Appreciated Media Defaults on Debt Obligations
VANCOUVER, British Columbia, Nov. 26, 2020 (GLOBE NEWSWIRE) -- Appreciated Media Holdings Inc. ("Appreciated Media" or the "Corporation") (TSXV: AMH) (OTCQB:
AMEFF) announces the expiry of the forbearance period (the “Forbearance Period”) granted pursuant to the forbearance agreement, as amended and supplemented, between the Corporation
and Amcomri GP BVI Limited (“Amcomri”) previously announced on August 17, 2020.
The Corporation is indebted to Amcomri in the aggregate amount of approximately C$900,000 pursuant to a loan agreement entered into between the Corporation and Amcomri dated May 2, 2019 (the “Loan Agreement”) and a promissory note issued by the Corporation in favour of Amcomri dated October 19, 2020 (the “Note”). Pursuant to the Loan Agreement and the Note, the Corporation borrowed an aggregate of US$250,000 and C$150,000, respectively, from Amcomri. Pursuant to the terms of the Loan Agreement, as a result of the default, Amcomri is entitled to impose the default rate of interest of 1.875% per month compounded monthly on amounts owing thereunder. Pursuant to the terms of the Note, the outstanding principal amount of the Note bears interest at a rate of eight percent (8.00%) per annum commencing on November 20, 2020.
In addition, pursuant to the terms and conditions of the Loan Agreement, the Corporation entered into a general security agreement dated April 9, 2020 in favour of Amcomri (the “General Security Agreement”) pursuant to which the Corporation granted Amcomri a security interest over all of the present and after-acquired personal property of the Corporation.
As a result of the expiry of the Forbearance Period, Amcomri is entitled to exercise all of its rights as a creditor under the Loan Agreement, the Note and applicable law and as a secured creditor of the Corporation under the General Security Agreement. Further, the Corporation is precluded from contesting Amcomri’s enforcement action as a result of a waiver of notice and consent to enforcement of security dated October 1, 2020 that was granted to Amcomri by the Corporation in exchange for an extension of the Forbearance Period.
The Corporation has been notified that Amcomri intends to enforce its rights under the loan documents and the General Security Agreement by seeking the appointment of a receiver. The Corporation is considering potential strategic alternatives available to the Corporation to repay all or a portion of the indebtedness. No assurance can be given that Amcomri will not enforce its rights under the loan documents or the General Security Agreement or that the Corporation will be successful in securing alternative means of financing to repay the indebtedness owing to Amcomri.