Cielo Waste Solutions Corp. (TSXV:CMC; OTCQB:CWSFF)
(
“Cielo” or the
“Company”), a
waste-to-fuel environmental technology company, is pleased to
announce that it has executed the definitive agreements as required
under the binding letter of intent between Cielo and Renewable U
Energy Inc., on its own behalf and on behalf of its affiliates
(jointly, severally and collectively “
Renewable
U”), regarding the termination of the memorandums of
understanding (each an “
MOU” and collectively the
“
MOUs”) entered into between Cielo and Renewable U
between 2018 and 2021.
As disclosed in the Company’s news release on
May 1st, 2023, the LOI provided for the intention of Cielo and
Renewable U to enter into definitive agreements regarding the
restructuring of Renewable U’s proposed investment in Cielo’s first
commercial facility, the transactions to result in the
participation of Renewable U in the Dunmore Entity (as defined
below) (or other form of repayment as described below) and
consequent termination of the MOUs, and the concurrent acquisition
of the land owned by Renewable U in Dunmore, Alberta (the
“Land”), on which Cielo intends to build its first
full-scale facility (the “Dunmore Facility”).
For details on the background of the MOUs and
terms of the LOI and proposed transactions, please review the May
1st news release.
2021 MOUs - Termination and Debt
Conversion Agreement
Regarding the MOUs for four (4) of nine (9)
territories, defined in the May 1st news release as the 2021 MOUs,
Cielo and Renewable U have entered into a Termination and Debt
Conversion Agreement (the “Termination and Debt Conversion
Agreement”) that provides for the repayment of $1 million
in fees corresponding to the 2021 MOUs by issuing 16,666,667 common
shares of Cielo (the “2021 MOUs Repayment Shares”)
at a price of $0.06 per share, subject to the approval of the TSX
Venture Exchange (the “Exchange”).
The four (4) 2021 MOUs will terminate upon the
issuance of the 2021 MOUs Repayment Shares, which is anticipated to
occur in the coming days.
2018 - 2020 MOUs and Med Hat MOUs -
Termination Agreement
Regarding the MOUs for the remaining five (5) of
nine (9) territories, defined in the May 1st news release as the
2018 - 2020 MOUs and Med Hat MOU, Cielo and Renewable U have
entered into a separate termination agreement (the
“Termination Agreement”, together with the
Termination and Debt Conversion Agreement each an
“Agreement” and collectively the
“Agreements”).
As previously disclosed, Renewable U delivered
fees of $1 million ($250,000 per Territory for four (4)
Territories) for the 2018 - 2020 MOUs and, with respect to the Med
Hat MOU, although Renewable U delivered $250,000 for the one (1)
Territory, Cielo and Renewable U agreed that the value attributed
by the parties to the Med Hat MOU has increased to CAD $1 million
in total as a result of steps already taken, and costs incurred, by
Renewable U related to the Med Hat MOU and the Land.
The Termination Agreement provides for the CAD
$2 million to be paid by Cielo as follows:
- On or
before October 28, 2023 (the “Proposal Deadline”),
Cielo is required to submit a proposal (the
“Proposal”) to Renewable U setting out the terms
on which the $2 million owing to Renewable U would be exchanged for
a participation interest in the Dunmore Facility (the
“Participation Interest”), by issuing securities
in the Dunmore Entity once formed.
- In the
event that Cielo fails to submit the Proposal to Renewable U by the
Proposal Deadline, Cielo will be required to repay the $2 million
in cash within 60 days.
- In the
event that Cielo does submit the Proposal to Renewable U, Renewable
U can either: a) accept the terms of the Proposal, in which case
the $2 million will be exchanged for the Participation Interest
(securities of the Dunmore Entity) on the terms to be proposed; or
b) reject the terms of the Proposal, in which case:
- With
respect to the four (4) 2018 - 2020 MOUs, Cielo would repay the $1
million as initially agreed in the 2018 - 2020 MOUs, by issuing
common shares of Cielo (the “2018 - 2020 MOUs
Repayment Shares”, together with the
“2021 MOU Repayment Shares”, collectively the
“Repayment Shares”) at the greater of $0.25 per
share and the average of the closing price on the five most recent
trading dates, subject to the approval of the Exchange; and
- With
respect to the Med Hat MOU, Cielo would repay:
- The
corresponding fee of $250,000 as initially agreed in the Med Hat
MOU, by issuing common shares of Cielo at the greater of $0.25 per
share and the average of the closing price on the five most recent
trading dates, and
- the
verifiable costs incurred by Renewable U in connection with the Med
Hat MOU in cash.
The 2018 - 2020 MOUs and the Med Hat MOU will
terminate at the time that the Participation Interest is issued to
Renewable U (or the funds otherwise repaid as described above).
The transactions contemplated in the Agreements
as well as the Offer to Purchase as defined in the Company’s May
1st news release regarding the acquisition of the Land, are subject
to the approval of the Exchange.
All securities to be issued pursuant to the
Agreements, as applicable, including but not limited to the
Repayment Shares, shall be subject to a minimum hold period of four
months and one day from the date of issuance.
This press release shall not constitute
an offer to sell or the solicitation of an offer to buy securities
of the Company in the United States nor shall there be any sale of
securities of the Company in any jurisdiction in which such offer,
solicitation or sale would be unlawful. The securities described
herein have not been, and will not be, registered under the United
States Securities Act of 1933, as amended, or the securities laws
of any state of the United States. Accordingly, any of the
securities described herein may not be offered or sold in the
United States or to U.S. persons unless an exemption from
registration is available.
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.
ABOUT CIELO
Cielo Waste Solutions Corp. was incorporated
under the Business Corporations Act (British Columbia) on February
2, 2011. Cielo is a publicly traded company with its shares listed
to trade on the TSX Venture Exchange (“TSXV”)
under the symbol “CMC,” on the Frankfurt Exchange
(“DAX”) under the symbol “C36”, as well as on the
OTC Venture Market (“OTCQB”), under the symbol
“CWSFF.” The Company’s strategic intent is to become a leading
waste-to-fuel company using economically sustainable technology
while minimizing the environmental impact. Cielo has a patented
process that can convert waste feedstocks, including organic
material and wood derivative waste, to fuel. Having demonstrated
its ability to produce diesel and naphtha from waste, Cielo’s
business model is to construct additional processing facilities.
Cielo’s objective is to generate value by converting waste to fuel,
while fueling the sustainable energy transition.
For further information please
contact:
Cielo Investor RelationsPhone:
(403) 348-2972Email: investors@cielows.com
RB Milestone Group
LLC Email:
cielo@rbmilestone.com
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This news release contains certain
forward-looking statements and forward-looking information
(collectively referred to herein as “forward-looking statements”)
within the meaning of applicable Canadian securities laws. All
statements other than statements of present or historical fact are
forward-looking statements. Forward-looking statements are often,
but not always, identified by the use of words such as
“anticipate”, “achieve”, “could”, “believe”, “plan”, “intend”,
“objective”, “continuous”, “ongoing”, “estimate”, “outlook”,
“expect”, “may”, “will”, “project”, “should” or similar words,
including negatives thereof, suggesting future outcomes.
Forward-looking statements are subject to both
known and unknown risks, uncertainties and other factors, many of
which are beyond the control of the Company, that may cause the
actual results, level of activity, performance or achievements of
the Company to be materially different from those expressed or
implied by such forward looking statements. Cielo is making forward
looking statements, with respect to, but not limited to: the
issuance of the 2021 MOU Repayment Shares, and the issuance price
and timing thereof, pursuant to the Termination and Debt Conversion
Agreement, and the hold period thereon; the required approval of
the Exchange with respect to the transactions contemplated in the
Agreements; the amount(s) and method(s) of repayment pursuant to
the 2018-2020 MOUs and the Med Hat MOU, including but not limited
to the requirement to deliver a Proposal, all terms related
thereto, the issuance of the 2018-2020 Repayment Shares and the
issuance price thereof, and the hold period thereon.
Investors should continue to review and consider
information disseminated through news releases and filed by the
Company on SEDAR. Although the Company has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward looking statements,
there may be other factors that cause results not to be as
anticipated, estimated or intended.
Forward-looking statements are not a guarantee
of future performance and involve a number of risks and
uncertainties, some of which are described herein. Such
forward-looking statements necessarily involve known and unknown
risks and uncertainties, which may cause the Company’s actual
performance and results to differ materially from any projections
of future performance or results expressed or implied by such
forward-looking statements. Any forward-looking statements are made
as of the date hereof and, except as required by law, the Company
assumes no obligation to publicly update or revise such statements
to reflect new information, subsequent or otherwise. Neither the
TSXV nor its Regulation Services Provider (as that term is defined
in the policies of the TSXV), nor OTCQB nor WKN, have reviewed, and
do not accept responsibility for the adequacy or accuracy of, the
content of this news release.
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