~ Upon sale, World-Class will receive cash and shares of Fire & Flower, a leading technology- powered, adult-use cannabis retailer with 100 corporate-owned stores in its network
VANCOUVER, December 9, 2021 – World-Class Extractions Inc. (CSE: PUMP) (FRA:WCF) (OTCQB:WCEXF) (the “Company” or “World-Class”), is pleased to provide an update on Pineapple Express Delivery Inc. (“Pineapple Express”), a company in which World-Class has an interest. Pineapple Express is Canada’s largest delivery and logistics company serving the cannabis sector.
On December 8, 2021, Fire & Flower Holdings Corp. (“Fire & Flower”) (TSX: FAF; OTCQX: FFLWF) and its wholly owned subsidiary Hifyre™ Inc. (“Hifyre”) entered into a definitive agreement to acquire Pineapple Express (the “Transaction”).
Total consideration for the Transaction is approximately up to C$11.7 million, payable by way of assumption and repayment of approximately $5.3 million in debt owed by Pineapple Express and the issuance of up to approximately 1,267,761 common shares of Fire & Flower (the “Consideration Shares”), subject to Pineapple Express achieving certain performance-based milestones in the fiscal 2022 year. Pineapple Express’ revenue for the trailing 12-month period ended October 31, 2021 was approximately $10 million.(1)
The Transaction will be completed by way of a three-cornered amalgamation with a newly incorporated subsidiary of Hifyre. Completion of the Transaction is subject to the satisfaction or waiver of customary closing conditions, including the approval of the Toronto Stock Exchange and approval by the shareholders of Pineapple Express at a shareholders’ meeting to be convened in January 2022. The Transaction is expected to close in the first quarter of 2022.
In connection with the Transaction, World Class will receive approximately $2,000,000 in cash and up to approximately 273,081 Consideration Shares.
World-Class is an innovation-driven company with a focus on the evolving cannabis and hemp industries. World-Class offers compliant and secure delivery of government regulated products through its subsidiary Pineapple Express Delivery Inc., including medical and recreational cannabis in Ontario, Manitoba and Saskatchewan, and liquor delivery in certain jurisdictions in Saskatchewan. World-Class continues to investigate opportunities to monetize its technology, including its extraction and processing systems, technology, and processes, manufactured and created by its subsidiary, Soma Labs Scientific Inc.
(1) Preliminary and unaudited financial results are subject to customary financial statement procedures. Actual results could be affected by subsequent events or determinations. While the Company believes there is a reasonable basis for these preliminary financial results, the results involve known and unknown risks and uncertainties that may cause actual results to differ materially. These preliminary fiscal results represent forward-looking information. See “Cautionary Statement Regarding Forward- Looking Information” and “Financial Outlook”.
About Fire & Flower
Fire & Flower is a leading, technology-powered, adult-use cannabis retailer with 100 corporate-owned stores in its network. The Company leverages its wholly-owned technology development subsidiary, Hifyre Inc., to continually advance its proprietary retail operations model while also providing additional independent high-margin revenue streams. Fire & Flower guides consumers through the complex world of cannabis through education-focused, best-in-class retailing while the HifyreTM digital retail and analytics platform empowers retailers to optimize their connections with consumers. The Company’s leadership team combines extensive experience in the technology, cannabis and retail industries.
Through the strategic investment of Alimentation Couche-Tard Inc. (owner of Circle K convenience stores), the Company has set its sights on global expansion as new cannabis markets emerge and is poised to expand into the United States when permitted through its strategic licensing agreement with Fire & Flower U.S. Holdings upon the occurrence of certain changes to the cannabis regulatory regime.
Fire & Flower is a multi-banner cannabis retail operator that owns and operates the Fire & Flower, Friendly Stranger, Happy Dayz and Hotbox brands. Fire & Flower Holdings Corp. owns all issued and outstanding shares in Fire & Flower Inc. and Friendly Stranger Holdings Corp., licensed cannabis retailers that own and operate cannabis retail stores in the provinces of Alberta, Saskatchewan, Manitoba, British Columbia and Ontario, and the Yukon territory.
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this press release, which has been prepared by management.
This news release contains a financial outlook within the meaning of applicable Canadian securities laws. The financial outlook has been prepared by management of Pineapple Express and Fire & Flower to provide an outlook for the Pineapple Express’ revenue for the trailing 12 month period ended October 31, 2021 and may not be appropriate for any other purpose. The financial outlook has been prepared based on a number of assumptions including the assumptions discussed under the heading “Forward Looking Information” below. The actual results of Pineapple Express’ operations for any period will likely vary from the amounts set forth in these projections and such variations may be material. The Company and its management believe that the financial outlook has been prepared on a reasonable basis. However, because this information is highly subjective and subject to numerous risks, including the risks discussed under the heading “Cautionary Statement Regarding Forward-Looking Information” below, it should not be relied on as necessarily indicative of future results.
Cautionary Note Regarding Forward-Looking Statements
This news release contains certain forward-looking information within the meaning of applicable Canadian securities laws (“forward-looking statements”). All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “achieve”, “could”, “believe”, “plan”, “intend”, “objective”, “continuous”, “ongoing”, “estimate”, “outlook”, “expect”, “project” and similar words, including negatives thereof, suggesting future outcomes or that certain events or conditions “may” or “will” occur. These statements are only predictions. Forward-looking statements in this press release include, but are not limited to, statements in respect of completion of the Transaction and the potential benefits thereof to the Company and Pineapple Express’ anticipated revenues.
Forward-looking statements are based on the opinions and estimates of management of the Company at the date the statements are made based on information then available to the Company. Various factors and assumptions are applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements, including with respect to the closing of the Transaction on the terms described herein or at all. Forward-looking statements are subject to and involve a number of known and unknown, variables, risks and uncertainties, many of which are beyond the control of the Company, which may cause Fire & Flower’s and Pineapple Express’ actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Such factors, among other things, include: regulatory and other approvals or consents; fluctuations in general macroeconomic conditions; fluctuations in securities markets; the impact of the COVID-19 pandemic; the ability of the Fire & Flower and Pineapple Express to successfully achieve its business objectives and political and social uncertainties.
No assurance can be given that the expectations reflected in forward-looking statements will prove to be correct. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Readers should not place undue reliance on the forward-looking statements and information contained in this news release. Additional information regarding risks and uncertainties relating to the Company’s business are contained in the Company’s management discussion and analysis filed on its issuer profile on SEDAR at www.sedar.com. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws.