Early Warning Press Release – Issuance of Common Shares of EarthRenew Inc. to 2143596 Alberta Ltd. and Neil Wiens Family Trust

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CALGARY, Alberta, May 12, 2021 (GLOBE NEWSWIRE) -- 2143596 Alberta Ltd. ("214") and Neil Wiens Family Trust (the “Trust” and together with 214, the “Acquirers”), announce the filing of an early warning report in connection with the issuance of 10,524,962 and 4,157,512 common shares in the capital of EarthRenew Inc. (the "Issuer" or “EarthRenew”) (CSE: ERTH) to 214 and the Trust respectively.

The Transaction:

Effective May 1, 2021, the securityholders of Replenish Nutrients Ltd. (“Replenish”) (including the Acquirers) and EarthRenew entered into a private acquisition agreement (the “Agreement”) whereby, subject to the satisfaction of certain conditions precedent, EarthRenew acquired all of the issued and outstanding securities of Replenish from the securityholders (the “Transaction”) at a price of approximately $9 million (subject to certain adjustments for working capital and indebtedness outstanding on the completion date of the Transaction), payable as $1.41 million in cash and a total of 21,264,093 common shares of EarthRenew at a deemed price of $0.248 per EarthRenew common share.

Pursuant to the Agreement, 214 and the Trust were issued, 10,524,962 and 4,157,512 common shares, respectively in the share capital of EarthRenew on May 10, 2021.

Pursuant to the Agreement, the Trust may be further entitled to earn-out payments totaling an aggregate of up to $3,990,000 payable based on qualifying gross annual revenue of Replenish multiplied by an earn-out factor for each of the 12-month fiscal periods ending June 30, 2021- 2025 and payable by a combination of cash payments (40%) and the issuance of EarthRenew Shares valued at $2,394,000 based on a price per share calculated in accordance with the Agreement (60%). Additionally, the Trust may be entitled to supplemental earn-out payments totaling an aggregate of up to $1,140,000 payable based on certain sales parameters achieved by Replenish in the 12-month fiscal period ending June 30, 2021 and payable by a combination of cash payments (40%) and the issuance of EarthRenew Shares (valued at $684,000) based on a price per share calculated in accordance with the Agreement (60%) (the shares that may be issued under the above described earn-out payments hereinafter referred to as the “Earn- out Shares”).

Shareholdings of the Acquirers:

214 was issued 10,524,962 shares in EarthRenew pursuant to the Transaction representing a 13.42% interest in the issued and outstanding common shares of EarthRenew as at May 10, 2021. Prior to the Transaction 214 held nil shares representing a 0% interest in EarthRenew. After the Transaction 214 holds 10,524,962 common shares in EarthRenew representing a 13.42% interest in EarthRenew.

The Trust was issued 4,157,512 shares in EarthRenew pursuant to the Transaction representing a 5.30% interest in the issued and outstanding common shares of EarthRenew as at May 10, 2021. Prior to the Transaction the Trust held nil shares representing a 0% interest in EarthRenew. After the Transaction the Trust holds 4,157,512 common shares in EarthRenew representing a 5.30% interest in EarthRenew.

The Acquirer’s percentage interest identified above may change based on the exercise of warrants, the issuance of additional shares in EarthRenew or the issuance Earn-out Shares to the Trust.

Together the Acquirers hold 14,682,474 common shares in EarthRenew representing a 17.28% interest in EarthRenew as at May 10, 2021.

Consideration Paid:

Pursuant to the Agreement, 214 acquired 10,524,962 common shares in EarthRenew at a deemed price of $0.248 per share being $2,610,190.58 in aggregate (the “214 Consideration”).

The 214 Consideration was paid by 214 to EarthRenew by the transfer to EarthRenew by 214 of:

  • 950,000 First Preferred Non-Voting shares in the share capital of Replenish valued at $1.00 per First Preferred Non-Voting share; and

  • Assignment of a Promissory Note receivable in the amount of $1,660,190, owed by Replenish to 214.

Pursuant to the Agreement the Trust acquired 4,157,512 common shares in EarthRenew at a deemed price of $0.248 per share being $1,031,062.98 in aggregate (the “Trust Consideration”).

The Trust Consideration was paid by the Trust to EarthRenew by transfer to EarthRenew by the Trust of:

  • 285 Class E Non-Voting Common Shares in the share capital of Replenish which, after subtracting the payment of partial cash consideration already paid by EarthRenew to the Trust, are valued at approximately $1,205.92 per Class E Non-Voting Common Share; and

  • 570 Class F Non-Voting Common Shares in the share capital of Replenish which, after subtracting the payment of partial cash consideration already paid by EarthRenew to the Trust, are valued at $1,205.92 per Class F Non-Voting Common Share.

Purpose of Transaction:

The Acquirers acquired common shares in EarthRenew for economic and business reasons. Neil Wiens (a 50% shareholder, director and officer of 214 and a trustee of the Trust) will be appointed to the board of directors of EarthRenew. Pursuant to the terms of the Agreement and certain collateral agreements Neil Wiens will be appointed to serve as an officer of EarthRenew.

Other than as herein disclosed, 214 and the Trust do not have any plans that would result in any of the following: (a) the acquisition of additional securities of the Issuer, or the disposition of securities of the Issuer; (b) a corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of the assets of the Issuer or any of its subsidiaries; (d) a change in the board of directors or management of the Issuer, including any plans or intentions to change the number or term of directors or to fill any existing vacancy on the board; (e) a material change in the present capitalization or dividend policy of the Issuer; (f) a material change in the Issuer’s business or corporate structure; (g) a change in the Issuer’s charter, bylaws or similar instruments or another action which might impede the acquisition of control of the Issuer by any person or company; (h) a class of securities of the Issuer being delisted from, or ceasing to be authorized to be quoted on, a marketplace; (i) the Issuer ceasing to be a reporting issuer in any jurisdiction of Canada; (j) a solicitation of proxies from securityholders of the Issuer; or an action similar to any of those enumerated above. 214 and the Trust may change their plans and intentions at any time or from time to time, as they deems appropriate.

This press release is issued pursuant to National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, which also requires a report to be filed with regulatory authorities in each of the jurisdictions in which the Issuer is a reporting issuer containing information with respect to the foregoing matters (the "Early Warning Report"). A copy of the Early Warning Report will appear with the Issuer’s filings on the System for Electronic Document Analysis and Retrieval (SEDAR). A copy of the Early Warning Report can also be obtained by contacting Mr. Neil Wiens at (403) 880-2929. The Issuer’s registered and head office address is located at 65 Queen St. West, Suite 800, Toronto, ON M5H 2M5 Canada. The Acquirer’s mailing address is Site 17, Box 33, RR, Okotoks, AB T1S 1A1, Canada.


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