お知らせ • Nov 06
Juva Life Inc. Provides Update on Notice of Default
As previously noted in June 21, 2022 press release, Juva Life Inc. entered into a Secured Promissory Note with Pelorus REIT Corporation (Pelorus) for $11,827,000. On August 26, 2022, Douglas Chloupek, CEO of Juva, unrelated to the debt transaction with Pelorus, personally invested $250,000 into Pelorus' investment products, representing approximately 0.0725% of its $345 million assets under management. In June 2023, believing it was on a clear path to profitability, Juva issued CAD 2,230,400 in convertible unsecured notes to JLL Ventures Inc. and JT Labs LLC bearing a 30% annual interest rate and payable by December 1, 2024. Juva also issued 2,186,666 warrants related to these notes each exercisable at CAD 0.054 per warrant. On August 3, 2023, Juva funded the formation of Elie Pharmaceuticals Corp. as an independent joint venture vehicle to raise funds for its pharmaceutical initiatives. Elie Pharmaceuticals was established with Mr. Chloupek as its sole director and shareholder, a temporary structure intended to facilitate fundraising. No Juva assets have been transferred to Elie Pharmaceuticals to date and Elie Pharmaceuticals has no current assets. Despite extensive efforts, Juva was unable to secure such funding, and Elie Pharmaceuticals is now in the process of being dissolved. This unsustainable situation culminated in Juva's default on the Secured Promissory Note with Pelorus in February 2024, Juva's default of the payment due to JLL Ventures in August 2024, and Juva's default of the payment due to JT Labs in November 2024. It has also resulted in the layoff of all employees and closure of operations at Juva's cultivation facility in Stockton, CA as of October 31, 2024. In an effort to service Juva's debts, over the past year, Juva's management team has actively marketed its assets, including the retail store in Redwood City and the cultivation, manufacturing, distribution, and delivery business in Stockton, California. Despite outreach to hundreds of potential buyers, the challenging economic environment and market uncertainty have hindered viable offers for these assets. To that effect in July 2024, Juva listed the Stockton facility for sale through Capitol Rivers Inc., and shifted the focus to finding a cannabis cultivation tenant willing to acquire the operating entity and enter a long-term lease agreement, thereby facilitating the sale of the building. Unfortunately, despite best efforts and substantial price discounts, no tenant has been secured, and sales efforts have been limited by requirements from Pelorus, the primary lienholder, which must approve any transaction. Pelorus officially issued a Notice of Event of Default on July 11, 2024. As Juva has been unable to cure this default, Pelorus has requested the court to appoint a receiver, with the hearing scheduled for November 6, 2024. If appointed, the receiver will assume control of Juva's assets. Juva's management is currently working on several potential transactions to acquire the funds to repay Pelorus. In light of these potential transactions, on October 31, 2024 Juva requested Pelorus stay its request for appointment of a receiver for 120 days. Unfortunately, this request was denied by Pelorus.