Ms. Christina Rao reports

WORLD CLASS EXTRACTIONS REPORTS FINANCIAL RESULTS WITH 59% GROSS MARGIN FOR THE THREE-MONTH PERIOD ENDED JULY 31, 2019

World Class Extractions Inc. has released financial and operating results for its first quarter ended July 31, 2019.

First quarter highlights (unaudited)

Financial:

• The company had cash (available and restricted) at July 31, 2019, of $13,901,616 (April 30, 2019 -- $16,002,152) to settle current liabilities of $1,474,093 (April 30, 2019 -- $325,281).
• Net total asset position as at July 31, 2019, is $51,358,368.
• The net loss and comprehensive loss for the three months ended July 31, 2019, were $4,222,132 as compared with July 31, 2018, of $286,880. The increased loss for the quarter includes sales revenue of $167,802; cost of sales of $69,074; acquisition fees of $982,675; amortization expense of $702,611; consulting fees of $262,773; development and research of $254,258; professional fees of $359,549; management fees of $54,500; remuneration and benefits of $237,519; share-based payments of $993,135; and travel expenses of $365,734.
• Revenue of $167,802 for the quarter ended July 31, 2019, compared with nil revenue for the quarter ended April 30, 2019. Gross margin for the quarter ended July 31, 2019, was 59 per cent.
• Operating activities generated a net cash outflow of $1,883,725. The increased use of cash is primarily attributable to marketing to attract new customers, research and development of current potential new product lines, purchasing of inventory, and increase in staffing all related to an expected further expansion of the company's revenue.

Corporate:

• After completing a $23-million financing, World Class completed a merger transaction with Quadron Cannatech Corp. Management believes the synergy with Quadron is optimal as the company continues to develop industrial-grade extraction and processing systems for cannabis and hemp. World Class is commercializing its processes by providing cost-effective and at-scale production to produce high-margin, high-quality extracts, premium derivative products and consumer brands.
• The company entered into a hemp supply agreement with certain suppliers to purchase hemp crop at an agreed price and share in the proceeds.
• The company announced a revenue collaboration agreement with Parity Partners PBC, whereby Parity sources appropriate locations in the United States to locate the company's extraction and processing systems.

Subsequent to July 31, 2019

Certification:

• Obtained additional provincial CRN pressure vessel certification for its proprietary, automated, next-generation Boss CO2 (carbon dioxide) extraction system. The Boss CO2 extraction system is now officially certified in British Columbia, Alberta and Ontario.

Joint venture with FV Pharma Inc.:

• Entered into an agreement with FV Pharma Inc. to establish a joint venture to develop, manage and operate a large capacity extraction and processing facility for cannabis and hemp in Cobourg, Ont. The agreement amends, supersedes and replaces in its entirety the collaboration and licence agreement dated Nov. 23, 2018, between World Class and FV Pharma Inc.
• The facility will be deployed in multiple phases to satisfy the increasing market demand as the legal recreational market for cannabis extracts and extract-based products rapidly approaches.
• The joint venture is entering into a five-year lease agreement with an additional five-year renewal option with FV Pharma Inc. The lease (and initial phase of production) is scheduled to commence Dec. 1, 2019, which contains provisions for the expansion of the facility.
• During the initial phase, World Class, through its wholly owned subsidiary, Soma Labs Scientific Inc., will deploy several Boss CO2 extraction systems as well as the Beast ethanol extraction system, along with all the ancillary equipment required for the preparation of the biomass, as well as refining and distillation processes.
• As part of the joint venture, FV Pharma Inc. will provide its standard processing licence under the Cannabis Act (Canada), which it received in February, 2019.
• With ample room to expand, the facility will initially have an extraction and processing capacity of up to 5,000 pounds of biomass per day. As market demand increases, additional equipment will be deployed by the joint venture to accommodate the extraction and processing of up to 75,000 pounds per day.
• The joint venture is expected to provide revenue growth through processing material for FV Pharma Inc. as well as additional revenue growth through partnership opportunities as the processing centre can perform toll processing extraction for third party licence holders utilizing FV Pharma Inc.'s processing licence. The joint venture marks a significant milestone for World Class in preparation for the legalization of recreational cannabis extracts, edibles and topical products which will be available to consumers in upcoming months.

Following the execution of definitive agreements, the parties will each have a 50-per-cent interest in the joint venture.

About World Class Extractions Inc.

World Class Extractions provides scalable extraction and processing solutions for the cannabis and hemp industries through two wholly owned subsidiaries -- Soma Labs Scientific and Greenmantle Products. World Class develops advanced technology and processes for streamlined cannabis extraction, formulation and product development. World Class is set to become an international leader and developer of industrial-scale extraction and processing systems to produce high-margin, quality cannabis products and premium consumer brands -- from green to gold.

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