British Columbia · NOI

The Second Report described in detail the progress towards completing the Sale Transaction (the "Closing") and the reasons for the proposed Stay Extension. Pursuant to the Purchase Agreement, the Purchaser will deposit into the Proposal Trustee's trust account additional US$250,000 (the "Remaining Cash Payment") upon the Closing, increasing cash available to the estate. As described in detail in the First Report of the Proposal Trustee dated August 14, 2020, after the Closing, Feronia will have virtually no assets left other than the cash balance to be held by the Proposal Trustee in trust. The Purchase Agreement provides that the Remaining Cash Payment will be utilized by the Proposal Trustee for the payment of professional fees and disbursements relating to the Sale Transaction and the Company's insolvency proceedings, and any Priority Payables, if any, and that any residual amount would be distributed to unsecured creditors (the "Residual Funds"). Feronia, with the assistance its Canadian Counsel, Aird & Berlis LLP ("A&B") and Boughton Law Corporation ("Boughton"), continues to work cooperatively with the Proposal Trustee with a view to determining appropriate steps after the Closing for the benefit of its creditors, Based on discussions with A&B and Boughton, the Proposal Trustee understands that Feronia has yet to determine the method of distribution regarding the Residual Funds, if any, after the Closing. The options include Feronia pursuing a proposal to creditors pending its further evaluation of factors such as the availability of the Residual Funds and potential benefits in preserving the corporate entity. The Proposal Trustee has had preliminary discussions with the Company and its Canadian counsel regarding the potential structure of a proposal if such is determined to be appropriate in the future

Court officer report · 2 October 2020