World Class Extractions (PUMP.C), a newcomer in the extraction sector, signed an LOI to acquire Quadron Cannatech (QCC.C) today.
This acquisition will put World Class Extractions in a position to capitalize on the emerging Canadian market for edibles, topicals and concentrates when they are legalized in October.
World Class Extractions offers single step continuous flow extraction services to the hemp and cannabis industry using patent pending technology.
The company intends to leverage Quadron Cannatech’s technical expertise, established customer base and management team in an effort to become a leading provider of extraction and processing solutions.
“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,” said Rosie Mondin, CEO of Quadron Cannatech.
World Class came into existence in a reverse takeover of CBD Med Research last month and then immediately closed their first financing at $23 million. They got approval from the CSE to list their shares earlier this month, and went shopping for their first acquisition.
It’s fortunate timing for World Class, because Quadron’s stock price is up 18.42% today.
World Class said they believe that their strong cash position and technology, which uses both wet and dry cannabis and hemp as inputs, will be the perfect complement to Quadron’s employees and experienced executive team, along with their proven revenue track record.
The terms of the LOI give Quadron shareholders two common shares of World Class for each share of Quadron they hold, as well as approximately 143,300,894 World Class shares when the arrangement closes.
Also, Quadrant warrant and option holders will be able to exchange them for an equal amount of the same from World Class.
What is World Class getting?
Quadron has an established and growing revenue stream. Their revenue for the six months ended Oct. 31, 2018 increased by 50.71% when compared to the same period in 2017.
Equity.Guru has been covering Quadron since Feb. 24, 2017, when founder Chris Parry was a private investor.
“Quadron provides equipment for extractions. They formulate products for dealing with weed odors, they’re developing extraction techniques and products, they’re developing vape devices, but mostly they find pointy-headed experts with ideas, put those ideas into reality.”
–Chris Parry
Quadron does this through their three subsidiaries:
- Soma Labs, their R&D wing.
- Cybernetic Control Systems, their engineering wing.
- Greenmantle Products, their product development wing.
These subsidiaries have produced a number of different products from retail vape pens to their two main sources of income, the BOSS CO2 biomass extractor and the BEAST ethanol biomass extractor.
Quadron Cannatech has 71,650,447 issued and outstanding shares with a market cap of $16.1 million. Shares rose CAD$0.035 to end the day at $0.225 per share.
PUMP has 451,180,147 issued and outstanding shares and is valued at $65.4 million. The company’s SP settled at $0.145.
–Joseph Morton
Full disclosure: Quadron Cannatech is an Equity.Guru marketing client.