MCI Onehealth announces related party loan
TORONTO, July 05, 2022 (GLOBE NEWSWIRE) — MCI Onehealth Technologies Inc. (“MCI“or the”Company”) (TSX: DRDR), a clinician-led health technology company focused on improving access to and quality of healthcare, has entered into a loan agreement (the “Loan agreement”) to borrow up to $5,000,000 through a secured loan (the “Ready”) of The First Canadian Wellness Co. Inc. (the “Lender”).
Amounts may be advanced during the term of the Loan in amounts and at times agreed to by the Lender and the Company, up to the Maximum Loan Amount. The Company may pay the Lender a commitment fee of up to $100,000 in respect of the Loan.
MCI intends to use the loan proceeds to fund its day-to-day operations and general and administrative expenses, subject to any specific uses of proceeds agreed to with the lender in respect of each advance.
The loan bears interest at prime plus 9% per annum. The Loan is repayable at the earliest between December 31, 2023, the date on which there is a change of control of the Company or any refinancing by the Company. The Company may prepay the loan, in whole or in part, at any time without penalty. Each of the Company’s material subsidiaries has provided security in favor of the Lender in respect of the amounts advanced under the Loan. Pursuant to the Loan Agreement, the Company and its material subsidiaries have entered into a general security agreement in favor of the Lender and the amounts advanced under the Loan are secured by substantially all of the property and liabilities of the Company and these subsidiaries.
Dr. George Christodoulou and Dr. Sven Grail, directors, co-presidents and controllers of MCI, control the lender. Accordingly, the loan constitutes a related party transaction under the Toronto Stock Exchange Company Manual (the “company manual”) and under the multilateral instrument 61-101 – Protection of holders of minority securities in special transactions (“MI 61-101”). In accordance with the company’s handbook, the loan was unanimously approved by the board of directors, with Dr. Christodoulou and Dr. Grail abstaining from voting to approve the loan in their capacity as directors of MCI. MCI is exempt from the formal valuation requirement under NI 61-101 as the fair market value of the loan consideration does not exceed more than 25% of MCI’s market capitalization as of the date of the loan agreement. MCI is also exempt from the minority approval requirement under NI 61-101 on the foregoing basis and because the loan is not convertible or repayable into securities of MCI and was obtained on reasonable commercial terms which are no less advantageous to MCI than if the Loan was obtained from an arm’s length party.
MCI did not file a material change report more than twenty-one (21) days before the scheduled closing date of the loan, as the details of the loan and the loan agreement were not finalized until immediately before the closing and MCI wanted to close the transaction as soon as possible so that MCI could start using and benefiting from the loan as soon as possible.
MCI is a health technology company focused on empowering patients and physicians with cutting-edge technologies to increase access, improve quality and reduce healthcare costs. A part of the healthcare community for more than 30 years, MCI operates one of Canada’s leading primary care networks with nearly 260 physicians and specialists, serves more than one million patients annually, and has performed nearly than 300,000 telehealth visits last year, including online visits via mciconnect.ca. MCI additionally offers a growing range of occupational health service offerings that support a growing list of nearly 600 corporate clients. Led by a proven management team of experienced physicians and executives, MCI remains focused on executing a strategy focused on acquiring healthcare technologies and services that complement the company’s current roadmap. For more information, visit mcionehealth.com.
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This press release contains forward-looking information and forward-looking statements (together, “forward-looking statements”) within the meaning of applicable securities laws, which reflect MCI’s current expectations regarding future events, including statements relating to the loan. In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of words or phrases such as “may”, “could”, “might”, “could” or “will”. Forward-looking statements are based on a number of assumptions and are subject to a number of risks and uncertainties, many of which are beyond MCI’s control, which could cause actual results and events to differ materially. of those disclosed or implied by such forward-looking statements. These risks and uncertainties include execution risk, market risk, industry risk, the impact of general economic conditions and competition from other industry participants and stock market volatility, which which could cause actual results and events to differ materially from those disclosed or implied by such forward-looking statements and other factors discussed under “Risk Factors” in the Company’s Annual Information Form for the fiscal year ended December 31, 2021 which is available under the Company’s profile on SEDAR at www.sedar.com. All forward-looking statements made in this press release are made as of the date hereof, and MCI undertakes no obligation to update such forward-looking statements, whether as a result of new information, future events or otherwise, except if expressly required by applicable law.