Think Research Announces Cash Payment of Deferred Consideration
- Funding provided by a ~$1.8 million non-convertible loan from Beedie Capital
- Material dilution avoided and cash balance protected
- Deferred consideration is associated with both BioPharma and MDBriefcase acquisitions
- Grants RSU equity to non-executive directors according to the Omnibus Equity Inventive Plan (OEIP)
TORONTO, June 12, 2023 /CNW/ - Think Research Corporation (TSXV: THNK) ("Think" or the "Company"), a company focused on transforming healthcare through digital health software solutions, is pleased to announce that it is paying certain deferred consideration payments owing to the sellers of acquired companies Bio Pharma Services Inc. ("BioPharma") and MDBriefcase Group Inc. ("MDBriefcase"), in cash. Think is using the proceeds from a new ~$1.8 million loan (the "Loan") from Beedie Investments Ltd. ("Beedie Capital"), pursuant to its Credit Agreement with Beedie Capital (the "Credit Agreement"). By paying in cash, Think avoids potentially material dilution that would otherwise occur with payment by way of the issuance of Think common shares, as well as takes advantage of certain negotiated discounts available for cash payments.
Further to the Company's press release of December 30, 2022, the sellers of MDBriefcase (the "MDB Sellers") are entitled to certain deferred consideration, which may be paid in the form of cash and/or shares, at the option of the Company. The MDB Sellers agreed to defer the instalment due to them on May 31, 2023 to June 12, 2023, and the Company will pay today the amount owed of $985,829 in cash, using the proceeds of the Loan.
As outlined in the Company's press release of October 14, 2022, the sellers of BioPharma (the "BioPharma Sellers") are also entitled to certain deferred consideration payments, payable in cash or shares, at the option of the Company. Furthermore, payments in cash are subject to certain discounts depending upon the amount. The Company is paying the next instalment of deferred consideration to the BioPharma Sellers today, in the amount of $800,000 in cash, again using the proceeds of the Loan.
By paying the above amounts in cash, the Company avoided significant dilution that would have otherwise resulted from payment of the deferred considering owing to the MDB Sellers and BioPharma Sellers in Think common shares, as well as saved approximately $288,000 due to previously negotiated cash payment discounts.
The Company will determine in the future how best to pay any further deferred and/or earn out payments which may become due.
To fund such deferred payments, Think has received the Loan in the amount of $1,785,829, pursuant to the Credit Agreement and certain material amendments (the "Amendments") that have been made to the Credit Agreement to govern the terms of such Loan as follows:
- The Loan shall be used by Think to pay the instalment of deferred consideration due to the BioPharma Sellers on June 10, 2023 and the contingent consideration due to the MDB Sellers due on June 12, 2023.
- Unlike other advances under the Credit Agreement, the Loan will not be convertible into shares of Think.
- The outstanding principal amount of the Loan shall bear interest at a rate of 14% per annum calculated and payable as follows: (i) interest at a rate of 7.0% per annum shall be calculated daily and compounded monthly in arrears on the last day of each month and shall accrue and be payable (including compound interest) on a quarterly basis, and (ii) interest at a rate of 7.0% per annum shall be calculated daily and compounded monthly in arrears on the last day of each month and shall be added to the outstanding principal amount of the Loan at the end of each month.
- A commitment fee shall also be payable by Think to Beedie Capital (the "Commitment Fee"), which shall be added to the principal amount of the Loan.
- The Loan together with all outstanding and unpaid interest thereon (including, for greater certainty, the Commitment Fee) shall be due and payable on September 20, 2024.
- Think may make a voluntary prepayment in whole of the Loan at any time by paying to Beedie Capital the outstanding principal amount of the Loan (including, for greater certainty, the Commitment Fee), together with any unpaid interest and, if the prepayment occurs on or prior to the date that is four months following the date of advance of the Loan, a make-whole fee.
"We continue to be impressed with Think's ability to deliver on its strategic initiatives and are happy to support the Company in flexible and accretive ways to drive long-term enterprise value," said David Bell, Managing Director at Beedie Capital. "We are confident management will continue to lead the market in delivering technology to strengthen health systems in Canada and internationally with its Digital Front Door and Learning Management solutions"
Sachin Aggarwal, CEO of Think said "The cash discount available for the deferred consideration payments, combined with avoiding sizable dilution given the current trading price of Think's shares, led us to conclude that using debt to fund the upcoming payments was prudent despite the leverage on Think's balance sheet. We greatly appreciate the continued support of all shareholders as we work towards positive operating cash flow."
Beedie Capital is a "related party" of the Company as defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"), and the amendments would constitute a "related party transaction" as defined in MI 61-101 and within the meaning of TSXV Policy 5.9. The Company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and (b) and 5.7(1)(f) of MI 61-101.
On June 6, 2023, Think granted 264,744 deferred share units (each, an "DSU") and 331,813 restricted share units (each, an "RSU") to certain non-executive directors of the Company pursuant to the Company's Omnibus Equity Incentive Plan ("OEIP"). All DSUs and RSUs will vest on June 6, 2024.
Think Research Corporation is an industry leader in delivering knowledge-based digital health software solutions. The Company's focused mission is to organize the world's health knowledge so everyone gets the best care. Its evidence-based healthcare technology solutions support the clinical decision-making process and standardization of care to facilitate better health care outcomes. The Company gathers, develops, and delivers knowledge-based solutions globally to customers including enterprise clients, hospitals, health regions, healthcare professionals, and / or governments. The Company has gathered a significant amount of data by building its repository of knowledge through its network and group of companies.
Think licenses its solutions to over 14,200 facilities for over 320,000 primary care, acute care, and long-term care doctors, nurses and pharmacists that rely on the content and data provided by Think to support their practices. Millions of patients and residents annually receive better care due to the essential data that Think produces, manages and delivers.
In addition, the Company collects and manages pharmaceutical and clinical trial data via its BioPharma Services subsidiary. BioPharma Services is a leading provider of bioequivalence and Phase 1 clinical research services to pharmaceutical companies globally. Think's other services include a network of digital-first primary care clinics and medical clinics that provide elective surgery. Visit www.thinkresearch.com
Beedie Capital is a multi-strategy direct investment platform that manages the alternative investments and assets for Beedie, one of the largest private companies in British Columbia. It deploys capital using a flexible, evergreen mandate, and applies a highly agnostic approach to the duration, structure and size of its investments. Beedie Capital provides its partners the time to deliver on their strategic plans, while providing capital in the right structure to optimize cost of capital and shareholder return.
Beedie Capital invests in any sector, with a core focus on Technology, Tech-enabled Services, and Metals and Mining, and seeks to grow its invested capital alongside the enterprise value of its investments. Visit: www.beedie.ca/capital
This press release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information may be identified by statements including words such as: "believe", "expect," "likely," "may," "to be," "could,", "would," "should," "will" and similar references to future periods or the negative or comparable terminology, as well as terms usually used in the future and the conditional. Statements including forward-looking information may include, without limitation, statements regarding the payment of amounts due to the sellers of BioPharma and MDBriefcase, respectively.
Forward-looking information reflects management's current beliefs and is based on assumptions that may prove to be incorrect. The Company considers these assumptions to be reasonable in the circumstances. However, there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. By its nature, forward-looking information involves known and unknown risks, uncertainties, changes in circumstances and other factors that are difficult to predict and many of which are outside of the Company's control which may cause the Company's actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. The Company's actual results may differ materially from those indicated in the forward-looking information. Important factors that could cause actual results to differ materially from those indicated in the forward-looking information include, among others, the risk factors described under the heading "Caution Regarding Forward Looking Information" in the Company's Management's Discussion & Analysis for the year ended December 31, 2023, which is available on the Company's profile at www.sedar.com. The Company has assumed that the risk factors referred to above will not cause such forward-looking statements and information to differ materially from actual results or events. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements.
Other than as specifically required by applicable Canadian law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, whether as a result of new information, future events or results, or otherwise.
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.
For more information: https://www.thinkresearch.com/ca/investors/
SOURCE Think Research Corporation
Mark Sakamoto, Executive Vice President, Think Research Corporation, Direct: 416 388.7119, [email protected]
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