VANCOUVER, April 3, 2020 /PRNewswire/ - 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 Choom has completed the acquisition of the retail cannabis store (the "Niagara Store") in Niagara Falls, Ontario (the "Transaction"). The acquisition of this store furthers the Company's continued nationwide rollout. The Niagara Store has had a robust and stable operating history* with unaudited gross sales of approximately $7 million for the 9.5 months since opening on June 15, 2019.
"Choom is excited to add the Niagara store to its corporately owned portfolio of stores, with its large and loyal customer base and top-tier financial performance," said Corey Gillon, Choom's CEO. "Over the coming year, we look forward to growing our presence in the Ontario market and reaching the maximum of 10 stores per operator as quickly as possible," Mr. Gillon added. Through this transaction, Choom has made its first move toward significantly expanding its retail network in Canada's most populous province.
Consideration for the acquisition, includes cash of $2,000,000 (of which $1.45M will be funded from the cumulative operating cash flow from the Niagara Store) and $2,000,000 equivalent issued to the vendor in common shares of Choom. The Transaction was completed with the consent of the Alcohol and Gaming Commission of Ontario (AGCO) following the expiry of certain restrictions on change of control established under the rules applicable to the first cannabis retail lottery conducted by the AGCO on January 11, 2019. In connection with the Transaction, the Company acquired all of the issued and outstanding shares of 2688412 Ontario Ltd. that was wholly owned by the holder (the "Vendor") of a cannabis retail operator licence issued by the AGCO in the first lottery.
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.
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, Forward-Looking Financial Information and Non-IFRS Measures*
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.
This news release also contains certain future oriented financial information and financial outlooks (collectively, "FOFI") within the meaning of applicable Canadian securities laws. The FOFI has been prepared by management of the Company for inclusion as at March 30, 2020, solely to demonstrate the underlying performance of the Niagara Store and the benefits of the Transaction to shareholders. Management of the Company believes that the FOFI has been prepared on a reasonable basis, reflecting best estimates and judgments, and based on a number of assumptions management believes are reasonable as well as information provided to the Company by the Vendor. However, because this information is highly subjective and subject to numerous risks, including the risks discussed above, it should not be relied on as necessarily indicative of future results. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the FOFI prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although management of the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended.
The FOFI included in this news release may be based on certain non-International Financial Reporting Standards ("IFRS") financial measures, which may include EBITDA, EBIT before special items, and EBITDA before special items, adjusted net income, adjusted earnings per share and free cash flow. These non-IFRS measures do not have standardized meanings prescribed by IFRS, and therefore, others using these terms may define them differently. The Company has used or included such non-IFRS measures solely to provide investors with added insight into the underlying performance of the Niagara Store and the proposed Transaction, and readers are cautioned that the non-IFRS measures included herein (or incorporated in the FOFI included herein) may not be appropriate for any other purpose. These non-IFRS measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
The forward‐looking statements and FOFI contained herein are current as of the date of this news release. Except as required by law, the Company does not have any obligation to advise any person if it becomes aware of any inaccuracy in or omission from any forward-looking statement or FOFI, nor does it intend, or assume any obligation, to update or revise these forward-looking statements or FOFI to reflect new events or circumstances. Any and all forward-looking statements and FOFI included in this news release are expressly qualified by this cautionary statement, and except as otherwise indicated, are made as of the date of this news release.
SOURCE Choom Holdings Inc.