Cielo Waste Solutions Corp. (TSXV: CMC; OTCQB: CWSFF)
(
“Cielo” or the
“Company”), a
waste‐to‐fuel company, today announced its financial results for
the three and nine months ended January 31, 2023. Copies of the
unaudited interim financial statements and related management's
discussion and analysis can be found on the Company's issuer
profile at www.sedar.com. All financial information in this news
release is reported in Canadian dollars, unless otherwise
indicated.
Jasdeep K. Dhaliwal, CFO of the Company stated
“Over the previous eight months, the management team has strived to
make strategic decisions to minimize our corporate expenses and
allocate our expenditures to the fabrication of the R&D
Facility. As we begin commissioning of the R&D facility, we are
proud of all the hard work our departments have put in to managing
costs to achieve this goal.”
Q3 2023
HIGHLIGHTS
The Company continued to focus during and subsequent to the
quarter ended January 31, 2023 on progressing toward the
commercialization of its waste‐to‐fuel technology while continuing
its strategy of managing costs.
Financial Highlights
As at
(Thousands of
dollars) |
January 31,
2023 |
April 30,
2022 |
Total assets |
31,983 |
53,531 |
Total liabilities |
19,415 |
19,932 |
Total non-current liabilities |
9,985 |
16,959 |
Working capital |
(5,233) |
1,164 |
Periods ended January
31 |
Three months
ended |
Nine months
ended |
(Thousands of
dollars, except
per share
amounts) |
2023 |
2022 |
2023 |
2022 |
Financing costs |
620 |
249 |
1,838 |
1,222 |
General and administrative |
1,137 |
1,944 |
3,021 |
5,153 |
Research and development |
442 |
777 |
1,406 |
4,568 |
Share based compensation |
143 |
1,208 |
270 |
1,399 |
Net loss per share – basic & diluted |
(0.003) |
(0.007) |
(0.042) |
(0.042) |
- General and
administrative costs decreased $2.1 million (9‐month period) and
$0.8 million (3‐month period) from their comparative periods due to
reduced spending in all expenditures in the category.
- Research and development costs
decreased during the quarter from the comparative period, primarily
due to Cielo’s focus on design and fabrication of the R&D
Facility.
- Other income increased
significantly in the quarter from the comparative period, primarily
due to Cielo’s lease of its property in Fort Saskatchewan, Alberta,
as previously announced, providing for an annual base rent of $0.6
million, plus 90% of the occupancy costs (such as property taxes,
insurance, and building maintenance).
- For the three months ended January
31, 2023, the Company had a net loss of $2.3 million, which is
consistent with prior periods as expected. Net loss for the nine
months ended January 31, 2023 was $20 million higher than same
period in the previous year primarily resulting from the
decommissioning of the Company’s prior facility in Aldersyde,
Alberta (the “Aldersyde Facility”), however this was offset by the
decreases in general and administrative and research and
development expenditures noted above.
- During the quarter ended January
31, 2023, Cielo had negative operating cash flow, consistent with
prior periods and as expected in a pre‐revenue business.
- Financing costs increased
approximately $0.4 million for the quarter and $0.6 million for the
9 month period, primarily due to the Company not capitalizing
borrowing costs on qualifying assets as the construction in
progress ceased at the Aldersyde Facility, offset by lessened
interest expense as debt decreased from the comparative
period.
Operational
Highlights
- Throughout the
quarter, the Company continued to work with Crestmont Investments,
LLC (“Crestmont”) toward the completion of an up
to $5 million private placement offering of units (the
“Unit Offering”) to support ongoing R&D and
operating costs, subject to completion of due diligence. The terms
of the Unit Offering were amended from an offering of secured
convertible debentures to an offering of units comprised of common
shares and warrants, as announced on February 14, 2023.
- Subsequent to
the quarter end, the Company entered into a securities for debt
agreement for the payment in full of $4.5 million by the issuance
of units comprised of common shares and warrants (the
“Shares for Debt Transaction”), freeing up future
cash flows for operations and reducing interest charges. The terms
of the Shares for Debt Transaction were announced on February 23,
2023.
- The Company completed the
fabrication of its research and development facility (the “R&D
Facility”) and subsequent to the quarter end, commissioning of the
R&D Facility commenced at Aldersyde.
- The Company completed the sale of
approximately 80,000 litres of distillate to a TSX listed midstream
refiner.
- The Company developed a
performance‐based retention program for key personnel.
OUTLOOK
In its final quarter ended April 30, 2023, Cielo
anticipates:
- The completion of the Securities
for Debt Transaction, subject to the approval of the TSX Venture
Exchange (the “Exchange”) to result in a reduction
of $4.5 million in secured debt.
- The completion of the Unit
Offering, subject to the completion of due diligence and the
approval of the Exchange, to result in gross proceeds of up to $5
million toward the R&D Facility and general working
capital.
- The completion of commissioning of
the R&D Facility.
- Subsequent to the
commissioning of the R&D Facility, the Company intends to
continue to utilize the R&D Facility to generate the data
required to design and define the economics of its first full‐scale
commercial facility, with the Company’s primary business objective
being the initiation in calendar 2023 of the design of its first
full‐scale facility based on testing to be undertaken at the
R&D Facility.
- The Company
expects to list the Fort Saskatchewan Property for sale in the near
future. The anticipated sale is expected to reduce interest costs,
minimize corporate risk, and provide capital for ongoing
operations, which are in line with corporate goals.
CONFERENCE
CALL
Cielo will host a conference call on March 15,
2023 at 10:00 AM MST (12:00 PM EST) during which Cielo’s CEO, Ryan
Jackson, CFO, Jasdeep K. Dhaliwal and EVP Operations, Ryan
Carruthers, will discuss Cielo’s fiscal Q3 2023 financial results,
followed by a question‐and‐answer session.
There are 2 options for calling into the
conference:
To join the conference call without operator assistance, you may
register and enter your phone number at
https://emportal.ink/3KRyrap to receive an
instant automated call back. OR
You can also dial direct to be entered to the call by an
Operator using the following Instructions:
Date: March 15, 2023
Time: 10:00 a.m. MT / 12:00 p.m. ETDial
In: North America (toll‐free):
1‐888‐664‐6392Dial In: Toronto
Local / International: 416‐764‐8659
Replay: North
America: 1‐888‐390‐0541Replay: Toronto
Local/International: 416‐764‐8677Replay
Passcode: 634782#
The conference call replay will be available until March 22,
2023.
For further information please contact:
Ryan Jackson, CEOPhone: (403) 348-2972Email:
investors@cielows.com
RB Milestone Group LLC Email:
cielo@rbmilestone.com
ABOUT CIELO
Cielo Waste Solutions Corp. was incorporated
under the Business Corporations Act (British Columbia) on February
2, 2011. Cielo is a publicly traded company with its shares listed
to trade on the TSX Venture Exchange (“TSXV”)
under the symbol “CMC,” on the Frankfurt Exchange
(“DAX”) under the symbol “C36”, as well as on the
OTC Venture Market (“OTCQB”), under the symbol
“CWSFF.” The Company’s strategic intent is to become a leading
waste‐to‐fuel company using economically sustainable technology
while minimizing the environmental impact. Cielo has a patented
process that can convert waste feedstocks, including organic
material and wood derivative waste, to fuel. Having demonstrated
its ability to produce diesel and naphtha from waste, Cielo’s
business model is to construct additional processing facilities.
Cielo’s objective is to generate value by converting waste to fuel,
while fueling the sustainable energy transition.
CAUTIONARY
NOTE REGARDING
FORWARD‐LOOKING STATEMENTS
This news release contains certain
forward‐looking statements and forward‐looking information
(collectively referred to herein as “forward‐looking statements”)
within the meaning of applicable Canadian securities laws. All
statements other than statements of present or historical fact are
forward‐looking statements. Forward‐ looking statements are often,
but not always, identified by the use of words such as
“anticipate”, “achieve”, “could”, “believe”, “plan”, “intend”,
“objective”, “continuous”, “ongoing”, “estimate”, “outlook”,
“expect”, “may”, “will”, “project”, “should” or similar words,
including negatives thereof, suggesting future outcomes.
Forward‐looking statements are subject to both
known and unknown risks, uncertainties and other factors, many of
which are beyond the control of the Company, that may cause the
actual results, level of activity, performance or achievements of
the Company to be materially different from those expressed or
implied by such forward looking statements. Cielo is making forward
looking statements, with respect to, but not limited to: the
completion of the Unit Offering and the timing and terms thereof;
the completion of the Securities for Debt Transaction and the
timing and terms thereof; the commissioning of the R&D
Facility, including the timing thereof; the intention of the
company to use the R&D Facility subsequent to commissioning;
the intention of the company to initiate the design of the
Company’s first full‐scale commercial facility in calendar 2023;
the conference call, including the date and time, speakers and
agenda, and the period of time during which an audio replay will be
available.
Investors should continue to review and consider
information disseminated through news releases and filed by the
Company on SEDAR. Although the Company has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward looking statements,
there may be other factors that cause results not to be as
anticipated, estimated or intended.
Forward‐looking statements are not a guarantee
of future performance and involve a number of risks and
uncertainties, some of which are described herein. Such
forward‐looking statements necessarily involve known and unknown
risks and uncertainties, which may cause the Company’s actual
performance and results to differ materially from any projections
of future performance or results expressed or implied by such
forward‐looking statements. Any forward‐looking statements are made
as of the date hereof and, except as required by law, the Company
assumes no obligation to publicly update or revise such statements
to reflect new information, subsequent or otherwise. Neither the
TSXV nor its Regulation Services Provider (as that term is defined
in the policies of the TSXV), nor OTCQB nor WKN, have reviewed, and
do not accept responsibility for the adequacy or accuracy of, the
content of this news release.
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