Anaergia Announces Strategic Investment of C$40.8 Million to Be Secured by Bank Guarantees

BURLINGTON, Ontario, December 18, 2023--(BUSINESS WIRE)--Anaergia Inc. ("Anaergia" or the "Company") (TSX: ANRG), a global renewable fuels leader, is pleased to announce a C$40.8 million equity investment by Marny Investissement SA ("Marny") by way of an arm’s-length, three-tranche, non-brokered private placement (the "Strategic Investment").

Marny, through a wholly owned subsidiary ("Marny Holdco"), has agreed to subscribe for an aggregate of 102,000,000 units of the Company ("Units") at a price of C$0.40 per Unit with each Unit consisting of one subordinate voting share of the Company (each a "Subordinate Voting Share") and 1/5 of one Subordinate Voting Share purchase warrant of the Company (each a "Warrant"). Each Warrant will entitle Marny to purchase one additional Subordinate Voting Share at an exercise price of C$0.80 for a period of three years following the closing of the first tranche. The Unit subscription price of C$0.40 represents a 57% premium to the 10-day volume weighted average price of the Subordinate Voting Shares on the Toronto Stock Exchange ("TSX") as of December 15, 2023.

The Strategic Investment will close in three tranches of 34,000,000 Units for gross proceeds of C$13.6M each. The first, second and third tranches may close no later than January 15, 2024, February 15, 2024, and March 15, 2024, respectively. The Strategic Investment is subject to, among other things, the timely fulfillment of the payment obligations under the subscription by Marny and, the delivery by Marny of guarantees in respect of the payment obligations, acceptable to Anaergia, acting reasonably, on or about December 22, 2023 (the "Interim Conditions Completion Date"). The closing of the first, second and third tranches are subject to a limited number of customary conditions.

"As part of its strategic review process, the Company has focused on reducing costs, eliminating certain debt burdens and obligations, and improving liquidity. The Strategic Investment reflects the confidence that Marny has in these efforts to unlock the potential value in Anaergia’s long-term vision. The aggregate proceeds from the Strategic Investment are designed to enhance our liquidity position over time, providing us, potentially, with the resources to navigate current challenges as we have previously disclosed," said Mr. Brett Hodson, the Chief Executive Officer of Anaergia. "We appreciate the support of our stakeholders as we work towards strengthening our financial foundation and achieving our business plans. The anticipated capital injections reaffirm our commitment to delivering on our business strategy to drive sustainable success and harness the exciting opportunities that lie ahead for Anaergia."

"We are pleased to make the Strategic Investment in Anaergia, which is well positioned as a worldwide global renewable fuels leader," said Mr. Ohad Epschtein, the beneficial owner of Marny. "We have analyzed Anaergia’s unique technology and manufacturing capabilities and we are very optimistic that the Strategic Investment will allow the Company to unlock additional growth and potential. We expect to work closely with Dr. Andrew Benedek and Anaergia’s management team, as we continue to expand and grow Anaergia’s business interests in new directions, all with the ultimate goal of creating a cleaner and better world."

Anaergia intends to use the proceeds from the Strategic Investment to pay accounts payable and to fund its ongoing activities.

Marny has the right (the "Allotment Option"), in its sole discretion, to allocate an aggregate of 10,200,000 of the Subordinate Voting Shares for which it has subscribed to certain individual investors (the "Marny Individual Investors"), on a pro rata basis for each tranche, and any such Marny Individual Investors shall grant an irrevocable proxy to Marny Holdco in respect of the voting rights for such Subordinate Voting Shares.

On the Interim Conditions Completion Date, Anaergia will enter into an investor rights agreement (the "Investor Rights Agreement") with Marny and Dr. Andrew Benedek providing for, among other things, customary registration rights and participation rights, and certain information and director nomination rights, including the right for Marny to nominate a majority of the Company’s board of directors, following the closing of the third tranche of the Strategic Investment, so long as Marny owns or controls at least 40% of the voting power attached to the Company’s shares. The Investor Rights Agreement will become effective as of the closing of the first tranche of the Strategic Investment. Following the completion of the first tranche of the Strategic Investment, Marny will have the right to appoint one nominee to the Company’s board of directors. The Investor Rights Agreement will supersede and replace the Company’s existing principal shareholders agreement with Dr. Andrew Benedek.

Dr. Andrew Benedek has agreed to waive his pre-existing right to participate on a pro rata basis in equity financings by the Company and to convert one-third of all multiple voting shares of the Company (the "Multiple Voting Shares") held by him into Subordinate Voting Shares on a 1-for-1 basis in accordance with Anaergia’s constating documents with the closing of each tranche of the Strategic Investment.

Assuming the exercise in full of the Warrants, 122,400,000 Subordinate Voting Shares will be issued pursuant to the Strategic Investment, representing in aggregate approximately 187.2% of the 32,222,369 currently issued and outstanding Multiple Voting Shares and 33,179,135 of the currently issued and outstanding Subordinate Voting Shares.

Following the completion of the Strategic Investment and the conversion of the Multiple Voting Shares held by Dr. Andrew Benedek, Marny will own (or own or control, if the Allotment Option is exercised) approximately 60.9% of the issued and outstanding Subordinate Voting Shares (on a non-diluted basis) and 65.2% of the issued and outstanding Subordinate Voting Shares (on a partially diluted basis) assuming the exercise in full of the Warrants. Following the completion of the first tranche of the Strategic Investment and the conversion of one-third of the Multiple Voting Shares held by Dr. Andrew Benedek, Marny will own (or own or control, if the Allotment Option is exercised) approximately 20.8% of the voting rights attached to the Subordinate Voting Shares and the Multiple Voting Shares (on a non-diluted basis) and 23.9% of the voting rights attached to the Subordinate Voting Shares and the Multiple Voting Shares (on a partially diluted basis) assuming the exercise in full of the Warrants.

In connection with the Strategic Investment, the Company has provided an undertaking to the TSX to reclassify the Subordinate Voting Shares as "common shares" and to eliminate the Multiple Voting Shares from the Company’s authorized capital within 60 days from the closing of the third tranche of the Strategic Investment. Pursuant to a voting and support agreement, Dr. Andrew Benedek will agree to vote in favour of the reclassification.

The TSX will generally require security holder approval as a condition of acceptance of a notice under Section 602 if a private placement: (i) materially affects control of the listed issuer pursuant to Section 604(a)(i) of the TSX Company Manual (the "Manual"); or (ii) provides for the issuance of greater than 25% of the currently outstanding listed securities pursuant to Section 607(g)(i) of the Manual. Section 604(d) of the Manual provides that such approval may be obtained in writing from shareholders holding a majority of the outstanding voting securities of the listed issuer without the requirement to convene a shareholders’ meeting for such purposes, and the Company intends to obtain shareholder approval for the Strategic Investment in such a manner by having the Company’s major shareholder, Dr. Andrew Benedek, provide a written consent.

Piper Sandler & Co. is acting as financial advisor to the Company in connection with the Strategic Investment.

The Subordinate Voting Shares to be issued pursuant to the Strategic Investment will be subject to a statutory 4-month hold period in accordance with applicable Canadian securities laws.

About Marny

Marny is a Luxembourg-based holding company which focuses on investment properties in central and eastern Europe. Marny invests in high-quality projects that utilize advanced technology and materials and through Marny’s collaborations with its partners it ensures that its investments are well-managed and yield maximum value.

About Anaergia

Anaergia was created to eliminate a major source of greenhouse gases ("GHGs") by cost effectively turning organic waste into renewable natural gas ("RNG"), fertilizer and water through the use of proprietary technologies. With a track record of delivering innovative projects, Anaergia is uniquely positioned to provide solutions to today’s most pressing resource recovery challenges using a broad portfolio of proven technologies and multiple project delivery methods. Anaergia is one of the world’s only companies with a proprietary portfolio of end-to-end solutions that integrate solid waste processing as well as wastewater treatment with organics recovery, high efficiency anaerobic digestion, RNG production and recovery of fertilizer and water from organic residuals. The combination of these technologies enhances carbon-negative biogas, clean water and natural fertilizer production, utilizes a minimized footprint and lowers waste and wastewater treatment costs and GHG emissions.

For further information please see: www.anaergia.com

Forward-Looking Statements

This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects Anaergia’s current expectations regarding future events, including but not limited to, statements regarding the closing of each tranche of the Strategic Investment and the timing thereof; the Company’s anticipated use of proceeds therefrom; the potential value in Anaergia’s long-term vision; the strengthening of Anaergia’s financial foundation; the expectation that the Strategic Investment will improve the Company’s liquidity and provide the Company with resources to navigate current challenges; the Company’s continued focus on efforts to improve its liquidity; and the Company’s ability to achieve its liquidity objectives. Forward-looking information is based on a number of assumptions, including, but not limited to, the ability of the parties to satisfy the conditions required to close each tranche of the Strategic Investment; the Company’s ability to achieve its liquidity objectives, including reducing costs and achieving its business plan; and the Company’s ability to meet its financing and liquidity requirements on a continuing basis. The Company is subject to a number of risks and uncertainties, many of which are beyond the Company’s control. Such risks and uncertainties include, but are not limited to, counterparty risk exposure and the risk that one or more tranches of the Strategic Investment may not be completed or may not be completed in a timely manner and the factors discussed under "Risk Factors" in the Company’s annual information form for the fiscal year ended December 31, 2022 and under "Risks and Uncertainties" in the Company’s most recent management’s discussion and analysis. Actual results could differ materially from those projected herein. Anaergia does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws. Additional information on these and other factors that could affect Anaergia’s operations or financial results are included in Anaergia’s reports on file with Canadian regulatory authorities.

This news release 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 state in the United States or other jurisdiction in which such offer, solicitation or sale would be unlawful.

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Contacts

For media and/or investor relations please contact: IR@Anaergia.com