Proposed Consolidation, Fundraise, Loan Conversion

Introduction

EARNZ plc (AIM: EARN), an AIM Rule 15 cash shell which is seeking acquisitions in the energy services sector, is pleased to announce:

a proposed consolidation of every 100 ordinary shares of 0.04 pence each ("Existing Shares") in the capital of EARNZ into one new ordinary share of 4 pence each ("Consolidated Shares") in the capital of EARNZ (the "Consolidation");

a proposed placing of 39,954,644 New Ordinary Shares (as defined below) (the "Placing Shares") at a price of 7.5 pence per Placing Share (equivalent of 0.075 pence prior to the Consolidation) (the "Issue Price") to raise approximately £3.0 million (before expenses) (the "Placing"); and

a proposed subscription of 9,378,689 New Ordinary Shares (the "Subscription Shares") at the Issue Price, to raise approximately £0.7 million (before expenses) (the "Subscription") (together, with the Placing, the "Fundraising", and together with the Consolidation and the Loan Conversion, the "Proposals").

Capitalised terms used in this announcement (the "Announcement") have the meanings given to them in the section headed "Definitions" at the end of this Announcement, unless the context provides otherwise.

Shore Capital and Corporate Limited ("SCC") is acting as nominated adviser to EARNZ and Shore Capital Stockbrokers Limited ("SCS") and W H Ireland Limited ("WH Ireland" and, together with SCS, the "Joint Brokers") are acting as joint brokers in connection with the Proposals.

Use of proceeds of the Fundraising

The net proceeds of the Fundraising will be used for working capital purposes and, in particular, the cost of the due diligence to be carried out on any potential acquisitions to be made by EARNZ.

Transaction highlights

The Placing will raise approximately £3.0 million (before expenses) through the issue of 39,954,644 Placing Shares at 7.5 pence per Placing Share.

The Subscription will raise approximately £0.7 million (before expenses) through the issue of 9,378,689 Subscription Shares at 7.5 pence per Subscription Share.

The Issue Price of 7.5 pence per New Ordinary Share is equivalent to the closing middle market price of 0.075 pence per Existing Share on 15 March 2024, being the latest practicable date prior to the date of this Announcement.

The Placing and Subscription Shares (together the "Fundraising Shares") will represent approximately 78 per cent. of the issued share capital of EARNZ immediately following the Consolidation but prior to the issue of the Fundraising Shares (the "Existing Consolidated Shares").

The effect of the Consolidation will be that shareholders ("Shareholders") holding Existing Ordinary Shares on EARNZ's register of members at 6.00 p.m. on 4 April 2024 (the "Record Date") will, on implementation of the Consolidation, hold:

1 Consolidated Share for every 100 Existing Shares held on the Record Date

The Consolidation is expected to increase EARNZ's share price proportionately, help improve the market liquidity of, and trading activity in, EARNZ's shares, provide the basis for a narrowing in the spread of its bid and offer share price and enhance the perception of EARNZ and its prospects and help improve the marketability of EARNZ's shares to a wider group of investors.

The Consolidation will reduce the 954,649,500 Existing Shares in issue (as at the Record Date) to 9,546,495 Consolidated Shares, after the issue of the Additional Shares (as defined below) to ensure the Existing Shares can be precisely divisible by 100.

The Consolidation and the Fundraising are conditional upon, among other things, the resolutions (the "Resolutions") required to implement the Proposals being duly passed by Shareholders at the general meeting proposed to be held at 10.00 a.m. on 4 April 2024 (the "General Meeting"). The Fundraising is not being underwritten.

Bob Holt, Executive Chairman of EARNZ, said: "We are pleased by the response received from investors and look forward to putting the funds raised to good use in seeking suitable acquisitions in the energy services sector."

On 28 February 2024, the Company announced that it had entered into a conditional sale and purchase agreement to dispose of its solar business including the whole of the issued share capital of Verditek Solar srl to Verditek Solar Limited, a newly incorporated company owned and incorporated by the Company's then bondholders. The consideration for this sale was £528,340 which was satisfied by the surrender of all of the Company's secured convertible loan notes plus accrued interest to completion of the sale. In addition, the Company announced my loan to the Company of £300,000 to provide working capital, the proposed placing of 400 million new Ordinary Shares at 0.075 pence per Ordinary Share to raise £300,000 (the "Original Placing") and the appointment of John Charlton and myself as executive director and executive chair of the Company respectively.

Following a general meeting held on 28 February 2024, completion of the above sale occurred on 29 February 2024. From 1 March 2024, the Company has been regarded as an AIM Rule 15 cash shell further details of which are set out below. EARNZ has stated it is seeking acquisition targets in the energy services sector. On 5 March 2024, the Existing Shares issued pursuant to the Original Placing were admitted to trading on AIM. On 6 March 2024, the Company changed its name to EARNZ plc and, on 13 March 2024, it announced the appointment of Elizabeth Lake as a non-executive director of the Company.

The Company's announcement of 28 February 2024 also stated that, subject to approval from Shareholders, it intended to undertake the Consolidation and raise approximately £1.5 million which has subsequently been increased to £3.7 million. The proceeds of the Original Placing of £300,000 on 29 February 2024 together with the proceeds of the Placing and the Subscription means that the Company has, subject to Admission, now raised a total of £4.0 million from new Shareholders since its new management was brought in.

The purpose of this document is, amongst other things, to convene the General Meeting, set out the background to and reasons for the Consolidation, the Placing, the Subscription and the Loan Conversion and explain why the Directors consider that the Proposals are in the best interests of the Shareholders as a whole.

AIM Rule 15 cash shell status

As previously announced, since 1 March 2024, the Company has been regarded as an AIM Rule 15 cash shell for the purposes of the AIM Rules, having ceased to own, control, or conduct all or substantially all, of its existing trading business, activities, or assets. The Company will therefore, within 6 months need to make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14, failing which trading in the Company's shares on AIM will be suspended. Should the Company's shares remain suspended from trading for 6 months, admission of the Company's shares to trading on AIM will be cancelled under AIM Rule 41.

Consolidation

3.1. Background to and reasons for the Consolidation

The Directors believe that the Company's existing share capital structure is no longer appropriate. The high number of Ordinary Shares in issue combined with the current relatively low price per Ordinary Share is thought to result in excess volatility, reduced liquidity and a widening in the market bid and offer share price spread for the Existing Shares. We are therefore proposing to consolidate the Company's issued ordinary shares of 0.04 pence each so that every 100 Existing Shares will be consolidated into 1 ordinary share of 4 pence. To ensure the Existing Shares can be exactly divisible by 100, the Company will issue the Additional Shares. The Consolidation will reduce the 954,649,500 Ordinary Shares expected to be in issue as at the Record Date following the issue of the Additional Shares to 9,546,495 New Ordinary Shares.

As all of the Existing Shares are proposed to be consolidated, the proportion of Consolidated Shares held by each Shareholder immediately before and immediately after the Record Date will, save for Fractional Entitlements (as described below), remain unchanged.

The Consolidation is expected to:

• increase the Company's share price proportionately;
• help improve the market liquidity of, and trading activity in, the Company's shares;
• provide the basis for a narrowing in the spread of its bid and offer share price; and
• enhance the perception of the Company and its prospects and help improve the marketability of the Company's shares to a wider group of investors.

The Consolidation requires the approval of Shareholders by way of an ordinary resolution which will be sought at the General Meeting by way of Resolution 1 as set out in the Notice.

3.2. Summary terms of the Consolidation

At the General Meeting, the Directors are inviting Shareholders to approve the Consolidation pursuant to which every 100 Existing Shares will be consolidated into 1 Consolidated Share.

Subject to Resolution 1 (as set out in the Notice) being passed by the Shareholders at the General Meeting, the Company will, immediately prior to the Record Date, issue additional Ordinary Shares so that the total number of Existing Shares in issue at the Record Date is exactly divisible by 100. Assuming no other Ordinary Shares are issued by the Company between the date of this document and the Record Date, this will result in 83 Ordinary Shares being issued to the Registrars and will result in 954,649,500 Existing Shares. The nominal value of the Consolidated Shares following the Consolidation will be 4 pence each per Consolidated Share.

Since the Additional Shares will only represent a fraction of a Consolidated Share, this fraction will be combined with other Fractional Entitlements and sold pursuant to the arrangements for Fractional Entitlements detailed at paragraph 3.3 below.

As all of the Existing Shares are proposed to be consolidated, the proportion of issued ordinary shareholdings in the Company held by each Shareholder immediately before and immediately after the Consolidation will, save for Fractional Entitlements, remain unchanged.

3.3. Fractional Entitlements

The Consolidation will result in Fractional Entitlements to a Consolidated Share where any shareholding is not exactly divisible by 100. No Shareholder will be entitled to a fraction of a Consolidated Share. Instead, their entitlement will be rounded down to the nearest whole number of Consolidated Shares. If a Shareholder holds fewer than 100 Existing Shares at the Record Date, the rounding down process of the Consolidation will result in that Shareholder being entitled to no Consolidated Shares and they will cease to be a Shareholder.

Any Shareholder who, as a result of the Consolidation, has a Fractional Entitlement to any Consolidated Shares, will not have a proportionate holding of Consolidated Shares exactly equal to their proportionate holding of Existing Shares. No certificates will be issued for Fractional Entitlements to Consolidated Shares.

All Fractional Entitlements will be aggregated and sold on behalf, and for the benefit, of the Company in the market for the best price reasonably obtainable. Under the Articles, the Directors have a discretion as to how to deal with fractional entitlements, including by accounting to Shareholders for the net proceeds of any sale. The maximum fractional entitlement that any Shareholder would be entitled to would be worth less than 4 pence. The Board is of the view that, as a result of the disproportionate costs, it would not be in the best interests of the Company to distribute such proceeds of sale, which instead shall be retained for the benefit of the Company in accordance with the Articles.

For the avoidance of doubt, the Company is only responsible for dealing with fractions arising on registered holdings. For Shareholders whose shares are held in the nominee accounts of UK stockbrokers, the effect of the Consolidation on their individual shareholdings will be administered by the stockbroker or nominee in whose account the relevant shares are held. The effect is expected to be the same as for shareholdings registered in beneficial names, however, it is the responsibility of the stockbroker or nominee to deal with fractions arising within their customer accounts, and not the responsibility of the Company.

3.4. Resulting share capital and Consolidated Shares

If approved by the Shareholders, the issued share capital of the Company immediately following the Consolidation is expected to comprise 9,546,495 Consolidated Shares. The Consolidated Shares shall have the same rights as the Existing Shares including in respect of voting, dividends, returns of capital and other rights.

Application will be made to the London Stock Exchange for the Consolidated Shares to be admitted to trading on AIM in place of the Existing Shares. Subject to the Consolidation Resolution being passed, dealings in the Existing Shares will cease on the Record Date and it is expected that Admission will become effective, and that dealings in the Consolidated Shares will commence, at 8.00a.m. on 8 April 2024.

Placing of New Ordinary Shares

The Company has conditionally raised approximately £3.0 million of cash (before expenses) by means of the placing of 39,954,644 New Ordinary Shares at 7.5 pence per New Ordinary Share. The Issue Price of 7.5 pence per New Ordinary Share is equivalent to the closing middle market price of 0.075 pence per Existing Share on 15 March 2024, being the latest practicable date prior to the date of this document.

The Placing is conditional upon, inter alia, the passing of the Resolutions to be put to Shareholders at the General Meeting, receipt by EARNZ of the cleared funds from the subscribers for Subscription Shares on the day of the General Meeting, the Placing Agreement becoming unconditional in respect of the Placing Shares and not being terminated in accordance with its terms and Admission occurring by no later than 8.00 a.m. on 8 April 2024 (or such later date as the Company and Shore Capital and WH Ireland may agree, being no later than 8.00 a.m. on 22 April 2024).

The net proceeds of the Placing will be used for working capital purposes and, in particular, the cost of the due diligence to be carried out on any potential acquisitions to be made by the Company.

If the Proposals complete on the basis set out in this document, the Placing Shares will represent approximately 64 per cent. of the Company's issued share capital immediately following Admission and existing Shareholders will hold approximately 15 per cent. of the Company's issued share capital immediately following Admission.

The Placing Agreement

Pursuant to the terms of the Placing Agreement, Shore Capital and WH Ireland, as agents for the Company, have conditionally agreed to use their reasonable endeavours to procure subscribers for the Placing Shares. The Placing has not been underwritten.

The Placing Agreement contains normal warranties (in relation to, inter alia, the accuracy of the information in this document and other matters relating to the Company, its subsidiaries, and its business) and indemnities given by the Company to Shore Capital and WH Ireland as well as market standard rights of termination. The Company will pay Shore Capital and WH Ireland commissions in respect of those Placing Shares placed by them.

Subscription for New Ordinary Shares

The Company has conditionally raised approximately £0.7 million (before expenses) of cash by means of the subscription for 9,378,689 New Ordinary Shares at 7.5 pence per share. The Issue Price of 7.5 pence per New Ordinary Share is equivalent to the closing middle market price of 0.075 pence per Existing Share on 15 March 2024, being the latest practicable date prior to the date of this document. Bob Holt has agreed to subscribe approximately £50,000 for 666,666 Subscription Shares as part of the Subscription and his wife has agreed to subscribe £10,000 for 133,333 Subscription Shares as part of the Subscription.

The Subscription is conditional upon, inter alia, the passing of the Resolutions to be put to Shareholders at the General Meeting, the Placing Agreement becoming unconditional in respect of the Placing Shares and not being terminated in accordance with its terms and Admission occurring by no later than 8.00 a.m. on 8 April 2024 (or such later date as the Company and Shore Capital may agree, being no later than 8.00 a.m. on 22 April 2024).

Like the net proceeds of the Placing, the net proceeds of the Subscription will be used for working capital purposes and, in particular, the cost of the due diligence to be carried out on any potential acquisitions to be made by the Company.

If the Proposals complete on the basis set out in this document, the Subscription Shares will represent approximately 15 per cent. of the Company's issued share capital immediately following Admission.

Loan Conversion

As announced by the Company on 28 February 2024, Bob Holt entered into a loan agreement with the Company prior to his appointment as a director of the Company pursuant to which Bob Holt agreed to advance up to £300,000 to the Company, to satisfy certain outstanding liabilities of the Company and to provide working capital. The full amount of this loan has now been advanced to the Company.

This loan is unsecured and interest free but repayable upon demand and, in accordance with its terms, it is convertible at Admission into New Ordinary Shares at a price equivalent to the Issue Price, conditional upon Admission. As a result of the Loan Conversion, the Company will issue 4,000,000 New Ordinary Shares to Bob Holt, which will represent approximately 6 per cent. of the Company's issued share capital immediately following Admission.

Settlement and trading

Application will be made to the London Stock Exchange for the New Shares to be admitted to trading on AIM.

Subject to the Resolutions being passed, it is expected that Admission will become effective, and that dealings in the New Shares will commence, at 8.00 a.m. on 8 April 2024.

The New Shares will, on Admission, rank pari passu in all respects with the New Shares and will rank in full for all dividends and other distributions declared, made or paid on New Ordinary Shares after Admission.

Related party transactions

Ray Horney has agreed to subscribe for 1,333,333 Placing Shares. As at 15 March 2024, being the latest practicable date prior to the date of this document, so far as the Company is aware, Ray Horney holds 133,333,333 Existing Shares representing approximately 13.97 per cent. of the Existing Shares. As such, Ray Horney is a substantial shareholder of the Company and his participation in the Placing is a related party transaction pursuant to AIM Rule 13. The Directors consider, having consulted with the Company's nominated adviser, Shore Capital and Corporate, that the terms of Ray Horney's participation in the Placing are fair and reasonable insofar as the Shareholders are concerned.

Catherine Charlton, the wife of John Charlton, a Director, has agreed to subscribe for 133,333 Subscription Shares, which is a related party transaction pursuant to AIM Rule 13. Bob Holt and Elizabeth Lake, being independent Directors in relation to this transaction, consider, having consulted with the Company's nominated adviser, Shore Capital and Corporate, that the terms of Catherine Charlton's participation in the Subscription are fair and reasonable insofar as the Shareholders are concerned.

As a Director, Bob Holt and his wife's participation in the Subscription which, in aggregate, amounts to 799,999 Subscription Shares is a related party transaction pursuant to AIM Rule 13. John Charlton and Elizabeth Lake, being independent Directors in relation to this transaction, consider, having consulted with the Company's nominated adviser, Shore Capital and Corporate, that the terms of Bob Holt and his wife's participation in the Subscription are fair and reasonable insofar as the Shareholders are concerned.

Non-United Kingdom Shareholders

The distribution of this document and/or the Form of Proxy in certain jurisdictions may be restricted by law. Persons into whose possession these documents come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

The New Shares have not been approved or disapproved by the US Securities and Exchange Commission, or any other securities commission or regulatory authority of the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the New Shares nor have they approved this document or confirmed the accuracy or adequacy of the information contained in this document. Any representation to the contrary is a criminal offence in the US.

Shareholders who are not resident in the United Kingdom should note that they should satisfy themselves that they have fully observed any applicable legal requirements under the laws of their relevant jurisdiction in relation to the Proposals.

Issue Statistics

Notes:

• All references to time in this Announcement are to London time, unless specifically stated otherwise, and are subject to change. Any such change will be notified to Shareholders by an announcement through a Regulatory Information Service.

Information to Distributors

UK product governance

EEA product governance

DEFINITIONS

The following definitions apply throughout this Announcement unless the context otherwise requires: