Regina, Saskatchewan – TheNewswire – January 7, 2022 – HTC Purenergy Inc. o/a HTC Extraction Systems (“HTC” or the “Company”) (TSXV:HTC), (OTCQB:HTPRF), (UII:FRA) today announced that further to its news release dated December 31, 2021, it has applied for approval from the TSX Venture Exchange (the “TSXV”) of its sale (the “Transaction”) of certain of its assets used in its California-based cannabidiol extraction business (collectively, the “Assets”) to Starling Brands Inc. (“Starling”), a private company that is leading extraction and formulation of medical, wellness and recreational cannabis products in California, for an aggregate purchase price of $5,000,000 (the “Purchase Price”), pursuant to an asset sale and purchase agreement dated December 31, 2021 between the Company and Starling (the “Agreement”).
The Assets comprise certain equipment and inventory of the Company, the full benefit of all warranties and warranty rights against manufacturers or sellers which apply to the Assets, and all other property, assets, rights, interests, entitlements, benefits and privileges of any nature or kind whatsoever of the Company directly related to the foregoing.
In accordance with the terms and conditions of the Agreement, the Purchase Price is payable on the closing of the Transaction (the “Closing”) in $5,000,000 in cash, subject to the Option (as herein defined) granted to the Company. Pursuant to the Agreement, the Purchase Price may be payable, at the option of the Company, by the issuance of 5,000,000 Class A Common shares of Starling (the “Option Shares”) at a deemed price of $1.00 per Option Share (the “Option”). The Option shall be deemed to have been exercised by the Company and the Purchase Price will be payable through the issuance of the Option Shares, upon the delisting of the Company’s common shares from the TSXV or TSXV approval of delisting.
The Company has submitted an initial application to the Canadian Securities Exchange (the “CSE”) to list HTC’s common shares (the “HTC Shares”), and expects to request that the TSXV voluntarily delist the HTC Shares upon the commencement of trading on the CSE. At this time, the CSE has not yet reviewed the listing statement of HTC in connection with its application for a listing on the CSE. It is expected that the listing of the HTC Shares on the CSE will be completed in the first quarter of 2022.
In the event that the Purchase Price is paid by the issuance of the Option Shares, upon the Closing, the Company will be required to enter into a lock-up agreement (the “Lock-Up Agreement”), pursuant to which it will agree not to sell its Option Shares without the consent of Starling, until such Option Shares are released in accordance with a release schedule that provides for the release of 25% of such Option Shares on the date that is 6 months after the date on which the Option Shares commence trading on a Canadian Stock Exchange (the “Listing Date”) and on each of the dates that is 12, 18 and 24 months following the Listing Date. In the event that that the Option Shares are not listed on a Canadian Stock Exchange by April 30, 2022, the terms and conditions of the Lock-Up Agreement shall terminate.
Completion of the Transaction is subject to a number of conditions, including but not limited to: the receipt of all corporate, regulatory and other approvals necessary to complete the Transaction, including TSXV approval; Starling’s completion of a private placement of its units (in one or multiple tranches) for a minimum amount of $3,000,000; the Company having delivered to Starling good and marketable title to all of the Assets; the representations, warranties and covenants of each of the Company and Starling provided under the Agreement being true and correct in all material respects at Closing; and compliance and performance by each of the Company and Starling of all of the terms, covenants and agreements set forth in the Agreement on or before Closing. There can be no assurance that the Transaction will be completed as proposed or at all.
The Transaction constitutes a Reviewable Transaction pursuant to the policies of the TSXV and the Company has applied for approval of the Transaction from the TSXV. Further details in respect of the Transaction will be included in a material change report to be filed by the Company following receipt of all necessary approvals in connection with the Transaction, including final approval from the TSXV.
The Transaction is subject to TSXV approval.
The Company requested a voluntary trading halt of its common shares effective January 4, 2022 to allow the Company time to make an application to the TSXV and to provide additional information in respect of the Transaction. The Company expects the trading halt to be lifted, and for the Company’s common shares to continue trading at market open on January 10, 2022.
United States Disclaimer
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as such term is defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
NEITHER THE TSXV NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSXV ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.
For more information contact:
HTC Extraction Systems
HTC corporate developments can be followed on www.htcextraction.com and is traded under the symbol HTC
This press release contains “forward-looking statements” or “forward-looking information” (collectively referred to herein as “forward-looking statements“) within the meaning of applicable securities legislation. Such forward-looking statements include, without limitation, forecasts, estimates, expectations and objectives for future operations that are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of HTC. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur or be achieved. This press release contains forward-looking statements pertaining to, among other things, the receipt of all necessary approvals in connection with the Transaction, including: final approval of the Transaction from the TSXV; the timing and ability of the Company to close the Transaction, if at all; and timing and the ability of Starling to list the Option Shares on a Canadian Securities Exchange, if at all.
Forward-looking information is based on current expectations, estimates and projections that involve a number of risks, which could cause actual results to vary and, in some instances, to differ materially from those anticipated by HTC and described in the forward-looking information contained in this press release.
Although HTC believes that the material factors, expectations and assumptions expressed in such forward- looking statements are reasonable based on information available to it on the date such statements were made, no assurances can be given as to future results, levels of activity and achievements and such statements are not guarantees of future performance.
The forward-looking statements contained in this press release is expressly qualified by this cautionary statement and are made as of the date hereof. HTC disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
HTC Purenergy Inc. (OTCQB:HTPRF) trades on the OTCQB Venture Market for early stage and developing U.S. and international companies. Companies are current in their reporting and undergo an annual verification and management certification process. Investors can find Real-Time quotes and market information for the company on www.otcmarkets.com.
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