Sproutly Announces CCAA Filing for THR Divestiture
VANCOUVER, BC, June 27, 2022 /CNW/ – Sproutly Canada, Inc. (CSE: SPR) (OTCQB: SRUTF) (FSE: 38G) (“Germinate“or the”Company“), announced today that Toronto Herbal Remedies Inc. (“THR”) and Sproutly’s subsidiary, which owns the shares of THR, Sproutly Inc. (together “Reporters”), filed an application in the Ontario Superior Court of Justice for protection under the Companies’ Creditors Arrangement Act (“CCAA“) in order to restructure their business and financial activities. The Company and its other subsidiaries are not parties to the CCAA filing and will now focus solely on the commercialization of its APP technology.
After going through a time and resource demanding process to sell THR and the facility, careful consideration of available alternatives and consultation with legal and financial advisors, the directors of the Company have determined that, in the interests of shareholders of the Company, the assignment of THR is expected to be effected by a court-appointed monitor pursuant to a CCAA filing.
The initial order includes, among other things: (i) a stay of proceedings in favor of the filers; (ii) approval of a DIP (debtor in possession) loan (as described below); and (iii) the appointment of BDO Canada Limited as Controller of the Depositors (as such, the “Monitor“).SISP“) and facilitate a transaction.
Under the Initial Order, the Filers will operate in the ordinary course throughout the CCAA proceedings during the SISP. The Depositors’ management will remain responsible for the day-to-day operations of the Depositors, under the general supervision of the Controller. Filers’ day-to-day obligations to employees and major suppliers of goods and services, from the date of filing, will be met through the DIP loan.
In order to fund CCAA proceedings, SISP and other short-term working capital requirements, the depositors have signed a term sheet with 0982244 BC Ltd. o/a Isle of Mann Property Group., on behalf of its clients (the “DIP Lender“), pursuant to which the DIP Lender will provide a loan to the debtor in possession in the amount of $750,000 (the “DIP loan“). The DIP Loan is conditional, among other things, on the issuance of the Initial Order which has been granted.
The Company is not part of the proceedings under the CCAA. The Company holds the APP technology license from Infusion Biosciences for CanadaEU, UK, Australia, Israel and Jamaica. The company is transitioning from operating a licensed cannabis facility to a cannabis technology business, as evidenced by the plan for registrants. The company will continue to partner with licensed producers to produce products using APP technology, which is capable of producing strain-specific cannabis extracts, edibles and beverages. The Company has a partnership agreement in place under which the Company will manufacture its own branded products while actively pursuing other sub-licensing and other agreements.
“At this point in Sproutly’s evolution, our best path to capitalize on APP technology and be able to produce innovative products was through the sale of THR.” says dr. Arup Sen, CEO of Sproutly. “Especially in light of our progress in the newly formed joint venture with KCI, the execution of product development, manufacturing and commercialization in Canada requires full focus on joint venture operations and approaching potential partners in territories where Sproutly has rights to APP technology,” he added.
About Sproutly Canada, Inc.
Sproutly is positioning itself to be a leading supplier of proprietary cannabis ingredients, brands and custom formulations to the cannabis beverage and edibles markets by Canada, Europe, Australia, and other international markets. Our exclusive natural water soluble Infuz2O and BioNatural oils are designed to deliver true-to-strain whole-plant experiences for new consumers and cannabis connoisseurs, ushering in the Cannabis 3.0 revolution. Sproutly will partner with established consumer brands globally to leverage their existing customer bases, brand recognition and distribution networks to deliver this breakthrough science quickly and efficiently in key commercial territories of the world.
For more information about Sproutly, please visit: www.sproutly.ca.
Caution Regarding Forward-Looking Statements: This release contains certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws or forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or future performance and reflect Sproutly’s management’s expectations or beliefs regarding future events. Generally, forward-looking statements and information can be identified by the use of forward-looking terminology such as “intends” or “anticipates”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, “would” or “would”. Such information and statements, referred to herein as “forward-looking statements”, are not historical facts, are made as of the date of this press release, and include, but are not limited to, statements regarding discussions of future plans, estimates and forecasts and statements such as the expectations and intentions of management.
These forward-looking statements involve numerous risks and uncertainties, and actual results may differ materially from the results suggested in the forward-looking statements. These assumptions, risks and uncertainties include, among others, the inability of the Company to launch or deliver its Cannabis 2.0 products in Canada; the Company’s inability to enter into agreements with partners and launch additional products; potential negative consumer, investor or public perception of additional product lines; changes in consumer preferences and product trends; and political, legal and regulatory uncertainty related to cannabis products generally. In making the forward-looking statements in this press release, the Company has applied several important assumptions, including, without limitation, that the Company will launch its Cannabis 2.0 products in Canada; that the Company’s products will be positively received by consumers Canada; and that the Company will continue to develop and launch its Cannabis 2.0 products. Although the Company’s management has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking statements or information, there may be other factors that cause the results are not those anticipated, estimated or intended. . There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Readers are cautioned that reliance on this information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statements, forward-looking information or financial outlook which are incorporated by reference herein, except in accordance with applicable securities laws. We seek refuge.
SOURCE Sproutly Canada Inc.
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