Mogo Announces Preliminary Q3 2020 Results & Financial Updates
Mogo Inc. (TSX:MOGO) (NASDAQ:MOGO)(collectively with its subsidiaries, "Mogo" or the "Company"), one of Canada's leading financial technology companies, today provided a preliminary update on its financial results for the third quarter ending September 30, 2020, as well as amendments to its non-convertible debentures.
Q3 2020 Highlights
Mogo is expecting to report:
- Revenue of $9.5 million to $9.7 million;
- Adjusted EBITDA of $3.8 million to $4.2 million;
- Positive operating cash flow net of investing activities of $4.0 million to $4.5 million; and
- Accelerating new member growth.
“Building on record Adjusted EBITDA and cash flow in the second quarter, our third-quarter results continue to highlight the underlying profitability of our financial model as we transition back into growth,” said Greg Feller, President and CFO of Mogo. “We continue to see an acceleration in the shift to digital financial services in Canada and we believe Mogo’s focus on solutions that help consumers manage their financial health and live a more sustainable lifestyle, uniquely position us to capitalize on this shift. With the recent launch of our new spending account and the upcoming launch of our peer-to-peer solution, we have a strong foundation for growth heading into 2021.”
Amendments to Non-Convertible Debentures
Mogo also announced that the holders (the “Debentureholders”) of the Company’s outstanding non-convertible debentures (the “Debentures”) have approved certain amendments (the “Amendments”) to the terms of the Debentures. The Amendments are expected to become effective on or about September 29, 2020 (the “Effective Date”).
The Amendments include a reduction in the average interest rate, from approximately 13.7% to approximately 7.0%, and the extension of the maturity dates to Jan 31, 2023 and Jan 31, 2024.
Mr. Feller added: “These amendments significantly reduce our interest expense, extend the maturity date, and provide us with increased financial flexibility moving forward. Over the past year, we have taken several important steps to strengthen our balance sheet, and we view these amendments as the last major milestone in that process.”
In connection with the Amendments, the Company has agreed to issue an aggregate of up to 4,500,000 common share purchase warrants (the "Warrants") to the Debentureholders. Each Warrant will be exercisable to purchase one common share in the capital of Mogo Inc. (each, a "Common Share") at a price that is equal, subject to the approval of the Toronto Stock Exchange ("TSX"), to the VWAP of the Common Shares on the TSX for the five trading day period ending on the fifth day prior to the Effective Date. The Warrants are expected to be issued promptly after the Effective Date and will be exercisable at any time until December 31, 2022.