REG - Seed Innovations Ltd - Investee Company Update: Yooma Wellness Inc.

Seed InnovationsAnnouncement

13/02/2023 15:00

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RNS Number : 7630P  Seed Innovations Limited  13 February 2023

13 February 2023

 

SEED Innovations Limited

("SEED" or the "Company")

Investee Company Update: Yooma Wellness Inc.

SEED Innovations Ltd, the AIM-quoted company investing in fast-growing and
industry-leading businesses with a focus on the medical cannabis, health, and
wellness space, notes the announcement of 10 February 2023 released by its
portfolio company, Yooma Wellness Inc. ("Yooma").

As at 30 September 2022, being the last reported Net Asset Value ("NAV") of
SEED, the Company carried Yooma at a valuation of just £43,000 representing
0.26% of the SEED portfolio's NAV.

SEED has a holding of 4,427,609 ordinary shares in Yooma representing
approximately 4.4% of Yooma's issued share capital.

Ed McDermott, CEO commented 'Whilst we are clearly disappointed with this news
from Yooma, over time this has become an immaterial holding for the Company,
being 0.26% of NAV, and therefore its impact is minimal.'

YOOMA ANNOUNCES OPERATIONAL UPDATE

Yooma announces an exit from Japan and potential sale of assets and wind-down
of operations

Yooma Wellness Inc. (CSE: YOOM, AQSE:YOOM), a wellness platform that markets
a portfolio of CBD and wellness brands,today provides a corporate update.

The Company is engaged in an ongoing operational restructuring aimed at
addressing depressed market conditions in the CBD wellness industry, the
Company's increasing liquidity constraints and lack of working capital. The
initial phases of this restructuring involved the wind-down of the Company's
operations in the United States last year, and has gradually expanded to
include the Company's operations in other unprofitable markets. In parallel
with these restructuring initiatives, the Company has also been engaged in a
continuing review of strategic alternatives for the Company, however, that
process has to date been unsuccessful in identifying a path forward.

In connection with its restructuring efforts, the Company announced today that
it has reached a settlement (the "Settlement") with the vendors ("Vendors") of
Vertex Co., Ltd. ("Vertex"), which will discharge approximately US$12,000,000
in debts and other obligations of the Company and result in the Company's exit
from the Japan market. The Company acquired Vertex on October 1, 2021 for an
aggregate purchase price of US$12,000,000 (the "Transaction"), consisting of
US$2,500,000 paid in cash on closing, and deferred payments of US$6,500,000
due April 30, 2023 and US$3,000,000 due April 30, 2024. Under the terms of the
Transaction agreements, the Company also agreed to refinance up to
US$2,000,000 of Vertex debt, to fund certain working capital requirements, and
to pay bonuses based on Vertex's performance in 2022, 2023 and 2024.  As
security for certain of its obligations to the Vendors in connection with the
Transaction, the Company granted the Vendors a security interest over the
securities of Vertex.

Under the terms of the Settlement, the Company has agreed to cooperate with
the Vendors in the enforcement of their security interest, with the result
that ownership of Vertex will return to the Vendors, and to assign to the
Vendors approximately US$1,200,000 in receivables owing to the Company by
Vertex. The Company, Vertex and the Vendors will also exchange mutual
releases, which will result in the discharge of approximately US$12,000,000 in
debts, obligations, interest payments and other liabilities owing by the
Company in connection with the Transaction, and will free the Company from any
future commitments with respect to Vertex financing, performance bonuses or
working capital requirements.

The Company also announced today that its wholly-owned indirect subsidiary
Greenleaf SAS (France) is not able to meet its current liabilities with
available assets and is therefore in a state of suspension of payments under
local law.  As a result, Greenleaf has requested the opening of a legal
redress procedure under Article L.631-1 of the National Commercial Code of
France.

With the wind-down of the Company's operations in the United States in 2022
and the transfer of Vertex to the Vendors under the Settlement, the Company's
only material operating business lines are now in Europe, operating primarily
under its wholly-owned subsidiary, Vitality CBD. The Company is continuing to
consider all available options to address its liquidity constraints and
satisfy its current and future obligations, which may include raising
short-term debt or equity financing, a sale of Company assets, including its
Vitality CBD business, an orderly wind-down of some or all of the members of
the Company's corporate group or, if and to the extent applicable, insolvency
proceedings for some or all of the members of the Company's corporate group.
There can be no assurance at this time which alternatives, if any, will be
pursued by the Company and whether the Company will be successful in
addressing its liquidity constraints.

 

 

 

- Ends -

For further information on the Company please visit:  www.seedinnovations.com
(http://www.seedinnovations.com/)   or contact:

 

 Ed McDermott       SEED Innovations Ltd         E: info@seedinnovations.co

 Lance de Jersey
 James Biddle       Beaumont Cornish Limited,    T: (0)20 7628 3396

 Roland Cornish     Nomad
 Isabella Pierre    Shard Capital Partners LLP   T: (0)20 7186 9927

 Damon Heath        Broker
 Catherine Leftley  St Brides Partners Ltd,      E: info@stbridespartners.co.uk

 Isabelle Morris    Financial PR

 Max Bennett

 

 

Notes

Seed Innovations Ltd

SEED Innovations is an AIM quoted investment company focused primarily on
disruptive high growth life sciences and technology businesses particularly
within the medical cannabis arena. The Company's strategy is to identify
early-stage opportunities that have an upcoming investment catalyst and grow
its portfolio in terms of value whilst limiting the number of investee
companies to a level where relevant time can be devoted to each.

Yooma Wellness Inc.

Yooma's is engaged in the marketing and sale of wellness products including
hemp seed oil and hemp-derived and cannabinoid (CBD) ingredients. The company
leverages strategically curated sales channels and ecommerce networks to
deliver a diverse mix of wellness products through operating subsidiaries in
the United Kingdom and France. Learn more at www.yooma.ca
(http://www.yooma.ca) .

 

 

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