MOBI724 (MOS:CSE) at the vanguard of payments and coupon revolution
MOBI724 at the Vanguard of Payments and CouponRevolution
Original Posted by ProactiveInvestors
Card-linked technology is transformative for credit card points programs, the firm said
We all know that shopping isn’t what it used to be since the arrival of smartphones and e-commerce.
What you might not be aware of is that the payments, promotions and coupon landscape is also undergoing a seismic shift due to emerging technology.
At the vanguard of this revolution is rapidly growing fintech (financial technology) company MOBI724 Global Solutions Inc. (CSE:MOS), which provides consumer services that weren’t available as recently as two years ago and is participating in an expanding global market that this year has an estimated worth of $10 billion.
Specialising in card payments
The company specialises in card payments and its core business, explained Chief Executive Officer Marcel Vienneau, is its card-linked platform, which when combined with digital marketing represents a new ecosystem allowing banks, merchants and customers to transact more efficiently with each other.
Card-linked technology is transformative for credit card points programs, and in addition enables card users to receive a tailored stream of offers and promotions on their smart devices.
To give a sense of scale, the company’s website says there will be just over 1 billion mobile coupon users by 2019, up from just under 560 million this year.
MOBI724 also offers digital payments solutions.
“This type of technology simply didn’t exist two years ago,” said Vienneau. “We are selling our solutions primarily to card issuers or banks in different countries,” he adds, pointing out that the company has customers in Canada, Asia Pacific and Latin America. In the Canadian market alone it has 400 customers.
“Most banks, anywhere in the world, have points programs where they issue points when you spend with their cards. Most of these cards enable customers to redeem points and get a reward,” he said.
Reinventing the technology
Perhaps the most significant aspect of MOBI724’s technology is that it has reinvented a clumsy, 20-year-old cost and payment structure, and thereby helps banks to make more money from card transactions.
Vienneau offers some examples of how the system worked in the past and how MOBI724’s better approach makes a difference.
A credit card customer has been awarded 25,000 points for using his or her card and can therefore buy a product with a $250 gift card. The card-issuing bank bears the cost of producing a rewards catalogue and the shipping costs of any product bought.
Now, say that a customer goes to an actual store and wants to buy a gift for $400 and include the $250 gift card value as partial payment. The current system is disjointed and the balance can be made up from cash, or another credit card, which might not be linked to the points system. Obviously, the customer doesn’t get the benefit of gaining more points.
MOBI724 simplifies the process by bringing all the strands together. It links the credit card, which issued the points, with the gift card. A customer can make a payment with an app and it both acknowledges that the gift card has been used and applies the balance owing to the credit card that earns points.
Similarly, when someone is in a store MOBI724 can send a coupon based on location or the customer’s profile, then the coupon can be used moments later at the cash register. The system can also send offers directly to a smartphone at any time, regardless of whether the shopper happens to be at a store or not.
In the preceding case of the $400 purchase, the bank charges a percentage of the transaction value when the points are redeemed, and so does MOBI724. The bank also wins by avoiding the necessity of having to pay for catalogues and product shipping.
“This is a new way to transfer a cost structure into a revenue-driven model, and it is seamless for the user and the bank,” said Vienneau.
It also taps into the way people engage with their banks and financial institutions nowadays – namely, instead of going into branches and using ATMs, people are putting “plastic into phones” and want more personalised interaction.
“Banks are losing their branding abilities but this gives them more channel opportunities,” Vienneau explained.
MOBI724 has invested considerably in its “business intelligence” capabilities, which allow it to map out people’s past purchases, social media interests and other distinguishing characteristics so that it can target them with specific coupons and offers.
“We are not just throwing everything at them,” said Vienneau.
The digital marketing aspect of MOBI724’s technology should also be of interest to advertisers, he points out, as it reveals consumer spending habits and other tendencies.
To that end, the company has struck strategic alliances with several agencies to help further grow the business.
Sales projected to reach $2.75mln for 2016
And growing it certainly is. Two years ago,annual revenue at MOBI724 was just over $100,000, and last year came in at $450,000. For 2016, sales are projected to reach $2.75 million.
Vienneau, a tech entrepreneur who became Chief Executive Officer when the group listed on the Canadian Securities Exchange in February 2015, expects to double revenue in 2017, along with crossing the line into positive EBITDA territory around mid-year.
In the next 36 months, the aim is to have $50 million in annual revenue and an expanding sales pipeline.
Vienneau designed the card-linked technology himself, planning the concept on a single sheet of paper four years ago.
The digital coupon market is projected to be worth $50 billion in the next three years and he reckons MOBI724 is well positioned to win a meaningful piece of this.
The group already has a respected backer in the form of institutional investor Fidelity, which has been involved in four rounds of funding, the latest for a $1.5 million convertible debenture.
MOBI724 announced plans to raise $5 million in July, around half of which has already been obtained. The money will be used to drive growth, as the research and development phase is over and the various technology solutions are fully functional.
Significantly, MOBI724 owns all the intellectual property supporting its platform and has a patent pending.
Vienneau reckons that at a market cap of approximately $5 million, or around twice projected 2016 revenue, the share price offers good value to new investors. “The challenge for us is to go out there and tell our story,” he said. “In time, this should lead to the market understanding our huge potential.”
View Original – http://www.proactiveinvestors.com/companies/news/169469/mobi724-at-the-vanguard-of-payments-and-coupon-revolution-169469.html
- Published in Blog, Financial Technology, Mobi724 Global Solutions, Mobile Technology, Technology
MOBI724 Global Solutions (MOS:CSE) Closes $ 750,000 Private Placements
MOBI724 Global Solutions (CSE:MOS) Closes $ 750,000 Private Placements
– Momentum Public Relations –
Press Release: October 7, 2016
MOBI724 Global Solutions Inc. (“MOBI724” or the “Company”) (CSE:MOS)(CSE:MOS.CN), a Fintech leader offering all in one fully integrated EMV payment, card link couponing and digital marketing is pleased to announce that on October 5, 2016, it has successfully closed a first tranche equity private placement in the aggregate amount of $250,000.00 dollars by issuing 5,000,000 common shares (“Shares”) at $0.05. The private placement included a conversion of bona fide debt in the amount of $25,344.51. For each common share received, the subscribers were issued one common share purchase warrant at an exercise price of $0.15 exercisable on or before August 31st, 2018 after which they shall expire.
The Company has also closed a secured convertible debenture (“Convertible Debenture”) private placement in the amount of $500,000.00. The Convertible Debenture will (i) mature on March 30, 2018 (the “Maturity Date”), (ii) bear interest at a rate of 8 {92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} per annum, (iii) be convertible at the option of the holder into common shares of the Company (the “Shares”) on or prior to the expiry of the Term at a price of $0.15 (the “Conversion Price”) and (iv) be secured by the receivables of the Company limited to 20{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the gross revenues. Payments shall be effected every 6 months and shall be limited to 10{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the gross revenues collected and the holder shall have the option to be paid in cash or convert into Shares at the Conversion Price. The Company has the option to redeem the Convertible Debentures at any time prior to the expiry of the Term without penalty. Due to pari passu provisions in an existing and outstanding debenture recently issued to an institutional investor, the Company is also granting the same security in favour of the existing debenture holder.
The Shares and Convertible Debenture were sold pursuant to exemptions from prospectus requirements to purchasers in Canada and are subject to a hold period of four months and one day following the closing of the private placement. The Shares are listed on the Canadian Securities Exchange (CSE). The Company will use the net proceeds to support project deployments of the Company’s solution, for ongoing obligations and for working capital requirements. Since August 31, 2016, the Company has raised $ 2.25 million dollars and is currently working on closing another tranche of funding this month as previously announced.
The Company also announces that it recently ended its relationship with its current CFO-COO and that Mr. Michel David Pereira CPA CA will continue to execute the quarterly consolidated financials with internal accounting staff. The CEO, Marcel Vienneau stated that “we are currently concentrating our efforts in soliciting new team members.”
About Mobi724 Global Solutions
MOBI724 Global Solutions Inc. (CSE:MOS)(CSE:MOS.CN), a leader in the Fintech industry based in Montreal (Canada), offers a unique and fully integrated suite of Payment & Digital Marketing solutions.
We are innovating in our market with a combined EMV Payment, Card Linked Offers, and Digital Marketing platform that works on any card and any mobile device. We pioneered in adding intelligence to all types of transactions benefiting banks, retailers and cardholders. We succeed in leveraging all available user and purchasing data to increase transaction volumes and spend.
MOBI724 provides a turnkey solution to its clients to capture card transactions on any mobile device, at any point of sale or from any payment card. Our easy-to-adapt gateway Switch is designed for easy integration with all payment protocols in our target markets.
Within the same solution suite we combined our Card Linked Offers solution, and provided financial institutions´ payment card portfolios and retailers the ability to add offers and/or coupons which can be redeemed directly at the Point of Sale, in a seamless user experience for all the parties in the eco-system.
MOBI724 Global Solutions unleashes the true potential of both payment and card-linked couponing/rewards transactions for both online and offline points of sale (POS).
The Corporation provides its customers with full and comprehensive traceability and enriched consumer data through its offering. Its solutions enables card associations, retailers, manufacturers, offer providers, mobile operators and card issuers to create, manage, deliver and “track and measure” incentive campaigns worldwide to ANY mobile device and allow its redemption at ANY point of sales.
Our credit and debit EMV payment solutions will allow banks to process end to end EMV transactions, focusing on authentication, approved security and quick merchant adoption which allows the users to process payments with a wide range of devices over a secure and seamless transaction.
MOBI724’s PCI and EMV cloud-based switch, with their device agnostic connectivity, simplifies deployment and integration, and introduces new payment and digital incentives solutions to the market enabling multi layered intelligent transactions therefore SMART TRANSACTIONS.
For more information on its products and on MOBI724 Global Solutions, visit www.mobi724globalsolutions.com.
- Published in Financial Technology, Mobi724 Global Solutions, Mobile Technology, News Home
What to Expect from FinTech this Year
What to Expect from FinTech in 2016
– Momentum Public Relations –
Financial technology is an area that moves quickly. Since this type of technology directly impacts commerce around the globe, it shouldn’t come as a surprise that there are a lot of incentives for companies to move this industry forward. While there’s been a lot of exciting advancements in this space over the last few years, 2016 is already shaping up to be an even bigger year for the industry.
To help shine some light on what you can expect from FinTech over the next twelve months, we’ve put together a list of seven trends and forecasts that are likely to stand out the most:
Making Compliance as Easy as Possible
The banking industry has plenty of indiscretions on its record. As a result, the industry is now facing even more regulation issues. These increased regulations are targeted at transactions both online and offline. Because compliance creates a lot of additional work for financial institutions, these requirements present a significant opportunity for companies that can develop FinTech solutions specifically designed around streamlining compliance issues.
Helping Consumers Become Smarter with Their Finances
It’s no secret that plenty of financial institutions have engaged in consumer practices that were misleading or even predatory. However, that doesn’t mean the entire industry is looking for opportunities to exploit consumers. On the contrary, there are a lot of startups and other companies throughout the FinTech space that are working hard to help consumers become even smarter and more empowered with their finances. Many of these efforts are focused at younger consumers dealing with issues like student loan debt or older consumers who have concerns about their retirement planning being adequate enough.
Providing a Wider Range of Payment Options
More businesses than ever before are engaging with consumers and other businesses across the globe. The globalized nature of commerce means that both individuals and organizations are looking for ways to facilitate transactions without long delays or expensive processing fees. In addition to all of the efforts being built around Bitcoin, there are many other financial technologies exploring various ways to make and receive payments on a global scale.
Creating New Channels for Loans
Although it’s possible to start many types of businesses with very little upfront investment, most businesses still need at least some capital to get off the ground or grow. That’s why a very interesting area within the FinTech space is companies that are allowing small businesses to bypass traditional lending institutions and secure the types of loans they need at very appealing rates. There’s also a lot happening around giving individuals more control in regards to obtaining and managing loans.
Improving the Online Shopping Experience
While online shopping has come a long way over the last few years, it’s still not as seamless as most consumers and merchants would like. This is especially true for mobile transactions. Not only are financial technology companies focused on smartphone online shopping, but plenty of companies within this space are looking at how more basic phones in developing parts of the world can be used to facilitate commerce.
Cutting Down How Long It Takes to Get Paid
Both small and large businesses spend a lot of time and resources on activities like collecting invoices and collections. Since those types of inefficiencies can cause cash flow crunches and other headaches, there’s a lot of incentive for FinTech providers to come up with solutions that streamline and speed up the process of collecting payments.
Taking a Stand Against Fraud
As the breaches of several very large companies have shown, financial information and assets still aren’t as secure as they should be. Although standards like EMV are already helping to reduce credit card fraud among in-person payments, the industry still has a long way to go to truly curb the amount of fraud that occurs in relation to both consumer and business finances.
- Published in Blog, Financial Technology, Mobile Technology, Technology
Dealnet (DLS:V) to Acquire EcoHome Financial
Acquisition to be Financed by a $30 Million Bought Deal Private Placement of Subscription Receipts
Dealnet Capital Corp. (“Dealnet” or the “Company”) (TSX VENTURE:DLS) today announced that it has entered into a definitive agreement to acquire EcoHome Financial Inc. (“EcoHome”), a premier non-bank lender in the Canadian heating, ventilation and air conditioning (HVAC) and home improvement segments, from Chesswood Group Limited (the “Acquisition”) for total consideration of approximately $35 million.
The cash portion of the purchase price will be financed from the proceeds of a bought deal private placement of Subscription Receipts of the Company described below, led by GMP Securities L.P., Paradigm Capital Inc., Cormark Securities Inc. and INFOR Financial Inc.
Under the terms of the definitive agreement, Dealnet will acquire all of the shares of EcoHome, which has a seasoned loan book of over $60 million and a year over year origination growth rate of approximately 40{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}. The EcoHome portfolio consists of finance assets that have historically demonstrated low default rates and predictable revenue and cash flows. Key EcoHome lending facilities will transfer, and be increased on close adding low cost incremental capacity to Dealnet’s existing funding facilities.
“Our current platform is designed for large scale volume and to accept these acquisitions with no disruptions to business operations. With our incremental significant scale in origination volume we expect additional capital efficiencies in terms of lowering the cost of underwriting, driving incremental yield,” said Michael Hilmer, Dealnet’s Chief Executive Officer. “This acquisition will establish Dealnet as a new leader in the HVAC/Home Improvement consumer financing segment with a full market offering and end-to-end value added services. We continue to see opportunity for accretive acquisitions in markets where our equity and lending capacity, is a valuable currency. We will continue to focus on strong organic growth while continuing to review complementary acquisitions.”
Steven Small, Executive Chairman, stated “We have delivered on our penetration into the HVAC/Home Improvement space. This strong advance now allows us to continue as planned into retail and healthcare consumer finance. Our march to become the dominant ‘prime’ non-bank consumer finance company is proceeding as planned.”
As part of the Acquisition, Dealnet will acquire customer contracts, vendor finance agreements, employees, operating platform, systems, agreements and other assets of EcoHome. Dealnet expects to combine treasury functions, technology, risk and credit management and overall origination capabilities with no job loss due to the considerable growth trajectory demonstrated by EcoHome and Dealnet.
Under the terms of the agreement, Dealnet will satisfy the purchase price by a combination of (i) approximately $30 million in cash, (ii) common shares of Dealnet having an aggregate value of $3 million, and (iii) an unsecured convertible vendor take-back note in the principal amount of $2 million.
The Acquisition is expected to close in February, and is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange.
Cormark Securities Inc. and INFOR Financial Inc. are acting as the financial advisors to Dealnet on the Acquisition.
Bought Deal Private Placement
Dealnet has entered into an agreement with a syndicate of underwriters led by GMP Securities L.P., Paradigm Capital Inc., Cormark Securities Inc. and INFOR Financial Inc. (the “Underwriters”), pursuant to which the Underwriters have agreed to purchase, on a “bought deal” private placement basis, 54,545,700 subscription receipts (the “Subscription Receipts”) of the Company at a price of $0.55 per Subscription Receipt (the “Offering Price”) for gross proceeds of approximately $30 million (the “Offering”).
Dealnet has also granted the Underwriters an option, exercisable up to two business days prior to the closing date of the Offering, to arrange for the purchase of up to an additional 8,181,855 Subscription Receipts at the Offering Price for additional gross proceeds of approximately $4.5 million. The net proceeds of the Offering will be used to fund the cash portion of the purchase price of the Acquisition, and Dealnet’s future growth as well as for general corporate purposes.
Each Subscription Receipt will entitle the holder thereof to receive, without payment of further consideration or further action, one common share of Dealnet (a “Common Share”) in exchange for each Subscription Receipt upon satisfaction of certain escrow release conditions, including the satisfaction of all conditions precedent (but for the payment of the purchase price) of the Acquisition, provided that the conditions have been satisfied by March 31, 2016.
The Subscription Receipts will be issued pursuant to a subscription receipt agreement (the “Subscription Receipt Agreement”). Pursuant to the Subscription Receipt Agreement, the proceeds of the Offering, net of 50{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the Underwriters’ fee payable in connection therewith, will be held in escrow pending delivery of notice of the closing of the Acquisition. If: (i) the Acquisition closing does not occur prior to 5:00 p.m. (Toronto time) on March 31, 2016; (ii) the Acquisition share purchase agreement is terminated at an earlier date; or (iii) Dealnet announces that it does not intend to proceed with the Acquisition, the subscription receipt agent and Dealnet will return to holders of Subscription Receipts an amount per Subscription Receipt equal to the Offering Price plus a pro rata share of the interest earned or deemed to be earned on the escrowed funds, net of any applicable withholding taxes.
The Offering is expected to close on February 5, 2016 and is subject to certain conditions, including the receipt of TSX Venture Exchange approval.
The Subscription Receipts will be sold in all of the provinces and territories of Canada on a private placement basis pursuant to the “accredited investor” exemption under National Instrument 45-106 – Prospectus Exemptions and certain other available and agreed upon exemptions. The Subscription Receipts, including the underlying Common Shares, will have a hold period of four months and one day from the closing date of the Offering.
The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
About Dealnet Capital Corp.
Dealnet is an engagement enabled consumer finance company that is initially focused on home improvement finance solutions including heating ventilation and air conditioning financing and leasing. Dealnet leverages its large scale customer service and engagement technology platform to attract home improvement dealers by providing front and back office services to them resulting in dealer origination growth.
For additional information please visit www.sedar.com.
- Published in Dealnet News, Financial Technology, News Home
Follow the Money: The Rise of Mobile Technology
Follow the Money: The Rise of Mobile Technology
Momentum Public Relations
The phrase “follow the money” has been used to suggest that finding the truth behind a political scandal can be achieved by investigating a series of financial transactions that will point directly to the main perpetrators. However, this phrase can have a much more positive connotation. If investors are seeking a good bet (and who isn’t) following the money often leads to opportunities for superior returns. Financial technology, or fintech, is an opportunity that needs to be explored in 2016.
Business segments that are profitable are frequently suitable targets for disruptive startups. This situation is most certainly the case in the Canadian financial sector. The major players are justifiably proud of their heritage, stability, and profitability. The worldwide financial crisis of 2008 was barely a blip on the radar screen of Canada’s financial institutions. They did not suffer a liquidity crisis. Profits soared again post-2009. The major Canadian banks recorded net profits 31.7 billion dollars in 2014, a slight increase from the total of 29.2 billion in 2013. The trend continued in 2015.
So why are the big banks, and a wide variety of other related financial services companies, preparing for waves of technology based disruption in 2016 and beyond? Simply stated, their profitability and relatively stable position exist in combination with an absence of agility. Large legacy companies have a hard time becoming agile despite rousing speeches from the C-suite. The opportunity for startups that bring new technological approaches to financial management is enormous because the potential audience is large. The early adopting customers alone, 2-3{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the market, can generate revenue and profits that are too large to be ignored. Groundbreaking financial technologies are increasingly robust, and they are beginning to change the expectations and demands of consumers. Consequently, there is a high degree of likelihood that the entire sector is about to undergo a redefinition. Smart investors will follow the money and profit from the disruption!
Several emerging realities are at the core of the revolution in financial technology. There is an abundance of startups challenging the accepted norms of this highly regulated and traditional industry. The threat of disruptive entrants is forcing cautious organizations like banks and insurance companies to change or adapt their processes at a speed that may prove to be uncomfortable. Additionally, these startups are creating new products and services that are defining new market spaces.
Expect two significant financial technology trends to dominate the conversation in 2016. They include the need for increased data security coupled with a rise of mobile technology. Both trends have significant implications for the financial sector given that mobile transactions, while still nascent, are likely to grow exponentially over the next five years.
Entrepreneurs and investors have been quick to seize on this movement. Markets like Japan and Korea provide some early indications of how the field may sort itself out. Yes, the first wave of adoption has been dominated by the under 30-year-old cohort, but this is just the beginning of the wave. The fact is that over 2/3 of smart phone users have more than one shopping app on their device. However, there is a perception that using them is either a hassle or potentially not secure. Soon everyone’s grandma will use these apps along with a digital wallet. The challenge, for the moment, is to ensure that this technological change is easy to use and 100{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} secure. Most experts contend that the development of blockchain is a seminal event that will have broad implications for both challenges in managing mobile transactions. It has certainly grabbed the headlines and is celebrated as the functional dimension that makes Bitcoin usage possible. However, the Bitcoin phenomenon is likely more sizzle than steak. The real opportunity for blockchain lies in its potential to transform the way all financial transactions occur.
What is “a blockchain”? It is just a record, or ledger, of digital events. It is openly shared among many different parties and can only be updated by consensus of a majority of the participants in the system. And when data or information has been entered it can never be erased. It makes data manipulation and transactional fraud close to impossible because of the disparate and shared nature of the data. The result of secure transactions is that they lead to improved functionality and drive more usage. If the process is totally secure and incredibly easy why not use it?
Increasingly, everything is connected, and every connected device is becoming a commercial device. This connectedness is setting up an opportunity to develop superior tools to protect and secure the information that is being sent and stored. Financial institutions have historically been reluctant to make process changes because of legitimate security concerns and a variety of regulatory imperatives. Many of the things that look like changes have merely involved automating long-standing manual processes. Blockchain could change the paradigm completely. Once it is fully commercialized, it will provide opportunities to the financial sector. Startups are embracing this technology. They are seeking to invade traditional markets by offering new options and services that banks have been hesitant to embrace.
Several innovative fintech start-ups have been trumpeting marketing messages that threaten the existence of traditional banks. However, many of them are relying heavily on underlying infrastructure that banks provide to conduct their business. Some are beginning to operate as banks themselves and are free of dependency on other players. Building independent structures is a slow and expensive process, but the potential rewards may justify the strategic risk. In the meantime, the big banks are sending signals of “willingness to partner” with startups that have begun to carve into their traditional territory with new innovative products and services.
How does this impact the savvy investor? Just follow the money! The most likely scenario for many disruptive startups in fintech is that success and growth will result in an opportunity for their shareholders to cash out by being acquired and merged into the operations of existing financial institutions. Yes, there will be some fintech startups that won’t make it, and there will be some that emerge as stable standalone businesses. 2016 looks to be a watershed year in fintech – one to watch carefully for sure.
- Published in Blog, Business, Mobi724 Global Solutions
Dealnet Announces Closing of Debenture Offering of Up to $100 Million
TORONTO, ONTARIO–(Marketwired – Jan. 13, 2016) – Further to its press release of December 21, 2015, Dealnet Capital Corp. (“Dealnet” or the “Company”) (TSX VENTURE:DLS) is pleased to announce that its wholly owned subsidiary, One Dealer Inc., has closed a secured debenture offering and issued an initial $10 million debenture (the “Debenture”) with capacity to issue up to $100 million under the established structure.
The versatile structure of the financing allows for the warehousing before securitization as well as term funding of consumer finance contracts with terms of up to ten years. The transaction structure supports the Company’s expansion plans to capture a wide variety of consumer finance products at point of sale including home improvement, health care and retail financial solutions.
The Debenture has a term of ten years and carries a fixed interest rate of 5.99{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}. The rate applicable to future issuances will be fixed at the time of draw at the 10 year Government of Canada Benchmark Bond yield plus an appropriate margin. As part of the transaction, the Company repaid its existing $3 million debenture to the same subscriber instead of amending the instrument as previously announced (for net cash proceeds from the offering of $7 million to the Company). Future debenture issuances are at the discretion of the subscriber.
As a part of the offering, the Company issued 2,000,000 common share purchase warrants (the “Warrants”) to the subscriber. The Warrants have an exercise price of $0.67, expire on January 12, 2019 and are subject to a four month hold period until May 13, 2016. The issuance of the Warrants is subject to final acceptance by the TSX Venture Exchange.
“We have built an exceptional relationship with IA Clarington Investments, the subscriber, and we are now being rewarded for our proven execution and risk management methodologies,” stated Mike Hilmer, CEO of Dealnet. “On full draw, the debentures would support approximately 20,000 additional funded loans or leases in our home improvement vertical. The Debenture structure also co-exists well with additional underwriting facilities expected to be announced this year, which together expand our treasury capability to support significant growth within our financial services division. Our expanded capacity and flexibility supports our drive to be the emerging growth leader in the non-bank lending space.”
Forward Looking Statement
This news release contains certain “forward-looking information” within the meaning of applicable securities law including statements regarding the Company and the Debenture, its expected terms and closing date. Forward looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “would”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. These statements are only predictions. Forward-looking information is based on the opinions and estimates of management at the date the information is provided, and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. For a description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company’s Management’s Discussion and Analysis. The Company undertakes no obligation to update forward-looking information if circumstances or management’s estimates or opinions should change, unless required by law. The reader is cautioned not to place undue reliance on forward-looking information.
About Dealnet Capital Corp.
Dealnet is an engagement enabled consumer finance company that is initially focused on home improvement finance solutions including heating ventilation and air conditioning financing and leasing. Dealnet leverages its large scale customer service and engagement technology platform to attract home improvement dealers by providing front and back office services to them resulting in dealer origination growth.
For additional information please visit www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
- Published in Dealnet News, News Home