The business of Stralak after the completion of the Proposed Transaction (the “Resulting Issuer”), will be the business of Hempsana, which involves manufacturing cannabis derivatives and producing cannabis extracts for use in finished products, including vapeables, topical creams and infused consumables. Hempsana’s Health Canada Standard Processing Licensed, and EU-GMP compliant facility provides Hempsana access to wholesale and retail channels internationally, including the EU, Asia, South America, US and Canada.
Terms of the Proposed Transaction
The Proposed Transaction is structured as a three-cornered amalgamation pursuant to which a wholly-owned subsidiary of Stralak (“Subco”) and Hempsana will amalgamate under the provisions of the Canada Business Corporations Act, to form a new corporation, which will be a wholly-owned subsidiary of the Resulting Issuer; each issued and outstanding common share of Hempsana (each, a “Hempsana Share”) will be cancelled; and each shareholder of Hempsana (other than a dissenting shareholder) will receive a common share of the Resulting Issuer (each, a “Resulting Issuer Share”) for each cancelled Hempsana Share. In addition, holders of convertible securities of Hempsana will be able to exercise their securities for Resulting Issuer Shares in accordance with and permitted under their terms.
Prior to completion of the Proposed Transaction, Stralak will, among other things, change its name to “Hempsana Holdings Ltd.” or such other name as determined by Hempsana (the “Name Change”) and consolidate (the “Consolidation”) all of the issued and outstanding common shares of Stralak (“Stralak Shares”) into an aggregate number of Stralak Shares equal to either (A) if the Hempsana Private Placement (as defined below) is completed for aggregate cash gross proceeds of a minimum of $3,000,000 on or prior to 45 days following the date hereof (the “Minimum Financing”), 1,200,000, or (B) 1,500,000, if the Minimum Financing is not completed on or prior to 45 days following the date hereof.
Prior to the completion of the Proposed Transaction, Hempsana may complete a private placement (the “Hempsana Private Placement”) of securities to be determined by Hempsana at an issue price of a minimum of $1.05 per security.
In connection with the completion of the Proposed Transaction, Stralak will issue 21,871,667 Resulting Issuer Shares to the former holders of Hempsana Shares (exclusive of certain Hempsana Shares that may be issued pursuant to the Hempsana Private Placement, and to be issued to finders and a convertible debenture with a principal amount of $248,672 which will be exchanged for Hempsana Shares immediately prior to the completion of the Proposed Transaction). In addition, 1,655,345 stock options; 4,249,218 warrants will be exercisable into Resulting Issuer Shares in accordance with and as permitted under their terms. As a result of the completion of the Proposed Transaction, if the Minimum Financing is not completed, the current holders of Hempsana Shares will hold approximately 93.6% of the Resulting Issuer Shares and the current holders of Stralak Shares will hold approximately 6.4% of the Resulting Issuer Shares, on a non-diluted basis and not factoring in any securities issued under the Hempsana Private Placement. If the Minimum Financing is completed, the current holders of Hempsana Shares will hold approximately 94.8% of the Resulting Issuer Shares and the current holders of Stralak Shares will hold approximately 5.2% of the Resulting Issuer Shares, on a non-diluted basis and not factoring in any securities issued under the Hempsana Private Placement.
In addition, at closing of the Proposed Transaction, Hempsana will advance an aggregate of $200,000, subject to adjustment in accordance with the terms of the Combination Agreement, to certain directors, officers and consultants of Stralak, to pay management fees and expense reimbursements owed to such persons by Stralak.
Completion of the Proposed Transaction is subject to a number of conditions, including, among other others, receipt of all necessary shareholder and regulatory approvals, the execution of related transaction documents, the Name Change, the Consolidation, and conditional approval of the Canadian Securities Exchange for the listing of the Resulting Issuer Shares following completion of the Proposed Transaction.
Officers of the Resulting Issuer
Upon completion of the Proposed Transaction, management of the Resulting Issuer is expected to consist of the following individuals:
Randy Ko – President and Chief Executive Officer
Randy is an experienced entrepreneur, having successfully led three early stage high-growth companies, and has over 20 years of management consulting experience with market leaders, including Deloitte, in various industries including Retail, Financial, Oil and Gas, Tech, and Manufacturing.
David Chan – Chief Financial Officer and Secretary
David has over 20 years experience in accounting and finance, and has been a principal factor in helping a number of companies grow and to maximize stakeholder value. David also brings significant experience in helping companies grow through M&A. Previously, David was CFO at VersaPay Corp, a fintech software business. David is a CPA, CA, CFA, holds a BBA from Wilfrid Laurier University and an MBA from the Schulich School of Business.
Sohil Mana – Chief Quality Officer
Sohil Mana currently holds the position of President of Eurofins Experchem Canada, a Health Canada and FDA approved Biopharmaceuticals Services and Laboratories & Testing company specialized in testing Pharmaceuticals, Cosmetic, Medical Hemp and Food services globally. Sohil was instrumental in setting up the cannabis division for Eurofins and has helped accelerate the ACMPR license approval for more than 130 companies in Canada. With over 30 years of experience, Sohil is experienced in medical and product testing within the pharmaceutical industry. He was also active in pharma industry associations for 10 years as PSG course chair and Treasurer.
Stralak has ceased to carry on an active business and is presently engaged in identifying and evaluating suitable assets or businesses to acquire or merge with, with a view to maximizing value for shareholders.
Hempsana Inc. is a Canadian cannabis company incorporated under the Federal laws of Canada and is a specialized manufacturer of cannabis derivatives, focused on Extraction & Purification and End-Product Manufacturing. The Company’s EU-GMP compliant facility, located in Goderich Ontario, is Licensed under Health Canada’s Standard Processing and Industrial Hemp Licences. The Company’s focus is on producing consistent high-quality cannabis extracts for use in finished product development, including vapeables, topical creams and infused consumables.
Additional information regarding Stralak is available on SEDAR. Additional information regarding the Proposed Transaction and Hempsana will be made publicly available by Stralak in accordance with applicable securities laws and stock exchange requirements.
Stralak Resources Inc.
Chief Executive Officer, Chief Financial Officer & Director
T: 647 502-3558
Chief Executive Officer & Director
T: (647) 255-8849
As noted above, completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, receipt of all necessary shareholder and regulatory approvals. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the listing statement of the Resulting Issuer to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Stralak should be considered highly speculative.
The securities set forth herein have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
This press release contains forward-looking statements and forward-looking information within the meaning of applicable Canadian and U.S. securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward looking statements and information concerning the Proposed Transaction, the Hempsana Private Placement, the expected business of the Resulting Issuer, and the application to the CSE in respect of the Proposed Transaction. The forward-looking statements and information are based on certain key expectations and assumptions made by management, including expectations and assumptions concerning Stralak, Hempsana, the Resulting Issuer, and the Proposed Transaction, the timely receipt of all required securityholder, CSE and regulatory approvals and the satisfaction of other closing conditions in accordance with the terms of a Combination Agreement. Although management of each of Stralak and Hempsana believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information. There can be no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties, include, but are not limited to, the results of the due diligence review on either Stralak or Hempsana by the other are less than satisfactory, or the parties are unable to obtain the required regulatory and shareholder approvals. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward- looking information for anything other than its intended purpose. Management of each of Stralak and Hempsana undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.