NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES
Montreal, Canada, October 21, 2019 – Earth Alive Clean Technologies Inc. (CSE: EAC) (“Earth Alive” or the “Corporation”), a Canadian soil health company that develops and manufactures state-of-the-art microbial technology-based products for sustainable agriculture and infrastructure maintenance, has filed and obtained a receipt for the final prospectus for the offering of units of the Corporation (the “Units”) at a price of $0.10 each and consisting of one common share and common share purchase warrant having an exercise price of $0.25 and a term of two years in a minimum amount of $4,000,000 and a maximum amount of $5,000,000 (the “Offering”). The Offering is being conducted on a ‘best efforts’ agency basis under the terms of an agency agreement entered into between the Corporation and Desjardins Capital Markets and is expected to close on or about October 24, 2019 (the “Closing Date”).
The net proceeds from the Offering will be used mainly for the advancement of sales, marketing and commercialization of Soil Activator and the dust control product EA1 (the Corporation’s marquis products), research and development, including expanding the scope of use of EA1, to develop new markets for this innovative technology in addition to increasing its use in the mining sector, and for general corporate purposes.
The Corporation also reports that it has received the conditional approval of the TSX Venture Exchange for the listing of its common shares as well as for the common share purchase warrants to be issued under the Offering. As soon as practicable following the Closing Date, the Corporation will seek to have its common shares delisted from the Canadian Securities Exchange (the “CSE”). Such listing remains subject to the satisfaction of customary listing conditions of the TSX Venture Exchange.
Concurrently with the Offering, all the holders of 15% secured convertible debentures (the “Debentures”) issued by the Corporation in the aggregate principal amount of $2,740,000, have agreed to convert their respective Debentures into common shares of the Corporation at the issue price of $0.10 per share, following completion of the Offering. The principal of the Debentures and the accrued interest thereon to be converted on the Closing Date will amount to $3,525,503 and accordingly, 35,255,030 common shares of the Corporation will be issued in full and final satisfaction of the Debentures. The common shares to be issued upon conversion of the Debentures will be subject to a four month hold period.
The Corporation also announces that it has revised its sales projections for 2019, from $2.6M to $2.0M as a consequence of the additional delay that has resulted from a second work stoppage at a customer’s operating mine and a later than previously anticipated closing of the Offering. The Corporation had previously revised its sales projection from $3.7M as stated in the preliminary prospectus filed June 17 2019 to $2.6M in September 2019, following the initial delays resulting from this EA1 order and the extended timing of the Offering. ”While we believe that this second work stoppage may be brief, as experienced during the first work such instance earlier this year, we also believe the prudent approach is to assume deliveries of EA1 for this client, valued at $600,000, will not resume before year-end” , commented Michael Warren, CEO of Earth Alive. “Furthermore, we reiterate our confidence in the Corporation’s sales outlook for 2020 which was previously increased from $5.7M to $6.7M
Groupe Lune Rouge Inc. (GLR), currently an insider of the Corporation holding 22,978,572 common shares (19.05% of the outstanding common shares) is expected to participate in the Offering and purchase Units for an amount of $1,500,000 and has agreed to convert their Debentures in the principal amount of $1,500,000 and accrued interest in the amount of $381,696. Upon closing of the Offering and the completion of the Debenture conversion, GLR would then hold 56,795,529 common shares (27.58% with completion of the maximum Offering or 28.99% with completion of the minimum Offering) and, assuming the exercise of all of their outstanding convertible securities, they would hold 34.60% under the maximum Offering or 36.19% under the minimum Offering, on a partial dilution basis assuming no other convertible securities outstanding were converted. Pursuant to Regulation 61-101 Respecting protection of minority security holders in special transactions, this transaction constitutes a “related party transaction” however, the Corporation anticipates that this transaction will be exempt from the minority shareholder approval and formal valuation requirements, as the fair market value of the consideration for the transaction, as it involves GLR, does not exceed 25% of Earth Alive’ market capitalization, in accordance with Sections 5.5(a) and 5.7(a) of Regulation 61-101, at the time of the agreement. The participation of GLR was previously disclosed in a press release issued June 17, 2019.
A copy of the Final Prospectus is available under the Corporation’s SEDAR profile at www.sedar.com or by request to Desjardins Capital Markets at firstname.lastname@example.org.
The Offering is subject to certain customary conditions including, the receipt of all necessary approvals, including the approval of the TSXV or the CSE, as the case may be. There can be no assurance that the Offering will be completed. An investment in the Units of Earth Alive is subject to a number of risks. The Final Prospectus contains important information relating to the Offering. For more information, potential investors should read the final prospectus.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale or acceptance of an offer to buy securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the time a receipt for the final prospectus or other authorization is obtained from the securities commission or similar authority in such jurisdiction.
About Earth Alive Clean Technologies
Earth Alive aims to be a key player in world markets of environmentally sustainable industrial solutions. The Company works with the latest innovations in microbial technology to formulate and patent innovative products that can tackle the most difficult industrial challenges, once only reserved to environmentally harmful chemicals and additives. The Company is focused on environmental sustainability in the agriculture industry and dust control for the mining industry. For additional company information, please visit: www.earthalivect.com.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Forward-Looking Information: Certain information in this press release contains forward-looking information and forward-looking statements, which reflect the current view of management with respect to the Company’s objectives, plans, goals, strategies, outlook, results of operations, financial and operating performance, prospects and opportunities. Wherever used, the words “may”, “will”, “anticipate”, “intend”, “estimate”, “expect”, “plan”, “believe” and similar expressions identify forward-looking information and forward-looking statements. Forward‑looking information and forward-looking statements should not be regarded as a guarantee of future events, performance or results, and will not necessarily be an accurate indication of whether, or the times at which, such events, performance or results will be achieved. All of the information in this press release containing forward‑looking information or forward-looking statements is qualified by these cautionary statements. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and forward-looking statements and are cautioned not to place undue reliance on such information and statements. The Company does not undertake to update any such forward-looking information or forward‑looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.
The CSE has neither approved nor disapproved the contents of this press release. The CSE does not accept responsibility for the adequacy or accuracy of this release.
Earth Alive Clean Technologies Inc.,
9641 Rue Clement
Lasalle, Québec Canada
For information, please contact:
Mr. Michael Warren
(p) 438 333-1680