Acerus Files For CCAA Protection
TORONTO, Jan. 26, 2023 (GLOBE NEWSWIRE) — Acerus Pharmaceuticals Corporation (the “Company” or “Acerus”) (TSX: ASP; OTCQB: ASPCF) today announced that the Company and its subsidiaries, Acerus Biopharma Inc., Acerus Labs Inc. and Acerus Pharmaceuticals USA, LLC (collectively, the “Acerus Group”), have received an order for creditor protection (the “Initial Order”) from the Ontario Superior Court of Justice (Commercial List) (the “Court”) under the Companies’ Creditors Arrangement Act (the “CCAA”).
As previously disclosed on September 21, 2022, Acerus undertook a strategic review of its business including possible debt and equity financings, assets sales, M&A and licensing transactions which was overseen by a committee of independent directors. Following such strategic review and after careful consideration of all available alternatives following consultation with legal and financial advisors, the directors of the Company determined that it was is in the best interests of the Company to file an application for creditor protection under the CCAA.
The Initial Order includes, among other things: (i) a stay of proceedings in favour of the Acerus Group; (ii) approval of the DIP Loan (as described below); and (iii) the appointment of Ernst & Young Inc. as monitor of the Acerus Group (in such capacity, the “Monitor”).
The Acerus Group sought creditor protection under the CCAA in order to receive a stay of proceedings that will allow the Acerus Group to work with the Monitor to facilitate the development of an orderly process designed to maximize the value of the Acerus Group’s assets, for the benefit of its creditors and other stakeholders. The DIP Loan (as described below) is anticipated to fund the operations of the Acerus Group in the ordinary course during this process.
The Acerus Group intends to also file petitions commencing proceedings under Chapter 15 of the United States Bankruptcy Code at the United States Bankruptcy Court for the District of Delaware for creditor protection in the United States.
Management of the Company will remain responsible for the day-to-day operations of the Company, under the general oversight of the Monitor. FAAN Advisors Group Inc. has been appointed as Chief Restructuring Officer of the Company.
In order to fund the CCAA proceedings and other short-term working capital requirements, the Acerus Group has executed a facility agreement with First Generation Capital Inc. (the “DIP Lender”), a company affiliated with the Chairman of the Board of Directors of Acerus, pursuant to which the DIP Lender has agreed to advance a debtor-in-possession loan in the amount of US$7,000,000 (the “DIP Loan”). The continued availability of the DIP Loan is conditional on, among other things, certain conditions being satisfied, including the Initial Order remaining in effect.
It is anticipated that the Toronto Stock Exchange (the “TSX”) will place the Company under delisting review and there can be no assurance as to the outcome of such review or the continued qualification for listing on the TSX.
About Acerus
Acerus Pharmaceuticals Corporation is a specialty pharmaceutical company focused on the commercialization and development of innovative prescription products that improve patient experience, with a primary focus in the field of men’s health.
Acerus’ shares trade on TSX under the symbol ASP and on OTCQB under the symbol ASPCF.
For further information regarding the CCAA proceedings you can refer to the Monitor’s website at www.ey.com/ca/acerus.
Notice regarding forward-looking statements
Information in this press release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information are assumptions regarding our future operational results. These assumptions, although considered reasonable by the company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual performance of the Company is subject to a number of risks and uncertainties, including the Acerus Group’s intention to complete proceedings under the CCAA, the results of the proceedings under the CCAA and any potential recovery for stakeholders of the Company, and results could differ materially from what is currently expected as set out above. For more exhaustive information on these risks and uncertainties you should refer to our annual information form dated March 14, 2022 that is available on www.sedar.com. Forward-looking information contained in this press release is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
Company Contact
FAAN Advisors Group Inc.
Chief Restructuring Officer
ir@aceruspharma.com
