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VANCOUVER, Dec. 20, 2019 /CNW/ - Choom Holdings Inc. (the "Company" or "Choom") (CSE: CHOO; OTCQB: CHOOF), an emerging adult use cannabis company that has secured one of the largest national retail networks in Canada, is pleased to announce that will undertake a non-brokered private placement of secured convertible debentures (the "Debentures") for gross proceeds of $4,100,000 million (the "Offering").

The Debentures will mature two years after the issue date, subject to the rights of a holder to extend the term up to a further 12 months, and will accrue interest at the rate of 10.0% per annum, payable semi-annually. At a holder's option, the Debentures may be converted into common shares of Choom at a conversion price of $0.15. Under the Offering, the Company will also issue common share purchase warrants, each such warrant to be exercisable to acquire one Common Share for a four-year period at an exercise price of $0.20 per share.

The Offering is subject to customary closing conditions including, but not limited to, the receipt of any necessary stock exchange approvals. The net proceeds of the Offering will be used for store buildouts, general working capital purposes and inventory purchases. The Debenture warrants and any shares issued either on conversion or exercise will be subject to a four month hold period under applicable provincial securities laws in Canada.

One or more related parties of the Company may acquire Debenture Units under the Offering. Such participation will be considered to be "related party transactions" within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company intends to rely on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101in respect of related party participation in the Offering as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves interested parties, is expected to exceed 25% of the Company's market capitalization. In the event of participation of any related parties of a director of the Company, such director discloses such participation and shall abstain from voting on the approval by the Board. A material change report in relation to this transaction will be filed less than 21 days before closing as the Company intends to complete this transaction as soon as is commercially feasible.

The Debentures will be secured by certain property of the Company, will rank pari passu in right of payment of principal and interest, and may be redeemed by the Company on certain conditions.  The maximum amount of principal secured may be increased with the consent of the Debenture holders representing the majority of the outstanding principal.

The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements.  This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

Say hello to Choom™
Choom™ is an emerging adult use cannabis company whose mission is to establish one of the largest retail networks in Canada. The Choom brand is inspired by Hawaii's "Choom Gang"—a group of buddies in Honolulu during the 1970's who loved to smoke weed—or as the locals called it, "Choom". Evoking the spirit of the original Choom Gang, our brand caters to the Canadian adult use market with the ethos of 'cultivating good times'. Choom™ is focused on delivering an elevated customer experience through our curated retail environments, offering a diversity of brands for Canadians across a national retail network. 

"Corey Gillon"
CEO

Cautionary Statement:

NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATIONS SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Forward-looking information            
This news release contains forward-looking information relating to the Company's proposed activities and other statements that are not historical facts. Forward-looking information relates to management's future outlook and anticipated events or results, and include statements or information regarding the closing of the Offering, the use of proceeds, and future plans or prospects of the Company. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. These factors include risks and uncertainties associated with or arising as a result of delays in obtaining or an inability to obtain required regulatory approvals, access to sufficient quantities of cannabis, the results of diligence investigations, the actions of third parties, the results of negotiations with third parties, developments in the cannabis sector, the ability to access sufficient capital from internal and external sources, reliance on key personnel, regulatory risks and delays and other risks and uncertainties discussed in the management discussion and analysis section of the Company's interim and most recent annual financial statement or other reports and filings, including those made with the CSE and applicable Canadian securities regulators. There can be no assurance that such forward looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information.

SOURCE Choom Holdings Inc.

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