Replenish Nutrients Holding Corp (CSE:ERTH, OTC:VVIVF, FRA:7KE) has secured a $15 million strategic investment from SRC Agrominerals to expand its Beiseker fertilizer facility and lock in a long-term supply of carbonatite, a mineral-rich input for its regenerative fertilizer products.
Under the agreement, SRC will invest $7.5 million through the purchase of 50 million units at $0.15 per unit, giving it an initial 19.9% stake in Replenish on a non-diluted basis.
Each unit includes a common share and half of a warrant, with each whole warrant exercisable at $0.225 for four years, subject to acceleration if shares trade at or above $0.28 for twenty consecutive trading days.
SRC will also invest a further $7.5 million through a senior secured convertible debenture bearing 10% annual interest, payable quarterly in cash or shares at Replenish's election. The debenture matures in four years and converts at $0.225 per share.
Proceeds will fund a new 150,000 metric tonne pelletizing facility at Replenish's existing Beiseker site in Alberta, along with additional storage, load-out and processing infrastructure.
The expansion is expected to be completed in the first quarter of 2028 and is expected to carry gross margins of 25% to 35%.
As part of the deal, Replenish and SRC will enter a 10-year supply agreement under which Replenish will purchase a minimum annual quantity of carbonatite, a calcium, phosphorus and trace-mineral-rich resource used for its soil-enhancing properties, for incorporation into its fertilizer products. Initial payment terms include $1 million upon execution of the agreement.
SRC CEO Tim Close will join Replenish's board of directors following closing of the equity investment. Close previously led Ag Growth International for a decade, during which the company's revenue grew fivefold.
David Morris, founder and former chairman of Morris Group Canada, will join as a board advisor and will be put forward as a director at Replenish's next annual shareholder meeting.
"This strategic relationship marks a pivotal step in Replenish's growth strategy," said Neil Wiens, CEO of Replenish Nutrients. "SRC's investment gives us the capital to accelerate our Beiseker pelletizing expansion, while our new supply agreement gives Replenish access to a key input for our regenerative fertilizer platform."
"Replenish has built a capital-efficient, scalable platform for regenerative fertilizer production, and this investment reflects our confidence in their team and their growth trajectory," said Close.
Closing of the equity investment is expected by July 24 with the debenture investment expected to close by mid-August.
Shares of Replenish added 15% on the announcement.
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