Edge Total Intelligence, a provider of real-time digital operations solutions, approved a credit letter agreement with Lotus Domaine III, an investment fund managed by a director of the company, effective June 1, for the advancement of a non-revolving term loan in the amount of up to $1 million. The proceeds of the credit facility, to be advanced by way of draw down notices in the minimum amount of $100,000. The purpose of each drawdown shall be stated on each drawdown notice and such purpose shall be approved by lender at the time of each advance.
The credit facility has a maturity date of May 31, 2025 and bears interest at the annual rate of 5%, payable quarterly. It may be prepaid at any time prior to the maturity date, in whole or in part, without premium or penalty. No commission or bonus was paid in connection with the credit facility, and the credit facility is not convertible into any securities of the company.
As a result of Lotus being considered an insider, the credit facility is considered to be a related party transaction under applicable securities laws and subject to the provisions of multilateral instrument 61-101 -protection of minority security holders in special transactions (“MI 61-101”). The company has relied upon exemptions in respect of the formal valuation and minority shareholder approval requirements under applicable securities laws. The credit facility is not subject to the formal valuation requirements under MI 61-101, and the company has relied upon the exemption in paragraph (f) of section 5.7(1) of MI 61-101 as the non-conflicted directors have determined that the credit facility is being made on reasonable commercial terms that are not less advantageous to the company than if obtained from an arm’s length party. The loan is subject to the completion of due diligence by the lender.
