GuestLogix Inc. (TSX:GXI) ("GuestLogix" or the "Company"), the leading global provider of ancillary-focused merchandising, payment and business intelligence technology to airlines and the passenger travel industry, announced today that in light of the ongoing proceedings commenced under the Companies' Creditors Arrangement Act
(the "CCAA"), it does not currently intend to prepare or file consolidated audited financial statements for the period ended December 31, 2015 (the "2015 Annual Financials"). GuestLogix also announced today that the independent committee of its directors formed on December 16, 2015 (the "Special Committee") has concluded its internal review and provided its recommendations to the Company's board of directors (the "Board").
In developing its recommendations, the Special Committee considered a number of factors and consulted with and carefully considered the input of its own advisors and the Company's independent auditor. Following completion of its review, in reliance on the informed advice of the Company's independent auditor that the Company's revenue recognition accounting policies and its historical financial statements are in compliance with IFRS, the Special Committee recommended to the Board that a restatement of its 2013 and 2014 financial statements is not necessary. With respect to the Company's unaudited condensed interim consolidated 2015 financial statements, the Company, following consultation with and in reliance on advice received from the Company's independent auditor, is satisfied that the Company's current revenue recognition accounting policies are in compliance with IFRS. As a result, the Company has concluded that its unaudited condensed interim consolidated 2015 financial statements do not require restatement (subject to year-end adjustments if and when the Company prepares consolidated audited 2015 financial statements).
As previously disclosed, on February 9, 2016, the Company sought and obtained protection under the CCAA pursuant to an initial order (the "Initial Order") of the Ontario Superior Court of Justice (the "Court"). PricewaterhouseCoopers Inc. was appointed as monitor (the "Monitor") in the proceedings. The Initial Order was amended on February 12, 2016 to, among other things, include GuestLogix Ireland Limited (collectively with GuestLogix, the "Applicants") in the CCAA proceedings and approve an interim financing facility to be provided by the Company's senior and subordinated lenders in the maximum amount of US$3 million. On February 19, 2016, the Court granted an order authorizing and directing the Applicants to commence a court supervised sale and investment solicitation process (the "SISP"). On March 4, 2016, the Court extended the initial stay period set out in the Initial Order to May 6, 2016. The deadline for the receipt by the Company of non-binding expressions of interest is March 18, 2016.
The Company considered a number of factors in making its determination not to prepare and file 2015 audited financial statements at this time, including the significant amount of scarce management time and money that would be required, particularly because substantial management attention is required to administer the SISP and the CCAA proceedings more generally. The Company also considered the fact that it does not currently expect that any audit for the 2015 Annual Financials could be completed until after the initial deadline for bids under the SISP. Since the CCAA proceedings commenced, and in compliance with the CCAA and the orders of the Court, the Company has provided the Monitor with full access to its accounting records, and the Monitor has filed with the Court periodic reports which have included the Company's cash flow projections and other financial information. The Company anticipates that the Monitor will continue to file reports with the Court updating relevant financial information concerning the Company. The Monitor's reports and other Court materials are available on its website at www.pwc.com/ca/en/services/insolvency-assignments/guestlogix.html