DATA Communications Management Corp. (TSX: DCM) (“DCM”), a leading provider of marketing and business communication solutions to companies across North America, announces It has closed the previously announced additional $7 million financing with Crown Capital Partner Funding, LP, an investment fund managed by Crown Capital Partners Inc. (TSX:CRWN)(“Crown”).
DCM has entered into a third amendment to its original credit agreement dated May 8, 2018 with Crown (the “Crown Facility”), whereby Crown has advanced a second non-revolving term loan (the “Tranche Two Loan”) in the principal amount of $7 million. To date, Crown has made total advances under the Crown Facility in the principal amount of $19 million. The Tranche Two Loan bears interest at the rate of 10% per annum, payable quarterly. The terms of the Tranche Two Loan are consistent with the provisions of the initial term loan advanced by Crown (the “Tranche One Loan”) under the Crown Facility. DCM may, subject to certain prepayment fees, prepay in full (but not in part) the entire outstanding balance of the Tranche Two Loan, and provided the Tranche Two Loan has been, or will concurrently be, prepaid in full, the Tranche One Loan, commencing May 8, 2020. The final maturity date for both advances under the Crown Facility remains May 8, 2023. The net proceeds of the Tranche Two Loan will be used by DCM to fund working capital expenses. As partial compensation for advancing the Tranche Two Loan and the promissory notes issued to certain related parties to DCM on July 31, 2019, respectively, DCM has issued warrants to: (i) Crown to purchase up to 550,000 common shares of DCM and (ii) the holders of those promissory notes to purchase up to a total of 78,571 common shares of DCM, in each case at an exercise price of $1.08 per share until May 8, 2023 (subject to customary anti-dilution adjustments).
“This funding helps support our short-term working capital needs and our future growth,” said Gregory J. Cochrane, CEO. “Crown Capital is supportive of our business strategy and is a valued financial partner. This capital will provide additional flexibility for us as we continue our pivot to a leading marketing and business services provider. Year to date, we have closed approximately $20 million of new business, including business from new customers and new solutions serving our existing customers’ needs.”
About DATA Communications Management Corp.
DCM is a communication solutions partner that adds value for major companies across North America by creating more meaningful connections with their customers. DCM pairs customer insights and thought leadership with cutting-edge products, modular enabling technology and services to power its clients’ go-to market strategies. DCM helps its clients manage how their brands come to life, determine which channels are right for them, manage multimedia campaigns, deploy location-specific and 1:1 marketing, execute custom loyalty programs, and fulfill their commercial printing needs all in one place.
DCM’s extensive experience has positioned it as an expert at providing communication solutions across many verticals, including the financial, retail, healthcare, consumer health, energy, and not-for-profit sectors. As a result of its locations throughout Canada and in the United States (Chicago, Illinois and New York, New York), it is able to meet its clients’ varying needs with scale, speed, and efficiency – no matter how large or complex the ask. DCM is able to deliver advanced data security, regulatory compliance, and bilingual communications, both in print and/or digital formats.
Additional information relating to DATA Communications Management Corp. is available on www.datacm.com, and in the disclosure documents filed by DATA Communications Management Corp. on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
Certain statements in this press release constitute “forward-looking” statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, objectives or achievements of DCM, or industry results, to be materially different from any future results, performance, objectives or achievements expressed or implied by such forward-looking statements. When used in this press release, words such as “may”, “would”, “could”, “will”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “plan”, and other similar expressions are intended to identify forward-looking statements. These statements reflect DCM’s current views regarding future events and operating performance, are based on information currently available to DCM, and speak only as of the date of this press release. These forward-looking statements involve a number of risks, uncertainties and assumptions and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such performance or results will be achieved. Many factors could cause the actual results, performance, objectives or achievements of DCM to be materially different from any future results, performance, objectives or achievements that may be expressed or implied by such forward-looking statements. The principal factors, assumptions and risks that DCM made or took into account in the preparation of these forward-looking statements include: the limited growth in the traditional printing industry and the potential for further declines in sales of DCM’s printed business documents relative to historical sales levels for those products; the risk that changes in the mix of products and services sold by DCM will adversely affect DCM’s financial results; the risk that DCM may not be successful in reducing the size of its legacy print business, realizing the benefits expected from restructuring and business reorganization initiatives, reducing costs, reducing and repaying its long term debt, and growing its digital and marketing communications businesses; the risk that DCM may not be successful in managing its organic growth; DCM’s ability to invest in, develop and successfully market new digital and other products and services; competition from competitors supplying similar products and services, some of whom have greater economic resources than DCM and are well-established suppliers; DCM’s ability to grow its sales or even maintain historical levels of its sales of printed business documents; the impact of economic conditions on DCM’s businesses; risks associated with acquisitions and/or investments in joint ventures by DCM; the failure to realize the expected benefits from the acquisitions of Thistle Printing, Eclipse Colour & Imaging, BOLDER Graphics and Perennial Group of Companies and risks associated with the integration and growth of such businesses; increases in the costs of paper and other raw materials used by DCM; DCM’s ability to maintain relationships with its customers; risks relating to future legislative and regulatory developments and other business risks involving the wellness, medical and adult-use marijuana markets in Canada and internationally generally; DCM’s new enterprise resource planning (“ERP”) system may fail to perform as planned and interrupt operational transactions during and following the implementation, which could materially and adversely affect DCM’s liquidity and operations and results of operations; and risks relating to DCM’s ability to access sufficient capital on favourable terms to fund its business plans from internal and external sources. Additional factors are discussed elsewhere in this press release and under the headings “Liquidity and capital resources” and “Risks and Uncertainties” in DCM’s management’s discussion and analysis and in DCM’s other publicly available disclosure documents, as filed by DCM on SEDAR (www.sedar.com). Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated or expected. Unless required by applicable securities law, DCM does not intend and does not assume any obligation to update these forward-looking statements.