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Cielo Waste Solutions Corp
Symbol CMC
Shares Issued 249,259,762
Close 2020-06-30 C$ 0.04
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Cielo closes $250K financing tranche, extends JV deal

2020-06-30 18:19 ET - News Release

Mr. Don Allan reports

CIELO RAISES $250,000 IN SIXTH TRANCHE OF PRIVATE PLACEMENT OFFERING OF CONVERTIBLE DEBENTURE UNITS AND AGREES TO EXTENSION TO ENTER INTO DEFINITIVE JV AGREEMENTS

Cielo Waste Solutions Corp. has raised $250,000 in gross proceeds in the sixth tranche of its private placement offering of convertible debenture units, initially announced on March 30, 2020. A total of $1,926,642 has now been raised in the offering, exceeding the targeted minimum amount of $500,000.

Each unit consists of one $1,000 unsecured convertible debenture plus 7,500 share purchase warrants. The debentures bear interest at a simple rate of 15 per cent per year, with the initial three years of interest to be prepaid on the date of issuance of the debentures by the issuance of common shares at a price of seven cents per prepaid interest share. The principal of the debentures, together with all accrued interest exceeding the prepaid interest, will be repaid 48 months from the issue date unless repaid earlier by Cielo without penalty or converted by the holder(s) thereof, any time after four months and a day following the issue date, at a price of five cents for the principal and seven cents for the interest balance.

Each warrant has a term of 48 months from the issue date and an exercise price of seven cents per common share, subject to acceleration in the event that the common shares of Cielo, listed on a recognized stock exchange, trade at 15 cents or higher for at least five consecutive trading days, in which event Cielo may provide a notice to holders that the warrant term will terminate 30 days from the date of notice.

Although the offering is non-brokered, the company may, as determined in its sole discretion, pay reasonable customary brokers' and/or finders' commissions in connection with the completion of the offering of up to 8 per cent in cash of the gross proceeds raised by such broker(s)/finder(s) and issue finder warrants of up to 8 per cent of the total number of common shares that would be issued to subscribers introduced to the company by such broker(s)/finder(s), if 100 per cent of the principal under the subject debentures is converted. The finder warrants have a 48-month term from the date of issue and an exercise price of seven cents per share.

There may be additional tranches of the offering, anticipated to close on or prior to Aug. 6, 2020. At the discretion of the company, the offering may be extended and/or increased, subject to approval from the Canadian Securities Exchange as applicable. Net proceeds of the offering will be used to scale up production of high-grade renewable fuel at the company's green waste-to-renewable-fuel facility in Aldersyde, Alta., as well as for general working capital purposes.

A total of 250 units were issued pursuant to the sixth tranche for gross proceeds of $250,000, including 1,875,000 warrants and 1,607,143 prepaid interest shares. Pursuant to the sixth tranche, the company also issued 400,000 finder warrants and paid $20,000 in cash commissions. To date, 1,926.62 units have been issued for gross proceeds of $1,926,642.

All securities issued pursuant to the offering are subject to a statutory four-month hold period.

Update on joint venture agreements

Cielo and Renewable U Grande Prairie Inc., Renewable U Medicine Hat Inc., Renewable U Halifax Inc., Renewable U Lethbridge Inc. and Seymour Capital Inc. (collectively, the JV companies) have agreed to extend the deadline by which they will enter into the previously announced joint venture agreements to 90 days after Cielo has reached 500 litres per hour of continuous production. These agreements will govern the building and operation of the first five facilities to be placed on production in the agreed territories in Alberta, Nova Scotia and Ontario (the JV facilities). Prior to being shut down for COVID-19, the Aldersyde facility was operating on a continuous-flow basis at low production volumes to identify how to resolve bottlenecks. Over the past few months, Cielo has been working with personnel from a third party engineering firm, who have redesigned a number of the pieces of equipment and streamlined processes that are currently being implemented for the purposes of enhancing the company's proprietary processes and increasing production volumes.

Don Allan, president and chief executive officer of Cielo, stated, "Cielo utilized the downtime to further work on improvements to the process, and management believes that these improvements will see volumes reach approximately 1,000 lph [litres per hour] during the resumption of the commissioning phase."

Raphael Bohlmann, president of Renewable U Energy, which represents four of the five JV companies, stated: "We are still moving each location forward while allowing Cielo the time it needs to complete the improvements at Aldersyde that will demonstrate how we can scale production to 4,000 litres per hour in each one of our facilities. The Medicine Hat location is now working towards permits, while Grande Prairie and Nova Scotia are narrowing down the ideal locations. We are all very hard at work to move these facilities forward as quickly as possible."

About Cielo Waste Solutions Corp.

Cielo is a waste-to-renewable-fuel company with a game-changing technology engineered to help solve the world's garbage crisis. Cielo's technology transforms landfill garbage into renewable high-grade diesel and kerosene (aviation jet fuel). Cielo's proven and patent-pending technology is currently being deployed in the company's Aldersyde, Alta., facility, where wood waste is currently being converted into renewable fuels. Cielo is headquartered in Alberta, Canada, with plans to build and operate green facilities across North America as well as globally.

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