TORONTO, July 31, 2018 (GLOBE NEWSWIRE) -- Newstrike Brands Ltd.(TSXV:HIP) ("Newstrike" or the "Company") is pleased to announce that it has closed the transactions described in the investment agreement with Inner Spirit Holdings Ltd. (“Inner Spirit”) dated May 22, 2018 (the “Investment Agreement”), the signing of which was previously announced on May 23, 2018.
Pursuant to the Investment Agreement, both Newstrike and Inner Spirit have acquired equity interests in each other and have entered into a strategic alliance agreement for the retail distribution of UP Cannabis Inc. (“Up Cannabis”) products, subject to applicable law, and the creation and operation of Up Cannabis-branded customer lounges or “Experiential Hubs” in Spirit Leaf stores.
“The closing of this transaction signifies our commitment to the adult-use market, participating in the production, supply and retail of cannabis,” said CEO and Chairman of Newstrike and Up Cannabis, Jay Wilgar. “We look forward to working with the Inner Spirit team to create quality customer experiences and supplying our product to retail in their stores across Canada.”
Newstrike and Inner Spirit will create and operate Up Cannabis Experiential Hubs within Spirit Leaf’s stores. The store-in-store experiences will complement the existing Spirit Leaf design elements and provide education about cannabis, showcase both companies’ love of music and their various community and charitable endeavours.
Newstrike made an aggregate investment in Inner Spirit valued at $2.25 million comprised of $1,125,000 in cash and 1,250,000 Newstrike common shares (the "Newstrike Shares") issued at closing at a price of $0.90 pursuant to the terms of the Investment Agreement. Newstrike has also issued 1,125,000 warrants to purchase Newstrike common shares (the “Newstrike Warrants”). The Newstrike Warrants have an exercise price of $0.99, a term of 24 months and will vest on a performance-based schedule triggered by the opening of a pre-determined number of future Spirit Leaf locations. The Newstrike Share and Newstrike Warrants are subject to a four month hold period. The issuance of the Newstrike Shares and Newstrike Warrants remains subject to approval by the TSX Venture Exchange.
In consideration for Newstrike’s investment in Inner Spirit, Inner Spirit issued Newstrike, 15,000,000 units of Inner Spirit (“Units”) on the same terms as such securities were offered under Inner Spirit’s initial public offering, which closed today, at a price of $0.15 per Unit. Each Unit was comprised of one common share of Inner Spirit and one-half of a common share purchase warrant, exercisable at $0.30 per share for a period of two (2) years following the date of issuance, subject to adjustment.
For further information, please contact:
Investor Relations
Telephone: 1-877-541-9151
Email: ir@newstrike.ca
About Newstrike and Up Cannabis
Newstrike is the parent company of Up Cannabis Inc., a licensed producer of cannabis that is licensed to both cultivate and sell cannabis in all acceptable forms. Newstrike, through Up Cannabis and together with select strategic partners, including Canada's iconic musicians The Tragically Hip, is developing a diverse network of high quality cannabis brands. For more information visit www.up.ca or www.newstrike.ca.
Forward-Looking Information
This news release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Newstrike to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements 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. These forward-looking statements include, but are not limited to: the need to obtain TSX Venture Exchange approval to issue the Newstrike Shares and the Newstrike Warrants; statements relating to Newstrike's expectations with respect to its relationship with Inner Spirit; and the receipt of the requisite permits by Inner Spirit for retail distribution, sales or the number of stores opened and operated by Spirit Leaf. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties.
Actual results could differ materially from those currently anticipated due to a number of factors and risks. Readers are cautioned that the foregoing list of factors is not exhaustive. The forward-looking statements contained in this news release are made as of the date of this release and, accordingly, are subject to change after such date.
Newstrike does not assume any obligation to update or revise any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf, except as required by applicable law.
Neither 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.