Cielo Waste Solutions Corp (CMC)

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Cielo Corporate Update


Cielo Announces a Memorandum of Understanding With NXGEN Global Inc., Update on Purchase of Land and Related Matters


2017-04-13


Vancouver, British Columbia, Canada / April 13, 2017 / CSE:CMC: Cielo Waste Solutions Corp. ("Cielo" or the "Company") is pleased to announce that it has entered into a Memorandum of Understanding ("MOU") with NxGen Global Inc. ("NxGEN"). Further to the Company's press release on March 31, 2017 ("March 31 PR") relating to working with strategic partner(s) to move forward on the construction of the first six refineries, Cielo is pleased to announce this MOU sets out the initial terms pursuant to which NxGEN proposes to subscribe, on a best efforts basis, for up to 100,000,000 common shares ("Shares") of the Company ("Financing") at a price of $0.10 per common share for gross maximum proceeds of $10,000,000. All of the Shares will be subject to a voting trust agreement, whereby all of the voting rights attached to the Shares will be irrevocably granted to Don Allan, President and CEO of Cielo, such that the Financing will not result in a change of control of Cielo.

If completed, the proceeds of the Financing ("Proceeds") will be used to purchase the High River Property and the High River Refinery, each as defined in the March 31 PR, to retrofit the High River Refinery, and to further develop the Company's proprietary renewable fuel technology. In addition, the Proceeds will be used for general working capital purposes.

The Company anticipates completing the Financing on or about April 28th, 2017 but in any event no later than May 7th, 2017 on the terms set out in the MOU.

Asset Purchase:
The Company is now in the final process of completing the purchase of the idle High River Refinery and High River Property and anticipates that such acquisition will be completed on or before April 21st, 2017.

Joint Venture:
The MOU also provides for the Company and NxGEN to enter into a joint venture agreement ("JV Agreement") for further construction of new refineries. The MOU sets out the initial terms of the contemplated joint venture ("JV") between NxGEN and the Company. If completed, the Company will grant to NXGEN certain rights related to the building and owning of certain interests in and to refineries to be built and commissioned by the Company. While the terms of the JV are subject to further negotiations, if the JV Agreement is concluded, it would initially provide for the funding by NxGEN of 100% of the costs to build and commission a total of five refineries, anticipated to be built on a property in Edmonton, Alberta at an anticipated cost of approximately $50,000,000, with NxGEN or its nominee having a 49.9% ownership of the such refineries. In addition, NxGEN would have a separate right of first refusal to finance, either on its own, or with third parties, on competitive terms, the balance of the costs to build and or commission refineries on

Related Party Loan:
A related party has delivered to the Company a loan in exchange for a demand promissory note ("Note") in the amount of $250,000 (the "Loan") for the purposes of contributing to the purchase of the Higher River Property and the High River Refinery. The Loan constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Shareholders in Special Transactions ("MI 61-101"). Cielo relies on the exemption from the formal valuation requirements of MI 61-101 contained in section 5.5(a) and (b) of MI 61-101 on the basis that the fair market value of the Loan not being more than Twenty-Five Percent (25%) of the market capitalization of Cielo and no securities of Cielo are listed on a specified market set out in such section, and Cielo relies on the exemption from the minority shareholder approval requirements of MI 61-101 contained in Section 5.7(1)(a) and 5.7(1)(b) of MI 61-101 on the basis of the fair market value of the Loan not being more than Twenty-Five Percent (25%) of the market capitalization of Cielo and $2,500,000. As contemplated by MI 61-101, Cielo did not file a material change report in respect of the related party transaction at least 21 days before the issuance of the Note as Cielo was not aware of the Loan at such time.

Don Allan, President and CEO of Cielo, stated "We have worked incredibly hard to bring to the world our game changing technology that deals with reducing landfill waste and generating renewable fuels. Cielo is now poised to become a break out company in the waste to energy industry and to make a serious contribution to reducing greenhouse gas emissions."

Business Development Agreement:
Cielo is also pleased to announce that it has entered into a Business Development Agreement ("BD Agreement") with Merchant Equities Capital Corp. ("Merchant") for the purposes of assisting Cielo in facilitating the transactions contemplated in the MOU. The BD Agreement provides for both cash payment and the issuance of up to 6,000,000 warrants, each Warrant being exercisable for a period of three (3) years from the date of issuance, 4,000,000 at an exercise price of $0.10 per share and 2,000,000 at an exercise price of $0.25 per share.

Convertible Debenture Offering:
As announced in the March 31 PR, the Company has agreed to continue to suspend securing participation into the private placement offering ("Debenture Offering") of up to $7,000,000 ("Loan Amount") in convertible debentures ("Debentures") initially announced on November 29th, 2016 ("Nov 29 PR"), however the Debenture Offering has not been cancelled and will resume in the event that the Financing is not completed. The Debentures would bear an interest rate of 12% per annum and mature in 36 months from the date of issuance. Each subscribed dollar would also result in the issuance of one full warrant, for an aggregate issuance of up to 7,000,000 warrants ("Warrants"), each Warrant allowing the holder ("Debenture Holder") to purchase a common share at $0.25 per share within 24 months, unless the stock trades above $0.50 for 5 consecutive days, in which event the Company will be entitled to provide a 30 day notice period to the Debenture Holders, after which the Warrants will expire if not exercised. Additional terms can be reviewed in the Nov 29 PR.

About Cielo Waste Solutions Corp.:
Cielo specializes in environmentally advanced technologies focused on materials recovery, renewable diesel and landfill reduction through responsible diversion practices. By incorporating the latest material recovery technologies, Cielo is able to achieve significant diversion from landfills while creating a feedstock specifically for renewable diesel. Cielo provides solutions for responsible waste management while also providing value added opportunities.

About NxGen Global Inc.
NxGen Global is a private Canadian corporation focused on delivering innovative solutions for the energy management and services industry. NxGen's experienced management team is dedicated to working with technology innovators to bring disruptive solutions to market by providing smart working capital, strategic thinking, value creation and an experienced management team.

For more information on the Company, please contact

Don Allan, President, at [phone], or visit the Company's website at www.cielows.com

Further information regarding the Company can be found on SEDAR at www.SEDAR.com or by visiting our profile on www.CSE.ca.

On Behalf of the Board of Directors

"Don Allan"
Chief Executive Officer
Tel: [phone] Ext. 222
Email: [e-mail]

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