$13.5 million package, including $7.0 million to accelerate growth via acquisition and working capital flexibility, and a $6.5 million term loan to consolidate existing debt
NeuPath Health Inc., owner and operator of a network of clinics delivering category-leading chronic pain treatment, announced that it has entered into a new credit agreement (the “Credit Agreement”) with the National Bank of Canada (“National Bank”), providing an aggregate of up to $13.5 million, comprising of a (i) $4.0 million revolving credit facility (the “Revolving Facility”), (ii) $3.0 million non-revolving delayed draw term loan facility (the “Acquisition Line”), and (iii) $6.5 million non-revolving term loan facility (the “Term Loan” and together with the Revolving Facility and the Acquisition Line, the “Credit Facilities”). The Credit Facilities provide NeuPath with additional capital to execute on its growth plan, while also helping the Company refinance its existing debt on favourable terms.
The Revolving Facility permits the Company to draw amounts at any time, subject to satisfying certain financial covenants, for working capital, capital expenditures and general corporate purposes.
The Acquisition Line is made available to the Company to finance future acquisitions, subject to certain terms and conditions.
The Term Loan is made available to the Company in the amount of approximately $6.5 million for the purpose of consolidating and refinancing the Company’s existing debt. As a result of the Term Loan, the Company has repaid all amounts outstanding under its credit facilities with the Royal Bank of Canada and has subsequently closed such facilities. In addition, the Company has redeemed all outstanding debentures, as more particularly described below, and repaid all outstanding related party loans.
Interest rates for amounts outstanding under the Credit Facilities are calculated based on the National Bank’s prime lending rate, plus applicable margins, which are calculated based on certain financial ratios. As of today, the Company has not drawn down on the Revolving Facility or the Acquisition Line and has $6.5 million outstanding on the Term Loan.
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Pursuant to the terms and conditions of the Credit Agreement, the Credit Facilities will be secured by substantially all of the assets of the Company and its subsidiaries. Additionally, the Company will be required to meet certain financial covenants and to satisfy various affirmative and negative covenants that limit, among other things, the Company’s ability to incur additional indebtedness outside of permitted indebtedness. The Credit Agreement also includes customary events of default, including payment and covenant breaches, bankruptcy events and the occurrence of change of control.
“Our financial and operational turnaround has enabled us to attract excellent terms and rates,” said Joe Walewicz, NeuPath’s Chief Executive Officer. “By cutting our net debt in half and substantially boosting adjusted EBITDA over the last two years, we built the financial foundation to raise non-dilutive capital for accretive growth. With the flexibility to respond to opportunities as we discover them, we’re well-positioned to accelerate growth in 2025 and beyond.”
NeuPath’s growth plan involves recruiting additional physicians to service patients in need, broadening its service offerings, building new locations, and acquiring existing clinics and their teams to provide better access to care for more patients in more Canadian communities. NeuPath is also exploring adjacent markets for opportunities that leverage its brand, real estate footprint and operational capabilities.
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Redemption of Debentures
On March 26, 2025, the Company provided notice to holders (the “Debentureholders”) of its outstanding 10% subordinated and postponed unsecured non-convertible debentures (the “Debentures”) notifying Debentureholders of the Company’s intention to redeem all outstanding Debentures, being the aggregate principal amount of $1,453,000 of Debentures as of April 25, 2025 (the “Redemption Date”). In connection with the early redemption of the Debentures, the Company shall pay a redemption amount equal to $1,030 for each $1,000 principal amount of Debentures outstanding, being equal to the aggregate principal amount of $1,496,590, plus all accrued and unpaid interest up to, but excluding, the Redemption Date (collectively, the “Total Redemption Price”).
Proceeds from the Term Loan that are being used to pay the Total Redemption Price are being held in trust by TSX Trust Company, as debenture trustee, until the Redemption Date. Upon payment of the Total Redemption Price on the Redemption Date, all Debentures redeemed shall be cancelled and the Debentureholders shall have no rights in respect thereof, except to obtain payment of their portion of the Total Redemption Price.
Beneficial holders of the Debentures (held through an account with a bank, brokerage firm, financial instrument or other intermediary, each an “Intermediary”) that maintain their interest through CDS should contact their Intermediary with any questions that they may have regarding the redemption.
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Source – PR Newswire
