Healing Co Inc.

On February 15, 2024 the lender's agent, Westmount Group LLC, gave notice that the company's August 2022 credit agreement is in default and the debt is accelerated and immediately due, with remaining commitments terminated. The stated defaults include two missed monthly interest payments of $91,454.13 (for November and December 2023). About $4.37M was owed, including $4,160,887.68 of principal. This turns the loan facility that was meant to fund acquisitions into a demanded debt, and no further borrowing is available. The filing does not say how the company will repay it.

debt financing

On March 3, 2023 the company, through a new subsidiary Chopra HLCO LLC, bought certain assets of Chopra Global, LLC (digital, licensing and products businesses tied to Deepak Chopra) and closed the same day. The price is up to $5,000,000 cash plus newly issued shares: $1,000,000 cash and 1,400,000 shares were paid at closing, $2,500,000 is due March 31, 2023, and up to three earnouts of $1,000,000 each (half cash, half shares) depend on Chopra business net revenue exceeding $5.9M (Mar-Dec 2023), $11M (2024) and $15M (2025). The company also owes a 5% royalty on net revenue under a license. This is the second brand purchase after Your Super and issues new shares, diluting existing holders; the shares are locked up for three years. If the deferred $2.5M is not paid, the seller can terminate and the assets and closing shares revert.

asset acquisition disposition

On October 7, 2022 the company agreed to sell 500,000 more Seed Preferred shares at $2.00 for $1,000,000 to one U.S. accredited investor and one non-U.S. person. Only $100,000 of the $1,000,000 had been received so far. This is a new tranche beyond the earlier 5,000,000-share offering, and as before, much of the subscribed money was not yet in.

capital raising announcement

Under an asset purchase agreement dated October 13, 2022, the company acquired substantially all assets of Your Super, Inc., a non-GMO organic superfoods maker, for 3,200,000 common shares valued at $2.50 each ($8 million) plus forgiveness of the $7,614,444.40 loan bought in September. This completes the acquisition that the loan purchase was meant to enable. The shares are locked up for three years, the business will run through Your Super HLCO LLC, and founders Michael Kuech (employment, $225,000 plus EUR30,000 salary) and Kristel De Groot (consulting, $225,000) each received 300,000 options tied to EBITDA targets. Issuing 3,200,000 shares dilutes existing common holders.

asset acquisition disposition

On September 9, 2022 the company bought from CircleUp Credit Advisors LLC the loans made to Your Superfoods, Inc. and Your Super, Inc., paying $2,000,000 cash plus a warrant for 1,500,000 common shares. The loans stood at about $7.614 million including interest, which stopped accruing July 22, 2022. The company says it bought them to allow more time to negotiate a possible acquisition of Your Super's assets, a step toward a second brand purchase.

material agreement

On August 4, 2022 the company signed a credit agreement with lenders for term loans of up to $75,000,000 (expandable to $150,000,000), to be used to buy assets that meet criteria set by an administrative agent. Loans carry 12% interest, mature the earlier of 12 months after the final draw or an event of default, and are secured by a first lien on substantially all assets of the company and its subsidiaries plus the subsidiaries' stock. The company paid a $562,500 upfront fee, will pay the agent $12,500 a quarter, and issued the agent a seven-year warrant for up to 1,300,123 Seed Preferred shares at $2.00. The filing does not say any amount has been drawn yet; it is the company's first debt facility, and the warrant could add to Seed Preferred shares outstanding.

material agreement

On March 10, 2022 the company bought 100% of NOEO GmbH, a German direct-to-consumer adaptogen and wellness products business, for EUR25,000 cash. The seller, Anabel Oelmann, is a company director, so it is a related-party deal; this is the first acquisition under the holistic-nutrition plan set out in August 2021 and ends the company's shell status. The filing also reports that Larson Elmore resigned as president, CEO and director effective January 10, 2022 and Simon Belsham was appointed, and says the Seed Preferred offering is fully subscribed but expected to close in the quarter ending March 31, 2022. The text is truncated, so further details are not covered.

asset acquisition disposition

This amendment corrects the picture of the second Seed Preferred tranche: the shares are issued only when subscription funds arrive, and $8,350,000 was still owed by two individual subscribers. Of the $10,000,000 of subscriptions accepted in October and November 2021, 4,675,000 shares remained unissued, so the earlier filing overstated how much cash had actually come in.

capital raising announcement

The company reported a second tranche of 4,675,000 Seed Preferred Shares at $2.00 each for $9,350,000, sold to non-U.S. persons on November 30, 2021. This would bring the 5,000,000-share Seed Preferred offering to $10,000,000 in total, but the January 2022 amendment shows the shares had not all been issued.

capital raising announcement

On October 8, 2021 the company sold a first tranche of 325,000 new Seed Preferred Shares at $2.00 each, raising $650,000, and adopted new articles authorizing 290,000,000 common and 10,000,000 preferred shares. Seed Preferred holders get paid 1.5 times their purchase price ahead of common shareholders in a liquidation, and have no voting rights, so common holders rank behind them.

capital raising announcement

The company, now named The Healing Company Inc., said that with its major shareholder it will narrow its focus to finding a business combination in holistic nutrition. It states it has no definitive agreements with any candidate and that its plans depend on a business combination and/or selling its securities. The filing says its plan since 2010 had been to seek a merger or other combination, so this narrows the search to one sector rather than starting a new business.

business combination