Mr. Jeff Ruby reports
NEWTOPIA ANNOUNCES PROPOSED NON-BROKERED OFFERING OF SUBORDINATED NON-CONVERTIBLE DEBENTURES OF UP TO $1.35 MILLION
Newtopia Inc. has arranged a proposed non-brokered offering of subordinated and postponed 13 per cent secured non-convertible debenture units pursuant to which Newtopia proposes to raise gross proceeds of up to $1.35-million. The company expects to use the proceeds of the offering for corporate and general working capital purposes.
Up to 135 units may be issued pursuant to the offering. Each unit comprises: (i) $10,000 principal amount of subordinated and postponed secured non-convertible debentures of the company; and (ii) for no additional consideration, such number of common shares in the capital of the company as is equal to 20 per cent of the principal amount of debentures purchased divided by three cents, being the closing market price of the common shares of the company on the TSX Venture Exchange on Nov. 30, 2022. In the event that the maximum amount of debentures are issued in connection with the offering, a maximum of nine million bonus shares will be issuable in connection with the offering.
The debentures will mature on the date that is 24 months from the closing date of the offering and are secured by the assets of the company and bear interest at a rate of 13 per cent per annum payable quarterly in arrears in cash.
The company will pay to the holders of the debentures an annual work and credit maintenance fee of 2 per cent of the principal amount in cash. The annual maintenance fee will be paid in advance for each year, with the first payment due and payable on the date that is three months following the closing date and the final maintenance fee payment due and payable on the one-year anniversary of the closing date.
Commenting on the proposed non-brokered offering, Jeff Ruby, founder and chief executive officer of Newtopia, noted: "Following a successful third quarter marked by industry-leading engagement levels and increasing profitability, we are pleased to announce this most recent financing. As we move closer to the finish line with several new health plans and employers, as well as continue to grow our current relationships with leading Fortune 50 clients, this additional capital infusion will enable us to fully capitalize on these increasing opportunities. These fundraising efforts, in conjunction with our new strategic cost-cutting measures launched in the third quarter, will drive Newtopia toward profitability quicker as we continue to work toward preventing, slowing and reversing chronic disease."
To demonstrate continued support of the company's growth plans, Jeff Ruby, the company's chief executive officer, chairperson and director, as well as Roger Poirier, a director, intend to participate in the offering. Such participation is considered a related party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The related party transaction is exempt from minority approval, information circular and formal valuation requirements pursuant to the exemptions contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as neither the fair market value of the gross securities issued nor the consideration paid exceeds 25 per cent of the company's market capitalization.
The debentures and the bonus shares to be issued pursuant to the offering will be subject to a hold period of four months plus one day from the closing date, except as permitted by applicable securities legislation and the rules of the TSX Venture Exchange. The offering is subject to approval by the TSX-V and the consent of the company's Schedule I bank secured lender.
As consideration for certain services provided to the company in connection with the offering, the company has agreed to pay a finder's fee comprising a cash fee equal to 5 per cent of the principal amount of debentures purchased by subscribers that are introduced to the company by each such finder (other than in respect of debentures sold to persons included on the president's list of the company, for which no cash fee shall be payable).
About Newtopia Inc.
Newtopia is a personalized whole health platform helping people create positive lifelong habits that prevent, slow or reverse chronic disease while reducing health care costs. The platform leverages genetic, social and behavioural insights to create individualized prevention programs with a focus on metabolic disease, diabetes, mental health challenges, hypertension, weight management and musculoskeletal disorders. With a person-centred approach that combines virtual care, digital tools, connected devices and actionable data science, Newtopia delivers sustainable clinical and financial outcomes. Newtopia serves some of the largest nationwide employers and health plans and is currently listed in Canada on the Toronto Stock Exchange and is quoted in the United States on the OTCQB Venture Market.
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