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.
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SOURCE BuildDirect.com Technologies Inc.