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Eureka 93 Inc. Restructures and Executes a Partial Payment Transaction for Discharge of Material Partial Secured Debt Obligation

Eureka 93 Inc. (CSE: ERKA, "Eureka93") announced today that the current Board of Directors, after having reviewed strategic alternatives, approved a partial restructuring of its debt by executing a partial payment transaction for discharge of a material secured debt obligation.

Partial Payment Transaction

Pursuant to the insolvent nature of the company, and to secured creditors being able to act on their security, the current Board of Directors of Eureka 93 Inc. (E93) on December 18, 2019 resolved to agree to a Partial Payment Transaction to effect a reduction of debt of $3,000,000.00 USD as follows:

  • Reference is made to (a) the Securities Purchase Agreement (as amended to the date hereof, the "First Purchase Agreement"), dated as of February 14, 2019, among Eureka 93 Inc. (f/k/a LiveWell Canada Inc.) (the "Borrower"), Vitality CBD Natural Health Product Inc. ("Vitality") and Dominion Capital LLC (in its capacity as collateral agent under First Purchase Agreement and the Second Purchase Agreement, the "Collateral Agent"), BPY, Ltd. and Nomis Bay Ltd., as purchasers (collectively, the "First Holders") relating to the 10% Senior Secured Convertible Notes, dated February 14, 2019, and issued by the Borrower in favor of the Holders, in an aggregate initial principal amount of $3,000,000.00 USD (as amended to the date hereof, the "First Notes") and (b) the Securities Purchase Agreement (as amended to the date hereof, the "Second Purchase Agreement"), dated as of March 20, 2019, among the Borrower, Vitality, the First Holders and MMCAP International Inc. SPC (collectively, the "Holders") relating to the 10% Senior Secured Convertible Notes of the Borrower, dated March 20, 2019, in an aggregate initial principal amount of $12,000,000.00 USD (as amended to the date hereof, the "Second Notes" and, together with the First Notes, the "Notes"), along with all other Transaction Documents referenced therein;
  • All parties agreed that, as of the date hereof, the aggregate outstanding principal balance on the Second Notes as of the date hereof is $8,400,000.00 USD and the aggregate outstanding principal balance on the First Notes remains $3,000,000.00 USD. Furthermore, all parties agreed that various Events of Default have occurred and are continuing under the Notes, including for failure to deliver the mortgage required to be delivered on the property owned by Vitality in New Mexico (the "Property" or "New Mexico Facility");
  • The Parties agreed, instead of delivering a mortgage on the Property, the First Holders and the collective Holders have accepted a full transfer (the "Transfer") of ownership in the Property to the Collateral Agent as partial payment under the Notes (which may be allocated to all amounts due under the Notes as the Holders may each decide in accordance with and as provided in the Transaction Documents) in an amount equal to $3,000,000.00 USD (the "Agreed Amount"); and
  • At the time, the Borrower paid $1,587,000.00 USD in cash deposits to the Seller and $247,000.00 USD in deposits with other vendors, plus 1,608,626 E93 shares (in post-amalgamation terms) for the New Mexico Facility between November 2018 and February 2019, and Borrower has transferred the Property to the First Holders and collective Holders in exchange for a partial payment of $3,000,000.00 USD against said debt.

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.

About Eureka93

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. For more information, please visit: Eureka93.com

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Contacts

Media and Investors
info@eureka93.com

Seann Poli, Co-CEO
Owen Kenney, Co-CEO
+1 (613) 434-2751