Cielo Waste Solutions Corp. V.CMC

jv funding

[JustLookn]

I'm with you citadel.  I thought the jv deal was good a while back but I've changed my mind.  If they need to wait until the tech is proven to raise funds, what good is ruei?  At that point cielo could raise funds themselves.  I think cielo has realized this and that's why future deals are cancelled. At least they have course corrected, mistakes happen.

We have to wait 60 days to see if the tech works, THEN see if ruei has money.  

Many have said the jv are great because it avoids dilution.   I thought the same IF  they were raising money prior to proven tech, but no longer.  What limited amount they contributed so far, we are giving up 50% of future revenue.  To me that is much more expensive to shareholders than dilution.  I haven't done the formal math but seems to me this should be easy to calculate if it was a smart move or not.  

I raised these thoughts on another forum but did not get any support.

[Citadel]

Yeah I have the same thoughts - the cost of capital is extremely high with the JV structure so would only make sense if they didn’t want to wait to validate the tech, and would only really be needed for the first facility (after which traditional lending should be obtainable). JV structure seems to be a way to siphon profit away from the opco without bearing proportional risk It will always be

[JustLookn]

I agree 100%.  I'm invested already, but I don't need to be told daily why it's so great. Each day I try to find out why perhaps it's not as great as I think, to challenge the original investment.  Hard to do, most want to hold hands and tell each other all is great.  And then they question why the stock is only $.80, it should already be at $5 since everything is

[lscfa]

Cielo says a 4000 lph plant can do $28 million/year in ebitda but RUEI says $21 million.   Which is it?       https://drive.google.com/file/d/1QgCTrDaq9jZMAqQTI-w9E_Rjn4zk8l_7/view

[JustLookn]

  Thanks Iscfa, I really appreciate that document.  I don't have an answer, you know the numbers far better than me but I hope to compare the decks later this weekend   Thanks so much for sharing. Have you noticed where the discreptancy is between each?  On the ruei investment, were you able to find out more info on their proposed payout to investors?  what did

[TradeTracer]

Unfortunately 650 million shares is diluted enough, long term less dilution is key Deals made are water under the bridge, can only prove the tech and learn going forward with future deals

[JustLookn]

I don't disagree, what is done is done, and am glad they have cancelled future deals.   I keep hearing dilution though, you dont think reducing cash/ebitda by 50% has a negative impact to shareholders?  Have you done a simple spreadsheet to show net cost of EACH to shareholders? Not sure why we needed 9 JV. Anyway, just food for thought, it would be refreshing if someone would

[JustLookn]

there are people here that understand the numbers much better than me, but here is my quick and basic math.  REUI is raising $1.5 million per plant.  The rest is coming from low interest debt.  Cielo could access same low interest debt, so would also only need to have raised $1.5 million.  If this was raised when share price was $.06 that would mean dilution of 25million shares

[Stockhudson]

I see JV s are getting 70% of profit    also what is ruei   is it a finance co   GLTA

[Nugold]

No it's a group of business people that are going to come up with the build costs. Once build is paid for then the funds are split 50/50. Imo it was/is a shrewd business move with pros for all parties involved. Now maybe in 20 years it will have its critics but we must think in today's terms...it takes away the responsibility of Cielo of coming up with 50m per plant and leaves them to

[Nugold]

Actually, I'm going to change a thought, did McDonald's or Tim Hortons do wrong by setting up their JV's ? Franchisees This , IMO will be much bigger. Glta.

[JustLookn]

These are franchises, the reason they are set up this way is not because the parent company can't afford to expand, they are done this way so local owners have skin in the game and are hands on managers.  In fact most of these companies will purchase the land and lease it back to the franchisee.  Bad example, nothing even similar.

[JustLookn]

You do understand they are only raising $1.5 million through their offering and getting somewhat traditional financing for the rest?  It's not like they are raising $50 million venture capital per plant. They are waiting until the technology is proven and then getting more traditional, lower rate financing. From their presentation, 'Majority of CAPEX to be funded with Debt' which

[Nugold]

the way I understand it the debt will not be on Cielo, correct me if I'm wrong. There is an old saying " stay with what you know" , this JV set up allows Cielio to do just that. Plus as they are NOT taking on anymore JV's , they will be able to build their own plants....should that be the way that they go. I kinda think of it as the same scenario as to why you take a company

[JustLookn]

lol.  I'm not too quick to bash.  I'm not bashing at all.  I'm embarrased to say I'm extremely slow to learn. I've been involved for 2 years, I should have known some of this stuff much earlier.  I'm finally doing more research which I suggest to all.  With the recent run up it's much more important to me to pay closer attention than I have

[Stockhudson]

thanks for the replies   I have just started following this with a bunch of guys   they got me interested  I have started nibbling at the stock  but I did want to find out as much info as possible   GLTA  

[Citadel]

Sorry mate I disagree with you. A competent CFO can take a pre-revenue company public and work with the CEO on securing finance terms that are in the best interest of the shareholders. As stated before if they are set on running before they can walk then this JV might have made sense for the first facility - once up and running they could make a business case to fund the rest. The agreement they

[JustLookn]

Agree with Citadel, and would like to add that many people here like to have it both ways.  When we ask the question 'Is anyone concerned with RUEI's ability to raise funds' the answers back are always  'no because the money will flow once tech is proven so mute point'.  Then when it's asked 'If money is easy when tech is proven why doesn't Cielo

[lscfa]

Let's see how Ceilo does funding its Edmonton plant.    This will indicate how RUEI may do.   No damn way anyone lends Ceilo the entire $50 million. Project financing is usually 25% equity, 75% non-recourse debt.   

[Rollone]

Great info.  Correct me if I'm wrong but Cielo has over promised before so raising funds gets more difficult. They are in between having the proven tech and just a dream so are forced to make deals they'd otherwise not.  I've heard people say current dilution and 650m makes it a difficult investment. If the tech proves out is this still a significant hurdle to big guys

[Citadel]

It’s not hard to prove the tech - They can go through the process to get certified by the American Petroleum Institute. This is exactly what ReGenIII did with their re refined motor oil product. Once they had certification it opened doors to speak with SuperMajor oil companies and they ended up signing an offtake agreement. Financing becomes easy when you have an off take agreement and proven tech

[lscfa]

When the $10 million loan was issued and converted to shares immediately some asked why. I suggested that Cielo realized it will not get debt funding for the Edmonton plant unless it has more equity on the books. Since the lenders are also shareholders they went along with it. So why did they not do a straight equity raise in the first place? Because a convertible loan ranks ahead of equity

[JustLookn]

I don't know this area very well, but one question.  If they have converted right away which they've done, would't any benefit as you suggest be gone?  The question then remains why theyd didn't just do raise in the first place which I have no answer, other than perhaps Don said previoulsy they wouldn't do anymore, wanted to keep his word?  Somewhat unrelated and

[Citadel]

If they convert to common shares then after converted they have the same rank as pre existing common share holders. Since this happened right away I don’t have any great ideas why they didn’t just raise as equity, if you had the opportunity to read the agreement I’m sure it would be enlightening   

[JustLookn]

Good point on Edm, agree. Can you or anyone help me understand the RUEI offering that you shared?  Their presentation seems to imply they obtaining all debt financing except for 1.5million.  They are showing 17million shares issued with 70million in valuation, yet no cash on hand. (I assume this valuation is book value, perhaps the value of the jv agreement?)  How Is this enough to

[lscfa]

slide 10 says RUEI expects more equity raises over the next 12 months. No one lends 100% debt to a project and even high debt projects need assurances that the debt can be repaid such as long term off take contracts.

[JustLookn]

I agree with  you 100% financing does not seem possible. I see my mistake, I thought this offering brought the total to the 20 million, it only brings it to 18 million leaving more room for future raise.  Thanks for clarification.

[Stockhudson]

so is FCF and REUI two different entities here???    sorry to be a pain but doing the DD is long and twisted road in CMC s case    not saying anything is out of line here  but that road is not  paved all the way up to the pot of gold    GLTA  

[JustLookn]

They are 2 different entities.  RUEI is the JV partner for 9 locations, currently raising funds to open those same 9 jv plants.  The jv agreement is still subject to cielo producing low sulfur diesel continously for 60 days.  FCF has help cielo recently raise $10 million via convertible debt.

[vitalina2233]

You don't do DD from a BB because you can get a whole lot of BS.  Bullboards are full of bashers, pumpers,spammers ,opinions and yes some factual info. You want to know for certain EMAIL I.R.   PAPI   BTW    A stock which is just about up and running after years doesn't have a road BUT a RAINBOW  with a pot of gold awaiting  IMHO 

[Stockhudson]

thank you  Vita   but its not easy finding info   I have been all over the web site and PQueen info and I still cant find a lot of info   whether these two entities are for real and separate  (one is supposed to be a group of investors)  I see some good info here as well   I also have a busy iggy finger with a lot of BB   thanks

[Stockhudson]

ok   I have found FCF and the debs   and Seymour Capital now with Reui and all the road map  thanks to all   GLTA  

[vitalina2233]

YW Hudson  i wasn't trying to slag you but the best source is I.R.  I have a great relationship with the CO   I will email your concerns meaning copy and paste if you wish  Papi

[Stockhudson]

thanks Vita   I think I found everything     was a struggle  but I think I got it all    GLTA