After the markets closed on Friday, Entourage Health Corp. (TSX-V: ENTG) (OTCQX: ETRGF) announced that its shareholders approved the company’s plan to go private. The proposed plan involves a purchase by 1001095275 Ontario Inc. and guarantor 2437653 Ontario Inc., both related parties of the LiUNA Pension Fund of Central and Eastern Canada.
The acquirer agreed to pay for cash consideration equal to C$0.005 per common share. The stock closed on Friday at a price of $0.003 or C$0.0043. The highest traded price over the past year was $0.0148 or C$0.021.
The proposed arrangement needed a two-thirds approval vote by shareholders which the company said was secured at a meeting held on Friday. It is expected to become effective on or about March 31, 2025. The common shares are expected to be delisted from the TSX Venture Exchange (the “TSX-V”) and an application is also likely to be made for the company to cease to be a reporting issuer under applicable Canadian securities laws.
Entourage has expanded its multi-channeled distribution strategy with its Starseed Medicinal medical-centric brand. However, the company’s medical marijuana revenues have declined. Starseed does have an exclusive partnership with LiUNA, the largest construction union in Canada.
Green Market Report has previously written that Entourage Health faced financial pressures with an overwhelming level of debt and revenues that couldn’t meet those obligations. The company told investors in 2024 that it was in breach of certain financial covenants and other obligations under each of its Senior Credit Agreements and Subordinated Credit agreements with an affiliate of the LiUNA Pension Fund of Central and Eastern Canada. The company said at the time that it had received a renewed forbearance letter dated October 31, 2024, waiving its breaches until November 29, 2024.
Despite the revenue increasing slightly and expenses being reduced, it was enough for the company to dig itself out of its debt hole. As of September 30, 2024, the company had a working capital deficiency of C$171,377,696 and an accumulated deficit of C$390,525,487.
Entourage Health has not posted earnings since the third quarter of 2024.
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