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Juva Life Inc. Updates Shareholders on Financial Status and Upcoming Receivership Hearing

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Juva Life Inc. (CSE:JUVA, OTC:JUVAF) faces critical financial challenges, leading to a receivership hearing on November 6, 2024. The company defaulted on multiple obligations, including an $11.8M Secured Promissory Note with Pelorus REIT and convertible notes to JLL Ventures and JT Labs. Operational difficulties include virus-infected plants and mechanical issues, combined with a 70% drop in wholesale cannabis prices. All employees were laid off and operations at the Stockton facility ceased on October 31, 2024. The company also faced SEC compliance issues due to auditor suspension, resulting in trading suspensions on CSE and OTCQB.

Juva Life Inc. (CSE:JUVA, OTC:JUVAF) affronta gravi sfide finanziarie, portando a un'udienza per la nomina di un curatore il 6 novembre 2024. L'azienda ha inadempienze su più obbligazioni, comprese un nota di promissoria garantita di 11,8 milioni di dollari con Pelorus REIT e note convertibili a JLL Ventures e JT Labs. Le difficoltà operative includono impianti infetti da virus e problemi meccanici, insieme a un calo del 70% dei prezzi all'ingrosso della cannabis. Tutti i dipendenti sono stati licenziati e le operazioni presso la struttura di Stockton si sono fermate il 31 ottobre 2024. L'azienda ha anche affrontato problemi di conformità con la SEC a causa della sospensione del revisore, che ha comportato sospensioni nella contrattazione su CSE e OTCQB.

Juva Life Inc. (CSE:JUVA, OTC:JUVAF) enfrenta importantes desafíos financieros, lo que llevará a una audiencia de administración el 6 de noviembre de 2024. La empresa incumplió múltiples obligaciones, incluyendo un pagaré asegurado de 11,8 millones de dólares con Pelorus REIT y notas convertibles de JLL Ventures y JT Labs. Las dificultades operativas incluyen plantas infectadas por virus y problemas mecánicos, junto con una caída del 70% en los precios mayoristas del cannabis. Todos los empleados fueron despedidos y las operaciones en la instalación de Stockton se detuvieron el 31 de octubre de 2024. La empresa también enfrentó problemas de cumplimiento con la SEC debido a la suspensión del auditor, lo que resultó en suspensiones de negociación en CSE y OTCQB.

Juva Life Inc. (CSE:JUVA, OTC:JUVAF)는 심각한 재정적 어려움에 직면해 있으며, 2024년 11월 6일에 수탁자 청문회가 예정되어 있습니다. 이 회사는 Pelorus REIT와의 1180만 달러의 담보 약속어음 및 JLL Ventures와 JT Labs에 대한 전환 사채를 포함하여 여러 의무를 불이행했습니다. 운영상의 어려움에는 바이러스에 감염된 식물과 기계적 문제, 도매 대마초 가격의 70% 하락이 포함됩니다. 모든 직원이 해고되었으며, 스톡턴 시설의 운영은 2024년 10월 31일에 중단되었습니다. 이 회사는 감사인 정지로 인한 SEC 준수 문제에도 직면하여 CSE 및 OTCQB에서 거래가 정지되었습니다.

Juva Life Inc. (CSE:JUVA, OTC:JUVAF) fait face à des défis financiers majeurs, entraînant une audience de mise sous séquestre le 6 novembre 2024. L'entreprise a manqué à plusieurs obligations, y compris un billet à ordre garanti de 11,8 millions de dollars avec Pelorus REIT et des notes convertibles de JLL Ventures et JT Labs. Les difficultés opérationnelles comprennent des plantations infectées par des virus et des problèmes mécaniques, combinées à une baisse de 70 % des prix de gros du cannabis. Tous les employés ont été licenciés et les opérations de l'installation de Stockton ont été suspendues le 31 octobre 2024. L'entreprise a également rencontré des problèmes de conformité avec la SEC en raison de la suspension de l'auditeur, entraînant des suspensions de négociation sur le CSE et l'OTCQB.

Juva Life Inc. (CSE:JUVA, OTC:JUVAF) steht vor erheblichen finanziellen Herausforderungen, die zu einer Insolvenzanhörung am 6. November 2024 führen. Das Unternehmen hat mehrere Verpflichtungen nicht erfüllt, darunter einen gesicherten Schuldschein über 11,8 Millionen US-Dollar bei Pelorus REIT sowie wandelbare Anleihen von JLL Ventures und JT Labs. Zu den operativen Schwierigkeiten gehören von Viren befallene Pflanzen und mechanische Probleme, verbunden mit einem Rückgang der Großhandelspreise für Cannabis um 70 %. Alle Mitarbeiter wurden entlassen und die Betriebstätigkeiten an der Stockton-Anlage wurden am 31. Oktober 2024 eingestellt. Das Unternehmen sah sich auch aufgrund der Aussetzung des Wirtschaftsprüfers mit SEC-Konformitätsproblemen konfrontiert, was zu Handelsaussetzungen an CSE und OTCQB führte.

Positive
  • None.
Negative
  • Defaulted on $11.8M Secured Promissory Note with Pelorus REIT
  • Defaulted on convertible notes with 30% annual interest rate
  • 70% drop in wholesale cannabis prices affecting revenue
  • Complete closure of Stockton cultivation facility and layoff of all employees
  • Trading suspended on CSE and OTCQB due to audit compliance issues
  • Failed attempts to sell assets or secure new tenants
  • Pending receivership likely to result in loss of operational control
  • Equity recovery unlikely after debt settlement

REDWOOD CITY, CA / ACCESSWIRE / November 5, 2024 / Juva Life Inc. (CSE:JUVA)(OTC EXPERT MARKET:JUVAF)(FRANKFURT:4VV) ("Juva" or the "Company"), a life science company with both pharmaceutical research and development and consumer-facing operations in cannabis production and distribution, has been facing a series of challenges that has hindered its ability to both operate as well as meet its financial obligations. This serves as an update to Juva's shareholders regarding recent developments within the Company.

As previously noted in our June 21, 2022 press release, Juva 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.

During the past two years, Juva has faced numerous operational challenges while also being impacted by a decline in the overall stability of the California cannabis market. According to SFGate, approximately 78% of cannabis businesses in California have closed, highlighting the broader challenges facing the industry. In addition, there has been a sharp decline in prices for wholesale cannabis, where Juva has seen prices drop by nearly 70% over the last two years. Operationally, Juva's cultivation process has been negatively impacted by third-party clone vendors providing plants that were infected with viruses, fungi, or pests coupled with on-going mechanical issues with major HVAC and generator systems. These issues have led to poor yields which, when combined with low market prices, have resulted in substantial revenue shortfalls and recurring monthly losses.

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.

If the court appoints a receiver on November 6, 2024, Kevin Singer of Receivership Specialists will assume control over Juva's assets. The receiver's duties include securing and managing all Juva properties and business operations, stabilizing financials, and overseeing necessary maintenance to preserve value. The receiver will evaluate options to sell the assets to recover funds owed to Pelorus, with court oversight. Throughout this process, Juva's management will have limited involvement, as operational control will shift to the receiver until a resolution, such as asset sales or other remedies, can be reached to satisfy outstanding obligations. Once the receiver has completed asset sales and accounted for the proceeds, the court will determine Juva's remaining financial position. If proceeds are insufficient to cover all debts, the company may still hold residual debt obligations, subject to creditor claim terms and court rulings. Shareholders should note that, as creditor claims take priority, equity recovery is unlikely unless substantial funds remain after all debts are settled.

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.

Unrelated to the foregoing, on or about May 9, 2024, Juva received a letter from the U.S. Securities and Exchange Commission (SEC) notifying Juva that its auditor, BF Borgers, had been suspended from appearing or practicing before the Commission. As a result, Juva was disallowed from including their audit reports or consents in any filings with the SEC. Consequently, Juva was required to hire a new auditor to re-audit its 2022 financials before preparing the 2023 audited financials. This delay prevented Juva from meeting the May 17, 2024, deadline to file its 2023 Form 1-K under SEC Rule 15c2-11. Due to non-compliance, Juva was moved to the Expert Market on an unsolicited quotes-only basis, and the exchange issued a cease-trade order. Additionally, on June 5, 2024, Juva requested an extension from the BC Securities Commission, which granted an extension until July 12, 2024. However, despite its best efforts, Juva could not complete the re-audit in time, leading to its suspension from trading on both the Canadian Securities Exchange and the OTCQB in the United States.

Juva's management has made exhaustive efforts to refinance the debt, sell assets, and raise funds to pay Juva's outstanding debts. Unfortunately, none of these efforts have proved successful. While this outcome is disheartening, Juva's management wants to ensure that all of Juva's shareholders are fully informed as to the current state of the Company, the challenges the Company has faced, and the impending receivership hearing. On behalf of the Board, I would like to express our sincere gratitude to all investors and shareholders who have believed in Juva's mission and supported us during these difficult times.

ON BEHALF OF THE BOARD,

-Doug Chloupek-

Doug Chloupek, CEO and Founder
Juva Life Inc.

For further information, please contact:
Juva Life Investor Relations
Tel: +1 833-333-5882 (JUVA)
Email: inquiries@juvalife.com

Find out more at: https://juvalife.com/

Forward-Looking Statement
This news release contains statements and information that, to the extent that they are not historical fact, may constitute "forward-looking information" within the meaning of applicable securities legislation. Forward-looking information may include financial and other projections, as well as statements regarding future plans, objectives, or economic performance, or the assumption underlying any of the foregoing. In some cases, forward-looking statements can be identified by terms such as "may," "would," "could," "will," "likely," "except," "anticipate," "believe," "intend," "plan," "forecast," "project," "estimate," "outlook," or the negative thereof or other similar expressions concerning matters that are not historical facts. Examples of such statements include, but are not limited to, statements with respect to the objectives and business plans of the Company, product development, commercialization strategy, and future collaborations.

Forward-looking information involves known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the Company to differ materially from any future results, performance, or achievements expressed or implied by the forward-looking information, including, without limitation, risks relating to the future business plans of the Company; risks that the Company will not be able to retain its key personnel; risks that the Company will not be able to secure financing on reasonable terms or at all, as well as all of the other risks as described in the Company's management discussion and analysis for the year ended December 31, 2020, under the heading "Risks and Uncertainties." Accordingly, readers should not place undue reliance on any such forward-looking information.

Further, any forward-looking information speaks only as of the date on which such statement is made. New factors emerge from time to time, and it is not possible for the Company's management to predict all such factors and to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information. The Company does not undertake any obligation to update any forward-looking information to reflect information or events after the date on which it is made or to reflect the occurrence of unanticipated events, except as required by law, including securities laws.

The CSE does not accept responsibility for the adequacy or accuracy of this release.

SOURCE: Juva Life Inc



View the original press release on accesswire.com

FAQ

When is Juva Life's (JUVAF) receivership hearing scheduled?

Juva Life's receivership hearing is scheduled for November 6, 2024.

Why did Juva Life (JUVAF) default on its Pelorus REIT loan?

Juva Life defaulted due to substantial revenue shortfalls caused by poor cultivation yields, a 70% drop in wholesale cannabis prices, and operational challenges including infected plants and mechanical issues.

Why was Juva Life (JUVAF) suspended from trading on CSE and OTCQB?

Juva Life was suspended after failing to meet SEC filing deadlines due to their auditor's suspension, requiring a re-audit of 2022 financials and delaying 2023 financial statements.

When did Juva Life (JUVAF) cease operations at its Stockton facility?

Juva Life ceased operations at its Stockton facility and laid off all employees on October 31, 2024.

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