CHRIS LOWREY
LITCHFIELD Dec. 4, 2019
After taking several financial hits over the last year, Eureka 93 – the company responsible for the proposed cannabis . . .
growing facility in Litchfield – has announced that it is undergoing a restructuring phase.
In a press release issued Dec. 4, the company announced that it is insolvent and that the future of the Litchfield operation appears bleak.
The company said that it plans record an impairment charge against the Litchfield property in the amount of $5,000,000.
Impairment charges are essentially write-offs used when the value of an asset on a company’s books can’t be fully recovered.
“[T]he company is not in a position to continue investing in the development of the Litchfield Innovation Centre Project,” the press release said. “The secured debt and registered liens are nearing or exceed the fair value of the property.”
The company also noted the $1.8 million legal claim filed against it by Deslan A.I.M. Environmental, for unpaid wages and bills, as a reason for the impairment charge.
The company also announced that it will be reversing share transfer agreements and entering into share cancellation agreements related to the company’s acquisition of Acenzia Inc. and Vitality Natural Health LLC.
The press release says these moves will help put the company on solid ground.
Although the company’s stock price dropped in July, the company as a whole has been reeling since September.
On Sept. 4, the company was hit with a cease trade order for not filing its second quarter financial disclosures.
Then, on Sept. 24 – the same day the company was granted a license from Health Canada to grow cannabis at its Ottawa facility – the entire executive management team, including the CEO, CFO, COO and the entire board of directors except one person, resigned without giving notice to shareholders.
The press release says that those who resigned “abandoned” the company.
In fact, the new board of directors voted to reverse the $444,000 in bonuses paid to the former executive team.
The company is still without a CFO since the mass resignations in September.
