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Archive for September, 2016

Top Strike Resources Corp. Announces Proposed Transaction

By: Top Strike Resources Corp

Posted: Sept 29 2016


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.

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MMJ to list Canadian subsidiaries

By: Fraser Beattie

Posted: 14.:12, Sept 28 2016

MMJ Phytotech has announced plans to spin-out its medical cannabis-focused Canadian subsidiaries onto the TSX Venture Exchange though the reverse takeover of a resource company.

Nedlands –based MMJ, which listed on the ASX last year after completing a reverse takeover of Canada-based firm MMJ Bioscience, will spin-out its United Greeneries Holdings and Satipharm subsidiaries and pay $C40 million ($A39.4 million) in cash and shares to wholly acquire TSX-V listed company Top Strike Resources.

The sale price represents about 97 per cent of MMJ’s current market capitalization based on a share price of 24 cents.

MMJ will pay $C2.5 million in cash and $c37.5 million in shares to acquire Top Strike, which will then become a pure play cannabis company after adopting  UGH and Satipharm’s business models.

Top Strike will also undertake $C15 million equity raising as part of the transaction.

If the deal is successful, Top Strike’s management team will consist of representatives from MMJ and UGH.

“The transaction provides MMJ shareholders with the opportunity to benefit from the significant value currently being realized by TSX-V listed cannabis producers such as Aphria, Canopy and Aurora,” MMJ managing director Andreas Gedeon said.

“The board has been assessing the merits of obtaining a public listing in Canada for some time, and Top Strike represents a compelling and timely opportunity.

“MMJ shareholders will continue to benefit post-transaction, from indirect exposure to the rapidly expanding Canadian cannabis market, and near-term revenues generated from increased Satipharm sales through key regulated markets globally.

“We are very confident that our strategic market positioning and our capacity to rapidly scale up cannabis production at Duncan will be a major value catalyst for MMJ’s shareholders in the near-term.”

Canada-based Black Spruce Merchant Capital acted as a lead manager to MMJ on the deal.

Shares in MMJ were 8.6 per cent higher to 25 cent each at the close of trade.

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Energy veteran McGorman joins Black Spruce amid hopes for oil-patch uptick

By: Jeffery Jones

Posted: 11:08, Sept 28 2016

Energy banking veteran David McGorman has joined Calgary-based Black Spruce Merchant Capital ahead of an expected uptick in oil-patch deals.

Mr. McGorman, who was chief executive officer of Jennings Capital when that firm was acquired by Mackie Research Financial Corp. in 2014, started this week as managing director of investment banking for Black Spruce, a small shop that concentrates on the junior exploration, production and oil-field services sector.

At Mackie, he was vice-chairman and head of energy investment banking.

Black Spruce CEO Sonny Mottahed said Mr. McGorman’s experience is expected to benefit the deal-advisory firm as stubbornly low oil and gas prices yield more asset sales and takeovers.

“The fuse is getting shorter and shorter,” Mr Mottahed said. “Everybody kind of sits back and hopes for commodity price recovery. Conventional [exploration and production] companies do get immediate benefits from increases in the commodities, but at the same time there’s immediate pain when the commodities turn the other way and we’ve seen more of the latter than the former.

“So there are certainly going to be more transactions to be done.”

Before joining Jennings, a boutique that had struggled amid a downturn in business before it was sold, Mr. McGorman worked at Chase Manhattan Corp., Raymond James Financial Inc. and Haywood Securities Inc.

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David McGorman Joining BSMC

As of September 26th 2016, Black Spruce Merchant Capital would like to welcome David McGorman in the role of Managing Director.

David has 25 years of experience in the financial services industry with a primary focus on the energy sector.  He has participated in over $12 billion in transactional value; including private and public equity issues, debt placements, and a full range of advisory and work-out assignments. His client base includes Canadian based energy companies, both upstream and oil field services, with domestic and/or international operations.  David started his finance career at a U.S. bulge bracket (The Chase Manhattan Bank), building out of their investment banking platform in Canada.  Post Chase, he’s had senior investment banking roles at Raymond James, Haywood Securities, and Jennings Capital.  David eventual became the President & CEO of Jennings, guiding them through to its merger with Mackie Research Capital in 2014.

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