Atlantis Systems Corp.
TSX VENTURE : AIQ.H

Atlantis Systems Corp.

August 17, 2011 16:00 ET

Atlantis Systems Corp. Announces Board Approval of ComVest Refinancing of Atlantis Debt

TORONTO, ONTARIO--(Marketwire - Aug. 17, 2011) - Atlantis Systems Corp. (NEX:AIQ.H) (the "Company") today announced that the Board of Directors, on recommendation of its Independent Committee, has approved a proposed refinancing of its debt facilities provided by ComVest Capital LLC ("ComVest"), subject to approval by the NEX(the "Refinancing Transaction").

The Refinancing Transaction will allow the Company to complete its business plan for its training and job performance solutions division, Atlantis Systems Eduplus ("ASE"), based in Dartmouth, Nova Scotia.

ComVest has made a series of advances to the Company, beyond its over-advance facility, to permit the Company to meet its operational and working capital needs, due mostly to the rapid growth of the Company's training and job performance solutions division, ASE.

The Company received a proposal involving a recapitalization of the debt owing through the issuance of two fixed and non-revolving debt instruments and an extension of the balance of the term of the debt facilities.

The principal terms of the Refinancing Transaction include:

  1. The issuance of a US$6 million convertible senior debenture (the "Convertible Debenture") and an approximately US$6 million term senior debenture (the "Term Debenture"), each maturing three years from issuance, or earlier in the event of a change of control and secured by a first charge on the assets of the Company.

  2. The principal terms of the Convertible Debenture are anticipated to include:

    1. Payment-in-kind interest of 12% per annum on outstanding principal;
    2. No principal payments required until maturity;
    3. Convertible at any time prior to maturity by ComVest into common shares of the Company ("Common Shares") with payment-in-kind interest added to principal and also subject to conversion to Common Shares.
    4. The conversion price shall be 120% of the average closing market price on the NEX for the 20 trading days immediately prior to the closing date of the Refinancing Transaction.
    5. If the Convertible Debenture is not converted on maturity, payment of the outstanding principal and payment–in-kind interest to be paid in cash; and
    6. Not redeemable by the Company during its term and not open for pre-payment.
  1. The principal terms of the Term Debenture are anticipated to include:

    1. Cash interest payable at the rate of 12% per annum, payable monthly on the outstanding principal amount;
    2. No principal payments required until maturity; and
    3. Repayable in whole or part at any time without penalty.

  2. The Company will reimburse ComVest for customary legal costs and fees.

Both the term debt and Convertible Debenture will include the customary financial covenants, representation and warranties.

The Company intends to complete the refinancing with ComVest as soon as all applicable regulatory approvals have been obtained and definitive documentation finalized with ComVest. Subject to NEX approval, the Company anticipates being able to complete the Refinancing Transaction by August 31, 2011.

Forward-Looking Statements

Atlantis Systems Corp. assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or for any other reason. Additional information regarding risks and uncertainties that could affect Atlantis' business is contained in the Business Risk Factors section of Atlantis's Annual MD&A. which is available on SEDAR at www.sedar.com.

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