Announcement • Nov 06
SLANG Worldwide Inc. Announces Wind-Down Plan and Anticipated Receivership in Colorado and Bankruptcy Proceedings in Canada SLANG Worldwide Inc. announced that it has finalized a wind-down plan for the Company and its assets and subsidiaries with its secured lenders (the "Lenders") under the Company's credit and guaranty agreement dated November 15, 2021, as amended (the "Credit Agreement"), given that the Company does not anticipate being able to repay amounts owing under the Credit Agreement at the upcoming maturity date of November 15, 2024. As part of the wind-down plan, it is anticipated that the following steps will be undertaken by the Company and its subsidiaries in the near term: the disposition of the Company's assets in Colorado by way of a Colorado receivership proceeding involving the Company's Colorado subsidiaries; an assignment into bankruptcy of the Company pursuant to Canada's Bankruptcy and Insolvency Act (the "Bankruptcy Proceedings"); and a possible sale by the Company's Vermont subsidiaries of their respective assets, followed by an assignment for the benefit of creditors in respect of any remaining assets, all subject to local Vermont regulatory approval. Despite the best efforts of the Company, it has been unable to attract a viable transaction to restructure its debts and/or seek any sales of the Company or of its assets in the normal course. The difficult decision to approve and enter into the wind-down plan was made after careful consideration of the current financial condition of the Company and its subsidiaries, the Company's inability to pay its liabilities as they become due, and negotiations between the Company and the Lenders. The Company anticipates that B. Riley Farber Inc. will be appointed as the trustee under the Bankruptcy Proceedings. New Risk • Jul 01
New major risk - Shareholder dilution The company's shareholders have been substantially diluted in the past year. Increase in shares outstanding: 72% This is considered a major risk. Shareholder dilution occurs when there is an increase in the number of shares on issue that is not proportionally distributed between all shareholders. Often due to the company raising equity capital or some options being converted into stock. All else being equal, if there are more shares outstanding then each existing share will be entitled to a lower proportion of the company's total earnings, thus reducing earnings per share (EPS). While dilution might not always result in lower EPS (like if the company is using the capital to fund an EPS accretive acquisition) in a lot cases it does, along with lower dividends per share and less voting power at shareholder meetings. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-CA$3.5m free cash flow). Share price has been highly volatile over the past 3 months (32% average weekly change). Negative equity (-CA$10m). Shareholders have been substantially diluted in the past year (72% increase in shares outstanding). Market cap is less than US$10m (CA$8.99m market cap, or US$6.58m). New Risk • Jun 04
New major risk - Financial position The company has less than a year of cash runway based on its current free cash flow trend. Free cash flow: -CA$3.5m This is considered a major risk. With less than a year's worth of cash, the company will need to raise capital or take on debt unless its cash flows improve. This would dilute existing shareholders or increase balance sheet risk. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-CA$3.5m free cash flow). Share price has been highly volatile over the past 3 months (30% average weekly change). Negative equity (-CA$10m). Market cap is less than US$10m (CA$9.11m market cap, or US$6.66m). Minor Risk Shareholders have been diluted in the past year (3.9% increase in shares outstanding). 
