REG - Yooma Wellness Inc. - Sale of Vitality CBD

Yooma WellnessAnnouncement

02/10/2023 07:00

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RNS Number : 2683O  Yooma Wellness Inc.  02 October 2023

02 October 2023

Yooma Wellness Inc.

("Yooma" or the "Company" or the "Group")

 

Sale of Vitality CBD

 

Yooma Wellness Inc. (CSE:YOOM; AQSE:YOOM) announces that its wholly-owned
subsidiary Yooma Europe Limited ("Yooma Europe") has completed the sale of
Birmingham-based Vitality CBD Limited ("Vitality"), a UK-focused CBD company,
for a total consideration of US$2.0 million (the "Disposal") to Psilobrain
Therapeutics Inc. ("Psilobrain"). Psilobrain is a private Canadian biotech
company that uses the latest in psychedelic medicine to design products that
facilitate evidence-based healing & wellness. Further details regarding
Psilobrain is available at www.psilobrain.com.

Details on the Disposal

The consideration payable by Psilobrain comprises US$1.0 million in cash (the
"Cash Consideration"), and US$1.0 million in new shares of Psilobrain (the
"Consideration Shares"). The Cash Consideration is to be paid to the Company
in three instalments, with US$350,000 paid on completion, US$300,000 to be
paid within 130 days of completion, and US$350,000 to be paid within 210 days
of completion. The shares of Vitality that were sold are subject to a charge
in favour of the Company and Yooma Europe to secure the payment and
performance of Psilobrain's obligations in respect of the Cash Consideration
instalments that come due after the completion date. The consideration payable
by Psilobrain is subject to customary adjustments, Vitality having been sold
on a debt-free, cash-free basis.

The Company expects that the Cash Consideration and Consideration Shares will
be administered and applied towards the satisfaction of ongoing operating
expenses and the settlement of the outstanding indebtedness and accrued
liabilities of Yooma Europe and the Company.

The Company has provided customary warranties and indemnities in relation to
the business and operations, assets, trading and financial affairs of Vitality
(with related tax covenant and warranties). The current senior management team
at Vitality have been retained by Psilobrain and will continue to operate the
business day-to-day as Psilobrain focuses on integration and expansion.

Cash and Liquidity Update

The Company has faced and is continuing to face significant financial and
operational challenges and liquidity constraints which have gradually
increased in severity over the last year.  With the completion of the
Disposal, the Company no longer has any material operating business lines or
revenue generating assets.  While the Company is continuing to consider all
available alternatives, as set out in greater detail in the Company's press
release dated February 9, 2023, there can be no assurance at this time that
the Company will be successful in addressing its liquidity constraints on a
timely basis or at all. If the Company is unable to secure additional sources
of liquidity, it is anticipated that the Company will have no alternative
other than to pursue a liquidation, winding-up or insolvency proceeding.

As a consequence of the challenges and liquidity constraints faced by the
Company, it has fallen out of compliance with its continuous disclosure
obligations and with a number of the rules and policies of the Canadian
Securities Exchange and the AQUIS Growth Market (the "Exchanges"). The Company
has been subject to a cease-trade order issued by the Ontario Securities
Commission since May 8, 2023, resulting from the Company's inability to file
its annual financial statements, management discussion and analysis and CEO
and CFO certifications for the year ended December 31, 2022, and its common
shares have also been suspended from trading on the Canadian Securities
Exchange and the AQUIS Growth Market since that date. Based on the Company's
current financial condition and the anticipated proceeds of the Disposal, the
Company no longer expects that it will be able to complete the steps necessary
to lift the cease trade order on a timely basis or at all, and notes that it
may be subject to delisting from or other remedies by one or both of the
Exchanges.

The Company intends to provide an update on the aforementioned challenges and
any anticipated plans or responses in due course.

- Ends -

 For further information, please contact:
 Yooma Wellness Inc.

 Jordan Greenberg, CEO

 jgreenberg@yooma.ca (mailto:jgreenberg@yooma.ca)

 AQSE Corporate Adviser:                            Tel: +44 (0) 20 7469 0930

 Peterhouse Capital Limited                         Tel: +44 (0) 7990 139 093

 Guy Miller / Mark Anwyl

 

 

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", "may", "expect",
"anticipate", "to be", "subject to", "continue to", "intend", "future",
"potential", "plan", "subject to", 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 Vitality's revenues
and margin, the financial, operational and liquidity challenges facing the
Company and its plan to address them, the Company's ability to take steps to
lift the cease trade order and suspension of trading of its shares on the
Exchanges, the potential for a delisting of the Company's shares from the
Exchanges, and the effect of the foregoing matters on the future of the
Company.

 

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; reliance on licenses; competition;
dependence on senior management and key personnel; general business risk and
liability; changes in laws, regulations and guidelines; compliance with laws;
unfavourable publicity or consumer perception; product liability; risks
related to intellectual property; product recalls; difficulties with
forecasts; management of growth; litigation; claims for indemnity under the
transaction documents for the Disposal; the availability of potential
solutions to the Company's financial, operating and liquidity challenges and
the Company's ability to implement those solutions; 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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