The Futura Loyalty Group Inc.
TSX VENTURE : FUT

The Futura Loyalty Group Inc.

October 17, 2012 14:30 ET

Futura Announces CCAA Filing

TORONTO, ONTARIO--(Marketwire - Oct. 17, 2012) -

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The Futura Loyalty Group Inc. (TSX VENTURE:FUT) ("Futura") announces that after consideration of all viable alternatives, Futura's Board of Directors has determined that it is in the best interests of Futura and its stakeholders for Futura to commence proceedings under the Companies' Creditors Arrangement Act (Canada) (the "CCAA").

Futura's liquidity position has deteriorated as a result of various factors, including, but not limited to, negative cash flow from operations, high debt levels, an inability to secure additional sources of financing and increasing pressure to make payments to its creditors.

Accordingly, Futura, today, applied for and obtained an order (the "Initial Order") from the Ontario Superior Court of Justice (Commercial List) (the "Court") under the CCAA. The Court has granted CCAA protection for an initial period of 30 days, expiring on November 15, 2012. While under CCAA protection, creditors and others are stayed from enforcing any rights against Futura, giving Futura the opportunity to pursue restructuring alternatives.

Futura will require additional funding in order to implement a restructuring. As a result, the Initial Order also authorizes Futura to borrow funds from four individuals, three of who are directors of Futura (collectively, the "Lenders"), to provide debtor in possession financing in an initial amount of $175,000 but which can increase, subject to further Court approval, up to $300,000 ("DIP Financing"). Pursuant to the Initial Order, the Lenders were granted a charge over all property, assets and undertaking of Futura in priority to all existing creditors. The DIP Financing is expected to assist Futura in financing its working capital requirements, other general corporate requirements and capital expenditures during the initial 30 day period subsequent to the issuance of the Initial Order.

Pursuant to the Initial Order, Harris & Partners Inc., has been appointed as monitor that will oversee the proceedings under the CCAA (the "Monitor"). All inquiries regarding the CCAA proceedings should be directed to the Monitor (905-479-5712). Information about Futura's CCAA proceeding, including copies of all Court Orders made, will be available on the Monitor's website at www.harrisreceivers.com/document_library.html.

"Under the CCAA process, the Company will continue to operate and transact issuance for existing and new customers, expand its business and execute on opportunities for growth and monetization," said David Campbell, CEO. The Company will be considering strategic investment and combination opportunities.

About The Futura Loyalty Group Inc.

The Futura Loyalty Group Inc. is an industry-leading provider of integrated and stand-alone loyalty solutions for Canadian and American businesses. Futura offers a comprehensive suite of loyalty products and services including access to Aeroplan in Canada and four top frequent flyer programs in the United States. Futura also develops custom programs for companies wishing to develop proprietary loyalty solutions. Futura's loyalty services include member account set up, management and reward redemption platform, a web-based program transaction reporting interface for merchants, a robust offer management system, retail POS Integration for card swipe issuance, loyalty analytics and a proprietary web based reward issuance solution. For more information regarding Futura, visit www.tflg.ca or www.futuraloyaltygroup.com.

Forward-Looking Information

This news release includes certain forward-looking information that is based upon current expectations, which involve, among other things, risks and uncertainties associated with Futura's business and the restructuring process. Forward-looking information in this news release includes, among others, statements with respect to the timing and continuance of CCAA protection, the restructuring process and potential opportunities for the restructured business. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking information, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", "will", "may", "should", "could", and similar expressions to the extent they relate to Futura or its management. The forward looking information is not historical fact, but reflects Futura's current expectations regarding future results or events. Forward-looking information is subject to a number of risks, uncertainties and assumptions that may cause the actual results of Futura to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on Futura. Factors that could cause actual results or events to differ materially from current expectations include, among other things, changes in general economic and market conditions; the uncertainty involved in court proceedings; changes to regulations affecting Futura's activities; the level of merchant participation in Futura's programs; uncertainties relating to the availability and costs of financing needed in the future; the ongoing operation of Futura's business and other factors, including without limitation, those listed under "Economic Dependence" and "Risks and Uncertainties" in Futura's MD&A for the three and twelve month periods ended December 31, 2011.

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