Cielo Executes Binding LOI to Advance Clean Fuels Project Development Through Strategic Asset Acquisition and Concurrent Financing

Executive Summary

• Cielo Waste Solutions Corp. signed a binding LOI to acquire 100% of Canadian Discovery Ltd.’s proprietary project‑development and evaluation assets for an approximate purchase price of CDN $2.6 million, payable in 17,333,333 common shares at $0.15 per share.
• Concurrently, Cielo is conducting a private placement financing of up to CDN $1 million, issuing ~16.67 million units at $0.06 each (each unit = 1 common share + 1 warrant to purchase a share at $0.15 for 48 months).
• Proceeds from the financing will be used to advance Project Nexus – a sustainable aviation fuel facility in Prince George, BC – and for general working capital.

Key Details

• Acquisition Structure
• Assets: proprietary databases, models, analytical tools, technical reviews, and related IP for renewable/low‑carbon fuels.
• Consideration: 10,000,000 shares issued at closing (subject to a 12‑month hold period) + 7,333,333 shares placed in escrow, released on an earn‑out basis over 36 months contingent on milestone performance.
• Hold periods: statutory 4‑month hold plus additional 8‑month hold for a total of 12 months; escrowed shares subject to performance‑based release.

• Standstill provisions: CDL and its principals barred from trading the consideration shares or financing units for 24 months post‑closing.

• Closing Timeline

• Anticipated closing of acquisition in March 2026, subject to due diligence, execution of definitive agreements (APA), customary closing conditions, and regulatory approvals including TSX Venture Exchange consent.

• Board Appointment

• Upon or shortly after closing, Kaush Rakhit (Executive Chairman of CDL) will be appointed as a director of Cielo, pending standard eligibility and exchange approvals.

• Financing Terms

• Private placement size: up to CDN $1,000,000.
• Units issued: ~16,666,666 at $0.06 per unit.
• Unit composition: 1 common share + 1 whole‑share purchase warrant (exercise price $0.15, exercisable for 48 months).
• Participants: principals of CDL and certain Cielo insiders (related‑party transaction exempt from MI 61‑101 valuation/approval thresholds).

• Hold period on securities: 4 months + 1 day from issuance.

• Use of Proceeds

• Continue development and early‑stage engineering of Project Nexus (sustainable aviation fuel facility in Prince George, BC).
• Fund regulatory and incentive application work.

• General working capital.

• Transaction Rationale

• Acquisition provides Cielo with internal technical, economic modeling, and project‑evaluation capabilities to accelerate Project Nexus and build a scalable “Nexus Platform” for future clean‑fuels projects.
• Financing supplies the capital needed to move Project Nexus forward without diluting existing shareholders beyond the agreed terms.

Notable Quotes

• Ryan C. Jackson, CEO, Cielo: “This transaction is expected to conclude Cielo’s restructuring chapter and mark our full entry into execution… By internalizing these capabilities, we will have built the technical and commercial foundation required to advance Project Nexus and systematically develop future projects with speed, discipline, and capital efficiency.”
• Kaush Rakhit, Executive Chairman, Canadian Discovery Ltd.: “Cielo’s focus on advancing Project Nexus and building a scalable waste‑to‑fuels platform made it a natural fit. We believe they will be most impactful when fully integrated into an active development organization with clear execution objectives.”