Canadian cannabis producer Eve & Co Incorporated (TSXV: EVE) (OTCQX: EEVVF) is making a last-ditch effort to stay in business.
On Friday, the company said it was apply for creditor protection from the Ontario Superior Court, after receiving the approval of its administrators and “careful consideration of all available alternatives”.
Likewise, directors Ravi Sood and Jeanette VanderMarel both stepped down this week.
Eve & Co says the initial order sought includes a stay of proceedings in favor of the company, approval of a debtor-in-possession loan and the appointment of BDO Canada Limited as monitor of the company.
Staying proceedings would allow the company to go through a sale and investment solicitation process, which would see it exit creditor protection as a going concern.
Read more: Dutch investors to buy 90% stake in CannTrust
“The company is convinced that the protection offered by the [Companies’ Creditors Arrangement Act] will be sufficient to allow the Eve group to resolve its liquidity problems and stabilize its operations,” reads a press release.
If the initial order is granted, the company says it will operate normally through the creditor protection and solicitation process.
In order to fund the proceedings and other short-term working capital needs, the company says it has signed a term sheet with Deans Knight Capital Management Ltd., on behalf of its DIP lender clients, in which the lender will provide a loan DIP of $2.2 million. given that the court approves the order.
According to Eve & Co’s third quarter 2021 financial filings, net loss for the three months ended September 30 was $298,258. The company has a cash position of $289,000 and a working capital deficit of $15.4 million.