Quantum Energy enters into MoU with target company
In the United States, Quantum Energy Inc., a company within refinery development, construction, and operations in the US and Canada, has announced it and its subsidiary FTPM Resources, Inc. have entered into Non-Binding Memorandum of Understanding (MoU) with a target company that designs, manufactures, operates, and sells its patented 1 million, 2 million, and 5 million gallons per year, small-scale, modular biorefineries for the production of liquid biofuels from organic waste streams.
Quantum Energy Inc., is an “energy-focused” company with a project emphasis toward mid-sized refinery development, construction and operations in the United States and Canada. Through its subsidiary Dominion Energy Processing Group, Inc., (DEPG) Quantum is continuing to work on proposed 42 000 bbl per annum Bakken refinery development projects in Stoughton, Saskatchewan, Canada and in North Dakota, USA, which includes a 1 880 bbl cellulosic ethanol plant to produce ethanol blendstock for gasoline blending.
The biofuels can be mixed with, or can selectively replace, gasoline derived from fossil fuels. The biofuels created by these small-scale modular systems can also be used to then further power distributed electric generators. The refineries are centrally manufactured and can be shipped anywhere in the world, which enables the unnamed target company to bring new energy sources to locations that would otherwise not have access to it.
Pursuant to the MoU, if certain conditions are met, including the availability of financing, among other things:
- FTPM will enter into a joint venture with the target company, which would be jointly owned by FTPM and the target company, for the purpose of developing and marketing of a variety of value-added food, feed and potentially medical grade products which allows ordinary farm grown corn to realize a much greater value than simply converting it into ethanol.
- FTPM will have a 90-day option beginning April 30, 2019, to merge with the target company, whereby the target company would be the surviving entity;
- the target company will have the right to acquire shares of preferred stock of the Quantum, with such rights and preferences as the parties shall agree; and
- the target company would have the right to appoint members to Quantum’s board of directors.
The target company’s plant offers an added benefit of manufacturing “greener” biofuels from agricultural waste products and is currently equipped to manufacture ethanol.
We are excited about this potential project, which if we are able to consummate, is expected to add significant assets and revenue to Quantum while allowing Quantum to stay focused on its goal of building and/or acquiring refinery projects or its “economic equivalent, said Quantum’s Co-Chairman and CEO, Andrew J Kacic in a statement.
The transactions with the target company would be consummated with a combination of cash, common stock, and preferred stock to offer minimal dilution to the existing shareholders.
If we are able to consummate this transaction, we expect that the target company will be able to expand its operations throughout North America and Quantum would be building an ecosystem of the best people, partners, and customers to bring forth innovative technologies that will produce high-quality and efficient biofuels, valuable biochemicals, adhesives, fertilizers, animal feed and more, said Andrew J Kacic stressing that no assurances can be given that Quantum will obtain sufficient capital to consummate the transactions contemplated by the MoU.