Announces $14 Million Concurrent Private Placement Equity Offering
/NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
MONTREAL, June 29, 2021 /CNW Telbec/ – Carebook Technologies Inc. (“Carebook” or the “Company“) (TSXV: CRBK) (OTCPK: CRBKF) (XETR: PMM1), a leading Canadian digital health company offering innovative digital health and virtual care solutions for pharmacies, employers and insurers, today announced that it has entered into a share purchase agreement for the acquisition (the “Acquisition“) of all of the issued and outstanding securities of an industry leading company providing a technology platform that powers health and well-being programs for major corporations and organizations around the world (“TargetCo“).
TargetCo is based in North America and has been in operation for more than 15 years. TargetCo has revenues of over $3 million and will be immediately accretive to Carebook. TargetCo serves over 2 million license holders around the world. Clients include major insurance providers, employee assistance program providers, health systems, population health management providers, benefit brokers, health coaching providers and large employers.
“This agreement to acquire TargetCo is highly strategic for our company,” commented Pascale Audette, CEO of Carebook. “TargetCo is a well entrenched leader in the field of corporate wellness. Its leading technology is flexible, configurable, and scalable. They have truly built a wellbeing integration hub. Our opportunity to integrate this platform within the Carebook family, which also includes the technology of InfoTech’s Wellness Checkpoint, will immediately result in Carebook becoming an important global player in digital health platforms. With TargetCo, we will now be serving over 3.5 million license holders around the world. We believe that this Acquisition fits perfectly within our stated objective to be the connector to a new model of healthcare.”
The base purchase price payable for the Acquisition is $9 million on a cash free and debt free basis, consisting of a combination of $7.5 million in cash and $1.5 million in common shares of Carebook (“Carebook Shares“) at a price to be based on the greater of: (A) the volume weighted average trading price of the Carebook Shares on the TSX Venture Exchange (“VWAP“) for the five (5) trading days immediately preceding the closing date and (B) the Discounted Market Price (as such term is defined by the in the policies of the TSX Venture Exchange) on the day prior to the closing date. The purchase price is subject to customary post-closing adjustments for working capital, transaction expenses and net debt, and $2M of the cash portion of the purchase price is being deferred subject to TargetCo achieving certain revenue performance in the 12-month period following closing and also as an indemnification holdback. The vendors of TargetCo will also be entitled to a separate earn-out based on revenue performance of TargetCo for the 12-month period that commences 6 months following closing, up to a maximum of $4 million, payable entirely in Carebook Shares at a price to be based on the VWAP for the five (5) trading days immediately preceding the earn-out payment date.
The cash portion of the purchase price for the Acquisition will be financed through a concurrent private placement equity offering of up to $14 million to be led by iA Private Wealth Inc. and a syndicate that includes Canaccord Genuity. The Acquisition is expected to close on or before July 31, 2021, and is subject to a number of closing conditions, including successful completion of the Offering (as defined below), approval of the TSX Venture Exchange, consent and approval of Carebook’s third-party lenders, and the delivery of final documentation. Further information regarding the Offering is included below.
$14 Million Equity Offering
Concurrent with the agreement to acquire TargetCo, Carebook also announced that it has entered into an agreement with iA Private Wealth Inc., on behalf of a syndicate that includes Canaccord Genuity (collectively, the ”Agents“) in connection with a “best efforts” private placement (the “Offering“) of Carebook Shares of the Company for aggregate gross proceeds of up to $14 million consisting of up to 14,000,000 Carebook Shares at a price of $1.00 per Carebook Share (the “Offering Price“).
In addition, the Company will grant the Agents an option (the “Over-Allotment Option“) to arrange for the purchase of additional Carebook Shares in an amount equal to 15% of the Carebook Shares sold pursuant to the Offering at a price equal to the Offering Price. The Over-Allotment Option shall be exercisable, in whole or in part, at any time for a period ending 48 hours prior to the Closing Date (as defined below).
The Company intends to use the net proceeds of the Offering to complete the Acquisition, including allocating a portion of the net proceeds to repay indebtedness and for general corporate and working capital purposes, the whole to allow the Company to maintain its financial commitments to its lenders, whose consent is necessary to complete the Acquisition. The Offering is integral to the proposed Acquisition and therefore the Company expects to rely on the “part and parcel” pricing exception available under section 1.7 of TSX Venture Exchange Policy 4.1 – Private Placements.
The Offering is expected to close on or before July 21, 2021 (the “Closing Date“) and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange.
The Offering will be made by way of private placement to certain accredited investors in each of the provinces of Canada. In addition, the Agents will offer the Carebook Shares for sale by way of private placement exemptions (i) in the United States and (ii) in those jurisdictions outside of Canada and the United States that are agreed to by the Company and iA Private Wealth Inc.; provided it is understood that the Company will not be required to register or make any filings (other than reports on sales of securities in the United States and Canada) in such jurisdictions.
The securities to be issued under the Offering will have a hold period of four months and one day from the Closing Date.
At the closing of the Offering, the Company will pay to the Agents a cash fee equal to 6.0% of all gross proceeds raised in connection with the Offering (reduced to 1.0% for purchasers on the Company’s president’s list) and a number of warrants (the “Broker Warrants“) equal to 6.0% of the number of Carebook Shares issued by the Company under the Offering including the Over-Allotment Option (reduced to 1.0% for purchasers on the Company’s president’s list). Each Broker Warrant shall entitle the Agents to acquire one Carebook Share of the Company at the Offering Price for a period of 24 months from the Closing Date, subject to compliance with the pricing requirements of the TSX Venture Exchange. The Company also agreed to pay iA Private Wealth Inc. a corporate finance work fee of $50,000 plus applicable taxes.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act“) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined under applicable securities laws) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration is available.
Novus Health Letter of Intent Update
On November 19, 2020, Carebook announced that it had entered into an LOI to acquire Health Care Services International Inc., doing business as Novus Health. After several months of exploration and working together, the Carebook and Novus Health teams discovered a lot of synergies and are looking for mutually beneficial opportunities for the future, but concluded that an acquisition is not the best way to proceed at this time. Therefore, Carebook is no longer pursuing this acquisition.
About Carebook Technologies
Our core is science. Our solutions are accessible. Our mission is to empower people.
Built on a powerful health platform, Carebook creates highly engaging, customer-centric digital solutions for pharmacies, employers, and benefits providers. Based in Montreal and led by a world-class team and Board with extensive global business and healthcare industry experience, Carebook’s core is science and technology, its philosophy is people-first, and its goal is accessible, connected health for everyone. On April 6, 2021, Carebook announced the closing of its acquisition of InfoTech Inc., doing business as Wellness Checkpoint®. InfoTech is a recognized global leader in health and productivity risk management. InfoTech’s proprietary software platform Wellness Checkpoint, IP and metrics are supported by advanced analytics and focus on employees’ physical health, mental health and well-being, and their impact on work and business effectiveness. InfoTech’s significant international client base will contribute to the growth of Carebook’s global footprint. Carebook’s shares trade on the TSXV under the symbol “CRBK” and the Company’s shares also trade on the OTC Markets under the symbol CRBKF and Frankfurt Stock Exchange under the symbol PMM1.
Notice regarding forward-looking statements:
This release includes forward-looking information within the meaning of Canadian securities laws regarding Carebook, its subsidiaries and their business, including regarding the potential synergies from the TargetCo acquisition, the potential growth prospects of Carebook and its subsidiaries, Carebook’s products and technologies, the timing of closing of the TargetCo acquisition and the Offering, and the intended use of proceeds of the Offering. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “is expected”, “expects”, “scheduled”, “intends”, “contemplates”, “anticipates”, “believes”, “proposes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Such statements are based on the current expectations of the management of Carebook and are based on assumptions and subject to risks and uncertainties. Although the management of Carebook believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company, including risks regarding the failure to obtain TSXV approvals, failure to successfully close the Offering, failure to obtain the approval of Carebook’s lenders, economic factors, management’s ability to manage and to operate the business of Carebook, management’s ability to successfully integrate the Company’s contemplated and completed acquisitions and to realize the synergies of such acquisitions, management’s ability to successfully complete product studies, the equity markets generally and risks associated with growth and competition, as well as the risk factors identified in the Company’s management’s discussion and analysis for the year ended December 31, 2020 and described under the heading “Item 21 – Risk Factors” in the Listing Application of the Company dated September 28, 2020, each of which can be found on SEDAR under the Company’s profile at www.sedar.com. Although Carebook has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on any forward-looking statements or information. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Carebook does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. In addition, the current situation and future developments with respect to the COVID-19 pandemic could cause certain of the assumptions and information set forth herein or the fact that on which such assumptions are based to differ materially from previous expectations including in respect of demand for our products, supply chain and availability of materials, mobility and shipping of materials and or products, access to debt and equity capital and other factors.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Carebook Technologies Inc.