Vancouver, British Columbia--(Newsfile Corp. - November 22, 2022) - Beedie Investments Limited (the "Beedie") has amended (the "Amendment") its credit agreement dated April 22, 2022 (the "Credit Agreement") with Think Research Corporation ("Think Research" or the "Company"), pursuant to which, amongst other things, Beedie has agreed to advance an additional $3 million (the "Second Advance") under the $25 million non-revolving term convertible loan facility (the "Convertible Facility") provided to Think Research pursuant to the Credit Agreement.
The Second Advance will be drawn on the date that the conditions precedent under the Credit Agreement are satisfied, which conditions include conditional approval of the TSX Venture Exchange (the "Second Advance Closing Date"). Proceeds of the Second Advance will be used for general working capital purposes, to pay down a portion of the amounts borrowed under Think Research's existing credit agreement with The Bank of Nova Scotia, as lender, and to pay certain aged payables of the Company.
At any time during the term of the Convertible Facility, Beedie may elect to convert the principal amount of the Second Advance into common shares of the Company ("Common Shares") at a conversion price of $0.43 per Common Share, subject to adjustment in accordance with the terms of the Credit Agreement.
Pursuant to the Amendment, the following material amendments have been made to the Convertible Facility:
- the conversion price applicable to the initial advance of $10 million (the "Initial Advance") under the Convertible Facility has been amended from $1.443 per Common Share to $0.97 per Common Share;
- the amount of indebtedness permitted under the Convertible Facility has been reduced from $28 million in the aggregate to $26.75 million following the Second Advance and $25.75 million following completion of the Equity Financing (as defined below) and the $10 million accordion option previously available to the Company under the Credit Agreement has been removed;
- the interest rate under the Convertible Facility payable on each interest payment date has been decreased from 8.5% per annum (calculated and compounded in arrears on the last day of each month) to 6.0% per annum calculated and compounded monthly in arrears on the last day of each month and payable on each interest payment date commencing on the Second Advance Closing Date and ending on November 30, 2023, as such date may be extended by written agreement between the Company and Beedie. During the same period, the Convertible Facility will accrue an additional 3.5% interest per annum compounded monthly in arrears and added to the outstanding principal amount of the loan for an aggregate interest rate of 9.5%. If the Company and Beedie do not agree to extend the aforementioned period past November 30, 2023, then the aggregate interest rate under the Convertible Facility will revert back to 8.5% per annum calculated and compounded monthly in arrears on the last day of each month and payable on each interest payment date following the conclusion of such period;
- the addition of a new covenant regarding overdue accounts which provides that the Company may at no time have the greater of the "Payables Cap" (as such term is defined in the Credit Agreement) or 5% of trailing three-month revenue of the Company on a consolidated basis in accounts payable which are more than 90 days overdue, subject to certain exceptions; and
- amendments to certain financial covenants including, among other things, a reduction in the minimum liquidity financial covenant from $2 million to $1 million and a waiver of the minimum EBITDA financial covenant, in each case, during the period commencing on the Second Amendment Closing Date until December 31, 2022.
Furthermore, pursuant to the Amendment, the Company is required to complete a non-brokered private placement of Common Shares (the "Equity Financing") for minimum net cash proceeds of $3 million. Beedie has committed to subscribe for $750,000 of the Equity Financing subject to its satisfaction of the conditions set forth in the Amendment.
Immediately prior to entering into Amendment, Beedie, directly or indirectly, owned or controlled 1,059,900 Common Shares and the Initial Advance. If the Initial Advance was converted in full into Common Shares using the prior conversion price of $1.443 per Common Share, Beedie, directly or indirectly, would own or control a total of 7,989,906 Common Shares, representing approximately 11.1% of the issued and outstanding Common Shares immediately prior to entering into Amendment on a partially diluted basis.
Subsequent to entering into the Amendment and assuming completion of the Equity Financing and the conversion in full of the Initial Advance and Second Advance only, Beedie, directly or indirectly, would own or control a total of 20,220,922 Common Shares, representing approximately 22.4% of the issued and outstanding Common Shares on a partially diluted basis.
Subsequent to entering into the Amendment and assuming completion of the Equity Financing and the conversion in full of the Initial Advance, Second Advance and the remaining balance of the Convertible Facility into Common Shares in accordance with the terms of the Credit Agreement (assuming that all subsequent advances under the Convertible Facility are converted into Common Shares at a conversion price of $0.475 per share, representing a 25% premium above the closing price of the Common Shares on the TSX Venture Exchange as November 21, 2022), Beedie, directly or indirectly, would own or control a total of 45,484,079 Common Shares, representing approximately 39.4% of the issued and outstanding Common Shares on a partially diluted basis. The actual number of Common Shares issued pursuant to the conversion of any subsequent advances under the Convertible Facility will depend upon the 20-day VWAP of the Common Shares on the TSX Venture Exchange applicable at the time.
All of the securities held by Beedie in Think Research, including the Common Shares and the Credit Agreement, are being held for investment purposes. Beedie may in the future take such actions in respect of its Think Research securityholdings as it deems appropriate in light of the market circumstances then existing, including the potential purchase of additional shares of Think Research through open market purchases or privately negotiated transactions, or the sale of all or a portion of such holdings in the open market or in privately negotiated transactions to one or more purchasers, or Beedie may continue to hold its current positions.
A copy of the early warning report relating to the Credit Agreement will be available under Think Research's profile on SEDAR at www.sedar.com, and may also be obtained by contacting Beedie Investments Limited at 604-435-3321. Beedie's head office is located at Suite 1570 - 1111 West Georgia St., Vancouver, BC, V6E 4M3.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
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