Salona Global Extends Biodex Acquisition Debt Duration to July 2025

NEW YORK, Aug. 08, 2023 (GLOBE NEWSWIRE) -- Salona Global Medical Device Corporation (the "Company") (TSXV:SGMD) today announced it has executed an agreement (the "Agreement") to extend the payment terms of the debt incurred in connection with its acquisition of Biodex Medical Systems, Inc. ("Biodex").

On April 3, 2023, the Company acquired all of the outstanding equity of Biodex in consideration for, among other things, the Company's future obligation to pay an aggregate of approximately US$10 million, which included (i) approximately US$1.5 million payable under a loan for nuclear medicine medical device inventory and parts which was due May 15, 2023; (ii) approximately US$1.5 million payable under a working capital loan which was due on June 15, 2023 (the "WC Loan"); and (iii) approximately US$7 million in three payments: US$2 million payable on June 30, 2023, US$3 million payable September 30, 2023 and US$2 million payable December 31, 2023 (the "Acquisition Debt"). The Company's obligation to pay both the Acquisition Debt and the WC Loan are secured by a pledge of all of the outstanding shares of Biodex.

As of July 25, 2023, the remaining amounts to be paid according to the closing statement by the Company under the Agreement are (i) the Acquisition Debt is total US$6,756,525.45 plus interest; and (ii) the WC Loan total of US$1,502,765.63, for a total of US$8,259.291.08

The Company entered into an agreement dated August 4, 2023 (the "Debt Extension Agreement") which extends the maturity date for amounts payable under (i) the WC Loan to October 31, 2023; and (ii) the Acquisition Debt to July 31, 2025.

The Company is working towards finalizing a US$2 million asset-based lending (ABL) facility on the Biodex assets with its current lender. As of June 30, 2023, these unencumbered assets totaled in excess of US$2.5 million in accounts receivable and inventory. Subject to successfully closing on the ABL facility, SGMD intends to use a portion of this facility to pay down the WC Loan.

Pursuant to this Debt Extension Agreement, all cash in excess of US$2.5 million held by the Company is required to be paid to reduce the Acquisition Debt until payments are current. The Debt Extension Agreement also requires the Company to increase its ABL facility to 80% of working capital to provide further case to reduce amounts owing under the Acquisition Debt. The Company has the right to prepay the Acquisition Debt at any time without cost or penalty.

"These agreements should give us the ability to generate additional cash flow and focus on growth," said Mike Seckler, CEO. "As I mentioned recently, I plan to conduct a strategic review with an aim to put us back on a path to revenue growth and achieve a market multiple consistent with our peers thereby increasing our share price."

For more information please contact:?

Mike Seckler
Chief Executive Officer
Tel: 1 (800) 760-6826
Email: [email protected]

Additional Information

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the ?TSXV) accepts responsibility for the adequacy or accuracy of this release.?

There can be no assurance that a new ABL facility on the Biodex assets will be completed or the timing of any agreement. Completion of any transaction will be subject to, amongst other things, negotiation and execution of definitive agreements, applicable director, shareholder and regulatory approvals.

Certain statements contained in this press release constitute "forward-looking information" within the ?meaning of the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities ?laws. These statements can be identified by the use of forward-looking terminology such as "expects" ??"believes", "estimates", "may", "would", "could", ?? "should", "potential", ????? "will", "seek", "intend", ??"plan", and "anticipate", and similar expressions as they relate ???? to the Company, including: the Company obtaining a new ABL facility on the Biodex assets; the Company using cash flow generated as well as leverage against assets to reduce the principal and interest of the Acquisition Debt over the next 24 months; the Company being able to successfully increase its ABL facility to 80% of working capital; the ?Company believing it can operate profitably for the quarter ending September 30, 2023; and the Company ?increasing its share price.?

All ?statements ? other than ? statements of ? historical fact may be forward-looking ? information. Such ?statements reflect the Company's current views and intentions with respect to future ? events, and ?current information available to the Company, and are subject to certain risks, ?uncertainties and ?assumptions. Salona cautions that the forward-looking statements contained herein are qualified by ?important factors that could cause actual results to differ materially from those reflected by such ?statements. Such factors include but are not limited to the ?? general business and ?? economic ? conditions ?in the regions in ? which Salona operates; the ability of Salona to execute on key ?? priorities, ? including ?the successful completion of acquisitions, business? retention, and ?? strategic plans and to ?? attract, ?develop ? and retain key executives; difficulty integrating newly acquired businesses; ?? ongoing or new ?disruptions in the supply chain, the extent and scope of such supply chain disruptions, and the timing ?or extent of the resolution or improvement of such disruptions; the ability to ??? implement ?business ? strategies and pursue business opportunities; ?? disruptions in or ?? attacks (including ? cyber-?attacks) on Salona ' s information ? technology, internet, network ?? access or other ?? voice or ?data ? communications systems or services; the evolution of various types of fraud or ?other ??? criminal ?? behavior to which ? Salona is exposed; the failure of third parties to comply with their ?obligations to ?? Salona or its ? affiliates; the ? impact of new and changes to, or application of, current ?laws and regulations; ?granting of permits and licenses in a highly regulated business; the ? overall ?difficult ????? litigation environment, including in the United States; increased competition; changes in ?foreign currency rates; ? increased ???? funding ? costs and market volatility due to market illiquidity and ?competition for funding; the ? availability of funds ???? and resources to pursue operations; ?critical ? accounting estimates and changes to accounting ? standards, policies, ???? and methods used by ?Salona; the occurrence of natural and unnatural?? catastrophic ? events ? and claims ???? resulting from such ?events; www.sec.gov, and with the securities regulatory authorities in certain ? provinces of ? Canada ?and available at www.sedar.com. Should any factor affect Salona in an ?unexpected ??? manner, ? or ? should ? assumptions ? underlying the forward-looking information prove ?incorrect, the actual results or ??? events ? may ? differ ? materially ? from the results or events predicted. ?Any such forward-looking information is ??? expressly ? qualified ? in its ? entirety by ? this cautionary ?statement. Moreover, Salona does not assume ???responsibility for the ?? accuracy or ?? completeness of such ?forward-looking information. The forward-looking ??? information included in this ? press ?release ? is ? made as of the date of this press release and the Company undertakes ??? no obligation to ?publicly ? update or revise ? any ? forward-looking information, other than as required by ?applicable ???law.?