Earth Alive Clean Technologies Inc.
CSE : EAC
CSE : EAC.CN
CNSX : EAC

Earth Alive Clean Technologies Inc.

October 11, 2017 16:02 ET

Earth Alive Completes First Tranche of $500,000 in $3M Convertible Debt Financing

MONTREAL, QUEBEC--(Marketwired - Oct. 11, 2017) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES

Earth Alive Clean Technologies Inc. (CSE:EAC)(CSE:EAC.CN)(CNSX:EAC) ("Earth Alive" or the "Corporation") is pleased to announce that it has entered into a subscription agreement with Investissements Influx Anse Inc. (the "Investor") pursuant to which the Investor acquired from Earth Alive, in a first tranche investment on a private placement basis, secured convertible debentures (the "Debentures") in the principal amount of $500,000 and warrants (the "Warrants") to acquire up to 1,924,787 common shares of the Corporation, subject to adjustment in certain events. 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.

The Investor, an insider of the Corporation, currently owns 21,228,572 common shares, representing approximately 19.18% of the outstanding common shares of the Corporation. Pursuant to the initial investment of $500,000 aggregate principal amount of Debentures and assuming the immediate conversion of the Debentures into 1,428,571 common shares and the exercise of the Warrants to acquire 1,924,787 common shares, the Investor would hold 24,581,930 common shares, representing 21.56% of the then outstanding common shares on a partially diluted basis. The Investor entered into the transaction for investment purposes. Depending on market and other conditions, the Investor may from time to time in the future increase or decrease its ownership, control or direction over the shares or other securities of the Corporation, through market acquisitions, private agreements, public offerings or otherwise. However, the Investor has no pre-determined intention with respect to any of the foregoing, other than as described herein. A copy of the Investor's related early warning report will be filed with the applicable securities commissions and will be made available on SEDAR at www.sedar.com, a copy of which may be obtained by contacting Catherine Vu, Secretary-Treasurer, Investissements Influx Anse Inc., at (514) 723-7646 x8184.

Pursuant to Regulation 61-101 Respecting protection of minority security holders in special transactions, this investment constitutes a "related party transaction"; however, the Corporation is exempt from obtaining minority shareholder approval and a formal valuation as the fair market value of the consideration for the transaction, insofar as it involves interested parties, does not exceed 25% of Earth Alive's market capitalization. As the participation of the Investor was not finalized 21 days prior to the completion of this first tranche, it was not possible to publicly disclose the extent of the related party participation in such delay.

Any and all securities issued pursuant to the proposed investment will be subject to a statutory hold period of four months and one day from the date of issuance.

The Corporation intends to use the proceeds from the proposed investment for working capital purposes and to continue operations.

The securities to be issued pursuant to the offering have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "1933 Act"), or under any state securities laws, and may not be offered or sold, directly or indirectly, or delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the 1933 Act) absent registration or an applicable exemption from the registration requirements. This news release does not constitute an offer to sell or a solicitation to buy such securities in the United States.

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.

Forward Looking Information

Except for statements of historical fact, this news release contains certain forward-looking statements within the meaning of applicable securities law. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" occur. Although Earth Alive believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Such forward-looking statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new information, future events or otherwise.

For additional company information, please visit: www.earthalivect.com.

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