Mr. Raphael Bohlmann reports

CIELO ANNOUNCES BINDING LETTER OF INTENT REGARDING MEMORANDUMS OF UNDERSTANDING AND PURCHASE OF LAND IN DUNMORE, ALBERTA FOR FIRST COMMERCIAL FACILITY

Cielo Waste Solutions Corp. has entered into a binding letter of intent with Renewable U Energy Inc., on its own behalf and on behalf of its affiliates, regarding the memorandums of understanding entered into between Cielo and Renewable U between 2018 and 2021. The LOI provides for the intention of Cielo and Renewable U to enter into definitive agreements in the coming weeks regarding the restructuring of Renewable U's proposed investment in Cielo's first commercial facility. The transactions proposed in the LOI would result in the participation of Renewable U in the Dunmore entity (as defined herein) (or other form of repayment as described herein) and consequent termination of the MOUs and the concurrent acquisition of the land owned by Renewable U in Dunmore, Alta., on which Cielo intends to build its first full-scale facility.

Jasdeep K. Dhaliwal, chief financial officer of Cielo, stated: "Renewable U has been a long-term partner of Cielo and we look forward to moving ahead with Renewable U's proposed restructured investment in our first facility. The revised structure of Renewable U's investment will afford Cielo the ability to work with Crestmont and other potential partners in addition to Renewable U. The purchase of the land will also allow Cielo the control to move the development of our first facility forward. We believe this is of tremendous value and we appreciate Renewable U's continuing support in our journey to commercialization."

Raphael Bohlmann, chief executive officer of Renewable U Energy, stated: "We have always believed in Cielo and their vision to convert various waste-to-fuel products in the sustainable energy sector. The renewed focus of Cielo led by senior management has provided us the confidence to continue our investment into Cielo and our planned project in Dunmore."

Background

As previously disclosed, Cielo and Renewable U entered into the MOUs between the years 2018 and 2021 with the intention of forming joint ventures for nine territories in aggregate.

Pursuant to the terms of the MOUs, Renewable U had delivered to Cielo $250,000 per territory for an aggregate amount equal to $2.25-million. The initial five MOUs entered into between the years 2018 and 2020 provided for the repayment of the corresponding fees, if applicable, by issuing common shares of Cielo at the greater of 25 cents per share and the average of the closing price on the five most recent trading days. The latter four MOUs (collectively the 2021 MOUs) provided for the repayment of the corresponding fees, if applicable, by way of repayment in cash.

It had been the intention of Cielo and Renewable U that the first commercial facility to be constructed pursuant to the MOUs would be in Dunmore, Alta. In anticipation of the foregoing, Renewable U had acquired close to 80 acres of land in Dunmore and incurred related costs.

The land is located next to the CP Rail yard located in Dunmore, Alta. In addition to the proximity to the CP Rail Dunmore yard, the location is also at the intersection of a significant trade corridor linking both Eastern Canada and Western Canada as well as the United States that allows Cielo access to a broad market. Management believes this to be beneficial to Cielo, as previously disclosed, it is Cielo's initial and primary intention that the Dunmore facility process railway ties for CP Rail. Also, as previously disclosed, Cielo and CP Rail are party to an agreement pursuant to which CP Rail has agreed to deliver railway ties to Cielo for a tipping fee.

Current planning for Dunmore facility and entity

On April 10, 2023, Cielo announced that, as a part of the company's commitment to construct its first commercial full-scale facility, it had begun the process of structuring and financing the venture through which the facility will be held and that it has been engaged in discussions with third parties, such as Renewable U, regarding the participation of such third parties in the financing of this facility, which is intended to be the Dunmore facility.

Restructuring of Renewable U investment

The company and Renewable U have continued discussions throughout and since the period during which the MOUs were signed and have determined it to be in the best interests of the respective parties to restructure the nature of the investment of Renewable U in Cielo's commercialization efforts in a way that is beneficial to both parties, such as the proposed participation of Renewable U in the Dunmore entity and resulting in the consequent termination of the MOUs.

As described in further detail herein, the LOI contemplates the exchange of a majority of Renewable U's interest in nine of Cielo's future commercial facilities ($2-million deemed value) into an interest in the first commercial facility, a securities debt transaction for the remaining interest ($1-million value), the sale of the land on which the Dunmore facility is to be built by Renewable U to Cielo, and the resulting termination of the MOUs for the nine territories.

The parties intend to enter into definitive agreements in the coming weeks incorporating the terms as follows. If all contemplated agreements are not executed by May 15, 2023, unless otherwise agreed by the parties, the LOI will terminate.

As Ryan Jackson, chief executive officer and a director of Cielo, owned and/or controlled, indirectly, securities of Renewable U at the time recent discussions were initiated regarding the restructuring of Renewable U's investment (which securities have since been deposited into an irrevocable blind trust managed by a trustee), Cielo formed a special committee of two independent directors of Cielo, to evaluate and make recommendations to the board of directors of the company in this regard. The special committee will be dissolved upon the completion of the transactions contemplated in the LOI.

All of the agreements and transactions contemplated herein are subject to the approval of the TSX Venture Exchange, as required. No finders' fees or commissions are payable to any third party in connection with any of the transactions contemplated in the LOI or offer to purchase (as defined as follows). All securities of Cielo to be issued pursuant to the LOI (or resulting definitive agreements) will be subject to a hold period of four months following the issuance thereof.

2021 MOUs (four of nine territories)

As stated herein, Renewable U delivered fees of $1-million ($250,000 per territory for four territories) for the 2021 MOUs; termination of the 2021 MOUs would require Cielo to repay the corresponding fees in cash. As a part of the restructuring and in an effort to conserve cash, the company and Renewable U have agreed that the $1-million in fees will be repaid by issuing common shares of Cielo at a price of six cents per share (being the last closing price preceding the execution of the LOI) for an aggregate 16,666,666 shares (the 2021 MOUs repayment shares), subject to the approval of the exchange.

The four 2021 MOUs will terminate upon the issuance of the 2021 MOUs repayment shares.

2018 to 2020 MOUs and Medicine Hat MOU (five of nine territories)

The remaining five MOUs consist of one MOU for Medicine Hat, Alta., and four MOUs for four more territories (the latter four MOUs referred to as the 2018 to 2020 MOUs).

As stated herein, Renewable U delivered fees of $1-million ($250,000 per territory for four territories) for the 2018 to 2020 MOUs. With regard to the last of the MOUs, the Medicine Hat MOU, although Renewable U delivered $250,000 for the one territory, Cielo and Renewable U have agreed that the value attributed by the parties to the Medicine Hat MOU has increased to $1-million in total as a result of steps already taken and costs incurred by Renewable U related to the Medicine Hat MOU and the land. As a result, the restructuring and resulting termination of the remaining five MOUs (the Medicine Hat MOU and the 2018 to 2020 MOUs) would be $2-million, to be paid by Cielo as follows:

• Within six months of the date of the LOI, Cielo is required to submit one or more proposals 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 by issuing securities in the Dunmore entity once formed.
• In the event that Cielo fails to submit the proposal(s) to Renewable U within the six-month period, Cielo will be required to repay the $2-million in cash within 60 days.
• In the event that Cielo does submit the proposal(s) to Renewable U, Renewable U can either: (a) accept the terms of the proposal(s), 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(s), in which case:
  • With respect to the four 2018 to 2020 MOUs, Cielo would repay the $1-million as initially agreed in the 2018 to 2020 MOUs by issuing common shares of Cielo at the greater of 25 cents per share and the average of the closing price on the five most recent trading dates, subject to the approval of the exchange;
  • With respect to the Medicine Hat MOU, Cielo would repay:
    • The corresponding fee of $250,000 as initially agreed in the Medicine Hat MOU by issuing common shares of Cielo at the greater of 25 cents per share and the average of the closing price on the five most recent trading dates, subject to the approval of the exchange;
    • The verifiable costs incurred by Renewable U in connection with the Medicine Hat MOU in cash.

The 2018 to 2020 MOUs and the Medicine Hat MOU would terminate at the time that the participation interest is issued to Renewable U (or the $2-million is otherwise repaid as described herein).

Acquisition of the land

Concurrently with the execution of and as contemplated in the LOI, Cielo and Renewable U have also entered into an agreement of purchase and sale, pursuant to which Cielo (or its assignee) has agreed to purchase the land from Renewable U for a purchase price of $5.2-million. The company has received a copy of an appraisal prepared by an independent third party for Renewable U in July, 2022, indicating a value for the land of $5.2-million.

The offer of purchase provides for certain conditions and provides for an anticipated closing date of Aug. 1, 2023. Cielo, or its assignee, may, but is not obligated to, assume the outstanding mortgage on the land of approximately $1.6-million.

Crestmont Investments LLC financing

Further to the company's news release dated April 10, 2023, regarding a debt financing to be completed with Crestmont, the company would like to confirm that Cielo and Crestmont continue advance toward closing and anticipate the completion of the financing to occur on or about May 15, 2023.

About Cielo Waste Solutions Corp.

Cielo Waste Solutions was incorporated under the Business Corporations Act (British Columbia) on Feb. 2, 2011. Cielo is a publicly traded company with its shares listed to trade on the TSX Venture Exchange under the symbol CMC, on the Frankfurt Stock 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 fuelling the sustainable energy transition.

We seek Safe Harbor.