Choom Completes Convertible Debenture Unit Private Placement

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Choom Holdings Inc.

VANCOUVER – 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 further to its news release of December 20, 2019, it has completed a non-brokered private placement of debenture units at $250,000 per unit for gross proceeds of $4,100,000 million (the “Offering”).

The debentures will mature on December 23, 2021, 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% 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 also issued 1,666,666 transferable common share purchase warrants per debenture unit, 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.

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The net proceeds of the offering will be used for store buildouts, general working capital purposes and inventory purchases. The Debentures, 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, ending on April 24, 2020.

Two related parties of the Company participated in the Offering and acquired debenture units for $2.1 million. Such participation constituted a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The issuance to the Related Parties is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 in 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, exceeded 25% of the Company’s market capitalization.

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.


About 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.

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