Think Research Corporation (TSX-V:THNK) said it has entered into a credit agreement with Beedie Capital for a non-revolving term convertible loan facility of up to $25 million, including an initial advance of $10 million, to fund acquisitions.
"We look forward to having Beedie Capital as a strategic partner supporting our momentum as we execute on our strategy to become an essential data service for clinicians everywhere in the markets we serve,” said Sachin Aggarwal, CEO of Think Research in a statement.
“The financing will provide Think with financial flexibility to continue to aggressively grow its services and solutions and to expand its footprint," he added.
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The initial advance of $10 million will be drawn on the date that the conditions of the credit agreement are satisfied, with the remaining $15 million available for subsequent advances in minimum tranches of $3 million over the four-year term of the loan.
The proceeds of the initial advance will be used to fund future acquisitions, organic growth investments, and general working capital purposes, while subsequent advances will be used to finance the acquisition of complementary businesses or assets, Think said.
"We have been following Think for some time and are excited to partner with the company through this growth financing package," said David Bell, managing director at Beedie Capital. "We look forward to supporting Think as it continues to scale its digital health software solutions to empower healthcare providers to deliver the best care possible."
The convertible facility bears interest at a rate of 8.50% per annum on advanced funds and carries a standby fee equal to 1.25% per annum on the unadvanced portion of the loan, each compounded monthly and payable quarterly in arrears.
Draws of subsequent advances are subject to the approval of Beedie Capital for the acquisition to be financed by such advance, as well as applicable regulatory and stock exchange approvals.
Beedie Capital may at any time during the term of the loan elect to convert the principal amount of the initial advance into common shares of Think at a conversion price of $1.443 per common share, subject to adjustment in accordance with the terms of the credit agreement (the initial conversion price).
The initial conversion price represents a 40% premium above the 20 trading day volume-weighted average price (VWAP) of the common shares on the TSX Venture Exchange on April 22, 2022.
Subject to the approval of the TSXV, the principal amount of any subsequent advance will be convertible into common shares at a deemed price per common share equal to the higher of: (i) the market price of the common shares, less the maximum permitted discount under applicable stock exchange rules; and (ii) a 25% premium above the 20 trading day VWAP of the common shares, in each case measured on the close of trading on the trading day immediately prior to the announcement of the acquisition to be the financed with such subsequent advance (each a subsequent conversion price).
Under the loan terms, Think is entitled to require Beedie Capital to convert up to 50% of the principal amount of the initial advance or any subsequent advance in the event that the 20 trading day VWAP of the common shares equals or exceeds a 50% premium to the initial conversion price or the subsequent conversion price.
Beedie Capital will be entitled to have an observer on the board of Think while it has at least $10 million invested in the company.
In the event that Beedie Capital’s interest in Think reaches 15% or more, it will have the option to require the company to nominate a representative to the board.
The closing date and funding of the initial advance is expected to take place in early May, subject to the satisfaction of customary closing conditions and regulatory approvals.
On the closing date, Think may pay a finder's fee in cash and securities to Origin Merchant Securities Inc. in connection with the convertible facility, subject to the approval of the TSXV and compliance with applicable securities laws.
For over a decade, Think's cloud-based, EMR-agnostic digital tools have empowered clinicians around the world and benefited millions of patients across the continuum of care, including primary physician care, acute care hospitals and surgical suites. Think has a rapidly growing, global client base that spans five continents across more than 13,000 healthcare facilities, with a clinical audience of over 300,000 doctors, nurses and pharmacists.
Contact the author at jon.hopkins@proactiveinvestors.com