Klokwerks, a Toronto, Ontario-based company that produces technology-based sales programs, interactive marketing mobile apps, virtual reality, 3D photo-realistic renderings and film production for the real estate, automatic and retail sectors, filed an NOI on December 4, listing $855.0M in liabilities, including $636.6M to CRA. Dodick Landau is the proposal trustee.
Stantive Technologies Group, a Kingston, Ontario-based enterprise software provider focused on the development and deployment of its proprietary content management platform, OrchestraCMS, filed an NOI on November 14, listing $19.1MM in liabilities, including $1.4MM to Runway Finance Group and $1.9MM to Mamta Trust. The company relies on recurring revenue generated by subscription renewals through its main host platform, Salesforce.com. Salesforce, an American corporation based in San Francisco, is the company's most important relationship: OrchestraCMS is built entirely on Salesforce's platform. Although the company owns all of the intellectual property related to OrchestraCMS, the platform is not operable outside of the Salesforce ecosystem. In exchange for the use of the Salesforce platform, the company remits an amount equal to 12.5% of its recurring revenue. Currently, the company is in default of their agreement and owes Salesforce approximately $259.2M (USD). The company has been facing liquidity issues as a result of its debt structure and, for the past several months, has been working with EY, the proposal trustee, to try to address these issues. During these NOI proceedings, two numbered companies have agreed to provide up to $800.0M in DIP financing. PwC was engaged as financial advisor to the proposed DIP lenders. Counsel is TGF for the company and BTZ for the DIP lenders / certain secured creditors.
Intelligent Mechatronic Systems ("IMS") and Ridetones, Waterloo, Ontario-based technology companies in the business of developing and delivering advanced end-to-end mobile in-car solutions aimed at enhancing driver behaviour, were placed in receivership on September 14 on application by B.E.S.T Active 365 Fund LP et al., owed approximately $16.4MM by IMS and $12.1MM by Ridetones. The companies, which have been in default since March 2017, remain in default at present. Since these defaults arose, the companies have engaged in company-led efforts to refinance their indebtedness and/or sell its shares or assets. All refinancing and sales efforts have failed, however, to lead to any transaction which would have allowed the companies to repay their indebtedness. In early May 2018, in response to their financial difficulties, the companies' engaged Iberis Advisors, an outside investment bank, to administer a sale and investor solicitation process. This effort, too, proved unsuccessful. The companies are currently facing urgent and pressing liquidity issues, and their lenders are no longer willing to support them. PwC was appointed receiver. Counsel is Bennett Jones for the applicants, Norton Rose Fulbright for the companies and BLG for the receiver.
CrowdSpark Technology, a Toronto, Ontario-based subsidiary of the Australian technology and media company that engages in web-based and mobile software to help businesses gather and publish user-generated content, filed for bankruptcy on July 18. The company was founded by Alex Hartman in 2012, with its core technology developed by a French national news wire to deal with the volume of user-generated content it received during the Arab Spring in 2011. The company eventually went on to raise over $37.0MM from investors. Hartman, who rose to prominence as Australia's youngest tech entrepreneur in 1996, was deposed from the board in 2016 after Seven West Media took an 18.7% stake in the business. EY is the bankruptcy trustee.
Brican Automated Systems, a Brampton, Ontario-based company that develops custom robotic systems and factory automation, was assigned into bankruptcy on July 16 with a secured debt of $750.0M and an unsecured debt of $1.7MM. Grant Thornton is the bankruptcy trustee.
TELoIP, a Mississauga, Ontario-based technology company that principally develops and sells products that simplify cloud access through software-defined networks, filed for protection under the CCAA on June 27, listing approximately $36.6MM in liabilities. The company has been significantly impacted by the direction of telecommunications developments in the industry and its competitors' technologic advances. As a result, the company has been unable to achieve profitability and has relied on a succession of debt and capital financings to fund its operating losses while it continues to work towards the profitable commercialization of its technology. These financial difficulties placed the company at a competitive disadvantage and meant it has effectively been operating under increasing financial distress for many years. Accordingly, the company is now facing a liquidity crises and cannot meet obligations as they become due. Under the protection of the CCAA, the company is planning a restructuring and refinancing transaction that will see $36.4MM of secured debentures converted to equity or extinguished. Adarsan Holdings Limited and Dicot Holdings Ltd. are providing $1.5MM in DIP financing to ensure that the company has sufficient funds during the CCAA proceedings to effect the recapitalization. PwC was appointed monitor. Counsel is TGF for the company, and Goldman Sloan Nash & Haber for the monitor.
Blutip Power Technologies, a Mississauga, Ontario-based technology company that provided fuel management solutions for operators of high-horsepower diesel engines, filed for bankruptcy on May 30. Richter is the bankruptcy trustee.
Wavefront Innovation Society, a Vancouver, British Columbia-based startup accelerator focused on mobile and IoT (Internet of Things) innovation, filed for bankruptcy on May 14, listing $2.1MM in liabilities, including $958.5M to the National Research Council of Canada and its Centres of Excellence for Commercialization and Research. While the company once presented itself as a key player in facilitating the creation of technological "smart cities", declining sources of revenue have contributed to its financial downturn. Grant Thornton is the bankruptcy trustee.
Control Mobile, a Vancouver, British Columbia-based technology company, was placed in receivership on April 12 on application by the McDonnell Group, owed approximately $508.6M. Founded in 2014 and backed by Vanedge Capital and BDC Capital, the company provides an analytics platform for online businesses to manage and analyze their online transaction data and quickly grew to over 25.0M customers. Despite its growth, the company recently ran into cash flow difficulties. In January 2018, the company accepted a secured promissory note from the McDonnell Group, but defaulted on the note soon after. Crowe MacKay was appointed receiver. Counsel is Fasken for the applicant and Farris for the company.
BuildDirect, a Vancouver, British Columbia-based technology company that has built and operates an online market platform for home improvement products in Canada and the U.S., filed for protection under the CCAA on October 31. Although the company's operations consistently generated significant revenue, it failed to achieve profitability and currently owes its lenders approximately $75.0MM. The immediate cause of the company's financial difficulties, however, was its failure to complete an equity financing in mid-October. During the proceedings, the company will receive $15.0MM in DIP financing from its interim lenders while it pursues a potential sale. The company's cash flow forecast shows that the company expects to use up to $8.5MM in cash in the next five weeks. PwC was appointed monitor. Alvarez & Marsal is financial advisor to the interim lenders. Counsel is Fasken Martineau for the company and BLG for the monitor.