REG - Yooma Wellness Inc. - Operational Update

Yooma WellnessAnnouncement

10/02/2023 07:00

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RNS Number : 5144P  Yooma Wellness Inc.  10 February 2023

     10 February 2023

 

Yooma Wellness Inc.

('Yooma' or the 'Company' or the 'Group')

 

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.

 

About Yooma

 

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) .

 

The directors of the Company accept responsibility for the contents of this
announcement.

 For further information, please contact:

 Yooma Wellness Inc.                        Tel: + 1 512 823 1678

 Jordan Greenberg, CEO                      jgreenberg@yooma.ca (mailto:jgreenberg@yooma.ca)

 AQSE Corporate Adviser:

 Peterhouse Capital Limited                 Tel: +44 (0) 20 7469 0930

 Guy Miller / Mark Anwyl                    Tel: +44 (0) 7990 139 093

 

Notice regarding Forward Looking Statements

 

All information included in this press release, including any information as
to future financial or operating performance and other statements of Yooma
that express management's expectations or estimates of future performance or
activities, other than statements of historical fact, constitute
forward-looking information or forward-looking statements (collectively,
"forward-looking statements") within the meaning of applicable securities laws
and are based on expectations, estimates and projections as of the date
hereof. Forward-looking statements are included for the purpose of providing
information about management's current expectations and plans relating to the
future. Wherever possible, words such as "will", "intend", "future", "plan",
"potential", "result in", "continuing", "ongoing", "increasing", "may", or the
negative of these words or other variations thereof, have been used to
identify such forward-looking information. Specific forward-looking statements
include, without limitation, all disclosure regarding future results of
operations, economic conditions and anticipated courses of action, including
statements about the consummation of the Settlement and the alternatives that
are being considered and may be pursued in connection with the Company's
ongoing reorganization.

 

There are many risks and uncertainties that may affect forward-looking
statements including, among others, regulatory risk in each jurisdiction in
which Yooma does or intends to operate; the uncertainties, effects of and
responses to the COVID-19 pandemic; reliance on licenses; competition;
dependence on senior management and key personnel; general business risk and
liability; regulation of the CBD industry; changes in laws, regulations and
guidelines; compliance with laws; limited operating history; unfavourable
publicity or consumer perception; product liability, risks related to
intellectual property; product recalls; difficulties with forecasts;
management of growth; litigation; the requirement for increasingly innovative
product solutions and service offerings; trends in customer growth; the
availability and sufficiency of financing to support existing and future
capital requirements; the availability of potential transaction partners to
acquire some or all of the Company's assets; changes in the value of the
Company's assets; the Company's ability to continue to operate as a going
concern; and other matters which are beyond the control of Yooma. Although the
forward-looking statements contained herein reflect management's current
beliefs and reasonable assumptions based upon information available to
management as of the date hereof, Yooma cannot be certain that actual results
will be consistent with such forward-looking information. Yooma cautions you
not to place undue reliance upon any such forward-looking statements. Yooma
disclaims any intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or otherwise,
except as required by applicable law. Nothing herein should be construed as
either an offer to sell or a solicitation to buy or sell securities of Yooma.

 

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