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Newstrike Complete $4 Million Convertible Debt and Warrants Offering

Published: 09/29/2017

Team: Jay Goldman, Alexander Pizale, Patricia Wood, Ardy Mohajer, Carla Potter, Jenna Clark

On September 29, 2017, Newstrike Resources Ltd., a licensed producer of medical cannabis in Canada, issued a secured convertible debenture in the principal amount of $4 million to a strategic arm’s-length lender. The debenture will mature in three years and bears interest at the rate of 8% per annum, payable quarterly. The debenture is convertible at the option of the lender into common shares of Newstrike, at a price per common share of $0.365. Newstrike also issued to the lender 10,958,904 common share purchase warrants, each exercisable to purchase one common share of Newstrike at a price of $0.42 per common share for three years.

Newstrike intends to use $3 million of the funds received from the financing to retrofit its greenhouse property in Beamsville, Ontario and the balance for general corporate purposes.

Cassels Brock acted for Newstrike with a deal team that included Jay Goldman, Alex Pizale and Patricia Wood (Securities and Cannabis), Ardy Mohajer (Real Estate) and Carla Potter and Jenna Clark (Financial Services).