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CALGARY, July 3, 2018 /CNW/ - Top Strike Resources Corp.
("Top Strike" or the "Corporation") (TSX Venture-NEX: TSR.H) is
pleased to announce a private placement of between $5.0 and $25.0
million, provided that the Corporation shall be entitled to
increase the size of the private placement to $30.0 million as a result of excess demand (the
"Private Placement") and the appointment of a new management team
and board of directors (the "New Management Team") (collectively,
the "Transaction").
Completion of the Transaction is subject to the delisting of the
common shares of the Corporation ("Common Shares") from the NEX
board (the "NEX") of the TSX Venture Exchange and the concurrent
listing of the Common Shares on the facilities of the Canadian
Securities Exchange (the "CSE") and customary closing conditions,
including the approval of the NEX to delist and the satisfaction of
the initial listing requirements of the CSE. The CSE will issue a
bulletin confirming the date on which trading of the Common Shares
on the CSE will commence, which is anticipated to be within four
days of the completion of the Private Placement. The Transaction
will constitute an arm's length transaction.
The completion of the Private Placement is expected to occur on
or about August 1, 2018 and may be
completed in one or more tranches (the "Closing"). The resignation
of the current board of directors and management team of Top Strike
and the appointment of the New Management Team will occur
contemporaneous with the Closing.
The Transaction will see the Corporation transition from a
resource company to a company carrying on business in the cannabis
sector. Upon completion of the Transaction, it is anticipated
that the shareholders of Top Strike will be asked to approve, at a
special meeting called for such purpose, a change of the
Corporation's name to "Vencanna Holdings Inc.".
New Management Team
The New Management Team will be led by David McGorman as Chief Executive Officer &
Director, Jon Sharun as Executive
Director, Jason Ewasuik as Vice
President, Originations and Mike Tanasichuck as Chief Financial
Officer. The new board of directors will be comprised of
David McGorman, Jon Sharun, Matt
Christopherson, Alan Gertner,
Dr. Inbar Maymon-Pomeranchick and W. Scott
McGregor. Sony Gill, a partner in the Business Law
Group in the Calgary office of the
national law firm McCarthy Tétrault LLP, will act as Corporate
Secretary.
The New Management Team has been extremely active in the legal
cannabis sector; actively investing in Canada and the
United States and having developed a deep network of
contacts within the legal cannabis sector in North America and Europe. The New Management Team has
significant investment banking and direct investing experience, and
are skilled at identifying, evaluating and adding value to start-up
companies.
Management Team
David
McGorman,
Chief Executive
Officer and Director
|
David has 25 years of
experience in the financial services industry with a wide range of
transaction experience. He has participated in over $12 billion in
transaction value; including private and public equity issues, debt
placements, including M&A advisory and restructuring
assignments. David is currently Managing Director of Black Spruce
Merchant Capital; a Calgary based merchant bank advisory firm.
Black Spruce has successfully launched and capitalized
51st Parallel (a Lethbridge based late-stage applicant)
and CBi2 Capital (a publicly traded investment company with a focus
on the Canadian cannabis market).
|
Jon
Sharun,
Executive Director
|
Jon has 18 diverse
years of international investment, real estate, branding and
business development experience; a Forty under 40 winner. Jon is
Founder and Managing Partner of Venexo Capital, a boutique private
equity firm that has raised in excess of $100 million in
healthcare, hospitality and real estate. Venexo has been an active
and early investor into the medical marijuana sector including
Aurora, Friday Night, The Green Organic Dutchman, and
Emblem.
|
Jason
Ewasuik,
Vice President, Originations
|
Jason has over 10
years of global financial market and trading experience. Jason
brings capital markets and acquisition expertise – sourcing,
structuring, financing and managing investment opportunities.
Currently he leads Venexo Capital's cannabis efforts as Director of
Healthcare where Venexo has placed its private capital in over 20
cannabis initiatives.
|
Mike
Tanasichuck,
Chief Financial Officer
|
Mike joined Venexo in
2015 as Director of Finance with the responsibility of evaluating
acquisitions, conducting due diligence, and managing portfolio
companies. Previously, Mike was a Chartered Accountant at Deloitte
& Touche where he provided financial advisory, tax, and audit
services within Deloitte's Private Company Service line.
|
Board of Directors
The new directors have strong track records, distinguished
careers and have held prominent lead positions within a range of
successful companies, including in the cannabis sector. Their
combined experience and expertise will provide the New Management
Team with invaluable advice, guidance and mentorship.
Matt
Christopherson
|
Matt is the VP of
Business Development and partner at Keirton Inc. With over a decade
of experience in the cannabis industry, Keirton has made a name for
itself by providing growers with the world's fastest and most
dependable medical cannabis harvesting machines. Twisted Trimmer™
is the most recognized and widely used harvesting solution, not
only in Canada, but internationally. Matt is a co-founder of Lift
Cannabis Co. Lift is home to Canada's largest database of
comprehensive medical marijuana reviews left by real patients. Matt
is also a director of a non-profit organization, Ruben's
Shoes.
|
Alan
Gertner
|
Alan Gertner is the
CEO of Hiku Brands and co-founder of Tokyo Smoke, an award-winning,
internationally recognized, cannabis brand with a cross country
network of retail stores. Prior to taking the reins of HIKU Brands
and founding Tokyo Smoke, he led a $+100 million organization at
Google in Asia and was a founding member of Google's first Global
Business Strategy team while based in Mountain View, California.
Alan graduated Dean's list from the Richard Ivey School of
Business.
|
Dr. Inbar
Maymon-Pomeranchick
|
Dr. Inbar
Maymon-Pomeranchik is a scientist and Biotech Investment Consultant
Expert, specializing in Life Science, Biotech, Ag-tech and a
particular expertise in the global medical cannabis industry. Ms.
Inbar brings more than 15 years of experience in molecular &
genetic research and as an R&D researcher and project leader in
the Biotech industry in large, small and start-up technology
corporates. Ms. Inbar is often seen speaking at global conferences,
sharing her knowledge and insights, and exposing investors to
various global opportunities.
|
W. Scott
McGregor
|
Scott is a senior
investment banking professional with over twenty years of energy
and corporate finance experience. Most recently Scott served as
Executive Vice President of Merrco Payments, a secure payment
gateway that provides a fully customizable method to regulate a
direct-to-consumer cannabis mail-order system in Canada. Scott has
a B.A. from Queens University and an M.B.A. from Rotman School of
Management.
|
Advisory Board
Trent
Woloveck
|
Trent is currently
President of TGS National, a Colorado based integrated cannabis
franchisor with operations in the U.S. and Canada. In
addition to its proprietary genetics, cultivation, manufacturing
and Point-of-Sale systems, TGS National is responsible for the
highly recognized brands The Green Solution and NectarBee.
Prior to TGS National, Trent was the COO of American Cannabis
Company (AMMJ) which successfully procured licensing agreements for
its clients in several states.
|
Corporate Strategy
The New Management Team has extensive experience in creating
shareholder value and believes its focused full-cycle business plan
and the current market environment provide an excellent opportunity
to reposition Top Strike as a high growth cannabis investment
vehicle. The New Management Team believes that Top Strike
will be well positioned to take advantage of investment
opportunities in the current global cannabis market.
Top Strike expects to execute on an international
cannabis-focused investment strategy with an emphasis on state
compliant opportunities in the United
States through the development and management of a
diversified portfolio of predominantly early stage cannabis
investment opportunities. The recapitalized corporate
structure will allow Top Strike to explore and invest in a number
of strategic global opportunities in the medical and recreational
cannabis industry including ancillary products and services. The
Corporation plans to issue further press releases once it has
identified specific investment opportunities. Top Strike's
investment policy and information regarding investment
opportunities will be submitted to the CSE for its review.
Upon completion of the Transaction, taking into account
transaction and financing costs, the recapitalized Top Strike is
expected to have a net cash position of approximately $24 million, assuming the Private Placement,
Insider Private Placement and Rights Offering (as defined below)
are each fully subscribed, providing the New Management Team a
platform to aggressively grow the business through strategic
investments in the cannabis market.
Upon completion of the Transaction and subject to all regulatory
and shareholder approvals, it is anticipated that the New
Management Team will change the name of the Corporation from "Top
Strike Resources Corp." to "Vencanna Holdings Inc.".
Private Placement and Insider Private Placement
Pursuant to the Private Placement, Venexo Capital, together with
additional subscribers on a non-brokered basis, will subscribe for
units ("Units") of Top Strike for aggregate gross proceeds of
between $5.0 and $25.0 million at a price of $0.06 per Unit, provided that the Corporation
shall be entitled to increase the size of the private placement to
$30.0 million as a result of excess
demand.
Each Unit shall be comprised of one Common Share and one-half of
one Common Share purchase warrant (a "Warrant"). Each Warrant
will entitle the holder thereof to purchase one Common Share at a
price of $0.09 per Common Share for a
period of three years from the date of issuance of the
Warrant. After one year from the date of issuance of the
Warrants, the Corporation may accelerate the expiry date of the
Warrants provided that the average trading price of the Common
Shares is equal to or exceeds $0.14
for any consecutive 20-day trading period following the first
anniversary date of issuance of the Warrants.
In addition to the Private Placement, the New Management Team,
together with additional subscribers identified by the New
Management Team, will subscribe for units ("Insider Units") of Top
Strike for aggregate gross proceeds of up to $1.5 million at a price of $0.05 per Insider Unit (the "Insider Private
Placement").
Each Insider Unit shall be comprised of one Common Share and one
Common Share purchase warrant (an "Insider Warrant"). Each Insider
Warrant will entitle the holder thereof to purchase one Common
Share at a price of $0.06 per Common
Share for a period of five years from the date of issuance,
provided that if the Common Shares are either: (i) listed on the
facilities of a stock exchange other than the CSE; or (ii) acquired
for cash or for the securities of a public company not listed on
the facilities of the CSE, then each Insider Warrant shall be
exercisable for two Common Shares at a price of $0.06 per Common Share.
Proceeds from the Private Placement and Insider Private
Placement will be used to make investments in strategic cannabis
investment opportunities and for general corporate purposes.
Venexo, or its nominee, along with the New Management Team will be
participating in the Private Placement for a minimum of
$1.0 million and shall be subscribing
for up to $1.5 million in the Insider
Private Placement. The Transaction will not result in the creation
of a new control person.
Upon completion of the Private Placement, the Company will grant
stock options to the New Management Team and employees of the
Corporation in an aggregate amount equal to 8.0% of the issued and
outstanding Common Shares. The options will be exercisable at a
price of $0.06 per Common Share.
Rights Offering
Upon completion of the Private Placement, Top Strike
shareholders will be entitled to participate in a rights offering
of the Corporation (the "Rights Offering"), which is expected to be
conducted by way of a Rights Offering Circular. Pursuant to the
Rights Offering, each shareholder as of the record date for such
offering (the "Record Date") will be issued one right ("Right") for
each Common Share held on the Record Date, entitling that holder to
purchase one Common Share for every four Rights held at a price of
$0.06 per Common Share at or before
the expiry time of the Rights Offering, following which all
outstanding Rights shall terminate and expire. Subscribers of
Common Shares under the Private Placement and the Insider Private
Placement will waive their right to participate in the Rights
Offering with respect to any securities acquired pursuant to the
Private Placement or the Insider Private Placement, as applicable.
The Rights Offering is subject to applicable regulatory approval,
including the CSE.
The Corporation
The Corporation currently does not carry on active business
activities. The Corporation has evaluated several opportunities.
The Corporation had previously focused on international and
domestic oil and gas projects but has expanded its scope to
consider other industries as well. On February 1, 2017 the Corporation entered into a
letter of intent with Phytopharma International Ltd.
("Phytopharma"). On January 9, 2018,
the Corporation announced that Phytopharma and Top Strike had
mutually agreed that they would not proceed with the transaction to
combine Top Strike and Phytopharma. The Corporation continued
evaluating opportunities for possible transactions.
The Corporation has 16,431,428 Common Shares, 900,000 options,
and no other dilutive securities outstanding. The Corporation
currently has a working capital balance of less than $100,000 and no debt. Upon completion of
the Insider Private Placement and the Private Placement, and
assuming the exercise of all Rights issued in connection with the
Rights Offering, Top Strike will have approximately 457.2 million
Common Shares and approximately 732.6 million Common Shares
outstanding on a fully diluted basis.
Board of Directors' Recommendation
The board of directors of Top Strike has determined that the
Transaction and the Rights Offering are in the best interests of
its shareholders and has unanimously approved the Transaction and
the Rights Offering.
Reader Advisory
Completion of the Transaction and the Rights Offering is subject
to a number of conditions, including but not limited to, CSE. There
can be no assurance that the Transaction or the Rights Offering
will be completed as proposed or at all. Trading in the securities
of Top Strike should be considered highly speculative.
Neither the Canadian Securities Exchange nor its Market
Regulator (as that term is defined in the policies of the Canadian
Securities Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities described
herein. The securities have not been and will not be registered
under the United States Securities Act of 1933, as amended (the
"U.S. Securities Act"), or any state securities laws and may not be
offered or sold within the United
States or to United States Persons unless registered under
the U.S. Securities Act and applicable state securities laws or an
exemption from such registration is available
Forward-Looking Statements
This news release may include forward-looking statements
including opinions, assumptions, estimates, the New Management
Team's assessment of future plans and operations, and, more
particularly, statements concerning the delisting from the NEX and
the listing on the CSE, the Transaction, the Rights Offering and
the Insider Private Placement, the number of securities issued by
way of the Private Placement and Insider Private Placement, the
business plan of the New Management Team, the change of name of the
Corporation, use of proceeds, net cash position and debt levels
following completion of the Transaction.
When used in this document, the words "will," "anticipate,"
"believe," "estimate," "expect," "intent," "may," "project,"
"should," and similar expressions are intended to be among the
statements that identify forward-looking statements.
The forward-looking statements are founded on the basis of
expectations and assumptions made by Top Strike which include, but
are not limited to, the timing of the receipt of shareholder,
regulatory and third party approvals, the future operations of, and
transactions completed by Top Strike as well as the satisfaction of
other conditions pertaining to the completion of the
Transaction.
Forward-looking statements are subject to a wide range of risks
and uncertainties, and although Top Strike believes that the
expectations represented by such forward-looking statements are
reasonable, there can be no assurance that such expectations will
be realized.
Any number of important factors could cause actual results to
differ materially from those in the forward-looking statements
including, but not limited to, shareholder, regulatory and third
party approvals not being obtained, the ability to implement
corporate strategies, the state of domestic capital markets, the
ability to obtain financing, changes in general market conditions
and other factors more fully described from time to time in the
reports and filings made by Top Strike with securities regulatory
authorities.
Except as required by applicable laws, neither Top Strike nor
the New Management Team undertake any obligation to publicly update
or revise any forward-looking statements.
SOURCE Top Strike Resources Corp.