Heritage Cannabis Holdings Corp. CANN HERTF announced on Tuesday that alongside its subsidiaries it sought and obtained an order for creditor protection from the Ontario Superior Court of Justice under the Companies Creditors Arrangement Act.
"The difficult but necessary decision to commence CCAA proceedings was made after careful consideration of the Company's financial position while evaluating all available alternatives and engaging in significant consultation with legal and financial advisors," the company said in a press release.
The Toronto-based cannabis producer also said that BJK Holdings Ltd., its senior secured lender, made a demand to the company for payment in full of certain indebtedness owing by the Heritage Group to the lender totaling $8,421,088.87.
Heritage has entered into binding agreements to sell its real estate properties in Ontario and British Columbia to BJK Developments Ltd. for a net purchase price of $9,714,475 and lease the Ontario and BC Property back from the purchaser in October.
The company said at the time the purchase would be used to set off the amount owing by the company to its lender, BJK Holdings Ltd., a related entity of the purchaser, reducing the company's remaining term debt by roughly 64% to $5,256,379. The remaining term financing, as amended within a third amending agreement, has been extended through to Jan. 31, 2025. Additionally, the company said it retains its revolving line of credit of up to $5 million with BJK, which has also been extended until the same date.
According to a Wednesday update, the company's initial order includes:
- A stay of proceedings in favor of the company and its Canadian subsidiaries; and
- The appointment of KPMG Inc. as monitor of the company.
Heritage said its board of directors will remain in place and management will remain responsible for the day-to-day operations, under the supervision of the monitor.
The company plans to seek approval of a sale and investment solicitation process. If approved, the move would allow interested parties to participate in the process by the SISP procedures.
Canadian Securities Exchange is expected to place the company under delisting review.
Heritage recently reported a slight year-over-year decrease in fourth-quarter revenue to CA$7.98 million ($5.9 million), from CA$8.03 million in the prior year’s period.
It also reported an increase in gross margin of more than 50% for 2023 and 628% for the fourth quarter compared to last year.
In 2023 it reported a comprehensive loss of CA$19.9 million, down from CA$23.9 million in the same period of 2022.
HERTF Price Action
Heritage Cannabis' shares traded 76.67% lower at $0.0028 per share at the time of writing on Wednesday morning.
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The Benzinga Cannabis Capital Conference is coming to Florida
The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.
Get your tickets now on bzcannabis.com – Prices will increase very soon!