Atlantis Systems Corp.

Atlantis Systems Corp.

November 08, 2011 15:07 ET

Atlantis Systems Corp. Announces Changes to the Terms of Its Proposed Refinancing Transaction

TORONTO, ONTARIO--(Marketwire - Nov. 8, 2011) - Atlantis Systems Corp. (NEX:AIQ.H) (the "Company") today announced changes to the terms of the proposed refinancing of its debt facilities provided by ComVest Capital, LLC ("ComVest"), which was previously announced on August 17, 2011, and its intention to close the transaction on November 9, 2011, subject to approval by the NEX.

ComVest has previously 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, Atlantis Systems Eduplus ("ASE"), based in Dartmouth, Nova Scotia.

The purpose of the Refinancing Transaction is to consolidate all of the outstanding notes issued by the Company in favor of ComVest into the New Notes (as defined below), which is expected to result in a net saving of interest payable by the Company. It is anticipated that this will have a positive effect on the Company's finances and should allow the Company to continue to develop the business plan for both Atlantis Systems International, based in Brampton, Ontario, and ASE.

The revised principal terms of the Refinancing Transaction include:

1. The issuance of a US$6 million convertible senior note (the "Convertible Note") and an approximately US$6.54 million term senior note (the "Term Note" and together with the "Convertible Note", the "New Notes"), 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 Note are anticipated to include:
a. Payment-in-kind interest of 12% per annum on outstanding principal, with interest increasing to 17% during the continuance of an event of default;
b. No principal payments required until maturity;
c. 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;
d. The conversion price shall be US$0.30 per Common Share, equivalent to CDN$0.30 based on the exchange rate in effect on October 31, 2011;
e. If the Convertible Note is not converted on maturity, payment of the outstanding principal and payment–in-kind interest to be paid in cash; and
f. Not redeemable by the Company during its term and not open for pre-payment.
3. The principal terms of the Term Note are anticipated to include:
a. Cash interest payable at the rate of 12% per annum, payable monthly on the outstanding principal amount, with interest increasing to 17% during the continuance of an event of default;
b. No principal payments required until maturity; and
c. Repayable in whole or part at any time without penalty.
4. The Company will be obligated to pay ComVest approximately $302,598 in principal and accrued interest owed to ComVest under the outstanding notes issued by the Company in favor of ComVest. This amount is due and payable by the Company on or prior to December 31, 2011 and will accrue interest at the rate of 12% per annum, increasing to 17% in the event the amount is not paid on or prior to December 31, 2011.
5. The Company will reimburse ComVest for customary legal costs and other fees, including a restructuring/commitment fee in the amount of $350,000.

The New Notes will include the customary financial covenants, representations and warranties.

The Refinancing Transaction has been approved by the Company's board of directors, on recommendation of its independent committee, and the Refinancing Transaction has also been conditionally approved by the NEX. The Company intends to complete the Refinancing Transaction with ComVest on or about November 9, 2011, provided that all applicable regulatory approvals have been obtained and definitive documentation has been finalized with ComVest. Completion of the Refinancing Transaction remains subject to final NEX approval.

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

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