Alkemy to issue up to a total of 148,166,312 Ordinary Shares
upon achievement of contractual annual earnout sales milestones
exceeding US$300,000,000 within 5
years
BEIT SHEAN, Israel,
Jan. 21, 2022 /CNW/
- Alkemy (K.B. Recycling Industries Ltd.)
(www.alkemy.solutions) ("Alkemy" or the "Company"),
(TSXV: AKMY), (TSXV: AKMY.WT), a leading environmental
plastic recycling technology company, announced today the signing
of a Share Purchase Agreement to purchase oceansix
GmbH ("oceansix"), a Germany based company focused on developing
technologies and product solutions from recovered materials,
from RAM.ON finance GmbH ("RAM.ON finance"), a
company beneficially owned by Mr. Gat Ramon, the founder and MD
of the CABKA Group GmbH, a leading recycling corporation
specializing in transforming post-consumer and post-industrial
waste into material-handling solutions.
"This is a significant step in our mission to expand into the
global recycling market," said Mr. Shmulik Porre, CEO of Alkemy. "Leveraging our
purchase of oceansix, we plan to establish production centers in
Europe and to conduct R&D
towards opening additional profitable product lines."
"With the growing government and consumer awareness of the
importance of recycling plastic, I see tremendous potential for
Alkemy in the European and global markets. The synergy created by
adding oceansix to Alkemy will enable us to expand our product
lines and set up production centers in Europe and later in the rest of the
world," said Mr. Gat Ramon, the beneficial owner of RAM.ON
finance.
Following the transaction, Alkemy and oceansix will focus on the
development, production and sale of plastic products for a variety
of uses, extruded from plastic films made from post-consumer or
post-industrial plastics.
Transaction Details
In consideration for oceansix, Alkemy has agreed to issue at
closing 20,295,037 Ordinary Shares, par value NIS 0.01 each to RAM.ON finance. The transaction
also includes earnout payments involving the issuance of additional
Ordinary Shares to RAM.ON finance upon the achievement of certain
milestones, including the following:
- The issuance of 10,000,000 additional Ordinary Shares if Alkemy
is able to successfully establish an operational manufacturing site
outside of Israel for the
production of products utilizing oceansix's or the Company's
technology or processes within two years of the closing of the
transaction;
- The issuance of 4,593,773 additional Ordinary Shares if Alkemy
is able to successfully establish a second manufacturing site, as
described above, within two years of the closing of the
transaction;
- The issuance of 6,000,000 additional Ordinary Shares if Alkemy
is able to successfully commercialize and generate revenues from
oceansix's technology within five years of the closing of the
transaction;
- The issuance of 20,000,000 additional Ordinary Shares if,
within the five year period following the closing, the annual sales
of products utilizing oceansix's technology reaches a minimum of
US$ 40,000,000 and 0.338915 Ordinary
Shares for every US$ 1 in sales in
excess of US$ 40,000,000, altogether
up to a maximum amount of 74,111,190 Ordinary Shares; and
- The issuance of 33,166,312 additional Ordinary Shares, if,
within the five year period following the closing, the annual sales
of products utilizing oceansix's technology exceeds US$ 300,000,000.
The maximum number of Ordinary Shares to be issued to RAM.ON
finance, if all the above milestones are satisfied, is limited to
148,166,312 Ordinary Shares.
In connection with purchase of oceansix, Sullam Holdings L.R.
Ltd. and Tedea Technological Development and Automation Ltd., two
of Alkemy's significant shareholders, notified the Company that
they will support the transaction at the shareholders meeting that
will be scheduled in order to approve the transaction. Such
shareholders have also agreed to enter into a shareholders'
agreement with RAM.ON finance, which will include a lock-up period
of three years with respect to the sale of more than 25% of each of
the shareholders' holdings in Alkemy, as well as a right of first
refusal for each of the shareholders regarding off-market sales of
10% of such shareholder's holdings in Alkemy, during the period
commencing on the end of the lock-up period and until the fifth
anniversary of the closing of the transaction.
The abovementioned shareholders have also agreed to cooperate
and exercise their votes as shareholders such that the board of
directors of the Company will consist of eight (8) members with
RAM.ON Finance recommending three (3) persons to be nominated
and appointed as board members (one (1) of whom shall act as
Chairperson of the board). It is the intention of RAM.ON Finance to
appoint board members who are industry experts and that will take
an active role in the Company and the development and the Company's
business.
Based on the agreement between said shareholders, Tedea may
recommend the identity of one person to be nominated and appointed
as a board member, Sullam may recommend the identity of one person
to be nominated and appointed as a board member and one person to
be nominated and appointed as a board member will be recommended by
RAM.ON finance, Tedea and Sullam unanimously. The remaining
two members of the board shall be External Directors (as such term
is defined under the Israeli Companies Law, 5759-1999) who shall be
nominated and appointed in accordance with applicable law.
The transaction is subject to approval by the shareholders of
Alkemy, regulatory and TSX Venture Exchange (the "TSXV")
approvals, and other customary closing conditions.
About Alkemy (K.B. Recycling Industries Ltd.)
Alkemy is an environmental technology company based in
Israel that has developed a unique
plastic recycling process for plastic bags and sheets traditionally
not considered economically viable for recycling. Alkemy employs a
dynamic one-step process that does not require separate recycling
and production plants. Alkemy's process includes both recycling and
finished product manufacturing in a single process called
"waste-to-product", allowing Alkemy to reduce the cost of the
recycled plastic as raw materials, and increase the profit margin
per metric ton.
Forward-Looking Information
This press release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
information") within the meaning of applicable securities laws.
Forward-looking information may relate to the Company's future
financial outlook and anticipated events or results and may include
information regarding the Company's financial position, business
strategy, growth strategies, addressable markets, budgets,
operations, financial results, taxes, dividend policy, plans, and
objectives. Particularly, information regarding the Company's
expectations of future results, performance, achievements,
prospects or opportunities, or the markets in which the Company
operates is forward-looking information. In some cases,
forward-looking information can be identified by the use of
forward-looking terminology such as "plans", "targets", "expects",
"budgets", "scheduled", "estimates", "outlook", "forecasts",
"projects", "prospects", "strategy", "intends", "anticipates",
"believes", or variations of such words and phrases or statements
that certain actions, events or results "may", "could", "would",
"might", or "will" occur. In addition, any statements that refer to
expectations, intentions, projections, or other characterizations
of future events or circumstances contain forward-looking
information. Statements containing forward-looking information are
not historical facts but instead represent management's
expectations, estimates, and projections regarding future events or
circumstances. Forward-looking information herein includes
statements in respect of: the closing of the oceansix transaction
and timing thereof; plans of the Company to expand into the
European and global recycling market; achievement of sales
milestones and other milestones and the timing thereof; synergies
created by the oceansix transaction and expansion of profitable
product lines; appointment of board members by RAM.ON; approval of
oceansix transaction by the Company's shareholders and the TSXV;
and general business objectives and goals of the Company.
Forward-looking information is necessarily based on a number of
opinions, estimates and assumptions that, while considered by the
Company to be appropriate and reasonable as of the date of this
press release, are subject to known and unknown risks,
uncertainties, assumptions and other factors that may cause the
actual results, level of activity, performance or achievements to
be materially different from those expressed or implied by such
forward-looking information, including but not limited to, risks
and uncertainties associated with market conditions and the
satisfaction of all applicable regulatory requirements, as well as
risks and uncertainties associated with the Company's business.
If any of these risks or uncertainties materialize, or if the
opinions, estimates or assumptions underlying forward-looking
information prove incorrect, actual results or future events might
vary materially from those anticipated in such forward-looking
information. The opinions, estimates or assumptions referred to
above and the risk factors described in the "Risk Factors" section
of the Management's Discussion and Analysis of the Company dated
November 30, 2021 should be
considered carefully.
Although the Company has attempted to identify important risk
factors that could cause actual results to differ materially from
those contained in forward-looking information, there may be other
risk factors not presently known to the Company that could also
cause actual results or future events to differ materially from
those expressed in such forward-looking information. There can be
no assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not
place undue reliance on forward-looking information. The Company
disclaims any intention or obligation or undertaking to update or
revise any forward-looking information whether as a result of new
information, future events or otherwise, except as required under
applicable securities laws. In particular but without limitation,
there is no assurance that the oceansix transaction will be
completed on the terms specified herein or at all. In addition,
there is no assurance that the transaction will result in Alkemy
achieving any or all of the business or operational objectives
stated above.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE K.B. Recycling Industries Ltd.
