Newstrike Brands Ltd NWKRF

RE:Strong vote for NO

[quinlash]

Investorguy1234 wrote: It has been a week or more since the announcement and i am still scratching my head trying to figure out why we would accept a deal to be purchased at or below our market value. Most deals, if not all of them, come at a premium. 

Q - I agree. The deal as it stands does not make sense and makes me think there is another part of this deal that we have yet to see but that is JMHO

HEXO is not a profitable company, operate in the Province of Quebec, issued 100,000,000 shares in their last quarter and will be issue god knows how many more to pay us for our solid company. 

Q - At this point HEXO will issue apx 22.5 million shares to aquire HIP, that is apx 356 million HIP shares with a .06332 conversion

We bring to them access to the 9 provinces and world class production facility, product recognition and also diversification. And we are getting no compensation for this goodwill. 

Q - We add 8 additional provinces, HIP did not have QC but just added MB

This leaves me to believe that existing management want to get their money out of Newstrike and cash out. None of the insiders have paid fair market for their 27% ownership and with this deal they become insignificant and can sell into the open market without disclosure. 

Q - Management is motivated to make the best deal possible as much of their compensation comes from options they hold.  Jay has apx 2.5 mil options and has experience with mergers etc in his past work history, he is not a pot smoker who decided to start and LP, this again leads me back to the theory that there is more to be told here.

I truly believe that Newstrike is worth more that $0.06332 per share of Hexo and actually am very concerned that HEXO might drop in value prior to the sale date. They have no problem with dilution in order to operate.

Q - HEXO is picking HIP up at a discount and should actually increase in value post-merger, assuming it is approved by shareholders.

With Newstrikes growth opportunities it should be worth north of $ 0.80 per share not $ 0.53 or .54

Q - My rough numbers are higher than your's but it is all subjective, regardless, the value of HIP IMO is grossly understated in this deal and again makes me come back to the thought that there is a second part of this deal we are yet to be made aware of and one that will win over HIP shareholders into voting YES for the deal.  JMHO


Please don't tell me that A + B = C + If that is the case then we should be paid for that. 

Q - When a deal doesn't make sense you are either using the wrong data or you don't know the full extent of the deal yet, this is what I have learned.  Either we are wrong about the position and value of NewStrike or there is more to come, simple as that.  JMHO