Cielo Announces Closing of First Tranche of Private Placement of Convertible Debenture Units - Seite 2

The Principal Amount may be converted, for no additional consideration, into Conversion Shares at the option of the holder of a Convertible Debenture (each, a “Holder”) at any time after the Issue Date at a conversion price (the “Conversion Price”) of $0.40 per Conversion Share. However, the Company may force the conversion of the Convertible Debentures (the “Forced Conversion”), at the Conversion Price, in the event that the volume weighted average price of the Common Shares on the Exchange is greater than C $1.00 for any ten (10) consecutive trading days. In the event of a Forced Conversion, the Company will provide notice to Holders by issuing a news release announcing the details of the Forced Conversion, including the date upon which the Forced Conversion will occur. In addition, the principal amount of the Convertible Debentures may be redeemed by the Company at any time without penalty.

Each Warrant will entitle the holder thereof to purchase one Warrant Share at a price of $0.70 per Warrant Share for a period of 24 months from the Issue Date. However, the Company may accelerate the expiry of the Warrants (the “Warrant Term Acceleration”) in the event that the volume weighted average price of the Common Shares on the Exchange is greater than C $1.00 for any ten (10) consecutive trading days. In the event of a Warrant Term Acceleration, the Company will provide notice to holders of the Warrants by issuing a news release announcing the details of the Warrant Term Acceleration, including the accelerated expiry date of the Warrants.

The Company anticipates using the net proceeds of the Private Placement for the continued advancement of its renewable fuel projects, namely the wood byproduct to Bio-SynDiesel Project in Carseland, Alberta (the “Carseland Project”), which is currently undergoing front-end engineering and design, and the Company’s railway tie to Bio-Syndiesel project in Dunmore, Alberta (the “Dunmore Project”), as well as general working capital and corporate growth purposes. The Carseland Project will be situated adjacent to an existing synthetic fuel facility owned and operated by Rocky Mountain Clean Fuels Inc. (“RMCFI”), which deploys patented technology developed by Expander Energy Inc. (“Expander”).