Toronto-based digital pharmacy startup Mednow has been placed into receivership under the Bankruptcy and Insolvency Act, to restructure and identify parties interested in purchasing the company or its assets.
The announcement comes a little over two years after the company raised approximately $37 million CAD for its initial public offering (IPO) on the TSX Venture Exchange (TSXV) in March 2021.
Ernst & Young has been appointed as a restructuring professional, or receiver, to help reposition the business to meet the long-term needs of its stakeholders and customers.
“In light of the inability of the company to secure access to capital in the public markets or by way of private placement and to certain underperforming business segments, the company is, with the assistance of the receiver, seeking to re-position the business for long term success under a revised operating protocol,” the company said in a statement.
Later this month, Ernst & Young will seek approval for a sale and investment solicitation process to identify parties interested in purchasing the assets and undertakings of Mednow and its subsidiaries.
Founded in early 2020 by former CEOs Karim Nassar and Ali Reyhany, and former director Felipe Campusano, Mednow connected consumers with pharmacies, and provided at-home delivery of medications and pharmacy products while facilitating virtual care visits. Just months after it launched, the company raised a $6.5-million CAD seed round.
Shortly after its IPO, Mednow acquired Medvisit for approximately $2 million in August 2021. At the time, Medvisit claimed it conducted around 30,000 patient home visits per year, had served over 400,000 patients since its founding and made a gross profit of approximately $790,000 the previous year.
On October 31, Mednow announced Reyhany and Campusano had stepped down from their positions as CEO and treasurer, respectively, just a week after Reyhany invested an $850,000 non-brokered private placement offering into the company and a month after CFO Benjamin Ferdinand stepped down.
Mednow then announced it had received a notice of default from its secured creditor Alirey Corp. amounting to $3.23 million on November 1.
Ernst & Young said it had entered into discussions with a group of interested stakeholders “including the former chairperson of the board and CEO” of Mednow that intend to submit an offer to purchase the assets and undertakings of the company.
Feature image courtesy Mednow.