Mr. Justin Cochrane reports

CARBON STREAMING ANNOUNCES FINANCIAL RESULTS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2023

Carbon Streaming Corp. has released its financial results for the three-month period ended March 31, 2023. All figures are expressed in United States dollars, unless otherwise indicated. The company will host a live audio call at 11 a.m. ET on Tuesday, May 16, 2023.

Justin Cochrane, Carbon Streaming founder and chief executive officer, stated: "We had a solid start to 2023, receiving first carbon credits from our portfolio of streams and royalties. To date, five of the projects in our portfolio have had credits issued and we remain on track to receive carbon credits or royalties from 10 or more projects this year. Sales of these credits have commenced and are anticipated to continue over the next approximately 12 months, with cash flow expected to follow."

Mr. Cochrane added: "In 2022, we transformed our portfolio by adding carbon credit streams and royalties covering 18 additional projects, while investing in internal systems and capabilities. Building this foundation positions us today as a differentiated partner of choice for project developers, and corporate buyers and end-users of carbon credits. We remain conscientious about protecting our robust, debt-free balance sheet, while selectively continuing to grow and diversify our portfolio."

Company highlights

Three months ended March 31, 2023:

• Ended the quarter with $65.8-million in cash and no corporate debt.
• Received first delivery of carbon credits from three projects from two of the company's carbon credit streaming agreements. Additionally, a second project for which the company holds a carbon credit royalty agreement was issued carbon credits.
• Revenue from sale of purchased carbon credits of $21,200 for the three months ended March 31, 2023 (three months ended March 31, 2022 -- revenue of nil).
• Sold a total of 8,696 carbon credits, including 2,496 purchased carbon credits and 6,200 carbon credits that were delivered under the company's carbon credit streaming agreements.
• Recognized net loss of $1-million for the three months ended March 31, 2023 (three months ended March 31, 2022 -- net income of $49.1-million). After adjusting for the revaluation of warrant liabilities, and the revaluation of carbon credit streaming and royalty agreements, adjusted net loss was $2.9-million for the three months ended March 31, 2023 (three months ended March 31, 2022 -- adjusted net loss of $4.4-million). Please see the non-IFRS (International Financial Reporting Standards) measures and performance measures section of the associated MD&A (management's discussion and analysis) for further information.
• Paid $1.5-million in upfront deposits and milestone payments for carbon credit streaming and royalty agreements during the quarter.
• The company received International Carbon Reduction & Offset Alliance (ICROA) accreditation. The ICROA accreditation program defines and promotes best practice in the financing of high-quality emission reductions and use of carbon credits as an effective carbon management tool.

Subsequent to March 31, 2023:

• Announced a pipeline streaming agreement with Mast Reforestation SPV I LLC to develop a pipeline of postwildfire reforestation carbon removal projects in the Western United States, which are expected to generate approximately one million carbon removal credits.
• The first project to be financed under the pipeline streaming agreement with Mast is the Sheep Creek Ranch project, which is expected to generate approximately 225,000 carbon removal credits.
• The company invested $2-million into the parent company of Mast through a convertible note.
• Published the company's 2022 sustainability report, updated for the six months ended Dec. 31, 2022, which describes Carbon Streaming's business model, approach to climate action and impact investing, due diligence and governance practices, guiding principles, as well as the company's environmental and social impacts.
• Offset five times the company's calendar-year 2022 emissions through the retirement of 245 carbon credits from the company's portfolio.

Stream and royalty portfolio updates -- three months ended March 31, 2023

Community carbon stream: Distribution of cookstoves or water purification devices commenced at two more projects with distribution now continuing at six of the seven projects within the stream, in line with expectations. Carbon Streaming made a milestone payment of $600,000 to the project developer upon reaching a device deployment target for its Uganda cookstoves project. In the first quarter, the company received first carbon credits from two projects under the stream, the Ugandan cookstoves and water purification projects. Milestone payments of $2-million related to these issuances were made subsequent to the end of the first quarter. The company expects initial credit issuance from several additional projects under the stream in 2023.

Sheep Creek reforestation stream: In May, 2023, the company and Mast signed a pipeline agreement and a stream agreement for the Sheep Creek reforestation project, the first stream under the pipeline agreement. This project is expected to remove a total of approximately 225,000 tonnes of carbon dioxide equivalent (tCO2e) and generate an equivalent number of carbon removal credits referred to as forecasted mitigation units (FMUs) under the Climate Action Reserve's Climate Forward program, based on two planting phases, with FMU issuance anticipated in approximately 2025 and 2026. The company made an initial upfront deposit of $500,000 (U.S.) and will make additional milestone payments of up to $3.2-million (U.S.) as the Sheep Creek reforestation project achieves site preparation, planting and issuance milestones.

Nalgonda rice farming stream: Project validation activities and landholder enrolment continued, with approximately 35,000 hectares of farmland now enrolled in the project. In March, 2023, Verra announced that it is considering developing a revised rice-specific methodology, which would replace the methodology currently used by the project. The project is proceeding with validation under the existing methodology and is anticipated to transition to the revised methodology once it is finalized and released.

Enfield biochar stream: Carbon Streaming made a milestone payment of $500,000 to the project partner upon the project securing grant funding and receiving confirmation that the project will be eligible to issue carbon removal credits in accordance with the Puro.earth standard.

Cerrado biome stream: Verra's final approval of the project was confirmed in December, 2022, and the company received its first issuance of 316,781 carbon credits in early 2023. With the first issuance, the company made a milestone payment of $66,000 to the project partner. Sales of the carbon credits are under way.

FCG Amazon portfolio royalty: Carbon credits were issued in January, 2023, to Future Carbon Group for the second of the four REDD+ projects covered by the FCG Amazon portfolio royalty. Future Carbon received carbon credits from the first project in September, 2022. The company expects to receive cash flow from the royalty beginning in the second half of 2023.

Bonobo peace forest royalty: The company advanced $400,000 and amended the Bonobo peace forest royalty for the right to receive a 5.99-per-cent royalty, an increase from 5 per cent. Proceeds will further advance development of the two projects subject to the royalty.

Strategy and outlook

Carbon Streaming's strategy continues to be focused on acquiring additional streams and royalties to diversify and grow its portfolio of projects, and supporting existing streams and royalties through project development, and the marketing and selling of carbon credits. The company is also increasingly focused on executing its sales strategy.

Over the long term and on a company-wide basis, the company continues to expect to retain on average 15 per cent to 25 per cent of carbon credit revenue (with stream-specific retention ranging between 5 per cent and 50 per cent of net revenue) generated from the sale of the carbon credits, subject to fluctuation based on the realized price from carbon credit sales and the specific terms of the stream agreements. Through a continuing delivery payment under the terms of a stream agreement, a project partner is typically entitled to receive the balance of the net revenue from the sale of carbon credits (that is, on average 75 per cent to 85 per cent).

Outlook

The company expects 2023 to be transformational as it begins to sell carbon credits and generate cash flow from its portfolio of streams and royalties. The strong foundation and systems that Carbon Streaming has been building since its 2021 public listing positions the company well to receive carbon credits or royalty payments from 10 or more projects in 2023. To date, five of the projects in the company's portfolio of streams and royalties have been issued carbon credits. The company's sales infrastructure aims to optimize the sale of carbon credits from its streams over the 12 months following issuance, with cash flow expected to follow.

As the company commences selling carbon credits, Carbon Streaming also aims to continue growing and diversifying its portfolio with leading project developers, and to be a partner of choice for buyers seeking to support high-integrity carbon projects. Voluntary carbon markets have the potential to mobilize finance to address the gaps in funding for climate projects and act as a complementary tool to other climate action activities. Carbon Streaming believes that its strategy will position the company as an industry leader which will be a go-to source of carbon credits in the voluntary market.

First quarter 2023 results conference call details

The company's management team will host an interactive audio call on Tuesday, May 16, 2023, at 11 a.m. ET to provide a brief company update. Participants may join by dialling 1-416-764-8658 or toll-free from North America at 1-888-886-7786, or by webcast on the company's website. An audio replay of the conference call will be available on the company website until 11:59 p.m. ET on June 16, 2023.

About Carbon Streaming Corp.

Carbon Streaming aims to accelerate a net-zero future. It pioneered the use of streaming transactions, a proven and flexible financing model, to scale high-integrity carbon credit projects to advance global climate action and additional United Nations Sustainable Development Goals. This approach aligns the company's strategic interests with those of project partners to create long-term relationships built on a shared commitment to sustainability and accountability, and positions the company as a trusted source for buyers seeking high-quality carbon credits.

The company's focus is on projects that have a positive impact on the environment, local communities and biodiversity, in addition to their carbon reduction or removal potential. The company has carbon credit streams and royalties related to over 20 projects around the world, including high-integrity removal, reduction and avoidance projects from nature-based, agricultural, engineered, and community-based methodologies.

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