The Flowr Corporation FLWPF (TSX.V:FLWR) and it subsidiaries, The Flowr Group Inc., The Flowr Canada Holdings ULC and Terrace Global Inc. (collectively the “Flowr Group”) reported Thursday it will submit an application for an order for creditor protection from the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act.
The initial order being sought would include, among other things:
A stay of proceedings in favor of the Flowr Group.
Approval of the DIP loan as described below.
The appointment of Ernst & Young Inc. as monitor of the Flowr Group. The Flowr Group is seeking creditor protection under the CCAA in order to receive a stay of proceedings that will allow the Flowr Group to conduct a sale and investment solicitation process and facilitate a transaction that sees the company emerge from CCAA protection as a going concern.
If the initial order is granted, the company intends to operate in the ordinary course throughout the CCAA proceedings and while conducting the sale and investment solicitation process. Management of the company would remain responsible for the day-to-day operations of the company, under the general oversight of the monitor.
In order to fund the CCAA proceedings, the sale and investment solicitation process and other short -term working capital requirements, the Flowr Group has executed a term sheet with 1000343100 Ontario Inc. (the “DIP Lender”), pursuant to which the DIP Lender will advance a debtor-in-possession loan in the amount of $2 million.
The company’s common shares will be transferred to the NEX Board of TSX Venture Exchange where trading will be suspended.
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