- All growth capital and resources directed to DrivrzFinancial
- Targeting new segments of the market, including commercial, fleet, professional corporations, EV's and exotics
- Advancing discussions with new lending partners to support growth in segments outside of its existing lending criteria
TORONTO, ON / ACCESSWIRE / September 29, 2022 / PowerBand Solutions (TSXV:PBX)(OTCQB:PWWBF)(Frankfurt:1ZVA) ("PowerBand" "PBX" or the "Company"), a comprehensive e-commerce solution transforming the online experience to sell, trade, lease, and finance vehicles is pleased to unveil its corporate strategy, which has been approved by the Board of Directors and supported by strategic shareholders.
The Company will allocate all growth capital and resources to its used and new vehicle leasing platform, DrivrzFinancial, as it represents the highest near-to-medium-term return to shareholders. Upon completion of a comprehensive review of its product portfolio, the Company has suspended operations of DrivrzLane and has moved to a maintenance mode for DrivrzXchange. Refer to Q2 2022 disclosure for more detail on the impairment and discontinuation of DrivrzLane. DrivrzXchange offers a compelling longer-term value proposition through its unique technology stack. However, given the capital intensity of marketing expenses associated with the business, PowerBand will take a more measured approach to its expansion.
DrivrzFinancial is underpinned by a robust "flow" financing business model and technology platform that is systemic to dealer operating systems. Cox Automotive is forecasting 37.1M used vehicle sales in 2022, of which 19.6M would be sold through retail channels. Approximately 25% of new vehicles are leased in the U.S. versus less than 1% of used vehicles, representing a significant opportunity for PowerBand. DrivrzFinancial has completed its CDK integration with key enterprise customers and is now positioned to commence systematic origination programs with those dealer bodies. DrivrzFinancial currently has 1,000 dealers on the platform and has bolstered its sales team to provide advocacy, education, and support to F&I managers.
At DrivrzFinancial, the new management team has deliberately scaled down dealer onboarding and consequently originations to reposition the Company for more sustained and profitable growth. Lending guidelines across the industry have become more rigorous, impeding the ability to capture market share in programs directed at commercial, fleet, professional corporations, EV's and exotics. These are highly profitable segments of the market, and the Company is currently advancing discussions to expand lending relationships to meet guidelines within these market segments. Volumes for originations are currently difficult to forecast given supply chain challenges, onboarding of enterprise customers, targeting of new market segments and potential introduction of new lending partners.
Given the uncertainty in a rising interest rate environment, PowerBand believes its best hedge is to maintain a strong balance sheet and lean operating structure. The Company had $18M of cash as of the end of Q2 2022 and has subsequently closed on another tranche of its previously announced financing, for incremental proceeds of $5.2M. The new management team and Board will employ a highly disciplined approach to capital deployment within defined return thresholds.
Darrin Swenson, CEO and Director of PowerBand Solutions states "PowerBand's management team, Board and strategic shareholders are supportive of this new strategy, which really leans in on the DrivrzFinancial opportunity. Our business has been right sized and is positioned for growth following the CDK integration. As lending guidelines have tightened, we are seeking new lending relationships to expand into lucrative market segments, however, our existing credit unions will continue to be instrumental to the success of our organization."
About PowerBand Solutions, Inc.
PowerBand Solutions Inc., listed on the TSX Venture Exchange and the OTCQB markets, is a fintech provider disrupting the automotive industry. PowerBand's integrated, cloud-based transaction platform facilitates transactions amongst consumers, dealers, funders, and manufacturers (OEMs). It enables them to buy, sell, trade, finance, and lease new and used, electric and non-electric vehicles, on any phone, tablet or PC connected to the internet. PowerBand's transaction platform - being trademarked under DRIVRZ™ - is being made available across North American and global markets.
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Chief Executive Officer and Director
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This news release contains forward-looking statements relating to the Company and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects" and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding future plans and objectives of the Company, expected benefits and results from operations, are forward looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
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Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as at the date of this news release, and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by Canadian securities law.
SOURCE: PowerBand Solutions Inc.