Mr. Seann Poli reports

EUREKA 93 INC. ENTERS INTO RESTRUCTURING AND REVERSES PREVIOUS COMPONENTS OF SHARE TRANSFER AGREEMENT AND ENTERS INTO A SHARE CANCELLATION AGREEMENT

Eureka 93 Inc.'s current board of directors, after having reviewed strategic alternatives, has recommended that the company enter into an initial restructuring phase by reversing certain components of share transfer agreements, entering a share cancellation agreement, subject to partial revocation of the cease trade order issued by the Ontario Securities Commission, and also seeking exemptive relief regarding certain continuous disclosure matters.

Pursuant to the insolvent nature of the company and to secured creditors being able to act on their security, the current board of directors of Eureka 93 resolved to agree to reverse the March 28, 2019, share transfer agreement concerning the acquisition of Acenzia Inc. and to accept a share cancellation agreement with certain Vitality Natural Health LLC shareholders to effectively reverse components of the definitive amalgamation share exchange agreement dated April 26, 2019, by and among Eureka 93 (formerly LiveWell Canada Inc.) and its respective shareholders and Vitality Natural Health and its respective shareholders (through Vitality CBD Natural Health Products Inc. (formerly Serenity CBD Canada Inc.) and Mercal Capital Corp.). Both of these share transfer reversals and cancellations are material in nature and significantly improve the capitalization table of the company. Both are subject to a partial revocation of the cease trade order issued by the Ontario Securities Commission on Sept. 4, 2019, as well as obtaining exemptive relief from the OSC and the Canadian Securities Exchange for continuous disclosure obligations for the second quarter and third quarter 2019 until such time as the company restructuring is completed.

On Sept. 24, 2019, the former Eureka 93 executive management team, including the chief executive officer, the chief financial officer and the chief operating officer, and the board of directors, except one board member, all resigned and abandoned the company. At that time, it was evident to the former board and executive management team that the Eureka 93 group of companies was insolvent, and that material impairments would be required to be disclosed both at the second quarter ended June 30, 2019, and third quarter ended Sept. 30, 2019, financial disclosures.

Since mid-October, 2019, a new Eureka 93 board was appointed, and co-chief executive officers were established as disclosed in the press release. Since then, the new management team and board of Eureka 93 have undertaken due diligence to review all former documents, asset impairments and security agreements (to the extent that the information was available) with a view to undertake a comprehensive restructuring of the company.

The Eureka 93 board and co-chief executive officers have also been considering options and alternatives for a viable restructuring of the companies within the Eureka 93 group, with a focus on maintaining Artiva Inc. and its cannabis licence and related operations for the future.

Since mid-October, 2019, other than to point out a material impairment in biomass inventory of Vitality LLC that the former management team was aware of, the new Eureka 93 board and new management team have received virtually no assistance, nor transition knowledge transfer, in financial reporting matters, disclosures, asset impairments and securities matters from the former CEO, CFO and COO. The new management team was able to reconcile the unconsolidated financial statements for all companies within the Eureka 93 group for the second quarter ended June 30, 2019, in Canadian dollars, and for the third quarter ended Sept. 30, 2019, in Canadian dollars (with the exception of Vitality LLC that is recorded in U.S. dollars). This reconciliation included accruals for additional liabilities and asset impairments that may have subsequently existed from June 30, 2019, to Dec. 4, 2019. At that time, a material caveat for such disclosures was that the complex capitalization table was not effectively reconciled beyond Sept. 30, 2019.

Three material exceptions remain regarding the second quarter and third quarter unconsolidated financial reporting disclosures:

• Although the second quarter ended June 30, 2019, capitalization table was substantially reconciled and forwarded to the external auditor MNP for review on Aug. 13, 2019, new management was not able to verify the complex capitalization table for the period from June 30 to Sept. 30 and beyond, which requires specialized knowledge of agreements, warrants and negotiated option knowledge that have not been transferred to the new management team.
• The new Eureka 93 board resolved to record material impairments across the Eureka 93 group of companies under international financial reporting standard guidance, given subsequent event knowledge that the company now has and given the insolvent financial position of the group of companies finds itself in today. However new management was not able to confirm these impairments against an independent review by the external auditor MNP, as there is a significant outstanding balance owing to the auditor, and further work could not continue.
• Although the company engaged a senior financial adviser in late October, 2019, the company has not had a CFO since the former CFO resigned on Sept. 24, 2019.

Material changes and material fair value impairments that have been approved by the new board of Eureka 93 for recognition in the draft second quarter and third quarter 2019 unconsolidated financial statements of certain Eureka 93 group of companies include:

• Sept. 1, 2019: Further to the announced $15-million (U.S.) financing for a one-year term agreement, on Sept. 1, the former management team agreed to extend the hedge-fund general security agreement (GSA) to all Eureka 93 assets in exchange for relief from the Sept. 1 payment to same, and agreed for release from escrow $3.6-million (U.S.) of conditional financing, which reduced residual escrow amounts and long-term debt by the same amount in Eureka 93.
• Sept. 4, 2019: OSC issues cease trade order against Eureka 93 for failing to file the second quarter ended June 30, 2019, quarterly financial disclosures.
• Sept. 6, 2019: supplemental press release to the Sept. 6 disclosure announcing strategic review.
• Sept. 24, 2019: The entire executive management team and board (except one member) resigned en masse without providing notice to shareholders.
• Sept. 24, 2019: Eureka 93 acquires Health Canada licence to cultivate cannabis in Ottawa.
• Nov. 15, 2019: The new Eureka 93 board resolved that effective the second quarter ended June 30, 2019, the Vitality Natural Health biomass inventory be written down for impairment in the amount of $19,309,710.60 (U.S.).
• Nov. 15, 2019: The new board resolved, effective Sept. 30, 2019, to record an impairment charge against the LiveWell Foods Quebec Inc. property, plant and equipment improvement asset in the amount of $5-million (Canadian) as the company is not in a position to continue investing in the development of the Litchfield innovation centre project, and the secured debt and registered liens are nearing or exceed the fair value of the property at this time, where certain contractors have filed statements of claim in Quebec Superior Court for $1.8-million (Canadian) and the secured lender holds a first charge of $4,653,526 (Canadian).
• Nov. 15, 2019: The new board resolved to reverse the accrued bonuses payable to the previous executive management team as at Sept. 30, 2019, in the amount of $444,000 (Canadian) in LiveWell Foods Canada that were initially accrued by the resigning executive management team.
• Nov. 29, 2019: The new board was given notice by Surety Land Development LLC regarding UCA paragraph 70A-9a-609 Notice of Taking Possession, that Surety has a perfected security interest in Vitality Natural Health's equipment situated at the 254 Truss Rd. Eureka Montana processing facility. Surety provided the former executive management team with formal written notice of default under its loan agreements, as amended, on or about July 15 and July 29, 2019. The new Eureka 93 management team was not made aware of these default notices provided back in July, 2019. Despite the written notice of default, Vitality Natural Health had not cured the default. Surety provided the new Eureka 93 board with written notice of its intent to take possession, pursuant to Utah Code ann. paragraph 70A-9a-609, of all of the Montana processing plant equipment on Nov. 29, 2019, at 9 a.m. MST. This represents either a partial release, or a full release, of the $18.5-million (U.S.) of the secured debt instrument held by Surety against Vitality Natural Health, which needs to be verified.

The initial restructuring phase has commenced with the reversing of certain components of share transfer agreement and entering to a share cancellation agreement, as noted herein:

• The new board approved on Nov. 27, 2019, the reversal of the Acenzia investment of $16,972,839.21 (Canadian) and acceptance of forfeiture of 793,650 Eureka 93 common shares in return, valued at an originating agreement amount of $14,498,523.81 (Canadian), based upon mutual defaults under the original agreement signed on March 28, 2019, and subject to a secured creditor acting on its security in the matter. This share exchange is subject to a partial revocation of the OSC cease trade order, and the release of the GSA over the Acenzia assets, as well a holding of such shares in escrow. This reversal also involved the writedown for impairment of $1,709,000 (Canadian) in LiveWell Foods Canada for impaired Interco advances to Acenzia, offset by the retirement in totality of a $2,049,863.01 (Canadian) note payable due to the original Acenzia shareholders.
• The new board on Dec. 4, 2019, approved a share cancellation agreement with certain Vitality Natural Health shareholders, subject to partial revocation of the cease trade order by the OSC, by forfeiting its shares stemming from the amalgamation share exchange agreement dated April 26, 2019, by and among Eureka 93 (formerly LiveWell Canada) and its respective shareholders, and Vitality Natural Health and its respective shareholders (through Vitality CBD Natural Health Products (formerly Serenity CBD Canada Inc.) and Mercal Capital). The certain Vitality stockholders were approximately 43.5-per-cent controlling shareholders of Eureka 93 as a result of the amalgamation. As a holder of a record of 31,836,465 Eureka 93 shares of common stock and other warrants and stock options as yet unexercised as at Dec. 4, 2019, certain Vitality shareholders have agreed to enter into an agreement to cancel shares, warrants and options, to forfeit and have Eureka 93 cancel an aggregate of 31,836,465 shares of common stock held by the certain Vitality stockholders, and forfeit all outstanding warrants and stock options held by such stockholders.
• The new board on Dec. 4, 2019, resolved to seek exemptive relief from the OSC and CSE regarding its continuous disclosure requirements for the second quarter and third quarter 2019 given the significantly material changes being affected by the restructuring of the Eureka 93 group of companies.

Given these material restructurings, changes and impediments to continuing operations, and notwithstanding best efforts by the new management team and board under very difficult circumstances, Eureka 93 management regretfully informed the OSC and CSE on Nov. 29, 2019, that Eureka 93 was not in a position to provide fully U.S.-dollar consolidated financial statements and notes for the second quarter and third quarter 2019 periods, that would include management's discussions and analyses and related certifications.

Furthermore, the new board resolved to seek exemptive relief from the OSC and CSE regarding its continuous disclosure requirements for the second quarter and third quarter 2019 given the significantly material changes being affected by the restructuring of the Eureka 93 group of companies. Eureka 93 plans to be in a position to file the fourth quarter year-end financial statements on a new consolidation basis as a restructured company focused on Artiva and the cannabis licence reporting in Canadian dollars.

About Eureka 93 Inc.

Eureka 93 is an integrated life science company focused on the cultivation, extraction and distribution of cannabis and hemp-derived cannabidiol through its Health Canada-licensed Artiva facility in Ottawa, Canada, and subsidiary operations.