To our Shareholders,

This is an update on actions taken by Ascent Industries Corp. (“Ascent”) since the October 25, 2019 Shareholder Update.

CCAA Update
Thank you for your continued patience during this CCAA process. Since the last update, the Ascent team has worked to address important new developments in these CCAA proceedings. After considerable consultation with key stakeholders, we have built what we believe is a fair and reasonable consolidated plan of compromise, arrangement and reorganization (the “Plan”). If approved by the CCAA Court and affected creditors, the Plan will support Ascent’s exit from CCAA, allowing Ascent to use its remaining funds and assets to establish a sustainable business with headquarters in Canada and operations in the United States. Capitalizing on our knowledge of the emerging cannabis market, the Ascent team has also prepared a business plan that focuses on participation in the high potential THC market in Nevada and the higher potential hemp CBD market across the entire United States.

A creditor meeting is scheduled for December 12, 2019, where certain creditors will vote on a resolution to approve the Plan. The Plan includes the resolution of two key claims. Solely for the purposes of the Plan, the over $45 million claim of entities referred to as Green Sage has been settled as a proven claim in the amount of $10,400,000. Similarly, solely for the purposes of the Plan, the original claim of an entity known as Trek Global, has been settled as a proven claim in the amount of $1.9 million, which includes additional amounts to indemnify Trek Global for any shortfall it may owe to two of its subsidiaries, each of whom have submitted claims in these CCAA proceedings. These resolutions include as a key component, the support of Green Sage and Trek Global for the Plan.

As part of the Plan, a convenience class has been created, which allows certain creditors with proven claims below $11,100 to receive the full amount of their claims. In addition, certain other creditors with proven claims above that level can elect to accept $11,100 in full and final satisfaction of their claims. All other creditors with proven claims (that are not unaffected claims), will receive a cash payment equal to 51% of their claims and have the option to receive Ascent shares from a pool of shares that is equal to 10% of the post-issuance equity of the company. Both Green Sage and Trek have agreed to decline these shares. This allows the creditors receiving shares to benefit in the potential upside of the company’s share value, following a successful implementation of the business plan. This approach also allows Ascent to retain the funds necessary to implement the business plan and drive growth in Nevada.

The Ascent team believes that supporting the Plan is in all of the creditors’ best interests as the Plan offers an equitable payment of claims, creates certainty on the amount and timing of cash distributions, and offers potential upside in the share value for those participating creditors. Rejecting this Plan would create uncertainty as the litigation of the Green Sage and Trek claims could potentially lead to reduced cash payments to all creditors coupled with significant further delays in resolving claims.

Implementation of the Plan is subject to the approval of the Plan by the requisite number of affected creditors under the Plan, fulfillment or waiver of certain conditions set out in the Plan, and the CCAA Court’s approval and sanction of the Plan. A sanction hearing, for the Court to consider the Plan, is scheduled for December 19, 2019. Provided the Plan receives the support of the necessary number of creditors, and is sanctioned by the Court, it is anticipated that distributions under the Plan would occur as soon as possible thereafter.

Strategic Planning
Despite the restrictions of the CCAA process, Ascent’s management team has continued to work on a sustainable business plan to be executed following the company’s exit from CCAA. The team is focused on preparing to execute Ascent’s detailed business plan and addressing the challenges that come with expanding the company’s products and market presence.

Yours truly,
Ascent Industries Corp.

-CEO & Director