Ackroo Announces Re-structuring of BDC loan

Rhea-AI Summary

Ackroo Inc. (TSX-V: AKR; OTC: AKRFF) has announced a restructuring of its loan with BDC Capital. The company has agreed to a 12-month payment plan for the remaining $3,000,000 principal balance, starting September 30, 2024. The new plan includes:

• Minimum monthly payments of $50,000 for 12 months
• A final balloon payment of $2,450,000 due on August 31, 2025
• Option to pay the full principal balance without prepayment penalties

The loan's other terms, including the 9.3% base interest rate plus 1.7% variance, remain unchanged. This restructuring allows Ackroo to continue its acquisition strategy while managing debt repayment.

Positive

• Restructured loan provides more manageable repayment terms
• Option to repay full principal balance without penalties
• Ability to continue acquisition strategy while servicing debt
• Maintained positive relationship with BDC Capital

Negative

• Significant debt burden of $3,000,000 remaining
• Large balloon payment of $2,450,000 due in August 2025
• Ongoing interest payments at 11% rate (9.3% base + 1.7% variance)

Ackroo agrees to 12-month payment plan for BDC loan

HAMILTON, Ontario, Aug. 13, 2024 (GLOBE NEWSWIRE) -- Ackroo Inc. (TSX-V: AKR; OTC: AKRFF) (the “Company”), a gift card, loyalty marketing, payments and point-of-sale technology consolidator and services provider, is pleased to report they have re-structured their loan with BDC Capital (“BDC”). The current loan consists of:

• $4,000,000 (of which Ackroo has paid back $1,000,000 to date)
• Bears a floating interest rate of BDC Capital’s base rate (which is currently 9.3%) plus a Variance of 1.7% per year.
• Includes a 2.55% annual royalty on clients acquired with the facility during the term of the loan, excluding the first year.
• Includes a 0.5% bonus on sale or change of control payment to be made to BDC Capital should the Company sell the business during the term of the loan
• Includes a 1.5% processing fee of the value of the facility (as the funds are tranched) plus $100 a month financing management fee
• Final principal ballon payment of $3,000,000 due on September 15^th,2024.

Ackroo and BDC Capital have agreed to re-structure the balloon payment by having Ackroo pay a minimum $50,000 a month for 12 months commencing September 30^th,2024 and then a balloon payment of $2,450,000 due on August 31^st, 2025. During the term the Company may pay up to the full principal balance owed without prepayment penalty of any kind. The company will maintain all other terms and conditions of the current loan.

“We are very appreciative of the partnership we have with BDC Capital” said Steve Levely, CEO of Ackroo. “The initial loan back in 2019 was at an integral time for the Company as we wanted to continue to execute our roll-up strategy however, we wanted to do so with very minimal dilution to shareholders through equity issuances. Doing accretive deals was and is important for Ackroo so using debt and our own working capital have been important aspects of our strategy over the last 5 years. We have been successful in doing so and are now in a position to not only service the interest payments but also the principal loan itself. We came to a monthly amount that Ackroo can comfortably support while also continuing our capital allocation towards future acquisitions and share buy backs. In all we are very happy with the re-structuring and appreciate the on-going partnership BDC capital extends.”

About BDC Capital
BDC Capital is the investment arm of the Business Development Bank of Canada - Canada’s only bank devoted exclusively to entrepreneurs. With $3 billion under management, BDC Capital serves as a strategic partner to the country’s most innovative firms. It offers a full spectrum of risk capital, from seed investments to transition capital, supporting Canadian entrepreneurs who wish to scale their businesses into global champions. Visit bdc.ca/capital.

About Ackroo

As an industry consolidator, Ackroo acquires, integrates and manages gift card, loyalty marketing, payment and point-of-sale solutions used by merchants of all sizes. Ackroo’s self-serve, data driven, cloud-based marketing platform helps merchants in-store and online process and manage loyalty, gift card and promotional transactions at the point of sale. Ackroo’s acquisition of payment ISO’s affords Ackroo the ability to resell payment processing solutions to their growing merchant base through some of the world’s largest payment technology and service providers. As a third revenue stream Ackroo has acquired certain custom software products including hybrid management and point-of-sale solutions that help manage and optimize the general operations for niche industry’s including automotive dealers and more. All solutions are focused on helping to consolidate, simplify and improve the merchant marketing, payments and point-of sale ecosystem for their clients. Ackroo is headquartered in Hamilton, Ontario, Canada. For more information, visit: www.ackroo.com.

For further information, please contact:

Steve Levely
Chief Executive Officer | Ackroo
Tel: 416-360-5619 x730
Email: slevely@ackroo.com

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward Looking Statements
This release contains forecasts and forward-looking statements that are not guarantees of future performance and activities and are subject to risks and uncertainties. The Company has based these forward-looking statements on assumptions and assessments made by its management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, but are not limited to: the Company’s ability to raise enough capital to support the Company’s go forward plans; the overall global economic environment; the impact of competition and new technologies; general market, political and economic conditions in the countries in which the Company operates; projected capital expenditures and liquidity; changes in the Company’s strategy; government regulations and approvals; changes in customers’ budgeting priorities; plus other factors that may arise. Any forward-looking statements in this press release are made as of the date hereof, and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

FAQ

What are the new repayment terms for Ackroo's BDC loan?

Ackroo will pay a minimum of $50,000 monthly for 12 months starting September 30, 2024, followed by a $2,450,000 balloon payment due on August 31, 2025.

How much is Ackroo's remaining loan balance with BDC Capital?

Ackroo's remaining loan balance with BDC Capital is $3,000,000.

What is the current interest rate on Ackroo's BDC loan?

The current interest rate on Ackroo's BDC loan is BDC Capital's base rate of 9.3% plus a variance of 1.7% per year, totaling 11%.

Can Ackroo (AKRFF) repay the loan early without penalties?

Yes, Ackroo can pay up to the full principal balance owed without any prepayment penalties during the term of the loan.