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BluMetric Environmental Inc. M&A Activity 2024

Oct 2, 2024

43311_rns_2024-10-02_239002f5-4e39-4bbb-bd40-9c5ff9505994.pdf

M&A Activity

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BLUMETRIC ENVIRONMENTAL INC. MATERIAL CHANGE REPORT

Item 1. Name and Address of Company

The name of the reporting issuer is BluMetric Environmental Inc. (the “ Issuer "). Its head office is located at 1682 Woodward Dr., Ottawa, Ontario, K2C 3R8, Canada.

Item 2. Date of Material Change

The material change occurred on September 23, 2024.

Item 3. News Release

The Issuer disseminated a news release via Newsfile Corp. on September 24, 2024.

Item 4. Summary of Material Changes

On September 24, 2024, the Issuer announced the acquisition of all the membership interest in Gemini Water, LLP.

Item 5. Full Description of Material Changes

See attached new release.

Item 6. Reliance on Subsection 7.1(2) of National Instrument 51-102 Information

The Issuer is not relying on sub-section 7.1(2) of National Instrument 51-102 or the equivalent provisions of the securities legislation in other jurisdictions governing the Issuer for the filing of this report.

Item 7. Omitted Information

No information has been omitted.

Item 8. Executive Officers

For further information, please contact Dan Hilton, CFO of the Issuer, at [email protected] or +1 (613) 839-3053.

Item 9. Date of Report

DATED at Ottawa, Ontario this 2[nd] day of October 2024.

BluMetric�Announces�Acquisition�of�U.S.Based�Gemini�Water�to�Expand�CleanTech Portfolio�and�Geographic�Footprint

Ottawa,�Ontario--(Newsfile�Corp.�-�September�24,�2024)�-�BluMetric�Environmental�Inc.�(TSXV: BLM)�("BluMetric"�or�"the�Company"),�a�full-service�environmental�consulting�and�engineering cleantech�firm,�announced�its�acquisition�of�U.S.-based�Gemini�Water,�LLC�("Gemini�Water"),�marking the�Company's�cleantech�water�portfolio�expansion�and�entry�into�the�Caribbean�and�U.S.�water�markets (the�"Acquisition").

Under�the�terms�of�the�membership�interest�purchase�agreement�executed�September�23,�2024, BluMetric�acquired�100%�of�the�membership�interest�in�Gemini�Water�from�GSWS�Holdco�Inc.�(the "Vendor")�in�exchange�for�a�purchase�price�of�US$5.05�million�(the�"Purchase�Price").�At�closing,�the Company�paid�out�from�its�working�capital�and�operating�line,�an�initial�amount�of�US$3.0�million (CA$4.1�million)�and�issued�2,352,500�Common�Shares�in�the�Capital�of�the�Company�to�the�Vendor (the�"Closing�Equity�Consideration").�The�remaining�balance�of�US$1.05�million�will�be�paid�through an�earn-out�over�the�next�three�years�in�equal�amounts�which�are�contingent�on�revenue�growth,�gross margin,�and�EBITDA�generation�targets.�The�Vendor�is�also�entitled�to�additional�earn�out�of�US$50,000 on�each�US$1.0�million�annual�revenue�growth�in�excess�of�US$7.0�million�annual�revenue�for�up�to US$3.0�million.

Founded�in�2015�in�Gainesville,�Florida,�Gemini�Water�designs,�builds,�installs,�and�commissions�largescale�desalination�and�wastewater�treatment�systems�using�membrane-based�technologies.�Gemini Water�systems�have�7�million�gallons�per�day�(GPD)�of�potable�and�wastewater�treatment�capacity across�22�locations�in�the�Caribbean�and�Texas.

"Today�we�progress�our�long-term�growth�strategy�by�expanding�our�cleantech�product�line�and geographic�footprint�into�the�U.S.�and�Caribbean�markets,"�said�Scott�MacFabe,�CEO�of�BluMetric. "This�acquisition�improves�our�market�accessibility�by�covering�a�combined�population�almost�ten�times the�size�of�Canada's�in�regions�that�are�significantly�more�water�stressed.�Gemini�Water�has�developed an�impressive�solution�for�managing�water�shortages�within�complementary�customer�verticals�from private�developments,�and�government�infrastructure�to�the�leisure�market�supporting�resorts�and international�cruise�lines."

For�the�twelve-month�period�ending�June�30,�2024,�based�on�unaudited�figures�currently�available, Gemini's�revenues�stood�at�approximately�US$7.3�million�(CA$9.8�million)�with�historic�EBITDA margins[1] �exceeding�10%.�In�addition,�Gemini�Water�is�currently�in�St.�Kitts�and�Nevis�to�design,�build, and�install�a�two�million�gallons�per�day�(GPD)�desalination�plant.�There�is�a�remaining�balance�of US$9.3�million�(CA$12.5�million)�on�the�contract,�and�the�project�is�expected�to�be�completed�by�the�end of�calendar�year�2025.�The�Company�is�not�assuming�any�long-term�debt�of�Gemini�on�Closing.

BluMetric�believes�the�strategic�nature�of�this�acquisition�provides�the�following:

  • Ability�to�diversify�its�cleantech�customer�base�into�new�industrial�and�commercial�applications Backfill�the�longer�sales�cycles�observed�in�the�Military�segment�with�the�shorter�sales�cycles�in Gemini�Water's�client�base

  • Share�know-how�and�proprietary�expertise�to�mutually�strengthen�both�companies'�service offerings

  • Jump�start�the�establishment�of�a�manufacturing�presence�in�the�U.S.�to�take�advantage�of potential�American�demand�for�BluMetric's�military�technologies

  • Leverage�financial�and�personnel�resources�to�help�Gemini�Water�execute�on�its�accelerating order�backlog

The�acquisition�of�Gemini�is�an�arm's�length�transaction,�and�the�issuance�of�the�Closing�Equity Consideration�will�not�result�in�the�creation�of�a�new�Insider.�No�finder's�fee�was�payable�by�the Company.

Pursuant�to�the�Company's�Board�compensation�policy,�BluMetric�has�granted�options�of�150,000 common�shares�to�an�Executive�of�the�Company.�These�options�are�granted�effective�September�24, 2024,�vest�over�two�years,�and�are�exercisable�into�common�shares�of�BluMetric�at�a�price�equivalent�to the�5-day�VWAP�of�$0.60�per�share�for�a�period�of�seven�years.

About�BluMetric�Environmental�Inc.

BluMetric�Environmental�Inc.�is�a�publicly�traded�environmental�consulting�and�engineering�company�with expertise�across�professional�and�trade�disciplines�and�technologies�that�allow�for�the�design, fabrication�and�delivery�of�sustainable�solutions�to�environmental�and�water�challenges.�BluMetric�has more�than�200�employees�operating�in�ten�offices�and�over�45�years�of�expertise.�Headquartered�in Ottawa,�Ontario,�BluMetric's�team�of�industry�experts�serves�Commercial�and�Industrial,�Military,�Mining and�Government�clients.

For�more�information,�visit www.blumetric.ca�or�please�contact:

Scott�MacFabe,�CEO BluMetric�Environmental�Inc. Tel:�1-877-487-8436�x242 Email: [email protected]

Dan�Hilton,�CFO BluMetric�Environmental�Inc. Tel:�1-877-487-8436�x550 Email: [email protected]

Brandon�Chow,�Principal�&�Founder Panolia�Investor�Relations�Inc. Tel:�1-647-598-8815 Email: [email protected]

Forward-Looking�Statements

Some�of�the�statements�in�this�press�release,�including�those�relating�to�the�Company's�quarterly�and annual�results,�future�products,�opportunities�and�cost�initiatives,�strategies,�and�other�statements�that are�predictive�in�nature,�that�depend�upon�or�refer�to�future�events�or�conditions,�or�that�include�words such�as�"expects",�"anticipates",�"intends",�"plans",�"believes",�"estimates",�or�similar�expressions,�are forward-looking�statements�within�the�meaning�of�applicable�Canadian�securities�laws.�Forward-looking statements�include,�without�limitation,�the�information�concerning�possible�or�assumed�future�results�of operations�of�the�Company.�These�statements�are�not�historical�facts�but�instead�represent�only�the Company's�expectations,�estimates,�and�projections�regarding�future�events.�By�their�nature,�forwardlooking�statements�require�us�to�make�assumptions�and�are�subject�to�inherent�risks�and�uncertainties. We�caution�readers�of�this�news�release�not�to�place�undue�reliance�on�our�forward-looking�statements as�a�number�of�factors�could�cause�actual�results�or�conditions�to�differ�materially�from�current expectations.�Please�refer�to�the�risks�set�forth�in�the�Company's�most�recent�annual�MD&A�and�the Company's�continuous�disclosure�documents�that�can�be�found�on�SEDAR+�at www.sedarplus.ca.�The Company�does�not�intend,�and�disclaims�any�obligation,�except�as�required�by�law,�to�update�or�revise any�forward-looking�statements�whether�as�a�result�of�new�information,�future�events�or�otherwise.

Neither�the�TSX�Venture�Exchange�nor�its�Regulation�Services�Provider�(as�that�term�is�defined�in�the policies�of�the�TSX�Venture�Exchange)�accepts�responsibility�for�the�adequacy�or�accuracy�of�this release.

1�Non-IFRS�Measure

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To�view�the�source�version�of�this�press�release,�please�visit https://www.newsfilecorp.com/release/224322