Butte Enters Cannabis Industry with the Pura Cali Group, Announces Rto, Change of Business and Financing
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BUTTE ENTERS CANNABIS INDUSTRY WITH THE PURA CALI GROUP, ANNOUNCES
RTO, CHANGE OF BUSINESS AND FINANCING
VANCOUVER, BRITISH COLUMBIA – November 20, 2018 - Butte Energy Inc. ( "Butte" or the
"Company") (TSXV: BEN.H) is pleased to announce that it has enter ed into an agreement dated
November 16, 2018 with Jonathan Lasser to acquire all of the issued and outstanding equity of Pura
Valley, LLC ( "Valley"), which holds the licenced Price Creek Ranch production facility in Humboldt
County, CA, and Pura Extraction s LLC, which holds a majority interest in a high- capacity extraction lab
with locations and immediate plans for two additional high -capacity labs for extraction and distillation
("Extraction", and with Valley, the "Purchased Companies").
The acquisition of the Purchased Companies is being done in conjunction with a 10:1 consolidation of
Butte's share capital, a change of Butte' s name, a financing, and changes to Butte' s management
(collectively, the "Proposed Transaction "). The parties have agreed to cooperate reasonably and in
good faith in finalizing the structure of the Proposed Transaction for optimal tax treatment of the parties
and for operational purposes. On completion of the Proposed Transaction, Butte will carry on the
business currently carried on by the Purchased Companies.
Among other closing conditions, t he Proposed Transaction is subject to the approval of Butte' s
shareholders, which will be obtained at a general meeting expected to be scheduled for a date in January
2019 (the "Meeting"). Butte 's shares will remain halted until the closing of the Proposed Transaction.
Further information respecting the Proposed Transaction and the Purchased Companies and their
business will be contained in the management information circular to be prepared by the Company and
delivered to its shareholders prior to the M eeting, a copy of which will be filed under the Company’s
profile at www.sedar.com.
About the Purchased Companies
Jon Lasser is the innovative Founder and CEO of Pura Valley and Pura Extrac tion. For over 15 years,
Mr. Lasser has been a leader in the Humboldt Country Organic Cannabis category. Pura Extraction has
established new, innovation methods to isolate botanical compounds and to do so more efficiently
resulting in better, purer quali ty outputs. These two entities will be the core of the Pura vision of a
complete, organic, seed to consumer sales company. The Pura Team consists of many industry veterans ,
experienced executives, and stellar operators.
Acquisition of the Purchased Companies
The November 16, 2018 agreement between Butte and Mr. Lasser includes the following terms:
• In conjunction with a 10:1 consolidation of its share capital (the "Butte Consolidation "), Butte
shall raise funds pursuant to a subscription receipt offering ( the "Butte Financing"), which on
closing will be contributed to a newly formed wholly owned US subsidiary corporation ( "USCo"),
which shall invest such funds in the Purchased Companies and become the sole manager of the
Purchased Companies.
• The operating agreements of the Purchased Companies shall be amended and restated in their
entirety to provide members of the Purchased Companies (other than USCo) with a redemption-
exchange right which allows the member s to exchange their LLC units for Butte shares or at the
election of the LLC, a cash equivalent payment (the "Redemption-Exchange Right").
• Members of the Purchased Companies shall purchase special voting shares in Butte for a
nominal price based on an appraisal , each of which shall entitle the holder t o exercise the
equivalent voting rights which would attach to the number of Butte shares such member would be
entitled to acquire upon exercise of the Redemption- Exchange Right. The number of such votes
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to which the holders of special voting shares are entitled will be reduced from time to time as the
Redemption-Exchange Right is exercised.
• Butte will reserve an aggregate of 70,000,000 common shares of Butte ( "Consideration
Shares") for issuance to the members of the Purchased Companies upon the exercise of the
Redemption-Exchange Right and in exchange for all of the issued and outstanding securities of
the Purchased Companies . The value of the Consideration Shares for the purpose of the
Proposed Transaction is $0.75 per share.
The Consideration Shares m ay be required to be escrowed pursuant to applicable stock exchange
requirements.
Following the completion of the purchase of the Purchased Companies , (but prior to the issuance of
securities pursuant to the Butte Financing, Mr. Lasser will have the right to exercise approximately 70% of
the total votes ascribed to all of the Company’s outstanding shares. Mr. Lasser is an arm’s length party
to the Company. A finder’s fee of 2.250,000 shares is payable in connection with the acquisition of the
Purchased Companies.
The Proposed Transaction is expected to close in late January, 2019 and is subject to the conditions set
out in the purchase agreement between the Company and Mr. Lasser, i ncluding the negotiation of a
definitive agreement and related documentat ion respecting the Proposed Transaction on or before
December 31, 2018 and the completion of the Butte Financing (described below), it is a condition of
Closing of the Proposed Transaction that Butte shall have received conditional approval for the delisti ng
of its common shares from NEX and for listing of its common shares on the CSE . It is a further condition
of the transaction that Stone's Throw Capital Corp ( "STC"), a company controlled by Ron Tremblay, the
current CEO, President and a Director of Butt e will vote all of its common shares (representing
approximately 95. 4%% of the Company’s issued and outstanding shares) in favour of the Proposed
Transaction and the delisting of the Company’s shares from NEX , and a support agreement respecting
this commitment is expected to be entered into prior to or concurrently with the execution of the definitive
agreement. NEX may require majority of the minority approval of the Company’s shareholders for the
delisting of the Company’s shares from NEX.
The Butte Financing
Prior to closing the acquisition of the Purchased Companies, Butte will complete a financing (the "Butte
Financing") to raise proceeds to fund the operation of the purchased business and its further growth and
development, including the capitalization of USCo and the Purchased Companies. The Butte Financing
shall be in an amount and at a price to be determined by the parties, acting reasonably and having regard
to market conditions and the anticipated capital requirements of Butte and its business af ter closing of the
acquisition of the Purchased Companies (" Closing"). The Butte Financing will be effected by the
issuance of subscription receipts which will convert into Butte common shares at Closing. Finder's fees
may be payable in connection with the Butte Financing.
The common shares of Butte issued pursuant to the Butte Financing will be subject to resale hold periods
under applicable Canadian and United States securities laws.
New Management
On Closing, the existing board and management of Butt e shall resign, and subject to their consent and
the acceptability of such persons to the CSE , the board of directors of Butte shall include Jonathan
Lasser. Douglas Meyer, Patrick McEntee and other persons to be determined prior to Closing. Mr. Lasser
shall also serve as the Company’s President and Chief Executive Officer. Stone 's Throw Capital Corp
("STC"), a company controlled by Ron Tremblay, the current CEO, President and a Director of Butte, will
be entitled to nominate one director to the board.
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Mr. Lasser is the lead force behind the business development, strategic partnerships, team building, and
organizational structure of Pura Valley, LLC and Pura Extractions LLC . He has carefully crafted the
dynamic foundation of the company through a determined persistence that has manifested rapid growth
for the business and its partners. He is a seasoned expert in organic land management and the
commercial operation of sustainable outdoor and mixed light cultivation and retail dispensaries with a
focus on orig inal heritage strains alongside the newest, best -in-class genetics available and hemp
cultivation. An experienced cultivator of twelve years, he has nurtured key industry relationships and
assembled a powerful team capable of propelling it to be the most i nnovative, respected and competitive
vertically integrated cannabis company in California.
Douglas Meyer is a senior executive of various Consumer Packaged Goods and Over -the-Counter
Medicine companies for almost 40 years. Mr. Meyer has worked at some of the leading United States and
Global companies and private equity firms and is respected for his positive management style and
successful financial and marketing achievements.
Patrick McEntee has been a leading CEO of technological science oriented companies for almost 20
years. Mr. McEntee has managed major divisions of Oracle, IBM and ABC/Disney. Currently, Mr.
McEntee is CEO of Xeriplant, Inc. a company that delivers agricultural compliance, security, and resource
systems and services that leverage botanical intelligence, mobility, and cloud computing. XERI is involved
in the transformation of urban, rural, and remote agriculture.
Name Change
In conjunction with the Butte Consolidation, the Company will change its name from " Butte Energy Inc." to
"Pura Cali Group Inc." or such other name as may be selected by the Butte board of directors.
The Convertible Debenture
STC holds a $300,000 convertible debenture which bears interest at 10% per annum and is repayable on
January 3, 2018. STC has agreed to extend the maturity date of the debenture until two years following
the Closing.
For further information please contact:
Butte Energy Inc.
Ron Tremblay, President and CEO
604-636-1917
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of
the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains " forward looking statements " within the meaning of applicable Canadian
securities legislation. Forward looking statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by management, are inherently subject to significant
business, economic and competitive uncertainties and contin gencies. Forward looking statements
involve known and unknown risks, uncertainties and other factors that may cause actual financial results,
performance or achievements to be materially different from the estimated future results, performance or
achievements expressed or implied by those forward looking statements and the forward looking
statements are not guarantees of future performance. Butte's ability to complete the Proposed
Transaction and successfully conduct the business currently conducted by the Purchased Companies is
subject to a number of conditions, any of which are outside of Butte' s control. A full description of the
risks associated with Butte 's business on completion of the Proposed Transaction will be set out in the
"Risk Factors" section of the management information circular to be delivered to Butte s hareholders in
connection with the Meeting, which circular will be posted under the Company 's profile at
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www.sedar.com. Butte disclaims any obligation to update or revise any forward look ing statements,
whether as a result of new information, events or otherwise.