Cielo's Strategic Debt Conversion: A Path to Long-Term Growth

Cielo Waste Solutions Corp. (TSXV:CMC; OTCQB:CWSFF) has announced a strategic move to settle approximately CAD $2,000,000 in debt by way of share issuance, subject to the approval of the TSX Venture Exchange (the "Exchange"). This Shares for Debt Transaction is a significant step towards reducing Cielo's debt burden and improving its financial position.

The Company has agreed to issue 26,984,126 common shares at a price of $0.07 per share to settle the debt. Upon approval and issuance, the Repayment Shares will be subject to a hold period of 4 months. Additionally, 12,000,000 non-transferable bonus warrants had been issued in August 2021 as an inducement for the loan, and another 2,000,000 Bonus Warrants will have their term reduced to the date that is 90 days following the completion of the Shares for Debt Transaction.

This Shares for Debt Transaction brings several strategic values to Cielo's long-term growth prospects:

1. Reduced Debt Burden: By converting CAD $2,000,000 of debt into equity, Cielo reduces its debt burden, which improves its financial position and liquidity. This allows the company to focus more resources on its core operations and growth initiatives.
2. Lower Interest Payments: The repayment of a portion of the loan reduces the interest payments Cielo has to make, freeing up capital that can be reinvested into the business. This is particularly important as the interest reserve period ends in August 2022, and Cielo will have to start making additional monthly interest payments.
3. Alignment of Interests: The conversion of debt into equity aligns the interests of the lenders (FCF and KV) with those of Cielo's shareholders. This can lead to a more collaborative relationship and potentially better support for Cielo's long-term growth plans.
4. Potential for Future Financing: The successful completion of this Shares for Debt Transaction may make it easier for Cielo to secure future financing, as it demonstrates the company's ability to manage its debt and attract investors.
5. Dilution Mitigation: Although the issuance of new shares dilutes existing shareholders, the strategic value of the transaction outweighs the dilution. The reduced debt burden, lower interest payments, and alignment of interests contribute to Cielo's long-term growth prospects, which can ultimately benefit all shareholders.



In conclusion, Cielo's Shares for Debt Transaction is a strategic move that reduces the company's debt burden, lowers interest payments, aligns interests, and opens doors for future financing. While there may be some dilution for existing shareholders, the long-term benefits of this transaction outweigh the short-term impact. As Cielo continues to execute on its growth initiatives, this strategic move positions the company for long-term success.