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Hempalta Corp. (TSXV: HEMP) ("Hempalta" or the "Company"), a Canadian-based innovator in nature-based carbon credits, today provided an update on its ongoing corporate transformation and operational milestones.
As part of its previously announced strategic shift to focus exclusively on its high-growth carbon credit business, Hempalta has completed the wind down and closure of its processing facility in Calgary. The facility has now been vacated and decommissioned.
FCC Loan Update
In connection with the plant closure, the Company's wholly owned subsidiary, Hempalta Processing Inc. ("HPI") has received a notice of default from Farm Credit Canada ("FCC") in respect of the Company's obligations under its existing loan agreement and related security (the "Default"). The notice cites technical defaults arising from the cessation of operations and FCC's determination that there is a material adverse change. No monetary payment default has occurred to date.
Equipment Sales
In connection with the Default, and further to the previously announced marketing of the Company's turn-key industrial hemp processing line, including biochar processing equipment (the "Equipment"), the Company is pleased to announce that HPI has entered into a binding asset purchase agreement (the "Purchase Agreement") with an arm's length third party for sale of the Equipment for cash consideration of USD$1,150,000 (the "Purchase Price") (the "Transaction"). The Purchase Agreement includes the payment of a fifty percent deposit of USD$575,000 upon signing, and remains subject to standard closing conditions including but not limited to the receipt of necessary regulatory and shareholder approvals (the "Approvals"), and receipt of the balance of the Purchase Price. In connection with the Purchase Agreement, certain insiders have signed voting support agreements in respect of shareholder approval of the Transaction.
Proceeds from the Transaction will be used to satisfy the outstanding amounts owed to FCC to satisfy the Default, and are also expected to be used to reduce outstanding corporate liabilities and strengthen the Company's balance sheet. The Company expects to call its annual and special shareholders meeting to approve the Transaction and annual items in due course.
Carbon Credit Update
Hempalta is pleased to report continued growth and progress in its carbon credit business:
For the 2024 crop year, approximately 29,000 tonnes of COâ‚‚ sequestration have been calculated using the Company's AI-powered MRV (Measurement, Reporting and Verification) platform. These credits are currently in final verification with Control Union, and once issued, will bring the Company's total verified credits to over 44,000 tonnes when combined with the previously announced 15,325 credits issued for 2023.
Looking ahead to 2025, the Company anticipates continued growth in its carbon credit program driven by expanded farm participation. Final 2025 acreage and sequestration estimates are anticipated to be announced when Hempalta reports its Q2 results at the end of May.
Upcoming Industry Event Participation
Hempalta also announced its participation in Carbon Unbound East Coast, taking place May 21-22, 2025, in New York City. The Company will be showcasing its innovative hemp-based carbon credit methodology and actively engaging with global carbon buyers and partners.
"We continue to execute on our focused carbon-first strategy while responsibly managing the wind down of legacy operations," said Darren Bondar, CEO of Hempalta. "We are continuing to advance our carbon credit platform, and seeing clear momentum in both our sequestration volumes and industry engagement."
About Hempalta
Hempalta Corp. (TSXV: HEMP) is a nature-based carbon credit provider utilizing industrial hemp's potential to sequester carbon. Through its subsidiary Hemp Carbon Standard Inc. (HCS), the Company develops methodologies and supports farmers in monetizing regenerative farming practices. In addition to HCS, through its subsidiary Hempalta Processing Inc., the Company retains its established hemp-based product lines for licensing, supporting a balanced portfolio that addresses modern sustainability needs.
Learn more at www.hempalta.com or contact Investor Relations at invest@hempalta.com.
For more information, please contact:
| Investor Relations Hempalta Corp. Email: info@hempalta.com Website: www.hempalta.com | Hempalta Corp. Web: https://www.hempalta.com/  Email: info@hempalta.com |
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Forward-Looking Information
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 is typically, but not always, identified by the use of words such as "will," "expected," "plans," "enable," "positions," "aim," and similar words, including negatives thereof, or other similar expressions concerning matters that are not historical facts.
Forward-looking information in this news release includes, but is not limited to, statements regarding: the anticipated benefits of the sale of the Equipment; the timing and closing of the Transaction; the receipt of necessary Approvals; ; the Company's ability to execute its carbon credit initiatives; the settlement of the outstanding Default with FCC; the demand for carbon credits increasing; the ability of the Company to successfully scale the Hemp Carbon Standard platform; any future financing of the Company; and the Company's future business development activities.
Such forward-looking information is based on various assumptions and factors that may prove to be incorrect, including, but not limited to, assumptions regarding: the completion of the Transaction and receipt of Approvals; the settlement of the outstanding Default with FCC;; the expected benefits of the Hemp Carbon Standard platform; the ability of the Company to maintain access to capital markets and financing sources; demand for carbon credits in the voluntary market; the sale of the Equipment and the proceeds from such sales being sufficient to satisfy outstanding debts; required regulatory approvals; and the ability of Hempalta to successfully execute its strategic plans.
Although the Company believes that the assumptions and factors on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information, because the Company can give no assurance that it will prove to be correct or that any of the events anticipated by such forward-looking information will transpire or occur, or if any of them do so, what benefits the Company will derive therefrom.
Actual results may vary from those currently anticipated due to a number of factors and risks, including, but not limited to: General economic conditions and conditions in the capital markets; Regulatory risks relating to approvals required by securities regulators or other governing bodies; Risks associated with debt financing, including repayment obligations; Market risks affecting the voluntary carbon credit market and demand for nature-based carbon credits; Risks affecting the closing of the Transaction and the satisfaction of outstanding conditions; Operational risks, including the ability to successfully implement the Hemp Carbon Standard at scale; Risks associated with future financings and the terms available for such financings; Weather and environmental factors affecting the ability of farms to grow industrial hemp; Risks related to Other risks detailed in the Company's continuous disclosure filings available on SEDAR+ at www.sedarplus.ca.
The forward-looking information included in this news release is made as of the date of this news release, and the Company does not undertake an obligation to publicly update such forward-looking information to reflect new information, subsequent events, or otherwise, except as required by applicable law.
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