TORONTO, Dec. 18, 2020 /PRNewswire/ - Canopy Rivers Inc.
("Canopy Rivers'' or the "Company") (TSX: RIV) (OTC:
CNPOF) today provided an update on its 49%-owned joint venture,
PharmHouse Inc. ("PharmHouse").
On October 29, 2020, PharmHouse
received a court order from the Ontario Superior Court of Justice
(the "Court") to initiate a sale and investment solicitation
process ("SISP") to identify interest in, and opportunities
for, a sale of, or investment in, all or part of PharmHouse's
assets or business. This may include a restructuring,
recapitalization, or other form of reorganization of PharmHouse's
business and affairs. Phase one of the SISP concluded on
November 30, 2020, and a number of
non-binding offers were received. PharmHouse, with the assistance
of the monitor and the SISP advisor, have selected a number of
parties to bring forward to the next phase of the SISP, and binding
offers for phase two of the SISP are due on or about February 16, 2021.
The Company also announced an amendment to the
debtor-in-possession financing arrangement (the "DIP
Financing") entered into between the Company and PharmHouse on
September 15, 2020. As a result of
this amendment, the maximum principal amount available to be drawn
by PharmHouse pursuant to the DIP Financing has increased by
approximately $2.5 million from
approximately $7.2 million to
$9.7 million, and the maturity date
has been extended from December 29,
2020 to February 28, 2021. It
is expected that this amendment will provide PharmHouse with
sufficient funding to continue its day-to-day operations throughout
phase two of the SISP and up to the revised maturity date. In the
event that the restructuring proceedings have not concluded by the
revised maturity date, PharmHouse may require additional capital.
On December 18, 2020, the Court
approved the DIP Financing amendment and extended the stay of
proceedings in respect of PharmHouse until February 28, 2021, inclusively.
"We remain committed to resolving the PharmHouse matter in the
best interests of our shareholders," said Narbé Alexandrian,
President and CEO of Canopy Rivers. "We believe that the DIP
Financing provides PharmHouse with the capital needed to maintain
full operations in the short term, and we believe that this will
also ensure the best outcome for our shareholders in the long
term."
PharmHouse commenced formal proceedings under the Companies'
Creditors Arrangement Act ("CCAA") on September 15, 2020, and has continued its regular
operations throughout its restructuring process. This includes
growing and harvesting cannabis, and working towards finalizing new
commercial agreements in the Canadian cannabis sector. Canopy
Rivers currently anticipates that PharmHouse's CCAA proceedings
will conclude before the end of the Company's current fiscal year
and the Company continues to work collaboratively with PharmHouse's
bank lending syndicate throughout this process.
About Canopy Rivers
Canopy Rivers is a venture capital firm specializing in cannabis
with a portfolio of 18 companies across various segments of the
cannabis value chain. We believe that bringing together people,
capital, and ideas raises the potential of the entire cannabis
industry. By leveraging our industry insights, in-house expertise,
and thesis-driven approach to investing, we aim to provide
shareholders with exposure to specialized and disruptive cannabis
companies. Our mission is to invest in innovators across the
cannabis value chain, help them grow, and ultimately create value
by guiding these companies towards a monetization event. Together
with our portfolio, we are helping build the cannabis industry of
tomorrow, today.
Forward-Looking Statements
This news release contains statements which constitute
"forward-looking information" within the meaning of applicable
securities laws, including statements regarding the plans,
intentions, beliefs and current expectations of the Company with
respect to future business activities and operating performance. To
the extent any forward-looking information in this news release
constitutes "financial outlooks" within the meaning of applicable
Canadian securities laws, the reader is cautioned that this
information may not be appropriate for any other purpose and the
reader should not place undue reliance on such financial outlooks.
Forward-looking information is often identified by the words "may",
"would", "could", "should", "will", "intend", "plan", "anticipate",
"believe", "estimate", "expect" or similar expressions and
forward-looking information in this news release includes, but is
not limited to, information and statements regarding: the potential
outcome of the SISP, including the possible restructuring,
recapitalization, or other form of reorganization of PharmHouse's
business and affairs; the potential participation by, and receipt
of any binding offers from, those parties selected to be brought
forward to the next phase of the SISP and the indicated deadline
for when binding offers for this phase two are due; the expectation
that the amendment to the DIP Financing will provide PharmHouse
with sufficient funding to continue its day-to-day operations
throughout phase two of the SISP and up to the revised maturity
date of the DIP Financing; the possibility that PharmHouse may
require additional capital in the event that the restructuring
proceedings have not been concluded by the revised maturity date of
the DIP Financing; the belief that the DIP Financing will provide
PharmHouse with the capital needed to maintain full operations in
the short term and the belief that this will also ensure the best
outcome for the Company's shareholders in the long term; the
ability of PharmHouse to continue its regular operations throughout
its restructuring process; the anticipated completion of
PharmHouse's CCAA proceedings before the end of the Company's
current fiscal year; the Company's intention to continue to work
collaboratively with PharmHouse's bank lending syndicate during
this process; and expectations for other economic, business, and/or
competitive factors.
Investors are cautioned that forward-looking information is
not based on historical fact but instead reflects management's
expectations, estimates or projections concerning future results or
events based on the opinions, assumptions and estimates of
management considered reasonable at the date the statements are
made. Although the Company believes that the expectations reflected
in such forward-looking information are reasonable, such
information involves risks and uncertainties, and undue reliance
should not be placed on such information, as unknown or
unpredictable factors could have material adverse effects on future
results, performance or achievements of the Company. Financial
outlooks, as with forward-looking information generally, are,
without limitation, based on the assumptions and subject to various
risks as set out herein. Our actual financial position and results
of operations may differ materially from management's current
expectations. Among the key factors that could cause actual results
to differ materially from those projected in the forward-looking
information are the following: risks associated with the SISP,
including participation by and the receipt of binding offers from
parties selected to participate in phase two and the outcome of
such process; risks associated with the DIP Financing and the
amendments thereto; risks associated with PharmHouse and its
ability to continue its day-to-day operations throughout the SISP;
risks associated with the potential need for additional capital by
PharmHouse; risks associated with PharmHouse's CCAA proceedings
generally; risks associated with the termination, renegotiation and
enforcement of material contracts; credit, liquidity and additional
financing risks for the Company and its investees; stock market
volatility; regulatory and licensing risks; cannabis pricing risks;
changes in cannabis industry growth and trends; changes in the
business activities, focus and plans of the Company and its
investees and the timing associated therewith; the Company's actual
financial results and ability to manage its cash resources; changes
in general economic, business and political conditions, including
challenging global financial conditions and the impact of the novel
coronavirus pandemic; competition risks; potential conflicts of
interest; the regulatory landscape and enforcement related to
cannabis, including political risks and risks relating to
regulatory change; changes in the Company's relationship with
Canopy Growth and its investees; changes in applicable laws;
compliance with extensive government regulation, including the
Company's interpretation of such regulation; changes in the global
sentiment towards, and public opinion of, the cannabis industry;
divestiture risks; and the risk factors set out in the Company's
AIF, filed with the Canadian securities regulators and available on
the Company's profile on SEDAR at www.sedar.com.
Should one or more of these risks or uncertainties
materialize, or should assumptions underlying the forward-looking
information prove incorrect, actual results may vary materially
from those described herein as intended, planned, anticipated,
believed, estimated or expected. Although the Company has attempted
to identify important risks, uncertainties and factors that could
cause actual results to differ materially, there may be others that
cause results not to be as anticipated, estimated or intended. The
Company does not intend, and does not assume any obligation, to
update this forward-looking information except as otherwise
required by applicable law.
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SOURCE Canopy Rivers Inc.