ZeU Crypto : Restructuring of Debt, Placement & Corporate Update | MarketScreener

(via TheNewswire)

Montreal –TheNewswire –July 30, 2020–ZeU Crypto Networks Inc. (CSE:ZEU)(CNSX:ZEU.CN) is pleased to announce it has reached agreements to restructure certain debts of the Company, agreed to shares for debt transactions, and would like to issue an update on its financial situation.

Debentures Restructuring

ZeU has entered into amending agreements with debenture holders to amend the terms of$474,979of the$3,157,524 principal amount of debtand the accumulated interest is of $677,572.84owed by the Company that came due and was payable on July 5, 2020, pursuant to the July 5, 2018,10% unsecured convertible debentures (the “Original Debentures“) offering for an aggregate principal amount of $5,063,692 originally closed in 2018 prior to the Company receiving a termination notice in regard to a previously executed agreement with a Chinese entity, which resulted in listing delays and extensive damages for ZeU.

These Original Debentures have a floor conversion price of $1.00 (the “Conversation Price“), the interest is capitalized and payable at maturity in shares or cash at the discretion of the Company at the Conversion Price.

Today’s announcement covers all but one of the Canadian debenture holders. Based on the on-going discussions with the last remaining Canadian entity, Management expects to have the agreement formalized within the coming days. Management is also in communication with the Chinese debenture holders. As of today,none of these investors have entered into the new agreement, and $614,510 could be converted into shares of ZeU via a board resolution. The Company is confident that the remainder of the capital, representing $2,763,774, should be settled in cash over the next few years based on its internal revenue projections.

New Debentures Terms

Under the terms of the amended debentures (the “Amended Debentures“), the maturity date has been extended two years from July 5, 2020, to July 5, 2022, and in exchange:

(i)the floor conversion price of the principal amount of the Debentures has been reduced from $1.00 to $0.25 per common share;
(ii)the interest has beenraised from 10% to 12%;
(iii)the Amended Debentures now rank inpriority of all unsecured debts; and
(iv)the Company issued2 years, $0.30 common share purchase warrantsof ZeU for every tranche of $0.25 of Original Debenture principal amount amended. The proceeds of the warrants will be used to buy back the debentures if it has not been repaid or converted at the time of the warrants exercise.

The Company is also agreed to assign 30% of all net private placement proceeds, minus the insiders’ subscriptions, and 60% of its future profits to repay the debentures in priority until the debt is settled in full.

The amendments are subject to approval by the CSE.

Frank Dumas, ZeU’s CEO, stated: “(…)Prior to reaching these agreements to restructure ZeU’s debt, the Company was facing three important challenges: limited financial resources, a significant debt inthe…