Phivida Holdings Inc. Provides $500,000 Secured Bridge Loan to Choom Holdings Inc.
Vancouver, British Columbia and San Diego, California--(Newsfile Corp. - July 23, 2020) - Phivida Holdings Inc. (CSE: VIDA) ("Phivida") has extended a $500,000 bridge loan (the "Bridge Loan") to Choom Holdings Inc. ("Choom"). As previously announced, on June 2, 2020, Choom and Phivida entered into an arrangement agreement pursuant to which Choom agreed to acquire Phivida (the "Arrangement Agreement").
The Bridge Loan is evidenced by a convertible secured promissory note (the "Promissory Note") bearing interest at a rate of 15% per annum on the outstanding principal sum. The aggregate principal amount of the Bridge Loan and accrued and unpaid interest thereon is, in certain circumstances, convertible into common shares of Choom (the "Choom Shares") at a conversion price of $0.115 per share. Certain of Choom's subsidiaries have also agreed to guarantee Choom's obligations under the Bridge Loan. Pursuant to the terms of the Promissory Note, Choom and the guarantor subsidiaries thereof have granted Phivida a third-ranking security interest over all of their respective present and after-acquired property. The security interest is governed in accordance with the terms of a security agreement between Choom and the guarantors and Phivida, dated July 23, 2020.
In connection with the Bridge Loan, Choom also granted Phivida 4,347,826 non-transferable common share purchase warrants(the "Warrants"). Each Warrant entitles Phivida to acquire one Choom Share at an exercise price of $0.115 per share for a period of three years from the date of issuance (subject to automatic earlier expiry immediately prior to the consummation of the transactions contemplated by the Arrangement Agreement). The Warrants are only exercisable from and after the termination of the Arrangement Agreement for any reason other than as a result of a breach of the Arrangement Agreement by Phivida.
The parties also amended the Arrangement Agreement in order to provide that the closing condition in favour of Choom that Phivida have not less than $2,000,000 in working capital surplus be reduced to $1,500,000, on account of the funds advanced to Choom under the Bridge Loan.
Phivida is a CBD-centric holding group with assets in technology, publishing and consumer-packaged goods (CPG). Headquartered in Vancouver BC, with operations in San Diego, Toronto and Belgrade, Phivida produces a line of CBD-infused foods and beverages (OKI), and CBD topicals and supplements (VIDA+), in addition to managing and operating two CBD-related, online retail marketplaces under the brand names Bloomgroove and Wikala. Greencamp is Phivida's online publication and knowledge center on CBD sector news. For more information, visit www.phivida.com.
David Moon, Interim CEO, Telephone: 1 (844) 744-6646 x2, Email IR@Phivida.com.
Disclaimer/Cautionary Note Regarding Forward-Looking Information:
This news release contains forward-looking information within the meaning of applicable securities laws. Forward-looking information in this news release relate to future events or future performance. Any forward-looking information in this news release are based on assumptions believed by management to be reasonable, including assumptions regarding the expectations around completing the transactions contemplated by the Arrangement Agreement, among other things. Since forward-looking information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated or implied due to a number of factors and risks, including but not limited to the following: counterparty risk and credit risk. Accordingly, readers are cautioned not to place undue reliance on forward-looking information. The forward-looking information contained in this news release are made as of the date of this news release and no undertaking is given to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the policies of the Canadian Securities Exchange. The forward-looking information contained in this news release are expressly qualified in their entirety by this cautionary statement.
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