TORONTO, May 28, 2024
/CNW/ - Shiny Health & Wellness Corp.
("ShinyHealth") (TSXV: SNYB) today reports that its
wholly-owned subsidiary, Shiny Bud Inc. (the "Company"),
with the authorization and approval of its board of directors (the
"Board"), has filed a Notice of Intention to Make a Proposal
("NOI") pursuant to the provisions of the Bankruptcy and
Insolvency Act (Canada)
("BIA"). The principal purpose of the NOI filing is to
create a stabilized environment for the Company and its financial
advisors to run an orderly and flexible sale, investment and
solicitation process ("SISP") with the goal of identifying
one or more interested parties that wish to acquire or make an
investment in the Company's business or all or some of its assets.
B Riley Farber Inc. has been appointed as the trustee under the NOI
(the "Proposal Trustee"). The Company is working closely
with the Proposal Trustee and its legal advisors on the SISP to
best protect the Shiny Bud brand and its 20 licensee stores whose
ability to continue to use the Shiny Bud brand in accordance with
the license agreements is not impacted by the NOI.
In connection with the filing of the NOI, the Company has
entered into an agreement with its existing senior creditor,
Evergreen Gap Debt GP Inc, as Agent for and on behalf of Evergreen
Gap Debt LP and Gap Debt III LP (the "DIP Lender"), pursuant
to which the DIP lender will advance a debtor-in-possession
("DIP") loan to the Company in the amount of up to
$580,000 to generally fund working
capital needs and expenses related to the NOI proceedings. The DIP
Loan is conditional on, among other things, approval from the
Ontario Superior Court of Justice (the "Court").
The Company intends to seek an order from the Court approving
the terms of the SISP and DIP loan. The Company's objective is to
complete the SISP by the end of July
2024. It is important to note that the Company is not
bankrupt. If the DIP agreement is approved, the Company believes it
has sufficient resources to fund its operations during the SISP and
its stores will remain open for business during that time, subject
to any restructuring steps that the Company may take during the
process. Pursuant to the BIA, upon filing the NOI, there is an
automatic stay of proceedings in respect of all creditor claims and
actions against the Company that will protect the Company and its
assets from the claims of creditors and others during the pendency
of the proposal proceedings.
Anyone interested in obtaining more information about the SISP
should contact the Proposal Trustee at: Nerina Jahja – njahja@brileyfin.com.
ShinyHealth also announces that its wholly-owned subsidiary,
mihi Health and Wellness Inc. ("mihi"), has received, in
connection with a guarantee provided by mihi in favour of its
wholly-owned subsidiary that owns the Cotton Mill Pharmacy, a
demand from the lender to such subsidiary for immediate payment of
unpaid loan amounts. The Cotton Mill Pharmacy is currently
temporarily closed. ShinyHealth is reviewing the merits of
this demand and financial circumstances of mihi.
As a result of the NOI and financial resource constraints,
ShinyHealth also announces that it is expecting not to file its
annual financial statements and accompanying management's
discussion and analysis for the fiscal year ended January 31, 2024 by the prescribed deadline of
May 30, 2024. ShinyHeath's ability to
complete the audit and filing of its annual financial statements
and related management's discussion and analysis will be dependent
upon the results of the NOI process.
As a result of the prior resignations of Meris Kott and Jonathan
Hemi, the remaining directors of ShinyHealth are
Brad Kipp (non-independent) and
Lyn Christensen (independent), and
the remaining officers are Brad Kipp
(Interim CEO) and Dominic Lavallée (Interim CFO). As a result of
ShinyHealth currently having only two directors, it does not
currently meet the minimum number of directors required under
applicable law as a reporting issuer or pursuant to the policies of
the TSX Venture Exchange ("TSXV"). In light of this,
ShinyHealth has been advised by the TSXV that trading of its shares
will remain halted and failure to remedy the deficiency within 10
business days will result in a suspension in trading of the
ShinyHealth shares. ShinyHealth confirms that its transfer agent,
Computershare, continues to act as its transfer agent.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This press release contains "forward-looking information" within
the meaning of applicable Canadian securities legislation.
Generally, forward-looking information can be identified by the use
of forward-looking terminology such as "plans", "expects" or "does
not expect", "is expected", "intends", or "believes", or variations
(including negative and grammatical variations) of such words and
phrases or state that certain acts, events or results "may",
"could", "would", "might" or "will be taken", "occur" or "be
achieved".
These statements are based upon assumptions that are subject to
significant risks and uncertainties, including risks regarding the
Company's financial situation, liquidity and its need for
additional financing, Court approval of the SISP and DIP loan, the
sufficiency of resources to fund the Company's operations during
the SISP, the ability to design the SISP to protect the Shiny Bud
brand and the Company's 20 licensees, the cannabis industry, market
conditions, general economic factors, management's ability to
manage and to operate the business generally and during the process
being undertaken by the Proposal Trustee, and the equity markets
generally. Because of these risks and uncertainties and as a result
of a variety of factors, the actual results, expectations,
achievements or performance may differ materially from those
anticipated and indicated by these forward-looking statements. Any
number of factors could cause actual results to differ materially
from these forward-looking statements as well as future results.
Although the Company believes that the expectations reflected in
forward looking statements are reasonable, they can give no
assurances that the expectations of any forward-looking statements
will prove to be correct. Except as required by law, the Company
disclaims any intention and assume no obligation to update or
revise any forward-looking statements to reflect actual results,
whether as a result of new information, future events, changes in
assumptions, changes in factors affecting such forward-looking
statements or otherwise.
SOURCE Shiny Health & Wellness Corp.