CareRx Announces Final Conversion of Convertible Debentures

CNW Group

Mon, Nov 25, 2024, 5:00 AM 4 min read

TORONTO, Nov. 25, 2024 /CNW/ - CareRx Corporation ("CareRx" or "the Company") (TSX: CRRX) today announced that the final tranche of the unsecured convertible debentures (the "Convertible Debentures") originally issued by the Company on November 22, 2019, have been converted into common shares ("Common Shares") at a price of C$3.00 per Common Share pursuant to the terms of the Convertible Debentures.

As part of a private placement financing announced on September 30, 2019, CareRx issued $27,500,000 aggregate principal amount of 8.25% unsecured Convertible Debentures to Yorkville Asset Management, Inc. and certain shareholders and directors of the Company. Each Convertible Debenture was convertible into Common Shares at the option of the holder at a conversion price of $3.00 per Common Share (the "Conversion Price"). In addition, the Convertible Debentures had a mandatory conversion feature such that 25% of the outstanding original principal amount of the Convertible Debentures automatically converted into Common Shares at the Conversion Price at the beginning of years two, three, four and five following their issue date. The Convertible Debentures have now been extinguished in full.

"The conversion of the final tranche of the Convertible Debentures into Shares further simplifies our balance sheet and decreases our annual interest expense," said Puneet Khanna, President & Chief Executive Officer of CareRx. "Since the end of the third quarter of 2023, we have reduced total outstanding debt by over $57 million from approximately $104 million. This continued deleveraging has substantially improved our cash flow, lowered our cost of capital and better positioned the Company to capitalize on future growth and margin-enhancing opportunities."

About CareRx Corporation

CareRx is Canada's leading provider of pharmacy services to seniors living communities. We serve approximately 89,000 residents in approximately 1,450 seniors and other congregate care communities (long-term care homes, retirement homes, assisted living facilities, and group homes). We are a national organization with a large network of pharmacy fulfillment centres strategically located across the country. This allows us to deliver medications in a timely and cost-effective manner and quickly respond to routine changes in medication management. We use best-in-class technology that automates the preparation and verification of multi-dose compliance packaging of medication, providing the highest levels of safety and adherence for individuals with complex medication regimens. We take an active role in working with our home operator partners to promote resident health, staff education, and medication system quality and efficiency.

Forward-Looking Statements

This press release contains statements that may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. These forward-looking statements include, among others, statements regarding the Company's business strategy, plans and other expectations, beliefs, goals, objectives, information and statements about possible future events. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate" or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management.

Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements. Factors that could cause such differences include the Company's general business risks, the Company's exposure to and reliance on government regulation and funding, risks related to employee recruitment and retention, the Company's liquidity and capital requirements, exposure to epidemic or pandemic outbreak, reliance on contracts with key care operators and other risk factors described from time to time in the reports and disclosure documents filed by the Company with Canadian securities regulatory agencies and commissions. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. As a result of the foregoing and other factors, no assurance can be given as to any such future results, levels of activity or achievements and neither the Company nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. The factors underlying current expectations are dynamic and subject to change.

SOURCE CareRx Corporation