National Bank of Canada appoints receiver over Drop Technologies after buyer walks from RVO deal

The Ontario Superior Court of Justice (Commercial List) appointed KSV Restructuring Inc. as receiver and manager of Drop Technologies Inc., Drop Technologies Holdings ULC, and Drop Technologies USA Inc. on December 11, 2025, on application by National Bank of Canada. The appointment followed an urgent attendance after a proposed purchaser advised that it would not close a negotiated transaction that had been structured as a reverse vesting order and scheduled for approval.

Drop Technologies was founded in 2015 and is headquartered in Toronto. The company operates an app-based loyalty and rewards platform that allows consumers to earn points through card-linked offers with partner merchants, while generating revenue from data analytics and channel partnerships. Its corporate structure included a Canadian operating entity, a US subsidiary, and an Alberta ULC that holds intellectual property.

At its peak, the platform reported approximately one million active app users and access to anonymized spending data for millions of consumers through a US financial services partner. By mid-2025, operations had been materially scaled back, with a reduced workforce and impaired vendor relationships.

As of late 2025, the company was indebted to NBC under a senior secured facility of approximately US$7.3 million before interest and costs, equivalent to roughly C$10.3 million at prevailing exchange rates, with NBC as the only creditor with an economic interest in the estate. The balance sheet reflected liabilities exceeding assets by more than $30 million, negative retained earnings of approximately $156.8 million, and ongoing operating losses.

Liquidity deteriorated throughout 2024 and 2025 despite a forbearance agreement that expired on April 1, 2025. Vendor arrears accumulated, critical service providers suspended support, and the business became effectively illiquid absent a completed transaction. Management and NBC pursued a sale process as the only viable alternative to liquidation. Raymond James Ltd. was retained in August 2024 to lead a broad market canvass. Over approximately 15 months, 73 parties were contacted, 22 executed confidentiality agreements, and four parties submitted expressions of interest. The process culminated in negotiations with a purchaser for a going-concern share transaction to be implemented through an RVO, with Court approval as the sole material closing condition.

KSV, acting as proposed receiver, supported the transaction as the best available outcome, preserving the business, tax attributes, and most employment, while providing recoveries to NBC that exceeded any liquidation scenario. On December 10, 2025, the purchaser advised that it would not close, notwithstanding earlier representations that it intended to proceed. The Court was advised of the development, and an urgent attendance was scheduled the following day.

With the transaction terminated, the Court appointed KSV as receiver without security over all assets, undertakings, and properties of the debtor entities. The order grants broad powers to take possession, operate or wind down the business, market assets, and pursue further sale or realization efforts. A sealing order was granted over confidential transaction terms, customer information, and shareholder identities, with the Court accepting evidence that disclosure could prejudice realizations.

KSV may continue or restart a sale process and address issues arising from the terminated transaction, including any deposit paid by the purchaser, which the Court expressly left to be determined in the receivership.

Counsel is Aird & Berlis for NBC, Chaitons for the receiver and Cassels Brock & Blackwell for the purchaser.