Advantex Announces Fiscal 2024 Second Quarter Results
Continuing significant improvements in operational financial metrics
- Core activity – Merchant Cash Advance program – Revenues increased 105.1% to
$581,756 in second quarter and 69.9% to$1,107,445 in YTD second quarter. - Total Revenues increased 97.5% to
$863,982 in second quarter and 57.7% to$1,612,160 in YTD second quarter. - Gross Profit increased 96.1% to
$671,301 in second quarter and 66.5% to$1,259,088 in YTD second quarter. - Flat SG&A.
$455,029 vs.$441,920 in second quarter and$866,311 vs.$861,052 in YTD second quarter. - Earnings from operations before depreciation, amortization and interest
$216,272 in second quarter and$392,777 in YTD second quarter. Significant turnaround of$315,848 in second quarter and$497,824 in YTD second quarter from loss positions in the corresponding periods in the previous year. - Decrease in Loss from operations before non-cash expenses. Reduction of
$151,043 to$258,564 in second quarter and$183,442 to$545,713 in YTD second quarter.
Post pandemic improvements in operational financial metrics which were gradual until fiscal year ended
Advantex carries a higher debt load to support re-build of its business and for general corporate purposes, and this is a reason for increase in interest costs in the second quarter and YTD second quarter vs. corresponding periods in the previous year. This debt consists of fixed coupon non-convertible debentures which provide general working capital and a line of credit which carries a floating interest rate - a base rate plus prime rate - and which is used exclusively for growth of the core activity. The increase in prime rates during 2023 was the factor that hurt the financial performance for July-
The above improvement in Loss from operations before non-cash expenses is masked by increase in non-cash expenses. Increase in non-cash expenses is primarily on account of accretion charges which reflect outcome of prescribed accounting connected to the non-convertible debentures.
Highlights are provided in the tabulation in this news release comparing three and six months ended
|
|
3 months ended |
6 ended |
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|
|
23 |
22 |
Inc./(Dec) |
23 |
22 |
Inc./(Dec) |
|
` |
$ |
$ |
$ |
$ |
$ |
$ |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
Merchant Cash Advance ("MCA") program |
$ 581,756 |
$ 283,655 |
$ 298,101 |
$ 1,107,445 |
$ 651,915 |
$ 455,530 |
|
Reseller-Aeroplan program-Loyalty marketing |
$ 282,226 |
$ 153,896 |
$ 128,330 |
$ 504,715 |
$ 370,473 |
$ 134,242 |
|
|
$ 863,982 |
$ 437,551 |
$ 426,431 |
$ 1,612,160 |
$ 1,022,388 |
$ 589,772 |
|
|
|
|
|
|
|
|
|
Gross profit |
$ 671,301 |
$ 342,344 |
$ 328,957 |
$ 1,259,088 |
$ 756,005 |
$ 503,083 |
|
|
|
|
|
|
|
|
|
Selling and General & administrative expenses |
$ 455,029 |
$ 441,920 |
$ 13,109 |
$ 866,311 |
$ 861,052 |
$ 5,259 |
|
|
|
|
|
|
|
|
|
Earnings/(Loss) from operations before depreciation, amortization and interest |
$ 216,272 |
$ (99,576) |
$ 315,848 |
$ 392,777 |
$ (105,047) |
$ 497,824 |
|
|
|
|
|
|
|
|
|
Stated interest expense - loan payable (utilized exclusively to support 90% of |
$ 237,570 |
$ 107,889 |
$ 129,681 |
$ 463,958 |
$ 219,823 |
$ 244,135 |
|
Stated interest expense - 9% non-convertible debentures payable, and 12% non-convertible |
$ 237,266 |
$ 202,142 |
$ 35,124 |
$ 474,532 |
$ 404,285 |
$ 70,247 |
|
|
|
|
|
|
|
|
|
(Loss) from operations before non-cash expenses |
$ (258,564) |
$ (409,607) |
$ (151,043) |
$ (545,713) |
$ (729,155) |
$ (183,442) |
|
|
|
|
|
|
|
|
|
Non-cash interest expense - 1) accretion charges and restructuring bonus |
$ 270,212 |
$ 217,924 |
$ 52,288 |
$ 533,020 |
$ 429,780 |
$ 103,240 |
|
|
|
|
|
|
|
|
|
Net (loss) and comprehensive (loss) |
$ (528,776) |
$ (627,531) |
$ (98,755) |
$ (1,078,733) |
$ (1,158,935) |
$ (80,202) |
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 interim consolidated financial statements for three and six months ended
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.sedarplus.com
Consolidated Statements of Financial Position (unaudited)
(expressed in Canadian dollars)
|
|
Note |
|
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|
|
$ |
|
$ |
|
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash |
|
$ 155,598 |
|
$ 340,427 |
|
Accounts receivable |
|
66,631 |
|
84,917 |
|
Transaction credits |
5 |
5,645,935 |
|
5,641,940 |
|
Prepaid expenses and sundry assets |
|
1,416 |
|
1,416 |
|
|
|
$ 5,869,580 |
|
$ 6,068,700 |
|
|
|
|
|
|
|
Total assets |
|
$ 5,869,580 |
|
$ 6,068,700 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Loan payable |
6 |
$ 5,869,038 |
|
$ 5,992,287 |
|
Loan |
16 |
60,000 |
|
60,000 |
|
Accounts payable and accrued liabilities |
|
3,605,951 |
|
3,590,699 |
|
|
|
$ 9,534,989 |
|
$ 9,642,986 |
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
9% non-convertible debentures payable |
7 |
$ 9,749,158 |
|
$ 8,765,806 |
|
12% non-convertible debentures payable |
8 |
300,696 |
|
278,136 |
|
Deferred fair value adjustment on 12% non-convertible debentures payable |
|
73,691 |
|
91,993 |
|
|
|
$ 10,123,545 |
|
$ 9,135,935 |
|
|
|
|
|
|
|
Total liabilities |
|
$ 19,658,534 |
|
$ 18,778,921 |
|
|
|
|
|
|
|
Shareholders' deficiency |
|
|
|
|
|
Share capital |
9 |
$ 24,530,555 |
|
$ 24,530,555 |
|
Contributed surplus |
|
7,901,617 |
|
7,901,617 |
|
Accumulated other comprehensive loss |
|
(47,383) |
|
(47,383) |
|
Deficit |
|
(46,173,744) |
|
(45,095,010) |
|
Total deficiency |
|
$ (13,788,955) |
|
$ (12,710,221) |
|
|
|
|
|
|
|
Total liabilities and deficiency |
|
$ 5,869,580 |
|
$ 6,068,700 |
|
|
|
|
|
|
|
Going concern (note 2) and Commitments and contingencies (note 12) |
|
|
|
|
|
|
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|
The accompanying notes are an integral part of these consolidated financial statements |
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Approved by the Board |
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Director: Signed "Marc Lavine" |
|
Director: Signed "Kelly Ambrose" |
||
|
Marc Lavine |
|
Kelly Ambrose |
||
Consolidated Statements of Loss and Comprehensive Loss (unaudited)
For the three and six months ended
(expressed in Canadian dollars)
|
|
|
3 months ended |
|
6 months ended |
||||
|
|
Note |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
15 |
|
|
|
|
|
|
|
|
Marketing activities |
|
$ 282,226 |
|
$ 153,896 |
|
$ 504,715 |
|
$ 370,473 |
|
Interest income |
|
581,756 |
|
283,655 |
|
1,107,445 |
|
651,915 |
|
|
|
$ 863,982 |
|
$ 437,551 |
|
$ 1,612,160 |
|
$ 1,022,388 |
|
Direct expenses |
14/15 |
192,681 |
|
95,207 |
|
353,072 |
|
266,383 |
|
|
|
671,301 |
|
342,344 |
|
1,259,088 |
|
756,005 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
Selling and marketing |
14/15 |
151,731 |
|
140,389 |
|
289,907 |
|
275,136 |
|
General and administrative |
14/15 |
303,298 |
|
301,531 |
|
576,404 |
|
585,916 |
|
Earnings/(Loss) from operations before depreciation, |
|
216,272 |
|
(99,576) |
|
392,777 |
|
(105,047) |
|
|
|
|
|
|
|
|
|
|
|
Stated interest expense |
|
|
|
|
|
|
|
|
|
Loan payable |
6 |
237,570 |
|
107,889 |
|
463,958 |
|
219,823 |
|
9% non-convertible debentures payable |
7 |
225,266 |
|
202,142 |
|
450,532 |
|
404,285 |
|
12% non-convertible debentures payable |
8 |
12,000 |
|
- |
|
24,000 |
|
- |
|
Interest - Lease |
|
- |
|
- |
|
- |
|
180 |
|
Non-cash interest expense - accretion charges, restructuring |
7 |
268,084 |
|
217,924 |
|
528,763 |
|
429,600 |
|
Non-cash interest expense - amortization of transaction costs related to 12% |
8 |
2,128 |
|
- |
|
4,257 |
|
- |
|
Non-cash interest expense - accretion charges related to 12% |
8 |
9,283 |
|
- |
|
18,302 |
|
- |
|
Non-cash interest expense - accretion of deferred gain |
8 |
(9,283) |
|
- |
|
(18,302) |
|
- |
|
Net (loss) and comprehensive (loss) |
|
$ (528,776) |
|
$ (627,531) |
|
$ (1,078,733) |
|
$ (1,158,935) |
|
|
|
|
|
|
|
|
|
|
|
(Loss) per share |
|
|
|
|
|
|
|
|
|
Basic and Diluted |
|
$ (0.00) |
|
$ (0.00) |
|
$ (0.00) |
|
$ (0.00) |
|
|
|
|
|
|
|
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|
|
The accompanying notes are an integral part of these consolidated financial statements |
|
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Consolidated Statements of Changes in Shareholders' Deficiency (unaudited)
For the three and six months ended
(expressed in Canadian dollars)
|
|
Class A |
|
Common |
|
Contributed |
|
Accumulated |
|
Deficit |
|
Total |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at |
$ 3,815 |
|
$ 24,526,740 |
|
$ 7,742,802 |
|
$ (47,383) |
|
$ (42,567,857) |
|
$ (10,341,883) |
|
Net (loss) and comprehensive (loss) |
- |
|
- |
|
- |
|
- |
|
(1,158,935) |
|
(1,158,935) |
|
Balance at |
$ 3,815 |
|
$ 24,526,740 |
|
$ 7,742,802 |
|
$ (47,383) |
|
$ (43,726,792) |
|
$ (11,500,818) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at |
$ 3,815 |
|
$ 24,526,740 |
|
$ 7,901,617 |
|
$ (47,383) |
|
$ (45,095,010) |
|
$ (12,710,221) |
|
Net (loss) and comprehensive (loss) |
- |
|
- |
|
- |
|
- |
|
(1,078,733) |
|
(1,078,733) |
|
Balance at |
$ 3,815 |
|
$ 24,526,740 |
|
$ 7,901,617 |
|
$ (47,383) |
|
$ (46,173,744) |
|
$ (13,788,955) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements |
|
|
|
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Consolidated Statements of Cash Flow (unaudited)
For the three and six months ended
(expressed in Canadian dollars)
|
|
Note |
2023 |
|
2022 |
|
|
|
$ |
|
$ |
|
Operational activities |
|
|
|
|
|
Net (loss) for the period |
|
$ (1,078,733) |
|
$ (1,158,935) |
|
Adjustments for: |
|
|
|
|
|
Accrued and unpaid 9% non-convertible debentures payable |
7 |
450,532 |
|
404,285 |
|
Accrued and unpaid 12% non-convertible debentures |
8 |
24,000 |
|
- |
|
Interest - Lease |
|
- |
|
180 |
|
Accretion charge - 9% non-convertible debentures payable |
7 |
458,678 |
|
380,968 |
|
Restructuring bonus - 9% non-convertible debentures payable |
7 |
56,608 |
|
38,608 |
|
Amortization of transaction costs - 9% non-convertible |
7 |
13,477 |
|
10,024 |
|
Amortization of transaction costs - 12% non-convertible |
8 |
4,257 |
|
- |
|
Non-cash interest expense - accretion charges related to 12% |
8 |
18,302 |
|
- |
|
Non-cash interest expense - accretion of deferred gain |
8 |
(18,302) |
|
- |
|
|
|
(71,181) |
|
(324,870) |
|
|
|
|
|
|
|
Changes in items of working capital |
|
|
|
|
|
Accounts receivable |
|
18,286 |
|
(12,576) |
|
Transaction credits |
|
(3,995) |
|
1,532,891 |
|
Prepaid expenses and sundry assets |
|
- |
|
40,172 |
|
Accounts payable and accrued liabilities excluding current |
|
18,192 |
|
244,386 |
|
|
|
32,483 |
|
1,804,873 |
|
Net cash generated/(used) - operating activities |
|
$ (38,698) |
|
$ 1,480,003 |
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Payment for lease |
|
- |
|
(12,948) |
|
Payment of interest - 12% non-convertible debentures payable |
|
(22,882) |
|
- |
|
Proceeds of loan payable |
6 |
6,322,140 |
|
2,320,821 |
|
(Repayment) of loan payable |
6 |
(6,445,389) |
|
(3,845,998) |
|
Net cash generated/(used) - financing activities |
|
$ (146,131) |
|
$ (1,538,125) |
|
|
|
|
|
|
|
Increase/(Decrease) in cash during the period |
|
$ (184,829) |
|
$ (58,122) |
|
Cash at beginning of the period |
|
340,427 |
|
93,185 |
|
Cash at end of the period |
|
$ 155,598 |
|
$ 35,063 |
|
|
|
|
|
|
|
Additional information |
|
|
|
|
|
Interest paid |
|
$ 486,840 |
|
219,823 |
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements |
|
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SOURCE
