Mr. Ryan Jackson reports

CIELO ANNOUNCES PRIVATE PLACEMENT OF CONVERTIBLE DEBENTURE UNITS FOR UP TO $5.0 MILLION TO ADVANCE RENEWABLE FUEL PROJECTS, CONFIRMS FINAL CREDIT FACILITY DRAW AND MAGAZINE FEATURE

Cielo Waste Solutions Corp. is proposing to undertake a non-brokered private placement offering of unsecured convertible debenture units of the company at a price of $1,000 per convertible debenture unit for targeted gross proceeds of up to $5-million.

The private placement and a concurrent final draw from Cielo's existing secured credit facility, as described below, represent an important shift in the company's financing strategy to utilize convertible instruments versus traditional forms of debt. This financing strategy is expected to improve alignment between the company's capital structure, and the advanced nature and status of its renewable fuel projects, and is supported by its current secured lender, who has indicated its intention to participate in the private placement.

In addition, Cielo is also pleased to share that the company has been featured in the winter, 2024, edition of Canadian Biomass Magazine, with further details provided below.

"By focusing on the structure of our capital stack for project development and incorporating convertible instruments, we believe Cielo is afforded an improved ability to manage dilution and lower the cost of capital, all of which are critical as we accelerate to revenue," said Ryan Jackson, chief executive officer of Cielo. "Following our recent share consolidation, the company has evolved its strategy to leveraging debt financing for revenue producing projects."

Convertible debenture unit offering

Each convertible debenture unit will be composed of: (i) one unsecured convertible debenture in the principal amount of $1,000, convertible into common shares of the company; and (ii) 2,500 detachable share purchase warrants exercisable into common shares. The minimum subscription amount will be $20,000.

The principal amount of the debentures, together with any accrued and unpaid interest, will mature and become due and payable in cash on the date that is 24 months from the date of issue of the convertible debenture units, subject to earlier conversion or redemption. The principal amount owing under the debentures will accrue interest from the date of issuance at 12 per cent per annum on a 30/360 calendar basis, payable every six months in cash, except the first payment will be made in November, 2024, and will consist of interest accrued from and including the issue date. As the convertible debentures will be unsecured debt obligations of the company, each convertible debenture will rank subordinate to all secured debt obligations of the company.

The principal amount may be converted, for no additional consideration, into conversion shares at the option of the holder of a convertible debenture at any time after the issue date at a conversion price of 40 cents per conversion share. However, the company may force the conversion of the convertible debentures, at the conversion price, in the event that the volume-weighted average price of the common shares on the exchange is greater than $1 for any 10 consecutive trading days. In the event of a forced conversion, the company will provide notice to holders by issuing a news release announcing the details of the forced conversion, including the date upon which the forced conversion will occur. In addition, the principal amount of the convertible debentures may be redeemed by the company at any time without penalty.

Each warrant will entitle the holder thereof to purchase one warrant share at a price of 70 cents per warrant share for a period of 24 months from the issue date. However, the company may accelerate the expiry of the warrants in the event that the volume-weighted average price of the common shares on the exchange is greater than $1 for any 10 consecutive trading days. In the event of a warrant term acceleration, the company will provide notice to holders of the warrants by issuing a news release announcing the details of the warrant term acceleration, including the accelerated expiry date of the warrants.

The company anticipates using the net proceeds of the private placement for the continued advancement of its renewable fuel projects, namely the wood byproduct to Bio-SynDiesel project in Carseland, Alta., which is currently undergoing front-end engineering and design, and the company's railway tie to Bio-SynDiesel project in Dunmore, Alta., as well as general working capital and corporate growth purposes. The Carseland project will be situated adjacent to an existing synthetic fuel facility owned and operated by Rocky Mountain Clean Fuels Inc. (RMCFI), which deploys patented technology developed by Expander Energy Inc.

The company intends to close the private placement in one or more tranches throughout February and early March. Completion of the private placement is subject to the receipt of all required regulatory approvals, as applicable, including the approval of the exchange. Finder's fees of cash and/or non-transferrable warrants may be paid in connection with the private placement, in accordance with applicable laws. The debentures and warrants, as well as conversion shares and warrant shares, will be subject to a statutory hold period expiring on the date that is four months and one day after the corresponding issue date.

Credit facility update

As noted above, the private placement represents the company's intention to streamline the capital structure going forward by utilizing convertible instruments rather than traditional debt. With its final draw of $110,000 made under the previously announced senior secured loan with First Choice Financial Inc. (FCF), Cielo's aggregate outstanding balance will not exceed a principal amount of $2.6-million. Proceeds from the credit facility draw will be used primarily for general corporate purposes that support advancement of the company's projects in Carseland and Dunmore.

Magazine feature

In concert with Expander, Cielo is very pleased to confirm that the two companies have been featured by Canadian Biomass Magazine within an article appearing in the winter, 2024, edition. Canadian Biomass Magazine is Canada's premiere business media providing comprehensive coverage of the emerging Canadian biomass, bioenergy and bioproducts markets, and is published six times per year by Canada's largest independent business-to-business publisher, Annex Business Media, which serves over 60 markets.

About Cielo Waste Solutions Corp.

Cielo Waste Solutions is fuelling renewable change with a mission to be a leader in the wood byproduct-to-fuels industry by using environmentally friendly, economically sustainable and market-ready technologies. The process and technology do not use food as feedstock as the company is proudly advancing its non-food-derived model based on its exclusive licence in Canada for patented enhanced-biomass-to-liquids (EBTL) and biomass-gas-to-liquids (BGTL) technologies and related intellectual property, along with an exclusive licence in the United States for creosote and treated wood waste, including abundant railway tie feedstock. Cielo has assembled a diverse portfolio of projects across geographic regions and secured the ability to leverage the expertise of proven industry leaders. Cielo is committed to the goal of producing renewable fuels from wood waste that contribute to a cleaner fuel source and generating positive returns for its shareholders.

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