BuildDirect Closes US$1.5M Secured Debt Financing and Amends 2018 Secured Debt

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VANCOUVER, BC, June 30, 2022 /CNW/ – BuildDirect.com Technologies Inc.. (TSXV: BILD) (“BuildDirect” Where “Company“), announces the closing of a secured debt financing under which it issued, through its wholly owned subsidiary BuildDirect Operations Limited (“BuildDirect operations“), notes secured to Pelecanus Investments Ltd. (“pelecan“), Lyra Growth Partners Inc. (“Lyre“) and Beedie Investments Ltd. (“Beedie“and, with Pelecanus and Lyra, the”Lenders“) of an aggregate amount of US $1.5 million (there “Additional loan“). The Company also announces the modification of the secured notes issued by BuildDirect Operations to (a) the lenders in February 2022 and (b) Deans Knight Capital Management Ltd. in its capacity as portfolio manager on behalf and for the benefit of two fully managed accounts (collectively, the “Dean Knight ticket holders“) in March 2018 (there “Ratings 2018“).

Additional loan:

Additional loan terms include the following:

  • The Supplementary Loan bears interest at an annual rate of 12% compounded monthly and is payable upon repayment of the Supplementary Loan;
  • The Supplementary Loan matures on January 1, 2023 and
  • A commitment fee equal to 1% of the Additional Loan is payable upon repayment of the Additional Loan.

On February 15, 2022the Company has issued secured notes (the “Original Remarks“) to the Lenders under which a total of US$3.0 million has been made available to the Company (the “Original Ready“, and with the Additional Loan, the “ReadyPursuant to the Supplemental Loan, BuildDirect Operations has issued Amended and Restated Secured Notes which amend and restate the Original Notes, thereby (a) extending the maturity date of the Original Loan to January 1, 2023; and (b) consolidate the initial loan and the additional loan into the same document.

The net proceeds from the additional loan will be used to continue to advance BuildDirect’s strategy and for general working capital purposes of the company. The TSX Venture Exchange has been notified of the additional loan pursuant to TSXV Policy 5.1 – Loans, Loan Bonuses, Finder’s Fees and Commissions.

Pelecanus, Lyra and Beedie are insiders in that they hold 37.7%, 12.9% and 11.4%, respectively, of the issued and outstanding common shares of the Company on a partially diluted basis. As a result of the foregoing, the Additional Loan granted to the above entities constitutes a related party transaction as defined in Multilateral Regulation 61-101 Protection of holders of minority securities in special transactions (“MI 61-101The Company relied on the exemptions from the formal valuation and minority shareholder approval requirements in sections 5.5(b) – Issuer not listed on specified markets and 5.7(1)(a) – Fair market value not exceeding 25% of market capitalization, respectively from MI 61-101.

Modification of tickets 2018:

BuildDirect Operations (formerly BuildDirect.com Technologies Inc.) issued the 2018 Notes to Deans Knight Noteholders for an aggregate principal amount of approximately CAD $5,000,000 under a ticket purchase agreement dated March 222018. BuildDirect Operations and Deans Knight Noteholders have agreed to amend the 2018 Notes pursuant to which (a) the maturity date of the 2018 Notes is extended to December 31, 2022 (there “2018 Ticket Expiry Date“) (b) the interest rate applicable to the 2018 Bonds is increased to 15% from June 30, 2022 and (c) deferred charges in the amount of between 1% and 3% of the aggregate principal amount of the 2018 Notes are payable by BuildDirect Operations subject to the redemption of the 2018 Notes prior to the maturity date of the 2018 Notes.

“We are very pleased to have the continued support of our shareholders as we navigate our continued transition to B2B-focused customer acquisition,” said David Lazar, interim CEO of BuildDirect. “Through our continued efforts to reallocate resources to the professional customer market and create synergies with our two previous acquisitions, which exclusively serve professional customers, we remain confident of our strategic direction.”

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 release.

About BuildDirect

BuildDirect (TSXV: BILD) is a growing omnichannel building materials retailer. BuildDirect connects North American B2B and B2C home improvement organizations and homeowners with quality building materials and services through its strong global supply chain network. BuildDirect’s growth trajectory, strong product offering and exclusive heavy-duty delivery network are driving value today, reinforcing its position as an innovator in the home improvement industry. For more information, visit www.BuildDirect.com.

Forward-looking information

This press release contains statements that constitute “forward-looking statements” and “forward-looking information” within the meaning of applicable securities laws (collectively, “forward-looking statements”), including statements regarding plans, intentions, the Company’s current beliefs and expectations regarding future business activities and operating performance. Forward-looking statements are often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, ” esteem”, “expect” or similar expressions. These statements reflect management’s current beliefs and expectations and are based on information currently available to management as of the date hereof. Forward-looking statements involve significant risks, uncertainties and assumptions.

Forward-looking statements in this press release may include, but are not limited to, statements relating to BuildDirect’s use of the loan proceeds, BuildDirect’s ability to repay the 2018 loan and notes, the continued transition to the customer acquisition focused on B2B, reallocating resources into the professional customer market and to drive acquisition synergies and BuildDirect conviction around its strategic direction.

Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied by the forward-looking statements. These factors include changes in consumer spending, availability of mortgage financing and consumer credit, changes in the housing market, changes in trade policies, tariffs or other laws and regulations applicable to both locally and in foreign jurisdictions, availability and cost of goods from suppliers, fuel prices and other energy costs, interest rate and currency fluctuations, retention of key personnel and changes in terms economic, commercial and general policies. These forward-looking statements may be affected by risks and uncertainties in the Company’s business and general market conditions, including COVID-19.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may differ materially from those described herein as anticipated, planned, anticipated, believed, estimated or expected. These factors should be carefully considered and readers should not place undue reliance on forward-looking statements.

Although the forward-looking statements contained in this press release reflect the Company’s expectations, estimates or projections regarding future results or events based on management’s beliefs, assumptions and estimates believed to be reasonable as of the date the statements are made, the Company cannot assure readers that actual results will be consistent with such forward-looking statements. There may be other risks, uncertainties and factors that cause results not to be as anticipated, estimated or intended and such changes could be material. These forward-looking statements are made as of the date of this press release, and BuildDirect undertakes no obligation to update or revise them to reflect new events or circumstances, except as required by law.

SOURCE BuildDirect.com Technologies Inc.

For further information: Ethan Rudin, CFO, BuildDirect IR, 1-778-382-7748, [email protected]


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