To Our Shareholders,
Further to previous communications and numerous recent discussions with shareholders, we are providing an update on recent activity.
As you will be aware the Creditors approved the Company's Plan at their December 12, 2019 meeting, in accordance with CCAA requirements. The Plan was supported by 98% of Affected Creditors and 97% of the value of Affected Claims. Court sanctioning and approval of the Plan was obtained at a December 19, 2019 hearing.
On January 28, 2020, we obtained an order from the Court extending the stay of proceedings to complete the final steps necessary to implement the Plan. On March 6, 2020, we confirmed for the Court that the cash distributions and issuance of Ascent common shares contemplated under the Plan had been completed.
At the same time, we applied for a final extension of the Court’s January 28, 2020 stay of proceedings to allow for the completion and filing of the company’s outstanding financial statements. Unfortunately we were not successful and the stay of proceedings expired.
Here is a link to news release we issued last Friday, March 6, 2020, that captures the results of the Court hearings: https://bit.ly/2WocczA
While the result was not what we had hoped, there is some relief that the decision has resulted in the conclusion of the long and difficult CCAA process. This means the Company can finally start to shape its own future again.
Immediate Next Steps
To complete this transition process, we have received a Management Cease Trade order from the BCSC. With this, our deadline to file the financial statements in association with this element of the process is May 11, 2020.
With the outcome of the CCAA Court ruling, we are targeting to have the audited financial statements and accompanying MD&A for the 2018 and 2019 fiscal years completed and filed by April 29, 2020. It is also the Company’s intention to file its 2019 unaudited quarterly statements at this time. This is now the Company’s top priority. Kingston Ross Pasnak LLP (“KRP”) has been engaged as successor auditors after MNP’s resignation and is actively engaged with our team. With our financial statement filings up to date we should be able to apply immediately to the CSE to have our shares resume trading, hopefully in early May.
Market Update and Additional Next Steps
With the Company’s exit from CCAA, we can now start to shape our own future in a very volatile marketplace. We continue our efforts to formalize a strategic plan for our United States business, both organically and through partnerships. Further we have launched a consultation process with shareholders and sector leaders to discuss strategy and next steps. Watch for updates in the coming weeks.
Thinking back to where the Company was last year at this time, we have come a long way. Since the leadership change in April 2019, we have worked hard to successfully resolve the high volume of outstanding claims we inherited.
While the process has been painful for everyone, we are working hard to come out of it in a way that the Company will at least have an opportunity to re-establish itself and thrive again, either on its own or as part of a strategic, forward-looking partnership.
We look forward to working with you in the weeks and months ahead and, as always, please do not hesitate to contact us with questions and comments.
ASCENT INDUSTRIES CORP.
Mark Lotz, CPA, CA.
Interim CEO & Director