VAUGHAN, ON, Jan. 6, 2022 /PRNewswire/ - CannTrust
Holdings Inc. ("CannTrust" or the "Company") (unlisted) today
announced that its Fourth Amended & Restated Plan of
Compromise, Arrangement and Reorganization dated July 7, 2021 (the "CCAA Plan") has been
implemented. The implementation of the CCAA Plan follows its
approval by the Ontario Superior Court of Justice on July 16, 2021 and the approval of the US class
action settlement by the United
States District Court Southern District of New York on December 2,
2021. Amongst other steps, the Company has contributed
$50 million to a trust established to
facilitate the class action settlements in full satisfaction of the
actions against it and $2.7 million
in trust for settlement of various claims under its CCAA
proceedings.
As planned, upon the implementation of the CCAA plan, four
Directors of the Company resigned from the Board of Directors with
immediate effect. CannTrust has accepted resignations from Chairman
of the Board Robert Marcovitch, along with Directors Mitchell Sanders, Mark
Dawber and Shawna Page. The
Company thanks each Director for their contribution to the Company
and wishes them every success in their future endeavors.
Notwithstanding the significant progress made by the CannTrust
Group in these proceedings, including successfully obtaining the
reinstatement of its licences from Health Canada, restructuring its
operations, resuming production and processing operations, reaching
key settlements, and the development, approval and sanction of the
CCAA Plan, the Canadian cannabis industry generally, and the
CannTrust Group specifically, have faced challenges. As a
result, the CannTrust Group does not have sufficient liquidity to
operate beyond the near term.
CannTrust is in default of the minimum EBITDA covenant under its
DIP loan. The DIP lender has not agreed to waive the default
although it continues to advance funds under the facility.
Despite the implementation of the CCAA Plan, CannTrust's CCAA
proceedings are continuing to facilitate further discussions with
potential investors and strategic partners, and to develop an
orderly wind-down plan to maximize the value of its assets in the
event that a financing or strategic transaction option cannot be
finalized. The Company's current stay period extends to
January 31, 2022. For more
information about CannTrust's CCAA proceedings, please visit:
www.ey.com/ca/canntrust.
About CannTrust
CannTrust is a federally regulated licensed cannabis producer.
We are proudly Canadian, operating a portfolio of brands including
estora, Liiv, Synr.g and XSCAPE, specifically designed to surprise
and delight patients and consumers.
At CannTrust, we are committed to providing an exceptional
customer experience, as well as consistent and quality products
through standardized processes. Our greenhouse produces Grade A
cannabis flower, with products currently being sold in dried
flower, pre-roll, vape, oil drops and capsule formats. Founded in
2013, our continued success in the medical cannabis market and
subsequent expansion into the recreational business, led to us
being named Licensed Producer of the Year at the Canadian Cannabis
Awards 2018.
CannTrust is committed to research and innovation, investing in
developing technologies for new products in the medical,
recreational, and wellness markets, while contributing to the
growing body of evidence-based research regarding the use and
efficacy of cannabis.
Learn more at www.canntrust.com.
Forward-Looking Statements
This press release contains "forward-looking information" within
the meaning of Canadian Securities laws and "forward-looking
statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and other applicable
United States safe harbor laws,
and such statements are based upon CannTrust's current internal
expectations, estimates, projections, assumptions and beliefs and
views of future events.
Forward-looking information and forward-looking statements can
be identified by the use of forward-looking terminology such as
"believes", "expect", "likely", "may", "will", "should", "intend",
"anticipate", "potential", "proposed", "estimate" and other similar
words, including negative and grammatical variations thereof, or
statements that certain events or conditions "may", "would" or
"will" happen, or by discussions of strategy.
The forward-looking information and statements in this news
release include statements relating to CannTrust's ongoing CCAA
proceedings, its efforts to finalize a financing or strategic
transaction and its effort to develop an orderly wind-down plan in
the event that a transaction can not be finalized. Forward-looking
information and statements necessarily involve known and unknown
risks, including, without limitation: the Company's limited cash
and other liquidity; the risk that the Company will be unable to
raise further liquidity; the impact of any regulatory and other
investigations; the Company's ongoing review of strategic and
financing alternatives; risks associated with general economic
conditions; adverse industry events; loss of markets; future
legislative and regulatory developments in Canada, the United
States and elsewhere; the state of the cannabis industry in
Canada generally; CannTrust's
ability to timely cure its disclosure defaults and obtain an order
revoking the OSC's cease-trade order; the willingness of a stock
exchange to list the Company's common shares and CannTrust's
ability to satisfy the requirements of such exchange; and, the
ability of CannTrust to successfully implement its business
strategies.
Any forward-looking information and statements speak only as of
the date on which they are made, and, except as required by law,
CannTrust does not undertake any obligation to update or revise any
forward-looking information or statements, whether as a result of
new information, future events or otherwise. New factors emerge
from time to time, and it is not possible for CannTrust to predict
all such factors. When considering these forward-looking
information and statements, readers should keep in mind the risk
factors and other cautionary statements in CannTrust's Annual
Information Form dated March 28, 2019
(the "AIF") and filed with the applicable Canadian securities
regulatory authorities on SEDAR at www.sedar.com and filed as an
exhibit CannTrust's Form 40-F annual report under the United States
Securities Exchange Act of 1934, as amended, with the United States
Securities and Exchange Commission on EDGAR at www.sec.gov (the
"March 2019 Form 40-F"). The risk
factors and other factors noted in the AIF could cause actual
events or results to differ materially from those described in any
forward-looking information or statements. Readers are also
reminded that CannTrust remains in default of its periodic
disclosure requirements under applicable securities laws and stock
exchange requirements, that its most recent AIF, Form 40-F and
other disclosures do not reflect all risk factors that currently
face the Company, and that the Company has not completed or filed
the restatements of the financial statements included in the AIF or
the March 2019 Form 40-F or otherwise
filed an amendment to such Form 40-F, and that the Company is
permitted by the Initial Order of the Superior Court of Justice to
not to correct its prior filings or make any further filings in
respect of periodic disclosure requirements under applicable
securities laws and stock exchange requirements. None of the
Company's securities is listed for trading on any stock exchange in
any jurisdiction and, in Canada,
trading in the Company's securities is subject to a cease-trade
order issued on April 13, 2020 by the
Ontario Securities Commission for CannTrust's failure to comply
with its disclosure obligations under applicable securities
laws.
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SOURCE CannTrust Holdings Inc.