HTC Extraction Systems (TSX.V: HTC) (OTCQB: HTPRF), a
hemp-biomass processing entity, this morning announced the closing of its
previously announced share and purchase agreement (“SPA”) with Starling Brands,
Inc., a party at arm’s length to HTC, pursuant to which HTC purchased all the
issued and outstanding shares of Kase Farma Inc. Kase Farma, which is
authorized to operate in the areas of hemp cultivation, extraction, refining
and formulation in the State of California, is now a wholly owned subsidiary of
HTC. In accordance with the agreement, the company retains the management
services of Starling, led by highly regarded experts in the cannabinoid
extraction, formulation and refining industry, CEO Mike Reynolds and chief
science officer Drew Ford. “On behalf of Starling, we are extremely excited to
integrate our experience, know-how and pedigree with HTC’s technologies and
pedigree, to further the vision and execution as global leaders in the science
and production of the highest quality cannabinoid extractions and formulations.
The benefits of our products will be provided to the global community
consistent with the irreversible momentum of changing perceptions and
acceptance of the planet’s most useful and beneficial plant,” Starling Brands
CEO Mike Reynolds stated in the news release.
As part of the transaction, Kase Farma has entered into an
intellectual property licensing agreement with Starling. This agreement allows
for a technology transfer in which intellectual property and technology
licensed under this agreement will be used and deployed in HTC’s Canadian
facility. Total consideration payable to Starling pursuant to the Transaction
is US$900,000 in cash and the issuance of 8,000,000 units of HTC and 2,000,000
bonus units of HTC. Each unit is comprised of one common share and one half of
one common share purchase warrant. Each warrant will be exercisable to acquire
one common share at a price of C$0.70 for a period of 36 months from the
completion of the transaction. Each bonus unit is comprised of one common share
and one half of one common share bonus purchase warrant of HTC. Each bonus
warrant shall be exercisable to acquire one common share at a price of C$1.00
for a period of 36 months from the completion of the transaction. The units and
bonus units (collectively, the “compensation units”) are subject to legends
restricting their transfer and which will provide that: (i) one-third of the
compensation units shall become freely tradeable 12 months after the completion
of the transaction; (ii) one-third of the compensation units shall become
freely tradeable 18 months after the completion of the transaction; and (iii)
one-third of the compensation units shall become freely tradeable 24 months
after the completion of the transaction. In addition, HTC will be paying
compensation to Hillcrest Merchant Partners Inc., an arm’s length party, in the
form of units, for the development, negotiation and finalization of the
ancillary agreements to the SPA. All common shares issued pursuant to the
transaction and as compensation, are subject to a hold period under applicable
securities law until May 29, 2020.
To view the full press release, visit http://ibn.fm/BopvS
About HTC Extraction Systems
HTC Extraction Systems has developed and optimized proprietary
technologies designed for biomass extraction, distillation and purification of
ethanol and ethanol-based solvents used for the hemp-biomass and cannabidiol
(“CBD”) industry as well as gas and liquid extraction. HTC’s extraction and
purification systems are engineered to large scale to reduce capital and
operating costs while delivering superior performance measured by reduced
energy usage, lowered emissions and improved quality of the product produced.
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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