GLG Life Tech Corporation Provides Update Regarding Delayed 2023 and 2024 Q1 Financial Filings and Events Related to Subsidiaries

Rhea-AI Summary

GLG Life Tech (TSX:GLG) has delayed its 2023 and 2024 Q1 financial filings, resulting in a failure-to-file cease trade order (FFCTO) issued by the British Columbia Securities Commission. The delays are due to late court orders from a Chinese court overseeing the bankruptcy of its subsidiary, Runyang. The company expects these adjustments to be favorable to its balance sheet. Management aims to complete and file these financial reports by June 17, 2024. Additionally, GLG has received shareholder approval to transfer its Runde subsidiary, which is anticipated to improve the balance sheet by CAD 67 million. The company will provide further updates at its Annual General Meeting on June 28, 2024.

Positive

• Expected balance sheet improvement from Runyang subsidiary bankruptcy.
• Shareholder approval of Runde subsidiary transfer, expected to enhance the balance sheet by CAD 67 million.
• No insolvency proceedings against the company.
• 99.99% shareholder vote in favor of the Runde transaction.
• Company has the resources to meet filing requirements.

Negative

• Delay in 2023 financial filings due to late court orders.
• Failure-to-file cease trade order issued by BCSC.
• Delay in 2024 Q1 financial filings due to pending 2023 reports.
• TSX delisting review initiated on April 2, 2024.

VANCOUVER, BC / ACCESSWIRE / May 23, 2024 / GLG Life Tech Corporation (TSX:GLG) ("GLG" or the "Company"), a global and agricultural leader in the natural zero-calorie sweetener industry, committed to the sustainable development of high-quality zero-calorie natural sweeteners, is providing updates related to its delayed financial filings, which have resulted in a failure-to-file cease trade order ("FFCTO") issued by the British Columbia Securities Commission ("BCSC"), and events regarding its Dongtai Runyang Stevia High Tech Co., Ltd. ("Runyang") and Qingdao Runde Biotechnology Co., Ltd. ("Runde") subsidiaries.

As previously announced, the Company was delayed in filing its 2023 financials (consisting of annual financial statements, its management discussion and analysis relating to its annual financial statements, and its Annual Information Form and CEO and CFO certifications, all in respect of its year ended December 31, 2023), due to a series of late-coming court orders from a Chinese court overseeing bankruptcy proceedings for the Company's Runyang subsidiary. The timing of the court's notifications to the Company and/or its subsidiaries/agents (late March 2024) regarding its rulings, as well as lack of clarity in the notifications regarding key events in the bankruptcy proceedings, vis-à-vis the dates those rulings were made effective (various dates in 2023) necessitated further evaluation of the rulings and additional time to determine the timing and magnitude of necessary changes not only to the 2023 full-year financials, but also to 2023 interim financial reports and 2022 year-end financial reports.

The Company has been working, in conjunction with its auditor, to determine the proper dates and magnitudes for the necessary adjustments. Overall, Management expects the adjustments to be favorable to the Company's balance sheet and, notwithstanding the timing of the court's notifications and the resultant delay in filing financials, the Company has long anticipated and viewed Runyang's bankruptcy as a positive development. While Runyang's long-idled assets have been liquidated by the court, a significantly greater amount of liabilities is no longer payable and will also be removed from the Company's balance sheet.

The Company's delay in filings its 2023 financials led to the BCSC's issuance of the FFCTO. Management is diligently working with its auditor to have the 2023 year-end financial filings, as well as the interim 2023 restatements and full-year 2022 restatement, completed as soon as possible. Management currently expects to complete and file these financial reports and accompanying documents by June 17 (Management's prior estimate was May 30); after filing, the Company will seek to have the FFCTO revoked.

With 2023 not yet completed and filed, the Company is also delayed in completing and filing its 2024 Q1 financials (consisting of 2024 Q1 quarterly financial statements, its management discussion and analysis relating to those quarterly financial statements, and its CEO and CFO certifications), owing only to the still-pending status of its 2023 financial reporting. Management is working on determining an expected filing date for the 2024 Q1 interim financial reports.

A further development, regarding which Management does not expect any impact to the Company's 2023 and earlier financial reporting, is the Company's recent shareholder vote regarding the expected transfer of its Runde subsidiary. Under the terms of the agreement presented to shareholders, the Company expects, subject to any necessary regulatory approvals, to transfer Runde for a nominal amount, including the transfer of Runde's tangible assets and all of its bank liabilities to a third party, Fengyang Xiaogang Hongzhang Health Industrial Park Co. Ltd ("Xiaogang"). Management expects that the transfer of Runde will result in a net improvement to the Company's balance sheet of $CAD 67 million and advises that this is Management's expectation and is unaudited. Management's proxy circular, dated April 23, 2024, describes the transaction in further detail, including the Company's rights to continue using Runde's facility for production of its natural sweetener products - through its contractual agreement with Xiaogang and Qingdao Honghongyuan Health Industry Technology Co., Ltd. ("HHY") (the Company refers to its November 14, 2023, announcement regarding Honghongyuan) - after the transfer of Runde is complete.

At the special shareholder meeting and vote, held on May 16, 2024, at its corporate headquarters with the only order of business being a vote on the transaction, over 53% of the Company's outstanding shares were voted and the transaction as proposed was approved with 99.99% of shares voted in favor of the transaction. The Company is working on next steps to fully realize the asset transfer agreement, including discussions with regulatory authorities.

The Company has scheduled its Annual General Meeting ("AGM") for June 28, 2024. Prior to or at the AGM, as appropriate, the Company anticipates providing updates regarding the Company's filing status, especially as to its currently delayed financial reports, any updates related to the Company's cease-traded status, and any updates regarding the TSX's delisting review of the Company, which the TSX initiated on April 2, 2024, and was announced by the Company on April 3, 2024.

The Company affirms that it has the necessary resources - both financial and personnel - to remedy its default in meeting the full-year 2023 and first quarter 2024 filing requirements. The Company affirms that there are no insolvency proceedings against it as of the date of this news release. The Company also affirms that as of the date of this news release there has been no material change in information previously disclosed, other than the Company's revised timeline for expected filing of its full-year 2023 financial reports and the concomitant delay in filing its 2024 first-quarter interim financial reports, and there is no other material information concerning the affairs of the Company that has not been generally disclosed.

For further information, please contact:
Simon Springett, Investor Relations
Phone: +1 (604) 285-2602 ext. 101
Fax: +1 (604) 285-2606
Email: ir@glglifetech.com

About GLG Life Tech Corporation

GLG Life Tech Corporation is a global leader in the supply of high-purity zero calorie natural sweeteners including stevia and monk fruit extracts used in food, beverages, and dietary supplements. GLG's vertically integrated operations, which incorporate our Fairness to Farmers program and emphasize sustainability throughout, cover each step in the stevia and monk fruit supply chains including non-GMO seed and seedling breeding, natural propagation, growth and harvest, proprietary extraction and refining, marketing and distribution of the finished products. Additionally, to further meet the varied needs of the food and beverage and supplement industries, GLG's Naturals+ product line enables it to supply a host of complementary ingredients reliably sourced through its supplier network in China. For further information, please visit www.glglifetech.com.

Forward-looking statements: This press release may contain certain information that may constitute "forward-looking statements" and "forward looking information" (collectively, "forward-looking statements") within the meaning of applicable securities laws. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases or words and phrases that state or indicate that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

While the Company has based these forward-looking statements on its current expectations about future events, the statements are not guarantees of the Company's future performance and are subject to risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such factors include amongst others the effects of general economic conditions, consumer demand for our products and new orders from our customers and distributors, changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations, industry supply levels, competitive pricing pressures and misjudgments in the course of preparing forward-looking statements. Specific reference is made to the risks set forth under the heading "Risk Factors" in the Company's Annual Information Form published March 31, 2023. In light of these factors, the forward-looking events discussed in this press release might not occur.

Further, although the Company has attempted to identify factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

As there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements, readers should not place undue reliance on forward-looking statements.

SOURCE: GLG Life Tech Corporation

View the original press release on accesswire.com

FAQ

Why has GLG Life Tech delayed 2023 and 2024 Q1 financial filings?

The delays are due to late court orders from a Chinese court overseeing the bankruptcy of its subsidiary, Runyang.

What impact do the delayed financial filings have on GLG Life Tech ?

The delays resulted in a failure-to-file cease trade order (FFCTO) issued by the British Columbia Securities Commission.

What is the expected date for GLG Life Tech to complete the delayed financial filings?

Management aims to complete and file the financial reports by June 17, 2024.

What are the expected financial benefits of GLG Life Tech 's subsidiary bankruptcy?

The bankruptcy process is expected to improve the company's balance sheet as more liabilities than assets have been liquidated.

What is the anticipated impact of the Runde subsidiary transfer on GLG Life Tech ?

The transfer is expected to improve the balance sheet by CAD 67 million.

When is GLG Life Tech 's Annual General Meeting scheduled?

The Annual General Meeting is scheduled for June 28, 2024.

What approvals did GLG Life Tech receive from shareholders regarding the Runde subsidiary?

Shareholders approved the transfer of the Runde subsidiary with 99.99% of shares voted in favor.

Is GLG Life Tech facing any insolvency proceedings?

No, there are no insolvency proceedings against the company.