VIQ Solutions entered into an amendment agreement with Beedie Investments in order to amend certain terms of the credit agreement dated Jan. 13, 2023, between the company and the lender. In connection with entering into the amending agreement, the company has drawn a subsequent advance of $1.25 million under its previously announced senior secured loan of up to $15 million with the Lender pursuant to the terms of the credit agreement, as amended by the amending agreement. As of the date hereof, $14.25 million of the loan has been advanced to the company. The company intends to use the subsequent advance for growth initiatives.
Terms of the Amended Credit Agreement and Warrant Issuance
Pursuant to the terms of the amending agreement, the interest rate on the loan was increased by 2% to 14.5%, which is comprised of cash interest of 9.5% per annum, calculated and paid monthly, and paid-in-kind interest charged at a rate of 5.0% per annum, compounded monthly and added to the outstanding principal amount of the loan. Pursuant to the amending agreement, the lender was also granted a participation right in certain future equity financings of the company in order to maintain its pro rata equity interest in the company determined on a partially-diluted basis. Additionally, the company is obligated to seek shareholder approval at the company’s next annual general meeting to approve an increase to the number of common share purchase warrants issuable to the lender under the credit agreement in order to permit the lender to receive the number of common share purchase warrants that the lender would have otherwise been able entitled to receive in connection with the subsequent advance and any further advance under the loan, but which were not issued because of the original limits set forth in the credit agreement. In the event the company is unable to increase the number of common share purchase warrants, the company is obligated to pay an amendment fee of $375,000 at the maturity or repayment of the loan.
