World Class Extractions Inc. (“
World Class”) (CSE:
PUMP) and Quadron Cannatech Corporation
(“
Quadron”) (CSE: QCC) are pleased to announce
that they have entered into a binding letter of intent (the
“
LOI”) to proceed with a business combination by
way of a statutory plan of arrangement under the Business
Corporations Act (British Columbia) pursuant to which World Class
has agreed to acquire, either directly or through a wholly-owned
subsidiary, all of the issued and outstanding common shares of
Quadron (the “
Arrangement”).
Under the terms of the LOI, on completion of the
Arrangement, the shareholders of Quadron (the “Quadron
Shareholders”) will receive two common shares (the
“Exchange Ratio”) of World Class (a “World
Class Share”) for each common share of Quadron (a
“Quadron Share”) held. On closing of the
Arrangement, it is expected that the current Quadron Shareholders
will receive approximately 143,300,894 World Class Shares.
Concurrently with the closing of the Arrangement, the holders of
options and warrants in the capital of Quadron will receive a
proportionate number of options and warrants of World Class.
Final terms of the Arrangement will be set out
in an arrangement agreement (the “Arrangement
Agreement”) to be entered into by the parties. The
Arrangement Agreement will contain representations and warranties
for the benefit of each of World Class and Quadron, conditions
relating to shareholder, court and regulatory approvals, material
adverse changes and compliance with the Arrangement Agreement as
are in each case customary in comparable transactions of this
nature. The Arrangement Agreement will include, among other things,
a non-solicitation covenant on the part of Quadron (subject to
customary fiduciary out provisions). In the event of a superior
proposal, World Class will have the right to either match such
superior proposal or receive a termination fee to be agreed by the
parties in the Arrangement Agreement, commensurate with
transactions of a similar size.
Completion of the Arrangement is subject to a
number of conditions being satisfied or waived by one or both of
World Class and Quadron at or prior to closing of the Arrangement,
including: entry into the Arrangement Agreement; approval of the
Quadron Shareholders, together with any requisite minority
approvals; and receipt of all necessary regulatory and court
approvals and the satisfaction of certain other closing conditions
customary for a transaction of this nature. Quadron intends
to engage an independent financial advisor to assist the Board of
Directors and to provide a fairness opinion, if advisable.
Directors, officers and certain shareholders of
Quadron representing 23% of the issued and outstanding Quadron
Shares have agreed to enter into voting and support agreements
under which they will agree to vote in favour of the
Arrangement.
Details of the Arrangement, including a summary
of the terms and conditions of the Arrangement Agreement, will be
disclosed in a management information circular of Quadron, which
will be mailed to Quadron Shareholders and will also be available
on SEDAR at www.sedar.com.
Transaction Highlights
The proposed Arrangement is intended to create a
leading provider of extraction and processing solutions. The
combined entities will leverage Quadron’s technical expertise,
established customer base and deep management team with World
Class’s unique patent-pending technology and strong cash position
resulting from its recent $23,000,000 private placement. The
proposed Arrangement would produce the following synergies:
- Quadron’s extraction and processing systems, which are
automated and have been simplified relative to comparable
technologies;
- a deep roster of Quadron executives and employees that have
been operating in the extraction and processing sector for over
four years;
- an established and growing revenue stream, as demonstrated by
Quadron’s revenue increasing by 50.71% for the six months ended
October 31, 2018 when compared to the same period in 2017;
- World Class’s unique patent-pending technology, which World
Class anticipates will provide higher yields of full spectrum
cannabis oil at faster rates and larger volumes than current
extraction technologies; and
- a strong cash position resulting from World Class’s
recently-closed private placement for gross proceeds of
approximately $23,000,000.
Rosy Mondin, CEO of Quadron, stated, "We are
very excited to proceed with this strategic alliance with World
Class and believe it marks a definitive shift in our business
model. Since our launch, Quadron’s focus has been the development
of extraction and processing solutions to simplify and automate the
very complex extraction process for cultivators. As the industry
prepares for the legalization and regulation of cannabis
concentrates and edibles in Canada, this transaction provides the
necessary resources to increase sales, distribution and establish
partnerships with leaders in industry with WCE, which will provide
a significant growth opportunity for our shareholders. This merger
combines the strength of both companies to strategically position
them as leading global extractions solutions provider for
cultivators and processors both within Canada and internationally
to serve a rapidly growing cannabis oils market.”
Michael McCombie, Chief Executive Officer of
World Class, added, “The combination of our business with Quadron’s
gives us an opportunity to accelerate our goal of becoming the
global leader in extraction and processing in general, with a
particular focus on large-scale processing of CBD from hemp. We
believe that our strong cash position and unique patent-pending
technology, which can use both wet and dry cannabis and hemp as
inputs, is the perfect complement to Quadron’s experienced team of
executives and employees, along with their proven year-over-year
revenue increases. This transaction is transformative for World
Class and its shareholders, and we couldn’t be happier to be able
to announce it on our first day of being listed on the CSE.”
The Arrangement is an arm’s length transaction
pursuant to applicable regulatory policies.
This announcement is for informational purposes
only and does not constitute an offer to purchase, a solicitation
of an offer to sell any shares or a solicitation of a proxy.
About Quadron:Quadron, through
its wholly owned subsidiaries, provides turn-key extraction and
processing solutions for the cannabis industry including
proprietary industrial grade equipment, custom build processing
facilities, ancillary products, and scientific services. Quadron
delivers streamlined, cost-effective and innovative solutions to
help licensed growers, producers and processors develop market
ready products all to achieve quicker ROI.
For more information, visit:
www.quadroncannatech.com
On behalf of the Board of Directors
ofQUADRON CANNATECH CORPORATION
Rosy MondinCEOrosy@quadroncannatech.com
Investor Relations Contact:KIN Communications
Inc.Caleb Jeffries, VP, Investor
Relations1-866-684-6730QCC@kincommunications.com
About World Class Extractions
Inc.
The Company is a Canadian based developer of an
innovative extraction process for both the hemp and cannabis
industry. The Company intends to provide single step continuous
flow extraction services to the hemp and cannabis industry. Using
patent pending technology, the Company’s results produce higher
yields and better quality crude hemp oil at faster rates. The
technology allows the extraction of CBD Oil and other related
extracts from wet or dried natural plants. The Company can save its
clients floor space, utility drying costs, equipment and processing
labour costs.
For further information please contact:
Michael McCombie Chief Executive Officer Email:
mike@wcextractions.com
Neither the CSE nor its Market Regulatory (as
that term is defined in the policies of the CSE) accepts
responsibility for the adequacy or accuracy of this release.
Statements included in this announcement,
including statements concerning our plans, intentions and
expectations, which are not historical in nature are intended to
be, and are hereby identified as “forward-looking
statements”. Forward-looking statements may be identified by
words including “anticipates”, “believes”, “intends”, “estimates”,
“expects” and similar expressions, including the proposed
Arrangement will receive the requisite corporate and regulatory
approvals, the proposed Arrangement will successfully close as
anticipated by management, the holders of, the directors, officers
and insiders of Quadron will enter into voting support agreements
to vote in favor of the proposed Arrangement and Quadron will hire
financial advisors are forward-looking statements and contain
forward-looking information. Forward-looking statements are based
on certain material assumptions and analysis made by World Class
and Quadron and the opinions and estimates of management as of the
date of this press release, including that the proposed Arrangement
will receive the requisite corporate and regulatory approvals to
close, the proposed Arrangement will successfully close on the
timeline and on the terms as anticipated by management, market
conditions will remain similar to present market conditions, that
the directors, officers and insiders of Quadron will not object to
signing an agreement to vote their shares in favor of the proposed
Arrangement, Quadron will hire financial advisors and that the
proposed synergies resulting from the combined entities will occur
as stated or at all. These forward-looking statements are subject
to known and unknown risks, uncertainties and other factors that
may cause the actual results, level of activity, performance or
achievements of World Class and Quadron to be materially different
from those expressed or implied by such forward-looking statements
or forward- looking information. Important factors that may cause
actual results to vary, include, without limitation, the proposed
Arrangement will not receive either the requisite corporate or
regulatory approval to close, the proposed Arrangement will not
close on the timeline or on the terms as anticipated by management,
that the directors, officers and insiders of Quadron will object to
signing an agreement to vote their shares in favor of the proposed
Arrangement, Quadron will not hire financial advisors and the
proposed synergies of the combined entities will not be realized as
stated above or at all. Although management of Quadron and World
Class have attempted to identify important factors that could cause
actual results to differ materially from those contained in
forward-looking statements or forward- looking information, there
may be other factors that cause results not to be as anticipated,
estimated or intended. There can be no assurance that such
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking statements and forward-looking information. Readers
are cautioned that reliance on such information may not be
appropriate for other purposes. Quadron and World Class do not
undertake to update any forward-looking statement, forward-looking
information or financial out-look that are incorporated by
reference herein, except in accordance with applicable securities
laws.
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