The beleaguered supplements company, Irwin Naturals Inc.,  whose foray into ketamine clinics destroyed a once profitable company, has amended its Chapter 11 bankruptcy declaration. Chapter 11 allows the company’s debtors to propose a plan of reorganization.

According to the court document filed in February, if its plan is enacted, the company believes it will emerge from bankruptcy in April 2025. The plan is as follows:

• Irwin Nevada will continue operating its nutraceutical business that it has successfully operated since its inception in 1994
• 5310 will remain a subsidiary of Irwin Nevada which holds the majority of the debtors’ intellectual property
• DAI will remain as the holding company for Irwin Nevada. DAI US HoldCo is a holding company that owns 2% of Irwin Nevada
• The debtors will be dissolving Irwin Canada with existing Irwin Canada shareholders to obtain their equivalent stock interest in Irwin
  Canada in DAI.

The creditors are organized by class of claims. The debtors propose paying East West Bank (EWB), which is owed $19.3 million,  $1 million a quarter beginning in June 2025. If the debt isn’t paid off by February 2027, a lump sum will need to be paid. General unsecured claims in the range of $5-$6 million will be paid 40% of the net disposable income.

How it started

Irwin Nevada also has two other supplement brands, Nature’s Secret and Applied Nutrition. Irwin Nevada’s product line currently includes over 130 formulas, which are distributed in more than 100,000 retail locations, including stores like Costco, Walmart, and CVS.
The debtors’ 2023 gross sales were $102 million. Klee Irwin is the CEO of the company.

As many people experienced mental health crises during the Covid pandemic, Irwin decided to embark on a plan to become the world’s first and largest household brand of psychedelic mental health clinics. To do so, he formed a new subsidiary: Irwin Naturals Emergence, Inc. and East West Bank agreed to lend the company $40 million to fund acquisitions.

What went wrong

The company’s Chapter 11 file states that its attempt to uplist the stock and a general downturn in retail caused it to suffer. The filing blamed “Extraordinarily high returns from retailers that were not on par with historical figures and projections, a downturn in the retail market generally, and the unexpectedly slow growth of digital sales.”

The company alleges that the bank exerted excessive and unreasonable control over their business affairs and imposed unconscionable constraints on them. It said that the Irwin Companies received three notices of default from EWB for failure to meet certain technical covenants of the Credit Agreement even though Irwin claims it had never been late on any debt service payments. Irwin claims it tried to renegotiate with the bank and made changes like cutting employees and closing the Emergence clinics. They allege EWB was sweeping its bank accounts daily.

The lender disputes Irwin’s side of the story, saying “Key elements of the Debtors’ business plan failed and the Debtors were allegedly in default for failure to comply with multiple covenants, including but not limited to the failure to meet minimum borrowing base availability requirements and to make required prepayments in full as a product of not meeting minimum borrowing based availability.” The lender says it validly exercised its contractual remedies in light of such defaults to appoint an independent director to protect the Lenders’ collateral against alleged mismanagement.

More lawsuits

Irwin suggests in the filing that it may sue EWB for taking control of their business and forcing them to pay approximately $2 million in professional fees related to EWB’s professionals and professionals that EWB forced them to retain. They claim that EWB restricted their ability to borrow money and controlled their expenses. Irwin also believes it will get the amount it owes to EWB reduced from $19 million.

Irwin also owes money to other parties in addition to EWB.

• Its being sued by Media Max Network for $79,000 in unpaid invoices.
• Herman and Jasminn Reese filed a personal injury case against the supplement company.
• Trisha Vaughn filed a class action lawsuit against Irwin Nevada in the Los Angeles Superior Court (case no. 24STCV01558) alleging damages due to alleged false/misleading advertising on an Irwin Nevada weight management supplement.
• EMA Anesthesia filed a breach of contract lawsuit against Serenity Health, LLC; Irwin Naturals Emergence, Inc.; and Irwin Naturals, Inc. for alleged unpaid invoices for anesthesia services provided by the company.

What’s next

The bankruptcy court has not approved the plan yet. Irwin has hired Essex Capital to assist it in its plan to get out of Chapter 11. If the company receives exit financing from Essex, it will move quickly with the plan. Irwin also stated it hired and retained STS Capital Partners M&A Advisers Inc. to sell the company six to eight months after the claims have been paid. Irwin says it has reviewed two offers to buy the company, but the price offered was below market value. They believe the company is worth between $93 and $112 million.

If the plan goes through, Irwin will remain CEO and his salary will return to his pre-petition salary of $790,000 a year. CFO Mark Green will remain and his salary will continue to be $240,000 a year.

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New York-based vape company The Blinc Group Inc. filed for Chapter 7 in a New York bankruptcy court. The company’s petition cited at least $1 million in liabilities. CEO Arnaud Dumas de Rauly signed the form submitted on March 14.

The company appears to have not paid taxes, suppliers, media or public relations firms, based on the list of creditors included in the filing.

While plant-touching cannabis company cannot file for Chapter 7 bankruptcy protection, Blinc describes itself as a vaping technology company. Under Chapter 7, a trustee will attempt to liquidate the assets of the company in order to pay debtors.

Blinc is a private company and sells it products in 11 states as well as China. Last month the company introduced a new product called TUUN, billed as its first 2 milliliter all-in-one with variable voltage and pre-heat on-tap.

The company’s list of creditors includes some big names in the cannabis industry as well as others including:

• 7Thirty Fund LLC
• Arcview Collective Fund
• Arizona Department of Revenue
• Equitas Partners Fund
• Etain Health
• Florida Department of Revenue
• Georgia Department of Revenue
• GoDaddy
• Google
• Hubspot
• Illinois Department of Revenue
• U.S. Internal Revenue Service
• Michael Zaitsev
• Meltwater News
• Michigan Department of Treasury
• Microsoft
• New Jersey Department of Taxation
• New York Department of Taxation
• NisonCo
• Ohio Department of Taxation
• Oregon Department of Revenue
• Panther Opportunity Fund
• Politico
• WGD Opportunity Fund

In addition, several Chinese companies were listed as creditors to the company.

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Bright Green Corp. (OTC: BGXX) plans to file a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Florida in the coming days.

The company has seen much upheaval in the past few months and failed to achieve the big promises it laid out.

In December, Bright Green announced that its CEO, Gurinder Singh, resigned, along with board members Dean Deson, Robert Arnone and Dean Valore. In addition, Saleem Elmasri also resigned as the chief financial officer, leaving only Lynn Stockwell to run the company.

Board departures

At the time of the resignations, it was announced that now-CEO Stockwell wanted to restructure the company. Her plan was to on-shore the end-to-end active pharmaceutical ingredient (API) manufacturing back to the United States and position the company as the facilitator and supplier of plant-based controlled substances authorized to manufacture in the U.S.

The restructuring and new direction included canceling all the company’s existing contracts, expressed or implied; land purchase options; employment agreements; board member agreements; financing agreements; and warrants.

The company also said it would repay creditors of allowed general unsecured claims in the form of 20% in cash plus 80% in newly issued common stock,. Bright Green said it will issue new common stock to the existing holders of common stock after a 1-for-50 reverse stock split, such that their dilution is limited to the newly issued common stock to the creditors.

“Simply put, Bright Green Corp. was in an extraordinary unique position to produce, manufacture and research legal controlled substances, under registration and licensing with both state and the federal government,” Stockwell said. “The company was unable to take advantage of the opportunity and was compromised financially when globalization policies were not favorable for research, production and manufacturing within the United States. In addition, the past immigration policy made funding from the company’s EB-5 program for investment capital impossible”.

Big plans … again

Once it emerges from bankruptcy, the company said it will change its name to Drugs Made in America Corp. Bright Green said it plans to get revenue from “production and supply contracts and maintain its EB-5 investor program.”

According to the company, it will “seek to partner with Health and Human Services and designate scientific support for research at the existing facility in Grants, New Mexico, on a contract, cost-plus basis.”

Franchise plans

Bright Green also said it is exploring a franchise-based business model to build agriculture facilities in phases across western Texas, eastern Arizona and central New Mexico.

“Each facility will include 15-acre specialty greenhouses, constructed annually until market demand is met,” the company said.

The company expects to receive a federal loan guarantee for its 60 new megafarm owner/operators, who collectively will invest $3.5 billion to supply and strengthen the Drugs Made in America supply chain.

Bright Green never delivered

Green Market Report has previously written about Bright Green‘s big promises to investors that it ultimately never delivered upon. The company crowed about its approval to grow cannabis for research with a DEA license. It also claimed it had built a huge growing facility but had to return most of the equipment for failing to pay the vendor.

The company never delivered any cannabis for research and never reported any revenue. What it did accomplish was paying its executives generous salaries and taking out large credit lines. The company kept telling investors that harvests were on the horizon, but nothing ever materialized.

Eventually, the stock was delisted from the Nasdaq and lately traded on the OTC for roughly four cents a share.