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.