In a regulatory filing, American Virtual Cloud Technologies disclosed that on January 11, the company and two of its subsidiaries, AVCtechnologies USA, Inc. and Kandy Communications, filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The debtors have filed a motion with the court seeking joint administration of the cases under the caption In re American Virtual Cloud Technologies, Inc., et al. The debtors will continue to operate their businesses as "debtors-in-possession" under the jurisdiction of the court and in accordance with the applicable provisions of the bankruptcy code and orders of the court. To ensure their ability to continue operating in the ordinary course of business, the debtors have filed various "first day" motions with the bankruptcy court requesting customary relief, including authority to pay employee wages and benefits, that will enable the debtors to transition into Chapter 11 protection without material disruption to their ordinary course operations. "As previously disclosed, the Company has retained Northland Capital Markets to advise the Company in connection with the review of its strategic alternatives, and has retained SOLIC Capital Advisors to provide strategic and operating restructuring support services. The Company has determined that it is most beneficial to continue to review its strategic options, which may include a process to sell its assets, in connection with the Cases. The Company cannot be certain that holders of the Company’s common stock or warrants will receive any payment or other distribution on account of those shares in the Cases," the filing stated.
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