Flavoured air device maker FÜM converts NOI proceedings to CCAA

RDFN FUM Natural Products Ltd. and RDFN FUM Natural Products Inc., the companies behind the nicotine-free “FÜM” flavoured air inhalation device, had their previous proposal proceedings under the Bankruptcy and Insolvency Act continued under the Companies’ Creditors Arrangement Act on March 2, 2026.

The companies operate within a cross-border corporate structure anchored in Calgary. FUM Canada, a federally-incorporated entity registered in Alberta, functions as the group’s primary operating company, while Delaware-incorporated FUM US supports employment and operational activities in the United States. Together, the companies design and sell nicotine-free, smokeless flavoured air devices marketed as behavioural aids for individuals attempting to quit smoking or vaping. Products are manufactured overseas in China and Vietnam and distributed internationally through online sales channels and third-party distributors.

The business employs 18 staff across Canada, the United States and the United Kingdom and operates largely through remote personnel, with management functions centralized in Calgary. Inventory is primarily stored at a Las Vegas warehouse, with additional stock held by logistics providers in Australia, the Netherlands and the United Kingdom. Approximately 80% of sales occur in the United States, making continued access to that market critical to the restructuring effort.

Financial pressure intensified in late 2025 following a trademark infringement dispute with BFL Metal Products Co. Ltd. that resulted in a confidential settlement requiring payments totalling USD$2.5 million. The agreement required fourteen monthly payments of USD$100,000 beginning November 1, 2025 followed by additional royalty payments tied to international sales beginning in 2027. Although the companies made the first two instalments, they defaulted on payments due January 1 and February 1, 2026, prompting BFL to threaten enforcement measures including potential injunction proceedings targeting US product sales. Management states that those obligations compounded existing operational pressures, including US tariff impacts and rising advertising costs, leaving the group with insufficient liquidity to meet obligations as they fell due.

The companies initiated NOI proceedings under the Bankruptcy and Insolvency Act on February 4, 2026 in an effort to stabilize operations while evaluating restructuring alternatives. However, management and the proposal trustee concluded that a CCAA process would provide greater flexibility to pursue restructuring options, including potential supplier relief, cross-border recognition and a longer runway to develop a plan of compromise or arrangement.

The restructuring also has a significant cross-border component. FUM Canada has been authorized to act as foreign representative for purposes of Chapter 15 recognition proceedings in the United States.

Alvarez & Marsal is the monitor. Counsel is McCarthy Tétrault for the companies, Osler for the monitor, and Gowling WLG for BFL.