Northstar Clean closes $1M first tranche of financing

Executive Summary

• Northstar Clean Technologies Inc. closed a non-brokered unit financing raising $1 million through the issuance of debentures and warrants to an arm's-length third party.
• The company received a $735,000 milestone payment from Emission Reduction Alberta (ERA), bringing total working capital reserves added to $1.74 million.
• Funds are designated for ramping up operations at the Empower environmental solutions facility in Calgary, following the achievement of an operational milestone of 80 tonnes per day.

Key Details

• Financing Structure:
  • Type: Non-brokered unit financing (First Tranche).
  • Total Proceeds: $1,000,000.
  • Quantity: 200 units.
  • Unit Composition: Each unit consists of a $5,000 face value debenture and 1,250 detachable, non-transferable whole warrants.
  • Debenture Terms: 9.0% coupon, paid semi-annually in cash or shares.
  • Share Payment Option: Interest may be satisfied by issuing common shares at a deemed price equal to the 10-day VWAP on the TSX Venture Exchange preceding the interest payment date.
  • Warrant Terms: Exercise price of $0.395 per warrant; term of 36 months from closing.
  • Security: Unsecured.
  • Subscriber: 1010770 B.C. Ltd. (arm's-length third party).
  • Regulatory Status: Conditional approval received from TSX-V; closing subject to final acceptance.
  • Hold Period: Four months and one day statutory hold period expiring April 6, 2026.
• Grant Receipt:
  • Source: Emission Reduction Alberta (ERA).
  • Amount: $735,000 (Milestone 3 payment).
  • Use of Proceeds: Exclusively for Empower Calgary operations.
  • Context: Payment follows the operational achievement of processing 80 tonnes per day at Empower Calgary.
  • Outstanding Grant: The company is focused on the final milestone of the $7.1-million ERA grant, which totals approximately $1.2 million (inclusive of prior holdbacks).
• Strategic Outlook:
  • Total capital raised via these initiatives: $1.74 million.
  • Goal: Bridge the company to operational break-even at Empower Calgary.
  • Strategy: Preference for non-dilutive bridge vehicles to focus on operations.

Notable Quotes

• "The combination of these various initiatives greatly assists with effectively conducting operations at Calgary Empower and at the corporate level... We plan to continue to secure capital on this basis in the short term to bridge the company to the point where production, revenues and the associated cash flows at Empower Calgary reach operational break-even. Aside from the warrants issued in the financing, non-dilutive bridge vehicles are preferred at this juncture of the company's growth capital formulation strategy as we ruthlessly focus on operations at Empower Calgary." — Greg Phaneuf, Vice-President, Corporate Development, and Chief Financial Officer