Assure Holdings, a provider of intraoperative neuromonitoring services (“IONM”), entered into a definitive agreement with Centurion Financial Trust, an investment trust formed by Centurion Asset Management Inc. (“Centurion”) in respect of an $11,000,000 credit facility comprised of a $6,000,000 senior term loan (the “Senior Term Loan”), a $2,000,000 senior revolving loan (the “Senior Revolving Loan”) and a $3,000,000 senior term acquisition line (the “Senior Term Acquisition Line” and together with the Senior Term Loan and the Senior Revolving Loan, the “Credit Facility”).
"We have capitalized on the recent momentum in our business to further strengthen our balance sheet and provide additional financial flexibility and liquidity,” said John A. Farlinger, Assure’s executive chairman and CEO. “This refinancing is expected to support our ability to take advantage of numerous growth opportunities including organically extending the Company’s operational footprint into new states and expanding our telehealth function for professional neurology services relating to IONM. In addition, this facility includes a line specifically for acquisitions and our M&A pipeline remains very active.”
“We are pleased to partner with Assure on a capital solution to help grow the Company,” said Daryl W. Boyce, Executive Vice President, Corporate Finance of Centurion. “We believe in Assure’s business model, are impressed with the quality of the management team and are confident the Company is well positioned for the future.”
Pursuant to the terms of the Agreement, the Senior Term Loan and the Senior Revolving Loan will be advanced to the Company as of the date hereof. The Senior Term Acquisition Line will be made available to the Company to fund future acquisitions, subject to certain conditions and approvals of Centurion. Interest on the Credit Facility will accrue at an annual rate equal to the greater of 9.5% per annum or the Royal Bank of Canada Prime Rate plus 7.05%, payable in monthly arrears. In addition, and pursuant to the Agreement, the Company shall pay Centurion a monthly standby fee of 1.50% per annum on any undrawn balance of the Credit Facility, as well as a one-time non-refundable commitment fee of $247,500 on the first advance under the Credit Facility.
The Credit Facility will mature 48 months from the date hereof and is secured by a first ranking security interest in all of the present and future assets of the Company and certain of its subsidiaries and affiliates (collectively, the “Assure Group”). The Credit Facility is guaranteed by the Assure Group, as more particularly set out in the Agreement. A description of the Credit Facility and a copy of the Agreement will be filed under the Company’s issuer profile on SEDAR at www.sedar.com and a current report on Form 8-K available at www.sec.gov.
Assure expects to use the net proceeds of the Credit Facility to repay all outstanding amounts under the Company’s previous credit facility, for general working capital purposes and to fund future acquisitions.
In addition, and subject to the approval of the TSX Venture Exchange (the “TSXV”), Assure has agreed to issue to Centurion an aggregate of 1,375,000 non-transferable common share purchase warrants of the Company (the “Warrants”). Each Warrant will entitle Centurion to acquire one common share in the capital of the Company at an exercise price equal to US$1.51 (representing the closing price of the Company’s common shares as of the close of business on June 9, 2021 and multiplied by the Bank of Canada’s daily exchange rate on June 9, 2021) for a term of 48 months from the date of issuance. The Warrants and underlying common shares will be subject to a hold period of four months and one day from the date of issuance pursuant to Canadian securities laws as well as applicable hold periods under U.S. securities laws.