RE:RE:RE:RE:Doing my own DD on MCISome reasonable overviews, Budd. But in keeping with DD, read the MD&A from March. The reason they talk about only a few of the many acquisitions is that those acquisitions are consolidated under one umbrella ...for example clinics US and clinics Canadian.
As for the most recent acquisition ....consider the following:
Pursuant to the definitive agreements executed by the parties on July 19, 2023, the Transaction will be comprised of the following key elements:
Bridge Financing
WELL is advancing $3 million to the Company under a secured promissory note, to provide the Company with working capital to stabilize its business, continue to operate in the ordinary course and to accelerate the pursuit of its strategic plan during the interim period between signing and closing. The note bears interest at a rate of prime plus 9%, which will accrue and be payable, along with all outstanding principal, on the earlier of four months or the date the Transaction closes. The promissory note is secured against all of the present and after acquired personal property of the Company and its subsidiary, MCI Medical Clinics Inc.
Convertible Debenture Financing
The Company will complete a convertible debenture financing to raise between $7.5 million and $10 million, to fund working capital and support future M&A activity while it focuses on growing its data-driven, AI-enabled healthcare technology offerings. WELL will participate in the financing as lead investor, for a minimum of $2.5 million of the total financing.
The debentures will be unsecured obligations of the Company, mature 5 years from the date the financing closes, and bear interest at a rate of 10% per annum, which will be payable at maturity. The principal and interest outstanding under the debentures will be convertible into Class A Subordinate Voting Shares of the Company (“Class A Shares”) at any time, at the option of the holder, at a conversion price of $0.20/share. Participants in the convertible debenture financing will also receive, for every $1 of debentures, 5 warrants for Class A Shares exercisable at a price of $0.20/share.
The financing is conditional on, among other things, the Company obtaining approval from the TSX and its shareholders for the proposed conversion and exercise price of the debentures and warrants, as well as the size of the raise and corresponding dilution.
Sale of Ontario Clinics
The Company will sell to WELL, under an asset purchase agreement between their respective subsidiaries, eleven of its fourteen medical clinics in Ontario, along with other related assets, for a purchase price of $1.5 million.
I think everyone can agree as to why only 11 are being purchased!
The acquired clinics will join WELL’s extensive and efficiently run network of clinics, the largest owned and operated network in Canada, ensuring stability and continued quality of care for patients and healthcare professionals. The Company’s flagship Polyclinic group of clinics will be retained by the Company, and will continue to contribute to the Company’s technology-enabled healthcare research offerings.
The sale of the Ontario clinics is subject to standard closing conditions typical for transactions of a similar nature and kind, and is expected to close concurrently with the convertible debenture financing noted above.
Secured Debt Resolution
In connection with the Transaction, it is anticipated that the Company will fully satisfy and discharge its outstanding secured credit facility with TD Bank. The Transaction also contemplates a solution for the Company’s existing secured credit facilities with The First Canadian Wellness Co. Inc. (the “Lender”), a related party to the Company, under which the Company presently owes an aggregate of approximately $9.0 million in principal and accrued fees and interest.
It appears they bought the best of the company ($21 million in revenue) for essentially $1.5 million. Clearly
WELL carried out considerable DD for over a year before cementing this acquisition. As a successful business (WELL) it can also be assumed that the management of MCI will improve considerably. Doctors may be good/great doctors ...that doesn't presume they are good business persons.
We shall see?