services ("Westlake") and Nowcom Corporation ("Nowcom"). Pursuant to the financing, Axis issued an aggregate of US$2,000,000 (C$2,640,000) principal amount of Debentures, with an additional US$3,000,000 available for future draw at Axis' option on an as-needed basis. In connection with the issuance of the Debentures the Company also issued an aggregate of 5,866,666 common share purchase warrants ("Warrants"), which only become exercisable following an Exercise Notice, as defined herein. The Company will use the net proceeds from the issuance of Debentures for working capital purposes.
The Debentures have a maturity date of June 30, 2023 (the "Maturity Date") and carry an interest rate of 7.5% per annum. Each Debenture will be convertible at the option of the holder at any time prior to the Maturity Date, or if called for redemption, the last Business Day preceding the date specified by the Company for redemption, at a conversion price of $0.45 per share (the "Conversion Price"). The Debentures may be redeemed by the Company on and after June 30, 2022 and prior to the Maturity Date at a price equal to the outstanding principal amount and accrued and unpaid interest provided that the volume weighted average trading price of the Company's common shares for the 20 consecutive trading days preceding the date on which the notice of redemption is given is not less than $0.5625. In certain circumstances, if the Company intends to issue additional debt that ranks equal or senior to the Debentures where the Company's total net debt (being total debt less cash and cash reserves) as a percentage of gross finance receivables exceeds 95% as a result of such further issuance of debt (the "95% Condition") it must first provide the holders of Debentures with prior written notice of such issuance and request their approval for such issuance. In the event the holders of the Debentures do not provide such approval and the Company proceeds with such issuance and the Company remains in breach of the 95% Condition 60 days following such issuance, it is required to provide notice thereof to the holders of the Debentures and the holders of the Debentures shall have 10 business days to provide a written notice to the Company (the "Exercise Notice") that the holder will require that the Company repay the outstanding Debentures and accrued and unpaid interest thereon in cash. Each Warrant entitles the holder to purchase one common share in the capital of the Company (a "Warrant Share") at a price $0.45, at any time and from time to time following the delivery of an Exercise Notice up to 5:00 p.m. (Toronto time) on the Maturity Date. The Warrants will expire in the event that the Debentures are converted in accordance with their terms. The number of Warrants that will expire will be proportional to the principal amount of Debentures converted out of the total number of Debentures issued. Further details regarding the terms of the Debentures will be available under the Company's profile on www.sedar.com.
INFOR Financial Inc. acted as the exclusive financial advisor to Axis in connection with the private placement and in such capacity received a 4.5% cash fee and 234,666 compensation warrants ("Compensation Warrants"). Each Compensation Warrant entitles the holder to acquire one common share of the Company at any time on or before September 13, 2021 at an exercise price of $0.45.
About Westlake Technology Holdings
Westlake Technology Holdings is an auto and finance technology company headquartered in Los Angeles, CA with approximately US$9.8 billion in assets under management. Westlake Financial Services originates indirect automotive retail installment contracts through a nationwide network of new and used automotive and powersports dealers. Westlake also offers loan portfolio purchasing, credit facilities and portfolio servicing through their ALPS division (Advanced Lending & Portfolio Services); www.WestlakeALPS.com. Floor plan lines of credit are provided through their Westlake Flooring Services division, www.WestlakeFlooringServices.com, shared cash flow auto lending through Westlake's wholly owned subsidiary, Western Funding Inc., a Nevada based auto lender, and indirect automotive leasing for credit unions through Westlake subsidiary, Credit Union Leasing of America (CULA). Dealer leads and direct-to-consumer auto loans are offered through Westlake Direct. Consumer title loans are offered through Westlake's wholly owned subsidiary Loan Center, www.loancenter.com.
About Nowcom
Nowcom Corporation is a technology company developing technology solutions for the automotive and financial services verticals. Nowcom is one of seven companies within The Hankey Group (US$10 billion in assets) and based in Los Angeles, CA. Nowcom not only provides technology for all the Hankey group of companies including Westlake but also provides industry leading software to auto dealerships through its flagship product DealerCenter (Dealer Management System) and patented IMaxx technology. Nowcom also developed first-of-its-kind, fully automated finance decision websites like Carzing.com and powers up dealers' websites in the country with the same finance engine like BuyMcar.com. Nowcom has vast experience and the right resources to bring products from ideation to market quickly and efficiently.
About Axis Auto Finance
Axis Auto Finance is a leading Canadian provider of alternative used vehicle financing options servicing roughly 30% of Canadians (Source: Equifax) that have credit scores in the non-prime range. 100% of all Axis auto loans report to the credit bureau, resulting in a significant improvement of the credit scores for the overwhelming majority of clients. These clients use Axis as a stepping stone in their credit rebuilding journey and we are proud to be improving the lives of these Canadians. Supported by state-of-the-art, in-house developed risk analytics, Axis continues to be Canada's fastest-growing publicly traded auto-financing company. Further information on the Company can be found at investors.axisautofinance.ca.
Forward-Looking Statements
This news release includes forward-looking information and statements, which may include, but are not limited to, information and statements regarding or inferring the future business, operations, financial performance, prospects, and other plans, intentions, expectations, estimates, and beliefs of the Company. Information and statements which are not purely historical fact are forward-looking statements. The forward-looking statements in this press release relate to comments that include, but are not limited to, the use of proceeds from the financing and the completion of future financings. Forward-looking information and statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking information and statements herein. Although the Company believes that any forward-looking information and statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such information and statements, there can be no assurance that any such forward-looking information and statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking information and statements. Any forward-looking information and statements herein are made as of the date hereof, and except as required by applicable laws, the Company assumes no obligation and disclaims any intention to update or revise any forward-looking information and statements herein or to update the reasons that actual events or results could or do differ from those projected in any forward-looking information and statements herein, whether as a result of new information, future events or results, or otherwise, except as required by applicable laws.
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Axis Auto Finance Inc.
Axis Auto Finance Inc., Ilja Troitschanski, President (416) 633-5626, [email protected]
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