1000843823 Ontario Inc.

CCAA

^{Page last updated: May 7, 2024}

This page is for information purposes only and you should consult your professional adviser if you have any questions or are uncertain as to your rights or obligations.

Status of File as of April 26, 2024

The Transaction closed on April 16, 2024.

Status of File as of April 4, 2024

On April 3, 2024, the Court issued the Approval and Reverse Vesting Order which, among other things: 

1. Declared that ResidualCo shall be added as one of the Applicants in these CCAA Proceedings and that the Excluded Liabilities (as defined in the Subscription Agreement) should be transferred to ResidualCo;
2. Approved the Subscription Agreement, Transaction and any steps necessary to complete the Transaction; Authorized the Monitor to assign ResidualCo into bankruptcy;
3. Extended the Stay Period to the CCAA Termination Date;
4. Approved the Reports and the activities of the Monitor, described therein; and
5. Approved the fees and disbursements of the Monitor and its legal counsel as described in the Second Report.

On the same date, April 3, 2024, the Court issued an order (the “Stripe Payment Order”) which, among other things:

1. Declared that Stripe Payments Canada Ltd. (“Stripe”) remit to the Applicants the amount of $317,725.24, representing the funds that have been withheld by Stripe from the Filing Date; 
2. Declared that Stripe shall not withhold any further funds of the Applicants until the CCAA Termination Date; and
3. Authorized Stripe to apply to the Court to vary or amend the Stripe Payment Order by no later than April 18, 2024;

Status of File as of March 29, 2024

On March 29, 2024, the Monitor filed its Second Report with the Court to provide the Court with information concerning:

1. The activities of the Companies and the Monitor since the First Report. 
2. The Companies’ actual cash flows for the 10-week period ending March 22, 2024. 
3. The Companies’ motion for the Approval and Reverse Vesting Order;
4. Approval of Releases (as defined in the Second Report); 
5. Approval of the fees and disbursements of the Monitor and its legal counsel;
6. Approval of the Reports; 
7. Approval of the extension of the Stay Period to the CCAA Termination Date.

Status of File as of March 28, 2024

On March 28, 2024, the Applicants filed their motion with the Court for an order (the “Approval and Reverse Vesting Order”) to, among other things:

1. Approve a Share Subscription Agreement, dated March 27, 2024 (the “Subscription Agreement”) between Fresh City, as issuer, and the DIP Lender, as purchaser;
   
2. Approve the transactions contemplated in the Subscription Agreement (collectively, the “Transaction”) and restructuring steps to complete the Transaction (the “Closing Time”);
3. Declare 1000843823 Ontario Inc. (the “Residual Co.”) to be an applicant in this CCAA Proceedings;
4. Authorize the Monitor to assign the Residual Co. into bankruptcy;
5. Extend the Stay Period to the earlier of the date of bankruptcy of Residual Co. or the Closing Time (the "CCAA Termination Date”);
6. Approve the Pre-Filing Report of the Monitor, dated January 17, 2024, the First Report of the Monitor, dated January 25, 2024, and the Second Report of the Monitor, to be filed with the Court (the "Second Report"), and the activities of the Monitor and its counsel as described therein;
7. Approves the fees and disbursements of the Monitor and its counsel as set out in the affidavits of Michael McTaggart and Jesse Mighton, each attached to the Second Report;
8. Discharge the Monitor on the CCAA Termination Date.

The motion will be heard on April 3, 2024.

Status of File as of January 26, 2024

On January 26, 2024, the Court issued

1.     An order (the “Amended and Restated Initial Order”) which, among other things

a.     Extended the Stay of Proceedings to and including April 5, 2024;

b.     Approved the increase of the Administration Charge to $250,000;

c.     Approved the increase of the permitted borrowings under the DIP Facility to the maximum capital amount of $2.5 million;

d.     Approved the increase of the DIP Lender's Charge to $2.5 million;

e.     Approved the key employee retention plan (the "KERP"), appended as Exhibit "C" to the affidavit of Ran Goel sworn January 23, 2024 (the “Second Goel Affidavit”);

f.       Granted a third ranking charge, to rank ahead of the Director’s Charge, on the Property in favour of the beneficiaries of the KERP, in the maximum amount of $60,000 (the "KERP Charge");

g.     Sealed the Confidential Exhibit "1" to the Second Goel Affidavit, containing a list of the beneficiaries of the KERP and the amounts they will receive under the KERP; and

2.     An order (the “SISP Approval Order”) which, among other things

a.     Approved that the Companies, with the assistance of and in consultation with the Monitor, perform a Sale and Investment Solicitation

Process (“SISP”); and

b.     Approved the Pre-Filing Report of the then-proposed Monitor dated January 17, 2024 and the First Report of the Monitor, dated January 25, 2024, and the activities of the Monitor outlined therein.

Status of File as of January 18, 2024

On January 18, 2024 (the “Filing Date”), Fresh City Farms Inc. (“Fresh City”) and Mama Earth Organics Inc. (the “Applicants” or the “Companies”) applied for and received an order (the “Initial Order”) for protection pursuant to the Companies’ Creditors Arrangement Act R.S.C.1985, c.C-36, as amended (“CCAA Proceeding”) from the Ontario Superior Court of Justice Commercial List (the “Court”).

The Initial Order, among other things:

1. Appointed PricewaterhouseCoopers Inc., LIT (”PwC”) as monitor of the Companies (the “Monitor”);
2. Approved a stay of proceedings up to and including January 29, 2024 (“Stay of Proceedings”), which applies against the Companies or the Monitor, or any of their respective employees and representatives, any of the former, current or future directors or officers of the Companies and the Companies’ Property and Business (as defined in the Initial Order);
3. Declared that the Stay of Proceedings should extend to FCPDP Inc., a wholly-owned subsidiary of Fresh City;
4. Authorized the Companies to continue to use the central cash management system (“CMS”) currently in place as described in the affidavit of Ran Goel, sworn January 16, 2024 (the “Goel’s Affidavit”), or replace it with another substantially similar CMS;
5. Granted a first ranking charge, in the amount of $200,000 (the “Administration Charge”), on the Property of the Companies, as security for the professional fees and disbursements of the Monitor, the Monitor’s counsel and the Companies’ counsel, which charge shall rank in priority to all other security interests, trusts, liens, charges and encumbrances, claims of secured creditors, statutory or otherwise;
6. Authorized the Companies to borrow under a credit facility from 1000691958 Ontario Inc. and Bennett Church Hill Capital Inc. (together, the “DIP Lender”) in order to finance the Companies’ working capital requirements and other general corporate purposes and capital expenditures, provided that borrowings under such credit facility shall not exceed $570,000 (the “DIP Facility”), unless permitted by further order of this Court;
7. Granted a second ranking charge in favour of the DIP Lender over the Property of the Companies to a maximum amount of $570,000, as security for the DIP Facility (the “DIP Lender’s Charge”); and
8. Granted a third ranking charge, in the amount of $450,000 (the “Directors’ Charge”), on the Property of the Companies, as security for the indemnity granted to the Companies’ directors and officers, which charge shall rank in priority to all other security interests, trusts, liens, charges and encumbrances, claims of secured creditors, statutory or otherwise.

In accordance with section 23 (1)(ii)(b) of the CCAA and the Initial Order, on January 23, 2024, a notice was sent to all known creditors of the Companies who are owed $1,000 or more.