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Quadron Cannatech Corp (CNSX:QCC) Surging Ahead of World Class Extraction (CSE:PUMP) Merger

Quadron Cannatech Corp (CNSX:QCC) Surging Ahead of World Class Extraction (CSE:PUMP) Merger
Written by
Jim Bloom
Published on
April 18, 2019
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Shares of Quadron Cannatech Corp (CNSX: QCC) rallied by more than 20% after it emerged the company is an acquisition target for World Class Extraction (CSE: PUMP). The spike adds to an impressive start to 2019 that has seen the stock surge by more than 150%.

Quadron Cannatech Price Analysis

The stock has since resumed its upside action after a minor correction from the C$0.25 level at the start of Q2. The excellent start to the year follows the sale of a full extraction facility to Cannaworld Ventures early in the year.The stock’s markets sentiments also received a boost on the company delivering impressive Q3 financial results with revenues streaming in at $1.87 million in the recent quarter. The company signing an agreement to supply full extraction and processing facility for Puriflor Enterprise also appears to have had a hand in fuelling the upward moment.A bounce back from the C$0.21 mark has triggered a rally past the C$0.23 resistance level. After the recent spike, the stock is likely to make a run for the C$0.30 mark, as the upward momentum continues to gather pace. QUDCF Daily ChartA Rally followed by a close above the C$0.30 mark should open the door for the stock to make a run for 52-week highs of C$0.96. While the stock remains bullish above the C$0.25 mark, a breach of the new support level could result in drop back to the sub C$0.21 handle.

About Quadron Cannatech

Quadron Cannatech is an automated extraction and processing solution company that provides ancillary equipment and products to licensed cannabis operators. The company is engaged in the development of sale and licensing of cannabis manufacturing, extraction, and processing equipment.

World Class Extraction Merger

The confirmation that Quadron Cannatech is an acquisition target is the catalysts fuelling the upside action after a minor correction. The two companies have entered into an arrangement agreement that paves the way for a merger.World Class Extraction has agreed to acquire all Quadron Cannatech issued and outstanding shares in a deal that values the company at $0.25 per share. The acquisition represents a 19% premium to Quadron shares value as of April 12, 2019.A merger of the two companies will result in a combined company with prospects to become a leader in the extraction and processing of CBD hemp. The combined company will also boast of a robust balance sheet following the closing of a private placement for gross proceeds of $23 million by World Class Extraction.

“By bringing together Quadron and World Class, two complementary businesses, we are creating a stronger enterprise to achieve long-term growth and value creation for our shareholders. Strengthen production and operations as key competitive factors and enhancing our prospects to innovate and lead, we are tightly aligned in our goal of becoming a global leader in the emerging, and rapidly growing, cannabis oils market,” stated Quadron CEO Rosy Mondi in defense of the merger.

The merger push is high on the heels of Quadron Cannatech reporting impressive financial results. For the nine-month ended January 31, 2019, the company registered a 132% increase in revenues. Revenues for Q3 ended January 31 came in at $1.87 million.Quadron Cannatech has also achieved significant milestones on its bid to become a key player in the cannabis equipment and extraction business prior to the merger push. In March, the company entered into a letter intent to acquire a one-third interest in Puriflor Enterprises extraction and processing facility.A partnership with Puriflor is in line with the company’s business of collaborating strategic partners as a way of solidifying revenue channels. The partnership also cements the company’s push to become an industry leader in cannabis extraction and processing.

Bottom Line

Revenue growth, as well as a push to become an industry leader in the CBD sector, are some of the reasons behind Quadron Cannatech improved market sentiments.A deal with Cannaworld Ventures for the sale of end-to-end cannabis, extraction, and processing facility also affirms the company’s growing segment of developing full cannabis extraction facilities. This segment is poised to be a key driver of the bottom line as companies look to ramp up production capacitiesQuadron Cannatech is likely to continue climbing the cannabis ladder, after the recent spike, pending the proposed merger with World Class Extraction.We will be updating our subscribers as soon as we know more. For the latest updates on CNSX: QCC and CSE: PUMP, sign up below!Disclosure: We have no position in CNSX: QCC or CSE: PUMP and have not been compensated for this article.

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