OTCPK:NWKRF - Post by User
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surveyor2582on Jan 24, 2018 12:07pm
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Post# 27424054
Update - Newstrike Resumes Trade, Down 20%
Update - Newstrike Resumes Trade, Down 20%
10:42 AM EST, 01/24/2018 (MT Newswires) -- Newstrike Resources Ltd. (HIP.V) was at last look down more than 20% on resumption of trade after it confirmed Wednesday that it and CanniMed Therapeutics Inc. (CMED.TO) have terminated the previously announced Arrangement Agreement, dated November 17, 2017. This follows the news earlier today that CMED -- which had moved previously to buy the smaller rival Newstrike -- has instead agreed to be bought itself by rival Aurora Cannabis (ACB.TO) in a deal worth near $1.1 billion.
"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.
According to a statement, the Arrangement Agreement will be terminated effective upon payment by CanniMed of $9.5 million to Newstrike. 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 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 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.
Price: 1.42, Change: -0.40, Percent Change: -22