Bluma Wellness Announces Proposed Warrant Repricing And Redemption Of Debentures

Bluma Wellness Inc. (the " Company") (CSE: BWEL.
Author:
Publish date:

Bluma Wellness Inc. (the " Company") (CSE: BWEL.U) (OTCQX:BMWLF) announces today that it proposes to amend the exercise price of up to 45,869,475 common share purchase warrants of the Company (collectively, the " Warrants") to a price of US$1.01 per common share in the capital of the Company (each a " Common Share"), representing the closing price of the Common Shares on the Canadian Securities Exchange (the " CSE") on January 14, 2021 (the " Repricing"). The Warrants were issued on various dates between June 26, 2020 and October 30, 2020, in connection with the conversion of the outstanding principal and accrued interest on the then issued and outstanding 12.5% unsecured convertible debentures of the Company (" 12.5% Debentures") in accordance with their terms. The Warrants are currently exercisable for a period of two years from the date of issuance into Common Shares at an exercise price per Common Share currently equal to the greater of: (i) US$1.00; (ii) the volume weighted average price at which the Common Shares have traded on the CSE during the five trading days ending on the date of exercise; and (iii) 110% of the price at which the 12.5% Debentures were converted. No other terms of the Warrants will be amended other than for fixing their exercise price at US$1.01. Completion of the Repricing is subject to approval of the CSE and the unanimous approval of the holders of the Warrants.

Redemption of Debentures

The Company also announces that it proposes to redeem the US$2,920,000 remaining outstanding principal amount of the Company's 6.0% unsecured debentures (the " 6% Debentures"), together with all accrued and unpaid interest thereon, and to satisfy such amounts in Common Shares at a deemed price of US$0.81 per Common Share (the " Debenture Redemption"), representing the closing price of the Common Shares on the CSE on January 14, 2021, less a 20% discount as permitted under applicable CSE policies. Completion of the Debenture Redemption is subject to the Company entering into debenture settlement agreements with the holders of the 6% Debentures on terms satisfactory to the Company and such holders. Any Common Shares issued pursuant to the Debenture Redemption will be subject to a statutory hold period which will expire four months and one day from the date of issuance in accordance with applicable securities laws.

Additional Information

The Company's securities have not been and will not be registered under the U.S. Securities Act and may not be offered or sold in the United States or to a U.S. Person absent registration or an applicable exemption from the registration requirement. 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 jurisdiction in which such offer, solicitation or sale would be unlawful.

Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable Canadian securities laws including information relating to the proposed Repricing, the receipt of the approval of the CSE and the holders of the Warrants for the Repricing, the proposed Debenture Redemption, the entry by the Company into debenture settlement agreements with the holders of 6% Debentures and the issuance of the Common Shares pursuant to such agreements. Although the Company believes, in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things: risks relating to cannabis being illegal under US federal law and risks of US federal enforcement actions related to cannabis activities; the Company's ability to comply with all applicable governmental regulations in a highly regulated business; negative changes in the political environment or in the regulation of medical cannabis in the state of Florida; the risk of any disruptions to the Company's business and operations as a result of the COVID-19 pandemic; negative shifts in public opinion and perception of the cannabis industry and cannabis consumption; increasing competition in the industry; risks of product liability and other safety-related liability as a result of usage of the Company's cannabis products; the Company's limited operating history with no assurance of profitability; the ability of the Company to access future financing if needed or on terms acceptable to the Company; the risk of defaulting on its existing debt; risk of shortages of or price increases in key inputs, suppliers and skilled labor; the risks inherent in running agricultural operations such as pests and crop failure; loss of licenses; reliance on key personnel; cybersecurity risks; constraints on marketing products; fraudulent activity by employees, contractors and consultants; tax and insurance related risks and risk of litigation.

The forward-looking information in this press release are made as of the date of this release. The Company does not undertake any obligation to update forward-looking information except as required by applicable securities laws.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210115005292/en/