Dynamic Technologies Group Inc. (NEX: DTG.H, OTC:ERILF)
(“
Dynamic”, “
DTGI” or
“
Company”), with reference to the Company’s prior
news releases dated June 13, 2023 and June 26, 2023, announces
that, further to the previously announced approval and reverse
vesting order and a sale approval and vesting order (collectively,
the “
Court Order”) obtained on June 23, 2023 by
the Company from the Court of King’s Bench of Alberta (the
“
Court”) pursuant to the Companies’ Creditors
Arrangement Act (Canada) (the “
CCAA”), the
previously announced Transaction (defined below) involving Dynamic
and its subsidiaries, Dynamic Attractions Ltd.
(“
DAL”), Dynamic Entertainment Group Ltd.
(“
DEGL”), Dynamic Structures Ltd.
(“
DSL” and together with DAL and DEGL, the
“
Canadian Subsidiaries”) and Dynamic Attractions
Inc. (“
DAI” and together with the Canadian
Subsidiaries, the “
Subsidiaries”) closed July 21,
2023.
The Transaction closed following the receipt, on
July 20, 2023, of an order (the “Transaction Recognition Order”)
granted by the United States Bankruptcy Court for the Northern
District of Texas (the “US Court”) recognizing the Court Order,
approving the Transaction, the transfer of the purchased assets
free and clear of claims, liens and encumbrances, and approving the
related relief, including the releases of the Company, the
Subsidiaries, and the directors and officers. The Transaction
Recognition Order is the sole authorization required by the Company
and its Subsidiaries from the US Court to proceed with the
transaction.
The Transaction
Dynamic and its Subsidiaries completed a
transaction (the “Transaction”) pursuant to which,
among other things: (1) the newly formed Canadian subsidiary of
Promising Expert Limited (the “Purchaser”)
acquired: (i) one (1) new Class “A” Common Share in the capital of
Dynamic (the “DTGI Share”) for a
subscription price of $1.00, and all other issued and outstanding
equity securities in the capital of Dynamic other than the DTGI
Share were cancelled, resulting in the Purchaser owning 100% of the
issued and outstanding equity securities of Dynamic upon the
closing of the Transaction; (ii) all of the issued and outstanding
equity securities in the capital of DSL, other than the equity
securities of DSL held by persons other than Dynamic which will be
cancelled for no consideration, resulting in the Purchaser owning
100% of the issued and outstanding equity securities of DSL upon
closing of the Transaction; (iii) all of the issued and outstanding
equity securities in the capital of DAL; and (iv) all of the issued
and outstanding equity securities in the capital of DEGL; and (2) a
newly formed United States subsidiary of the Purchaser acquired
substantially all of the assets of DAI’s parts and services
business and Dynamic’s creative services division.
The purchase price payable pursuant to the
Transaction included: (i) a credit bid of approximately
USD$14,200,000 of secured claims being a portion of the debt owed
by Dynamic to the Purchaser; (ii) the set-off and cancelling of
USD$1,900,000, being a portion of the debt owed by Dynamic to the
Purchaser under the DIP loan agreement, including any accrued and
unpaid interest on the entire DIP loan amount and any costs
incurred by the Purchaser as interim lender; (iii) the payment of
certain priority payables and wind-down costs estimated to be
CAD$352,000; (iv) the assumption of certain
retained liabilities, including the principal amount of
USD$3,995,822, plus accrued interest thereon, that is owed to High
Express Holdings Limited, as lender, by DEGL; plus (v) certain
other retained liabilities enumerated in the Transaction agreement
which will continue to be liabilities of Dynamic and its
Subsidiaries following consummation of the Transaction. Excluded
liabilities and excluded assets of the Dynamic and its Canadian
Subsidiaries were vested out of Dynamic and its Canadian
Subsidiaries and will be assumed and taken up by another separate
legal entity referred to as a residual company
(“ResidualCo”) pursuant to the Court Order. All
claims against Dynamic and its Canadian Subsidiaries that were not
satisfied through the Transaction are now claims against ResidualCo
and have the same priority against any of the excluded assets that
are transferred into ResidualCo as they did against the Company and
its Canadian Subsidiaries.
The Company intends to seek approval of the
Court on July 28, 2023 to extend the stay of proceedings until
September 23, 2023 to: (i) wind down the operations at its
Vancouver production facility including ensuring all assets have
been removed and properly vacating the premises; (ii) provide FTI
Consulting Canada Inc., the court-appointed monitor (the
“Monitor”) sufficient time to assign ResidualCo
into bankruptcy and to administer the remainder of the CCAA
proceedings, including, but not limited to, seeking its discharge
as Monitor.
Post-Closing Reorganization
Upon completion of the Transaction, the Company
continued under the Canada Business Corporations Act and then
completed a series of amalgamations with its Canadian Subsidiaries
and the Purchaser, the end result of which is that the amalgamated
company will operate under the name “Dynamic Structures Ltd.” going
forward.
Regulatory Update
Upon completion of the Transaction, the Alberta
Securities Commission and the Ontario Securities Commission today
granted an order (the “Regulatory Order”) under
the securities legislation of those jurisdictions that Dynamic
has ceased to be a reporting issuer in all jurisdictions in Canada
in which it is a reporting issuer and, concurrently with the
Regulatory Order, issued a full revocation of the cease trade order
issued by the Executive Director of the Alberta Securities
Commission, which evidences the decision of the regulator or
securities regulatory authority in Ontario, with respect to Dynamic
dated May 9, 2023.
Following the completion of the Transaction, the
Company will no longer meet the listing requirements for the NEX
Board of the TSX Venture Exchange and, although the Company’s
public shares were canceled pursuant to the Court Order, the
Company anticipates being delisted from the NEX Board no later than
Thursday, July 27th.
MLT Aikins LLP is acting as legal counsel to
Dynamic and its Subsidiaries in connection with the CCAA
proceedings and the proposed Transaction.
About Dynamic
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. For more information
about the Company 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 Company’s intention to seek approval of the Court on
July 28, 2023 to extend the stay of proceedings until September 23,
2023 to: (A) wind down the operations at its Vancouver production
facility including ensuring all assets have been removed and
properly vacating the premises; and (B) provide the Monitor
sufficient time to assign ResidualCo into bankruptcy and to
administer the remainder of the CCAA proceedings, including, but
not limited to, seeking its discharge as Monitor; and (iii) the
anticipated delisting from the NEX Board of the TSX Venture
Exchange. 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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