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TORONTO-Ontario- February 25, 2022 – Avante Corp Inc. (TSX.V: XX) (OTC: ALXXF) (“Avante” or the “Company”) released financial results for its third fiscal quarter ended December 31, 2021 (all amounts in thousands of Canadian dollars, unless otherwise indicated).

In addition, the Company’s Board of Directors concluded the Strategic Review and, on February 9, 2022, announced that SSC Security Services Corp (TSXV: SECU; “SSC”) had agreed to acquire 100% of the Company’s common shares subject to shareholder and regulatory approval (see the “Subsequent Events” note below).



Avante’s Fiscal Year End is March 31. Three Months Ended
Expressed in C$ thousands, unless otherwise noted 31-Dec-20 30-Sep-21 31-Dec-21
Revenues  $25,204  $22,601  $23,286
Gross profit (1)  $5,584  $4,242  $4,725
Gross profit margin (1)  22.2%  18.8%  20.3%
Direct Operating Expenses (1)  $3,880  $3,668  $3,788
EBITDA (1)  $108 ($2,085)  $2,900
Adjusted EBITDA (1)  $1,633  $627  $968
Comprehensive income (loss) attributed to Avante shareholders ($1,493) ($2,926)  $1,611
Basic and fully diluted income per share ($0.070) ($0.138)  $0.076
Basic and fully diluted Adjusted EBITDA per share (1)  $0.077  $0.030  $0.046
Cash Flow from Operations before Working Capital  $1,236  $623  $401

(1) Adjusted EBITDA, EBITDA, Gross Profit, Gross Profit Margin and Direct Operating Expenses are non-IFRS measures. See Description of Non-IFRS Measures.

The Company reported year-over-year revenue declines of 7.6% and Adjusted EBITDA declined from $1.6 million in Q3 F21 to $1.0 million during Q3 F22. However, Avante delivered growing recurring monthly revenue (“RMR”) and contractual revenue streams of $17.8 million during the third quarter of this year from $17.2 million in the prior year’s third quarter, representing year-over-year growth of 3.5%, and sequential growth versus Q2 of 2.8%.

Q3 F21 Q4 F21 Q1 F22 Q2 F22 Q3 F22
Recurring Monthly Revenue $ 2,194 $ 2,380 $ 2,435 $ 2,437 $ 2,577
Contractual Revenue $ 15,019 $ 14,643 $ 14,171 $ 14,888 $ 15,235
Total recurring/ contractual revenue $ 17,213 $ 17,023 $ 16,606 $ 17,325 $ 17,812
% of total revenues  68.3%  68.9%  68.8%  76.7%  76.5%


  • Revenues of $23.3 million for the quarter ended December 31, 2021, which represented a 7.6% YoY decline and a sequential improvement versus the second quarter of 3.0%.
  • Revenue by segment during the third quarter of Fiscal 2022 was as follows:
For the Quarter Ended
$ in thousands Revenue % of Total
Logixx Security  $18,639  80.0%
Avante Security  $4,752  20.4%
Intercompany ($105) (0.4%)
Total  $23,286   100.0%


  • Gross profit of $4.7 million for the quarter ended December 31, 2021, which represented a decline of 15.4% year over year, but sequential growth of 11.4%.
  • Direct Operating Expenses increased in absolute dollars sequentially and declined slightly year over year. Such costs were 16.3% of revenue during Q3 F22 from 15.4% in Q3 of the prior year, but were essentially flat versus16.2% of revenues during Q2 F22.
  • Adjusted EBITDA during Q3 F22 of $1.0 million, or 4.2% of revenue, was $0.7 million less than the prior year, but a $0.3 million improvement on a sequential basis.
  • Generated $0.4 million in cash flow from operations (before changes in working capital) during Q3 F22.
  • IFRS reported net profit and EBITDA reflected a gain on the derivative component of the Convertible Debentures of $2.5 million during Q3 Fiscal 2022. This gain is removed in the Company’s calculation of the quarter’s Adjusted EBITDA.
  • IFRS reported Net Income of $1.6 million or $0.076 per share.



Sale of Company

·       On February 8, 2022, the Company entered into a definitive arrangement agreement (the “Arrangement Agreement”) with SSC Security Services Corp. (“SSC”) pursuant to which SSC has agreed to acquire all of the Company’s common shares by way of a statutory plan of arrangement (the “Arrangement”).  Under the terms of the Arrangement Agreement, shareholders of the Company will receive $0.52 in cash plus 0.4155 common shares of SSC for each common share of the Company (the “Shares”) to be paid on completion of the Arrangement.   SSC’s common shares are listed on the TSX Venture Exchange under the symbol SECU.

·       The Arrangement will be carried out by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario) OBCA.  The Arrangement requires the approval of the holders of Shares representing at least two-thirds of all votes cast at a special meeting of shareholders anticipated to be held in April 2022 and a majority of such votes excluding the votes required to be excluded by applicable securities laws.

·       The Arrangement is also subject to the satisfaction of certain closing conditions customary in transactions of this nature, including TSX Venture Exchange approval and the approval of the Ontario Superior Court of Justice (Commercial List).  The Arrangement is not subject to any financing condition. The Company is subject to customary non-solicitation provisions under the Arrangement Agreement.

·       Under the Arrangement Agreement, the Company may be required to pay a termination fee in the amount of $1,800,000 in the event the Arrangement Agreement is terminated in certain circumstances, following the occurrence of a termination fee event.  Additionally, in the event the Company’s shareholders do not approve the SSC transaction, an expense reimbursement to SSC in the amount of 2.5 times actual expenses (up to a maximum of $750,000) will be payable by the Company.  Further, in the event the Arrangement is terminated, the Company would also be required to absorb the costs of other advisory and related expenses in the expected range of $800,000 to $1,000,000.

·       If all required approvals are obtained, the Transaction is expected to close in April 2022.


Conversion of Convertible Debentures

·       On February 17, 2022, the Company announced that it received notice from Fairfax Financial Holdings Limited, through certain of its affiliates (collectively “Fairfax”) to convert all of the outstanding convertible debentures issued by the Company into common shares of the Company.  After giving effect to the conversion on the effective date at $1.56 per share, an aggregate of 5,297,434 common shares were issued to Fairfax, representing 19.998% of all common shares outstanding including the newly issued shares.  The effective date was February 16, 2022 and the Company paid interest due in respect of the time from its last interest payment on December 31, 2021, up to and including the conversion’s effective date.  During its fourth fiscal quarter ending March 31, 2022, the Company will record a net gain from accounting purposes of approximately $0.3 million as a consequence of this conversion.



This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities described herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This news release does not constitute an offer of securities for sale in the United States. The securities described herein have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent registration under U.S. federal and state securities laws or an applicable exemption from such U.S. registration requirements.


About Avante Corp Inc.

Avante Corp Inc. (TSXV: XX) is a Toronto based provider of high-end security services. We acquire, manage and build industry leading businesses which provide specialized, mission-critical solutions that address the needs of our customers. Our businesses continuously develop innovative solutions that enable our customers to achieve their objectives. With an experienced team and a proven track record of solid growth, we are taking steps to establish a broad portfolio of security businesses to provide our customers and shareholders with exceptional returns. Please visit our website at and consider joining our investor email list.

Avante Corp Inc.


Craig Campbell


(416) 923-6984


Forward-Looking Information

All statements in this press release, other than statements of historical fact, may constitute “forward looking information” with respect to Avante within the meaning of applicable securities laws. Forward-looking information is often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “planned”, “expect”, “project”, “predict”, “potential”, “targeting”, “intends”, “believe”, “potential”, and similar expressions, or describes a “goal”, or a variation of such words and phrases or state that certain actions, events or results “may”, “should”, “could”, “would”, “might” or “will” be taken, occur or be achieved. This forward-looking information includes statements with respect to, among other things, the intention to create a platform capable of supporting a business with significantly greater scale, Avante’s strategic plan, Avante’s intentions to engage in mergers and acquisitions in the near term, Avante’s intentions to identify, acquire and integrate suitable targets for mergers and acquisitions, the ability to achieve operational efficiencies and provide a better overall customer experience, Avante’s run- rate, opportunities to grow Avante’s revenue and Adjusted EBITDA profile, investments in corporate infrastructure, Avante’s ability to execute and integrate larger acquisitions, the expected trajectory of corporate costs as a percentage of revenue and the unwinding of Covid-19 related revenue benefits and the normalization of pre-pandemic customer revenues. This forward-looking information also includes statements with respect to, among other things, information or statements about Avante’s strategy, future operations, its review of strategic alternatives, any transactions arising from the Strategic Review and statements regarding Avante’s work with a strategic advisor. Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied by the forward looking information, including, without limitation, the ability to identify, acquire and integrate suitable targets for mergers and acquisitions, the ability to control corporate costs, the effects of the ongoing Covid-19 pandemic and the list of risk factors identified in Avante’s Management Discussion & Analysis (MD&A), Annual Information Form (AIF) and other continuous disclosure, which list is not exhaustive of the factors that may affect any of Avante’s forward-looking information. In connection with the forward-looking statements contained in this and subsequent press releases, Avante has made certain assumptions about its business and the industry in which it operates and has also assumed that no significant events occur outside of Avante’s normal course of business. Although management believes that the assumptions inherent in the forward-looking statements are reasonable as of the date the statements are made, forward-looking statements are not guarantees of future performance and, accordingly, undue reliance should not be put on such statements due to the inherent uncertainty therein. Avante’s forward-looking information is based on the beliefs, expectations, and opinions of management on the date the statements are made, and Avante does not assume any obligation to update forward-looking information, whether as a result of new information, future events or otherwise, other than as required by applicable law. For the reasons set forth above, readers should not place undue reliance on forward-looking information.

Non-IFRS Financial Measures

This press release includes certain measures which have not been prepared in accordance with IFRS such as EBITDA and Adjusted EBITDA. These non-IFRS measures are not recognized under IFRS and, accordingly, users are cautioned that these measures should not be construed as alternatives to net income determined in accordance with IFRS. The non-IFRS measures presented are unlikely to be comparable to similar measures presented by other issuers.

References to EBITDA are to net income before interest, taxes, depreciation and amortization. References to Adjusted EBITDA are to net income before interest, taxes, depreciation, amortization of intangibles & capitalized commissions, share-based payments, acquisition, integration and / or reorganization costs, deferred financing costs, loss (gain) in fair value of derivative liability, expensing of CWL fair value adjustment per IFRS less non-controlling interest’s share. Neither EBITDA nor Adjusted EBITDA is an earnings measure recognized by International Financial Reporting Standards (“IFRS”) and do not have a standardized meaning prescribed by IFRS. Management believes that Adjusted EBITDA is an appropriate measure in evaluating Avante’s performance. Readers are cautioned that neither EBITDA nor Adjusted EBITDA should be construed as an alternative to net income (as determined under IFRS), as an indicator of financial performance or to cash flow from operating activities (as determined under IFRS) or as a measure of liquidity and cash flow. Avante’s method of calculating Adjusted EBITDA may differ from methods used by other issuers and, accordingly, Avante’s Adjusted EBITDA may not be comparable to similar measures used by other issuers.

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.