You are receiving this email because you are a creditor of Sunniva Inc., Sunniva Medical Inc. or
1167025 B.C. Ltd. (collectively, the “Companies”). The Companies, along with another wholly owned subsidiary, recently entered into creditor protection under the Companies’ Creditors Arrangement Act (“CCAA”), under the supervision of the Supreme Court of British Columbia. As you will have seen from communication recently sent by Alvarez & Marsal (the Monitor in the CCAA proceedings), the Companies are proposing to restructure their debt via a debt for equity restructuring. Under the proposed arrangement, the debt held by creditors of the Companies will be exchanged for 95% of the common shares of Sunniva Inc. on a pro rata basis with the remaining 5% held by the existing Sunniva Inc. equity holders.
You should have received an email from Alvarez & Marsal with information regarding the proposed arrangement, including a proxy. Additional information can be found on the Monitor’s website:
https://www.alvarezandmarsal.com/content/sunniva-plan-arrangement and in the past press releases of Sunniva Inc.
If the Plan is approved by the required majorities of creditors and the Court, you will receive shares in exchange for your claim in an amount equal to approximately 1 share for every $0.0848 of debt. The most significant asset of the Companies is a disputed leasehold interest in a state-of-the-art cannabis facility that is currently in construction in Cathedral City, California. Attached is a summary of the capabilities of the facility. If the Plan is rejected by the creditors and the Companies become bankrupt, the Monitor estimates that creditors will receive approximately 2 cents for every dollar of debt owed to them. For illustrative purposes, creditors owed $10,000 would receive 117,900 shares in Sunniva Inc. under the Plan. If there were a bankruptcy, at 2 cents on the dollar, creditors owed $10,000 would receive $200.
Management and the Board of Directors believe that the best path towards a meaningful recovery for creditors is through the Plan and issuance of shares. Accordingly, we encourage you to support the Plan. To do so, you can complete the attached proxy (or arrange to attend the meeting in person).
In order to vote in favor of the plan please sign and date the last page of the proxy and return it by email as soon as possible and preferably by Friday, January 29
th. A witness signature is also required if you are an individual (as opposed to a corporate entity or LLC). If you have not received the proxy, a blank proxy is included in with this email.
We would be happy to discuss this with you and answer any questions that you may have. To do so, please contact us at this email address or contact Chief Financial Officer David Weinmann at
(619) 804-5901.