LifeSpeak Announces Third Bridge Loan from Beedie Investments Ltd.
TORONTO, Jan. 10, 2025 /CNW/ - LifeSpeak Inc. (TSX: LSPK) ("LifeSpeak" or the "Company"), a leading provider of mental, physical, and family wellbeing solutions for employers, health plans, and other organizations, announced today that it has entered into an additional loan agreement (the "Additional Loan Agreement") with Beedie Investments Ltd. ("Beedie Capital") to make available to the Company an additional non-revolving, non-convertible loan in the principal amount of $1,700,000 (the "Third Bridge Loan") and to make certain amendments to the terms of its previously announced credit agreement (as amended from time to time, the "Credit Agreement") dated March 30, 2023 in respect of a non-revolving term convertible loan in the principal amount of $15 million (the "Loan") in furtherance of the foregoing. As announced on September 27, 2024 and December 30, 2024, respectively, Beedie Capital has previously provided the Company with a first bridge loan in the principal amount of $2 million (the "First Bridge Loan") and a second bridge loan in the principal amount of $500,000. It is expected that the Third Bridge Loan will be drawn down in multiple tranches, with a first tranche draw down of $1,100,000 completed on the date hereof.
Additional Loan Agreement
The Company and Beedie Capital entered into the Additional Loan Agreement to make available to the Company the Third Bridge Loan, which will be used to partially repay the installment of principal in the amount of $1,812,00 in respect of the senior lender's term loan that had been due December 31, 2024 (the "Installment"). The remainder will be paid by the Company using cash on hand. The Third Bridge Loan will bear interest at a rate of 15% per annum (plus default interest at a rate of 5% per annum). However, no additional default interest will accrue or be payable with respect to the Third Bridge Loan upon the occurrence of any event of default occurring after the date of the Additional Loan Agreement. Subject to the Lender's right at any time to demand accelerated payment of all outstanding obligations, the outstanding principal amount of the Third Bridge Loan together with all outstanding and unpaid interest thereon matures on March 31, 2025.
As the Company has previously disclosed in connection with its earnings releases for the second and third quarters of 2024, the Company is in default under its term loan commitment, which also resulted in a cross default on the Company's convertible term loan. The Company's failure to pay the Installment by December 31, 2024, constituted an additional default under the term loan commitment. The Additional Loan Agreement acknowledges that the forbearance period previously granted to the Company has expired and Beedie Capital is entitled to demand immediate repayment of the amounts due under its agreements with the Company and take steps to enforce the security thereunder. Notwithstanding the foregoing, the Company is currently in active discussions with its lenders to remedy the covenant breaches and the payment of the Installment to the senior lender is in furtherance of such remedy. LifeSpeak has historically had strong relationships with its lenders and intends to continue to work productively and constructively with them going forward.
The Additional Loan Agreement and related Third Bridge Loan, were each unanimously approved by the board of directors of the Company, all members of which are independent for the purposes of the Additional Loan Agreement and the Third Bridge Loan.
Additional Information Pursuant to MI 61-101
The lender under the Third Bridge Loan, Beedie Capital, is a "related party" of the Company. Beedie Capital holds 8.58% of the Company's common shares on a non-diluted basis and 27.13% on a partially diluted basis. As no securities of the Company are being issued under the Additional Loan Agreement, the transaction will have no effect on the percentage of securities that Beedie Capital beneficially owns or controls in LifeSpeak. The Third Bridge Loan is considered a "related party transaction", subject to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). MI 61-101 requires issuers, in certain circumstances and in the absence of exemptions, to obtain a formal valuation and minority shareholder approval, of the related party transaction.
The Company is not required to obtain a formal valuation per subsection 5.4 of MI 61-101, which only requires a formal valuation if a "related party transaction" falls within paragraphs (a) to (g) of that definition in MI 61-101. The Company is exempt from the need to obtain minority shareholder approval per subsection 5.7(1)(f) of MI 61-101, as the Additional Loan Agreement is deemed to create a new loan or credit facility, and such loan or credit facility is on reasonable commercial terms that are not less advantageous to LifeSpeak than if the loan or credit facility were obtained from a person dealing at arm's length with LifeSpeak, and the loan or credit facility is not convertible, directly or indirectly, into equity or voting securities of LifeSpeak or a subsidiary, or otherwise participating in nature, or repayable, as to principle or interest, directly or indirectly, in equity or voting securities of the Company or a subsidiary.
The Company is issuing this news release, and will file a material change report in connection with the transaction described herein, less than 21 days prior to the closing of the transaction. The shorter period is reasonable and necessary in the circumstances as the Company requires the Third Bridge Loan for payments immediately due to its senior lender.
About LifeSpeak Inc.
Celebrating 20 years of supporting wellbeing, LifeSpeak Inc. is the leading provider of mental, physical, and family wellbeing solutions for employers, health plans, and other organizations across the globe. With a suite of digital solutions, LifeSpeak enables organizations to deliver best-in-class content and human expertise at scale, catering to individuals throughout their wellbeing journeys. The LifeSpeak Inc. portfolio of solutions spans every pillar of wellbeing, including LifeSpeak Mental Health & Resilience, Wellbeats Wellness, Torchlight Parenting & Caregiving, ALAViDA Substance Use, and LIFT session Fitness. Insights from LifeSpeak Inc.'s digital and data-driven solutions empower organizations and individuals to take impactful action to strengthen wellbeing and maximize workplace performance. To learn more, follow LifeSpeak Inc. on LinkedIn, or visit http://www.LifeSpeak.com.
Forward-Looking Information
This press release may include "forward-looking information" within the meaning of applicable securities laws. Such forward-looking information may include, but is not limited to, information with respect to the expected effect on the financial condition of the Company based on the Third Bridge Loan, the Company's ability to meet its covenants under the Additional Loan Agreement or any other outstanding financial obligations, the Lender's intentions not to demand immediate repayment of the loan and pursue enforcement procedures; the Company's steps to remedy covenant breaches; any future financing, any future forbearance by the Company's lenders, and expectations regarding continued support from the Company's lenders. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology and phrases such as "forecast", "target", "goal", "may", "might", "will", "could", "expect", "anticipate", "estimate", "intend", "plan", "indicate", "seek", "believe", "predict", or "likely", or the negative of these terms, or other similar expressions intended to identify forward-looking information, including references to assumptions. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts nor guarantees or assurances of future performance but instead represent management's current beliefs, expectations, estimates and projections regarding possible future events, circumstances or performance.
Forward-looking information is necessarily based on a number of opinions, estimates and assumptions that, while considered reasonable by LifeSpeak as of the date of this release, is subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information.
Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking information include, but are not limited to, general market conditions, the Company's ability to secure financing in the future, decisions made by the Company's lenders (including any decision by the Company's senior lender (either with or without an equivalent decision by the junior lender) to demand immediate repayment of obligations outstanding and pursue enforcement procedures), third party reaction to the Third Bridge Loan and Additional Loan Agreement, as well as the risk factors identified under "Risk Factors" in LifeSpeak's annual information form for fiscal year ended December 31, 2023 dated April 1, 2024, and in other periodic filings that LifeSpeak has made and may make in the future with the securities commissions or similar regulatory authorities in Canada, all of which are available under LifeSpeak's SEDAR+ profile at www.sedarplus.com. These factors are not intended to represent a complete list of the factors that could affect LifeSpeak. However, such risk factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. You should not place undue reliance on forward-looking information, which speak only as of the date of this release. LifeSpeak undertakes no obligation to publicly update any forward-looking information, except as required by applicable securities laws.
SOURCE LifeSpeak Inc.