PALM BEACH, FL--(Marketwired - Sep 27, 2016) - Q2Power Technologies Inc. (
Under a new letter of intent signed between the parties, Q2P will pay $5 million for the ERTH Companies comprised of $2.5 million in cash at closing and $2.5 million in restricted stock, equivalent to 20 million shares. Q2P will then have an 18 month right to redeem 15 million shares of the acquisition consideration for $2.5 million. If Q2P chooses not to exercise this right and the total value of the 20 million shares is less than $2.5 million at such time, the sellers may exchange all of their stock in Q2P in return for 65% of the ERTH Companies' equity. This LOI is non-binding and the terms may change prior to closing, which is anticipated in the fourth quarter of 2016.
The ERTH Companies are leaders in the manufacturing of agricultural compost and sustainable soils from waste water biosolids in the southeastern United States. Collectively, they forecast over $5 million in revenue in 2017 generating over $1 million in EBITDA.
Q2P has also agreed to invest $500,000 in growth capital for facility upgrades and expansion of sales and marketing of ERTH products, activities that could further increase revenue and margin projections. Q2P will also refinance a loan secured by ERTH's facility and 230 acres of land to be acquired in the transaction. The current management of the ERTH Companies will continue in their positions under three year employment agreements.
"This agreement marks a significant step forward in our strategy to enter the composting and sustainable soil manufacturing business," stated Q2Power's Chairman, Kevin Bolin. "ERTH has a 20 year history in compost manufacturing, and is truly a thought leader in the development and sale of new sustainable soil products, a sector of the industry that shows great growth and importance to construction and infrastructure projects worldwide. With the right funding partners, which the Q2 team is negotiating currently, we believe that the ERTH Companies as a platform can support additional acquisitions in the future and propel Q2P into a leading position in this space over the next year."
"We are pleased to take this next step with Q2Power and look forward to proceeding to closing as soon as possible," stated Wayne King Sr., ERTH's founder. "We share the mission and values of Kevin and his team to build a highly profitable business through compost manufacturing while promoting sustainable soils that replenish the land, conserve water, boost food supply and reduce pollution."
ERTH owns and operates a composting facility in Plains, GA, to which it diverts biosolids from nine waste water treatment plants that would normally go to landfill, and with this recycled feedstock produces over 75,000 cubic yards per year of Class A compost sold to local farms, sod farms, retail bulk yards, and golf courses under the brand name ERTH Food®. Exceptional Products sells engineered soils produced from ERTH Food® compost to the construction and landscape industry, specifically blended for their structural, water and nutrient retention, and other LEED building requirements.
About Q2Power: Q2Power seeks to become a leading provider of waste management services for small-scale waste water treatment plants and other producers of methane and organic waste. Q2Power's current pilot staged combined heat and power (CHP) technology can be deployed with minimal time and expense at thousands of small-scale facilities that must dispose of waste such as methane, biogas and other used fuels at increasingly greater costs and regulatory burdens. Through acquisitions and strategic alliances, Q2Power also seeks to convert biosolid waste from water treatment plants into beneficial reuse products such as Class A compost and engineered soils.
For more information about Q2Power, please visit: www.q2p.com
Legal Notice Regarding Forward-Looking Statements: This news release contains "Forward-looking Statements". These statements relate to future events or our future financial performance. These statements are only predictions and may differ materially from actual future results or events. We disclaim any intention or obligation to revise any forward-looking statements whether as a result of new information, future developments or otherwise. There are important risk factors that could cause actual results to differ from those contained in forward-looking statements, including, but not limited to our ability to fully commercialize our technology, risks associated with changes in general economic and business conditions, actions of our competitors, the extent to which we are able to develop new products and markets, the time and expense involved in such development activities, the ability to secure additional financing, the level of demand and market acceptance of our products, and changes in our business strategies.