U de the LOI, P ime Tex i te ds to evaluate a pote tial acquisitio o assig me t of 1606’s ights a d i te ests u de the existi g Pu chase a d Sale Ag eeme t elati g to the P oject (the “PSA”). The LOI is o -bi di g a d does ot establish a ag eed t a sactio o obligate eithe pa ty to p oceed. A y pote tial t a sactio emai s subject to P ime Tex’s due dilige ce eview, fu the egotiatio s a d the executio of mutually acceptable defi itive ag eeme ts.
Followi g executio of the LOI, the pa ties may excha ge i fo matio easo ably ecessa y fo P ime Tex to evaluate the p oposed t a sactio , i cludi g i fo matio elati g to the PSA, p ope ty, existi g powe i f ast uctu e, ge e atio facility, title, pe mits a d othe P oject matte s. P ime Tex is ot obligated to co duct due dilige ce, egotiate a defi itive ag eeme t o complete a y t a sactio .
“This LOI eflects p elimi a y i te est f om P ime Tex a d ep ese ts a additio al step i ou effo ts to explo e oppo tu ities to c eate value f om the P oject,” said Auste Lamb echt, CEO of 1606 Co p. “We believe P ime Tex’s stated p ese ce i the Texas timbe a d sawmill i dust y, togethe with its stated pla s to expa d its U.S. ope atio s, may make its i te est eleva t give the existi g biomass i f ast uctu e at the p ope ty. A y pote tial t a sactio , howeve , emai s subject to due dilige ce, fu the egotiatio a d the executio of mutually acceptable defi itive ag eeme ts.”
Acco di g to P ime Tex, it has established ope atio s i the U ited States th ough P ime Tex Lumbe LLC., which has acqui ed a ope ati g sawmill i Kou tze, Ha di Cou ty, Texas. P ime Tex states that the ope atio p oduces Southe Yellow Pi e lumbe a d i dust ial timbe p oducts a d is pa t of a b oade st ategy to expa d its p ese ce i U.S. timbe a d wood p ocessi g. P ime Tex o thei ow is setti g up a othe mode saw mill at Ke a d, Texas, u de the ame P ime Tex I c. Which is likely to go i to p oductio by the e d of 2026. Both these saw mills p oduce la ge qua tities of woode chips which ca be used fo ge e ati g biomass powe .
Acco di g to P ime Tex, it is actively pu sui g the acquisitio of additio al mills a d fo est esou ces as pa t of its U.S. expa sio st ategy, a d its b oade e ewable-e e gy activities i clude sawmill developme t a d ope atio s, biocha p oductio , a d biomass pellet facilities desig ed to utilize fo est y a d sawmill byp oducts. P ime Tex has also i dicated a i te est i expa di g i to biomass powe ge e atio i the U ited States, compleme ti g its existi g timbe , wood-p ocessi g a d e ewable-e e gy activities.
Acco di g to P ime Tex, it also mai tai s a i vestme t i itiative associated with its Kou tze ope atio s th ough a EB-5 Regio al Ce t e ide tified with P ime Tex Re ewables LLC.
Ma ageme t believes that, if co fi med, these ope atio s a d expa sio objectives could p ovide pote tial st ategic alig me t with the existi g biomass ge e atio i f ast uctu e a d the su ou di g East Texas timbe ma ket.
The LOI is exp essly o -bi di g a d o -exclusive. It is solely a exp essio of the pa ties’ cu e t i te est i explo i g a pote tial t a sactio a d does ot c eate a y legally bi di g obligatio to pu chase, sell, assig , t a sfe , fi a ce o othe wise co summate a y t a sactio . Eithe pa ty may disco ti ue discussio s at a y time, fo a y easo o o easo , without liability to the othe pa ty.
The Compa y views the LOI as a additio al step i evaluati g a pote tial t a sactio i volvi g its i te ests i the P oject. Because the LOI is o -exclusive, 1606 emai s f ee to co ti ue evaluati g othe st ategic alte atives a d to discuss, egotiate, solicit o e te i to pote tial t a sactio s i volvi g the P oject o its PSA ights with additio al pa ties.
1606 i te ds to co ti ue these discussio s while P ime Tex co ducts its evaluatio , with the objective of ide tifyi g the t a sactio st uctu e, if a y, that p ovides the st o gest combi atio of value, ce tai ty a d st ategic be efit to 1606 a d its sha eholde s.
“We believe it is impo ta t to mai tai flexibility as i te est i the P oject co ti ues to develop,” Lamb echt added. “P ime Tex has exp essed p elimi a y i te est i evaluati g a pote tial t a sactio i volvi g the Compa y’s co t actual i te ests i the P oject, a d we i te d to co ti ue discussio s while P ime Tex co ducts its evaluatio , while we co ti ue evaluati g othe oppo tu ities i volvi g the p ope ty. Ou espo sibility is to dete mi e which path, if a y, ultimately p ovides the g eatest value to the Compa y a d its sha eholde s.”
Neithe pa ty is obligated to complete the p oposed t a sactio u less a d u til defi itive ag eeme ts a e egotiated a d executed. The e ca be o assu a ce that the due dilige ce p ocess will esult i a defi itive ag eeme t o that a t a sactio with P ime Tex G oup, USA will ultimately be completed.
The LOI is scheduled to expi e o Decembe 31, 2026 u less exte ded i w iti g by the pa ties.
The p oject co sists of app oximately 132 ac es a d i cludes a existi g biomass powe ge e atio facility a d elated i f ast uctu e that 1606 has bee evaluati g fo edevelopme t i co ectio with data ce te a d high-pe fo ma ce computi g applicatio s.
1606’s st ategy has focused o the pote tial value c eated by combi i g existi g powe -ge e atio i f ast uctu e, available eal estate a d the g owi g dema d fo powe ed sites capable of suppo ti g data ce te a d AI- elated i f ast uctu e.
The Compa y co ti ues to evaluate multiple pote tial paths, i cludi g developme t of the powe ed site, st ategic pa t e ships, fi a ci g, pote tial e d-use elatio ships a d a sale o assig me t of the Compa y’s co t actual i te ests.
1606 Co p. (OTCID:CBDW) is focused o pu sui g oppo tu ities at the i te sectio of e e gy i f ast uctu e, a tificial i tellige ce a d data ce te developme t. The Compa y is cu e tly evaluati g multiple pote tial paths i volvi g the P oject, which may i clude the acquisitio a d developme t of the Lufki powe ge e atio facility, fi a ci g, st ategic a a geme ts, pote tial e d-use elatio ships, o a pote tial sale o assig me t of its co t actual i te ests u de the PSA. No pa ticula alte ative has bee selected.
This p ess elease co tai s fo wa d-looki g stateme ts, i cludi g stateme ts ega di g the LOI a d the discussio s with P ime Tex, due dilige ce, the egotiatio o executio of defi itive ag eeme ts, the pote tial acquisitio , assig me t o sale of the Compa y’s co t actual ights elati g to the P oject, the completio of a y t a sactio , the Compa y’s p oposed acquisitio of the P oject, fi a ci g, ecommissio i g, epai o edevelopme t of the facility, data ce te a d high-pe fo ma ce computi g pla s, st ategic pa t e ships, pote tial e d-use elatio ships, the Compa y’s capital st uctu e a d othe st ategic alte atives.
Fo wa d-looki g stateme ts a e subject to isks a d u ce tai ties that could cause actual esults to diffe mate ially f om those exp essed o implied. The LOI is o -bi di g, a d the e ca be o assu a ce that a defi itive ag eeme t will be e te ed i to o that the p oposed t a sactio o a y othe st ategic t a sactio will be completed. The Compa y’s pla s a d i te tio s, i cludi g those elati g to its capital st uctu e, may cha ge i espo se to futu e ci cumsta ces. Reade s should ot place u due elia ce o fo wa d-looki g stateme ts, which speak o ly as of the date made.
I additio , a d to the exte t applicable: the Compa y has ot secu ed the fi a ci g ecessa y to complete its p oposed acquisitio of the P oject, a d the e ca be o assu a ce that the acquisitio will close; the facility is bei g acqui ed o a “as-is, whe e-is” basis a d may equi e substa tial ecommissio i g, epai o eplaceme t befo e it ca etu to ope atio ; the PSA has bee ame ded multiple times to exte d the closi g date, a d the cu e t closi g deadli e is Octobe 31, 2026; the Compa y has paid o – efu dable ea est mo ey a d exte sio fees that will ot be efu ded o c edited agai st the pu chase p ice if the acquisitio is ot completed; a d the acquisitio , a d the Compa y’s ability to obtai clea title to the p ope ty, a e subject to the esolutio of pe di g tax a d othe litigatio affecti g the p ope ty.
Because the Compa y’s commo stock is co side ed a “pe y stock,” the safe ha bo fo fo wa d-looki g stateme ts p ovided by the P ivate Secu ities Litigatio Refo m Act of 1995 is ot available to the Compa y, a d the Compa y does ot ely upo that safe ha bo with espect to a y fo wa d-looki g stateme ts i this p ess elease.
This p ess elease is fo i fo matio al pu poses o ly a d does ot co stitute a offe to sell, o the solicitatio of a offe to buy, a y secu ities, o shall the e be a y sale of secu ities i a y ju isdictio i which such offe , solicitatio o sale would be u lawful. A y offe of secu ities will be made o ly by mea s of a p ospectus meeti g the equi eme ts of the Secu ities Act of 1933, as ame ded, o pu sua t to a applicable exemptio f om the egist atio equi eme ts the eof.
