OTTAWA, Ontario--(BUSINESS WIRE)--Eureka 93 Inc. (CSE: ERKA, “Eureka93”) announced today that the current Board of Directors, after having reviewed strategic alternatives, has recommended that the company continue its restructuring phase by executing a full payment transaction for discharge of material secured debt obligations.
Full Payment Transaction
Pursuant to secured creditors being able to act on their security, the current Board of Directors of Eureka 93 Inc. (E93) on December 18, 2019 also resolved to agree to a Full Payment Transaction to effect a reduction of debt of $18,900,000.00 USD as follows:
- Vitality Natural Health LLC, a wholly own US subsidiary of Vitality CBD Natural Health Product Inc., and Eureka 93 Inc. (collectively the “Borrowers”) and Surety Land Development LLC (“Lendor”) were parties to an Agreement and Promissory Note dated August 28, 2017 as amended and further amended by that “Amended and Restated Settlement Agreement” dated November 29, 2018 (the “Agreement”) whereby the Borrower owed the Lendor $18,900,000.00 USD and wherewith the Borrower has subsequently defaulted on the repayment of this and other loans resulting in Surety Land Development LLC perfecting their lien and taking possession of all of the Borrower’s assets in the Vitality Natural Health LLC plant located in Montana, USA (commonly known as the “Montana Processing Plant” located at 254 Truss Road, Eureka, Montana, USA), including production equipment, seed and inventory;
- Subsequent to taking possession, pursuant to Utah Code Ann. § 70A-9a-609, of all of the Montana Processing Plant equipment on Friday, November 29, 2019, the Borrower desired that the Lendor discharge the remaining debit obligation of $18,900,000.00 USD owed by the Borrower in exchange for Borrower’s equity in the real property held by the Borrower in the Montana Processing Plant;
- The Lender agreed to take possession of all personal property including but not limited to processing equipment, seed and materials, along with the equity in the real property and all remaining inventory and other good and valuable consideration now paid by each of the Surety Land Development LLC to the other of them (the receipt and sufficiency of which are hereby acknowledged by each of the undersigned);
- In exchange for a full release of the secured debt of $18,900,000.00 USD, on the date the Quit Claim Deed is recorded, the Lendor will release 400 pounds of Red Cross hemp seed to the Borrower at a fair value of $5,000 USD per pound or a stated total value of $2,000,000 USD. The seed will be available for the Borrower to pick up at 254 Truss Road, Eureka, Montana USA to be delivered to the address chosen by the Borrower. The Borrower will forfeit its rights to the seed if Borrower has not picked up the seed within 21 business days following the Quit Claim Deed recording date.
The Board of E93 plans to be in a position to complete residual restructuring matters over the coming weeks and begin to focus on development in Artiva Inc. and the Cannabis license.
Eureka 93 Inc. (Eureka93) is an integrated life sciences company focused on the cultivation, extraction, and distribution of cannabis and hemp-derived cannabidiol (CBD) through it’s Health Canada licensed Artiva facility in Ottawa, Canada and subsidiary operations. For more information, please visit: Eureka93.com