CannTrust Applies to Ontario Court to Extend Time for Annual General Meeting and Provides Update Regarding Strategic Review
VAUGHAN, ON, June 23, 2022 /PRNewswire/ - CannTrust Holdings Inc. (the "Company" or "CannTrust") (unlisted), minority investor in Phoena Holdings Inc.("Phoena", formerly CannTrust Equity Inc.) today announced that it is seeking an order from the Ontario Superior Court of Justice (the "Court") extending the time for the Company to call the next annual meeting of its shareholders. The Company also provided an update concerning its board of directors' (the "Board") review of strategic alternatives.
The Court previously issued an order extending the time for the Company to call the next annual general meeting ("AGM") of its shareholders to a date no later than 120 days following the completion of the Company's proceedings under the Companies' Creditors Arrangement Act ("CCAA"). The Company emerged from its CCAA proceedings on March 15, 2022 and is currently required to call the next annual meeting of shareholders on or before July 13, 2022. The Company requires additional time to prepare certain audited financial statements and other information which are required to be presented to the shareholders at each annual meeting. It has been working with its auditors, MNP LLP, to complete these audited financial statements but will be unable to do so before July 13, 2022. It is therefore requesting an extension from the Court to a date no later than November 30, 2022.
The motion is scheduled to be heard by the Court on July 7, 2022 at 10:00 a.m. EST. In support of the motion, the Company will today file with the Court the following materials (collectively, the "Court Materials"): a Motion Record containing the Notice of Motion, affidavits from Greg Guyatt, David Blair and Dan Hogan and a draft Order. The Court Materials are available at https://ln5.sync.com/dl/3460270d0/8szhn4iv-8tiac58r-f6b2rwde-v2iwj2q6. The Company will post a Zoom link for the hearing at the same location once it is provided by the Court.
The Company previously announced that it intends to explore alternatives for either applying to the Ontario Securities Commission ("OSC") for an order revoking the OSC's "failure-to-file" Cease Trade Order dated April 13, 2020 ("CTO") and listing the Company's common shares on a Canadian stock exchange or for taking steps to exchange the Company's common shares for common shares of Phoena and obtaining a Canadian stock exchange listing for Phoena's common shares. The Company is working closely with its advisors to devise a corporate structure that will be aimed at delivering modest incremental value to its shareholders, but in a manner that appropriately balances the constraints imposed by its cash position, accounting requirements and applicable Canadian and United States securities and tax laws. The Board's deliberations are ongoing and progressing, but there can be no assurance that the Company will be able to execute successfully on either strategic alternative.
The Board anticipates being in a position to complete its review, obtain any requisite audited financial statements and disclose its findings, and any related recommendations for approval by the Company's shareholders, before the Company's next shareholders meeting to be held by November 30, 2022, subject to the Court providing the relief noted above.
CannTrust is a holding company and its primary asset is comprised of an approximate 10% equity interest in Phoena. Although CannTrust is a reporting issuer under the laws of each of the Canadian provinces except for Quebec, it remains subject to the CTO and its common shares have been delisted by the Toronto Stock Exchange and the New York Stock Exchange.
Phoena is an award-winning, federally regulated licensed cannabis producer, with locations in Vaughan and Fenwick, Ontario. Phoena operates a portfolio of well-known brands, including estora, Liiv, SYNR.G and Xscape.
Phoena is committed to providing exceptional consumer experience, quality products and consistency. Phoena's greenhouse produces Grade A cannabis flower, which is sold in a variety of dried flower and extract formats.
Phoena creates cannabis products that meet the diverse needs of patients and consumers, promoting positivity, supporting creativity, and inspiring confidence.
Phoena, empowering you every day.
Learn more at Phoena.com
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 the Company's efforts to resolve certain securities regulatory and stock exchange issues, some of which have not been finalized and remain subject to completing further analyses, obtaining shareholder and creditor approval and satisfying the requirements of securities regulators and a stock exchange. Forward-looking information and statements necessarily involve known and unknown risks, including, without limitation: the risk that, if Phoena requires additional equity, the Company's investment in Phoena could be diluted further; the risk that Phoena or its affiliates could default under its credit facilities from Cortland Credit Lending Corporation or Marshall Fields International B.V., which are secured against substantially all of Phoena and the Company's assets; the risk that the Company will not be able to cure its disclosure defaults under securities laws and obtain an order from the OSC to revoke the CTO, on commercially reasonable terms, or at all; the impact of any regulatory and other investigations or proceedings; the risks associated with general economic conditions and/or adverse industry events; the risk of loss of markets; the risk of future legislative and regulatory developments in Canada, the United States and elsewhere; the state of the cannabis industry in Canada generally; the ability of the Company to attract and retain suitable directors, officers and employees; the risks that, even if the CTO can be revoked, the Company will be unable to obtain a stock exchange listing for the Company's common shares; the risk that neither the Company nor Phoena will be able to satisfy the requirements of such exchange; and the ability of Phoena 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, the Company 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 the Company 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 the Company'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 the Company'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 the Company 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 was 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.
SOURCE CannTrust Holdings Inc.
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