Calgary, Alberta--(Newsfile Corp. - April 11, 2022) - The Directors of Discover Wellness Solutions Inc. (CSE: WLNS) ("Discover Wellness", or the "Company") have made the decision to exit the cannabis industry. The Company faces a very challenging liquidity situation and has implemented several cost-savings actions including reducing the Company's staffing to one part-time position, deferred paying all staff effective February 1, 2022 and paying only crucial vendors. The Company's Directors have observed that the cannabis industry in Canada is a very challenging industry to generate profits. Over the last several years, many companies significantly reduced or shut down operations, have gone bankrupt or entered into bankruptcy protection to restructure their assets, liabilities and operations. These challenging industry conditions and industry changes are expected to continue in 2022 and the foreseeable future.
Given the challenges to Discover Wellness and the cannabis industry, the Company's Directors have approved an intention to exit the cannabis industry. The Company has entered into an exclusive sale listing agreement (the "Listing Agreement") with Jones Lang Lasalle Real Estate Services, Inc. to sell the Newell property. The Newell property will be marketed to purchasers as a licenced cannabis facility and as an industrial property without the cannabis licences. The timing of the sale and amount of proceeds from the sale of the Newell property is unknown at this time, however, net proceeds are expected to be adequate to settle the debt secured by the Newell property and pay a portion or all of the Company's other unsecured payables.
Mr. Cheung has resigned as interim-Chief Executive Officer and remains Chief Financial Officer. The Company does not expect to appoint a Chief Executive Officer during the restructuring period. Mr. Cheung had voluntary accepted half of his salary from June 1, 2021 to December 31, 2021 and voluntarily agreed to accrue his full salary since January 1, 2022. Mr. Cheung has agreed to stay with the Company to manage the transition out of the cannabis industry and analyze new opportunities for Discover Wellness and its shareholders.
Discover Wellness Solutions Inc.
Discover Wellness is a Canadian company licensed, through its subsidiary, to cultivate, produce, process and sell cannabis in various forms. The Company intends to exit the cannabis industry and seek new business opportunities.
Peter Cheung, Chief Financial Officer
Certain information set forth in this news release contains forward-looking statements or information ("forward-looking statements"). By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Company's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, operational risks, competition from other industry participants, stock market volatility, and the ability to access sufficient capital from internal and external sources. Although the Company believes that the expectations in its forward-looking statements are reasonable, its forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on the forward-looking statements, as no assurance can be provided as to future results, levels of activity or achievements. Risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our public disclosure documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, the Company does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.
Trading in the securities of WLNS should be considered highly speculative.
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