MONTREAL, Dec. 6, 2023
/CNW/ - Carebook Technologies Inc. ("Carebook" or
the "Company") (TSXV: CRBK) (OTCPK: CRBKF) (XETR:
PMM1), a leading Canadian provider of innovative digital health
solutions, is pleased to announce a $2 million private placement of convertible
debt (the "Transaction").
"We wish to thank UIL Limited for their continuing belief in our
strategy. The Transaction will provide Carebook with enhanced
operational flexibility and extend our runway considerably,
supporting us on our journey towards profitable growth" said
Carebook's CEO Michael Peters "As
previously demonstrated, we continue to execute on our business
plan, and we expect continued organic revenue growth into the year
end and 2024. We will continue managing cost with an objective of
minimizing cash burn and increasing our profit margins, to
establish a strong foundation for durable long-term
growth."
As part of the Transaction, the Company has entered into a
convertible loan agreement (the "Loan Agreement") with UIL
Limited, currently the Company's largest shareholder, (the
"Lender") pursuant to which the Lender has agreed to extend
a loan in favour of the Company in the principal amount of
$2 million.
The loan under the Loan Agreement will mature on December 22, 2026. Interest on the principal
amount outstanding under the Loan Agreement will accrue at the
arithmetic average of CORRA for the applicable period plus 10% per
annum, and will be payable in cash or common shares in the capital
of the Company (the "Common Shares") (subject to prior
approval of the TSX Venture Exchange (the "Exchange")), as
applicable, upon (i) maturity, (ii) a prepayment of the principal
amount, (iii) an event of default or (iv) a conversion. The
obligations of the Company under the Loan Agreement will be
subordinated to the Company's obligations under its existing senior
credit facilities. To secure the Company's obligations under the
Loan Agreement, the Company has agreed to grant to the Lender a
security interest and hypothec in all of the property and
undertaking of the Company, subordinated to the security interests
granted by the Company to its senior lender. The proceeds from this
financing will be used to repay short-term borrowings, for working
capital and general corporate purposes.
Pursuant to the Loan Agreement, the principal amount under the
Loan Agreement will be convertible, in whole or in part, at any
time following the expiry of a period of six months after the
closing of the Transaction, at the sole option of the Lender into
Common Shares at a conversion price equal to $0.10 per Common Share for up to 20,000,000
Common Shares. At the option of the Lender, and subject to prior
approval of the Exchange, any and all accrued but unpaid interest
on the principal amount under the Loan Agreement may also be
converted into Common Shares at a price that will be subject to the
policies of the Exchange. The Common Shares issuable upon such
Conversion will be subject to resale restrictions in accordance
with applicable Canadian securities legislation.
Subject to and effective upon the prior approval of the Exchange
at the time of conversion, if the Company completes an equity
financing or other issuance of Common Shares having an aggregate
fair market value of $2 million at
the time of issuance (excluding for such purposes any Common Shares
issued upon exercise or conversion of outstanding convertible
securities of the Company) within six months of the closing of the
Transaction, then the principal amount and any accrued but unpaid
interest thereon under the Loan Agreement shall be automatically
converted into Common Shares at a price equal to the issue price of
the Common Shares under such equity financing or other issuance,
subject to a minimum of $0.05 per
Common Share and a maximum of $0.25
per Common Share.
The Transaction is expected to close on or about December 8, 2023, subject to customary closing
conditions, including approval from the senior lender and the
Exchange. The Company has applied to the Exchange to obtain
conditional approval for the Transaction and the listing of the
Common Shares issuable upon an optional conversion of the principal
amount under the Loan Agreement.
Disclosure Required under MI 61-101
The Lender is a "related party" of the Company within the
meaning of Multilateral Instrument 61-101 - Protection of
Minority Security Holders in Special Transactions ("MI
61-101"). As a result, the Transaction is considered to be a
"related party transaction" as such term is defined by MI 61-101,
requiring the Company, in the absence of exemptions, to obtain a
formal valuation of, and minority shareholder approval of, the
"related party transaction". Pursuant to MI 61-101, the Company
intends to rely on an exemption from the formal valuation
requirement as no securities of the Company are listed or quoted on
certain specified exchanges, and on an exemption from the minority
shareholder approval requirement as the fair market value of the
convertible loans does not exceed $2.5
million, as determined in accordance with MI 61-101. Neither
the Company nor, to the knowledge of the Company after reasonable
inquiry, the Lender, has knowledge of any material information
concerning the issuer or its securities that has not been generally
disclosed. The Company intends to file a material change report
within the required timeframe, which will contain all prescribed
disclosure relating to this related party transaction.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities described
herein in the United States of
America. The securities have not been and will not be
registered under the United States Securities Act of 1933,
as amended (the "1933 Act") or any state securities laws and
may not be offered or sold within the
United States or to U.S. Persons (as defined under
applicable securities laws) unless registered under the 1933 Act
and applicable state securities laws, or an exemption from such
registration is available.
Information on the Lenders
UIL Limited ("UIL") is a London Stock Exchange listed
investment company of which Mr. Alasdair
Younie, a director of the Company, is a representative.
Currently, UIL beneficially owns or exercises control or direction
over, directly or indirectly, 61,046,167 Common Shares of the
Company, representing 59.4% of the issued and outstanding Common
Shares. UIL also owns, or has direction or control over, 568,383
warrants to purchase one Common Share and $2.25 million aggregate principal amount of loans
convertible into up to 14,047,618 Common Shares.
Immediately after completion of the Transaction, UIL will
beneficially own or exercise control or direction over, directly or
indirectly, 61,046,167 Common Shares, representing 59.4% of the
issued and outstanding Common Shares, as well as 568,383 Common
Share purchase warrants and $4.25 million aggregate principal amount of
loans convertible into up to 34,047,618 Common Shares. Assuming a
full conversion of the convertible loans under which UIL is a
lender, and assuming the exercise in full of the warrants held by
UIL, UIL would own, or have direction or control over, 95,622,168
Common Shares, representing in the aggregate approximately 69.6% of
the issued and outstanding Common Shares (on a partially diluted
basis).
The Loan Agreement described herein has been entered into by UIL
for investment purposes. UIL may, from time to time, depending on
market and other conditions, increase or decrease its beneficial
ownership, control or direction over Common Shares or other
securities of Carebook through market transactions, private
agreements, or otherwise.
In accordance with National Instrument 62-103 – The Early
Warning System and Related Take-Over Bid and Insider Reporting
Issues, UIL will file an early warning report regarding this
transaction on the System for Electronic Document Analysis and
Review + (SEDAR+) at www.sedarplus.ca under Carebook's issuer
profile.
About Carebook
Technologies
Carebook's digital health platform empowers its clients and more
than 3.5 million members to take control of their health journey.
During 2021, the Company completed the acquisitions of InfoTech
Inc., a global leader in health and productivity risk management,
and CoreHealth Technologies Inc., owner of an industry-leading
wellness platform. In combination, these companies create a
comprehensive digital health platform that includes both assessment
tools and the technology to deliver complementary solutions.
Carebook's shares trade on the Exchange under the symbol "CRBK," on
the OTC Markets under the symbol "CRBKF," and are listed on the
Open Market of the Frankfurt Stock Exchange under the symbol
"PMM1." Carebook's head office is located at 1400-2045 Stanley
Street, Montreal, Quebec H3A
2V4.
www.carebook.com
For further information contact:
Carebook Investor Relations Contact:
Olivier Giner, CFO
Email: ir@carebook.com
Telephone: (450) 977-0709
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Notice regarding forward-looking
statements:
This release includes forward-looking information and
forward-looking statements within the meaning of Canadian
securities laws regarding Carebook, its subsidiaries and their
business. Often, but not always, forward-looking information can be
identified by the use of words such as "plans", "is expected",
"expects", "scheduled", "intends", "contemplates", "anticipates",
"believes", "proposes" or variations (including negative
variations) of such words and phrases, or state that certain
actions, events or results "may", "could", "would", "might" or
"will" be taken, occur or be achieved. The forward-looking
information in this release includes, but is not limited to,
statements with respect to the intended use of proceeds from the
Transaction and the expected closing date of the Transaction. Such
statements are based on the current expectations of the management
of Carebook and are based on assumptions and subject to risks and
uncertainties. Although the management of Carebook believes that
the assumptions underlying these statements are reasonable, they
may prove to be incorrect, and undue reliance should not be placed
on such forward-looking statements. The forward-looking statements
reflect the Company's current views with respect to future events
based on currently available information and are inherently subject
to risks and uncertainties. The forward-looking events and
circumstances discussed in this release may not occur by certain
specified dates or at all and could differ materially as a result
of known and unknown risk factors and uncertainties affecting the
Company, including the Company's inability to obtain approval from
the Exchange or to meet the other conditions for completion of the
Transaction, economic factors, management's ability to manage and
to operate the business of Carebook, management's ability to
identify attractive M&A opportunities, management's ability to
successfully integrate the Company's completed acquisitions and to
realize the synergies of such acquisitions, management's ability to
successfully complete product studies, the equity markets generally
and risks associated with growth and competition, management's
ability to achieve profitability for the Company, as well as the
risk factors identified in the Company's management's discussion
and analysis for the year ended December 31,
2022, a copy of which can be found on SEDAR+ under the
Company's profile at www.sedarplus.ca. Although Carebook has
attempted to identify important factors that could cause actual
actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results to differ from those
anticipated, estimated or intended. Accordingly, readers should not
place undue reliance on any forward-looking statements or
information. No forward-looking statement can be guaranteed. Except
as required by applicable securities laws, forward-looking
statements speak only as of the date on which they are made and
Carebook does not undertake any obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events, or otherwise.
SOURCE Carebook Technologies Inc.