Earth Alive's Strategic Sale: A New Dawn for the Company

Earth Alive Clean Technologies Inc. (TSXV: EAC) has announced its intention to complete a sale transaction and ancillary steps, marking a significant turning point for the company. The Transaction, as outlined in the Subscription Agreement dated January 17, 2025, between Earth Alive and 9530-8086 Québec Inc. (the Purchaser), provides a clear path forward for the company's future.

The key terms and conditions of the Subscription Agreement include the Purchaser subscribing for certain common shares in the capital of the Company, the cancellation of all other equity interest in the Company for no consideration, and the assumption of the vast majority of the Company's indebtedness. Upon closing of the transaction, the Purchaser will hold all of the issued and outstanding common shares of the Company, subject to the terms and conditions of the Subscription Agreement. The Transaction is conditional upon the approval of the Court, among other things, and is to be given effect by way of a reverse vesting order and certain ancillary relief, to be granted with the BIA proceedings.

The Company intends to file an application seeking approval of the Transaction in the coming days, with additional information related to the BIA proceedings available on the Trustee's website. Anyone interested in obtaining more information about the BIA proceedings, the SISP, or the Transaction should contact the proposal trustee (Ayman Chaaban - Chaaban.Ayman@rcgt.com) or the Company’s legal counsel (Gabriel Lavery Lepage – glaverylepage@dwpv.com).

The Transaction is expected to have a significant impact on the Company's capitalization, enterprise value, and valuation ratios. The Purchaser's subscription for common shares and the cancellation of other equity interest will lead to a substantial increase in the Company's capitalization. The assumption of the Company's indebtedness will also impact the Company's capitalization and enterprise value. The Transaction's closing will result in the Purchaser holding all of the issued and outstanding common shares of the Company, which will likely lead to a significant increase in the Company's valuation ratios, such as the P/E ratio, PBR, and EV/EBITDA.

The expected outcome for the Company's employees and indebtedness following the Transaction's closure is positive. The Subscription Agreement contemplates the continuation of the employment of all of the Company’s employees, ensuring job security and stability during this transition period. The assumption of the vast majority of the Company’s indebtedness by the Purchaser will also reduce the Company's financial burden and potentially improve its financial health moving forward.

In conclusion, Earth Alive's strategic sale transaction marks a new dawn for the company, with a clear path forward for its future. The Transaction's terms and conditions, as outlined in the Subscription Agreement, provide a solid foundation for the Company's continued success, with positive outcomes expected for both employees and indebtedness. As the Company moves forward, investors should keep a close eye on developments regarding the NOI proceedings and the SISP, as well as the Company's ongoing efforts to maximize the value of its business and assets.