RE:RE:RE:look at the buys coming in TORONTO, ONTARIO--(Marketwired - Jan. 24, 2018) - Newstrike Resources Ltd. (TSX VENTURE:HIP) ("Newstrike" or the "Company") and Up Cannabis Inc. (wholly-owned licensed producer of Newstrike) ("Up Cannabis" or "Up"), announces that Newstrike has agreed with CanniMed Therapeutics Inc. ("CanniMed") to terminate the previously announced Arrangement Agreement, dated November 17, 2017 (the "Arrangement Agreement").
"With this transaction quickly behind us and a renewed balance sheet, we look forward to deploying the $14.1 million received from CanniMed to bring our 160,000 s.f. automated Niagara Facility greenhouse into licensed production ahead of schedule and accelerate and expand the roll-out of Up Cannabis across Canada," said Jay Wilgar, Newstrike's CEO. "These additional resources will immediately help us solidify Up as the leading cannabis brand in the emerging adult-use market," added Wilgar.
The Arrangement Agreement will be terminated effective upon payment by CanniMed of $9.5 million to Newstrike (the "Break Fee"). Upon termination, the Arrangement Agreement will be null and void and as a result, the previously announced plan of arrangement will not proceed. CanniMed will also:
- fully convert the $4.0 million secured convertible debenture issued by Newstrike on September 29, 2017 (the "Debenture") into approximately 11 million Newstrike common shares, simultaneously with the payment of the Break Fee; and,
- exercise the 10,958,904 common share purchase warrants ("Warrants") issued to CanniMed at the same time as the Debenture, providing Newstrike with aggregate proceeds therefrom of $4.6 million, on or before February 15, 2018.
CanniMed has also granted Newstrike a right for three-business days to place those common shares issued upon conversion of the Debenture or exercise of the Warrants, that CanniMed wishes to sell.