TORONTO, May 28, 2018 (GLOBE NEWSWIRE) -- Newstrike Resources Ltd. (TSX-V:HIP) ("Newstrike" or the "Company") confirms that all of the issued and outstanding shares of its wholly-owned subsidiary, Enderlein Nurseries Ltd. ("Enderlein"), have been sold to 10673242 Canada Inc. (the "Purchaser") pursuant to a share purchase agreement dated May 25, 2018 ("Share Purchase Agreement").
“We have decided to focus our growth strategy elsewhere as we are ramping up our production capacity at our Niagara facility and actively assessing accretive opportunities,” states Jay Wilgar, CEO and Chairman of Newstrike.
Pursuant to the Share Purchase Agreement, the Purchaser is acquiring all of the issued and outstanding shares of Enderlein for total consideration of CAD$2,504,500, consisting of an upfront payment in the amount of CAD$1,479,500 and a future payment of CAD$1,025,000 (the "Holdback Amount"). Any further gain or loss attributable to the aforesaid transaction is expected to be nominal. The Holdback Amount is to be paid within 10 business days of Enderlein obtaining its cultivation licence from Health Canada (the "HC Licence") and becoming a licensed producer of medical cannabis (a "Licensed Producer") pursuant to the Access to Cannabis for Medical Purposes Regulations.
If Enderlein, which has been issued a pre-licence “ready to build” letter from Health Canada, does not receive the HC Licence by the date that is 18 months following May 25, 2018 (the "Holdback Release Date"), the Holdback Amount is subject to an extension. The Holdback Release Date may be extended provided that the Company has not breached any of its ongoing obligations under the Share Purchase Agreement in a manner that has had a material effect on, or delay in, the HC Licence or Enderlein otherwise becoming a Licensed Producer.
For further information, please contact:
Jay Wilgar, Director and CEO
Telephone: (905) 844-8866 ext. 12
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. Up Cannabis is in turn the parent company of Up Cannabis Niagara Inc. 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.
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, statements relating to Newstrike's expectations with respect to its performance and achievements. 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.