Earth Alive Clean Technologies (CSE:EAC) has announced it has entered into a subscription agreement with Investissements Influx Anse pursuant to which Investissements acquired from Earth Alive secured convertible debentures in the amount of $500,00 and the right to acquire up to 1.9 million shares of Earth Alive.
As quoted in the press release:
The subscription agreement also provides for a second tranche investment by the Investor pursuant to which, subject to various conditions precedent including, among others, (a) a satisfactory update on Earth Alive’s recovery plan, and (b) the subscription by other qualified investors for Debentures of Earth Alive in an aggregate principal amount of $1,500,000 on or before October 31, 2017, the Investor would purchase additional Debentures in a principal amount of up to $1,000,000 and additional Warrants to acquire up to 3,625,409 common shares, subject to adjustments to be made in accordance with applicable anti-dilution provisions, during the period commencing on March 1 through March 31, 2018.
The Debentures bear interest at a rate of 15% per annum, which will be payable, together with the principal, on the maturity date of October 11, 2019, subject to earlier optional conversion, in whole or in part. The Investor will have the right to convert, in whole or in part and at any time, the principal amount of the Debentures and accrued and unpaid interest thereon into common shares of the Corporation at a conversion price equal to $0.35, subject to adjustments to be made in accordance with applicable anti-dilution provisions. The Warrants have an exercise price of $0.25, subject to adjustments to be made in accordance with applicable anti-dilution provisions, for a term of five (5) years. Moreover, in lieu of exercising the Warrants for cash, they may be, in whole or in part, exercised by means of a “cashless exercise”.
All Debentures to be issued under the aggregate $3M offering will be secured by way of a hypothec on all of the Corporation’s intellectual property assets and will rank pari passu with the then outstanding Debentures, which hypothec will be removed earlier upon the Corporation completing a third party financing in the amount of $3M.
As part of the offering, Michel Ringuet and Benoit La Salle, directors of the Corporation, as well as Investissement Influx Anse Inc., together representing approximately 24.71% of the issued and outstanding common shares, have agreed to enter into lock-up agreements restricting their ability to transfer their common shares and other securities convertible, exerciseable or exchangeable into common shares of the Corporation until the date that is 12 months following the date hereof.