EWK Earthworks Industries Inc

Earthworks Industries Inc. (TSXV:EWK) (the “Company”) is pleased to announce that it is amending the terms of its brokered private placement (the “Offering”) previously announced on September 21, 2023. The amended Offering will be for a minimum of 5,000,000 up to a maximum of 7,500,000 units (the “Units”) of the Company at a price of C$0.20 per Unit (the “Offering Price”) for gross proceeds to the Company of a minimum of C$1,000,000 up to a maximum of C$1,500,000.  

Each Unit will consist of one common share in the capital of the Company (a “Common Share”) and one common share purchase warrant of the Company (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, for a period of 24 months following the closing date of the Offering (the “Closing Date”).

The Company has entered into an amended and restated engagement letter agreement with Haywood Securities Inc. to act as lead agent and sole bookrunner on behalf of a syndicate of agents (collectively, the “Agents”) on a commercially reasonable efforts’ basis in connection with the Offering.

Upon closing of the Offering, the Company shall pay to the Agents: (i) a cash commission equal to 6% of the aggregate gross proceeds of the Offering; and (ii) non-transferrable broker warrants of the Company exercisable at any time prior to the date that is 24 months from the Closing Date to acquire that number of Units equal to 6% of the number of Units issued under the Offering at an exercise price equal to the Issue Price, subject to adjustment in certain events.

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

Subject to compliance with applicable regulatory requirements and in accordance with National Instrument 45-106 – Prospectus Exemptions (“NI 45-106”), the Offering is being made to purchasers resident in all provinces and territories of Canada, except Quebec, pursuant to the listed issuer financing exemption under Part 5A of NI 45-106 (the “Listed Issuer Financing Exemption”). The securities offered under the Listed Issuer Financing Exemption will not be subject to a statutory hold period in accordance with applicable Canadian securities laws. The Agents will also be entitled to offer the Units for sale in jurisdictions outside of Canada provided it is understood that no prospectus filing or comparable obligation arises in such other jurisdiction. All securities not issued pursuant to the Listed Issuer Financing Exemption will be subject to a hold period in accordance with applicable Canadian securities law, expiring four months and one day following the Closing Date.

An amended and restated offering document (the “Offering Document”) related to the Offering can be accessed under the Company’s profile at www.sedarplus.ca and on the Company’s website at www.earthworksinc.com. Prospective investors should read the Offering Document before making an investment decision.

The Offering is scheduled to close on or about November 3, 2023. Completion of the Offering is subject to certain conditions including, but not limited to, receiving subscriptions for the minimum amount of C$1,000,000 under the Offering, the entering into of a definitive agency agreement between the Company and the Agents with respect to the Offering and the receipt of all necessary approvals, including the approval of the TSX Venture Exchange (the “TSXV“).

Cortina Project Update

As a further update, the Company is pleased to announce that it has entered into an amended debt settlement agreement with North Bay Corporation ("North Bay"), dated October 15, 2023 (the "Amended Debt Settlement Agreement"), granting a further option to extend the repayment date of debt owing to North Bay by the Company (the "North Bay Debt") from April 15, 2024, to November 15, 2024.

Pursuant to the Amended Debt Settlement Agreement, North Bay and the Company have agreed that:

	a)	on or about the Closing Date, the Company shall issue to North Bay, separate and apart from the Offering and pursuant to available prospectus exemptions, 3,335,000 units of the Company at a price per unit of US$0.15 in settlement of US$500,000. Each unit issued to North Bay shall consist of one (1) Common Share and one (1) common share purchase warrant of the Company entitling the holder thereof to purchase one additional Common Share at a price of $0.40 per Common Share from the date of issuance, expiring October 30, 2025;
	b)	the repayment date of the remaining US$2,150,000 of the North Bay Debt shall be extended to April 15, 2024. The Company shall pay a fee to North Bay for the extension, equal to 25% of the net proceeds of the Company's next financing;
	c)	following the Closing Date, the Company shall have an option to extend such repayment date to November 15, 2024. Upon exercise of such option to extend, the Company shall issue to North Bay, separate and apart from the Offering and pursuant to available prospectus exemptions, units of the Company in settlement of US$500,000 at the price of the Common Shares at such time. Each unit issued to North Bay shall consist of one (1) Common Share and one (1) Common Share purchase warrant of the Company entitling the holder thereof to purchase one additional Common Share at a price and expiry date to be determined at the time of issuance; and
	d)	interest will accrue at 10.0% per annum on the total principal and accrued interest outstanding of approximately US$6,000,000 from October 10, 2023 and be paid in addition to the remaining settlement amount of US$2,150,000.

The Amended Debt Settlement Agreement is subject to acceptance by the TSXV by November 30, 2023.

Earthworks’ CEO, David Atkinson, commented: “The amended Offering size significantly reduces potential dilution to shareholders and reflects the adjustment in liquidity requirements of Earthworks as a result of both the extension to the debt settlement repayment date and the reduced principal payment required for the North Bay loan. These amendments are a testament to North Bay’s confidence in Earthworks and the Cortina Project and allows Earthworks to avoid unnecessary equity dilution to shareholders”.

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/CEO604-669-3143

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: closing of the Offering on the terms described herein or at all; the expected Closing Date of the Offering; TSXV 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.