Choom Holdings Inc. — M&A Activity 2020

Jun 4, 2020

MATERIAL CHANGE REPORT

1. Name and Address of Company

Choom Holdings Inc. (“ Choom ” or the “ Company ”) #208 – 1525 West 8th Avenue Vancouver, BC V6J 1T5

2. Date of Material Change

June 2, 2020

3. News Release

The news release was disseminated through Globe Newsire on June 3, 2020 and filed on Choom’s profile on SEDAR.

4. Summary of Material Change

On June 2, 2020 Choom and Phivida Holdings Inc (“ Phivida ”) entered into a definative arrangement agreement (the “ Arrangement Agreement ”) pursuant to which Choom will acquire all of the issued and outstanding common shares of Phivida (the “ Phivida Shares ”) in exchange for common shares of Choom (the “ Choom Shares ”) in an arm’s length all-share transaction (the “ Transaction ”).

5. Full Description of Material Change

On June 2, 2020 Choom and Phivida entered into an Arrangement Agreement pursuant to which Choom will acquire all of the Phivida Shares in exchange for Choom Shares.

Under the terms of the Arrangement Agreement, Phivida shareholders will receive 0.72566 of a Choom Share in exchange for each Phivida Share held based on $0.082 per Phivida Share, representing a 10% premium to the 20-day volume weighted average price of the Phivida Shares ending June 2, 2020, and based on a 20-day volume weighted average price of the Choom Shares for the same period, being $0.113 per Choom Share.

Upon completion of the Transaction, existing Choom and Phivida shareholders will hold approximately 78% and 22% of the pro forma company, respectively, on a fully diluted basis.

Transaction Summary

The Transaction will be effected by way of a court-approved plan of arrangement completed under the Business Corporations Act (British Columbia) and will require approval by at least 66 2/3% of the votes cast by the shareholders of Phivida at a special meeting of Phivida shareholders. In addition to shareholder approval, the Transaction is subject to applicable regulatory, court and stock exchange approvals and certain other closing conditions customary in transactions of this nature.

The Arrangement Agreement has been unanimously approved by the boards of directors of Choom and Phivida, and the Phivida board has recommended that Phivida shareholders vote in favour of the Transaction. The board of directors of Phivida has obtained a fairness opinion from

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Haywood Securities Inc. that, as of the date of the opinion, and subject to the assumptions, limitations, and qualifications on which such opinion is based, the consideration to be received by Phivida's shareholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to the Phivida shareholders.

Directors and officers of Phivida as well as certain Phivida shareholders holding, in aggregate, approximately 31% of the issued and outstanding Phivida Shares, have entered into support and voting agreements pursuant to which they have agreed to vote their Phivida Shares in favour of the Transaction.

The Arrangement Agreement includes customary provisions including reciprocal non-solicitation provisions, subject to the right of each of Choom and Phivida to accept a superior proposal in certain circumstances, with both Choom and Phivida having a seven business day right to match any such superior proposal for the other party. The Arrangement Agreement also provides for reciprocal termination fees of $500,000 if the Transaction is terminated in certain specified circumstances, as well as a reciprocal payment of a $250,000 expense reimbursement fee if the Transaction is terminated in certain other specified circumstances.

Upon completion of the Transaction, Choom’s board of directors will be reconstituted to comprise three directors nominated by Choom and one director nominated by Phivida. A fifth director, mutually agreed upon by Phivida and Choom, will subsequently be added to the board.

Cautionary Note Regarding Forward-Looking Information

This material change report contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Choom, or its respective subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained in this material change report. Statements containing forward-looking information include, but are not limited to, statements relating to our expectations with respect to: the timing and outcome of the Transaction; the anticipated benefits of the Transaction to the parties and their respective securityholders; and the impact of the Transaction on the parties’ respective businesses on a combined basis, and the anticipated growth of the combined company and how the Transaction are expected to enhance the parties’ respective future business plans.

In respect of the forward-looking information in this material change report concerning the anticipated benefits and completion of the Transaction and the anticipated timing for completion of the Transaction, Choom has provided such statements and information in reliance on certain assumptions that they believe are reasonable at this time, including assumptions as to the time required to prepare and mail security holder meeting materials; the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court and shareholder approvals; the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Transaction; other expectations and assumptions concerning the Transaction. Although Choom believe’s that the assumptions and factors used in preparing the forward-looking information or forward-looking statements in this material change report are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all.

Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including; risks that the Arrangement will not close as anticipated or at all, risks that required shareholder, regulatory or other approvals will not be obtained or may be materially delayed, risks that the synergies expected as a result of the Transaction will not be realized as anticipated or at all, integration risks following completion of the Transaction, risks associated with general economic conditions, including adverse conditions

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resulting from the ongoing COVID-19 pandemic and the resulting government policies restricting mobility, assembly or contact with actual and potential customers and suppliers; future legislative and regulatory developments; inability to access sufficient capital on favourable terms or at all, and such other risks identified in Choom’s most recent management’s discussions and analysis filed with Canadian securities regulators and which are available on Choom’s issuer profile on SEDAR at www.sedar.com. Readers are cautioned that the foregoing list of factors is not exhaustive.

The forward-looking statements included in this material change report are made as of the date of this material change report and Choom does not undertake an obligation to publicly update such forward-looking information or forwardlooking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws. There can be no assurance that the Transaction will occur, or that it will occur on the terms and conditions contemplated in this material change report. The Transaction could be modified, restructured or terminated. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Completion of the Transaction is subject to a number of conditions, including but not limited to the approval of the Canadian Securities Exchange and the approval of shareholders of Phivida. The Transaction cannot close until the required shareholder, court and regulatory 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 a meeting of Phivida shareholders to consider the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon.

6. Reliance on subsection 7.1(2) of National Instrument 51-102

This report is not being filed on a confidential basis.

7. Omitted Information

No information has been omitted in respect of the material change.

8. Executive Officer

For further information, please contact: Terese Gieselman, CFO Telephone: 604-683-2509

9. Date of Report.

June 4, 2020

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