CannTrust Holdings Inc., minority investor in Phoena Holdings Inc. 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.