Fresh City Farm Inc. and Mama Earth Organics Inc., Toronto, Ontario-based companies which operate an online shopping platform and delivery service, a commercial urban city farm, a commercial-grade professional kitchen, bakery and butchery, and four brick-and-mortar baked goods boutiques in downtown Toronto, obtained CCAA protection on January 19, listing approximately $15.4 million in liabilities.

The companies began to face liquidity issues in 2022 due to the significant investments required to create their online platform, rapidly rising inflation and interest rates, increased debt servicing costs, compressed margins, and reduced sales.

Despite taking numerous steps to address these liquidity issues - including implementing operational changes, closing many of the brick-and-mortar locations, layoffs, and raising further capital - the companies face an urgent liquidity crisis and are insolvent. They intend to use the CCAA proceedings to restructure their balance sheet and operations to focus on their online platform.

1000691958 Ontario Inc. and Bennett Church Hill Capital Inc. will be providing a DIP loan.

PwC is the monitor.

Counsel is Reconstruct for the companies and Bennett Jones for the monitor.

By: Dina Milivojevic