Next Phase Ventures Resolves FCC Indebtedness Through Settlement Agreement

Next Phase Ventures Ltd. has reached a settlement agreement with Farm Credit Canada (FCC) to resolve outstanding indebtedness, marking a significant step in the company’s financial restructuring. The agreement, effective July 16, 2026, was countersigned by FCC on September 14, 2026, and is now fully executed and binding.

Under the terms of the agreement, the Company’s wholly owned subsidiary, Hempalta Processing Inc. (HPI), and its President and CEO, Darren Bondar, will settle the remaining FCC indebtedness of $389,582.01, which was reduced from $626,307 following the disposition of HPI’s secured processing equipment. The settlement provides a defined framework for addressing the remaining obligation, with two payment options available.

The first option involves an initial payment of $100,000 by September 30, 2026, followed by twelve quarterly payments of $13,750 over three years, starting December 31, 2026. The second option allows for the settlement amount to increase to the outstanding FCC indebtedness plus legal costs if a "Monetization Event" occurs by December 31, 2029. No interest accrues on the FCC indebtedness after the effective date of the agreement for purposes of calculating the amount payable following a Monetization Event.

To fund the initial $100,000 payment, Bondar has advanced $100,000 to the company as an additional shareholder loan. This loan will be used exclusively to make the initial payment directly to FCC on behalf of HPI. The funds used for this purpose will be advanced by Bondar to the company as indebtedness bearing interest at 12% per annum and secured against the company’s assets.

Additionally, the company and Bondar have consolidated and extended existing shareholder loans into a single secured obligation. The consolidated shareholder loan will bear interest at 12% per annum, accrue interest without monthly cash payments, and mature on June 30, 2027. It is secured by a general security agreement over the assets of the company, subject to any postponement or subordination arrangements agreed to in favor of FCC.

The agreement also includes events of default, such as failure to file audited annual financial statements, issuance of a cease trade order, suspension of trading, or delisting of the company’s shares. On an event of default, Bondar may accelerate all amounts owing. The shareholder loan will not automatically convert into securities of the company and contains no equity, voting, or participating component.

The settlement and funding arrangements are related-party transactions, as Bondar is a director and senior officer of the company. The transaction was approved by the independent directors, Anshu Khanna and Christopher Ostafie, who determined that the arrangements are in the best interests of the company and are on reasonable commercial terms.

Next Phase Ventures Ltd. continues to evaluate strategic alternatives, including a reverse takeover, recapitalization, merger, business combination, or asset acquisition. The reduction of the FCC indebtedness and the defined settlement framework provide greater certainty regarding a significant legacy obligation while the company advances its strategic transaction process.

Darren Bondar, the President and CEO of the company, stated, "The completed equipment disposition reduced the outstanding FCC indebtedness by approximately $237,000, and the Settlement Agreement now provides a defined framework for addressing the remaining legacy obligation. The initial $100,000 payment will be funded by me through an additional shareholder-loan advance to NPV, with every dollar directed to FCC. Together, these steps provide greater clarity regarding the company's balance sheet as we continue pursuing a value-accretive strategic transaction."

The company is actively seeking qualified counterparties and is prepared to engage with private companies, management teams, investment bankers, and advisors regarding potential transaction structures. The company's focus is on preserving the value of its public-company platform and engaging with credible counterparties that may benefit from a TSX Venture Exchange listing, an established shareholder base, and an experienced public-company team.