TORONTO, Dec. 30, 2024 /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 a forbearance and additional loan agreement (the "Second Forbearance and 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 $500,000 (the "Second 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, Beedie Capital has previously provided the Company with a first bridge loan in the principal amount of $2 million (the "First Bridge Loan"). Pursuant to the Second Forbearance and Additional Loan Agreement, Beedie Capital has also agreed to forbear for the time being from demanding immediate repayment of the Loan and the First Bridge Loan and taking steps to enforce the security thereunder.
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Second Forbearance and Additional Loan Agreement
The Company and Beedie Capital entered into the Second Forbearance and Additional Loan Agreement to make available to the Company the Second Bridge Loan, which will be used for general working capital purposes. The Second Bridge Loan will bear interest at a rate of 15% per annum. The Second Bridge Loan and all obligations thereunder will mature on the earlier of the expiry of the continuance period under the Company's forbearance agreement with its senior lender and March 31, 2025. Default interest on the outstanding principal amount of the Second Bridge Loan is an additional 5% per annum.
The Second Forbearance and Additional Loan Agreement and related Second 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 Second Forbearance and Additional Loan Agreement and the Second Bridge Loan.
Additional Information Pursuant to MI 61-101
The lender under the Second 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 Second Forbearance and Additional Loan Agreement, the transaction will have no effect on the percentage of securities that Beedie Capital beneficially owns or controls in LifeSpeak. The Second 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 Second Forbearance and 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 Second Bridge Loan for short term general working capital purposes.
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 Second Bridge Loan, the Company's ability to meet its covenants under the Second Forbearance and Additional Loan Agreement or any other outstanding financial obligations, 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, third party reaction to the Second Bridge Loan and Second Forbearance 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.
