Seed Innov Regulatory News (SEED)

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 or contact:

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.