Wellfield Technologies Inc. Provides Update on Trading Reinstatement

Rhea-AI Summary

Wellfield Technologies Inc. (TSXV: WFLD) (OTC Pink: WFLDF) announces the reinstatement of trading for its common shares on the TSX Venture Exchange. This follows the revocation of a ceased trade order issued by the British Columbia Securities Commission on September 5, 2024, due to delayed financial statement filing. The company addressed its working capital deficiency through an equity financing facility and a share purchase agreement with Leonovus, resulting in a $20 million spin-out of the Tradewind business.

Wellfield has also settled $676,970 of debt through the issuance of 11,043,395 common shares. The company issued RSUs to settle legacy SAFT agreements and compensate executives. Additionally, Wellfield secured cryptocurrency-based loans, including a short-term credit line of 20-30 BTC and two minor related-party loans totaling 2.7 BTC and 11 ETH.

Positive

• Reinstatement of trading on TSX Venture Exchange
• $20 million valuation for Tradewind business spin-out
• Debt settlement of $676,970 through share issuance
• Access to equity financing facility to address working capital deficiency

Negative

• Working capital deficiency of $12,481,148 as of March 31, 2024
• Ceased trade order due to delayed financial statement filing
• Cancellation of $484,040 convertible debenture subscription due to non-payment
• Short-term cryptocurrency loans with interest obligations

Toronto, Ontario--(Newsfile Corp. - September 26, 2024) - Wellfield Technologies Inc. (TSXV: WFLD) (OTC Pink: WFLDF) (FSE: K8D) ("Wellfield" or the "Company") announces that the TSX Venture Exchange (the "Exchange") has accepted the Company's application for the reinstatement of trading in the Company's common shares (the "Shares").

On September 5, 2024, the British Columbia Securities Commission issued a ceased trade order ("CTO") due to the Company's failure to file its interim unaudited financial statements for the fiscal first quarter ended June 30, 2024, as required under National Instrument 51-102 - Continuous Disclosure Obligations, as previously disclosed on September 10, 2024. As a result of the CTO, trading of the Shares was suspended on the Exchange. The BCSC revoked its CTO effective September 9, 2024.

The Shares will be reinstated to trading on the Exchange two business days after issuance of Exchange bulletin.

Corporate Update

As disclosed in the Company's audited financial statements dated March 31, 2024, the Company had a working capital deficiency of $12,481,148. The Company has the ability to remedy such deficiency by drawing down on its equity financing facility with Alumina Partners (Ontario) Ltd. Further information regarding the equity financing facility is available in the Company's March 12, 2024 press release.

In addition, and further to the Company's September 6, 2024 press release, the Company entered into a share purchase agreement with Leonovus dated September 5, 2024 the result of which will be the spin out of the Tradewind business and a reverse takeover of Leonovus following which the shares of the resulting issuer will be traded on the Exchange. As consideration for the spin out, the Company will receive common shares of the resulting issuer equal to the value of the Tradewind business which is equal to $20 million. The Transaction is subject to Exchange acceptance and other customary closing conditions, including the completion of a concurrent financing by Leonovus.

As disclosed in the Company's press release dated August 21, 2024, the Company has decreased the aggregate indebtedness to be settled (the "Debt Settlement") through the issuance of common shares in the capital of the Company to $676,970 through the issuance of 11,043,395 common shares. Pursuant to the Debt Settlement, the Company issued 3,724,727 common shares on September 17, 2024 and 5,918,668 common shares on September 25, 2024 at $0.06 per common share in settlement for existing convertible debentures. As well, the Company issued 1,400,000 common shares on September 25, 2024 at $0.0714 per common share in settlement for accounts payable.

The Company's audited financial statements dated March 31, 2024 noted a receivable in the amount of $484,040. This amount was owed in relation to the subscription for certain convertible debentures as disclosed in the Company's August 4, 2023 press release. On closing of such transaction, the subscriber failed to deliver the subscription proceeds and therefore such convertible debentures were held in escrow pending delivery of the subscription funds. The subscriber ultimately did not advance the subscription funds. The parties entered into an agreement whereby such convertible debentures were cancelled and the amount owing by the subscriber and the debentures to be issued by the Company were both cancelled.

In connection with the Company's business combination transaction as disclosed in the Company's press release dated November 24, 2021, the Company agreed to convert certain legacy SAFT agreements issued by its predecessor Seamless Logic Software Limited. The Company issued 3,776,932 RSUs to related parties in exchange for the settlement of legacy SAFT liabilities, including 2,682,326 RSUs issued to Brian Lock, Chief Financial Officer and 1,094,606 RSUs issued to Chanan Steinhart, Director, which will vest one year from the grant date, being September 5, 2024. On closing of such transaction, certain insiders and consultants of the Company deferred their entitlement to common shares until September 5, 2024. Such parties agreed to receive equivalent numbers of RSUs pursuant to the Company's equity incentive plan. In settlement for compensation, the Company issued 520,000 RSUs to settle $86,667 to Levy Cohen, CEO and Director of the Company on September 5, 2023 through the Company's equity incentive plan, which will vest one year from the date of grant being September 5, 2024.

The Company was advanced a short-term credit line agreement in the form of cryptocurrency for a minimum of 20 BTC and a maximum of 30 BTC. The loan is subject to accrued interest of 2.5% per annum to be paid monthly, including a late payment interest of 1% per month if applicable. The total loan amount plus accrued interest is to be repaid 48 months following the January 1, 2022 effective date. In addition, the Company was advanced two minor loans from related parties in the form of cryptocurrency in the total amount of 2.7 BTC and 11 ETH. Pursuant to the loan agreements, the total loan amount shall be repaid plus accrued interest of 3% per annum in the same currency of the loan being either cryptocurrency or fiat no later than 12 months from the date of disbursement.

About Wellfield Technologies

Wellfield Technologies, Inc. (TSXV: WFLD) is a leading fintech company specializing in innovative solutions leveraging blockchain technology. Our platform Coinmama (web and Mobile app), provides seamless access to the cryptocurrency market for over 3.5 million registered users across 180 countries. We offer disruptive on-chain and web3 secure and friendly self-custody solutions through Coinmama. Additionally, Wellfield operates Tradewind Markets platform to digitize and trade real-world assets, including our flagship VaultChain™ Gold and VaultChain™ Silver products. Expanding our offerings for institutional clients, we present Brane Trust aiming to operate Alberta Canada's second qualified digital asset custodian.

Join Wellfield's digital community on LinkedIn and Twitter, and for more details, visit wellfield.io.

For further information contact:

Wellfield Technologies Inc.
Levy Cohen, CEO
levyc@wellfield.io

Ryan Graybill, Investor Relations
ryan.graybill@wellfield.io

About Leonovus

Leonovus is a secure data management software company. The Leonovus suite of data management tools offer customers a complete end-to-end data-centric solution. This solution can stand on its own or integrates with the organization's zero-trust strategy and architecture. It takes seamless advantage of the organization's existing storage infrastructure and network architecture, working on-premises in the cloud. It extends the data-centric controls across the entire architecture, including cloud resources. To learn more, please visit www.leonovus.com.

For further information contact:

Michael Gaffney, Chair and CEO
mgaffney@leonovus.com

Cautionary Notice on Forward-Looking Statements

This news release contains statements that constitute "forward-looking information" ("forward-looking information") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking information and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information. Forward-looking information in this news release includes statements regarding: the completion of the RTO; the completion of the Financing; the timeline to complete the RTO and the Financing; the anticipated benefits of the RTO; the conditions to be satisfied for completion of the RTO; completion of the Stock Consolidation; the name and business carried on by the Resulting Issuer; the reliance on a prospectus exemption for the issuance of the Leonovus Shares to Wellfield; obtaining a waiver from the TSXV sponsorship requirements; the timing and completion of the Tradewind platform upgrades; the terms of the ancillary agreements to the Definitive Agreement relating to the RTO, including the support agreement, non-competition agreement and investor rights agreement; and the approval of the TSXV of the transactions contemplated herein, which are based on Wellfield and Leonovus' current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking information necessarily involves known and unknown risks and uncertainties, which may cause Wellfield and Leonovus' actual performance and results in to differ materially from any projections of future performance or results expressed or implied by such forward-looking information. These risks and uncertainties include but are not limited to Wellfield and Leonovus satisfying the conditions for TSXV approval of the transactions herein; there is no assurance that the Financing will be completed or as to the actual gross proceeds to be raised in connection with the Financing; there is no assurance that Wellfield and Leonovus will obtain all requisite approvals for the RTO, including the approval of the shareholders of Leonovus, or the approval of the TSXV for the RTO (which may be conditional upon amendments to the terms of the RTO); following completion of the RTO, the Resulting Issuer may require additional financing from time to time in order to continue its operations, which may not be available when needed or on terms and conditions acceptable to the Resulting Issuer; unanticipated costs and expenses of the RTO or the Financing; the ability of Wellfield to conduct the Tradewind platform upgrades, in a timely manner, if at all; new laws or regulations could adversely affect the Resulting Issuer's business and results of operations; the stock markets have experienced volatility that often has been unrelated to the performance of companies, which fluctuations may adversely affect the price of the Resulting Issuer's securities, regardless of its operating performance; and general business, financial market, economic, competitive, political and social uncertainties. There can be no assurance that forward-looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated. Readers are cautioned that the foregoing list is not exhaustive, and readers are encouraged to review the disclosure documents accessible on Wellfield and Leonovus' respective SEDAR+ profile at www.sedarplus.ca. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Except as required by law, Wellfield and Leonovus disclaims any intention and assumes no obligation to update or revise any forward-looking information.

All information contained in this news release with respect to Wellfield and Leonovus was supplied by the parties, respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning such party.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) has approved nor disapproved the contents of this news release, nor do they accept responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/224715

FAQ

When will Wellfield Technologies (WFLDF) resume trading on the TSX Venture Exchange?

Wellfield Technologies' shares will be reinstated to trading on the TSX Venture Exchange two business days after the issuance of the Exchange bulletin, following the acceptance of the company's application for reinstatement.

What was the reason for the ceased trade order on Wellfield Technologies (WFLDF) stock?

The British Columbia Securities Commission issued a ceased trade order on September 5, 2024, due to Wellfield Technologies' failure to file its interim unaudited financial statements for the fiscal first quarter ended June 30, 2024, as required by National Instrument 51-102.

How much debt did Wellfield Technologies (WFLDF) settle through share issuance?

Wellfield Technologies settled $676,970 of debt through the issuance of 11,043,395 common shares at prices of $0.06 and $0.0714 per share.

What is the value of the Tradewind business spin-out for Wellfield Technologies (WFLDF)?

The Tradewind business spin-out is valued at $20 million, for which Wellfield Technologies will receive common shares of the resulting issuer equal to this value.