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Newtopia Completes $2 Million Debt Financing, Assignment of Existing Senior Secured Credit Facility and Provides Corporate Update

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Newtopia (NEWUF) has completed a significant debt financing transaction, securing $2 million in total funding. The deal includes $1.6 million in new senior secured debt financing and settlement of $0.4 million owed to officers and directors. B.E.S.T. Venture Opportunities Fund acquired the company's existing $5.0 million senior secured debt, consolidating it with the new funds. The Consolidated Facility has a 2-year term with 15% annual interest. The company reported strong clinical outcomes from its Heartland Whole Health Institute trial, achieving best-ever engagement rates and weight-loss results. However, Newtopia faces challenges with a failure-to-file cease trade order due to delayed 2024 annual financial filings, resulting in trading suspension on TSXV.
Newtopia (NEWUF) ha completato un'importante operazione di finanziamento tramite debito, assicurandosi un totale di 2 milioni di dollari. L'accordo comprende un finanziamento senior garantito di 1,6 milioni di dollari e la liquidazione di 0,4 milioni di dollari dovuti a dirigenti e amministratori. Il B.E.S.T. Venture Opportunities Fund ha acquisito il debito senior garantito esistente della società di 5,0 milioni di dollari, consolidandolo con i nuovi fondi. La struttura consolidata ha una durata di 2 anni con un interesse annuo del 15%. L'azienda ha riportato risultati clinici positivi dal trial del Heartland Whole Health Institute, raggiungendo i migliori tassi di coinvolgimento e risultati di perdita di peso mai ottenuti. Tuttavia, Newtopia deve affrontare delle difficoltà a causa di un ordine di cessazione delle negoziazioni per mancata presentazione, dovuto al ritardo nella pubblicazione del bilancio annuale 2024, che ha comportato la sospensione delle negoziazioni sulla TSXV.
Newtopia (NEWUF) ha completado una importante operación de financiamiento mediante deuda, asegurando un total de 2 millones de dólares. El acuerdo incluye 1,6 millones de dólares en nueva deuda senior garantizada y la liquidación de 0,4 millones de dólares adeudados a funcionarios y directores. El B.E.S.T. Venture Opportunities Fund adquirió la deuda senior garantizada existente de la compañía por 5,0 millones de dólares, consolidándola con los nuevos fondos. La estructura consolidada tiene un plazo de 2 años con un interés anual del 15%. La empresa reportó resultados clínicos sólidos del ensayo del Heartland Whole Health Institute, logrando las mejores tasas de compromiso y resultados de pérdida de peso hasta la fecha. Sin embargo, Newtopia enfrenta desafíos debido a una orden de suspensión por falta de presentación, causada por el retraso en los informes financieros anuales de 2024, lo que resultó en la suspensión de la negociación en la TSXV.
Newtopia (NEWUF)는 총 200만 달러의 자금을 확보하는 중요한 부채 자금 조달 거래를 완료했습니다. 이번 거래에는 160만 달러의 신규 선순위 담보 부채 자금 조달과 임원 및 이사에게 지급해야 할 40만 달러의 채무 정산이 포함되어 있습니다. B.E.S.T. 벤처 기회 펀드는 회사의 기존 500만 달러 선순위 담보 부채를 인수하여 신규 자금과 통합했습니다. 통합 시설은 2년 만기이며 연 15%의 이자를 적용합니다. 회사는 Heartland Whole Health Institute 임상 시험에서 최고의 참여율과 체중 감량 결과를 달성하며 강력한 임상 성과를 보고했습니다. 그러나 Newtopia는 2024년 연례 재무 보고서 지연 제출로 인한 거래 중단 명령으로 TSXV에서 거래가 정지되는 어려움에 직면해 있습니다.
Newtopia (NEWUF) a finalisé une opération importante de financement par dette, sécurisant un total de 2 millions de dollars. L'accord comprend un nouveau financement par dette senior garantie de 1,6 million de dollars ainsi que le règlement de 0,4 million de dollars dus aux dirigeants et administrateurs. Le B.E.S.T. Venture Opportunities Fund a acquis la dette senior garantie existante de la société de 5,0 millions de dollars, la consolidant avec les nouveaux fonds. La facilité consolidée a une durée de 2 ans avec un taux d'intérêt annuel de 15 %. La société a rapporté d'excellents résultats cliniques issus de l'essai du Heartland Whole Health Institute, atteignant les meilleurs taux d'engagement et résultats de perte de poids jamais enregistrés. Cependant, Newtopia fait face à des difficultés en raison d'une ordonnance de cessation de négociation pour non-dépôt, liée au retard dans la publication des états financiers annuels 2024, entraînant la suspension des échanges à la TSXV.
Newtopia (NEWUF) hat eine bedeutende Fremdfinanzierungstransaktion abgeschlossen und sich insgesamt 2 Millionen US-Dollar an Mitteln gesichert. Das Geschäft umfasst 1,6 Millionen US-Dollar an neuer vorrangiger besicherter Fremdfinanzierung sowie die Begleichung von 0,4 Millionen US-Dollar, die an Führungskräfte und Direktoren geschuldet werden. Der B.E.S.T. Venture Opportunities Fund erwarb die bestehende vorrangige besicherte Schuld des Unternehmens in Höhe von 5,0 Millionen US-Dollar und konsolidierte diese mit den neuen Mitteln. Die konsolidierte Finanzierung hat eine Laufzeit von 2 Jahren bei einem jährlichen Zinssatz von 15 %. Das Unternehmen berichtete von starken klinischen Ergebnissen aus der Studie des Heartland Whole Health Institute, mit den besten jemals erreichten Beteiligungsraten und Gewichtsverlustresultaten. Allerdings steht Newtopia vor Herausforderungen aufgrund eines Handelsstopps wegen verspäteter Einreichung der Jahresfinanzberichte 2024, was zu einem Handelsaussetzung an der TSXV führte.
Positive
  • Secured $1.6 million in new senior secured debt financing
  • Settlement of $0.4 million in debt to officers/directors with no cash consideration
  • Achieved best-ever clinical outcomes in 12-year history with Heartland Whole Health Institute trial
  • Company expects to reach cash flow positive status within 2025
  • Strong positioning in GLP-1 drug market with complementary habit change solutions
Negative
  • Failure to file annual financial statements for 2024 resulting in cease trade order
  • Trading suspension on TSXV due to regulatory non-compliance
  • High interest rate of 15% p.a. on consolidated debt facility
  • Significant total debt burden with $5.0 million existing debt plus new financing
  • Recent downsizing of key company personnel
  • Existing senior secured credit facility assigned to new investors; added $1.6 million of new senior secured financing, and settled $0.4 million owing to officers and directors for no cash consideration
  • Moving towards cash flow positive status within calendar 2025
  • Supports Newtopia's ability to facilitate sustainable metabolic health outcomes, proven cost savings and demonstrated positive ROI to GLP-1 sponsors
  • Highly scalable alongside the rise of Health AI: unique and rich longitudinal data sets and capabilities will enrich and accelerate progress of next-gen clinical discovery platforms and predictive health analytics
  • Reports best-ever engagement, weight-loss and A1C reduction outcomes in company's 12-year history with Heartland Whole Health Institute in Arkansas, USA

Toronto, Ontario--(Newsfile Corp. - May 14, 2025) - Newtopia Inc. (TSXV: NEWU) ("Newtopia" or the "Company"), a tech-enabled whole health platform creating economically affordable and sustainable habits that prevent, slow and reverse metabolic disease, today announced the completion of a transaction that included (i) an aggregate $1.6 million in new senior secured debt financing (the "New Secured Funds"), and (ii) the settlement of $0.4 million in amounts owing to certain officers and directors for past services to the Company, for no cash consideration.

Prior to advancing the New Secured Funds, B.E.S.T. Venture Opportunities Fund Inc. (the "Lender") purchased the Company's existing senior secured indebtedness, with a current outstanding balance of approximately $5.0 million (the "Assigned Debt") which obligations of the Company under the Assigned Debt has been consolidated with the New Secured Funds and form part of the Company's obligations under a new loan (the "Consolidated Facility").

Concurrently with closing of the Consolidated Facility, participating interests in the Consolidated Facility were sold by the Lender (i) to certain accredited investors, including existing investors in the Company, in return for an aggregate of $400,000 in cash, and (ii) to certain officers and directors of the Company in return for such individuals forgiving and releasing the Company from an aggregate of $400,000 in amounts owing for past services.

Summary terms of the Consolidated Facility include:

  • 2-year term with 15% p.a. accruing interest (no cash payment during the term)
  • Senior secured obligation of the Company
  • Includes participation by existing investors in the Company
  • Previous senior secured credit facility assigned to the Lender
  • Covenants, including in respect to adherence to budgetary goals and optimizing the business sizing, along with other conditions consistent for a financing of this type, are included in the terms of the Consolidated Facility.

"We are proud that over 175,000 participants have benefited from Newtopia's integrated tech-enabled offering as we continue to drive industry-leading patient engagement and to cultivate healthy habits that can prevent, slow and reverse chronic metabolic disease with a proven value-based model," said Jeff Ruby, Newtopia Founder and CEO. "Furthering this achievement, earlier this month we reported one-year outcomes from our ongoing trial with Arkansas-based Heartland Whole Health Institute, that produced Newtopia's best-ever outcomes in our 12-year history, including our highest engagement rates, greatest weight loss outcomes, and most significant A1C reduction outcomes. Importantly, we achieved this in both provider and employer environments."

"Now, on the strength of this new financing, Newtopia will leverage our core capabilities and strengths to drive even greater value to stakeholders by combining our proven habit change platform with GLP-1 drugs for obesity and type 2 diabetes management, and by partnering with health AI and clinical discovery innovators to improve our collective ability to prevent, reverse and slow chronic disease," Ruby added.

Ruby concluded, "Newtopia has spent the past 12 years partnering with the most sophisticated market innovators to deliver proven habit change solutions that are sustainable and affordable. These core competencies, together with our unparalleled experience, are now wonderfully complementary to the remarkable GLP-1 class of drugs that require engaging and effective habit change to sustain their positive outcomes and deliver a return on investment over time. Newtopia stands in a unique position to enable this progress, given our attractive value-based unit economics, our tech-enabled and scalable offering, and our current, cash flow break-even operating mode."

The Consolidated Facility is secured against all of the Company's present and after-acquired property and bears interest at a rate of 15% per annum and matures on the earlier of (i) any change of control or sale or disposition of all or substantially all of the assets of the Company, and (ii) May 13, 2027 (the "Maturity Date"). The Consolidated Facility does not contemplate any principal or interest payments until the Maturity Date when all principal and accrued and unpaid interest becomes due.

Certain finders acting in connection with the sale of the participating interests received a finder's fee in the aggregate total amount of $10,325. The Company will use the net proceeds of the Consolidated Facility for corporate and general working capital purposes.

The Consolidated Facility has been conditionally approved by the TSX Venture Exchange (the "TSXV").

Failure to File Cease Trade Order

Newtopia has had a delay in filing its annual financial statements, management's discussion and analysis, related officers' certifications for the financial year ended December 31, 2024 (collectively, the "Annual Filings"), which are required to be filed on or before April 30, 2025. The delay in filing the Annual Filings is primarily a result of the Company's resource limitations, combined with recent downsizing of key Company personnel. The Company intends to complete the Annual Filings as soon as possible. As a result of that delay, the Company has been noted in default by applicable securities regulatory authorities in Canada and that the Ontario Securities Commission, as principal regulator, has issued a 'failure-to-file' cease trade order ("FFCTO") in accordance with the principles and guidance set out in National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions of the Canadian Securities Administrators. The FFCTO prohibits any trading in securities of the Company for so long as it remains in effect, in all Canadian jurisdictions in which the Company is a reporting issuer as well as certain other Canadian jurisdictions based on the provisions of local securities legislation and is anticipated to remain in effect until after the Annual Filings have been filed. The FFCTO is also expected to result in a suspension of the Company's shares from trading on the TSXV, which will continue until the FFCTO is revoked and all TSXV requirements are satisfied. The Company is working towards getting the Annual Filings filed and intends to provide updates if and when necessary in accordance with applicable securities laws. The Company anticipates that the FFCTO will remain in place until such time as the Annual Filings are filed. If the Annual Filings are filed within 90 days of the date of the FFCTO, such filings will constitute the Company's application to have the FFCTO revoked. There can be no assurance that the FFCTO will be revoked on the timeline contemplated by the Company.

About Newtopia

Newtopia is a personalized whole health platform helping people create positive lifelong habits that prevent, slow, or reverse metabolic disease while reducing healthcare costs. The platform leverages genetic, social and behavioral insights to create individualized prevention programs with a focus on metabolic disease, diabetes, mental health challenges, hypertension, weight management and musculoskeletal disorders. With a person-centered approach that combines virtual care, digital tools, connected devices and actionable data science, Newtopia delivers sustainable clinical and financial outcomes. Newtopia serves some of the largest nationwide employers and health plans and is currently listed in Canada on the Toronto Venture Exchange (TSXV: NEWU). To learn more, visit newtopia.com, LinkedIn or X.

For further information:

Chief Executive Officer:
Jeffrey Ruby, jruby@newtopia.com; 888-639-8181

Forward-Looking Statements

This news release contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, and forward looking statements, within the meaning of applicable United States securities legislation (collectively, "forward-looking statements"), which reflects management's expectations regarding Newtopia's future growth, results from operations (including, without limitation, future production and capital expenditures), performance (both operational and financial) and business prospects and opportunities. Wherever possible, words such as "predicts", "projects", "targets", "plans", "expects", "does not expect", "budget", "scheduled", "estimates", "forecasts", "anticipate" or "does not anticipate", "believe", "intend" and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. All statements other than statements of historical fact may be forward-looking information. Such statements reflect Newtopia's current views and intentions with respect to future events, based on information available to Newtopia, and are subject to certain risks, uncertainties, and assumptions. Material factors or assumptions were applied in providing forward-looking information. While forward-looking statements are based on data, assumptions and analyses that Newtopia believes are reasonable under the circumstances, whether actual results, performance or developments will meet Newtopia's expectations and predictions depends on a number of risks and uncertainties that could cause the actual results, performance and financial condition of Newtopia to differ materially from its expectations. These forward-looking statements include, among other things, statements with respect to the Consolidated Facility, the use of proceeds and the timing, and the anticipated timing of filing the Annual Filings. Forward-looking statements are not a guarantee and are based on a number of estimates and assumptions management believes to be relevant and reasonable, whether actual results, performance or developments will meet Newtopia's expectations and predictions depends on a number of risks and uncertainties that could cause the actual results, performance and financial condition of Newtopia to differ materially from its expectations. Certain of the "risk factors" that could cause actual results to differ materially from Newtopia's forward-looking statements in this press release include, without limitation: the termination of contracts by clients, , including the risk factors discussed or referred to in Newtopia's disclosure documents, filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedarplus.ca including Newtopia's final long form prospectus dated March 30, 2020.

Should any factor affect Newtopia 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, Newtopia does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this news release is made as of the date of this news release, and Newtopia undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.

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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/252170

FAQ

What is the total amount of Newtopia's (NEWUF) new debt financing in 2025?

Newtopia secured $2 million in total debt financing, consisting of $1.6 million in new senior secured debt and $0.4 million in debt settlement with officers and directors.

Why was Newtopia (NEWUF) issued a cease trade order in 2025?

Newtopia received a failure-to-file cease trade order for not submitting its annual financial statements and related documents for the year ended December 31, 2024, by the April 30, 2025 deadline.

What are the terms of Newtopia's (NEWUF) Consolidated Facility?

The Consolidated Facility has a 2-year term until May 13, 2027, with 15% annual interest, no principal or interest payments until maturity, and is secured against all company assets.

What clinical results did Newtopia (NEWUF) achieve with Heartland Whole Health Institute?

Newtopia reported its best-ever outcomes in its 12-year history, including highest engagement rates, greatest weight loss outcomes, and most significant A1C reduction outcomes.

When does Newtopia (NEWUF) expect to become cash flow positive?

Newtopia expects to achieve cash flow positive status within calendar year 2025.
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