Vitasave: restock first, then a sale process

Vitasave began, in its director's telling, as a brick-and-mortar store in Kerrisdale. Behyar Assadkhan founded the company in 1994, his son Ali Assadkhan launched Vitasave as a brand in 2013, and by this summer it was a web retailer, Vitasave.ca, carrying more than 5,000 natural health products across hundreds of brands, with a flagship store on Robson Street in downtown Vancouver, a second store in North Vancouver, a head office and warehouse in Burnaby, 25 employees and, by its count, more than a million customers served, per the Affidavit #1 of Ali Assadkhan, July 31, 2026, paras. 3–4, 18–22, 26. The same affidavit gives the figure the rest of the case turns on: "Today, approximately 70–80% of Vitasave's active catalogue is out of stock." Conversion on the website, as reflected in Shopify analytics, fell from approximately 3.71% in September 2022, "when inventory was fully stocked," to approximately 1.09%, per the same affidavit, para. 9. Revenue declined from approximately $37.3 million to $27.7 million in fiscal 2023, and was approximately $8.8 million in the year ended April 30, 2026, with a net loss of approximately $2.1 million, per the same affidavit, paras. 6, 41.

On September 8, 2026, Justice Brongers of the Supreme Court of British Columbia, Vancouver Registry, No. S265738, granted Vitasave Wellness Inc. an initial order under the CCAA, appointed Ernst & Young Inc. as monitor and stayed proceedings to September 18. The application came on for hearing on September 1 and September 8; the order recites that judgment was reserved to September 8, per the Initial Order, Sept. 8, 2026, p. 1 and paras. 2, 13, 20. No reasons for it are among the case documents. Ten days later, at a hearing held by MS Teams, the same judge extended the stay to November 20 and raised to $2.3 million the charge protecting the interim lender, Fairway Ventures Corp., whose facility the company means to use to replenish inventory before pursuing a recapitalization or a sale and investment solicitation process, per the Amended and Restated Initial Order, Sept. 18, 2026, p. 1 and paras. 14, 30, 36, the Pre-Filing Report of the Proposed Monitor, Aug. 13, 2026, para. 40 and the First Report of the Monitor, Sept. 16, 2026, para. 19.

An IPO that did not proceed, and a private label

The causes are the company's account, sworn by Ali Assadkhan as sole director. In fiscal 2022 Vitasave was in advanced preparation for an initial public offering and incurred significant legal, advisory and overhead costs; when the IPO did not proceed, "these costs had already been absorbed without the benefit of the anticipated capital raise." Previous management, Amir Assadkhan as chief executive and Adam Assadkhan as chief operating officer, then pivoted toward private-label products and the Amazon channel. In fiscal 2023, the affidavit says, the line of credit rose from approximately $2.1 million to $3.74 million and retained earnings went from a surplus of approximately $2.84 million to a deficit of approximately $135,000. About 40 private-label SKUs came to represent roughly half of inventory value by cost, which reduced, by the affidavit's account, the company's ability to keep depth across the more than 5,000 third-party SKUs that had historically generated over 90% of revenue, per the Affidavit #1 of Ali Assadkhan, July 31, 2026, paras. 5–7.

What followed, the affidavit calls "a self-reinforcing contraction loop": inventory was sold down to service the line of credit and the borrowing base shrank with it, "whereby reduced inventory levels led to lower sales, which in turn further constrained liquidity and the ability to restock product." Amir and Adam Assadkhan ceased to act as officers in January 2025, and Ali Assadkhan took over day-to-day management. He says he cut marketing by more than 50% and retired approximately $500,000 in merchant cash advance facilities "with my personal funds." The company and he have sued the former officers in a separate action, No. VLC-S-S-262973, alleging breaches of fiduciary duty and diversion of corporate opportunities; no finding on those allegations appears in the case documents, per the same affidavit, paras. 8, 10–13, 58.

Behyar Assadkhan, the founder and the father of all three, describes the early business as "a traditional, small family business" and says he has not been actively involved since around 2018, after which Amir and Adam ran most of the day-to-day operations, per the Response to Petition of Behyar Assadkhan, filed July 28, 2026, Part 4, paras. 4, 6–8.

The bank's petition, and the father's answer

Bank of Montreal's petition of June 1, 2026 rests on a June 27, 2025 credit agreement for a revolving operating facility, a $1,000,000 non-revolving demand loan repayable by December 13, 2025 and a corporate MasterCard; on a guarantee by Behyar, Adam, Ali and Amir Assadkhan limited to $5,500,000 plus interest; and on a mortgage of August 7, 2025 over land Behyar Assadkhan owns. BMO demanded payment on March 20, 2026 and delivered a notice of intention to enforce security to Vitasave with its demand. The petition asks for judgment against the company and the four guarantors for $4,357,678.08 as of May 14, 2026, with interest at $871.03 a day, a one-day redemption period on the land, and the appointment of MNP Ltd. as receiver and manager of Vitasave under s. 243 of the Bankruptcy and Insolvency Act, per the Receivership Petition, June 1, 2026, Part 1, paras. 1, 3, 6–8, 13, and Part 2, paras. 12, 19, 24.

The defaults BMO lists include financial covenants missed for the fiscal years ending April 30, 2023, 2024 and 2025, the unpaid demand loan, "permitting the advance of loans to shareholders and other related entities, repayment of shareholder loans, payment of dividends and share redemptions," and the use of operating-line money for payments on the mortgage and on what it calls unauthorized third-party debt to Bizcap Canada LLC. The bank says it "has lost confidence in management of Vitasave," citing those defaults and the allegations in the company's own lawsuit, and that it "is not prepared to advance any additional funds to Vitasave or in respect of its business outside of a Court-supervised receivership," per the Receivership Petition, June 1, 2026, Part 2, paras. 20–22; these are allegations.

Behyar Assadkhan's response in that action, No. H-260725, takes no position on a receiver for the company, "save and except for professional fees being kept modest," and opposes the orders sought against him. He says he "cannot say with certainty that he knowingly, voluntarily, or intentionally signed all of those documents or that he fully understood their terms, nature and effect at the time." His concerns centre on the mortgage BMO registered in August 2025 for $4.5 million under Charge No. CB2228466; his understanding, he pleads, was that the new mortgage was for $3.5 million, the released $2.5 million mortgage increased by $1 million. He relies on non est factum and misrepresentation and, if the bank gets its order, asks for the conventional six-month redemption period, per the Response to Petition of Behyar Assadkhan, filed July 28, 2026, p. 1, Part 4, paras. 9, 11, 13–14, 24, and Part 5, paras. 4, 14. Those are his allegations, and no ruling on them appears in the case documents.

The company's answer

Vitasave filed its CCAA petition on July 31 with Crowe MacKay LLP as proposed monitor and an interim financing term sheet already entered into, per the Affidavit #1 of Ali Assadkhan, July 31, 2026, paras. 62–63, 73. After an adjournment on August 4, the company agreed to bank exclusively with BMO during the adjournment and, on August 5, moved its Shopify and Amazon payouts from a Royal Bank of Canada account to BMO. That RBC account, opened on or about April 24, 2026, held approximately $174,828.74 on July 30, and by the affidavit's account, BMO had raised it "in the context of its opposition to the initial order." Management also decided the company would benefit from "a substitute firm with broader experience acting in proceedings under the Companies' Creditors Arrangement Act," and retained Ernst & Young Inc., per the Affidavit #2 of Ali Assadkhan, Aug. 13, 2026, paras. 6–7, 23–26.