skidcanuck
3rd Apr 2003, 06:35
Airline Training International Ltd. Announces Loan Financing Agreements
Wednesday April 2, 4:34 pm ET
TORONTO, ONTARIO--Airline Training International Ltd. (TSX VENTURE EXCHANGE:ATS - News) announced that it has agreed to enter into a series of loan transactions to raise $162,500.00 to satisfy short term financial needs of the company. The company has agreed to enter into two term loans, the first loan in the amount of $62,500.00 (the "First Loan") and the second loan in the amount of $100,000.00 (the "Second Loan").
ADVERTISEMENT
The First Loan is from a group of related parties to the company, comprising of David Lewis (as to $10,000.00), Robert Gilson, (as to $22,5000.00) James Essex (as to $15,000.00) and Anthony Wilshere (as to $15,000.00), all of whom are directors of the company. Mr. Gilson, Essex and Wilshere are also officers of the company. The First Loan is to be evidenced by a promissory note from the company to the related parties. The promissory note is unsecured, and bears interest at the rate of 24% per annum, calculated monthly, not in advance, payable interest only monthly, and with the principal balance due six months from the date of advance. Funds are scheduled to be advanced pursuant to the First Loan on April 2, 2003.
The Second Loan is from a group comprising of Aviation Equities Limited (as to $65,000.00) and Aspen PharmaTech, Inc. (as to $35,000.00). Aspen PharmaTech, Inc. is a related party to the company, in that Robert Gilson, the principal shareholder of Aspen PharmaTech, Inc. is an officer and director of the company. The Second Loan is to be evidenced by a promissory note from the company. The Second Loan bears interest at the rate of 24% per annum, calculated monthly, not in advance, payable interest only monthly for the first four months of the loan, and principal payments of $12,500.00 per month plus accrued interest for the last eight months of the loan with the remaining principal balance due twelve months from the date of advance. Funds are scheduled to be advanced pursuant to the Second Loan on April 2, 2003.
It is also a provision of the Second Loan that the principal amount of the Second Loan shall be immediately due and payable, at the option of the Lenders, on the closing date of any loan or Private Placement of Equity Shares or Convertible Securities arranged or obtained by the company prior to April 1, 2004, wherein the principal amount of the loan, or the cash consideration received by the company pursuant to the Private Placement of Equity Shares or Convertible Securities exceed the sum of Three Hundred Thousand Dollars ($300,000.00).
As security for the Second Loan, the company has agreed to provide collateral security for the Second Loan in the form of a General Security Agreement over partnership units owned by the company in ATI Limited Partnership I ("ATILPI"), a limited partnership registered in Ontario. ATILPI is the owner of a Cessna 172R aircraft which is leased to A.T.R. Seminars Inc. ("ATR") a wholly owned subsidiary of the company. There are currently 9,352 outstanding limited partnership units, of which 6,128 are owned by the company. The company acquired its partnership units for $75,000.00 from the previous owner of the partnership units in a transaction that closed on April 1, 2003.
In addition ATR has agreed to provide collateral security for the Second Loan in the form of a General Security Agreement over two aircraft owned by ATR., which will be in second position to an existing first security agreement in favour of the Canadian Imperial Bank of Commerce. The approximate value of the aircraft is $370,000.00. The General Security Agreement will also be secured against an outstanding shareholder loan owed to ATR by Carlos Monsalve, a Director of the company, and ATR's parts inventory.. ATR has also agreed to grant to the Second Loan Group an option to purchase the two aircraft to be pledged at the appraised value of the aircraft, which option expires on August 31, 2003. In the event the option is exercised, the Second Loan Group has agreed to lease back the aircraft to ATR for a three year period.
In consideration of the risks jointly taken by the Lenders in granting the First Loan and the Second Loan to the company, the Company has agreed, subject to the company obtaining necessary regulatory approval, and any other approvals as may be required by law, to use its best efforts to issue to the Lenders under the First Loan a bonus in the form of Two Hundred Fifty Thousand (250,000) non-transferrable warrants (the "First Loan Warrants") to purchase common shares in the capital of the Borrower, said warrants to be issued to each of the Lenders in proportion to their Pro-Rata Interest in the First Loan, and to issue to the Lenders under the Second Loan a bonus in the form of Four Hundred Thousand (400,000) non-transferrable warrants (the "Second Loan Warrants") to purchase common shares in the capital of the Borrower, said warrants to be issued to each of the Lenders in proportion to their Pro-Rata Interest in the Second Loan.
If necessary regulatory approvals are received the warrants issued with respect to each of the loans will be exercisable at a price of $0.10 per warrant exercised, due and payable at the date the warrant is exercised. The warrants shall be exercisable on or before the earlier of that date (the "Expiry Time") which is (a) April 1, 2005, and (b) the date on which the principal amount of the loan is paid in full. Any warrants not exercised on or before the Expiry Time shall expire on the Expiry Time. The number of warrants will be reduced or cancelled on a pro rata basis if the loans are reduced or paid out in the first year before the warrants expire. The reduction or cancellation shall take place within 30 days after the reduction or paying out of the loans. In the event that the company does not obtain necessary regulatory approval to issue the Second Loan Warrants, or having obtained approval, does not issue the Second Warrants on or before August 1, 2003, the company has ag
reed to pay to the Second Loan Lenders on the 1st day of April, 2004, an interest bonus equal to the sum of Ten Thousand Dollars ($10,000.00).
The Loan transactions were approved by the Board of Directors of the company, and by independent Directors of the company, on the basis that the company is in serious financial difficulty, the transactions were designed to improve the financial position of the company , and that the terms of the transactions are reasonable in the circumstances of the company. The company is relying upon the financial hardship exemption of section 5.8 to OSC Policy 61-501 with respect to the obtaining of minority approval for the related party transactions referred to herein.
Robert Gilson, President of the company stated "Substantial increases in insurance premiums for the company's fleet of aircraft, adverse weather conditions during the months of December, January and February which restricted customers and students from flying and unanticipated increases in fuel expenses have resulted in the company requiring short term financing that was not available to the company through institutional lenders. The Lenders under the First Loan and the Second Loan were not willing to grant the loans to the company without the company agreeing to use its best efforts to obtain the necessary regulatory approvals to issue warrants to the Lenders. This financing will allow the company to continue its operations at this time. We expect that anticipated increases in enrollment in the company's pilot training programs will enable the company to return to profitability in the fourth quarter ending June 30, 2003 and meet its obligations under these loans. It was nece
ssary for the company to proceed with these loan transactions on an expedited basis, as it was essential for the company to obtain the required short term financing to meet current obligations that had become due. Accordingly, the company was unable to give advance notice of the loan transactions."
The company is a public company trading under the symbol ATS on the TSX Venture Exchange. The company is Canada's first publicly traded company dedicated to pilot training and plans to grow by serving the needs of consumers as private pilots and career oriented pilots. The company seeks to expand by developing strategic alliances and increasing its market share through internal growth and acquisition, and embracing technological advancements in computer-based training, distance education through the Internet, and use of simulators.
Certain statements in this release may constitute "forward-looking statements" and involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any performance or achievements expressed or implied by such forward looking statements.
--------------------------------------------------------------------------------
Contact:
Airline Training International Ltd.
Robert Gilson
CEO & President
Phone: (416) 203-1199
E-mail: [email protected]
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
--------------------------------------------------------------------------------
Source: Airline Training International Ltd.
Wednesday April 2, 4:34 pm ET
TORONTO, ONTARIO--Airline Training International Ltd. (TSX VENTURE EXCHANGE:ATS - News) announced that it has agreed to enter into a series of loan transactions to raise $162,500.00 to satisfy short term financial needs of the company. The company has agreed to enter into two term loans, the first loan in the amount of $62,500.00 (the "First Loan") and the second loan in the amount of $100,000.00 (the "Second Loan").
ADVERTISEMENT
The First Loan is from a group of related parties to the company, comprising of David Lewis (as to $10,000.00), Robert Gilson, (as to $22,5000.00) James Essex (as to $15,000.00) and Anthony Wilshere (as to $15,000.00), all of whom are directors of the company. Mr. Gilson, Essex and Wilshere are also officers of the company. The First Loan is to be evidenced by a promissory note from the company to the related parties. The promissory note is unsecured, and bears interest at the rate of 24% per annum, calculated monthly, not in advance, payable interest only monthly, and with the principal balance due six months from the date of advance. Funds are scheduled to be advanced pursuant to the First Loan on April 2, 2003.
The Second Loan is from a group comprising of Aviation Equities Limited (as to $65,000.00) and Aspen PharmaTech, Inc. (as to $35,000.00). Aspen PharmaTech, Inc. is a related party to the company, in that Robert Gilson, the principal shareholder of Aspen PharmaTech, Inc. is an officer and director of the company. The Second Loan is to be evidenced by a promissory note from the company. The Second Loan bears interest at the rate of 24% per annum, calculated monthly, not in advance, payable interest only monthly for the first four months of the loan, and principal payments of $12,500.00 per month plus accrued interest for the last eight months of the loan with the remaining principal balance due twelve months from the date of advance. Funds are scheduled to be advanced pursuant to the Second Loan on April 2, 2003.
It is also a provision of the Second Loan that the principal amount of the Second Loan shall be immediately due and payable, at the option of the Lenders, on the closing date of any loan or Private Placement of Equity Shares or Convertible Securities arranged or obtained by the company prior to April 1, 2004, wherein the principal amount of the loan, or the cash consideration received by the company pursuant to the Private Placement of Equity Shares or Convertible Securities exceed the sum of Three Hundred Thousand Dollars ($300,000.00).
As security for the Second Loan, the company has agreed to provide collateral security for the Second Loan in the form of a General Security Agreement over partnership units owned by the company in ATI Limited Partnership I ("ATILPI"), a limited partnership registered in Ontario. ATILPI is the owner of a Cessna 172R aircraft which is leased to A.T.R. Seminars Inc. ("ATR") a wholly owned subsidiary of the company. There are currently 9,352 outstanding limited partnership units, of which 6,128 are owned by the company. The company acquired its partnership units for $75,000.00 from the previous owner of the partnership units in a transaction that closed on April 1, 2003.
In addition ATR has agreed to provide collateral security for the Second Loan in the form of a General Security Agreement over two aircraft owned by ATR., which will be in second position to an existing first security agreement in favour of the Canadian Imperial Bank of Commerce. The approximate value of the aircraft is $370,000.00. The General Security Agreement will also be secured against an outstanding shareholder loan owed to ATR by Carlos Monsalve, a Director of the company, and ATR's parts inventory.. ATR has also agreed to grant to the Second Loan Group an option to purchase the two aircraft to be pledged at the appraised value of the aircraft, which option expires on August 31, 2003. In the event the option is exercised, the Second Loan Group has agreed to lease back the aircraft to ATR for a three year period.
In consideration of the risks jointly taken by the Lenders in granting the First Loan and the Second Loan to the company, the Company has agreed, subject to the company obtaining necessary regulatory approval, and any other approvals as may be required by law, to use its best efforts to issue to the Lenders under the First Loan a bonus in the form of Two Hundred Fifty Thousand (250,000) non-transferrable warrants (the "First Loan Warrants") to purchase common shares in the capital of the Borrower, said warrants to be issued to each of the Lenders in proportion to their Pro-Rata Interest in the First Loan, and to issue to the Lenders under the Second Loan a bonus in the form of Four Hundred Thousand (400,000) non-transferrable warrants (the "Second Loan Warrants") to purchase common shares in the capital of the Borrower, said warrants to be issued to each of the Lenders in proportion to their Pro-Rata Interest in the Second Loan.
If necessary regulatory approvals are received the warrants issued with respect to each of the loans will be exercisable at a price of $0.10 per warrant exercised, due and payable at the date the warrant is exercised. The warrants shall be exercisable on or before the earlier of that date (the "Expiry Time") which is (a) April 1, 2005, and (b) the date on which the principal amount of the loan is paid in full. Any warrants not exercised on or before the Expiry Time shall expire on the Expiry Time. The number of warrants will be reduced or cancelled on a pro rata basis if the loans are reduced or paid out in the first year before the warrants expire. The reduction or cancellation shall take place within 30 days after the reduction or paying out of the loans. In the event that the company does not obtain necessary regulatory approval to issue the Second Loan Warrants, or having obtained approval, does not issue the Second Warrants on or before August 1, 2003, the company has ag
reed to pay to the Second Loan Lenders on the 1st day of April, 2004, an interest bonus equal to the sum of Ten Thousand Dollars ($10,000.00).
The Loan transactions were approved by the Board of Directors of the company, and by independent Directors of the company, on the basis that the company is in serious financial difficulty, the transactions were designed to improve the financial position of the company , and that the terms of the transactions are reasonable in the circumstances of the company. The company is relying upon the financial hardship exemption of section 5.8 to OSC Policy 61-501 with respect to the obtaining of minority approval for the related party transactions referred to herein.
Robert Gilson, President of the company stated "Substantial increases in insurance premiums for the company's fleet of aircraft, adverse weather conditions during the months of December, January and February which restricted customers and students from flying and unanticipated increases in fuel expenses have resulted in the company requiring short term financing that was not available to the company through institutional lenders. The Lenders under the First Loan and the Second Loan were not willing to grant the loans to the company without the company agreeing to use its best efforts to obtain the necessary regulatory approvals to issue warrants to the Lenders. This financing will allow the company to continue its operations at this time. We expect that anticipated increases in enrollment in the company's pilot training programs will enable the company to return to profitability in the fourth quarter ending June 30, 2003 and meet its obligations under these loans. It was nece
ssary for the company to proceed with these loan transactions on an expedited basis, as it was essential for the company to obtain the required short term financing to meet current obligations that had become due. Accordingly, the company was unable to give advance notice of the loan transactions."
The company is a public company trading under the symbol ATS on the TSX Venture Exchange. The company is Canada's first publicly traded company dedicated to pilot training and plans to grow by serving the needs of consumers as private pilots and career oriented pilots. The company seeks to expand by developing strategic alliances and increasing its market share through internal growth and acquisition, and embracing technological advancements in computer-based training, distance education through the Internet, and use of simulators.
Certain statements in this release may constitute "forward-looking statements" and involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any performance or achievements expressed or implied by such forward looking statements.
--------------------------------------------------------------------------------
Contact:
Airline Training International Ltd.
Robert Gilson
CEO & President
Phone: (416) 203-1199
E-mail: [email protected]
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
--------------------------------------------------------------------------------
Source: Airline Training International Ltd.