TORONTO, April 26, 2018 (GLOBE NEWSWIRE) -- Newstrike Resources Ltd. (TSXV:HIP) ("Newstrike" or the "Company”) the parent company of Up Cannabis Inc. (“Up Cannabis”) a licensed producer of cannabis and related products, today reported its financial results for the twelve-month period ended December 31, 2017. Copies of the financial statements, notes and related MD&A may be accessed at www.newstrike.ca or www.sedar.com.
The Company is also pleased to provide an overview of the key milestones achieved both year-to-date and over the last 12 months.
“In just under 12 months, Newstrike has made extraordinary progress towards its goal of becoming a top-five cannabis company”, noted Jay Wilgar, Newstrike’s CEO. “Our balance sheet is strong, our production-capacity is fully-funded and we have the resources, platform and people to selectively seize the right strategic growth opportunities which deliver sustained value to our investors and stakeholders.”
Milestones Achieved
Licensing & Production
Up Cannabis’ license was successfully amended to permit the sale of cannabis in all acceptable forms:
- to all authorized persons under the ACMPR; and, once the applicable legislation comes into force,
- into the broader adult-use Canadian recreational market.
The Brantford Facility:
- Health Canada removed all limitations on the amount of cannabis that may be produced at Up Cannabis’ facility in Brantford, Ontario (the “Brantford Facility”) and, upon installation of the requisite extraction equipment, Up Cannabis is permitted to produce an unlimited amount of cannabis oils at this same facility; and,
- received ISO 9001:2015 certification.
The Niagara Facility
- Acquired this automated, modern “Dutch-Tray” 200,000 sq. foot facility (of which approximately 160,000 sq. feet are dedicated to production) with 40,000 sq. feet of finished administration, packaging and shipping/receiving areas, all situated on approximately 17.0 acres of land;
- Completed retrofit of existing greenhouse and surrounding buildings;
- Cultivation began in April 2018 and the Company expects that (i) the first harvest; and (ii) this greenhouse reaching its forecasted annual production capacity will both occur in the third quarter of 2018;
- Health Canada licensed the Niagara Facility for the cultivation and production of an unlimited amount of:
- Dried and fresh Marihuana;
- Marihuana plants and seeds;
- Cannabis in its natural form: Cannabis Resin; and,
- Cannabis oil (bottled)
- Received all land-use and related construction permits and scheduled to break-ground on an additional 160,000 sq. ft. of cultivation space as well as enhanced processing, packaging, shipping, storage and administrative facilities in July 2018.
Brand Development and Marketing
Assembled Seasoned Marketing Team
- Welcomed Jean Richer, a long-time sales and marketing leader with deep experience growing premier brands in multiple categories, including alcohol to lead team;
- Added depth and innovative perspectives in additional senior marketing roles.
Executing Brand-Focused Strategy Supported by Key Partnerships
- Developed robust brand architecture based on highly researched and defined customer segments and a sophisticated segmentation model;
- Embarked on partnerships with leading marketing and customer experience agencies to further increase awareness and solidify perceptions of Up Cannabis’ unique and differentiated offer in a competitive market;
- Tested brand deployment at public and industry events including Lift, Osheaga, and others;
- Strengthened partnerships with organizations in key markets with significant reach, including the Junos, the Polaris Prize, and the Unison Benevolent Fund;
- Continued to position Up Cannabis for distribution in key markets focused on retail and online platforms;
- Executing strategy for new product development in accordance with evolving regulatory regimes; and
- Completed plan for full brand launch beginning in Spring, 2018.
Capital Markets/Financing Activity
$92 million “Bought Deal” Financing
- Issued approximately 70 million Units by way of a short form prospectus offering on a bought deal basis for gross proceeds of just over $92 million (see press releases dated January 24 & February 20, 2018. Each Unit consists of one common share and one warrant entitling the holder to purchase a common share for $1.75 expiring in early 2020; and,
- the exercise of all warrants issued as part of this offering could generate up to an additional approximately $122 million.
Enhanced Liquidity
- 2018: Second1 most liquid (measured by value of shares traded) licensed cannabis producer listed on TSX Venture Exchange.
1 YTD March 21, 2018 - S&P Capital IQ/Bloomberg, group of 15 issuers.
Significantly Strengthened Balance Sheet
Received Aggregate of $14.1 million
- $9.5 million “break fee” received from CanniMed Therapeutics Ltd. following termination of the proposed Arrangement; and,
- $4.6 million aggregate proceeds from the exercise by CanniMed of 10,958,904 warrants with an exercise price of $0.42/warrant.
Converted, Repaid or Paid-Out an Aggregate of over $9.3 million of Secured Debt and Lease Financing
- Converted: $4.0 million secured convertible debenture dated September 27, 2017, converted into 10,958,904 common shares (at the rate of $0.365 per share), on January 24, 2018; and
- Repaid: Secured short-term $4,000,000 facility funded by a syndicate of lenders led by Beechhill Capital Corp. (an investment entity controlled by the Van Haeren family) and which included Jay Wilgar and Scott Kelly, each officers and directors of Newstrike, was repaid in full on February 22, 2018 and all security interests discharged;
- Paid-Out: Capital lease with a principal amount of $1.3 million and all outstanding interest.
Annual General and Special Meeting of Shareholders
Newstrike’s annual and special meeting of shareholders will be held at Cassels Brock & Blackwell LLP, located at 40 King Street West, Suite 2100, Scotia Plaza, Toronto, Ontario, M5H 3C2, on May 22, 2018 at 2:00 p.m. EDT. Copies of the management information circular and form of proxy are being mailed to shareholders and also available at www.sedar.com.
For further information, please contact:
Jay Wilgar, Director and CEO
Telephone: (905) 844-8866 ext. 12
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. 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
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. These forward-looking statements include, but are not limited to, statements relating to Newstrike’s expectations with respect to the production capacity of cannabis, expansion plans and approvals, legalization of adult-use cannabis and timing thereof. 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. 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.