Land Purchase Agreement HTC Extraction Systems Announces Land Purchase Agreement
Regina, Saskatchewan – HTC Purenergy Inc. (dba “HTC Extraction Systems”) (“HTC”) (TSX-V: HTC) is pleased to announce that it has entered into a land purchase and sale agreement, pursuant to which, it will purchase 6 acres of land (“Land”), situate in Lajord, Saskatchewan, currently being leased from Kambeitz Agri Inc., for the purchase price of $240,000, conditional upon TSX Venture Exchange Inc. approval and completion of land subdivision (“Land Purchase Agreement”). The current lease is for a term of 10 years, renewable for 4 consecutive terms of 10 years each, at the option of HTC.
HTC is focused on its BOOM (build, own, operate and maintain) extraction tolling strategy and currently, has completed construction on the land, its 19,000-square-foot extraction tolling facility. The facility will be GMP Euro compliant and, in addition to on-site office and administration facilities, will include biomass processing, extraction, implementation of DeltaSolvTM technologies and Delta Purification® systems, distillate and refining equipment, laboratory quality control and testing operations. Also under construction on the Land is its 27,000 square-foot biomass extraction storage and processing facility.
Kambeitz Agri Inc. is a related party to HTC, due to the fact that a 50% shareholder of Kambeitz Agri Inc. is also a director and officer of HTC. As HTC is a public company, it is subject to Multilateral Instrument 61-101 ("MI 61-101") governing, among other things, transactions between listed issuers and related parties of such issuers. In accordance with MI 61-101, the Land Purchase Agreement would constitute a "related party transaction" for the purposes of MI 61-101 due to the fact that, HTC will purchase or acquire an asset from a related party for valuable. In accordance with MI 61-101, absent an exemption, MI 61-101 would require HTC to receive a formal valuation of the subject matter and "majority of the minority" shareholder approval to proceed with the Land Purchase Agreement. HTC relied on the exemptions set forth in Section 5.5(a) of MI 61-101 (as it relates to formal valuations) and the exemption set out in 5.7(1)(a) of MI 61-101 (as it relates to shareholder approval), which exemptions provide that at the time the Land Purchase Agreement is agreed to, neither the fair market value of the Land, nor the fair market value of the consideration for the Land, insofar as it involves interested parties, exceeds 25 percent of HTC’s market capitalization.
HTC has appointed a special committee, comprised of 2 independent directors, who has considered and approved the terms of this transaction.