Health Logic revises terms of financing transactions

Mr. George Kovalyov reports

HEALTH LOGIC INTERACTIVE INC. ANNOUNCES REVISED FINANCING TERMS

Health Logic Interactive Inc. has proposed revised terms for its previously announced financing transactions including its proposed debt settlement transactions and its proposed private placement.

Conversion of first promissory notes

As previously announced, it is anticipated that the holders of an aggregate of $200,000 principal amount of secured, convertible promissory notes previously issued by the corporation will elect to convert the principal owing under such notes into four million units of the corporation a deemed price of five cents per first note unit. Each first note unit will consist of one common share in the capital of the corporation and one common share purchase warrant, with each such first note warrant exercisable for a period of two years from the date of issuance for one additional common share of the corporation at a price equal to 10 cents per share.

Subject to the receipt of the approval of the TSX Venture Exchange, it is anticipated that the holders of the first notes will elect to convert the outstanding interest ($30,641.10) owing on such first notes, with arm’s-length parties receiving 44,684 additional first note units at a deemed price of 12 cents per first note unit and with non-arm’s-length parties receiving 210,657 common shares at a deemed price of 12 cents per common share. The first note warrants issued to arm’s-length parties on conversion of the interest payable on the first notes will have an exercise price of 16 cents per share.

The first notes were issued by the corporation on July 10, 2020. The term of the first notes is two years. The first notes bear interest at a rate of 24 per cent per annum and are convertible at the option of the holder into first note units at a postconsolidation price of five cents per first note unit in the first year and 10 cents per first note unit thereafter.

Conversion of the interest payable on the first notes is subject to certain conditions including receipt of elections from the noteholders and other closing documentation and the approval of the TSX Venture Exchange (insofar as it applies to the conversion of the interest). There is no guarantee that such conditions precedent will be satisfied or that any of the transactions will be completed as described herein or at all.

Conversion of subsidiary promissory notes

The corporation will also seek to obtain agreement with the arm’s-length holders of an aggregate of $140,000 principal amount of unsecured promissory notes issued by a wholly owned subsidiary of the corporation to the assumption of the obligations under those notes by the corporation and the issuance of 1,166,666 units of the corporation, at a deemed price of 12 cents per subsidiary note unit. Each subsidiary note unit will consist of one common share and one and one common share purchase warrant. Each subsidiary note warrant will be exercisable for a period of six months from the date of issuance for one additional common share of the corporation at a price equal to 16 cents per share.

The subsidiary notes are due June 30, 2021, and bear no interest. The proceeds of the subsidiary notes were used, and are being used, to finance the working capital of the subsidiary, as it seeks business opportunities. All holders of subsidiary notes are arm’s-length parties to the corporation.

Conversion of the subsidiary notes is subject to certain conditions including execution of definitive binding agreements, the receipt of closing documentation and the approval of the TSX Venture Exchange. There is no guarantee that such conditions precedent will be satisfied or that any of the transactions will be completed as described herein or at all.

Conversion of payables

The corporation will also seek to obtain the agreement of certain of its directors and officers to convert $217,993.31 payables owing to those persons into common shares at a deemed price of 12 cents per share for an aggregate issuance of 1,816,611 common shares. Such amounts are owing to them for services rendered up to Feb. 28, 2021, ($174,400 in aggregate) and for reimbursement of expenses incurred for the benefit of the corporation ($43,593.31).

The corporation will also seek to obtain the agreement of certain vendors to convert $74,116 payables owing to those vendors into common shares at a deemed price of 12 cents per share for an aggregate issuance of 617,633 common shares. Such amounts are owing to them for services rendered up to Feb. 28, 2021, ($60,000 in aggregate) and for reimbursement of expenses incurred for the benefits of the corporation ($14,116).

It is anticipated that the aforementioned transactions with the directors and officers will be exempt from the valuation and minority shareholder approval requirements of Multilateral Instrument 61-101 by virtue of the exemptions contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in that the fair market value of the shares to be issued to such insiders will not exceed 25 per cent of the corporation’s market capitalization at the time the transactions are agreed to.

Conversion of the insider payables and other payables is subject to certain conditions including execution of definitive binding agreements, the receipt of closing documentation and the approval of the TSX Venture Exchange. There is no guarantee that such conditions precedent will be satisfied or that any of the transactions will be completed as described herein or at all.

Arm’s-length private placement

The corporation proposes to complete an arm’s-length financing of up to 425,000 units of the corporation at a price of 12 cents per unit, for gross proceeds of up to $51,000. Each proposed private placement unit consists of one common share of the corporation and one common share purchase warrant of the corporation. Each private placement warrant shall entitle the holder thereof to acquire one common share in the capital of the corporation at an exercise price of 16 cents per private placement warrant share for a period of six months from closing, subject to adjustment in certain events.

Closing of the offering is subject to standard closing conditions including receipt of executed subscription agreements and subscription finances, the availability of prospectus exemptions for each investor and receipt of TSX Venture Exchange approval. There is no guarantee that such closing conditions will be satisfied or that any proceeds will be raised under the offering.

Website acquisition

The corporation has also announced the execution of a non-binding letter of intent with arm’s-length parties for the acquisition of a website. The corporation will seek to obtain the agreement of the sellers to the issuance of up to 1.25 million common shares at a deemed price of 12 cents per share in satisfaction of the purchase price for that acquisition.

The acquisition of the website is subject to certain conditions including execution of definitive binding agreements, the receipt of closing documentation and the approval of the TSX Venture Exchange. There is no guarantee that such conditions precedent will be satisfied or that any of the transactions will be completed as described herein or at all.

About Health Logic Interactive Inc.

Health Logic Interactive plans to develop and commercialize novel technologies through its wholly owned operating subsidiary, My Health Logic Inc. At the present time, the company is not engaged in active business operations. The company intends to acquire and commercialize consumer focused health care technologies that address areas of unmet needs, such as chronic disease management through point-of-care diagnostic medical devices that are connected to patient’s smart phones and virtual continued care platforms. However, to date it has not entered into any binding agreements for such acquisitions and there can be no guarantee that the company will be able to successfully identify, negotiate and complete such acquisitions or raise the necessary financings for such acquisitions or for the development of its business should it be able to complete such acquisitions.