CWSFF - Cielo Announces Asset Purchase Agreement with Expander Energy Inc. to Deploy Market Ready Technology for Production of Low Carbon Renewable Synthetic Fuel | Benzinga

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Acquisition Expected to Accelerate Timeline to Commercialization and
Further Advance Existing Technology

CALGARY, Alberta, Sept. 20, 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 that it has executed an asset purchase agreement dated September 15, 2023 (the "Asset Purchase Agreement") with Expander Energy Inc. ("Expander"), a private Alberta corporation and an arm's length third party, for the purchase of certain assets and liabilities of Expander to operate the EBTL™ and BGTL™ technologies business being acquired (the "Acquired Business"). The proposed acquisition (the "Proposed Transaction") is expected to allow Cielo to accelerate its timeline to commercialization and further enhance Cielo's existing proprietary Thermal Catalytic Depolymerization (TCD) technology.

The Proposed Transaction includes the grant of an exclusive licence in Canada to use Expander's patented EBTL™ and BGTL™ technologies and related intellectual property (the "Licensed Technologies"), as well as an exclusive licence in the United States for creosote and treated wood waste. The Licensed Technologies will be used to build facilities (the "Licensed Facilities") that process biomass (waste) to fuels (bio-syndiesel). The particular terms will be set out in a license agreement (the "License Agreement") to be executed by Cielo and Expander on closing, and as more particularly described below.

The Proposed Transaction will result in Cielo and Expander remaining separate entities while maximizing synergies between the companies. A key component of the Proposed Transaction includes the engagement of Expander and/or its affiliates to provide services for both the engineering, procurement and construction phases of the Projects (as defined below), as well as the operation/project management phase of the Projects.

Ryan Jackson, CEO of Cielo, commented, "We believe this is a monumental achievement for Cielo and one that will accelerate our path to commercialization and revenues. We expect that the partnering of Expander's technology, technical expertise and extensive engineering and operations experience with Cielo's board and executive management team, access to capital markets and business relationships will position Cielo to be a leader in the renewable fuels industry."

PROJECT DEVELOPMENT

Cielo intends to undertake three projects in Alberta proposed or underway by Expander, as well as three projects proposed by Cielo, including the previously disclosed facility in Dunmore, Alberta and two in the United States, all using the Licensed Technologies (collectively, the "Projects").

Projected financial metrics for the first two proposed Projects, one located in Carseland, Alberta, one in Dunmore, Alberta, are presented below:

_Notes:

     _{1. First full year production.}

     _{2. Non-IFRS measure. (See National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure)}

The remaining four of the six initial Projects include locations in Slave Lake, Carseland (Phase II), and two locations to be determined in the United States. Carseland Phase II will involve an increase in facility size and production volume. Slave Lake has been granted EPA (Alberta Environment and Protected Areas) approval, however, would require an amendment to the EPA permit to allow for an increase in facility size and production volume compared to what had been previously planned. The locations of the two Licensed Facilities in the United States are to be determined.

In addition, management believes that an anticipated result of the proposed relationship between Expander and Cielo, leveraging Expander's expertise and culture of innovation, will be an improvement to Cielo's proprietary technology, which is currently implemented at Cielo's research and development facility. In the meantime, Cielo's access to the Licensed Technologies is anticipated to accelerate the timeline to commercialization and therefore shorten the path to revenue.

With regard to the land in Dunmore, Alberta to be acquired by Cielo from Renewable U Energy Inc. ("RU"), as previously disclosed, Cielo and RU have agreed to extend the deadline for conditions until September 29, 2023, and the closing date to October 28, 2023. Refer to the news release dated May 1, 2023, and May 17, 2023 for additional information. Cielo will provide further material updates as they become available.

OPERATIONAL EXPERTISE

Expander's engineering team is led by its Executive Vice President and Chief Technical Officer, Steve Kresnyak, who brings over 40 years of international consulting engineering experience in the hydrocarbon energy industry. Mr. Kresnyak has extensive EPC/EPCM experience and is the technology developer and inventor of many world issued process patents including Expander's EGTL™ for Gas to Liquids, EBTL™ for Biomass to Liquids, Biomass Gasification, and FTCrude® process technology.

On closing, Cielo and Expander will execute agreements for the engineering procurement and construction services as well as the project management services to be provided by Expander and its affiliates to Cielo for the Projects.

Mr. Kresnyak commented, "We at Expander are elated to be part of the Cielo story, assisting in the commercialization of multiple, patented low carbon, Bio-Synfuel projects. We also look forward to lending our expertise to help bring Cielo's strategic vision to life with a particular focus on creosote and treated wood feedstocks, carving a lane in this niche market."

BOARD COMPOSITION

Following closing, Cielo's Board of Directors (the "Board") would be comprised of Cielo's four current directors, plus three Expander nominees for a total of seven directors with the majority remaining Cielo nominees. The proposed nominees will be James H. Ross, Larry B. Haggar and G. Steven Price (the "Expander Nominees").

James H. Ross, B. Sc., C. Dir., is Executive Chairman and Chief Financial Officer, as well as shareholder, of Expander, was Chief Executive Officer from 2010 to 2018, and has been a director of Expander since 2009. Mr. Ross has 40 years of capital markets experience including executive management, venture capital, private equity, and small cap investment banking. Mr. Ross is the former Chief Executive Officer of Rocky Mountain Clean Fuels Inc., and remains a director of Rocky Mountain Clean Fuels Inc. Mr. Ross is Co-Founder and Chief Executive Officer of Alberta Clean Technologies (VCC) Ltd., an Alberta based Venture Capital Corporation. His past experience includes director of C-Free Power Corp., a developer of wind and micro-hydro power generation in western Canada, (acquired by Good Energies Capital), director of Platinum Communication Corp. a provider of rural high-speed internet in western Canada, (acquired by Xplornet Communication Inc.), and director of Glenbriar Technologies Inc., an information technology service provider in B.C., Alberta, and Ontario (acquired by Uniserve Communications).

Larry B. Haggar is a director, as well as a shareholder, of Expander. Mr. Haggar has 50 years of experience in the oil and gas industry after graduating from the University of Waterloo with a B.A.Sc. degree in Chemical Engineering (1971). He began his career at Great Canadian Oil Sands (now Suncor) as a Process Engineer and later as Operations Engineer for the Upgrader. He next joined a major U.S. engineering firm's Calgary ...

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