XTM and Everyday People Payments obtain creditor protection amid trust shortfall and BoC suspension

XTM Inc. (CSE:PAID) and Everyday People Payments Inc., which operate a Canadian digital payments platform widely used by employers in the hospitality sector to distribute tips to employees, obtained initial protection under the Companies’ Creditors Arrangement Act on February 27, 2026.

The Everyday Payments platform, previously branded as AnyDay, enables hospitality businesses across Canada to pay tips out to their employees. Until recently, the services were used by approximately 3,700 hospitality and service-sector businesses in Canada, with approximately 120,000 end users receiving tips and gratuities through the platform.

The filing was precipitated by regulatory concern over nearly $19 million in missing trust funds. Financial disclosures preceding the filing revealed a widening deficit between restricted cash held in trust and program deposit obligations owed to merchants and cardholders. As at December 31, 2024, the company reported $62.99 million in restricted cash against $76.95 million in program deposit obligations, resulting in a $13.96 million shortfall. By September 30, 2025, the shortfall had increased to $18.96 million. At that same date, current liabilities totaled approximately $94.8 million and the company reported negative working capital of approximately $39.9 million.

On February 17, 2026, the Bank of Canada issued a temporary supervisory order directing XTM to cease retail payment activities, and the Canadian Investment Regulatory Organization halted the trading of XTM’s stock on the CSE.

The companies say they have been operating in a financially-strained position since inception and have depleted resources while attempting to reach profitability, resulting in trust funds being used for operating expenses. They attribute the liquidity crisis to a combination of factors, including reliance on an uncommitted, demand revolving credit facility with secured lender Pateno Payments Inc., repayable on demand and originally capped at $13 million before being increased to $15 million. Approximately $3 million was outstanding under that facility as of the filing date.

The Initial Order expressly excludes merchant funds from the companies’ property and imposes strict trust safeguards. Merchant funds must remain segregated in designated trust accounts and cannot be applied to satisfy corporate obligations. The Monitor is tasked with enhanced oversight, including daily reporting during the initial stay period.

Following the issuance of the Initial Order on February 27, the Bank of Canada amended its directive to permit limited payment activities necessary to allow the Everyday Payments platform to operate, subject to Court oversight and Monitor supervision. The amended authorization remains in effect for at least 30 days and restricts XTM from directing transactions or withdrawals from associated trust accounts. XTM’s stock on the CSE remains halted.

Existing secured creditor Pateno is providing a DIP loan.

The Fuller Landau Group was appointed Monitor. Counsel is Miller Thomson for XTM, Paliare Roland Rosenberg Rothstein for the Monitor, Aird & Berlis for Pateno, McLennan Ross for EveryDay People Finance Corp., Torys for Bank of Canada, and Borden Ladner Gervais for Northland Restaurant Group.