Cielo Waste Solutions Corp. announced private placement of secured convertible notes for up to an aggregate principal amount of up to CAD 5 million with new investor Crestmont Investments LLC on December 19, 2022. Under the terms of the financing, which is subject to due diligence by Crestmont and acceptance by the TSX Venture Exchange.

Security of the Notes will be subordinated security interests in the R&D Facility assets and all intellectual property and rights owned by Cielo. The notes will bear simple interest at a rate of 12.0% per annum on outstanding principal amounts, and will accrue and be payable upon maturity or at conversion. Maturity shall occur 18 months from issuance of the Notes, subject to earlier conversion by Crestmont or redemption by the company.

Investor will be entitled to convert the principal portion then-outstanding of the Notes into units on or before the maturity date at CAD 0.25 per share. Each unit will consist of one common share of company and one common share purchase warrant, each Warrant exercisable for a period of three years from the date of issuance into one common share of the company at an exercise price of CAD 0.35 CAD per share. The company will have the option to pay accrued and unpaid Interest when due in readily available funds or by issuing common shares of Cielo at Market Price at the time of settlement and subject to the prior approval of the TSXV.

No fees or commissions will be payable by company to Crestmont or any other party in connection with the Financing. The Financing is subject to customary closing conditions, including the approval of the TSXV. The financing is expected to close within 30 days from the satisfactory completion of the due diligence review.

The due diligence review is expected to be completed by January 31, 2023. All securities issued in connection with the Financing will be subject to statutory hold periods in accordance with applicable securities legislation.