What went wrong at this company

The short version: XTM ran a tips-and-gratuities payments platform (the EveryDay Program) and came up short on money it held for merchants and their workers — a problem the filings call "the Shortfall." That triggered Bank of Canada intervention, froze its banking, and exposed a business that had never once been profitable. The combination pushed it into CCAA.

The Shortfall. XTM had been reporting the Shortfall in its financial reporting since 2023, and its growing size — and inability to fix it — drove the company's initial liquidity challenges 3. One affected merchant, The Barley Merchant, describes depositing employee gratuities on the platform believing those funds "would remain available for that purpose and would not be used for XTM's operational purposes," then spending weeks trying to recover the money through emails, support tickets, reconciliation requests and formal notices of breach, before working with RBC on reversals 2. Notably, none of these passages quantify the Shortfall itself.

The regulator steps in. The Bank of Canada commenced an investigation under the RPAA (the federal retail payments law) that led to a Temporary Order halting the EveryDay Program; XTM "immediately lost some of its largest customers" 51. On February 4, 2026, DC Bank and Pateno both paused all services under their agreements, with DC Bank attributing the pause to XTM's February 2, 2026 press release 5. The CCAA filing was then negotiated as the path to satisfy the Bank of Canada's preconditions to resume operations 17.

The economics were broken all along. Despite strong customer uptake, XTM never reached profitability since inception due to high operating costs 3. For the nine months ended September 30, 2025, it generated $7.37 million in net revenue (~$820,000/month) but only $979,532 in gross profit (~$108,000/month) against $11.7 million of operating expenses (~$1.3 million/month) — a net loss of $11.93 million 3. The Supplement to the First Report also flags a deficit of $71,397,302 (up from $58,963,956 at December 31, 2024) with material uncertainty about going concern 9.

The cascade. Bank accounts frozen, two missed payroll periods (due January 31 and February 15, 2026), approximately $226,683 in outstanding source deductions, a missed February 2026 lease payment on the 67 Mowat Avenue head office, and a plan to lay off all but two employees 35. With no financing available, the company's only secured lender, Pateno, agreed to act as DIP Lender 1.

For the regulatory backstory, start with the February 27, 2026 endorsement 1; for the financial deterioration, the Monitor's First Report 3; for the banking pullback, the Fourth Report 5.

Short answer: these filings don't promise it outright — no passage states that merchants and their staff will be made whole, or what portion of the missing money will come back. What the record does show is a structure built to push money back toward merchants, some actual recoveries, and one big obstacle: the roughly $18.75 million hole.

The framework for getting money back

• The CCAA filing itself was negotiated with the Bank of Canada to stabilize the business, establish safeguards for Merchant/End User funds going forward, and run a SISP to "maximize the value for stakeholders, including the Merchants that suffered losses as a result of the Shortfall" (Monitor's First Report, March 6, 2026) 3.
• Return of funds to a Merchant is governed by paragraphs 14 and 25 of the Initial Order 3.
• The platform restarted — a March 19, 2026 notice to Merchants through the EveryDay Platform and April 17 and 28 press releases covering the restart, the SISP and a Stalking Horse Agreement (Monitor's Fourth Report, June 30, 2026) 9. SISP bids were due June 8, 2026 (June 1, 2026 endorsement) 6.
• Money clawed back after filing is being pulled back into the pool: the Monitor sought recovery of approximately $935,000 of about $1.5 million in post-filing chargebacks as breaches of the stay (June 1, 2026 endorsement) 67. The court granted the order the Monitor sought vis-à-vis the Merchants, largely upholding the Banks' position on the mechanics (endorsement in the motion record filed July 22, 2026) 7.
• Some merchants recovered on their own pre-filing: The Barley Merchant's dispute and recovery effort with RBC "ultimately resulted in the banking reversals" (Second Supplement to the Third Report, June 11, 2026) 4.

Where it gets hard

• The Shortfall itself: an accumulated and increasing trust deficit of approximately $18.75 million as at September 30, 2025, reported in XTM's financial statements 23. The SISP is about maximizing value — the passages contain no estimate of what portion of that gap will be recovered or distributed.
• Tips already paid out: per Ari Restaurant's responding factum (June 19, 2026), its $1,680.00 was fully disbursed to employees as tips on January 30, 2026, 28 days before the Initial Order; the employees aren't parties, and Ari argues there is nothing to recover — asking that its own $2,800.00 loss from the January 28 System Update be netted off for nil 1. That is a merchant's argument, not a decided outcome; these passages don't show how the court dealt with Ari specifically.
• The accounting wasn't done: the Monitor had not conducted an accounting to identify which Merchants may be creditors or the amounts owing, a situation the chargebacks complicated 38.

What would actually answer your question: the SISP outcome and any claims process. The Fifth Report (July 24, 2026) carries an "Update on Sale and Investment Solicitation Process" heading, but the provided text cuts off before its substance 5. A later report with the sale result and any distribution procedure is where a concrete "who gets paid, and how much" answer would live.