Franchise Services of North America Inc. announces Cease Trade Order and provides update on Advantage asset sale
TSX-V Trading Symbol: FSN
RIDGELAND, MS, April 2, 2014 /PRNewswire/ - FRANCHISE SERVICES OF NORTH AMERICA INC. ("FSNA" or the "Company") (FSN.V) announces that a Cease Trade Order (the "Cease Trade Order") was issued on April 1, 2014 by the Alberta Securities Commission (the "ASC") against the Company due to the Company (a) failing to file its audited annual financial statements and its related management's discussion and analysis and certification of annual filings for the year ended September 30, 2013 (the "Annual Filings"), and (b) failing to file its interim financial report, related management's discussion and analysis and certification of interim filings for the period ended December 31, 2013 (the "Interim Filings" and together with the Annual Filings, the "Required Filings"), in each case prior to the deadline of March 28, 2014 set forth in the Management Cease Trade Order ("MCTO") previously granted to the Company by the ASC (the "MCTO Deadline").
On January 29, 2014, the Company was granted the MCTO in accordance with National Policy 12-203 Cease Trade Orders for Continuous Disclosure Defaults ("NP 12-203"). Pursuant to the requirements of the alternative information guidelines set forth in NP 12-203, the Company has, following the granting of the MCTO by the ASC, issued bi-weekly default status updates in connection with the MCTO.
Since the issuance of its last default status update on March 14, 2014, the Company determined that it would be unable to complete the Required Filings by the MCTO Deadline. The Company continues to work with its auditors to prepare and finalize the Required Filings. The Company anticipates that it will be in a position to file the Annual Filings on or before April 18, 2014 and the Interim Filings on or before May 17, 2014.
As a result of not being able to complete the Required Filings by the MCTO Deadline, the ASC issued the Cease Trade Order against the Company. All trading in the securities of the Company will cease until the Company files the Required Filings and makes an application for a full revocation of the Cease Trade Order.
The Company also provides the following update on the previously announced proposed sale (the "Asset Sale") of certain assets used in connection with the business of the Company's wholly-owned subsidiary, Simply Wheelze LLC ("Simply Wheelz"), which does business as Advantage Rent A Car ("Advantage").
The Catalyst Capital Group, Inc. (on behalf of one or more funds managed by it) ("Catalyst") was selected as the prevailing purchaser in an auction of the Advantage assets conducted in accordance with the bidding procedures approved by the United States Bankruptcy Court for the Southern District of Mississippi in the Simply Wheelz insolvency proceedings. Catalyst had previously been approved by the Court as a secured lender in the proceedings.
The Asset Sale is currently scheduled to be completed on or before April 30, 2014. However, the Company cautions that there are a number of procedural matters and arrangements with third parties that will need to be completed before such sale is likely to be consummated.
Simply Wheelz filed for U.S. federal bankruptcy protection on November 6, 2013.
FSNA is a publicly traded company listed on the TSX Venture Exchange. The Company and its subsidiaries own the following brands: Advantage Rent A Car, U-Save Car & Truck Rental® ("U-Save"), U-Save Car Sales, Rent-A-Wreck of Canada, PractiCar, Auto Rental Resource Center ("ARRC"), Xpress Rent A Car and Peakstone Financial Services.
U-Save, together with its subsidiary ARRC, has over 900 locations throughout the United States and is one of North America's largest franchise car rental companies. U-Save currently services 19 airport markets in 13 different states. Although primarily based in the United States, U-Save has 18 international locations in Mexico, Greece, the Middle East, Latin America, and the Caribbean.
Practicar Systems Inc. owns the rights to the Rent-A-Wreck® and the PractiCar® trademarks for all of Canada. The Rent-A-Wreck® system operates a network of 61 franchise locations from coast-to-coast in Canada, providing a range of vehicle rental, leasing and sales options to its customers. The Rent-A-Wreck® system has been in continuous operation in Canada since 1976.
Certain statements made in this news release are forward-looking in nature, including statements concerning the ability of FSNA to file the Annual Filings by April 18, 2014 and the Interim Filings by May 17, 2014 and FSNA's ability to complete a sale transaction with Catalyst and the time at which such sale might be completed. The words "may", "could", "should", "would", "expect", "intend", "estimate", "anticipate", "believe", or "outlook" and similar expressions often identify forward-looking information. By their nature, forward-looking statements require FSNA to make assumptions and are subject to inherent risks and uncertainties. The forward-looking statements contained in this news release are based on certain key expectations and assumptions made by FSNA, including with respect to when the Company anticipates it will be able to remedy the disclosure defaults noted herein and FSNA's ability to complete a sale transaction with Catalyst and the time at which such sale might be completed. Although FSNA believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because FSNA can give no assurance that they will prove to be correct. These forward-looking statements also involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of FSNA to differ materially from the anticipated results, performance or achievements or developments expressed or implied by such forward-looking statements. If any such risks actually occur, they could materially and adversely affect FSNA's business, financial condition or results of operations. FSNA's forward-looking statements are qualified in their entirety by these cautionary statements. In addition, the forward-looking statements are made only as of the date of this news release, and except as required by applicable securities law, FSNA undertakes no obligation to publicly update these forward-looking statements to reflect new information, subsequent events or otherwise.
Neither 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.
SOURCE Franchise Services of North America Inc.