KDA Group Announces Debt Restructuring with Persistence Capital Partners
Thetford Mines, Quebec - TheNewswire – July 30, 2021 – KDA Group Inc. (TSXV: KDA) (“KDA” or the “Corporation”) is pleased to announce the restructuring, as of today, of its total debt owed to Persistence Capital Partners II, L.P. and Persistence Capital Partners II (International), L.P., (collectively “PCP”).
The Corporation and PCP signed today a Prepayment Agreement and related documents allowing the Corporation to (i) extend the maturity date of the notes and the Preferred Shares issued to PCP until December 31, 2022; (ii) reduce the interest and dividend rates and (iii) potentially reduce the amount payable to PCP to a minimum payment amount of $8,000,000.
“KDA’s management is proud to have found common ground with PCP to conclude this restructuring of PCP's total debt. This allows the Company to improve its current and future financial position, and I would like to thank PCP for their collaboration,” said Sylvain Duvernay, Chief Executive Officer of KDA.
The Series A Preferred Shares were issued to PCP in 2016 in consideration of $4,000,000 (the “Series A Preferred Shares”) and a promissory note in the amount of $1,000,000 was issued to PCP in 2017 (the “2017 Note”).
The Series A Preferred Shares were convertible into Class A Shares (the “Common Shares”) of the Corporation at a conversion price of $0.35 per Common Share, and entitled to vote as a separate class of shares and also on an “as converted” basis at any special or general meeting of the shareholders of the Corporation. The Series A Preferred Shares were not entitled to any fixed dividend entitlement but were entitled to participate in all dividends declared on the Common Shares on an “as converted” basis. Any time after June 30, 2020, PCP was entitled to demand that the Corporation redeem the Series A Preferred Shares at a redemption price equal to the greater of (i) the subscription price of the Series A Preferred Shares plus a preferred return equal to 24%, compounded annually from June 30, 2016, less any amounts previously distributed as dividends and (ii) their fair market value.
The 2017 Note was issued to PCP in consideration of a loan of $1,000,000 to the Corporation for its general business activities. The 2017 Note bore interest at a rate of 18% per annum.
Under the restructuring of the PCP debt, the Corporation issued new Series B-1 and Series B-2 Preferred Shares to PCP as well as interest-bearing promissory notes and the Series A Preferred Shares were cancelled.
The Series B Preferred Shares have similar rights to the Series A Preferred Shares regarding voting and dividends but are not convertible into Common Shares of the Corporation.
ABOUT KDA GROUP
KDA Group is a leading technological innovations and specialized solutions provider in the pharmaceutical market. Today, it is a respected name for quality and expertise among the different stakeholders in the pharmaceutical and medical sector. Its management team is guided by a vision of continuing to lead the way in Quebec while extending operations across Canada and internationally. Additional information on the Corporation is available at www.kdagroup.ca and on SEDAR at www.sedar.com.
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CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release from KDA Group contains forward-looking statements. Forward-looking statements are typically identified by the words assumption, goal, guidance, objective, outlook, strategy, target, and other similar expressions, or future or conditional verbs such as aim, anticipate, believe, predict, could, expect, intend, may, plan, seek, should, strive, and will. By their nature, forward-looking statements require us to make estimates and assumptions and express opinions based on current conditions and anticipated developments, as well as other factors that Management may deem appropriate under the circumstances. There is inherent uncertainty and significant risk in these estimates, assumptions, and opinions, particularly of a commercial, economic, and competitive nature, and they are therefore subject to change. KDA Group cannot guarantee that these estimates, assumptions, and opinions will prove to be accurate.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
Chief Executive Officer