News alert from EQTEC plc

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO, THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

This Announcement does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any investment decision in respect of EQTEC plc or other evaluation of any securities of EQTEC plc or any other entity and should not be considered as a recommendation that any investor should subscribe for or purchase any such securities.

This Announcement contains inside information for the purposes of the UK version of the market abuse regulation (EU No. 596/2014) as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR"). In addition, market soundings (as defined in UK MAR) were taken in respect of certain of the matters contained in this Announcement, with the result that certain persons became aware of such inside information, as permitted by UK MAR. Upon the publication of this Announcement, this inside information is now considered to be in the public domain and such persons shall therefore cease to be in possession of inside information.

EQTEC plc

("EQTEC", the "Company" or the "Group")

Proposed Equity Issue to raise approximately £3.5 million

Issue of Warrants, Broker Option, Loan Facility Prepayment and Loan Reprofile

EQTEC plc (AIM: EQT), a global technology innovator powering distributed, decarbonised, new energy infrastructure through its waste-to-value solutions for hydrogen, biofuels, and energy generation today announces it has conditionally raised c. £3.5 million before expenses, by way of a placing (the "Placing"), via direct subscriptions with the Company by institutional and other investors (the "Placees") of units ("Units") at a price of 0.22 pence per Unit (the "Placing Price"). Each Unit comprises one new ordinary share of €0.001 each in the Company ( "Ordinary Share") and one half of one Ordinary Share purchase warrant ( "Warrant"). Each full Warrant is exercisable at 0.33 pence per new Ordinary Share.

The Company also announces the reprofiling of existing loan facilities including the conversion of certain existing debt into equity and the settlement of strategic supplier fees in new Ordinary Shares, in each case at the Placing Price.

The Company has appointed Global Investment Strategy UK Limited ("GIS") as its Placing agent to raise up to an additional £550,000 (gross) for the Company via a broker option (the "Broker Option"), details of which are set out below. Existing shareholders may apply to GIS for Units pursuant to the Broker Option from the time of this announcement until 4.45 p.m.UK time on 31 March 2023.

The net proceeds from the Placing will be used for progressing Market Development Centres ("MDCs"), maintaining business continuity and driving new Research & Development ("R&D"). In addition, part of the proceeds will be applied to settling a proportion of the Group's debt, as further detailed below.

The Placing Price represents a discount of approximately 23% percent from the closing mid-market price of the Company's Ordinary Shares on AIM on 20 March 2023, being the latest practicable date before this Announcement, with the Placing and issue of New Shares (as defined below) and the Ordinary Shares on the exercise of the Warrants being conducted under the Company's existing share authorities.

Rationale for the Fundraise and use of funds

The Company's business strategy aims to establish its position as a world-class technology licensor and innovator. Execution of that strategy requires that it maintain momentum with development and commissioning of MDCs, execution of applied R&D with sufficient lead times to support project opportunities and greater breadth and depth of strategic partnerships with world-class infrastructure investors, owner-operators and delivery partners.

The Company requires specific funding for MDCs, business continuity and R&D to support its 2023 efforts and 2024 project opportunities and growth. Specifically, c. £1.3 million would be used to progress the Group's Croatia and France MDCs; c. £0.5 million would be used to support business continuity and partner development through working capital and reprofiling of existing loans; and c. £0.2 million would be used for applied R&D toward Renewable Natural Gas ("RNG") and Sustainable Aviation Fuel ("SAF") solutions aimed at 2024 projects.

In addition, part of the proceeds will be applied to settling part of the Group's debt with its largest shareholder, as further detailed below, with the balance of the proceeds being applied to general working capital.

David Palumbo, CEO, commented:

"This targeted Placing is focused on supporting strategic execution in 2023. With the Italia MDC now operational, we have turned our attention to Croatia and France, growing our portfolio of well-established and highly credible partners who are developing projects and deploying EQTEC's Industrial, Utility and Municipal business solutions. Demand remains strong, and focused execution remains imperative in the current, uncertain market. We look forward to updating shareholders as our solutions and brand gain global traction and the business grows accordingly."

The Placing

A total of 1,595,454,545 Units has been subscribed for at the Placing Price resulting in the issue of 1,595,454,545 new Ordinary Shares (the "Placing Shares") and the grant of 797,727,273 Warrants. Each Warrant, which is unlisted and fully transferable, will entitle the holder thereof to purchase one Ordinary Share at a price of 0.33 pence (being a 50 percent premium to the Placing Price) for a period of 24 months from the date on which the Units are issued pursuant to the Placing.

The Placing is conditional, inter alia, upon admission of the Placing Shares to trading on AIM becoming effective ("Admission") by not later than 8.00 a.m. on 29 March 2023 (or such later time and/or date as the Company may determine, but not later than 8.00 a.m. on 12 April 2023). In addition, the Placing is conditional on the Company's having received relevant Placing monies from each Placee prior to Admission.

If any condition of the Placing is not satisfied, the Placing Shares will not be issued, and all monies received will be returned to Placees and without interest as soon as possible thereafter. The Company may at its absolute discretion increase the size of the Placing. The Placing is not being underwritten.

It is expected that Admission will become effective and that dealing in the Placing Shares will commence at 8.00 a.m. on 29 March 2023. Warrants will be issued in certificated form to Subscribers as soon as practicable following Admission.

Settlement of Director remuneration in new Ordinary Shares

The Company is proposing that 24% of the Executive Directors' remuneration payable in 2023 can be satisfied at the Company's election by the issue of new Ordinary Shares at the Placing Price, at the discretion of the Company's remuneration committee. Subject to terms being agreed, a further announcement, together with any fair and reasonable opinion as required, would be made at such time as the Company entered into any such agreement.

Altair participation and Altair Facility prepayment and increase

Altair Group Investments Limited ("Altair"), the largest shareholder of the Company, has agreed to subscribe for £1.5 million pursuant to the Placing (the "Altair Placing").

In addition, the Company has an existing £2 million loan facility with Altair, as announced on 9 December 2022 (the "Altair Facility"). The Company and Altair have today entered into an agreement through which Altair's participation in the Placing will be applied towards reducing the outstanding amount of £1.8 million under the Altair Facility and to increase the maximum amount of such facility to £3.5 million, with £1.7 million remaining available for drawdown following the Altair Placing and intended repayment (the "Facility Extension"). All other terms of the Altair Facility remain unchanged.

Altair has an existing holding of 1,152,795,706 Ordinary Shares, representing 12.24 percent of the Company's issued share capital and, as such, is a substantial shareholder as defined in the AIM Rules. Therefore, the Altair Placing and the Facility Extension are related party transactions pursuant to Rule 13 of the AIM Rules. Accordingly, the directors of the Company, having consulted with the Company's nominated adviser, Strand Hanson Limited, consider the terms of the Altair Placing and the Facility Extension to be fair and reasonable insofar as the Company's shareholders are concerned.

David Palumbo and Thomas Quigley are members of Argentari Capital LLP ("ACL"), a limited partnership, which holds shares and warrants in the Company, as bare nominee for the beneficial owner, Altair (the "Altair Holding"). As is the case with a bare nominee relationship, neither ACL, David Palumbo nor Thomas Quigley has any beneficial interest in the Altair Holding, nor does any of them have any direct or indirect ability to deal in or exercise the voting rights attached to the Altair Holding (all such rights being specifically reserved to Altair).

As previously announced, David Palumbo is the Founding and Managing Partner of Origen Capital LLP ("Origen"), a private investment firm. Origen facilitated the introduction of Altair to the Company in 2014, together with a number of additional investors, some of which have since invested in and/or provided funding to the Company.  Origen has also acted as an adviser to Altair in other real estate investments since 2015. Origen has no interest in the Company's shares.

Lenders Facility conversion and reprofile

The Company has an existing £10 million loan facility with Riverfort Global Opportunities PCC Limited and YA II PN Limited (the "Lenders" and the "Lenders Facility"). As at 21 March 2023, the outstanding balance of the Lenders Facility is £5,137,500. The Lenders have agreed, conditional upon Admission, to convert £887,500 of the current outstanding loan balance into 403,409,091 Units at the Placing Price comprising 403,409,091 new Ordinary Shares ("Lender Shares") and 201,704,540 share purchase warrants on the same terms as the Warrants.

The Lenders have also agreed to reprofile the monthly repayment schedule of the Lenders' Facility for the period until 31 December 2024, with repayments starting on 30 June 2023. A one-off reprofile fee of 3% of the Lenders' Facility will be added to the outstanding balance. Following the reprofile, the outstanding balance of the Lenders' Facility will be £4.25 million and a fixed-interest monthly coupon of £31,875 will be payable when repayments commence.

The Lenders will also receive warrants over 965,909,091 Ordinary Shares as part of the debt reprofile, exercisable for a period of two years from the date of grant at a 100 percent premium over the Placing Price ("Lender Warrants"). However, the Lender Warrants will be exercisable only once the mid-market closing price of the Ordinary Shares is equal to or exceeds 0.55 pence at the time of exercise.

Broker Option

In order to provide registered EQTEC shareholders ("Existing Shareholders") with an opportunity to participate on the same basis as Placees, the Company has granted GIS the authority to raise additional finance for the Company pursuant to the Broker Option by placing up to an additional 250 million Units ("Broker Option Units"). Full take-up of this number of Units under the Broker Option would raise a further £550,000 for the Company, before expenses. The Company and GIS reserve the right to increase the number of Broker Option Units to be made available.

Existing Shareholders as at close of business on 20 March 2023, will be eligible to participate in the Broker Option and all orders from such Existing Shareholders will be accepted and processed by GIS, subject to scale-back in the event of over-subscription under the Broker Option. The Broker Option has not been underwritten.

The Broker Option is exercisable by GIS on more than one occasion, at any time from the time of this announcement to 4.45 p.m.UK time on 31 March 2023, at its absolute discretion and following consultation with the Company. There is no obligation on GIS to exercise the Broker Option or to seek to procure subscribers for the Broker Option.

None of the Broker Option Units are being offered or sold in any jurisdiction where it would be unlawful to do so. No prospectus will be issued in connection with the Broker Option.

To subscribe for Broker Option Units, Existing Shareholders should communicate their bid to GIS via their stockbroker, as GIS cannot take direct orders from individual private investors. Existing Shareholders who wish to register their interest in participating in the Broker Option Shares should instruct their stockbroker to call GIS on +44 20 7048 9045. Each bid should state the number of Broker Option Units the Existing Shareholder wishes to subscribe for at the Placing Price.

The Company will make a further announcement as soon as practicable following 31 March 2023 to confirm the number of Broker Option Units issued pursuant to the Broker Option and the proceeds of such issue.

Issue of Ordinary Shares to strategic suppliers

The Company further announces that it is proposing to issue, in aggregate, 106,805,444 new Ordinary Shares (the "Supplier Shares") at the Placing Price to certain strategic service providers providing business development and advisory services to the Group in satisfaction of fees due to them. The issue of the Supplier Shares will further align the interests of strategic advisers and service providers with those of the Company and its shareholders.

Admission

Application will be made to the London Stock Exchange for the Placing Shares, the Lender Shares and the Supplier Shares, being in aggregate 2,105,669,080 new Ordinary Shares (the "New Shares"), to be admitted to trading on AIM. Dealings in the New Shares, which will all rank pari passu with the Company's existing Ordinary Shares, are expected to commence at 8.00 a.m. on 29 March 2023 (or such later time and/or date as the Company agrees, being in any event no later than 8.00 a.m. on 12 April 2023.

Following Admission, there will be 11,527,148,173 Ordinary Shares in issue. This number may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company.

North Fork project finance restructure

On 12 October 2022, the Company announced the planned financial restructuring to North Fork Community Power LLC ("NFCP"), with such restructuring confirmed by the US Bankruptcy Court ("Court") on 08 February 2023. Certain challenges to the bankruptcy process were denied by the Court, and the Court granted protection against any derivative claims being brought against the managing members of NFCP, including the Company. As previously announced, the Company will remain as an equity shareholder in NFCP with the final shareholding being determined during the legal process.

ENQUIRIES

About EQTEC plc

As one of the world's most experienced thermochemical conversion technology and engineering companies, EQTEC delivers waste management and new energy solutions through best-in-class innovation and infrastructure engineering and value-added services to owner-operators. EQTEC is one of only a few technology providers directly addressing the challenge of replacing fossil fuels for reliable, baseload energy. EQTEC's proven, proprietary and patented technology is at the centre of clean energy projects, sourcing local waste, championing local businesses, creating local jobs and supporting the transition to localised, decentralised and resilient energy systems.

EQTEC designs, specifies and delivers clean, syngas production solutions in the USA, EU and UK, with highly efficient equipment that is modular and scalable from 1MW to 30MW. EQTEC's versatile solutions process 60 varieties of feedstock, including forestry waste, agricultural waste, industrial waste and municipal waste, all with no hazardous or toxic emissions. EQTEC's solutions produce a pure, high-quality synthesis gas ("syngas") that can be used for the widest range of applications, including the generation of electricity and heat, production of renewable natural gas (through methanation) or biofuels (through Fischer-Tropsch, gas-to-liquid processing) and reforming of hydrogen.

EQTEC's technology integration capabilities enable the Group to lead collaborative ecosystems of qualified partners and to build sustainable waste reduction and green energy infrastructure around the world. 

The Company is quoted on the London Stock Exchange's AIM market (AIM) (ticker: EQT) and the London Stock Exchange has awarded EQTEC the Green Economy Mark, which recognises listed companies with 50% or more of revenues from environmental/green solutions.

Further information on the Company can be found at www.eqtec.com.

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