Earthworks Industries Extends Debt Settlement Agreement

Shares of Earthworks Industries saw a significant rise on Thursday morning following the company’s announcement of an amended debt settlement agreement. The agreement extends the buy-out payment date to mid-April, providing relief to the Canadian solid-waste landfill company.

At 10:23 a.m. ET, shares were trading 25% higher at 20 Canadian cents.

Earthworks Industries, along with its subsidiary Cortina Integrated Waste Management, has reached an agreement with North Bay to modify the debt settlement terms. Under the amended agreement, the buy-out payment date for $2.2 million will be pushed back to April 15 of next year from the original date of Oct. 23.

As part of this arrangement, North Bay will receive 3.34 million units at 15 cents per unit, settling $500,000 of debt. Each unit consists of one share and a warrant to purchase an additional share at C$0.40 within the next two years.

To account for the extended payment date, Earthworks will accrue an annual interest rate of 10% on its debt of $6 million. Additionally, Earthworks will pay North Bay a fee equal to approximately 25% of the net proceeds from its next financing endeavor as a token of its appreciation for the extended buy-out option.

While the amended debt settlement provides Earthworks Industries with some relief, it remains focused on implementing strategic financial decisions to reduce its debt burden and continue its operations seamlessly.