TORONTO, April 6,
2023 /CNW/ - GreenSpace Brands Inc.
("GreenSpace" or the "Company") (TSXV: JTR) announces
that, as part of the Company's ongoing restructuring efforts, the
Company and certain of its subsidiaries, being Love Child (Brands) Inc. ("Love Child"), Central Roast Inc.
("Central Roast") and Life Choices Natural Food Corp.
("Life Choices", and collectively, with the Company, the
"Applicants"), have commenced proceedings before the Ontario
Superior Court of Justice (Commercial List) (the "Court")
and obtained an initial order (the "Initial Order") under
the Companies' Creditors Arrangement Act (Canada) (the "CCAA").
The Initial Order includes, among other things: (i) a stay of
proceedings in favour of the Applicants for an initial 10-day
period (the "Initial Period"), being the maximum stay period
permitted under the CCAA for the Initial Order; (ii) approval of a
debtor-in-possession financing facility (the "DIP Loan");
and (iii) the appointment of PricewaterhouseCoopers Inc., LIT as
monitor of the Applicants (the "Monitor").
The Applicants are commencing restructuring proceedings under
the CCAA with the support of the Company's senior lender, Pivot
Financial I Limited Partnership ("Pivot"). The Applicants
have executed a term sheet with Pivot (in such capacity, the
"DIP Lender"), pursuant to which the DIP Lender will advance
the DIP Loan in the amount of $400,000 for the Initial Period. A total of
$2,600,000 is available for borrowing
under the DIP Loan, subject to Court approval of the additional
availability at a subsequent hearing to be held within the Initial
Period (the "Comeback Hearing").
In addition, the Company and Love
Child have also entered into an Asset Purchase Agreement
with Pivot (the "Stalking Horse Agreement"), under which
Pivot (on behalf of an entity to be incorporated) has agreed to
serve as the "stalking horse bidder" in a Court-approved sale and
investment solicitation process (the "SISP") in respect of
the Love Child OrganicsTM business. The Stalking Horse
Agreement establishes a minimum value in the SISP for the Love
Child OrganicsTM business, which is comprised of all or
substantially all of the assets of Love
Child and certain assets of GreenSpace related thereto, and
ensures the continued operation the Love Child
OrganicsTM business. Subject to Court-approval, the SISP
will allow interested parties the opportunity to submit superior
bids and participate in any auction process conducted pursuant to
the terms of the SISP. The Applicants intend to seek Court-approval
of the SISP at the Comeback Hearing. Unless the successful bid at
the conclusion of the SISP provides for significantly higher value
than the Stalking Horse Agreement, there is not expected to be any
recovery for holders of equity interests in the Company. Certain
members of the Company's senior management team have an interest in
the entity to be formed by Pivot, which will be the purchaser under
the Stalking Horse Agreement if the Stalking Horse Agreement is
declared the successful bid under the SISP.
The board of directors of GreenSpace made the decision to
commence CCAA proceedings and pursue the SISP, with the support of
Pivot, after careful review and consideration of viable
alternatives, and upon consultation with the Company's professional
advisors, having consideration for the Company's challenging
financial circumstances and pending debt maturities, among other
things. The decision follows on the strategic review previously
announced in June 2022, which did not
yield any executable transactions of its Central RoastTM
and Go VeggieTM businesses.
Pursuant to the Initial Order, the Applicants will continue
operations throughout the CCAA proceedings, including with respect
to the Love Child OrganicsTM business. The Applicants'
management will, under the oversight of the Monitor, remain
responsible for the day-to-day operations of the Applicants.
The Comeback Hearing is scheduled for April 14, 2023
at 2:15 p.m. (Toronto time), at which the Applicants intend
to seek, among other things, an extension of the stay of
proceedings until June 16, 2023,
authorization to borrow up to the maximum amount of availability
under the DIP Loan and approval of the SISP, including the use of
the Stalking Horse Agreement as the "stalking horse bid"
therein.
The Initial Order also authorized the Company to incur no
further expenses in relation to making continuous disclosure
filings under securities legislation and policies. Detailed
information regarding the Applicants and their restructuring
efforts, including Court materials filed in the CCAA proceedings,
will be made available on the Monitor's website, at:
www.pwc.com/ca/greenspace.
Trading of the Company's shares will be suspended, and the
Company will be transferred to the NEX board of the TSX Venture
Exchange.
ABOUT GREENSPACE BRANDS INC.:
GreenSpace is a North
American organic and plant-based food business that develops,
markets and sells premium food products to consumers within the
fast-growing natural and organic food categories. GreenSpace owns
LOVE CHILD ORGANICS, a producer of 100% organic food for infants
and toddlers made with natural and nutritionally-rich
ingredients.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS:
This news release includes certain information
and contains statements that may constitute "forward-looking
information" and "forward-looking statements", respectively, under
applicable securities law. Forward-looking statements can be
identified by words such as: "anticipate", "intend", "plan,",
"goal", "believe", "project", "estimate", "expect", "strategy",
"likely", "may", "should", "will", and similar references to future
periods. Examples of forward-looking statements include, without
limitation, statements regarding the Company's restructuring
efforts, the ability of the Company to obtain approval of and
implement the SISP, the ability of the Company to obtain all
necessary approvals in order to complete any sale or other
restructuring transaction identified as the successful bid in the
SISP, the ability of the Company to operate during the CCAA
proceedings, the continued operation of the Love Child Organics
business, and the Company's intention to return to Court for the
Comeback Hearing on April 14,
2023, among other things. Forward-looking statements are
neither historical facts nor assurances of future outcomes.
Instead, they are based upon a number of estimates and assumptions
made by management that, while considered reasonable, are subject
to known and unknown risks, uncertainties, certain of which are
beyond the control of GreenSpace, including, but not limited to:
the failure of third parties to comply with their obligations to
the Company or its affiliates; the impact of new and changes to, or
application of, current laws and regulations; critical accounting
estimates and changes to accounting standards, policies, and
methods used by the Company; the occurrence of natural and
unnatural catastrophic events and claims resulting from such
events; inflation; the Company's ability to finance operations; the
adequacy of our cash flow and earnings and other conditions which
may affect our ability to finance operations; strategic actions;
the ability of the Company to retain qualified staff (including in
light of the Company's restructuring efforts); and other factors
which may cause the actual results and future events to differ
materially from those expressed or implied by such forward-looking
information, including the risks identified in the Company's
disclosure documents. There can be no assurance that such
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance
on forward-looking information. All forward-looking statements
contained in this press release are given as of the date hereof and
are based upon the opinions and estimates of management and
information available to management as at the date hereof.
Except as required by applicable securities laws, we undertake no
obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
SOURCE GreenSpace Brands Inc.