VANCOUVER, British Columbia, Sept. 06, 2018 (GLOBE NEWSWIRE) -- Goldrea Resources Corp.
(“Goldrea” or the “Company”) (CSE:GOR) (Frankfurt:GOJ) (Pink Sheets:GORAF)
Goldrea Resources Corp. (“Goldrea” or the “Company”) is pleased to announce the signing of a binding Letter of Intent (“LOI”)
with XChemistry Holdings, Inc. (“XChemistry or XChem”) headquartered in San Diego, California. The primary business of XChemistry
is focused on providing compliance testing for cannabis products. On January 1, 2018, new cannabis guidelines became effective in
the state of California, after legalizing its recreational use. It is XChem’s plan, partnering with Goldrea, to build a laboratory
testing facility in the Greater Los Angeles area. The lab is expected to be completed in a minimum of four months, and after
city and state requirements are fulfilled, be fully operational approximately two months following.
The market for cannabis products in California has been forecasted to surpass five billion dollars in 2019. California mandates
that samples from every type of cannabis be tested for impurities from a licensed laboratory. At a cost of estimated $400 per
sampling, this provides a lucrative source of revenue for an efficient and high capacity facility the XChem team will be building.
Only lab-tested products may be sold by licensed retailers as of July 1, 2018. With this new regulation in effect, there is a
shortage of testing services, causing long wait times for results, leading to delays in selling of product and possible spoilage.
This provides an immediate market for XChem participation. The cost of construction of the lab and becoming operational is
estimated to be three million dollars (CDN.)
XChem has an experienced group of experts in the field that will construct and operate the new facility. Chuck Nokes, CEO of
XChem, states, “We are excited to have found the right fit with Goldrea and now look forward to quickly moving this LOI forward to
a Definitive Agreement and begin the construction of a working laboratory that will fulfill a percentage of a massive need in the
coming years. We fully expect to play a major role in this field, along with future projects in DNA and non-cannabis application.
Our planned partnership with Goldrea gives us the public platform from which to build out our business plan efficiently and
effectively.
Under the LOI, Goldrea will acquire all of the issued and outstanding shares of XChemistry in exchange for issuing Goldrea
shares to the Xchemistry shareholders which collectively will equal approximately 10% of the issued and outstanding shares of
Goldrea at closing of the transaction. The value of this position is deemed to be approximately $320,000 based on Goldrea’s shares
outstanding priced at ten cents. Other key terms of the deal include:
- The Company must complete an equity financing of at least $2 million CDN, concurrent with the closing of the
acquisition.
- Xchemistry will be entitled to nominate one person to Goldrea’s board of directors.
- Goldrea will assume certain liabilities of Xchemistry.
- After the closing of the acquisition, Xchemistry (as a wholly-owned subsidiary of Goldrea) will enter into 3-year management
contracts with Chuck Nokes as CEO, Zac Simmar as President and CFO, and Dr. Charles Sailey as CSO.
- XChem’s founders will receive a total of US$150,000 cash bonus when Xchemistry attains net profits of at least US$500,000
over a trailing six-month period, and bonuses in the form of share issuances equal (collectively) to 10% of the issued and
outstanding Goldrea shares at the time Xchemistry reaches the milestones of $5 million, $15 million and $25 million of annual
revenues respectively, provided that net profits is at least 10% of the revenues attained. All benchmarks being reached would
result in a 40% ownership of Goldrea by XChemistry.
- Each party must be satisfied with its due diligence investigations of the other before completing the proposed
transaction.
- The proposed transaction is subject to obtaining all necessary consents including shareholder and regulatory approvals.
Construction of the laboratory is anticipated to begin in fourth quarter 2018 and end in March 2019.
Jim Elbert, President and CEO of Goldrea, states, "After much planning and investigation, we are quite satisfied that the
acquisition of XChemistry represents an exciting opportunity for Goldrea to enter the cannabis sector. We look forward to further
growth once we firmly establish this core business servicing a regulatory aspect of this burgeoning industry.”
ON BEHALF OF THE BOARD
“James Elbert”
James Elbert
President & CEO
For more information, please contact:
James Elbert, President and CEO
Telephone: (604) 559-7230
Email: jelbert@goldrea.com
The CSE has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. This
news release may contain “forward-looking statements”, which are statements about the future based on current expectations or
beliefs. For this purpose, statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements
by their nature involve risks and uncertainties, and there can be no assurance that such statements will prove to be accurate or
true. Investors should not place undue reliance on forward-looking statements. The Company does not undertake any obligation to
update forward-looking statements except as required by law.
