2021-08-06 10:33 ET - News Release
Mr. Jeff Allison reports
HTC ANNOUNCES BOARD APPROVAL OF DIVIDEND-IN-KIND SHARES OF DELTA CLEANTECH INC.
HTC Purenergy Inc. has approved the issuance of a special dividend-in-kind of 12 million of the 20 million common shares of Delta CleanTech Inc. held by HTC.
The dividend will be payable on or before Sept. 15, 2021, to holders of record of common shares of HTC at the close of business on Aug. 13, 2021.
The dividend will be taxable and non-residents of Canada will be subject to Canadian withholding taxes. In respect of those non-residents of Canada which are subject to withholding taxes, HTC will retain such number of Delta shares with a fair market value equal to the maximum withholding obligation for such respective shareholder. Shareholders with questions regarding the tax treatment of dividends should consult with their own tax advisers or contact their local office of the Canada Revenue Agency and, where applicable, the provincial taxation authorities.
The dividend will be distributed on a pro rata basis. No fractional shares or cash in lieu thereof (or any other form of payment) will be payable under the dividend. Any fractional interests in Delta shares under the dividend will be rounded up or down to the nearest whole number of shares. Based upon the number of HTC shares currently outstanding and ignoring the effect of rounding for fractional interests or any convertible securities which may be exercise prior to the record date, one Delta share will be paid under the dividend for approximately every 17.25 HTC shares held on the record date. It is expected that DRS statements evidencing the Delta shares paid under the dividend will be mailed to holders of HTC shares on or before Sept. 30, 2021.
The Delta shares distributed under the dividend are subject to a pooling arrangement restricting the trading of the Delta shares on a stock exchange with a release schedule over a period of 24 months at three-month intervals following the listing of the common shares of Delta on a recognized stock exchange in Canada.
The Delta shares were acquired by HTC in connection with the previously announced sale of clean energy assets to Delta, paid for by the issuance of 20 million Delta shares. The clean energy assets consisted of all of the intellectual property and certain contractual agreements for the operation of HTC's CO2 capture systems and reclaimer systems.
Following the distribution of the Delta shares under the dividend, HTC will continue to hold eight million Delta shares, some of which will be distributed to holders of HTC in one or more future distributions of dividends.
The company has filed a Form 3E with the TSX Venture Exchange in respect of the dividend, notifying the exchange of the record date. The distribution of the dividends is subject to regulatory approval, including the approval of the exchange.
Delta is differentiated in the market by developing its proprietary CO2 extraction and patented purification technology with a focus on environmental, social and governance (ESG) in response to greater acceptance of climate change and its effects, as well as social licence being sought by corporations in the energy industry. A reduced environmental footprint, through the capture of CO2, redirection of industrial byproducts as usable hydrogen and utilization of reclaimed, recycled and reused extraction fluids, has become an important currency for energy businesses, avoids the cost of increasing regulation consisting of penalties through fees and taxation, and makes a strong statement to stakeholders who expect ESG and identity preserved waste (IPW) protocols to be instituted by energy companies.
HTC's sale of its clean energy assets has unlocked the value of the clean energy assets IP by allowing Delta to be financed and its growth accelerated by a focused skilled and experienced management team. The dividend, paid as a dividend-in-kind of Delta shares, allows HTC shareholders to participate directly in Delta's growth and success.
On Jan. 28, 2021, HTC issued a press release regarding the disposition of the clean energy assets, containing a discussion of the rationale and benefits of the transaction. HTC shareholders are now realizing those benefits by directly holding shares in Delta as well as HTC.
HTC continues to operate its business associated with its hemp segment, which includes the production contracting of broad acre industrial hemp for: biofibre utilized in bioplastics, biotextiles/composites, and biocellulose, as well as hemp seed protein and hemp seed oil, and cannabinoid extraction, and continues to diversify its hemp portfolio.