ALXXF Avante Corporation (PK)

Trading symbols: TSX – XX.V, OTC - ALXXF

TORONTO, July 21, 2014 /CNW/ - Avante Logixx Inc., ("Avante" or the "Company") through its wholly owned subsidiary, Avante Security Inc., provides best in class residential and commercial security services including system design and installation, rapid alarm response, alarm monitoring, video analytics and secure transport through the use of advanced technology and a focus on client service.

Co-CEOs George Rossolatos and Emmanuel Mounouchos announced Avante Logixx Inc.'s results for the quarter ended June 30, 2014 ("Q1-15"). During the quarter, Avante generated revenues of $2,026,260, with an overall gross margin of $789,477 or 39.0%, and an Adjusted EBITDA of $217,006. Overall revenues decreased by approximately 13.2% for the quarter, due to a decrease in revenues from non-recurring security services, primarily driven by a softer quarter in international security travel advisory services. As indicated in earlier periods, other security services like International Security Travel Advisory services are not recurring in nature and depend on the international activities of our clients during the quarter.  "While we are disappointed in the volume of non-recurring revenue this quarter, we are pleased with the organic growth in our key recurring revenue categories.  We will focus on building both positively in future quarters," said co-CEO George Rossolatos.

Net income for Q1-15 was $208,055, as compared to $430,191 for Q1-14. The decrease was attributable to a) the quarter being soft with respect to non-recurring security services and transport; and b) a planned increase in sales and marketing expense of $66,000.  Adjusted EBITDA for the year was $217,006 as compared to $430,191 for the quarter ended June 30, 2013.  The Company will retain its focus on growing all of its revenue streams, while targeting strategic acquisitions that will enhance the Company's offerings.

The Company's customer base for the recurring revenue offerings continues to grow at greater than 10% annualized, as compared to Q1-14. Cash flow from operations for the quarter was approximately $130,000. Avante plans to continue to make investments in infrastructure, sales and continue the radio advertising campaign launched in this quarter.

Avante's prospects for the remainder of 2015 continue to be positive. The Company continues to strengthen its balance sheet which is free of debt, while pursuing opportunities to make strategic acquisitions. This, management believes, would further improve Avante's market share and result in increased profitability, while delivering maximum value to its shareholders.

Avante Logixx Inc. Signs Binding Share Purchase Agreement to Acquire INTO-ELECTRONICS INC.

The Company is pleased to announce that it has signed a binding share purchase agreement (the "Agreement") to purchase all of the issued and outstanding shares of INTO-ELECTRONICS INC. ("INTO-ELECTRONICS") from its founder and President Rodney Wechsler and a minority shareholder.  Completion of the transaction will be subject to a number of conditions including TSX Venture approval and satisfactory completion of certain remaining due diligence items.  The transaction is expected to close in mid to late August 2014. 

Founded in 1991 as a high end custom residential security and automation services integrator, INTO-ELECTRONICS which is based in Toronto, has developed a specialized skillset in commercial and high rise security integration, monitoring, and electronic building management, which includes 24/7 access control management and operation of its own 24/7 support centre, in addition to its expertise in high end residential security and generates over $2,500,000 in revenue annually of which approximately one third is recurring.  The transaction is expected to be immediately accretive upon close. On closing, Mr. Rodney Wechsler will continue in his role as President of INTO-ELECTRONICS pursuant to an employment agreement and continue to drive strategy and execution.  Rod Wechsler stated:  "I am proud of what we have created at INTO-ELECTRONICS and I'm very excited to be joining the Avante Logixx fold.  There are many opportunities where both businesses can mutually benefit from being under the same umbrella and I'm very excited to begin INTO-ELECTRONICS' next stage of development with Avante," stated Rod Wechsler.

 "I have known Rod for many years to be a talented, hardworking, ethical and driven individual.  He will be a great addition for Avante and I look forward to working with him.  We are extremely excited to join with Rod and the entire INTO-ELECTRONICS team and we believe this will further the growth strategy of both companies going forward " said Manny Mounouchos co-CEO of Avante Logixx Inc.

George Rossolatos, co-CEO of Avante Logixx Inc., added:  "Avante raised capital in March 2014 for the primary purpose of executing strategic acquisitions in the security space.  We have been working to assess a number of transactions since then and we hope this transaction is the first of a number of potential acquisitions in our deal pipeline.   We chose INTO-ELECTRONICS as our first because of the company's brand, it's commercial expertise, its proportion of recurring to non-recurring revenue which is similar to that of Avante and most importantly for the opportunity to work  with someone of Rod Wechsler's caliber."

Pursuant to the Agreement, Avante has agreed to purchase all of the issued and outstanding shares of INTO-ELECTRONICS in consideration for cash and Avante shares.  The terms of the Agreement provide that: (i) on closing, the vendor shareholders will receive a cash payment of $2,400,000, which payment would be subject to certain adjustments including in respect of working capital for which a holdback has been provided; (ii) on closing, the vendor shareholders will receive 1,052,632 Avante common shares (representing $400,000 of shares based on today's 20 day volume-weighted average sale price); and (iii) subject to certain contingencies and adjustments including in respect of indemnity claims, on each of the first and second year anniversaries of closing, the vendor shareholders will receive $400,000 of Avante common shares valued based on the preceding 20 day volume-weighted average sale price per share from the date of issuance, subject to a collar of $0.25 to $0.50 per share.

The proposed transaction is arm's length and no finder's fees are payable or to be paid in connection with the transaction. 

Avante will be hosting a conference call tomorrow morning (Tuesday, July 22, 2014) to discuss the aforementioned quarterly results and the acquisition of INTO-Electronics Inc. at 8:30am EDT.

Dial in details are as follows:      

About Avante Logixx

Avante Logixx Inc. (TSX VENTURE: XX) is a Toronto based security and technology company. Its primary operating division, Avante Security Inc. (www.avantesecurity.com), provides best in class security response and other security services for residential and commercial applications as well as being an industry leader in designing and installing complex security systems, access control, intelligent video analytics and smart home automation. Its International Travel Security offering helps corporations protect traveling employees working abroad in medium/high risk jurisdictions and has executed travel details in over 60 countries. The company continuously develops innovative products and applications within its core competencies. Please visit our newly updated websites at www.avantelogixx.com and www.avantesecurity.com and consider joining our investor email list.

FORWARD LOOKING STATEMENTS

Certain of the statements and information in this press release constitute "forward-looking statements" or "forward-looking information" These statements include, but are not limited to, statements with respect to the entering into of agreements, the closing of transactions and the use of proceeds. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, the timing of transactions, the ability to fulfill certain conditions and obtain regulatory approvals, and the ability to raise funds and use the proceeds as anticipated.

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.

¹ Revenues – Recurring Monitoring and Response includes Alarm Response along with Digital, Wireless and Video Monitoring services

SOURCE Avante Logixx Inc.