CALGARY, ALBERTA--(Marketwired - Sept. 29, 2016) -
NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES
Top Strike Resources Corp. (the "Corporation" or "Top Strike") (NEX:TSR.H), is pleased to
announce that it has entered into a binding letter of intent dated September 24, 2016 (the "LOI") with an Australia Stock
Exchange listed company, MMJ PhytoTech Limited ("MMJ"), for the purchase of its core cannabis subsidiaries, United Greeneries
Holdings Ltd. ("United Greeneries") and Satipharm AG ("Satipharm" )(the "Transaction"). Pursuant to the LOI, the
Corporation, subject to entering into a definitive agreement (the "Transaction Agreement"), will pay $40,000,000 pursuant to the
Transaction payable by way of a combination of: C$2,500,000 in cash; and 300,000,000 common shares of Top Strike ("Top Strike
Shares") at C$0.125 per Top Strike Share. Top Strike will undertake a concurrent equity financing of 100,000,000 Top Strike
Shares for minimum gross proceeds of C$12,500,000 through the issue of shares at a price not less than C$0.125 each (the
"Financing"). Upon completion of the Transaction and Financing, Top Strike shareholders will own approximately 3.9% equity of the
pro forma entity.
The Transaction represents a strategic acquisition of MMJ's Canadian subsidiary United Greeneries and Swiss subsidiary
Satipharm to provide shareholders with direct exposure to the rapidly expanding Canadian cannabis market. United Greeneries is
one of 34 Authorized Licensed Producers of dried marijuana for medical purposes in Canada. The concurrent $12.5 mm equity
offering will provide the necessary capital to increase United Greeneries production capacity with an outlook on the upcoming
recreational cannabis market in Canada next year. Satipharm has a number of key international partnerships for the production and
distribution of cannabinoid-based pharmaceutical, nutraceutical and wellness products, and has developed a unique oral delivery
system for cannabinoids, the proprietary GelPell® Microgel Capsules, currently marketed in Europe.
MMJ is the control person (as defined under applicable securities laws) of United Greeneries and Satipharm.
There are no control persons (as defined under applicable securities laws) of MMJ.
It is expected that the Resulting Issuer will be a Life Sciences Issuer, subject to Exchange approval. The resulting
TSXV-listed entity will be positioned to become a large-scale cannabis producer targeting supply to the Canadian medical and
recreational markets, estimated to be an $8 billion per annum market by 2024.
The proposed Directors and Officers of the Resulting Issuer are still being established but it is expected that the Board of
Directors will include: Andreas Gedeon, Jason Bednar and Peter Wall and that the CEO of the Resulting Issuer will be Andreas
Gedeon (all of whom are Directors and Officers of MMJ). When known, the identities and biographies of the additional
Directors and Officers of the Resulting Issuer (including the CFO and Corporate Secretary) will be disclosed by news release.
Andreas Gedeon, Dipl.-Paed. - Proposed CEO and Director
Mr. Gedeon, a former Officer in the German Navy, holds a degree in Educational Science from the University of Federal Armed
Forces Munich. He is an experienced businessman with proven expertise in large-scale and HR intensive projects. His previous
areas of business include media production, horticulture and commercial construction. As the founder of MMJ, Mr. Gedeon currently
oversees the global expansion strategy of the MMJ group.
Jason Bednar, B.Comm, CA - Proposed Director
Mr. Bednar is a Chartered Accountant with more than 18 years of direct professional experience in the financial and regulatory
management of companies listed on the Toronto Stock Exchange, TSX Venture Exchange, American Stock Exchange and ASX.
He is currently the CFO and director of Canacol Energy Ltd., a Colombian focused oil and gas exploration and production
company with an enterprise value of approximately US$650 million. Mr. Bednar has been the past CFO of several international
oil and gas E&P companies, most notably the founding Chief Financial Officer of Pan Orient Energy Corp., a South East Asia
exploration company, which during his tenure grew organically to operate 15,000 barrels of oil per day and had a market
capitalization of $700 million. He previously sat on the board of directors of several internationally-focused exploration and
production companies, including being the past Chairman of Gallic Energy Ltd.
Mr. Bednar holds a Bachelor of Commerce degree from the University of Saskatchewan.
Peter Wall, LLB, BComm, MAppFin, FFin - Proposed Director
Mr. Wall is a corporate lawyer and has been a Partner at Steinepreis Paganin (Perth based corporate law firm) since July 2005.
Mr. Wall graduated from the University of Western Australia in 1998 with a Bachelor of Laws and Bachelor of Commerce (Finance).
He has also completed a Masters of Applied Finance and Investment with FINSIA.
Mr. Wall has a wide range of experience in all forms of commercial and corporate law, with a particular focus on resources
(hard rock and oil/gas), equity capital markets and mergers and acquisitions. He also has significant experience in dealing in
cross border transactions.
Completion of the transaction is subject to receipt of all required regulatory and shareholder approvals and other certain
conditions precedent (including due diligence, completion of the Financing and execution of the Transaction Agreement).
The Transaction is an arm's length transaction and, when completed, may be considered to be a reverse takeover for the
purposes of the TSX Venture Exchange ("TSXV"). The Corporation has requested that Top Strike Shares be halted by the TSXV
pending review of materials for the Transaction.
Trading in Top Strike Shares on the TSXV (NEX board) is halted and will remain so until the documentation required by the TSXV
has been reviewed and accepted by the TSXV.
This is an initial press release. The Corporation plans to issue a further press release once it has entered into the
Transaction Agreement to provide, among other things, selected financial information respecting United Greneries and Satipharm
and the Transaction.
Subject to satisfaction or waiver of the conditions precedent referred to herein, Top Strike anticipates the proposed
Transaction will be completed prior to December 31, 2016.
Black Spruce Merchant Capital Corp. is acting as exclusive financial advisor to Top Strike in connection with the
Transaction.
Completion of the Transaction is subject to a number of conditions, including TSXV acceptance and, if required, disinterested
shareholder approval. The Transaction cannot close until the required shareholder approval is obtained. There can be no assurance
that the Transaction will be entered into or be completed.
Investors are cautioned that, except as disclosed in the Management Information Circular and/or Filing Statement to be
prepared in connection with the transaction, any information released or received with respect to the Transaction may not be
accurate or complete and should not be relied upon. Trading in the securities of the Corporation should be considered highly
speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor
disapproved the contents of this press release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.