VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 17, 2012) - ERA Carbon Offsets Ltd. (TSX VENTURE:ESR) ("ERA" or the "Company") is pleased to announce that it has entered into two non-binding letters of intent dated September 6, 2012 to acquire (the "Acquisition") shares in Offsetters Clean Technology Inc. ("Offsetters") and Carbon Credit Corporation ("CCC") of Vancouver BC, Canada.
The Company is also pleased to announce that it is conducting a private placement financing of Cdn $220,000 and that it is the intention of the Board of Directors to appoint Dr. James Tansey as the Company's CEO subject to the completion of the Acquisition and the Financing. Duncan Manson has resigned as the Company's CEO.
About Offsetters Clean Technology Inc.
Founded in 2005 by Dr. James Tansey of the University of British Columbia's Sauder School of Business, Offsetters is Canada's leading provider of carbon management solutions, helping organizations and individuals understand, reduce and offset their climate impact. Offsetters has been a leader in developing clean technology projects utilizing carbon finance, having developed over 500,000 tonnes of offsets to date, from landfill gas capture, biomass fuel switching, energy efficiency, small scale hydro-electric and fuel reduction programs. In addition to their project work, Offsetters provides greenhouse gas management strategies and tools for organizations, product lifecycle inventory, policy advisory services, water footprinting and carbon marketing and sales services. Offsetters was the first ever Official Supplier of carbon offsets for the 2010 Winter Olympic and Paralympic Games in Vancouver and remains a leading offset supplier to numerous large voluntary Corporate Social Responsibility (CSR) clients in Canada, and a leading supplier to the Pacific Carbon Trust in British Columbia.
About Carbon Credit Corp.
Carbon Credit Corp. (CCC) focuses on the development of land based carbon offset projects. CCC has supported the development of millions of tonnes of offsets in the Alberta Offsets System through changed agricultural practices and has developed Software As A Service platforms for the greenhouse gas industry. Drawing on over 50 years of collective experience in software design, the team has also created a world class platform for carbon offset aggregation and business process automation related to carbon and sustainability.
Terms of the Acquisition:
The Offsetters/CCC Agreement
The Company has entered into a non-binding Letter of Intent (the "LOI") whereby it anticipates it will acquire a total of approximately 90% (the "90% Interest") of the issued and outstanding shares of Offsetters and 100% of the issued and outstanding shares of CCC.
As consideration for the Acquisition, the Company will issue 2,000,000 share purchase warrants, exercisable for the maximum permitted period under the policies of the TSX Venture Exchange at a price of $0.40 per share, to the sellers.
The Company will also pay a minimum of $3,500,000 (the "Minimum Purchase Price") and a maximum of $6,000,000 (the "Maximum Purchase Price") (the Minimum Purchase Price, the Maximum Purchase Price and any amounts in between are referenced herein as the "Purchase Price"). The Purchase Price will be satisfied no later than December 31, 2016 and will be comprised of a cash payment of $500,000 made at the closing of the Acquisition, 15% of total gross cash revenues derived by the Company, Offsetters and CCC (certain ERA revenues being excluded) and a supplementary 20% premium paid on all commissions earned through sales generated from CCC's Great Bear Rain Forest Project, such amounts subject to certain annual minimum cash payments (collectively, the "Payments").
In the event that the Company engages in any financings, from the closing of the Acquisition until December 30, 2016, and subject to certain qualifying purposes, the Company will pay 20% of the gross proceeds of such financing (the "Financing Proceeds Payment") as an early payment of the Purchase Price.
If at any point before December 30, 2016 the aggregate of the Payments and any Financing Proceeds Payments total the Maximum Purchase Price, then the Maximum Purchase Price will be the Purchase Price for the Acquisition and the Company will have completed all required payments.
On December 30, 2016, if the Minimum Purchase Price has not been satisfied by the Payments or Financing Proceeds Payments, then the Company will be immediately required to pay the difference between the Minimum Purchase Price and the amount already paid to the sellers by the Company in respect of the Acquisition and the Minimum Purchase Price will be the Purchase Price for the Acquisition. On December 30, 2016 if an amount in excess of the Minimum Purchase Price, but not more than the Maximum Purchase Price, has been paid to the sellers by the Company, then such amount will be the Purchase Price for the Acquisition.
The LOI, and the performance of the parties' obligations thereunder, is subject to a number of conditions including Exchange approval, receipt of financial statements and information for CCC and Offsetters and other conditions.
The LOI is to be replaced by a definitive agreement on or before October 14, 2012 or such other date that the parties mutually agree upon.
The Tansey Agreement:
The Company has entered into a non-binding letter of intent (the "Tansey Agreement") dated September 6, 2012 whereby, subject to certain conditions, it anticipates it will acquire a total of approximately 10% (the "Remaining 10% Interest") of the issued and outstanding shares of Offsetters from Dr. James Tansey.
As consideration for the acquisition of the Remaining 10% Interest, the Company will issue to Dr. Tansey a total of 2,000,000 of its common shares (the "Acquisition Shares"). The Tansey Agreement calls for the Acquisition Shares to be subject to voluntary resale restrictions (in addition to the four month Exchange hold period applicable) such that the Acquisition Shares will be free of resale provisions in the following manner: 25% four months from the date of closing (the "Closing") of the Acquisition and the Financing, an additional 25% six months from the date of Closing, an additional 25% twelve months from the date of Closing and the final 25% eighteen months from the date of Closing.
The Tansey Agreement is subject to a number of conditions including the appointment of James Tansey to the position of CEO with the Company, closing of the Acquisition and the Financing. The Tansey Agreement is further conditional upon Dr. Tansey having the right to subscribe for a minimum of 1,000,000 units of the Financing described below.
The Tansey Agreement is to be replaced by a definitive agreement on or before October 14, 2012 or such other date that the parties mutually agree upon.
PRIVATE PLACEMENT FINANCING
The Company is conducting a private placement financing (the "Financing") of 2,000,000 units (the "Units") at $0.11 per unit, each unit comprised of one common share and one share purchase warrant exercisable for a period of one (1) year at an exercise price of $0.11 per share. Proceeds of the Financing will be approximately $220,000.
Proceeds of the Financing will be used for part of the payment owing to the sellers upon the closing of the Acquisition. No commissions or finder's fees are payable on the Financing.
RESIGNATION OF DUNCAN MANSON AS CEO
Effective immediately, Duncan J. Manson, interim Chief Executive Officer ("CEO") of the Company and its subsidiary, ERA Ecosystem Restoration Associates Inc. ("ERA"), has resigned from the position of Interim CEO. Mr. Manson continues to serve as a member of the Board of Directors, a position he has held since July 28, 2008. The Board of Directors thanks Mr. Manson for his service and dedication to the business.
It is the intention of the Board of Directors to appoint Dr. James Tansey as CEO of the Company subject to the completion of the Acquisition and the Financing.
Dr. Robert Falls, founder and Chairman of the Board of ERA, stated, "We are extremely pleased to have the opportunity to integrate three of Canada's leading offset project development companies under one roof, beginning an anticipated consolidation of the voluntary carbon business and creating the largest and most diverse carbon project development group in Canada. ERA's expertise in forest based carbon will be augmented with the addition of the team from Carbon Credit Corp. and matched with Offsetters expertise in clean technology carbon project consulting and development. Dr. James Tansey and his team at Offsetters and CCC have established a very capable and successful team that will bring valuable experience and market knowledge to complement that of ERA's, as we seek additional opportunities for growth and development in the international carbon markets."
Dr. James Tansey, founder and CEO of Offsetters, stated, "This acquisition brings together teams that have played a leading role in the establishment of carbon markets in North America and internationally. As a single Company we will be able to deliver on almost every form of carbon management service from measurement and reductions strategies through to offset origination and supporting software services. At a time when we expect to see rapid growth in the demand for greenhouse gas management services and offset origination, beginning in 2013 with the launch of the cap and trade system under the Western Climate Initiative, this Company will provide a unique one stop shop for companies seeking to address their climate impacts. In addition, by bringing together two companies that have developed some of the largest forest carbon projects in the world in Canada and in the Democratic Republic of the Congo, we expect to attract interest from project owners in the fastest growing part of the global carbon market."
Robert Falls, Ph.D., R.P.Bio., Chairman
ERA Carbon Offsets
About ERA Carbon Offsets Ltd.
A pioneer in carbon offset projects based on forest conservation and restoration, ERA has delivered over two million tonnes of carbon offsets to the voluntary market from a variety of international forestry based projects. The Company's Community Ecosystem Restoration Program ("CERP") began in 2005 in British Columbia, Canada, and has delivered large scale restoration of riparian ecosystems throughout the Lower Mainland of British Columbia. ERA's successful project development activities include the award winning Darkwoods and Denman Island forest carbon projects, the first REDD concessions in the Democratic Republic of Congo in central Africa and Improved Forest Management projects in the United States which are expected to deliver ARB compliant tonnes for the California market beginning in 2013. Our activities span Canada, Africa, the United States and New Zealand. ERA's carbon offset projects are validated and verified to ISO-14064, CCBA, PFSI-VER, CAR and VCS standards and sell into voluntary and pre-compliance carbon markets. ERA's clients and product users include Air Canada, Catalyst Paper, Rolling Stone Magazine, HSE - Entega, Forest Carbon Group AG, and Shell Canada Limited.
FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements as well as historical information. Forward-looking statements include, but are not limited to, the continued advancement of the Company's general business development, research development and the Company's development of forest-based carbon offsets. When used in this document, the words "anticipate", "believe", "estimate", "expect", "intent", "may", "project", "plan", "should" and similar expressions may identify forward-looking statements. Although ERA Carbon Offsets Ltd. believes that their expectations reflected in these forward looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include fluctuations in the marketplace for the sale of carbon credits, the inability to implement corporate strategies, the ability to obtain financing and other risks disclosed in our filings made with Canadian Securities Regulators.
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