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.
