TORONTO, Aug. 15, 2024 (GLOBE NEWSWIRE) --

Lifeist Wellness Inc.
(TSXV: LFST) (FRANKFURT: M5B0) (OTCMKTS: LFSWF)

My Fellow Shareholders,

In response to inquiries from many of you, we wish to set forth the reasoning behind the strategic decision to divest Lifeist of CannMart Inc. ("CannMart") via a sale to Simply Solventless Concentrates Ltd. ("SSC") under the terms of the agreement set forth in our press release of June 25, 2024.

The decision to sell CannMart is the result of careful consideration by the Lifeist Board with input from its advisors and is aimed at securing the near- and long-term viability and success of Lifeist for the benefit of all shareholders.

As you all know, the regulatory framework under which Canadian public cannabis companies operate has proven to be prohibitively expensive for all public companies in the space in terms of ever being able to turn a profit. This experience has not been unique to Lifeist or CannMart: the vast majority of Canadian public cannabis companies, from the largest to the smallest, from generalists growing stadium-sized crops to specialists focused on extracts, distillates, beverages, and exotics, have been unable to turn a consistent profit. As a result, share prices across the entire sector have been in a long and grinding bear market for several years. The previously high-flying TSX Cannabis Index (), after peaking in early 2021, was delisted in April 2023 after losing over 90% of its value.

Success stories in the cannabis space have been few and far between, but SSC is clearly one of them. SSC have proven themselves capable of succeeding in an extremely challenging sector, returning profitable quarters repeatedly while growing their market. It is the considered position of the Board that the best chance of success for CannMart is as a part of SSC, and the best hope for Lifeist shareholders to enjoy capital appreciation on the value of the CannMart assets is similarly through their sale to SSC.

Lifeist shareholders stand to benefit from this in four key ways:

First and foremost, through the realization of direct value through the sale of CannMart to SSC:

• $500,000 payable upon the closing date.
• $1,500,000 plus applicable interest in a VTB loan, subject to adjustments as set forth in the share purchase agreement.
• $500,000 satisfied by the issuance of units, comprised of one common share and one-half purchase warrant to purchase one common share of SSC.
• SSC shall pay Lifeist 100% of the net revenue generated by the sale of 50% of existing inventory (presently estimated at $1,000,000 value), separate and in addition to any other fees.
• An earnout bonus of 20% of any revenue above $3,000,000 per quarter over the first 12 months.
  

Second, through the divestiture of the consistent loss leader that CannMart has been and would otherwise continue to be for Lifeist under the presently applicable Canadian public cannabis company regulatory framework. This will remove the continued negative cash flow that the cannabis business has cost shareholders and give Lifeist its best chance at demonstrating positive cash flow.

Third, through the opportunity for capital appreciation via the common shares and warrants that Lifeist will hold in SSC after the sale has been completed. It is worth noting that SSC shares have dramatically outperformed the sector as well as the broader market, rising nearly 50% just since the proposed CannMart transaction was announced on June 25th.

Fourth, through the concentration of all resources on driving forward the success of Mikra Cellular Sciences, with no distractions in other sectors and ventures and substantially reduced costs as a result of that renewed singular focus.

We are more confident than ever in Lifeist's roadmap to future cash flow positivity and profitability. The combination of this divestiture and several critical initiatives already underway at Mikra hold great promise for the realization of shareholder value in the near- and intermediate-term, and this proposed sale of CannMart is the key to opening the door to that future.

We sincerely hope that shareholders will vote (or change their vote) in favor of the proposed sale, and thus be positioned to benefit from its completion, and the survival and growth of your company. Shareholders are encouraged to vote their shares NOW by one of the methods described in the Circular, available under Lifeist's profile on SEDAR+ () and on the Company's website at:

On behalf of the Board of Directors,

/s/ "Branden Spikes"

Branden Spikes, Chairman of the Board

About Lifeist Wellness Inc.

Sitting at the forefront of the post-pandemic wellness revolution, Lifeist leverages advancements in science and technology to build breakthrough companies that transform human wellness. Portfolio business units include: Mikra, a biosciences and consumer wellness company developing and selling innovative products for cellular health; and CannMart, which operates a B2B wholesale distribution business facilitating recreational cannabis sales to Canadian provincial government control boards including for CannMart Labs, a BHO extraction facility producing high margin cannabis 2.0 products.

Information on Lifeist and its businesses can be accessed through the links below:

Contact:
Meni Morim
CEO
Lifeist Wellness Inc.
Ph: 647-362-0390
Email: ir@lifeist.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release or has in any way approved or disapproved of the contents of this press release.

Forward-Looking Information

This letter to shareholders contains "forward-looking information" within the meaning of applicable securities laws. All statements contained herein that are not historical in nature contain forward-looking information. Forward-looking information can be identified by words or phrases such as "may", "expect", "likely", "should", "would", "plan", "anticipate", "intend", "potential", "proposed", "estimate", "believe" or the negative of these terms, or other similar words, expressions and grammatical variations thereof, or statements that certain events or conditions "may" or "will" happen.

The forward-looking information contained herein, including, without limitation, statements related to the expected benefits from the CannMart divestiture, including future cash flow positivity and profitability are made as of the date of this letter to shareholders and are based on assumptions management believed to be reasonable at the time such statements were made, including without limitation, Lifeist's ability to obtain all required approvals and fulfill all conditions required under the share purchase agreement with SCC and to close the sale of CannMart to SSC in a timely manner, its expectation that the nutraceutical market will continue to develop, expand and grow as currently anticipated, the nutraceutical market will continue to be a multi-billion dollar high-margin market, Mikra's introduction of new products and brands will generate additional revenue, expectations that Mikra's existing products as well as other new nutraceutical products to be developed by Mikra will gain market acceptance and generate meaningful revenue, as well as other considerations that are believed to be appropriate in the circumstances. While we consider these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct. By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct, and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the forward-looking information in this news release. Such factors include, without limitation:the inability of the Company to obtain all required shareholder and/or regulatory approvals to complete the transaction with SSC and to fulfill all closing conditions set out in the share purchase agreement with SSC. the Company's inability to develop successful marketing campaigns for Mikra's products, the risk that the expected demand for nutraceutical products in general and those of Mikra in particular does not develop as anticipated and risks relating to the Company's ability to execute its business strategy and the benefits realizable therefrom. Additional risk factors can also be found in the Company's current MD&A filed under the Company's SEDAR profile at . Readers are cautioned not to put undue reliance on forward-looking information. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law. Forward-looking statements contained in this letter to shareholders are expressly qualified by this cautionary statement.

Source: Lifeist Wellness Inc.