Cielo Announces Up to CAD $5 Million Financing, Termination of Prior Proposed Financing and Agreement for Sale of Property, and Provides Operational Update

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New Proposed Financing to Replace Terminated Financing; and
Completion of the Sale of the Property will Result in the Repayment of $11 million Mortgage Loan

CALGARY, Alberta, July 17, 2023 (GLOBE NEWSWIRE) -- Cielo Waste Solutions Corp. (TSXV:CMC; OTCQB:CWSFF) (“Cielo” or the “Company”), a waste-to-fuel environmental technology company, is pleased to announce a proposed financing and provide an update on a previously disclosed proposed financing, announce a purchase and sale agreement for its property in Fort Saskatchewan, Alberta, which upon completion will eliminate the Company’s $11 million mortgage loan, and provide an operational update.

Financing

Up to CAD $5 million Mortgage Loan

The Company has entered into a loan commitment letter (the “Commitment Letter”) with First Choice Financial Incorporated (“FCF”), as lender, for a mortgage loan (the “Mortgage Loan”) of up to an aggregate principal amount of CAD $5 million. The Company will initially receive a principal amount of $2 million, which is anticipated to be completed prior to the end of this week. The Mortgage Loan is subject to the approval of the TSX Venture Exchange (the “Exchange”).

The Mortgage Loan will bear simple interest of 7.5% per annum and FCF will withhold $150,000 as an interest reserve to satisfy the first 12 months of interest payments. In addition, FCF will be entitled to receive a financing fee of 3.5% per advance ($70,000 for the first advance of $2 million). No securities will be issued in connection with the Mortgage Loan and no other fees or commissions will be payable.

The Mortgage Loan will be secured against the Company’s property in Aldersyde, Alberta, including a site-specific general security agreement against the assets on the property. The proceeds of the Mortgage Loan will be used for general working capital.

The Mortgage Loan will have a term of 24 months from the closing date with respect to each advance (each a “Closing Date”), however, at any point following the 12 month anniversary of a Closing Date, in the event that FCF is dissatisfied following an evaluation of Cielo’s financial condition, business and technological progress, FCF may require the Company to repay the Mortgage Loan, in whole or in part, within 90 days of the notice from FCF to the Company that such repayment is required. Cielo will have the right to repay the Mortgage Loan at any time, without penalty. In addition, once the structure and financing terms for the Company’s first commercial facility (the “First Commercial Facility”) have been determined, Cielo may make a proposal to FCF to exchange the principal portion of the Mortgage Loan for participation in the First Commercial Facility, which FCF will be entitled to accept or reject. Management believes that this will result in minimizing the dilutive impact to Cielo while unlocking potential value for third parties, such as FCF, that may be interested in participating directly in the First Commercial Facility financing.