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BRAMPTON, ON, June 28, 2017 /CNW/ - DATA Communications
Management Corp. (TSX: DCM) ("DATA" or the "Company") is pleased to
announce that it has completed its previously announced private
placement (the "Private Placement") of units ("Units"), raising
gross proceeds of $3.8 million.
The Company also announced that it has established a $3.5 million non-revolving credit facility (the
"Bridging Credit Facility") with Bridging Finance Inc., as agent
for and on behalf of certain funds sub-advised or managed by it
("Bridging"). The net proceeds of these financings will be
used, together with the net proceeds from the Company's recently
completed rights offering, to repay the Company's 6.00% convertible
unsecured subordinated debentures (the "Debentures") at maturity on
June 30, 2017 and for general
corporate purposes.
Private Placement
Pursuant to the Private Placement, the Company issued 2,690,604
units ("Units"), with each Unit consisting of one common share of
the Company (a "Common Share") and one-half of a Common Share
purchase warrant (each whole Common Share purchase warrant, a
"Warrant") at a price per Unit of $1.40 for gross proceeds to the Company of
$3.8 million. The Company will
complete a second closing within the next five business days for an
additional 71,500 Units for additional gross proceeds of
$100,100. Each full Warrant
will entitle the holder to acquire one Common Share (a "Warrant
Share") at a price of $1.75 for a
period of two years from the closing of the Private
Placement. If the volume weighted average price of the Common
Shares on the Toronto Stock Exchange equals or exceeds $2.75 for 20 consecutive trading days, the
Company will have the right (the "Acceleration Right") to
accelerate the expiry date of the Warrants to a date that is 30
days from the date on which the Company notifies the Warrant
holders of its intent to exercise the Acceleration Right.
Michael G. Sifton, DATA's Chief
Executive Officer, and Gregory J.
Cochrane, DATA's President, acquired 357,150 Units and
179,000 Units, respectively, and certain other senior executives of
the Company acquired a total of 29,000 Units under the Private
Placement. The balance of the Units were acquired by a group
of third party investors.
The Company issued a total of 2,690,604 additional Common Shares
pursuant to the Private Placement and a total of 19,263,235 Common
Shares are currently outstanding (before giving effect to the
exercise of any Warrants, the second closing of Units and the
exercise of existing anti-dilution rights held by an existing
shareholder of the Company). The Common Shares, Warrants and
Warrant Shares will be subject to a statutory hold period expiring
four months and one day after closing.
Bridging Credit Facility
The Company has established the Bridging Credit Facility with
Bridging in the amount of $3.5
million pursuant to a credit agreement dated as of
June 28, 2017 between the Company and
Bridging. Advances under the Bridging Credit Facility are
repayable on demand and bear interest at a rate equal to the prime
rate of interest charged by the Company's bank lender from time to
time plus 10.3% per annum, calculated and payable monthly.
The Bridging Credit Facility has a term of one year and can be
repaid in full or partially at any time without any fee upon sixty
days prior written notice to the Lender, subject to the prior
written consent of the Company's other senior lenders.
The Bridging Credit Facility is secured by certain specified
equipment together with certain other conventional
security.
In connection with the Bridging Credit Facility, the Company
made certain amendments to its existing senior credit facility (the
"Bank Credit Facility") maintained with a Canadian chartered
bank. Under the terms of those amendments, the term portion
(the "Bank Term Facility") of the Bank Credit Facility will
amortize in equal monthly instalments over the twelve months ending
June 2018 and advances under the Bank
Term Facility will bear interest at the rate of the Canadian prime
rate plus 2.25% per annum. In addition, the Company repaid
$2 million of the borrowings
outstanding under the Bank Term Facility. Principal
repayments made on the Bank Term Facility will not reduce the total
available principal amount under the Bank Credit Facility.
Use of Proceeds
The Company intends to use the net proceeds from the Private
Placement, the Company's recently completed rights offering and the
Bridging Credit Facility to repay DATA's principal and interest
obligations under the Debentures at maturity, which total
approximately $11.5 million, and for
general corporate purposes.
Early Warning Reporting Information
The following information is being provided in respect of
Michael G. Sifton in accordance with
National Instrument 62-103 – The Early Warning System and
Related Take-Over Bid and Insider Reporting
Issues.
Pursuant to the Private Placement, Mr. Sifton acquired
beneficial ownership of, or control over, a total of 357,150 Units
(the "Acquired Units") at a price of $1.40 per Unit and an aggregate purchase price of
$500,010. Prior to the
acquisition of the Acquired Units, Mr. Sifton and his joint actors
had beneficial ownership of, or control over, 1,544,354 Common
Shares, 499,377 stock options (the "Options") to acquire Common
Shares at a price of $1.50 per share
and $62,000 aggregate principal
amount of Debentures, representing 12.0% of the outstanding Common
Shares. The principal amount of the Debentures is
convertible, at the option of the holder, into Common Shares at a
price of $1,189.41 per share (or
0.84075 Common Shares for each $1,000
principal amount of the Debentures). After giving effect to
the acquisition of the Acquired Units and the completion of the
Private Placement and assuming the exercise in whole of the Options
and the Warrants comprising the Acquired Units and the conversion
in whole of such Debentures, Mr. Sifton and his joint actors have
beneficial ownership of, or control over, 2,579,508 Common Shares,
representing 12.9% of the issued and outstanding Common Shares.
Mr. Sifton acquired the Acquired Units for investment
purposes. Other than the possible exercise of the Options
and, or, the Warrants, Mr. Sifton and his joint actors do not have
any present plans or intentions to acquire or dispose of Common
Shares. Depending upon the circumstances, including but not
limited to the Company's business and prospects, market and general
economic conditions and other available investment opportunities,
however, Mr. Sifton and his joint actors may, in the future,
acquire additional securities or related financial instruments of
the Company or dispose of all or a portion of the securities or
related financial instruments of the Company previously
acquired.
About DATA Communications Management Corp.
DATA is a leading provider of business communication solutions,
bringing value and collaboration to marketing and operation teams
across North America. We
help marketers and agencies unify and execute communications
campaigns across multiple channels, and we help operations teams
streamline and automate document and communications management
processes. Our core capabilities include direct marketing,
print services, labels and asset tracking, event tickets and gift
cards, logistics and fulfilment, content and workflow management,
data management and analytics, and regulatory communications.
We serve clients in key vertical markets such as financial
services, retail, healthcare, lottery and gaming, not‐for‐profit,
and energy. We are strategically located across Canada to support clients on a national basis,
and serve the U.S. market through our facilities in Chicago, Illinois.
Additional information relating to DATA Communications
Management Corp. is available on www.datacm.com, and in the
disclosure documents filed by DATA Communications Management Corp.
on the System for Electronic Document Analysis and Retrieval
(SEDAR) at www.sedar.com.
Forward-Looking Statements
Certain statements in this press release constitute
"forward‐looking" statements that involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance, objectives or achievements of DATA, or industry
results, to be materially different from any future results,
performance, objectives or achievements expressed or implied by
such forward‐looking statements. When used in this press
release, words such as "may", "would", "could", "will", "expect",
"anticipate", "estimate", "believe", "intend", "plan", and other
similar expressions are intended to identify forward‐looking
statements. These statements reflect DATA's current views
regarding future events and operating performance, are based on
information currently available to DATA, and speak only as of the
date of this press release. These forward‐looking statements
involve a number of risks, uncertainties and assumptions and should
not be read as guarantees of future performance or results, and
will not necessarily be accurate indications of whether or not such
performance or results will be achieved. Many factors could
cause the actual results, performance, objectives or achievements
of DATA to be materially different from any future results,
performance, objectives or achievements that may be expressed or
implied by such forward‐looking statements. The principal
factors, assumptions and risks that DATA made or took into account
in the preparation of these forward-looking statements include the
Company's debt service obligations under its outstanding credit
facilities and other indebtedness; the availability of capital to
refinance those debt obligations; and the fact that the Company's
respective obligations under the Bank Credit Facility and the
Bridging Credit Facility are subject to floating interest rates and
therefore are subject to fluctuations in interest rates.
Additional factors are discussed under the headings "Risk Factors"
in DATA's annual information form and "Risks and Uncertainties" in
DATA's management 's discussions and analysis and in DATA's other
publicly available disclosure documents, as filed by DATA on SEDAR
(www.sedar.com). Should one or more of these risks or
uncertainties materialize, or should assumptions underlying the
forward‐looking statements prove incorrect, actual results may vary
materially from those described in this press release as intended,
planned, anticipated, believed, estimated or expected. Unless
required by applicable securities law, DATA does not intend and
does not assume any obligation to update these forward‐looking
statements.
SOURCE DATA Communications Management Corp.