CALEB NICKERSON
PONTIAC July 18, 2019
Eureka 93, the company with halted plans to develop a cannabidiol (CBD) extraction facility in Litchfield, took a nose-dive in the markets after . . .
unhalting their stock on July 18.
Listed on the Canadians Stock Exchange as ERKA.C, the stock fell from roughly $11 per share to around $1.50 where it currently sits. The stock had been halted, meaning that trading was suspended, for the past eight months as the company, formerly known as LiveWell Foods, completed mergers with Vitality CBD Natural Health Products Inc. and Acenzia Inc.
This led to a dispute with their financier, Canopy Rivers and Canopy Growth Corp., which Eureka recently announced they had settled for an undisclosed amount that they described as “not material.”
Eureka also rolled back their stock at a ratio of 15:1, meaning that the company takes every 15 shares and consolidates them into one, which, on paper, will make for a higher price per share. In order to be listed on the NASDAQ, which Eureka 93 said they hoped to achieve in a press release issued on July 17, a company’s stock needs to be traded at a minimum of $4 per share.
In a July 19 post on the finance blog Equity.Guru, business journalist Chris Parry broke down the situation in colourful fashion, and highlighted the anger that shareholders are feeling due to a lack of communication from the company. He criticized Eureka 93’s decision to broker multiple deals at once, which led to a longer halt on their stock, as well as their lack of warning about the stock rollback.
“This isn’t a case of a company [hosing] shareholders as a deliberate act, it’s a company that didn’t run from the fire coming at them because it was feeling warm and toasty,” he wrote.
Eureka 93, when it was operating as LiveWell Foods, had announced a CBD research facility in Litchfield, on the site of the former paper mill, and even had contractors preparing the site for construction in 2018 before work was suddenly halted. Deslan – A.I.M Environmental, the company hired to perform the work, filed a legal motion in the amount of $1.6 million for work completed at the site in November 2018.
Eureka 93 did not respond to The Equity’s request for comment in time for print.
