In connection with the filing of the NOI, the Company has entered into an agreement with its existing senior creditor, Evergreen Gap Debt GP Inc, as Agent for and on behalf of Evergreen Gap Debt LP and Gap Debt III LP, pursuant to which the DIP lender will advance a debtor-in-possession loan to the Company in the amount of up to $580,000 to generally fund working capital needs and expenses related to the NOI proceedings. The DIP Loan is conditional on, among other things, approval from the Ontario Superior Court of Justice.
The Company intends to seek an order from the Court approving the terms of the SISP and DIP loan. The Company’s objective is to complete the SISP by the end of July 2024. It is important to note that the Company is not bankrupt. If the DIP agreement is approved, the Company believes it has sufficient resources to fund its operations during the SISP and its stores will remain open for business during that time, subject to any restructuring steps that the Company may take during the process. Pursuant to the BIA, upon filing the NOI, there is an automatic stay of proceedings in respect of all creditor claims and actions against the Company that will protect the Company and its assets from the claims of creditors and others during the pendency of the proposal proceedings.
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Anyone interested in obtaining more information about the SISP should contact the Proposal Trustee at: Nerina Jahja – njahja@brileyfin.com.
ShinyHealth also announces that its wholly-owned subsidiary, mihi Health and Wellness Inc., has received, in connection with a guarantee provided by mihi in favour of its wholly-owned subsidiary that owns the Cotton Mill Pharmacy, a demand from the lender to such subsidiary for immediate payment of unpaid loan amounts. The Cotton Mill Pharmacy is currently temporarily closed. ShinyHealth is reviewing the merits of this demand and financial circumstances of mihi.
As a result of the NOI and financial resource constraints, ShinyHealth also announces that it is expecting not to file its annual financial statements and accompanying management’s discussion and analysis for the fiscal year ended January 31, 2024 by the prescribed deadline of May 30, 2024. ShinyHeath’s ability to complete the audit and filing of its annual financial statements and related management’s discussion and analysis will be dependent upon the results of the NOI process.
As a result of the prior resignations of Meris Kott and Jonathan Hemi, the remaining directors of ShinyHealth are Brad Kipp (non-independent) and Lyn Christensen (independent), and the remaining officers are Brad Kipp (Interim CEO) and Dominic Lavallée (Interim CFO). As a result of ShinyHealth currently having only two directors, it does not currently meet the minimum number of directors required under applicable law as a reporting issuer or pursuant to the policies of the TSX Venture Exchange. In light of this, ShinyHealth has been advised by the TSXV that trading of its shares will remain halted and failure to remedy the deficiency within 10 business days will result in a suspension in trading of the ShinyHealth shares. ShinyHealth confirms that its transfer agent, Computershare, continues to act as its transfer agent.
