Rumbu Holdings Announces Annual and Special Meeting for Approval of Qualifying Transaction and Private Placement

Calgary, Alberta--(Newsfile Corp. - September 21, 2023) - Rumbu Holdings Ltd. (TSXV: RMB.P) ("Rumbu" or the "Company"), a capital pool company listed on the TSX Venture Exchange ("TSXV"), is pleased to announce that it has scheduled an Annual and Special Meeting of Shareholders to approve, amongst other matters, the Company's Qualifying Transaction (the "Transaction"). The Transaction is the proposed business combination of Rumbu and the Schrader Funeral Home Business located in Smithers, British Columbia (the "Funeral Business") which is owned by Daryl and Jamie Lockyer (the "Lockyers"), with the ongoing public company (the "Resulting Issuer") acquiring the Funeral Business. The Transaction will constitute as a Qualifying Transaction ("QT") pursuant to the rules of the TSXV and is subject to the final approval of the TSXV. If the Transaction is approved by the Shareholders of the Company and it is completed, the proposed Transaction will constitute the Company's QT as set forth in Policy 2.4 of the policies of the TSXV ("Exchange Policy 2.4"). Concurrent with the approval of the QT by its Shareholders, Rumbu plans to complete a non-brokered private placement of up to 1,000,000 Common Shares of Rumbu at a price of $0.20 per share with minimum subscription of $1,800 consisting of a minimum of nine (9) Public Shareholders, each holding a board lot representing 1,000 Common Shares.

About Rumbu Holdings and the Resulting Issuer

Rumbu is a reporting issuer in good standing in Alberta and British Columbia and its Common Shares (the "Rumbu Shares") are listed for trading on the TSX Venture Exchange (the "TSXV"). Currently, Rumbu currently has 6,500,000 Common Shares issued and outstanding, stock options outstanding to acquire 650,000 Common Shares at a price of $0.10 per share until December 10, 2032 (the "Stock Options") and Agent's Options outstanding to acquire 400,000 Common Shares at a price of $0.10 per share until December 10, 2027 (the "Agent's Options"). After completion of the QT, the Resulting Issuer will have 13,500,000 Common Shares issued and outstanding, if the Private Placement is fully subscribed.

About the Funeral Home Business of the Lockyers

The Lockyers jointly own a Funeral Home Business held by Schrader Funeral Home and Cremation Services Ltd. (the "Funeral Business") with a primary funeral home located in Smithers, British Columbia. The Funeral Business is a funeral business that provides all funeral and cremation related services to the public in its market area. The Lockyers believe that Rumbu will allow and provide a vehicle to them to expand their Funeral Business in Western Canada and particularly in Alberta, British Columbia and Saskatchewan. They also believe that Rumbu will enable them to access faster growth opportunities in this market place today where succession planning is booming. The Lockyers believe that based upon proven results and experience by them in the past that the partnership with Rumbu will fuel growth in the funeral home business and unlock additional potential value.

Non-Brokered Private Placement

Concurrent with the completion of the Qualifying Transaction, Rumbu will complete a non-brokered private placement (the "Private Placement") of up to 1,000,000 Common Shares of Rumbu at a price of $0.20 per share. The Private Placement is comprised of minimum proceeds of $1,800 consisting of a minimum of nine (9) Public Shareholders, each holding a board lot, representing 1,000 Common Shares. The Private Placement is not a Related Party Transaction as none of the Subscribers to the Private Placement will be Related Parties. All securities issued in the Private Placement will be subject to a statutory hold period of four (4) months from the date of issue. The proceeds from the Private Placement will be utilized for general working capital purposes and there will be no fees or commissions paid in connection with the Private Placement.

Proposed Qualifying Transaction

Pursuant to the terms of the Definitive Agreement between Rumbu and the Lockyers, Rumbu will acquire the Funeral Business in exchange for the issuance by Rumbu of 6,000,000 Common Shares of Rumbu (the "QT Shares") at a deemed issue price of $0.20 per Rumbu Share to the Lockyers for a total purchase price of $1,200,000 CDN. The outstanding management and director options of Rumbu and the Agent's Options, as the case may be, shall remain outstanding and shall be governed by their applicable Option Agreements. The QT Shares shall be distributed to the Lockyers pursuant to their instructions on the basis of 3,300,000 Common Shares to Daryl Lockyer and 2,700,000 Common Shares to Jamie D. Lockyer. At this point, Mr. Lockyer will directly own 3,800,000 Common Shares of the Resulting Issuer, as he was previously issued 500,000 Common Shares upon the formation of Rumbu. The Transaction may be considered a "Related Party Transaction" pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI-61-101") and Rumbu was required to hold a Special Meeting of the Shareholders of Rumbu (the "Shareholders") and obtain a majority of the minority shareholder approval, as Daryl Lockyer is a Director of Rumbu and the Transaction constitutes a Non-Arms Length Transaction pursuant to the policies of the TSXV. Mr. Lockyer is a Director and Shareholder of Rumbu holding 500,000 Common Shares and 125,000 Options of Rumbu. Therefore, the Transaction will be subject to shareholder approval and Rumbu specifically confirms that it will be seeking shareholder approval under the policies of the TSXV.

Additional Information and Description of Significant Closing Conditions

The closing of the Transaction will be subject to several conditions, including, but not limited to the following:

1. Approval by the Majority of the Minority Shareholders of Rumbu of the QT;

2. The receipt of all regulatory, corporate and third party approvals, including the approval of the TSXV and compliance with all applicable regulatory requirements and conditions necessary to complete the Transaction;

3. The completion of the Private Placement;

4. The maintenance of Rumbu's listing on the TSXV;

5. The confirmation of the representations and warranties of each party to the Definitive Agreement as set out in such Agreement;

6. The absence of any material adverse effect on the financial and operational condition of the business or the assets of each of the parties to the Definitive Agreement; and

7. The delivery of standard completion documentation including, but not limited to, legal opinions, officers' certificates and certificates of good standing or compliance of the parties and other mutual conditions precedent customary for a transaction such as the Transaction.

Directors, Officers and Other Insiders

On the closing of the Transaction, it is anticipated that the Board of Directors of the Resulting Issuer will consist of five Directors and Shelina Hirji will resign as a Director and be replaced by Jamie D. Lockyer. The following table sets out the names, relationships to the Company and summarizes the backgrounds of all persons who, at this time, are expected to be insiders of the Company upon closing of the QT.

Information Circular

In connection with the Transaction and pursuant to the requirements of the TSXV, Rumbu has completed and mailed on this date to the Shareholders an Information Circular for the holding of an Annual and Special Meeting to be held on Monday, October 16, 2023 at 10:00 a.m. and which Circular provides for the consideration and voting upon conventional annual meeting resolutions, the new Option Plan and the Proposed Transaction involving the purchase of all of the issued and outstanding securities of the Funeral Business from the Lockyers, which will constitute the QT of Rumbu. The Resulting Issuer intends to list as a Tier 2 Industrial Issuer in the Funeral Services sector, subject to meeting the requirements of the TSXV.

Sponsorship of Qualifying Transaction

Sponsorship of a QT of a capital pool company is required by the TSXV and the TSXV has granted Rumbu a waiver from sponsorship in connection with the QT.

Resumption of Trading

In accordance with the TSXV policies, Rumbu's Common Shares were halted from trading on May 1, 2023 and will remain so until the documentation required by the TSXV for the QT can be provided to the TSXV. Rumbu's Common Shares will remain halted until completion of the QT.

The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this Press Release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

For further information concerning this press release, please contact:

Ross O. Drysdale
President and Chief Executive Officer
Rumbu Holdings Ltd.
Telephone: (403) 585-3737
Email: ross@drysdalelaw.com

Cautionary and Forward-Looking Statements

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Transaction, any information release or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward- looking statements. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by the Company.

The Securities of Rumbu being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent, U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/181419