BuildDirect Closes Secured Debt Financing for US $1.5 Million and Amends 2018 Secured Debt

VANCOUVER, BC, June 30, 2022 /CNW/ - BuildDirect.com Technologies Inc. (TSXV: BILD) ("BuildDirect" or "Company"), announces the closing of a secured debt financing pursuant to which it issued, via its wholly owned subsidiary BuildDirect Operations Limited ("BuildDirect Operations"), secured notes to Pelecanus Investments Ltd. ("Pelecanus"), Lyra Growth Partners Inc. ("Lyra") and Beedie Investments Ltd. ("Beedie" and, together with Pelecanus and Lyra, the "Lenders") in an aggregated amount of US $1.5 million (the "Additional Loan").  The Company also announces the amendment of secured notes issued by BuildDirect Operations to (a) the Lenders in February 2022 and (b) Deans Knight Capital Management Ltd. in its capacity as portfolio manager on behalf and for the benefit of two fully managed accounts (collectively the "Dean Knight Noteholders") in March 2018 (the "2018 Notes").

Additional Loan:

The terms of the Additional Loan include the following:

• The Additional Loan bears interest at an annual rate of 12% compounded monthly and is payable upon repayment of the Additional Loan;
• The Additional Loan matures on January 1, 2023 and
• A commitment fee equal to 1% of the Additional Loan is payable upon repayment of the Additional Loan.

On February 15, 2022, the Company issued secured notes (the "Original Notes") to the Lenders pursuant to which an aggregate of US$3.0 Million was made available to the Company (the "Original Loan", and together with the Additional Loan, the "Loan"). Pursuant to the Additional Loan, BuildDirect Operations issued amended and restated secured notes which amend and restate the Original Notes, therefore (a) extending the maturity date of the Original Loan to January 1, 2023; and (b) consolidating the Original Loan and the Additional Loan in the same document.

The net proceeds from the Additional Loan will be used to continue to advance BuildDirect's strategy and for general working capital purposes of the Company.  The TSX Venture Exchange has been provided notice of the Additional Loan under TSXV Policy 5.1 – Loans, Loan Bonuses, Finder's Fees and Commissions.

Pelecanus, Lyra and Beedie are insiders by virtue of holding 37.7%, 12.9% and 11.4% respectively of the issued and outstanding common shares of the Company on a partially diluted basis.  As a result of the foregoing, the Additional Loan issued to the above entities constitutes a related party transaction as defined under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101").  The Company relied upon the exemptions from the formal valuation and minority shareholder approval requirements in sections 5.5(b) – Issuer not Listed on Specified Markets and 5.7(1)(a) – Fair Market Value Not More Than 25 Per Cent of Market Capitalization, respectively of MI 61-101.

Amendment of 2018 Notes:

BuildDirect Operations (formerly BuildDirect.com Technologies Inc.) issued the 2018 Notes to Deans Knight Noteholders in an aggregate principal amount of approximately CAD $5,000,000 pursuant to a Note Purchase Agreement dated as of March 22, 2018.  BuildDirect Operations and the Deans Knight Noteholders have agreed to amend the 2018 Notes pursuant to which (a) the maturity date of the 2018 Notes is extended to December 31, 2022 (the "2018 Notes Maturity Date") (b) the interest rate applicable to the 2018 Notes is increased to 15% effective June 30, 2022 and (c) deferred fees in the amount of between 1%-3% of the aggregate principal amount of the 2018 Notes are payable by BuildDirect Operations subject to repayment of the 2018 Notes prior to the 2018 Notes Maturity Date.

"We are very pleased to have the continued support of our shareholders as we navigate our continued transition to B2B focused customer acquisition said David Lazar, interim CEO of BuildDirect.  "With our ongoing push to reallocate resources to the pro customer market and drive synergies with our two prior acquisitions, that exclusively service pro customers, we have continued conviction around our strategic direction."

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 release.

About BuildDirect

BuildDirect (TSXV: BILD) is a growing omnichannel building material retailer.  BuildDirect connects North American home improvement B2B and B2C organizations and homeowners with quality building materials and services through its robust global supply chain network.  BuildDirect's growth trajectory, strong product offering and proprietary heavyweight delivery network are delivering value today, solidifying its position as an innovative player in the home improvement industry.  For more information, visit www.BuildDirect.com.

Forward-Looking Information

This press release contains statements which constitute "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws (collectively, "forward-looking statements"), including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities and operating performance. Forward-looking statements are often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions. These statements reflect management's current beliefs and expectations and are based on information currently available to management as at the date hereof.  Forward-looking statements involve significant risk, uncertainties and assumptions.

Forward-looking statements in this press release may include, without limitation, statements relating to BuildDirect's use of the proceeds from the Loan, BuildDirect's ability to repay the Loan and the 2018 Notes, the continued transition to B2B focused customer acquisition, the reallocation of resources to the pro customer market and to drive acquisition synergies and BuildDirect's conviction around its strategic direction.

Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. Among those factors are changes in consumer spending, availability of mortgage financing and consumer credit, changes in the housing market, changes in trade policies, tariffs or other applicable laws and regulations both locally and in foreign jurisdictions, availability and cost of goods from suppliers, fuel prices and other energy costs, interest rate and currency fluctuations, retention of key personnel and changes in general economic, business and political conditions. These forward-looking statements may be affected by risks and uncertainties in the business of the Company and general market conditions, including COVID-19.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements.

Although the forward-looking statements contained in this press release reflect the Company's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. There may be other risks, uncertainties and factors that cause results not to be as anticipated, estimated or intended and such changes could be material. These forward-looking statements are made as of the date of this press release, and BuildDirect assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.

SOURCE BuildDirect.com Technologies Inc.

Ethan Rudin, CFO, BuildDirect IR, 1-778-382-7748, [email protected]