Ontario · CCAA
Pre-filing report of the proposed Monitor
Pre-filing report · 2 April 2024
AI summary
A plain-English summary drawn only from this filing: what it is, why it matters, and the parties, amounts and dates it turns on.
What we verified from this filing6 verified
- financial positionnote: Assets comprise inventory ($17.3M), property, plant and equipment ($10.2M), accounts receivable ($6.8M), intangible assets and goodwill ($6.6M), and cash ($3.9M). Liabilities comprise accounts payable and accrued liabilities ($20.3M) and secured debt of $7.3 million (historical figure, distinct from current BJK indebtedness discussed elsewhere in the report). · page: 9 · as at: 2023-10-31 · basis: audited consolidated financial statements (FY2023) · scope: consolidated - Debtors (Heritage Cannabis Holdings Corp. and its subsidiaries) · currency: CAD · total assets: 55900000 · total liabilities: 35000000
- secured creditorsnote: Deemed-trust class claim (GST/HST arrears). CRA issued Requirement to Pay notices on or about March 12, 2024 to BC Liquor Distribution Branch requiring 40% of payments otherwise owing to Heritage East/West be redirected to CRA on account of the arrears. Estimated per Applicants' books and records. · page: 11 · amount: 1600000 · debtor: Heritage Cannabis West Corporation ($1.5 million) and Heritage Cannabis East Corporation ($0.1 million) · creditor: Canada Revenue Agency (CRA) - GST/HST Arrears · currency: CAD
- secured creditorsnote: Unremitted excise duties collected under the Excise Act, 2001; document characterizes as part of the Applicants' $17.2 million unsecured liabilities, but excise duties held for the Crown are a deemed-trust class claim. Subject to CRA repayment plan (monthly installments increasing from $270,000 in Oct 2023 to approx. $620,000 by Oct 2024); payments current through March 1, 2024. · page: 11 · as of: 2024-03-28 · amount: 11800000 · debtor: Heritage Cannabis East Corporation and Heritage Cannabis West Corporation · creditor: Canada Revenue Agency (CRA) - Excise Tax Arrears · currency: CAD
- secured creditorsnote: Limited number of other creditors hold registered security interests in the applicable PPSA registries; amounts not stated. · page: 11 · debtor: Applicants (unspecified) · creditor: PPSA equipment financiers (PMSI class) · currency: CAD · security: Registered PPSA security interests primarily relating to leasing and/or financing of vehicles
- secured creditorsnote: Registered PPSA security interest exists, but Monitor understands there are currently no amounts owed by Heritage to Bank of Montreal. · page: 12 · amount: 0 · debtor: Heritage Cannabis Holdings Corp. · creditor: Bank of Montreal · currency: CAD · security: Blanket PPSA registration against Heritage (all-property registrant)
- secured creditorsnote: Exact balance per BJK demand letter and BIA s.244 Notices of Intention to Enforce Security issued April 1, 2024 to each Borrower, excluding legal fees/disbursements. Loan Agreement in default. Monitor's Report (dated April 2, 2024) states approximate current aggregate indebtedness of $6.8 million (Revolving Facility $1.55 million; Term Facility $5.25 million) after Borrowers repaid $1.5 million to BJK on April 1-2, 2024. Security opinion on validity/enforceability of BJK's security from Monitor's independent counsel (Blakes) not yet received/confirmed as of report date. · page: 28 · as of: 2024-03-26 · amount: 8421088.87 · debtor: Heritage Cannabis Holdings Corp., 333 Jarvis Realty Inc., Heritage Cannabis East Corporation, Heritage Cannabis West Corporation, 5450 Realty Inc. (Borrowers); guaranteed by 1005477 B.C. Ltd., Purefarma Solutions Inc., Heritage Cannabis Exchange Corp., Premium 5 Ltd. · creditor: BJK Holdings Ltd. · currency: CAD · security: General Security Agreement(s) dated March 31, 2021 - first-ranking security interest in present and future personal property, plus Assignment of Contracts & Proceeds of Sales, Pledges of Securities, and Assignments/Postponements of intercompany creditor claims (Loan Agreement dated March 29, 2021, as amended; Revolving Facility limit $5 million, Term Facility $5.3 million)