VANCOUVER - Village Farms International, Inc. ("Village Farms") (TSX:VFF; Nasdaq:VFF) today announced that, following an equity payment default by Emerald Health Therapeutics, Inc. ("Emerald") (TSV:EMH) pursuant to the Delta 2 option agreement involving Pure Sunfarms Corp. ("Pure Sunfarms"), Village Farms notified Pure Sunfarms that it has exercised its rights under the Pure Sunfarms shareholders agreement to increase Village Farms' ownership position in Pure Sunfarms and advanced an equity payment to Pure Sunfarms of $5,940,000 (the "VF Additional Equity Contribution").
In accordance with these agreements, Emerald was obligated to pay $5,940,000 to Pure Sunfarms on November 1, 2019. Following Emerald's failure to make this equity payment, Pure Sunfarms issued a default notice to Emerald. Emerald nonetheless remained in default following the expiration of the contractual cure period earlier today.
Assuming the VF Additional Equity Contribution is accepted by Pure Sunfarms, Village Farms will receive an increased equity interest in Pure Sunfarms effective as of November 19, 2019. The calculation of the precise increased equity interest requires a determination of the fair market value of Pure Sunfarms pursuant to an appraisal process. Accordingly, Village Farms' precise increased equity interest in Pure Sunfarms is not ascertainable at this time. However, the aggregate effect of the VF Additional Equity Contribution and the potential cancellation of Emerald's escrowed shares of Pure Sunfarms (described below) is not expected to have an impact on the voting control of Pure Sunfarms (which would occur if Emerald were to hold less than 35% of the equity of Pure Sunfarms).
In light of Emerald's recent pattern of initiating disputes relating to Pure Sunfarms, no assurance can be given that Emerald will not similarly initiate a dispute in respect of the VF Additional Equity Contribution.
Click here to see more...