Earthworks Announces Closing of Private Placement of Units for Gross Proceeds of $1.5 Million

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

VANCOUVER, British Columbia, Nov. 02, 2023 (GLOBE NEWSWIRE) -- Earthworks Industries Inc. (TSXV:EWK) (the "Company") is pleased to announce that it has closed its previously announced commercially reasonable efforts private placement offering of an aggregate of 7,500,000 units (the "Units") at a price of $0.20 per Unit (the "Issue Price") for aggregate gross proceeds of $1,500,000 (the "Offering"). Each Unit consists of one common share in the capital of the Company (each, a "Common Share") and one common share purchase warrant of the Company (each, a "Warrant"). Each Warrant will entitle the holder thereof to purchase one additional Common Share at a price of C$0.40, subject to adjustment in certain events, at any time until November 2, 2025.

The Offering was completed pursuant to the terms of an agency agreement dated November 2, 2023, between the Company and Haywood Securities Inc. as lead agent and sole bookrunner (the "Agent").

The Company intends to use the net proceeds of the Offering for working capital, general corporate purposes, to pay outstanding accounts payable, and to pay a debt extension fee.

In consideration for the services provided by the Agent in connection with the Offering, the Company paid to the Agent: (i) a cash commission equal to 6% of the aggregate gross proceeds of the Offering; (ii) non-transferrable broker warrants of the Company exercisable at any time prior to November 2, 2025 to acquire up to 450,000 units (each, a "Compensation Option Unit") at a price equal to the Issue Price, subject to adjustment in certain events. Each Compensation Option Unit consists of one Common Share and one common share purchase warrant of the Company (each, a "Compensation Option Warrant"), with each Compensation Option Warrant entitling the holder to purchase one Common Share at a price of $0.40 per share at any time until November 2, 2025.

The Units sold under the Offering were issued and sold pursuant to the listed issuer financing exemption under Part 5A of NI 45-106 (the "Listed Issuer Financing Exemption"). A copy of the amended and restated offering document under the Listed Issuer Financing Exemption dated October 17, 2023 (the "Offering Document") is available under the Company's profile at www.sedarplus.ca and on the Company's website at www.earthworksinc.com. All Units issued pursuant to the Listed Issuer Financing Exemption are not subject to resale restrictions in Canada in accordance with applicable Canadian securities laws and the policies of the TSX Venture Exchange (the "TSXV"). All other securities not issued pursuant to the Listed Issuer Financing Exemption, including the Compensation Options, are subject to a statutory hold period in accordance with applicable Canadian securities laws, expiring on March 3, 2024. The Offering remains subject to the final acceptance of the TSXV.

David Russell, an "insider" and Chief Financial Officer of the Company, has subscribed for 100,000 Units under the Offering for aggregate gross proceeds of $20,000. The subscription by Mr. Russell is considered to be a "related party transaction" for purposes of Multilateral Instrument 61-101 ? Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company did not file a material change report more than 21 days before the expected closing date of the Offering as the details of the Offering and the participation therein by any related party of the Corporation was not settled until shortly prior to the closing of the Offering, and the Company wished to close the Offering on an expedited basis for sound business reasons. The Company is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The Corporation is exempt from the formal valuation requirement in Section 5.4 of MI 61-101 in reliance on Section 5.5(a) of MI 61-101 as the fair market value of the transaction, insofar as it involves interested parties, is not more than 25% of the Company's market capitalization. Additionally, the Company is exempt from the minority shareholder approval requirement in Section 5.6 of MI 61-101 in reliance on Section 5.7(1)(a) of MI 61-101 as the fair market value of the transaction, insofar as it involves interested parties, is not more than 25% of the Company's market capitalization.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the U.S. Securities Act of 1933, as amended (the "1933 Act") or under any U.S. state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act, as amended, and applicable state securities laws.

For further information, contact:
Earthworks Industries Inc.
David Atkinson
President/CEO
604-669-3143

Forward Looking Statements:

The news release contains "forward-looking information" and "forward-looking statements" (collectively "forward-looking statements") within the meaning of the applicable Canadian securities regulations. All statements contained herein, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objective assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are forward-looking statements, including but not limited to statements regarding: TSXV final approval of the Offering and the use of proceeds of the Offering. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this news release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on the forward-looking statements.

Neither the TSXV nor its regulation services provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this News Release.