MCI Onehealth Announces Loans to Related Parties
TORONTO, July 05, 2022 (GLOBE NEWSWIRE) — MCI Onehealth Technologies Inc. (“MCI” or the “company“) (TSX: DRDR), a physician-led health technology company focused on improving access to and quality of healthcare, has entered into a loan agreement (the “Credit Agreement’), to borrow up to $5,000,000 in the form of a secured loan (the ‘loan’) by The First Canadian Wellness Co. Inc. (the ‘lender“).
Amounts may be advanced during the term of the Loan in such amounts and at such times as the Lender and the Company may agree, up to the Loan Limit. The Company may pay the Lender a commitment fee of up to $100,000 in respect of the Loan.
MCI intends to use the proceeds of the loan to fund its ongoing operations and for general and administrative expenses, subject to a specific use of the proceeds agreed with the lender in respect of each advance.
The loan bears interest at an interest rate of 9% pa plus 9%. The loan is repayable on December 31, 2023, the date on which there is a change of control of the company or a refinancing by the company, whichever is earlier. The company can repay all or part of the loan in advance at any time without penalty. Each of the Company’s principal subsidiaries has provided a guarantee in favor of the Lender in respect of the amounts advanced under the Loan. Pursuant to the Loan Agreement, the Company and its principal subsidiaries have entered into a general security arrangement in favor of the Lender and the amounts granted under the Loan are secured against substantially all of the Company’s and such subsidiaries’ property and operations.
dr George Christodoulou and Dr. Sven Grail, directors, co-chairs and controllers of MCI, control the lender. Accordingly, the Loan constitutes a related party transaction within the meaning of the Toronto Stock Exchange Company Manual (the “company manual’) and under Multilateral Instrument 61-101 – Protection of minority shareholders in special transactions (“MI 61-101“). According to the company handbook, the loan was unanimously approved by the board of directors, with Dr. Christodoulou and Dr. Grail abstained to approve the loan in their capacity as directors of MCI. MCI is exempt from the formal valuation requirement of MI 61-101 because the market value of the consideration for the loan does not exceed 25% of MCI’s market capitalization at the date of the loan agreement. MCI is also exempt from the minority approval requirement under MI 61-101 on the foregoing basis and because the loan is not convertible into MCI securities or redeemable and was obtained on reasonable commercial terms no less favorable to MCI than if the loans were obtained from an independent party.
MCI did not file a Material Amendment Report more than twenty-one (21) days prior to the expected Closing Date of the Loan as the details of the Loan and Loan Agreement were not finalized until just prior to Closing and MCI wanted to complete the transaction as soon as possible so that MCI could can start using and benefiting from the loan as soon as possible.
MCI is a health technology company focused on empowering patients and physicians with advanced technologies to improve access, improve quality and reduce healthcare costs. Part of the healthcare community for over 30 years, MCI operates one of Canada’s leading primary care networks of nearly 260 physicians and specialists, serves more than one million patients annually and has had nearly 300,000 telemedicine visits in the past year, including online visits through mciconnect.ca. MCI also offers a growing range of occupational health service offerings, supporting a growing list of nearly 600 corporate clients. Led by a proven management team of physicians and experienced executives, MCI remains focused on executing a strategy focused on acquiring technology and healthcare 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 (collectively, “forward-looking statements) within the meaning of applicable securities laws, which reflect MCI’s current expectations with respect to future events, including statements related to the Loan. In some instances, but not necessarily all instances, forward-looking statements are identified by the use of words or phrases such as “may,” “could,” “would,” “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 from those contained in or implied by the forward-looking statements. These risks and uncertainties include execution risk, market risk, industry risk, the effect of general economic conditions and competition from other industry participants, and volatility in stock markets, which could cause actual results and events to differ materially from those published or implied by such forward-looking statements and other factors discussed under “Risk Factors” in the Company’s annual information form for the year ended December 31, 2021 available under the Company’s profile on SEDAR at www.sedar.com. All forward-looking statements in this press release are made as of the date of this press release and MCI undertakes no obligation to update any such forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.