Dynamic Technologies Obtains CCAA Protection and Trading Suspension
March 09 2023 - 6:22PM
Dynamic Technologies Group Inc. (TSXV: DTG, OTC:ERILF) (“Dynamic”,
“Company”, “we” and “our”) announces that after the close of the
market on March 9, 2023 it obtained an initial order for creditor
protection (the “Initial Order”) from the Court of King’s Bench of
Alberta (the “Court”) under the Companies’ Creditors Arrangement
Act (the “CCAA”). The Initial Order provides for a 10-day stay (the
“Initial Stay”) of creditor claims and proceedings in respect of
the Company and its subsidiaries, Dynamic Attractions Ltd., Dynamic
Entertainment Group Ltd., Dynamic Structures Ltd. and Dynamic
Attractions Inc. (“Subsidiaries”).
Initial Order and CCAA
Process
The Initial Order includes, in addition to the
Initial Stay and other items: (i) the appointment of FTI Consulting
Canada Inc. as the court-appointed monitor (the “Monitor”) of the
Company and its subsidiaries; and (ii) an administrative charge
(the “Administration Charge”) up to $100,000 over the assets of the
Company and its Subsidiaries for the fees of the Monitor and its
legal counsel and the legal counsel to the Company and its
Subsidiaries, an interim financing charge (“Interim Lender’s
Charge”) for funding during the CCAA proceedings up to the amount
of $250,000, and a directors’ charge in the amount of $250,000. The
Monitor has set up a website at:
http://cfcanada.fticonsulting.com/dynamicgroup where
updates on the restructuring process, the Monitor’s reports to the
Court, Court orders and other information will be posted as soon as
they are available.
Following consultation with its legal and
financial advisors, the Board of Directors determined that it was
in the best interest of the Company and its Subsidiaries to obtain
CCAA protection. The decision to commence CCAA proceedings was made
after careful consideration of: (i) Dynamic’s cash position,
forecasted revenue and expenses; (ii) the deferred revenue and
contingent liabilities disclosed in Dynamic’s financial statements
related to specific ride supply projects; (iii) the continuing
non-payment default under its USD$16 million secured credit
facility with Promising Expert Limited and corresponding
cross-default under the terms of the Company’s USD$2 million
subordinated secured loan with Export Development Canada, as
disclosed by the Company in a prior news release on March 1, 2023;
and (iv) all available alternatives to an application for creditor
protection.
A comeback hearing in respect of the relief
granted pursuant to the Initial Order has been scheduled for March
16, 2023 (the “Comeback Hearing”). At the Comeback Hearing, the
Company and its Subsidiaries anticipate seeking approval: (i) to
conduct and implement a sale and investment solicitation process
(the “Strategic Process”); (ii) increase the quantum of the
Administration Charge and Interim Lender’s Charge; and (iii) extend
the stay of proceedings for an additional 30-60 days. The Strategic
Process will be conducted by the Monitor under the Court’s
supervision and will seek to achieve an investment in the business
or the highest value available in the circumstances for the
Company, its Subsidiaries, and its stakeholders. The increased
Interim Lender’s Charge and corresponding debtor in possession
financing (“DIP Loan”) of up to CAD$2.6 million dollars will be
made available over the course of the CCAA process from its
existing senior secured lender, Promising Expert Limited (the “DIP
Lender”), which will be used to fund the CCAA Proceeding, the
Strategic Process and provide cash for operations, as needed.
Management of the Company and its Subsidiaries
will remain responsible for the day‐to‐day operations of the
Company and its Subsidiaries, under the general oversight of the
Monitor. Ongoing operations shall be supported by cash from
operations with additional cash from the DIP Loan, as required. The
Company’s Board of Directors remains unchanged.
MLT Aikins LLP is acting as legal counsel to the
Company and its Subsidiaries in connection with the CCAA
proceedings.
Further announcements regarding the CCAA Process
will be made, as appropriate.
Transfer to NEX and Suspension of
Trading
As a result of the CCAA Process, Dynamic’s
listing will be transferred to the NEX Board of the TSX Venture
Exchange (the “TSXV”) in accordance with the TSXV’s policies and
procedures. The Company is not in good standing with its transfer
agent and expects that its transfer agent will suspend services for
non-payment, therefore trading of the Company’s securities will
remain halted. The Company expects trading of its securities to be
suspended once the transfer agent suspends its services for
non-payment. Members are prohibited from trading in the securities
of the Company during the period of the suspension or until further
notice.
About Dynamic Technologies Group Inc.
Dynamic is a world leader in the design
engineering, production, and commissioning of iconic, media-based
attractions and ride systems for the global theme park industry and
popular tourist destinations. Dynamic leverages its world class,
media-based attraction products and attraction development
capability on a co-venture ownership basis. The Company also
applies its engineering integration and problem-solving skills on
special projects in diversified industries such as alternative
energy and large optical telescopes and enclosures. Dynamic’s
common shares are listed on the TSX Venture Exchange under the
symbol DTG. For more information about the Company, visit
www.dynamictechgroup.com or contact:
Guy Nelson |
Allan Francis |
Executive Chair & CEO |
Vice President – Corporate
Affairs and Administration |
Phone: (416) 949-7227 |
Phone: (204) 589-9301 |
Email:
gnelson@dynamictechgroup.com |
Email:
afrancis@dynamictechgroup.com |
Reader AdvisoryThis news
release contains forward-looking statements, within the meaning of
applicable securities legislation, concerning Dynamic’s business
and affairs. In certain cases, forward-looking statements can be
identified by the use of words such as ‘‘plans’’, ‘‘expects’’ or
‘‘does not expect’’, ‘‘budget’’, “booked”, ‘‘scheduled’’,
“positions”, ‘‘estimates’’, “forecasts’’, ‘‘intends’’,
‘‘anticipates’’, “believes” or variations of such words and phrases
or state that certain actions, events or results ‘‘may’’, “may be”,
‘‘could’’, “should”, ‘‘would’’, ‘‘might’’ or ‘‘will’’, ‘‘occur’’ or
‘‘be achieved’’. Such statements include statements with respect
to: (i) the anticipated approval to conduct and implement the
Strategic Process; (ii) the anticipated approval of the DIP Loan;
(iii ) the ability to achieve the highest value available or
otherwise best offer for the Company, its Subsidiaries, and its
stakeholders through the Strategic Process; (iv) the expectation
that Dynamic’s listing will be transferred to the NEX Board of the
TSXV in accordance with the TSXV’s policies and procedures; (v) the
expectation that the Company’s transfer agent will suspend services
for non-payment; and (vi) the expectation that the trading of the
Company’s securities will be suspended. These statements involve
known and unknown risks, uncertainties and other factors that may
cause actual results or events to differ materially from those
anticipated in such forward-looking statements. Although Dynamic
believes these statements to be reasonable, no assurance can be
given that these expectations will prove to be correct and such
forward-looking statements included in this news release should not
be unduly relied upon. Actual results could differ materially from
those anticipated in these forward-looking statements as a result
of prevailing economic conditions, and other factors, many of which
are beyond the control of the Company. The forward-looking
statements contained in this news release represent Dynamic’s
expectations as of the date hereof, and are subject to change after
such date. The Company disclaims any intention or obligation to
update or revise any forward-looking statements whether as a result
of new information, future events or otherwise, except as may be
required by applicable securities regulations.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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