|
ACCESSWIRE VANCOUVER, BC / ACCESSWIRE / December 30, 2021 / Cielo Waste Solutions Corp. (TSXV:CMC)(OTCQB:CWSFF) ("Cielo" or the "Company") is pleased to announce: an agreement for a $11 million mortgage loan to partially repay the Existing Loan (as defined below) and to provide general working capital to Cielo;the anticipated favorable amendment of the terms of the Existing Loan; andthe engagement of a New York based investor relations firm, to assist the Company in developing its investor relations program and expanding its access to institutional investors. All amounts in this news release are in Canadian dollars unless otherwise indicated. Cielo Secures Additional Working Capital and Generates Interest Savings and Stability On August 24, 2021, the Company announced the closing of a $12 million mortgage loan (the "Existing Loan") with First Choice Financial ("FCF") and KV Capital Inc. (collectively the "Existing Lenders"). Pursuant to the agreement of the Existing Loan: The term of the Existing Loan is 12 months, and the initial term of the Existing Loan will end in August 2022;The Existing Loan is subject to an annual simple interest rate of 6%;The Existing Loan is secured by the Company's property in Fort Saskatchewan and the facility in Aldersyde, Alberta (the "Assets");For the initial 12 months term, total interest of $720,000 was withheld by the Existing Lenders as an interest reserve (the "Interest Reserve") and applied against the initial 12 monthly payments of interest; andThe Existing Loan is subject to a special covenant in relation to the Company's market capitalization, which entitled the Existing Lenders to request partial repayments of the Existing Loan when the Company's market capitalization is below certain threshold (the "Market Cap Requirements"). The Company, in accordance with its current business strategy, set out to renegotiate the terms of the Existing Loan with goals including eliminating the Market Cap Requirements, obtaining additional capital, and reducing the interest costs associated with the Existing Loan. On December 29, 2021, the Company, as borrower, entered into an agreement with FCF, as lender, pursuant to which Cielo and FCF have agreed that: FCF to advance to Cielo a $11 million mortgage loan (the "Loan");The term of the loan will be 24 months and the Loan is subject to an annual simple interest rate of 3%;The Loan is also secured by the Assets;For the first year of the term, total interest of $330,000 will be withheld by FCF as an interest reserve and applied against the initial 12 monthly payments of interest;Cielo will make monthly interest payments in the amount of $27,500 during the second year of the term;At any point following the 12 months anniversary of the Closing Date (as defined below), in the event that FCF is acting reasonably and in good faith, dissatisfied upon an evaluation of Cielo's financial condition, business, and technological progress, FCF will be entitled to require the Company to repay the Loan, in whole or in part, within 90 days of the date of such written notice that repayment is required;The Company has agreed to issue 50,000,000 non-transferable share purchase warrants (the "Bonus Warrants"). Each Bonus Warrant will entitle FCF to purchase one common share of the Company at an exercise price of $0.22 for a period of 24 months; andNo commissions are payable in connection with the Loan and there are no guarantors. The Company may repay the Loan at any time, in whole or in part, without penalty. In the event that the Loan is repaid early in whole or in part, a pro rata number of the total Bonus Warrants will have their term reduced to the date that is the later of: a) 30 days following the date of such repayment; and b) 12 months from the date of issuance of the Bonus Warrants. The Loan and the issuance of the Bonus Warrants are both subject to the approval of the TSX Venture Exchange (the "TSX-V"). The Loan is anticipated to be closed on or about January 17, 2022 (the actual closing date defined as the "Closing Date"). Use of Proceeds - Anticipated Partial Repayment of the Existing Loan and General Working Capital Upon successful closing of the Loan, Cielo is planning to use $5.5 million of the net proceeds of the Loan to repay the Existing Loan (the "Early Repayment"), without penalty to Cielo. The balance will be used for general working capital purposes. The closing of the Loan is subject to the amendment of the terms of the Existing Loan in Cielo's favour, as further described below. In addition, as a result of the partial repayment, the term for $5.5 million of the $12 million bonus warrants that were issued in connection with the Existing Loan (the "Existing Bonus Warrants") will be reduced such that the $5.5 million Existing Bonus Warrants will, if not exercised, expire 90 days from the date of the Early Repayment. Anticipated Favorable Amendment of the Existing Loan and Anticipated Benefits to Cielo In consideration for the Early Repayment of the Existing Loan, the Existing Lenders have agreed in principle to: Remove the Market Cap Requirements in their entirety; andReturn to Cielo a proportionate portion of the Interest Reserve, approximately $200,000. In addition, management anticipates that the successful closing of the Loan, partial repayment to the Existing Loan, and the amendment to the terms of the Existing Loan will: Further improve the Company's cash position and provide additional capital to fund the activities at the Aldersyde facility to achieve steady-state production, and the cost related to the research and development facility in Fort Saskatchewan, Alberta, as announced in the Company's November 12, 2021 press release;Provide greater stability and certainty for Cielo regarding the timing of the repayment of the Existing Loan; andGenerate interest savings on the Existing Loan. The amendment to the terms of the Existing Loan, the return of a portion of the Interest Reserve, and the reduction of the term of $5.5 million Existing Bonus Warrants, will occur only in the event of the closing of the Loan, which is anticipated to be on or about January 17, 2022. Engagement of Investor Relations Firm Cielo has entered into an agreement with Rose & Company Holdings, LLC. ("Rose"), a New York based investor relations and capital markets advisory firm, to assist the Company in developing its investor relations program and expanding its access to institutional investors, effective as of January 1, 2022. Pursuant to the terms of the agreement, Cielo will pay Rose CAD $10,000 per month for the initial 3 months of the term, USD $10,000 per month from the fourth to the sixth month inclusive, and USD $12,500 per month thereafter. The term of the engagement is a period of 12 months, subject to automatic 12 months renewals unless terminated by either party upon 60 days' notice, however Cielo may terminate the agreement upon 30 days' notice within the first 6 months of the engagement. Cielo remains committed to providing updates to shareholders on a timely basis as the Company continues to meet its milestones, and as new key objectives are established. Company Contact:Chris SabatEmail: csabat@cielows.comTelephone: 1-(403)-348-2972Website: www.cielows.com For further information please contact: Cielo Investor RelationsEmail: investors@cielows.comTelephone: 1-(403)-348-2972Website: www.cielows.com RB Milestone Group LLC (USA):Trevor Brucato, Managing DirectorEmail: cielo@rbmilestone.comNew York, NY & Stamford, CT |