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Clearford Water Systems Inc. Announces Intention to Complete Court Approved Restructuring under Canadian Bankruptcy Proceedings

/EIN News/ -- OTTAWA, Oct. 04, 2022 (GLOBE NEWSWIRE) -- Clearford Water Systems Inc. (NEX:CLI.H) (“Clearford” or the “Corporation”) announces that on October 7, 2022 (the “Proposed Effective Date”) it intends to complete certain transactions contemplated by a Bankruptcy and Insolvency Act (Canada) (the "BIA") proposal (the "Proposal") filed by the Corporation‎, through its proposal trustee KSV Restructuring Inc. (the “Proposal Trustee”), on May 12, 2022‎. The Proposal provides for, among other things, the compromise and settlement of claims of secured creditors (the “Sponsors”) and unsecured ‎creditors of the Corporation (collectively, the “Creditors”). The Proposal further contemplates a ‎reorganization (the “Reorganization”) of the Corporation’s outstanding share capital under the ‎Canada Business Corporations Act (the “CBCA”), as further described below. ‎ The Proposal was approved by the Creditors at a meeting held on June 2, 2022 and on July 13, 2022, the Ontario Superior Court of Justice in Bankruptcy and Insolvency ‎granted an ‎‎order (Estate/Court File no. 33-2825753) approving: (i) the Proposal; ‎‎(ii) the ‎Reorganization; and (iii) the First Report of the Proposal Trustee dated ‎June ‎‎29, 2022 and the ‎actions of the Proposal Trustee described therein‎.‎

‎In accordance with the Reorganization, the Corporation intends file articles of reorganization under the CBCA on the Proposed Effective Date, pursuant to ‎which the Corporation’s authorized capital will be amended to create an unlimited number ‎of shares ‎of a class designated as “New Common Shares” (the “New Common Shares”), an ‎‎unlimited ‎number of shares of a class designated as “Non-Voting Common ‎Shares” (the “Non-‎Voting ‎Common Shares”, and together with the New Common Shares, the “New Shares”) and an ‎‎unlimited number of shares of a ‎class designated as “Redeemable Shares” (the “Redeemable ‎‎Shares”), and all common shares outstanding immediately prior to the implementation of the ‎Reorganization (the “Old Common Shares”) will be re-designated as Redeemable Shares on the ‎basis of ‎0.000001 (one-millionth) of a ‎Redeemable Share for each Old Common Share‎. All Redeemable Shares, into which the Old Common Shares and ‎‎fractional ‎interests therein outstanding will be changed pursuant to the Proposal and the Articles of ‎Reorganization, will be automatically redeemed by the Corporation on ‎‎payment of $0.01 for each ‎whole Redeemable Share (the “Redemption Price”), provided that if the aggregate Redemption ‎Price payable to any particular holder is less than $10.00, the actual Redemption Price payable ‎to each such holder of Redeemable Shares will be deemed to be $0.00 and the Redeemable ‎Shares or fractional interests therein will be redeemed without any payment or further act or ‎formality by the Corporation or otherwise. It is anticipated that no holders will be entitled to the ‎payment of any Redemption Price‎.

‎Pursuant to the Proposal and the Reorganization, the Corporation intends to issue New Shares to the Sponsors, or their designated assignees, in ‎consideration of the compromise of certain obligations owing by the Corporation to the ‎Sponsors. As a result of the Reorganization, ‎the Corporation will only have ‎three registered and beneficial ‎securityholders, namely the Sponsors or their designated assignees.

Effective at the open of markets on May 3, 2022, the Corporation’s listing transferred from the TSX Venture Exchange to NEX. Upon implementation of the Reorganization, the Old Common Shares are expected to be delisted from the NEX on the Proposed Effective Date. The Corporation has made an application to the Ontario Securities Commission (the “OSC”) seeking orders (collectively, the “Orders”) for ‎the revocation of the failure-to-file cease trade order issued by ‎the OSC on May 6, ‎‎2022, ‎as a result of the Corporation’s failure to file certain continuous disclosure documents, and to ‎cease to be a reporting issuer in the provinces of British Columbia, Alberta and Ontario. It is anticipated that the Orders will be issued on the Proposed Effective Date, following the implementation of the Reorganization and the delisting of the Old Common Shares from the NEX. ‎

About Clearford Water Systems Inc.

Clearford a provider of unified water management solutions for the design, deployment, finance and operation of water infrastructure systems. Clearford is one of the largest operators of private water and wastewater systems in Ontario with over 260 sites across the province. Our diverse team of licensed engineers, certified operators and technical staff provide total solutions that meet the water management needs of owners, property managers, and communities. In-house personnel include designers and technical specialists in, water and wastewater, engineering, compliance & regulations, construction services, and health & safety.

The Corporation’s technology-based water solutions include Clearford One® wastewater infrastructure systems, and a full range of UV Pure® water disinfection products. Clearford is the winner of the Frost & Sullivan 2017 Enabling Technology Leadership Award for Global Decentralized Water & Wastewater Treatment. For more information, visit www.clearford.com.

Forward Looking Statement

This news release includes certain “forward-looking statements” under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements can be identified by words such as: “anticipate,” “expect,” “likely,” “plan,” “will” and similar references to future periods. Forward-looking statements in this news release include, but are not limited to, statements regarding the implementation of the Reorganization and the Proposed Effective Date thereof, the delisting of the Old Common Shares from the NEX and the timing thereof, the issuance of the Orders by the OSC and the timing thereof, the Corporation’s ability to continue as a going concern. The statements are dependent on a number of assumptions and risk factors. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected effects on the Corporation. These forward-looking statements are made as of the date of this press release. Except as required by applicable securities legislation, the Corporation assumes no obligation to update publicly or revise any forward-looking statements to reflect subsequent information, events, or circumstances.

Neither the NEX nor its Regulation Services Provider (as that term is defined in the policies of the NEX) accepts responsibility for the adequacy or accuracy of this release.


For more information contact:
                    
                    Kevin Loiselle, President & CEO
                    Clearford Water Systems Inc.
                    Phone: (613) 599-6474 ext. 303
                    www.clearford.com 
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