ZEFIRO METHANE CORP. (Cboe Canada: ZEFI) (Frankfurt: Y6B)
(OTCQB: ZEFIF) (the “Company”, “Zefiro”, or “ZEFI”) today
announced that Zefiro’s subsidiary, Plants & Goodwin, Inc.
(“P&G”) has executed a Securities Exchange Agreement (the
“Agreement”) to acquire the remaining common shares of P&G from
the entity’s Chief Executive Officer Luke Plants in exchange for
newly issued preferred stock in P&G.
The Transaction does not contain any cash component
and the Company is confident the Transaction will be cash flow
accretive and better position Zefiro to more effectively manage its
liquidity and use of debt capital to advance critical commercial
expansion initiatives. In May 2023, Zefiro acquired an initial 75%
ownership stake in P&G to bolster the Company’s operational
presence across the Appalachia region through P&G’s
decades-long history of service in Pennsylvania, New York, West
Virginia, and Ohio.
Since becoming a Zefiro subsidiary, P&G has organically
increased its revenues by 50%, eclipsed P&G’s prior
profitability record, hired more than 60 full-time employees, and
achieved numerous other commercial milestones, including:
- acquiring a Cambridge, Ohio-based wireline services company to
expand P&G’s suite of environmental remediation service
offerings; and
- opening an additional facility in Buckhannon, West Virginia to
increase southern Appalachia client services while decreasing
operational expenses.
In connection with the Transaction, Luke Plants has been
promoted to Chief Executive Officer of Zefiro Services and
Executive Vice President of Business Development. Mr. Plants was
previously appointed Zefiro’s Vice President of Business
Development in December 2023.
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Zefiro Founder and CEO Talal Debs commented, “For over a year,
P&G has played a key role in Zefiro’s growth into one of the
methane reduction sector’s leading remediation service providers.
This transaction can not only bolster our capacity to generate
high-quality carbon credits for leading institutional traders, but
also promote alignment amongst subsidiary organizations throughout
Zefiro’s fully integrated methane abatement services strategy, led
by Luke and P&G field crews across our service territory. Their
extensive expertise positions Zefiro to continue both expanding
across North America and partnering with state and federal agencies
to reduce leaks from orphan wells. Our entire senior leadership
team could not be more excited to continue working with Luke and
his staff to help expedite the Company’s commercial growth.”
CEO of Zefiro Services and Executive Vice President of Business
Development Luke Plants commented, “Becoming an essential part of
Zefiro’s innovative, fully integrated commercial blueprint has
provided our abandonment specialists with exciting new challenges
across our key Appalachian markets. Producing repeatable,
sustainable carbon credits will, we believe, become a vital
instrument for financing critical environmental remediation
projects, and this finalized agreement will best position P&G
to continue expanding our operational footprint, bolster
profitability, and help safeguard more communities in need.”
At the closing of the transactions contemplated by the Agreement
(the “Transaction”), a wholly owned subsidiary of Zefiro will own
100% of the common shares of P&G and Luke Plants will own
approximately 7.01 million newly issued Series A Convertible
Preferred Shares of P&G (the “Preferred Shares”) that entitle
him to, in addition to other customary rights, (a) a US $1.00 per
share initial liquidation preference and (b) a 10% per annum
dividend, payable in kind, until the later of June 30, 2028 or the
achievement of US $10 million in June-to-June annual operating cash
flow at P&G (after which dividends will be payable in cash).
The Preferred Shares will be redeemable at P&G’s option at the
liquidation preference (including any accrued but unpaid dividends)
following the earlier of Luke Plant’s termination as an employee of
Zefiro and its affiliates or the second anniversary of the closing
of the Transaction. The Preferred Shares will automatically convert
at a conversion price of US $1.20 per share upon the completion of
a qualified public offering of P&G or an affiliate of P&G
(the “IPO Issuer”) on a nationally recognized U.S. stock exchange
into common stock of the IPO Issuer.
The closing of the Transaction is subject to customary closing
conditions and is expected to occur prior to August 31, 2024.
Reporters/Media: For any questions or to
arrange an interview with Dr. Debs or Mr. Plants, please contact
Rich Myers of Profile Advisors (New York City) by email at
media@zefiromethane.com or by telephone at +1 (347) 774-1125.
About Zefiro Methane Corp.
Zefiro is an environmental services company, specializing in
methane abatement. Zefiro strives to be a key commercial force
towards Active Sustainability. Leveraging decades of operational
expertise, Zefiro is building a new toolkit to clean up air, land,
and water sources directly impacted by methane leaks. The Company
has built a fully integrated ground operation driven by an
innovative monetization solution for the emerging methane abatement
marketplace. As an originator of high-quality U.S.-based methane
offsets, Zefiro aims to generate long-term economic, environmental,
and social returns.
On behalf of the Board of Directors of the Company,
ZEFIRO METHANE CORP.
“Talal Debs”
Talal Debs, Founder & CEO
For further information, please contact:
Zefiro Investor Relations1 (800) 274-ZEFI
(274-9334)investor@zefiromethane.com
For media inquiries, please contact:
Rich Myers - Profile Advisors (New York)media@zefiromethane.com
+1 (347) 774-1125
Forward-Looking Statements
This news release contains “forward-looking
information” within the meaning of applicable Canadian securities
legislation, Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking information is often, but not always, identified by
the use of words such as “seeks”, “believes”, “plans”, “expects”,
“intends”, “estimates”, “anticipates” and statements that an event
or result “may”, “will”, “should”, “could” or “might” occur or be
achieved and other similar expressions. In particular, this news
release contains forward-looking information including statements
regarding: the Transaction, including its closing, terms and cash
flow accretion; the Preferred Shares, including their issuance,
redemption or conversion; any future public offering of stock;
liquidity and use of debt capital; commercial expansion
initiatives; operational presence and operating expenses; project
financing; the Company’s goal to reduce emissions from end-of-life
oil and gas wells and reduce methane gas; the Company’s
partnerships with industry operators, state agencies, and federal
governments; the Company’s expectations for continued increases in
revenues and EBITDA growth as a result of these partnerships; the
Company’s intentions to build out its presence in the United
States; the anticipated federal funding for orphaned well site
plugging, remediation and restoring activities; the Company’s
expectations to become a growing environmental services company;
the Company’s ability to provide institutional and retail investors
alike with the opportunity to join the Active Sustainability
movement; the Company’s ability to generate long-term economic,
environmental, and social returns; and other statements regarding
the Company’s business and the industry in which the Company
operates. The forward-looking information reflects management’s
current expectations based on information currently available and
are subject to a number of risks and uncertainties that may cause
outcomes to differ materially from those discussed in the
forward-looking information. Although the Company believes that the
assumptions and factors used in preparing the forward-looking
information are reasonable, undue reliance should not be placed on
such information and no assurance can be given that such events
will occur in the disclosed timeframes or at all. Factors that
could cause actual results or events to differ materially from
current expectations include, but are not limited to: (i) adverse
general market and economic conditions; (ii) changes to and price
and volume volatility in the carbon market; (iii) changes to the
regulatory landscape and global policies applicable to the
Company's business; (iv) failure to obtain all necessary regulatory
approvals; and (v) other risk factors set forth in its Prospectus
dated April 8, 2024 under the heading “Risk Factors”. The Company
operates in a rapidly evolving environment where technologies are
in the early stage of adoption. New risk factors emerge from time
to time, and it is impossible for the Company’s management to
predict all risk factors, nor can the Company assess the impact of
all factors on Company’s business or the extent to which any
factor, or combination of factors, may cause actual results to
differ from those contained in any forward-looking information.
Forward-looking information in this news release is based on the
opinions and assumptions that management considered reasonable as
of the date hereof, including, but not limited to, the assumption
that general business and economic conditions will not change in a
materially adverse manner. Although the Company believes that the
assumptions and factors used in preparing the forward-looking
information in this news release are reasonable, undue reliance
should not be placed on such information. The forward-looking
information included in this news release is made as of the date of
this news release and the Company expressly disclaims any intention
or obligation to update or revise any forward-looking information
whether as a result of new information, future events or otherwise,
except as required by applicable law.
No Offer of Securities
This communication shall not constitute an offer
to sell or the solicitation of an offer to buy any securities, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction.
Statement Regarding Third-Party Investor
Relations Firms
Disclosures relating to investor relations firms
retained by Zefiro Methane Corp. can be found under the Company's
profile on SEDAR+ at www.sedarplus.ca/.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/503b76b5-e7fe-48ed-bf2b-cb8a3187557b