Mr. Ryan Jackson reports

CIELO ANNOUNCES FISCAL Q3 2024 FINANCIAL RESULTS AND PROVIDES UPDATE ON ITS PROGRESS TO FUEL RENEWABLE CHANGE

Cielo Waste Solutions Corp. today released its financial results for the three and nine months ended Jan. 31, 2024, along with an update on the company's progress as Cielo fuels renewable change. Copies of the unaudited interim financial statements and related management's discussion and analysis can be found on the financial reports section of the company's website and under Cielo's issuer profile at SEDAR+. All financial information in this news release is reported in Canadian dollars, unless otherwise indicated.

"We believe the closing of the asset purchase transaction with Expander Energy during Q3 2024 represents a pivotal moment on our journey, positioning Cielo with an economically sustainable and market-ready solution. Cielo has a clear line of sight to produce our net-zero carbon intensity Bio-SynDiesel," said Ryan Jackson, chief executive officer of Cielo. "As a result of the company's achievements in Q3 2024, we are able to focus on accelerating construction of our first commercial facility at Carseland, Alta., as well as a full-scale facility in Dunmore, Alta., both of which will transform wood byproducts, including railway ties, to low-carbon liquid fuels that are critical for the world's energy transition."

Jasdeep K. Dhaliwal, chief financial officer of the company, added: "I am proud of our team's success both through the third quarter and to date in Q4 2024, as we have made great progress against key milestones. Over and above finalizing the Expander transaction, our five-year plan is to construct six facilities across North America. We are committed to generating a compelling return on investment for all stakeholders and having a positive impact on the planet."

Q3 2024 highlights

During the quarter ended Jan. 31, 2024, Cielo achieved the following milestones:

• Closed the asset purchase transaction with Expander Energy Inc. on Nov. 9, 2023, gaining an exclusive licence in Canada for all feedstock and in the United States for treated wood waste to deploy Expander's innovative enhanced biomass to liquids (EBTL) and biomass gas to liquids (BGTL) technologies (the licensed technologies), which management believes will allow Cielo to accelerate its timeline to revenue.
• As a result of the transaction with Expander, secured several key agreements and approvals designed to accelerate the company's path to commercialization of Bio-SynDiesel at the Carseland facility:
  • Secured a long-term contract that provides Cielo with a cost-effective and continuous supply of the requisite biomass feedstock for the Carseland project from an established local biomass supply company, ECCO Recycling & Energy Corp.;
  • Signed a long-term syngas processing agreement with Rocky Mountain Clean Fuels Inc. (RMCFI) that will see Bio-Syngas produced at the Carseland project converted into 8.2 million litres per year of renewable Bio-SynDiesel fuel at the existing, operational and adjacent synthetic fuel facility;
  • Received approval for a long-term lease on a parcel of land totalling 25 acres, situated immediately adjacent to the existing and operational RMCFI facility at Carseland, which enables Cielo to leverage existing infrastructure and operational capabilities to accelerate commercial production of Bio-SynDiesel fuel.
• Completed a share consolidation on the basis of 1:15, reducing outstanding shares to 113,302,703 from 1,699,540,548 effective Jan. 29, 2024;
• Raised $670,000 through a non-brokered private placement of flow-through shares in December, 2023, with proceeds directed to advance the Carseland project;
• Took critical steps to further progress the Carseland project and the proposed project in Dunmore, Alta., by allocating approximately $762,000 in capital expenditures to the projects;
• Repaid a $60,000 Canadian Emergency Business Account (CEBA) loan.

Subsequent to the end of the quarter, Cielo continued to build on the momentum realized in Q3 2024 with the following achievements:

• Announced a private placement of convertible debenture units intending to raise up to $5.0-million over several tranches for the ongoing advancement of Cielo's renewable fuel projects, closing the first tranche for gross proceeds of $560,000, primarily to be used for the advancement of the Carseland project;
• Confirmed its final credit facility draw, signaling an important shift in Cielo's go-forward financing strategy to use convertible instruments versus traditional debt to better align with its current stage of development.

Outlook

Through the final quarter of Cielo's fiscal 2024 and into fiscal 2025, the company is targeting the following milestones:

• Confirm final investment decisions for both the Carseland project and the Dunmore project, and continue to work toward financing the completion of construction for these two commercial facilities;
• Continuing and pro-active capital markets engagement activities, including participating in various industry and investment conferences, undertaking profile-building activities with both investors and media, as well as continuing to actively position Cielo as an upcoming leader in the waste-to-fuels industry;
• Utilization of the company's R&D (research and development) facility located in Aldersyde, Alta., subject to receipt of approval from Alberta Environment and Projected Areas, to generate the data required to design and define the economics of a commercial facility using Cielo's existing TCD technology and exploration of the possibility of integrating Cielo's existing TCD technology with the licensed technologies.

The company recorded a net loss of $1.9-million for the three months ended Jan. 31, 2024, primarily comprising (i) general and administrative costs of $600,000; (ii) research and development costs of $200,000; (iii) finance costs of $80,000; (iv) share-based compensation credit of ($100,000) due to the expiry of unvested options, and amortization of $1.3-million. Net loss for the nine months ended Jan. 31, 2024, was $9.2-million, $22-million less than the period ended Jan. 31, 2023, primarily due to an overall reduction of operating costs totalling approximately $1.0-million, plus reduced impairment expense of $21-million. During the third quarter ended Jan. 31, 2024, there was an impairment loss upon the sale of the company's Fort Saskatchewan property of $3.8-million, compared with the impairment recognition related to property, plant and equipment of $25.4-million in the period ended Jan. 31, 2023.

Cielo's operating cash flow totalled $20,000 for the third quarter 2024, and the company recorded negative cash flow of $1.1-million in the nine-month period ended Jan. 31, 2024. This level of cash flow aligns with prior periods and is to be expected in a prerevenue business such as Cielo.

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 Waste 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 byproducts that contribute to a cleaner fuel source and generating positive returns for its shareholders.

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