TORONTO, Sept. 27, 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 amending agreement (the "Forbearance and Amendment") with Beedie Investments Ltd. ("Beedie Capital") to amend 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"). Pursuant to the Forbearance and Amendment, Beedie Capital has also agreed to forbear for the time being from demanding immediate repayment of the Loan and taking steps to enforce the security thereunder. Concurrent with the entering into of the Forbearance and Amendment, LifeSpeak has also entered into a forbearance agreement with its senior lenders (the "Senior Lenders Forbearance").
Amendment to Credit Agreement and Forbearance Agreements
The Company and Beedie Capital entered into the Forbearance and Amendment to make available to the Company an additional non-revolving, non-convertible loan in the principal amount of $2 million (the "Bridge Loan"). The Bridge Loan will be used to repay in full the installment of principal in the amount of $1,812,500, due from the Company to its senior lenders on September 27, 2024 under its senior credit facility, thereby reducing the Company's indebtedness under its senior facility, with the balance to be used for general working capital purposes. The Bridge Loan will bear interest at a rate of 15% per annum. Subject to the terms of the Credit Agreement, the Bridge Loan and all obligations thereunder will mature on March 31, 2025 (the "Maturity Date").
The Company previously announced in connection with the release of its second quarter, 2024 financial results that it was in default under its senior credit agreement, which had triggered a cross-default under its Credit Agreement with Beedie Capital, and that the Company was in active discussions with its lenders on a remedy. Pursuant to the Forbearance and Amendment, Beedie Capital has also agreed to forebear for the time being from demanding immediate repayment of the Loan and taking steps to enforce the security thereunder, subject to the Company meeting the conditions set out in the Forbearance and Amendment, including continuing to work towards completing a financing transaction. The Company has also entered into the Senior Lenders Forbearance with its senior lenders. Pursuant to the Senior Lenders Forbearance, the senior lenders have agreed to not enforce their rights and remedies against the Company and the guarantors in respect of defaults under the senior facility ending upon certain conditions not being satisfied (such date, the "Forbearance Date"). Such conditions are primarily related to the Company undertaking a financing in order to pay down its senior debt in the timeframe set out in the Senior Lenders Forbearance. Similarly, Beedie Capital has agreed, pursuant to the Forbearance and Amendment, to forbear until the same Forbearance Date.
The Forbearance and Amendment, related Bridge Loan and the Senior Lenders Forbearance, were each unanimously approved by the board of directors of the Company (the "Board"), all members of which are independent for the purposes of the Forbearance and Amendment, the Bridge Loan and the Senior Lenders Forbearance.
Additional Information Pursuant to MI 61-101
The lender under the 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 Forbearance and Amendment, the transaction will have no effect on the percentage of securities that Beedie Capital beneficially owns or controls in LifeSpeak. The 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 Forbearance and Amendment 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 installment of principal in the amount of $1,812,500 is due to the senior lenders on September 27, 2024.
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 Bridge Loan, the Company's ability to meet its covenants under the Credit Agreement, any future financing, additional reductions in indebtedness, 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 and the TSX, third party reaction to the Bridge Loan, Amendment and Forbearance and Senior Lenders Forbearance, 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.
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