Top Strike Announces 2021 Third Quarter Financial Results ending January 31, 2021 and Corporate Update

Rhea-AI Summary

Top Strike Resources Corp. (OTCQB: TPPRF) reported financial results for the quarter ending January 31, 2021, showing revenue of $142,842, a slight decline from $144,635 in the previous quarter. The company posted a net loss of $663,014, following a loss of $134,587 in the prior quarter. Total assets stood at $10,464,502 with total liabilities at $2,239,989. Vencanna announced plans to acquire Cannavative Group for US$2 million, aiming for completion in summer 2021, contingent on CSE approval and shareholder consent.

Positive

• Plans to acquire Cannavative Group, enhancing market position in Nevada.
• Cannavative generates monthly revenues approaching US$1.5 million, indicating strong sales potential.

Negative

• Significant quarterly loss of $663,014, impacting overall financial health.
• Revenue decline from $144,635 to $142,842 over the last quarter.

CALGARY, AB, March 30, 2021 /PRNewswire/ - Top Strike Resources Corp. d.b.a. "Vencanna Ventures" (the "Corporation" or "Vencanna") (CSE: VENI) (OTCQB: TPPRF) is pleased to provide a summary of its financial results as of January 31, 2021.  Selected financial information is outlined below and should be read in conjunction with the Corporation's financial statements and management's discussion and analysis for the three ended January 31, 2021, which are available on SEDAR at www.sedar.com.

Financial Highlights

The following financial data is selected information for the Corporation for the eight most recently completed financial quarters:

($)	Jan 31, 2021	Oct 31, 2020	July 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019	Jul 31, 2019	Apr 30, 2019
Revenue	142,842	144,635	127,166	950,424	307,630	281,650	113,548	222,857
Gain (Loss) for the period	(663,014)	(134,587)	(253,263)	712,761	59,196	(60,828)	(205,824)	(1,390,478)
Gain (Loss) per share - basic	(0.00)	(0.00)	(0.00)	0.00	0.00	(0.00)	(0.00)	(0.02)
Total assets	10,464,502	10,789,987	10,873,139	9,293,961	8,671,208	8,438,837	8,468,446	8,603,826
Total liabilities	2,239,989	1,900,699	1,870,846	76,132	66,268	37,109	58,138	58,370

Expenses for the three months ended January 31, 2021 was $805,856 (2020 - $248,434) of which $554,260 (2020 - $Nil) is related to unrealized changes in fair market value for investments and other financial instruments and $251,596 (2020 – $248,434) is related to general and administrative expenses.

The unrealized loss of $554,260 consists of $351,000 (2020 - $Nil) from the change in fair market value of the derivative portion of the convertible debenture which increased due to higher volatility of the common shares of the Corporation during the quarter.  The remaining unrealized loss of $203,260 (2020 - $nil) was due to the impact of foreign currency fluctuations related to the Corporation's investments and its convertible debenture.

Corporate Update and Recent Developments

On March 12, 2021 Vencanna announced that it had entered into a loan agreement with the Cannavative Group LLC ("Cannavative") for US$2.0 million (the "Loan").  Further, the Corporation announced that it had entered into an exclusive non-binding letter of intent with Cannavative (the "LOI"), pursuant to which Vencanna will acquire all of the common shares in the capital of Cannavative in an all-share exchange through the issuance of an aggregate of 360,000,000 common shares of Vencanna ("Vencanna Shares") at a deemed issuance price of US$0.05 per Vencanna Share (~$0.065 per Vencanna Share, the "Transaction"). 

The Transaction is subject to, among other things, the execution of a definitive agreement between Vencanna and Cannavative (the "Definitive Agreement") and customary closing conditions. As the Transaction will be deemed a "Fundamental Change" pursuant to the policies of the Canadian Securities Exchange (the "CSE"), the Transaction is also subject to the acceptance of the CSE and the approval of shareholders of Vencanna holding not less than 50% plus one Vencanna Share of the issued and outstanding Vencanna Shares.  The Transaction is expected to be completed in the summer of 2021. For more information on the Transaction, see the Corporation's press release dated March 12, 2021.

The Loan matures on March 11, 2022, at which time Cannavative will repay the Loan in its entirety including any accrued interest. Prior to the execution of the Definitive Agreement, interest on the Loan shall be 17.5% per annum. Upon execution of the Definitive Agreement, interest shall be reduced to 12.5% per annum. 

About Cannavative

Cannavative is a leading premium cannabis brand in the state of Nevada, producing a wide variety of flower and extracted products, including its award-winning infused pre-roll, the Motivator.  Cannavative has deep penetration into the Nevada market as its products are sold in over 80% of the state's dispensaries and retail outlets, resulting in monthly revenues approaching US$1.5 million per month.  Cannavative is a multi-cup winner; a gold and silver medalist at the 2020 Las Vegas Cannabis Awards, in 2019 they won the Jack Herer Cup for their vape pen, and in 2018, Leafly named them the Best Flower Products brand.  Based in Reno, Nevada, they have 14,500 square feet of canopy, with the ability to significantly expand to meet their growing demand.  In addition, the facility houses a 10,000-sf state-of-the-art pharmaceutical-grade extraction lab and kitchen. 

The Nevada market continues to grow.  According to Nevada Department of Taxation, Q4 2020 cannabis sales were 26% higher in 2020 than 2019.  This in spite of the fact that tourism was down 55%.  BDS Analytics projects the NV market will grow another 27% in 2021 to $1 billion in sales. 

About Vencanna

On September 24, 2018, the Corporation announced the completion of a recapitalization financing, the appointment of a new management team and board of directors and commencement of trading on the CSE. The transactions have transitioned the Corporation from an oil and gas issuer to a merchant capital firm, rebranded as "Vencanna Ventures". The recapitalized Corporation aims to be a go-to capital provider for early-stage global cannabis initiatives with an emphasis on strong management operating in state compliant jurisdictions with barriers to entry. The Corporation looks to provide investors with a diversified, high-growth, cannabis investment strategy through strategic investments focused through-out the value chain (cultivation, processing and distribution, and including ancillary businesses).

Forward-Looking Statements

This news release may include "forward-looking statements" which reflect the Corporation's current expectations regarding the future results of operations, performance and achievements of the Corporation, including but not limited to: the signing of a Definitive Agreement in respect of the Transaction, including the terms thereof; timing for completion of the Transaction; required approvals for the completion of the Transaction and the expected receipt thereof; the business plan of the Corporation and Cannavative, including the business plan of the go-forward entity after completion of the Transaction; the anticipated benefits of the Transaction; the market for medical cannabis in the United States; the state of the cannabis market and U.S. regulatory changes in respect thereof; the effects of COVID-19 on the operations of Cannavative and the Nevada cannabis industry, generally; and expectations regarding the business plans of such companies. When used in this news release, the words "will," "anticipate," "believe," "estimate," "expect," "intent," "may," "project," "should," and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are founded on the basis of expectations and assumptions made by the Corporation, including expectations and assumptions concerning: the Transaction, including CSE and shareholder approvals, the execution of the Definitive Agreement in respect thereof and the satisfaction of other closing conditions in accordance with the terms of the Definitive Agreement; the future operations of, and transactions contemplated by, the Corporation and Cannavative; the impact of increasing competition; timing and amount of capital expenditures; the legislative and regulatory environments of the jurisdictions where the Corporation will carry on business, have operations or plan to have operations; the ability of the Corporation to enter into contracts with companies to provide financing on acceptable terms; conditions in general economic and financial markets; the ability of the Corporation's investments to execute on their business plan; and the Corporation's ability to obtain additional financing on satisfactory terms or at all. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Corporation believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized.

Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to, changes to global cannabis laws, how the developing U.S. legal regime will impact the cannabis industry, the ability of the Corporation to implement its corporate strategy, the state of domestic and international capital markets, the ability to obtain financing, changes in general market conditions and other factors more fully described from time to time in the reports and filings made by the Corporation with securities regulatory authorities. Except as required by applicable laws, the Corporation does not undertake any obligation to publicly update or revise any forward-looking statements.

Neither the Canadian Securities Exchange nor its Market Regulator (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this news release.

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SOURCE Top Strike Resources Corp.

FAQ

What were Top Strike Resources Corp.'s latest earnings results for TPPRF?

For the quarter ending January 31, 2021, Top Strike reported a revenue of $142,842 and a net loss of $663,014.

What financial challenges did Top Strike Resources face in its latest report?

The company faced a revenue decline and posted a significant net loss of $663,014 for the quarter.

What is the significance of the Cannavative Group acquisition for TPPRF?

The acquisition aims to strengthen Vencanna's position in the growing Nevada cannabis market with Cannavative's established brand and revenue.

When does Top Strike plan to complete the Cannavative acquisition?

The acquisition is expected to be completed in summer 2021, subject to regulatory approvals.