Trichome Financial Corp. Initiates Sale and Investment Solicitation Process & Receives Stalking Horse Bid

TORONTO, ON / ACCESSWIRE / January 3, 2023 / Pursuant to an order issued by the Ontario Superior Court of Justice (Commercial List) (the "Court") on November 7, 2022, Trichome Financial Corp. ("Trichome"), Trichome JWC Acquisition Corp. ("TJAC"), MYM Nutraceuticals Inc. ("MYM"), Trichome Retail Corp., MYM International Brands Inc. and Highland Grow Inc. ("Highland" and collectively, the "Applicants" or the "Company") obtained relief under the Companies' Creditors Arrangement Act (Canada) ("CCAA"). KSV Restructuring Inc. was appointed as monitor (the "Monitor") in the Applicants' CCAA proceedings (the "CCAA Proceedings").

TJAC and Highland are licensed producers of cannabis in accordance with the Cannabis Act, and are licensed to cultivate, produce, distribute, and sell dried cannabis flower, pre-rolled cannabis and other cannabis products. TJAC and Highland own and operate the WAGNERS and Highland Grow premium and ultra-premium brands of dried flower, pre-rolls and concentrates, respectively. The Company's branded cannabis business has reached an approximately $25 million annualized net revenue run-rate as of the last 6 months ending November 2022.

Stoic Advisory Inc. ("Stoic") is conducting a "stalking horse" sale and investment solicitation process (the "SISP") for the assets and/or shares of the Applicants under the supervision of the Monitor. In connection with the SISP, the Applicants executed a stalking horse share purchase agreement with L5 Capital Inc. (the "Stalking Horse SPA") on December 12, 2022 to sell all of the issued and outstanding shares in the capital of TJAC and MYM owned by Trichome. Marc Lustig, a director of Trichome, controls L5 Capital Inc. The Stalking Horse SPA provides total consideration of approximately $6.3 million, plus the collection of receivables and sale of inventory, if any, at the time of closing. The transaction proposed under the Stalking Horse SPA (the "Stalking Horse Transaction") contemplates the emergence of the Company's business from the CCAA Proceedings as a going concern.

The Applicants intend to seek Court approval of the SISP and the Stalking Horse SPA (solely for the purposes of acting as the "stalking horse bid" in the SISP) on January 9, 2023. If approved by the Court as the stalking horse bid, the Stalking Horse SPA will be subject to higher and otherwise superior bids received in the SISP.

Qualified interested parties will be provided with an opportunity to participate in the SISP. The SISP is intended to solicit interest in a sale of all of the Applicants' assets or all of the shares in the capital of the Applicants or a reorganization or recapitalization of the Applicants' business. The successful bid selected in the SISP, regardless of whether such bid is the stalking horse bid, will be subject to Court approval.

The deadline to submit a binding offer in the SISP is expected to be February 6, 2023 at 5:00 p.m. (Eastern Time).

Those who are interested in participating in the SISP can contact Stoic to receive additional information at:

Stoic Advisory Inc.
Attention: Aaron Salz, CFA
Email: aaron@stoicadvisory.com

Information regarding the CCAA Proceedings can be found on the Monitor's website at: https://www.ksvadvisory.com/experience/case/trichome.

Forward-Looking Information:

Certain information contained in this press release may contain forward-looking statements within the meaning of applicable securities laws. The use of any of the words "continue", "plan", "propose", "would", "will", "believe", "expect", "position", "anticipate", "improve", "enhance" and similar expressions are intended to identify forward-looking statements. In particular, and without limitation, this document contains forward-looking statements concerning: key terms of the Stalking Horse SPA and the SISP and the effect of their implementation; the expected process for and timing of implementing the Stalking Horse SPA and the SISP; the relief to be sought in the CCAA Proceedings in respect of the Stalking Horse SPA and the SISP; the completion of the Stalking Horse Transaction, the SISP, and/or any alternative transaction identified in the SISP, including with respect to obtaining any necessary approvals and satisfying any conditions and the expected timing thereof; and the effect of the Stalking Horse Transaction.

Forward-looking statements necessarily involve risks, including, without limitation, risks associated with the ability of the Company to implement the Stalking Horse Transaction, the SISP and/or any alternative transaction identified in the SISP on the terms described in this press release; the Company's ability to receive all necessary Court, third party and stakeholder approvals in order to complete the Stalking Horse Transaction, the SISP and/or any alternative transaction identified in the SISP; the Company's ability to operate in the ordinary course during the CCAA Proceedings, including with respect to satisfying obligations to service providers, suppliers, contractors and employees; the Company's ability to continue as a going concern; the Company's ability to continue to realize its assets and discharge its liabilities and obligations; the Company's future liquidity position, and access to capital, to fund ongoing operations and obligations (including debt obligations); and the Company's ability to stabilize its business and financial condition.

Although the Company bases its forward-looking statements on assumptions believed to be reasonable when made, they are not guarantees of future performance and actual results of operations, financial condition and liquidity, and developments in the industry in which the Company operates, may differ materially from any such information and statements in this press release. Other unknown or unpredictable factors also could harm the Company's future results. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as at the date hereof. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by law.

SOURCE: Trichome Financial Corp.