CALGARY, July 31, 2018 /CNW/ - Inner Spirit Holdings Ltd.
("Inner Spirit" or "the Company"), is pleased to announce that it
has closed its initial public offering (the "IPO"). The Company
closed on the maximum gross proceeds under the IPO of $3,750,000 and issued 25,000,000 units of Inner
Spirit (the "Units"). Each Unit consists of one common share in the
capital of the Company (each, a "Common Share") and one-half of one
Common Share purchase warrant (each whole Common Share purchase
warrant, a "Unit Warrant"). Each Unit Warrant will entitle the
holder thereof to acquire one Common Share at an exercise price of
$0.30 for a period of 24 months
following the closing date, subject to acceleration in certain
cases (as described in the Company's prospectus). The Warrants will
not be listed for trading. Leede Jones Gable ("Leede") acted as the
Company's sole agent under the Offering and received a fee equal to
$375,000 and 2,500,000 Agent's
Options, with each Agent's Option entitling Leede to acquire one
Common Share at an exercise price of $0.15 for a period of 24 months following the
closing date.
The Common Shares will begin trading effective at the market
open on August 1, 2018 on the
Canadian Securities Exchange ("CSE") under the symbol "ISH".
Newstrike Transaction
The Company is also pleased to announce that it has completed
the previously announced cross-investment with Newstrike Brands
Ltd. (TSXV:HIP) ("Newstrike") (the "Newstrike Transaction"),
pursuant to which both Newstrike and Inner Spirit have acquired
equity interests in each other and have entered into a
strategic alliance agreement for the retail distribution of Up
Cannabis products, and the creation and operation of Up
Cannabis-branded customer lounges or "Experiential Hubs" in Spirit
Leaf stores. The store-in-store experiences will complement the
existing Spirit Leaf design elements and provide education about
cannabis, showcase both companies' love of music and their various
community and charitable endeavours.
Newstrike made an aggregate investment in Inner Spirit valued at
$2.25 million comprised of
$1,125,000 in cash and 1,250,000
common shares in the capital of Newstrike (the "Newstrike Shares")
at a deemed value of $0.90 per
Newstrike Share. The Company also acquired 1,125,000 warrants to
purchase Newstrike Shares (the "Newstrike Warrants"). The Newstrike
Warrants have an exercise price of $0.99, a term of 24 months and will vest on a
performance-based schedule triggered by the opening of a
pre-determined number of future Spirit Leaf locations. The
Newstrike Shares and Newstrike Warrants are subject to a four month
hold period. The issuance of the Newstrike Shares and Newstrike
Warrants remains subject to approval by the TSX Venture
Exchange.
In consideration for Newstrike's investment in Inner Spirit,
Inner Spirit issued to Newstrike, 15,000,000 units ("Private
Placement Units") at a price of $0.15
per Private Placement Unit. Each Private Placement Unit was
comprised of one Common Share and one-half of a Common Share
purchase warrant ("Warrant"), exercisable at $0.30 per share for a period of two (2) years
following the date of issuance. The Common Shares and Warrants
issued to Newstrike are subject to a four month hold period.
Auxly Exercises Anti-Dilution Rights and Completes Private
Placement
In connection with the Newstrike Transaction, Auxly Cannabis
Group Inc. (TSXV:XLY) (formerly known as Cannabis Wheaton Income
Corp.) ("Auxly") exercised its anti-dilution rights and acquired an
additional 2,647,059 Private Placement Units of the Company at
$0.15 per Private Placement Unit for
proceeds of $397,058.85. In addition,
Auxly completed a concurrent private placement and acquired an
additional 4,411,765 Private Placement Units at $0.15 per Unit for proceeds of $661,764.75 (the foregoing transactions
collectively referred to as the "Auxly Private Placements").
The Common Shares and Warrants issued to Auxly are
subject to a four month hold period. Following completion of the
transactions described herein, Auxly will continue to hold
approximately 15% of the total issued and outstanding Common Shares
as of the date hereof.
Outlook
As a result of closing of its IPO, the Newstrike Transaction and
the Auxly Private Placements, Inner Spirit has raised a total of
$5,933,823.60 in cash proceeds, along
with acquiring the Newstrike Shares and Newstrike Warrants
described above.
The Company has a strengthened balance sheet and, together with
its franchisees, is now preparing to open the first wave of
dispensaries under its Spirit Leaf brand in BC, Alberta and Saskatchewan upon legalization and receipt of
the necessary permits. It will simultaneously continue the
development of its own proprietary cannabis brands and explore
other strategic investments as well as opening Spirit Leaf
locations in other jurisdictions as regulations may permit.
"Our shareholders, franchise partners, future customers, and the
cannabis industry in general, have all been very receptive to our
initiatives. We are looking forward to continuing to collaborate
with all stakeholders to support ongoing success of the Company as
we move toward the end of prohibition," added Darren Bondar,
President and Chief Executive Officer.
About Inner Spirit
Inner Spirit is establishing a chain of recreational cannabis
dispensaries under its Spirit Leaf brand. Supporting local
entrepreneurs by applying its award-winning franchise and retail
models, Inner Spirit has more than 100 franchise partnerships in
place for Spirit Leaf locations across BC, Alberta and Saskatchewan. Inner Spirit also intends to
operate corporate dispensaries in certain jurisdictions. Developing
a diverse portfolio of quality and curated lifestyle cannabis
products - including Spirit Leaf's own locally sourced lines –
Inner Spirit and its Spirit Leaf brand is positioned to be an
iconic Canadian brand and the most trusted source for recreational
cannabis. More information can be found on Inner Spirit's website
at www.innerspiritholdings.com.
Forward-looking statements
This press release contains statements and information that, to
the extent that they are not historical fact, may constitute
"forward-looking information" within the meaning of applicable
securities legislation. Forward-looking information may include
financial and other projections which involve known and unknown
risks, uncertainties and other factors which may cause actual
results, performance or achievements of Inner Spirit to be
materially different from any future results expressed or implied
by Inner Spirit, as well as statements regarding future plans,
objectives or economic performance, or the assumption underlying
any of the foregoing. In some cases, forward-looking statements can
be identified by terms such as "may", "would", "could", "will",
"likely", "except", "anticipate", "believe", "intend", "plan",
"forecast", "project", "estimate", "outlook", or the negative
thereof or other similar expressions concerning matters that are
not historical facts. Examples of such statements include, but are
not limited to, statements with respect to the objectives and
business plans of the Company; the receipt of all regulatory and
stock exchange approvals; the establishment of recreational
cannabis dispensaries in BC, Alberta and Saskatchewan and such other jurisdictions as
regulations may permit; the creation and operation of Up Cannabis
experiential centres in Spirt Leaf stores; the intention to grow
the Company's business and operations; the legalization of
cannabis for recreational use in Canada, including federal and provincial
regulations pertaining thereto and the timing related thereof and
the Company's intention to participate in such market, if and when
legalized; the competitive conditions of the industries in which
the Company operates; and laws and any amendments thereto
applicable to the Company. The forward-looking information
contained in this press release are made as of this date hereof,
and accordingly, are subject to change after such date. Inner
Spirit does not assume any obligation to update or revise and
forward-looking information, whether written or oral, that may be
made from time to time by the Company or on its behalf, except as
require by applicable law.
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATION
SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE.
SOURCE Inner Spirit Holdings