Zefiro Methane Corp. Subsidiary Signs Definitive Agreement to Recapitalize Plants & Goodwin, Inc. & Acquire 100% of Outstanding Common Stock

Rhea-AI Summary

Zefiro Methane Corp (ZEFIF) announced that its subsidiary, Plants & Goodwin, Inc. (P&G), has signed a definitive agreement to acquire the remaining common shares from P&G's CEO, Luke Plants. The transaction involves exchanging newly issued preferred stock in P&G for the common shares, with no cash component. Since Zefiro's initial 75% acquisition in May 2023, P&G has increased revenues by 50%, achieved record profitability, and expanded its workforce by over 60 employees.

Key developments include acquiring a wireline services company in Ohio and opening a new facility in West Virginia. Luke Plants has been promoted to CEO of Zefiro Services and Executive VP of Business Development. The transaction aims to enhance Zefiro's capacity to generate high-quality carbon credits and expand its methane abatement services across North America.

Positive

• Acquisition of remaining P&G shares expected to be cash flow accretive
• P&G's revenue increased by 50% since becoming a Zefiro subsidiary
• P&G achieved record profitability under Zefiro's ownership
• Expansion of operational capacity with 60+ new full-time employees
• Acquisition of Ohio-based wireline services company to expand service offerings
• Opening of new facility in West Virginia to increase client services and reduce operational expenses

Negative

• Issuance of new preferred stock in P&G may lead to potential dilution for Zefiro shareholders

As a Zefiro subsidiary, Plants & Goodwin has achieved record profits, increased its employee count by 20%, and rapidly expanded its operational capacity

FORT LAUDERDALE, Fla., Aug. 06, 2024 (GLOBE NEWSWIRE) -- ZEFIRO METHANE CORP. (Cboe Canada: ZEFI) (Frankfurt: Y6B) (OTCQB: ZEFIF) (the “Company”, “Zefiro”, or “ZEFI”) today announced that Zefiro’s subsidiary, Plants & Goodwin, Inc. (“P&G”) has executed a Securities Exchange Agreement (the “Agreement”) to acquire the remaining common shares of P&G from the entity’s Chief Executive Officer Luke Plants in exchange for newly issued preferred stock in P&G.

The Transaction does not contain any cash component and the Company is confident the Transaction will be cash flow accretive and better position Zefiro to more effectively manage its liquidity and use of debt capital to advance critical commercial expansion initiatives. In May 2023, Zefiro acquired an initial 75% ownership stake in P&G to bolster the Company’s operational presence across the Appalachia region through P&G’s decades-long history of service in Pennsylvania, New York, West Virginia, and Ohio.

Since becoming a Zefiro subsidiary, P&G has organically increased its revenues by 50%, eclipsed P&G’s prior profitability record, hired more than 60 full-time employees, and achieved numerous other commercial milestones, including:

• acquiring a Cambridge, Ohio-based wireline services company to expand P&G’s suite of environmental remediation service offerings; and
  
  
• opening an additional facility in Buckhannon, West Virginia to increase southern Appalachia client services while decreasing operational expenses.
  

In connection with the Transaction, Luke Plants has been promoted to Chief Executive Officer of Zefiro Services and Executive Vice President of Business Development. Mr. Plants was previously appointed Zefiro’s Vice President of Business Development in December 2023.

Readers using news aggregation services may be unable to view the media above. Please access SEDAR+ or the Investors section of the Company’s website for a version of this press release containing all published media.

Zefiro Founder and CEO Talal Debs commented, “For over a year, P&G has played a key role in Zefiro’s growth into one of the methane reduction sector’s leading remediation service providers. This transaction can not only bolster our capacity to generate high-quality carbon credits for leading institutional traders, but also promote alignment amongst subsidiary organizations throughout Zefiro’s fully integrated methane abatement services strategy, led by Luke and P&G field crews across our service territory. Their extensive expertise positions Zefiro to continue both expanding across North America and partnering with state and federal agencies to reduce leaks from orphan wells. Our entire senior leadership team could not be more excited to continue working with Luke and his staff to help expedite the Company’s commercial growth.”

CEO of Zefiro Services and Executive Vice President of Business Development Luke Plants commented, “Becoming an essential part of Zefiro’s innovative, fully integrated commercial blueprint has provided our abandonment specialists with exciting new challenges across our key Appalachian markets. Producing repeatable, sustainable carbon credits will, we believe, become a vital instrument for financing critical environmental remediation projects, and this finalized agreement will best position P&G to continue expanding our operational footprint, bolster profitability, and help safeguard more communities in need.”

At the closing of the transactions contemplated by the Agreement (the “Transaction”), a wholly owned subsidiary of Zefiro will own 100% of the common shares of P&G and Luke Plants will own approximately 7.01 million newly issued Series A Convertible Preferred Shares of P&G (the “Preferred Shares”) that entitle him to, in addition to other customary rights, (a) a US $1.00 per share initial liquidation preference and (b) a 10% per annum dividend, payable in kind, until the later of June 30, 2028 or the achievement of US $10 million in June-to-June annual operating cash flow at P&G (after which dividends will be payable in cash). The Preferred Shares will be redeemable at P&G’s option at the liquidation preference (including any accrued but unpaid dividends) following the earlier of Luke Plant’s termination as an employee of Zefiro and its affiliates or the second anniversary of the closing of the Transaction. The Preferred Shares will automatically convert at a conversion price of US $1.20 per share upon the completion of a qualified public offering of P&G or an affiliate of P&G (the “IPO Issuer”) on a nationally recognized U.S. stock exchange into common stock of the IPO Issuer.

The closing of the Transaction is subject to customary closing conditions and is expected to occur prior to August 31, 2024.

Reporters/Media: For any questions or to arrange an interview with Dr. Debs or Mr. Plants, please contact Rich Myers of Profile Advisors (New York City) by email at media@zefiromethane.com or by telephone at +1 (347) 774-1125.

About Zefiro Methane Corp.

Zefiro is an environmental services company, specializing in methane abatement. Zefiro strives to be a key commercial force towards Active Sustainability. Leveraging decades of operational expertise, Zefiro is building a new toolkit to clean up air, land, and water sources directly impacted by methane leaks. The Company has built a fully integrated ground operation driven by an innovative monetization solution for the emerging methane abatement marketplace. As an originator of high-quality U.S.-based methane offsets, Zefiro aims to generate long-term economic, environmental, and social returns.

On behalf of the Board of Directors of the Company,

ZEFIRO METHANE CORP.

“Talal Debs”

Talal Debs, Founder & CEO

For further information, please contact:

Zefiro Investor Relations
1 (800) 274-ZEFI (274-9334)
investor@zefiromethane.com

For media inquiries, please contact:

Rich Myers - Profile Advisors (New York)
media@zefiromethane.com
+1 (347) 774-1125

Forward-Looking Statements

This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking information is often, but not always, identified by the use of words such as “seeks”, “believes”, “plans”, “expects”, “intends”, “estimates”, “anticipates” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions. In particular, this news release contains forward-looking information including statements regarding: the Transaction, including its closing, terms and cash flow accretion; the Preferred Shares, including their issuance, redemption or conversion; any future public offering of stock; liquidity and use of debt capital; commercial expansion initiatives; operational presence and operating expenses; project financing; the Company’s goal to reduce emissions from end-of-life oil and gas wells and reduce methane gas; the Company’s partnerships with industry operators, state agencies, and federal governments; the Company’s expectations for continued increases in revenues and EBITDA growth as a result of these partnerships; the Company’s intentions to build out its presence in the United States; the anticipated federal funding for orphaned well site plugging, remediation and restoring activities; the Company’s expectations to become a growing environmental services company; the Company’s ability to provide institutional and retail investors alike with the opportunity to join the Active Sustainability movement; the Company’s ability to generate long-term economic, environmental, and social returns; and other statements regarding the Company’s business and the industry in which the Company operates. The forward-looking information reflects management’s current expectations based on information currently available and are subject to a number of risks and uncertainties that may cause outcomes to differ materially from those discussed in the forward-looking information. Although the Company believes that the assumptions and factors used in preparing the forward-looking information are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed timeframes or at all. Factors that could cause actual results or events to differ materially from current expectations include, but are not limited to: (i) adverse general market and economic conditions; (ii) changes to and price and volume volatility in the carbon market; (iii) changes to the regulatory landscape and global policies applicable to the Company's business; (iv) failure to obtain all necessary regulatory approvals; and (v) other risk factors set forth in its Prospectus dated April 8, 2024 under the heading “Risk Factors”. The Company operates in a rapidly evolving environment where technologies are in the early stage of adoption. New risk factors emerge from time to time, and it is impossible for the Company’s management to predict all risk factors, nor can the Company assess the impact of all factors on Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in any forward-looking information. Forward-looking information in this news release is based on the opinions and assumptions that management considered reasonable as of the date hereof, including, but not limited to, the assumption that general business and economic conditions will not change in a materially adverse manner. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information. The forward-looking information included in this news release is made as of the date of this news release and the Company expressly disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable law.

No Offer of Securities

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Statement Regarding Third-Party Investor Relations Firms

Disclosures relating to investor relations firms retained by Zefiro Methane Corp. can be found under the Company's profile on SEDAR+ at www.sedarplus.ca/.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/503b76b5-e7fe-48ed-bf2b-cb8a3187557b

FAQ

What is the main purpose of Zefiro Methane Corp's (ZEFIF) recent transaction with Plants & Goodwin?

The main purpose is to acquire the remaining common shares of Plants & Goodwin (P&G) from its CEO, Luke Plants, in exchange for newly issued preferred stock in P&G. This will give Zefiro 100% ownership of P&G's common shares and is expected to enhance Zefiro's capacity to generate carbon credits and expand its methane abatement services.

How has Plants & Goodwin performed since Zefiro Methane Corp (ZEFIF) acquired a 75% stake in May 2023?

Since becoming a Zefiro subsidiary in May 2023, Plants & Goodwin has increased its revenues by 50%, achieved record profitability, hired over 60 full-time employees, acquired a wireline services company in Ohio, and opened a new facility in West Virginia.

What new role has Luke Plants taken on at Zefiro Methane Corp (ZEFIF) following this transaction?

Following the transaction, Luke Plants has been promoted to Chief Executive Officer of Zefiro Services and Executive Vice President of Business Development. He was previously appointed as Zefiro's Vice President of Business Development in December 2023.

When is the transaction between Zefiro Methane Corp (ZEFIF) and Plants & Goodwin expected to close?

The closing of the transaction is subject to customary closing conditions and is expected to occur prior to August 31, 2024.