Eve & Co Incorporated announced it has entered into debt settlement agreements (the “Debt Settlement Agreements”) with certain directors, officers, employees, and debentureholders (the “Parties”) whereby it has agreed to settle an aggregate of $657,000 in payables (the “Payables”) owed to the Parties related to expenses, loans and services rendered to the Company up to January 2022 in exchange for an aggregate of 5,189,606 common shares in the capital of the Company (the “Settlement Shares”). The Company is proposing to issue the Settlement Shares to settle the Payables in order to preserve cash for general working capital purposes.
Pursuant to the terms of the Debt Settlement Agreements, the Company has agreed to issue an aggregate of 908,677 Settlement Shares at a deemed issuance price of $0.12 per Settlement Share in full and final satisfaction of $109,041 of certain trade payables, directors’ fees, and salaries and an aggregate of 4,280,929 Settlement Shares at a deemed issuance price of $0.128 per Settlement Share in full and final satisfaction of $547,959 owed to the holders of the Company’s outstanding 10% unsecured convertible debentures that were issued on December 11, 2020.
Insiders of the Company (the “Insiders”) are expected to receive 1,916,667 Settlement Shares in settlement of $242,500 of debt. Pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“), the settlement of the Payables will constitute a “related party transaction” as the Insiders are considered to be related parties to the Company. The Company will rely on exemptions from the formal valuation and minority approval requirements of MI 61-101 (pursuant to subsections 5.5(a) and 5.7(a)) as the fair market value of the securities to be distributed to, and the consideration received from, the Insiders will not exceed 25% of the Company’s market capitalization. The settlement of the Payables has been approved by all of the independent directors of the Company. All securities issued pursuant to the Debt Settlement Agreements will be subject to statutory and TSX Venture Exchange (“TSXV”) hold periods until the date that is four months and one day from the date of issuance.
Settlement of the Payables and issuance of the Settlement Shares is subject to the acceptance of the TSXV. There is no guarantee that such conditions precedent will be satisfied or that any of the transactions will be completed as described herein or at all.
ABOUT EVE & CO
Eve & Co, through its wholly-owned subsidiary Natural Medco Ltd. (“NMC”), holds cultivation and processing licences under the Cannabis Act (Canada) for the production and sale of various cannabis products, including dried cannabis, cannabis plants and extraction of cannabis oil and has received its European Union certificate of Good Manufacturing Practice. NMC was Canada’s first female-founded licensed producer of medicinal marijuana and received its cultivation licence from Health Canada in 2016. Eve & Co is led by a team of agricultural experts and has a licensed 1,000,000 square foot greenhouse located in Strathroy, Ontario. The Company’s website can be visited at www.evecannabis.ca.
