An anonymous director reports

CIELO ANNOUNCES EXECUTION OF DEFINITIVE AGREEMENTS REGARDING TERMINATION OF MEMORANDUMS OF UNDERSTANDING

Cielo Waste Solutions Corp. 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 entered into between Cielo and Renewable U between 2018 and 2021.

As disclosed in the company's news release on May 1, 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, Alta., on which Cielo intends to build its first full-scale facility.

For details on the background of the MOUs and terms of the LOI and proposed transactions, please review the May 1 news release.

2021 MOUs -- termination and debt conversion agreement

Regarding the MOUs for four of nine territories, defined in the May 1 news release as the 2021 MOUs, Cielo and Renewable U have entered into a 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 at a price of six cents per share, subject to the approval of the TSX Venture Exchange.

The four 2021 MOUs will terminate upon the issuance of the 2021 MOUs repayment shares, which is anticipated to occur in the coming days.

2018 to 2020 MOUs and Med Hat MOUs -- termination agreement

Regarding the MOUs for the remaining five of nine territories, defined in the May 1 news release as the 2018 to 2020 MOUs and Med Hat MOU, Cielo and Renewable U have entered into a separate termination agreement.

As previously disclosed, Renewable U delivered fees of $1-million ($250,000 per territory for four territories) for the 2018 to 2020 MOUs and, with respect to the Med Hat MOU, although Renewable U delivered $250,000 for the one territory, Cielo and Renewable U agreed that the value attributed by the parties to the Med 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 Med Hat MOU and the land.

The termination agreement provides for the $2-million to be paid by Cielo as follows:

• On or before Oct. 28, 2023, Cielo is required to submit a 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, 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 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 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 25 cents per share and the average of the closing price on the five most recent trading dates;
    • The verifiable costs incurred by Renewable U in connection with the Med Hat MOU in cash.

The 2018 to 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 1 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.

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.

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