VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 12/14/12 -- ERA Carbon Offsets Ltd. ("ERA" or the "Company") (TSX VENTURE: ESR) is pleased to announce that it has closed its acquisition (the "Acquisition") of Offsetters Clean Technology Inc. ("Offsetters") and Carbon Credit Corporation ("CCC") of Vancouver BC, Canada.
The Company has also closed its private placements announced on September 17, 2012 (the "First Private Placement") and October 9, 2012 (the "Second Private Placement") for total proceeds of $413,440.
In addition, the Company has appointed Dr. James Tansey as the Company's President and CEO.
Closing of the Acquisition
The Company has purchased all of the issued and outstanding shares of Offsetters (the "Offsetters Shares") and CCC (the "CCC Shares") from the three holders of those shares: Dr. James Tansey ("Tansey"), Donovan Woollard ("Woollard") and a third party seller (the "3rd Party Seller").
In consideration of the purchase of the 3rd Party Seller's CCC Shares and Offsetters Shares, the Company issued to the 3rd Party Seller share purchase warrants to purchase 2,000,000 Common shares of ERA (the "Warrant Shares"), exercisable at a price of $0.40 per Common share until March 31, 2017 (the "Warrants") and paid $500,000 (the "First Cash Payment") to the 3rd Party Seller. As further consideration, the Company shall also make cash payments to the 3rd Party Seller, as follows:
i. on or before December 30, 2013, the Company will pay the 3rd Party Seller the greater of either (A) $1,500,000 (the "Second Cash Payment") or (B) the sum of 15% of the net cash it receives from projects unrelated to its current operations (the "Net Cash Received" and the "15% Payment") in 2013 and 35% of commissions from the Great Bear Project (a "GBI Payment") in 2013;ii. on or before December 30, 2014, the Company will pay the 3rd Party Seller the greater of either (A) $500,000 (the "Third Cash Payment") or (B) the sum of the 15% Payment for the Net Cash Received in 2014 and the GBI Payment for 2014;iii.on or before December 30, 2015, the Company will pay the 3rd Party Seller the greater of either (A) $500,000 (the "Fourth Cash Payment") or (B) the sum of the 15% Payment for the Net Cash Received in 2015 and the GBI Payment for 2015;iv. on or before December 30, 2016, ERA will pay the 3rd Party Seller the greater of either (A) $500,000 (the "Fifth Cash Payment") or (B) the sum of the 15% Payment for the Net Cash Received in 2016 and the GBI Payment for 2016; andv. 15% of Net Cash Received and 35% of GBI Commissions during the period of December 31, 2016 and March 31, 2017 attributable to revenues accrued in 2016 to the extent that the sum of (A) such amount and (B) 15% of the Net Cash Received in 2016 and the GBI Payment for 2016, exceeds the Fifth Cash Payment (the "2016 Adjustment"),
provided that the total of all Payments shall not be less than the Minimum Purchase Price of $3,500,000, and not more than the Maximum Purchase Price of $6,000,000.
In addition, the 3rd Party Seller will receive 20% of any equity financing of projects unrelated to the Company's current operations.
The shares underlying the Warrants are subject to a four (4) month hold period expiring on April 15, 2013. The shares are also subject to a right of first refusal of the Company to purchase the shares should the 3rd Party Seller wish to sell them.
