Vitasave enters CCAA as inventory shortages deepen cash crunch

Vitasave Wellness Inc. obtained CCAA protection on September 8, 2026, after severe inventory shortages and declining sales left the Burnaby-based natural health retailer facing receivership proceedings brought by Bank of Montreal. The company’s creditor list identifies approximately $6.86 million of secured and unsecured claims, with certain additional amounts still undetermined. Vitasave operates an e-commerce platform and two retail stores in Vancouver and North Vancouver, carrying more than 5,000 natural health products and employing approximately 25 people.

Family ownership and financial decline

Behyar Assadkhan founded the business in 1994 as a family-run health-food retailer. His son Ali Assadkhan, now Vitasave’s sole director, says he launched the Vitasave brand in 2013. Behyar stepped back from active involvement around 2018, leaving his sons responsible for the business. Ali’s brothers, Amir Assadkhan, as CEO, and Adam Assadkhan, as COO, handled most day-to-day operations.

According to Ali, Vitasave incurred significant legal, advisory and overhead costs preparing for an IPO in fiscal 2022, but changing market conditions prevented the capital raise from proceeding. Under Amir and Adam’s management, the company subsequently pursued private-label development and expansion through Amazon, committing substantial working capital to minimum orders and upfront inventory purchases.

Approximately 40 private-label products came to represent roughly half of Vitasave’s inventory value, reducing the cash available to replenish its broader third-party catalogue. Revenue fell from approximately $37.3 million in fiscal 2022 to $27.7 million in fiscal 2023, while its line of credit increased from approximately $2.1 million to $3.74 million.

In January 2025, Ali acquired Adam and Amir’s shares and assumed day-to-day management. Adam and Amir resigned as directors and ceased serving as COO and CEO, respectively. Ali reduced marketing expenditure by more than 50% and pursued forbearance, repayment and refinancing arrangements with creditors. Revenue nevertheless fell to approximately $8.8 million for the year ended April 30, 2026. In his July affidavit, Ali estimated that 70–80% of the active catalogue was out of stock, arguing that unavailable inventory, rather than a loss of underlying demand, was driving the decline.

BMO enforcement and family litigation

BMO demanded repayment in March 2026 and filed a petition on June 1 seeking a receiver. The bank, owed approximately $4.37 million as of May 14, alleged defaults extending back to at least April 2023, including financial covenant breaches, missed payments, unauthorized shareholder and related-party transactions, and additional borrowing without its consent.

BMO also cited a lawsuit brought by Vitasave, Ali and the Assadkhan Family Trust against Adam, Amir and related companies. The claim alleges that, while managing Vitasave, Adam and Amir used its funds, staff, infrastructure, vendor relationships and intellectual property to develop competing supplement business Magic Scoop. It identifies at least $336,000 in allegedly diverted funds, acknowledges a $275,000 repayment, and seeks damages and other relief. These allegations are not findings of the court.

The bank said the defaults and allegations in the family litigation had caused it to lose confidence in management. It would not advance further funds outside a court-supervised receivership and sought independent oversight to preserve and realize on Vitasave’s business and assets.

Restocking ahead of a potential sale

Vitasave pursued CCAA protection in response to BMO’s application, arguing that immediate enforcement could lead to a disorderly liquidation and materially lower creditor recoveries. Its proposed restructuring would first replenish third-party inventory and stabilize sales before pursuing a recapitalization or sale and investment solicitation process, subject to further court approval. EY supported that approach, reasoning that operating results reflecting more normal inventory levels would help prospective lenders, investors and purchasers assess the business’s going-concern value.

The initial order authorizes Vitasave to borrow up to $375,000 from Fairway Ventures, with further borrowing requiring court approval. The proposed financing facility contemplates up to $3.3 million, subject to conditions. Fairway had advanced approximately $696,000 before the CCAA application, while BDC is owed approximately $955,000. The initial lender’s charge ranks behind BMO’s security. A comeback hearing is scheduled for September 18.

EY is the monitor. Counsel includes McEwan Cooper Kirkpatrick for Vitasave, Norton Rose Fulbright for the monitor, Cassels for BMO, Kornfeld for BDC, Sevenoaks Law for Behyar Assadkhan, and Bojm, Funt & Gibbons for Adam and Amir Assadkhan.