VIQ Solutions, a global provider of secure, AI-driven, digital voice and video capture technology and transcription services, entered into a senior secured loan with Beedie Investments Ltd. (the "Lender"), pursuant to which the Lender will make available up to US$15 million to the Company (the "Loan"), pursuant to the terms of a credit agreement by and among the Company and the Lender.
US$12 million of the Loan has been advanced to the Company as an initial advance, with an additional US$3 million available to the Company to be drawn in subsequent advances in a minimum of US$1 million tranches.
"We’re excited to kick off the new year with this announcement and begin our partnership with Beedie Capital, a renowned firm with a stellar reputation and track record for value-added collaboration. This new facility is a significant step forward for VIQ Solutions. It extends the term of our lending base and provides additional capacity to fuel our future growth while allowing us to continue to execute on our operational plans to drive margin expansion in digital documentation globally," said Sebastien Paré, VIQ's Chief Executive Officer.
"We are proud to partner with VIQ Solutions as they continue to scale one of the leading international platforms in digital documentation," said David Bell, Managing Director at Beedie Capital. "We believe VIQ Solutions’ technology is a significant differentiator in an industry and vertical that still operates very traditionally and we are excited for the opportunity to help them drive growth through innovation."
Terms of the Credit Agreement and Warrant Issuance
The Company currently intends to use the proceeds of the Initial Advance as follows: (i) approximately US$9 million to refinance all existing senior debt; (ii) approximately US$2 million for working capital, and (iii) approximately US$1 million for permitted growth initiatives. The Subsequent Advances will be used by the Company for business acquisitions or growth initiatives, unless otherwise agreed by the Lender.
The amount outstanding under the Loan will bear interest at 12.5% per annum, comprised of cash interest of 9.5% per annum, calculated and paid monthly, and paid-in-kind interest will be charged at a rate of 3.0% per annum, compounded monthly and added to the outstanding principal amount of the Loan. A standby fee will be charged monthly at a rate of 1.5% per annum on the undrawn amount of the standby facility. The Company paid a commitment fee of 1.5% of the Loan. The Lender has also been granted a board observer right.
In connection with the initial advance under the Loan, the Company has issued 7,968,750 common share purchase warrants (each, a "Warrant") to the Lender. Each Warrant is exercisable to purchase one common share of the Company (each, a "Warrant Share") at an exercise price of US$0.256 per Warrant Share. The Warrants expire on January 16, 2030. In addition, the Company has agreed to issue additional common share purchase warrants (each, a "Subsequent Warrant") in connection with the Subsequent Advances, with such number of Warrants to be equal to 17% of the amount of such Subsequent Advance divided by the exercise price of such Subsequent Warrants. The Subsequent Warrants are to have an exercise price equal to the 5-day volume weighted average price of the Company’s common shares immediately prior to the earlier of: (i) the announcement of the applicable Subsequent Advance, and (ii) the funding of the applicable Subsequent Advance. The Subsequent Warrants will expire seven years from the date of issuance.
The Loan will be secured against all of the assets and property of the Company and certain subsidiaries pursuant to a general security agreement. The transaction contemplated by the Credit Agreement has been conditionally approved by the Toronto Stock Exchange.
SenaHill served as exclusive financial advisor for VIQ Solutions and Dentons Canada LLP acted as legal advisors.