/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S.
NEWSWIRE SERVICES/
VANCOUVER and NAPANEE, ON, March 19,
2018 /CNW/ - Choom™ (CSE: CHOO; OTCQB: CHOOF) (the
"Company" or "Choom") and ABcann Global Corporation ("ABcann")
(TSXV: ABCN, OTCQB: ABCCF) are pleased to announce that the Company
has completed a financing of subscription receipts (each, a
"Subscription Receipt") for gross proceeds of $7.0 million including a $4.0 million lead order from ABcann.
Strategic Subscription Receipt Financing - $7.0
million
Further to Choom's news release of March
19, 2018, the Company announces that it has completed a
strategic private placement of Subscription Receipts concurrent
with the execution of a definitive agreement relating to the
acquisition of International Tungsten Inc. ("ITI"). In total
11,666,991 Subscription Receipts were issued for gross proceeds of
$7.0 million (the "Offering"),
including a strategic $4.0 million
lead order from ABcann.
"ABcann remains committed to becoming a global leader in the
cannabis sector. With our strategic investment in Choom, we are
signaling a strong move into the recreational market with one of
the premium recreation brands in Canada," stated Barry
Fishman, CEO of ABcann. "With our strong cash position of
approximately $135,000,000, ABcann
intends to pursue other accretive opportunities to diversify our
industry presence. We look forward to working with and
assisting the Choom team with the supply of our premium grown
products."
Supply Agreement
Additionally, Choom™ has entered into a binding agreement (the
"Supply Agreement") with ABcann whereby ABcann, one of Canada's premier growers, will supply Choom™
with premium cannabis products, subject to regulatory approval.
"The Supply Agreement will demonstrate our commitment to
becoming one of Canada's leading
retailers in the cannabis space. Working with ABcann will provide
us with a premium line of products, with a strong focus on quality,
in the roll-out of our retail store strategy, upon receipt of
applicable regulatory approvals," stated Chris Bogart, President and CEO of Choom™. "As
we expand our efforts to strengthen our retail platform and brand
position, a partnership with one of the market leaders in quality
and production will be of great value to our organization. The
investment and supply agreement with ABcann is a strong endorsement
of our strategy and a pivotal step in developing Choom™ as the
premium brand in Canada's
burgeoning recreational cannabis market."
Subscription Receipt - Unit Offering
The proceeds from the Offering are being held in escrow until
the completion of the acquisition of ITI (the "Transaction"). Upon
closing of the Transaction and satisfaction of the other escrow
release conditions, each Subscription Receipt will be automatically
converted, for no additional consideration and without any further
action by the holder of such Subscription Receipt, into one unit of
the Company (each a "Unit"). If the escrow release conditions are
not satisfied by June 11, 2018, the
Subscription Receipts will be cancelled and the escrowed proceeds
from the Offering will be returned to the holders of the
Subscription Receipts pro rata. For further details with respect to
the Transaction, please see Choom's news release dated March 19, 2018, a copy of which is available
under Choom's profile on SEDAR at www.sedar.com.
Each Unit will consist of one common share of the Company (each,
a "Common Share") and one common share purchase warrant (each, a
"Warrant"). Each Warrant will entitle the holder thereof to
purchase one common share of the Company for a period of 18 months
from the date of issuance at a price of $0.90 per Common Share. In the event that,
following the conversion of the Subscription Receipts into Units,
the 10-day volume weighted average trading price of the Common
Shares on the Canadian Securities Exchange is above $1.35, the expiry date of the Warrants will be
accelerated to a date that is 30 days after the Company
disseminates a news release announcing the accelerated expiry
date.
The Subscription Receipts, and any Common Shares and Warrants
issued upon conversion thereof, will be subject to a hold period
expiring four months and one day after the closing of the Offering.
The proceeds from the Offering will be used to cover costs of the
Transaction, production facility improvements and for general
working capital purposes.
None of the securities issued in connection with the Offering
will be registered under the United States Securities Act of
1933, as amended (the "1933 Act"), and none of them may be
offered or sold in the United
States absent registration or an applicable exemption from
the registration requirements of the 1933 Act. This news release
shall not constitute an offer to sell or a solicitation of an offer
to buy nor shall there by any sale of the securities in any state
where such offer, solicitation, or sale would be unlawful.
SAY HELLO TO CHOOMTM
Choom™ was created for and inspired by the Choom Gang; a
group of buddies in Honolulu
during the 1970's who loved to smoke weed—or as the locals called
it, "Choom". Now, after four decades, Choom™ is
bringing the spirit of Hawaii to
Canada. We're planting our flag in
the rapidly growing legal cannabis industry in Canada with our own brand of high-grade
handcrafted herb. Choom™ will provide an amazing experience for
customers, and bring style, sophistication and fun to the cannabis
market through our Choom™ stores.
"Chris Bogart"
President & CEO
About ABcann:
ABcann holds production and sales licenses from Health Canada.
Its flagship facility in Napanee,
Ontario contains proprietary plant-growing
technology, centred on its specially designed,
environmentally-controlled growing chambers. This approach results
in the production of pharmaceutical-grade cannabis products. ABcann
is expanding its production capacity and pursuing partnership and
product development opportunities domestically, as well as in
select international markets, such as Germany, Australia and Israel.
"Barry Fishman"
CEO and Director
Cautionary Statement:
NEITHER OF THE TSX VENTURE EXCHANGE, THE CANADIAN SECURITIES
EXCHANGE NOR THEIR REGULATIONS SERVICES PROVIDERS, HAVE REVIEWED OR
ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS
RELEASE.
Forward-looking information
Certain statements in this release are forward-looking
statements, which reflect the expectations of management regarding
the proposed Transaction and Choom's or ABcann's future business
plans. Forward-looking statements consist of statements that are
not purely historical, including any statements regarding beliefs,
plans, expectations or intentions regarding the future. Forward
looking statements in this news release include statements relating
to the terms of the Transaction and the Offering; the expected
benefits of, and impact on, the cannabis industry; and other
statements regarding the business of Choom or ABcann. Such
statements are subject to risks and uncertainties that may cause
actual results, performance or developments to differ materially
from those contained in the statements, including the risk that the
CSE may not approve the Transaction, the Offering or the Supply
Agreement; that the Transaction, the Offering or the Supply
Agreement may not be completed for any other reason; or that
factors may occur which impede or prevent Choom's future business
and development plans. No assurance can be given that any of the
events anticipated by the forward-looking statements will occur or,
if they do occur, what benefits Choom or ABcann will obtain from
them. Readers are urged to consider these factors carefully in
evaluating the forward-looking statements contained in this news
release and are cautioned not to place undue reliance on such
forward-looking statements, which are qualified in their entirety
by these cautionary statements. These forward-looking statements
are made as of the date hereof and Choom and ABcann disclaim any
intent or obligation to update publicly any forward looking
statements, whether as a result of new information, future events
or results or otherwise, except as required by applicable
securities laws.
SOURCE Choom Holdings Inc.