(TheNewswire)
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 datedDecember 31, 2021, it has applied for approval from the TSX VentureExchange (the “ TSXV ”) of its sale (the “ Transaction ”) ofcertain of its assets used in its California-based cannabidiolextraction business (collectively, the “ Assets ”) toStarling Brands Inc. (“ Starling ”), a private company that isleading extraction and formulation of medical, wellness andrecreational cannabis products in California, for an aggregatepurchase 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 ofthe Company, the full benefit of all warranties and warranty rightsagainst manufacturers or sellers which apply to the Assets, and allother property, assets, rights, interests, entitlements, benefits andprivileges of any nature or kind whatsoever of the Company directlyrelated to the foregoing.
In accordance with the terms and conditions of theAgreement, the Purchase Price is payable on the closing of theTransaction (the “ Closing ”) in $5,000,000 in cash, subject tothe Option (as herein defined) granted to the Company. Pursuant to theAgreement, the Purchase Price may be payable, at the option of theCompany, by the issuance of 5,000,000 Class A Common shares ofStarling (the “ OptionShares ”) at a deemed price of $1.00 per OptionShare (the “ Option ”). The Option shall be deemed to havebeen exercised by the Company and the Purchase Price will be payablethrough the issuance of the Option Shares, upon the delisting of theCompany’s common shares from the TSXV or TSXV approval of delisting.
The Company has submitted an initial application to theCanadian Securities Exchange (the “ CSE ”) to listHTC’s common shares (the “ HTC Shares ”), and expects to request thatthe TSXV voluntarily delist the HTC Shares upon the commencement oftrading on the CSE. At this time, the CSE has not yet reviewed thelisting statement of HTC in connection with its application for alisting on the CSE. It is expected that the listing of the HTC Shareson the CSE will be completed in the first quarter of 2022.
In the event that the Purchase Price is paid by theissuance of the Option Shares, upon the Closing, the Company will berequired to enter into a lock-up agreement (the “ Lock-Up Agreement ”), pursuant to which it will agree not to sell its OptionShares without the consent of Starling, until such Option Shares arereleased in accordance with a release schedule that provides for therelease of 25% of such Option Shares on the date that is 6 monthsafter the date on which the Option Shares commence trading on aCanadian Stock Exchange (the “ Listing Date ”) and on each of the dates thatis 12, 18 and 24 months following the Listing Date. In the event thatthat the Option Shares are not listed on a Canadian Stock Exchange byApril 30, 2022, the terms and conditions of the Lock-Up Agreementshall terminate.
Completion of the Transaction is subject to a number ofconditions, including but not limited to: the receipt of allcorporate, regulatory and other approvals necessary to complete theTransaction, including TSXV approval; Starling’s completion of aprivate placement of its units (in one or multiple tranches) for aminimum amount of $3,000,000; the Company having delivered to Starlinggood and marketable title to all of the Assets; the representations,warranties and covenants of each of the Company and Starling providedunder the Agreement being true and correct in all material respects atClosing; and compliance and performance by each of the Company andStarling of all of the terms, covenants and agreements set forth inthe Agreement on or before Closing. There can be no assurance that theTransaction will be completed as proposed or at all.
The Transaction constitutes a Reviewable Transactionpursuant to the policies of the TSXV and the Company has applied forapproval of the Transaction from the TSXV. Further details in respectof the Transaction will be included in a material change report to befiled by the Company following receipt of all necessary approvals inconnection with the Transaction, including final approval from theTSXV.
The Transaction is subject to TSXV approval.
The Company requested a voluntary trading halt of itscommon shares effective January 4, 2022 to allow the Company time tomake an application to the TSXV and to provide additional informationin respect of the Transaction. The Company expects the trading halt tobe lifted, and for the Company’s common shares to continue tradingat market open on January 10, 2022.
United StatesDisclaimer
This news release does notconstitute an offer to sell or a solicitation of an offer to buy anyof the securities in the United States. The securities have not beenand will not be registered under the United States Securities Act of1933, as amended (the " U.S. Securities Act ") or any state securities laws andmay 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. SecuritiesAct) unless registered under the U.S. Securities Act and applicablestate securities laws or an exemption from such registration isavailable.
NEITHER THE TSXVNOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THEPOLICIES OF THE TSXV ACCEPTS RESPONSIBILITY FOR THE ADEQUACY ORACCURACY OF THE RELEASE.
For moreinformation contact:
Jeffrey Allison,
HTC Extraction Systems
Tel: 306 ? 352-6132
E ? mail: lpk@htcextraction.com
HTC corporate developments can befollowed on www.htcextraction.com and is traded under the symbolHTC
This press release contains"forward-looking statements" or "forward-lookinginformation" (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 futureoperations that are subject to a number of assumptions, risks anduncertainties, many of which are beyond the control of HTC.Forward-looking statements are statements that are not historicalfacts 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 beachieved. This press release contains forward-looking statementspertaining to, among other things, the receipt of all necessaryapprovals in connection with the Transaction, including: finalapproval of the Transaction from the TSXV; the timing and ability ofthe Company to close the Transaction, if at all; and timing and theability of Starling to list the Option Shares on a Canadian SecuritiesExchange, if at all.
Forward-looking information is basedon current expectations, estimates and projections that involve anumber of risks, which could cause actual results to vary and, in someinstances, to differ materially from those anticipated by HTC anddescribed in the forward-looking information contained in this pressrelease.
Although HTC believes that thematerial factors, expectations and assumptions expressed in suchforward- looking statements are reasonable based on informationavailable to it on the date such statements were made, no assurancescan be given as to future results, levels of activity and achievementsand such statements are not guarantees of future performance.
The forward-looking statementscontained in this press release is expressly qualified by thiscautionary statement and are made as of the date hereof. HTC disclaimsany intention and has no obligation or responsibility, except asrequired by law, to update or revise any forward-looking information,whether as a result of new information, future events orotherwise.
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 reportingand undergo an annual verification and management certificationprocess. Investors can find Real-Time quotes and market informationfor the company on www.otcmarkets.com.
(links to:http://www.otcmarkets.com/stock/htprf/quote)
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