HTC Extraction Systems (TSX.V: HTC) Building on Financing in Bid to Become Go-to CBD FSO Extractor and Refiner

• HTC Extraction Systems is advancing its strategy to use its ethanol-based distillation know-how to extract and refine cannabidiol full spectrum oil in Canada and the United States
• The company’s proprietary Delta Purification system and DeltaSolv technologies will be housed in a Saskatchewan biomass processing facility, with a future second facility anticipated in the United States
• HTC closed a bought deal agreement on October 22 worth $10 million in funding for the company’s operations
• The company reported unaudited interim condensed consolidated financial results in August that showed the company experienced a three-fold increase in revenue for the year

HTC Extraction Systems (TSX.V: HTC) is advancing its plans to become one of the largest extraction, distillation and refining operators in North America in the market for fully integrated hemp, cannabidiol (CBD) and other cannabinoid products following the closing date for a bought deal agreement that is set to add C$10 million in aggregate gross proceeds to HTC’s coffers.

HTC has developed and subsequently improved on proprietary systems for biomass, gas and liquid extraction, founded on the distillation of ethanol and ethanol-based solvents used in the extraction process. The company is developing an extraction, distillation and refining strategy that derives hemp biomass product from farmers through tolling contracts in Canada and anticipated opportunities in the United States.

HTC has built a 19,000-square-foot extraction facility in Port Lajord, Saskatchewan, near the metropolitan Regina commerce center. The facility will provide the commissioning for newly installed biomass processing, extraction, distillation and refining equipment, utilizing the corporation’s DeltaSolv™ technologies and Delta Purification® systems.

The facility will also house laboratory quality control and testing operations, as well as on-site administration offices. HTC is also engaged in preliminary due diligence investigations that would expand its operations into the United States, where the company seeks to replicate its model of using hemp biomass tolling contracts with producers and other providers to begin extraction for the 2020 hemp crop growing year in an as-yet-to-be-determined location.

The company will ensure tolling and processing volumes by selecting qualified harvest contractors and using diversified growing locations, high performance regulated genetics and irrigation to establish two or three annual crop rotations, according to a recent company statement (http://ibn.fm/dVg6j).

The brokered private placement “bought deal” with Canaccord Genuity Corp. involves 25 million units of combined common shares plus warrants to purchase further common shares at a price amended to C$0.40 per unit (http://ibn.fm/KdjAA). Canaccord is a global, full-service investment bank focused on growth companies, and the sole bookrunner and lead underwriter on behalf of a syndicate of underwriters for the bought deal.

Upon receipt of required licenses, HTC’s existing operation in Canada includes receiving a projected five million kilograms of hemp biomass from this year’s Saskatchewan harvests, using five varieties of Health Canada-approved cultivars as the genetic foundation. The tolling agreement allows HTC to extract CBD full spectrum oil (FSO) and to keep a percentage of the distillate as payment of the tolling fee.

The company plans to use the CBD FSO distillate in sales and offtake agreements with its related entity, Purely Canada Foods, through which it will sell and distribute its CBD to Purely Canada Foods’ customers under the brands Purely Canada Hemp, Purely Canada CBD, Purely Canada Cannabinoids and Purely Canada THC. The hemp byproducts will also be available for expected singulation and sale to the cannabinoid pharmaceutical market.

In August, the company posted unaudited interim condensed consolidated financial results that showed the company experienced a three-fold increase in revenue during the previous year (http://ibn.fm/M9XcB). HTC’s carbon dioxide extraction business and fertilizer and grain handling operations drove revenues from $560,260 in 2018 to $1.85 million this year.

For more information, visit the company’s website at www.HTCExtraction.com

NOTE TO INVESTORS: The latest news and updates relating to HTC are available in the company’s newsroom at http://ibn.fm/HTC

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