XTM: the DIP lender buys the platform with its loan

The teaser went out to approximately 1,070 parties, about 980 of them payment service providers registered with the Bank of Canada. Thirteen signed a non-disclosure agreement and entered the data room. When the extended bid deadline passed at 4:00 p.m. on June 12, 2026, the monitor had received nothing, per the Sixth Report of the Monitor, Aug. 28, 2026, paras. 24, 26–27. One party's adviser had emailed at about 12:45 that afternoon to ask for more time to decide whether to bid at all; it had done no diligence and signed no NDA, and the monitor, judging its interest "speculative," declined. A non-binding letter of intent from a second party arrived at about 2:51 a.m. the next morning. It did not meet the requirements of a qualified bid, and after further talks the bidder told the monitor on June 18 that it would not become one, per the Sixth Report of the Monitor, Aug. 28, 2026, paras. 27–28.

That day the monitor, The Fuller Landau Group Inc., declared the stalking horse agreement the successful bid. The stalking horse was Pateno Payments Inc., which is also XTM's senior secured creditor and its DIP lender, per the Sixth Report of the Monitor, Aug. 28, 2026, paras. 29, 35(c). On September 1, Justice W.D. Black of the Ontario Superior Court of Justice (Commercial List) approved the sale of XTM Inc.'s assets to Pateno, per the Approval and Vesting Order, Sept. 1, 2026, paras. 3–4.

XTM, which traded on the CSE as PAID, ran the EveryDay Platform, through which hospitality merchants loaded funds, including tips, that their workers drew through an app, a virtual wallet or a payment card. How the merchant float came to be short, and who bore the chargebacks taken after the stay, was reported here on June 13 and July 8.

A price made of the loan

The stalking horse agreement, approved with the sale process on April 10, 2026, let Pateno take the business either by buying XTM's shares through a reverse vesting order or by another structure, including an asset purchase, per the Fifth Report of the Monitor, July 24, 2026, para. 22. After the bid deadline Pateno chose the asset purchase, and the stalking horse agreement was reworked into an asset purchase agreement dated August 26, 2026, per the Affidavit of Naveed Z. Manzoor, Aug. 26, 2026, paras. 37–38.

The purchase price has two parts. The first is a credit bid of the DIP debt outstanding at closing, which the monitor estimated at $9,500,000. The second is cash: an amount equal to every liability ranking ahead of the DIP debt, including the administration charge, plus an administrative wind-down amount of no more than $150,000, per the Sixth Report of the Monitor, Aug. 28, 2026, para. 30. The applicants' factum describes the credit bid as about $9.5 million "minus the amount that has been collected by the Monitor in respect of the Post-Filing Chargeback Order," per the Factum of the Applicants, Aug. 31, 2026, para. 23(a). The wind-down money is meant to pay the monitor and its counsel after closing to finish the CCAA proceeding and wind XTM down, including a bankruptcy of XTM, per the Sixth Report of the Monitor, Aug. 28, 2026, para. 34. Because the stalking horse is the buyer, no break fee is payable.

By August 21, XTM had drawn $7,742,680 under the DIP facility. Of that, $3,242,680 was money Pateno had funded into merchants' wallets after what the monitor calls the Reset Date, per the Sixth Report of the Monitor, Aug. 28, 2026, para. 56.

What Pateno buys is short: accounts receivable, intellectual property, books and records, equipment, and all of XTM's claims and recovery claims, "including, among other things, any Chargeback claims," per the Sixth Report of the Monitor, Aug. 28, 2026, para. 30. The shares of any United States subsidiary are excluded. The claims category extends to merchant reimbursement, reserve account, processor, indemnity, Interac e-Transfer recall and fraud recovery claims, per the Affidavit of Naveed Z. Manzoor, Aug. 26, 2026, para. 39(b). Pateno takes the merchant agreements and the CCAA merchant trust agreements as assumed contracts and assumes liabilities under them only for the period after closing. XTM has no employees, and the outside date is September 30, 2026, per the Sixth Report of the Monitor, Aug. 28, 2026, para. 30. The agreement's purchase price allocation puts $100,000 on hardware and equipment, receivables and prepaid expenses at their actual amounts on closing, and the balance on software and intellectual property, against a total of $9,500,000, per the Sixth Report of the Monitor, Aug. 28, 2026, App. D, Sch. F. Nothing in the agreement was sealed.

Closing also depends on the Bank of Canada. The monitor and its counsel have discussed with the Bank what approvals Pateno may need under the Retail Payment Activities Act, and the monitor expects closing once those requirements are met and the appeal period on the vesting order has run, per the Sixth Report of the Monitor, Aug. 28, 2026, para. 37. The chief restructuring officer, Naveed Z. Manzoor of FAAN Advisors Group Inc., deposed that the agreement contains Pateno's representation that it is qualified under the Act, and that Pateno is confident it can meet any regulatory approvals because it is registered with the Bank as a payment service provider, per the Affidavit of Naveed Z. Manzoor, Aug. 26, 2026, para. 42. The vesting order preserves the Bank's powers under the Act and the Ontario Securities Commission's jurisdiction, per the Approval and Vesting Order, Sept. 1, 2026, paras. 13–14. Once the monitor's certificate is delivered, XTM must drop "XTM" and "EveryDay" from its corporate name, per the Approval and Vesting Order, Sept. 1, 2026, para. 10.

Why the approval waited

The sale process had called for an approval hearing no later than June 29, per the Affidavit of Naveed Z. Manzoor, Aug. 26, 2026, para. 30. In its Fifth Report, the monitor wrote that XTM and the CRO, Pateno "in its various capacities" and DC Bank were considering whether the transaction "can proceed in a way that enhances the potential for recovery of the Shortfall by Merchants," that discussions were "at a very preliminary stage and uncertain," and that the approval motion had been deferred, per the Fifth Report of the Monitor, July 24, 2026, para. 33. On July 29 Justice Black extended the stay to September 4 for that purpose, heard a high-level overview of the mechanisms under discussion in the absence of other parties, declined to describe them, and called the effort "appropriate and laudable," per the Endorsement of Black J., July 29, 2026, paras. 3–7.

The Merchant Recovery Program

The result is a term sheet dated August 28, 2026 from Pateno and Digital Commerce Bank, which the monitor attached to its Sixth Report and did not ask the court to approve. The monitor said the parties would give merchants time to consider it and return to court later, per the Sixth Report of the Monitor, Aug. 28, 2026, paras. 38–39. The term sheet is non-binding until definitive documents are signed and the court approves them.