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://cnw.fm/O5L5b
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.
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