/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE
SERVICES OR DISSEMINATION IN THE UNITED
STATES/
VANCOUVER, BC and CALGARY, AB, May 28, 2024
/CNW/ - Northstar Clean Technologies Inc. (TSXV: ROOF) (OTCQB:
ROOOF) ("Northstar" or the "Company") is pleased to announce the
acceleration and closing of a non-brokered private placement of
US$1.8 million (the "Private
Placement") in three-year unsecured convertible debentures (each, a
"Convertible Debenture") of the previously announced US$10.0 million arm's length strategic investment
(the "Strategic Investment") from Allmine Paving LLC ("Allmine"), a
party and subsidiary of TAMKO Building Products LLC ("TAMKO"). In
addition, the Company is pleased to announce that Northstar and
TAMKO (together, the "Parties") have extended the Memorandum of
Understanding ("MOU") exclusivity period from three years to four
years and added a fourth facility to the Northstar development plan
in the United States ("US").
Strategic Investment Summary
As previously announced by the Company on July 31, 2023, TAMKO agreed to invest
US$10.0 million as part of the
Strategic Investment, composed of Phase 1 of US$6.4 million of preferred shares at
C$0.29 per preferred share ("Phase
1"), and Phase 2 of US$3.6 million in
two tranches of Convertible Debentures, each totaling US$1.8 million ("Phase 2").
- Phase 1: US$6.4 million
(C$8.5 million) of Preferred Shares
(closed on July 31, 2023)
- Phase 2: US$3.6 million of
Convertible Debentures to be purchased in two tranches and
conditional on the attainment of the milestone criteria agreed a
part of the Company's Emissions Reductions Alberta ("ERA")
contribution agreement as follows:
- Tranche 1: US$1.8 million payable when the Company
completes the ERA Milestone criteria for commissioning the Empower
Calgary Facility ("Milestone 3");
- Tranche 2: US$1.8 million
payable when the Company completes the ERA Milestone criteria for
operation of the Empower Calgary Facility ("Milestone 4").
As a result of the acceleration, Tranche 1 of US$1.8 million has now been completed following
the Company's completion of ERA Milestone 1 (detailed engineering
design) rather than Milestone 3 (Commissioning). Tranche 2,
scheduled to be completed following the Company's completion of
Milestone 4, remains unchanged.
As part of the Strategic Investment, the Parties executed the
MOU that included exclusivity for three years and an undertaking
for Northstar to develop three facilities in the US from which
TAMKO would offtake liquid asphalt and aggregate. As part of the
acceleration, the Parties have revised the existing MOU to extend
exclusivity to TAMKO by one additional year to four years and to
include a fourth US facility, at the mutual option of both
parties.
Mr. Aidan Mills, President &
CEO and Director of Northstar, stated, "TAMKO's support as a lead
order in our recent financing, the acceleration of the Phase 2
Strategic Investment from ERA Milestone 3 to ERA Milestone 1, the
joint selection of the first US location, and the exclusivity
extension and addition of a fourth US facility, demonstrates
TAMKO's ongoing and unwavering support for Northstar. These steps
are testament to TAMKO's confidence in our progress, our business,
and the de-risking that has been achieved since July 2023 when we closed the Strategic
Investment. We couldn't have asked for a better partner as we
continue to strive towards our goal of creating a circular economy
for discard and waste asphalt shingles."
Mr. Jeffrey Beyer, Vice President
and Chief Operating Officer of TAMKO, and Director of Northstar,
stated, "Northstar has made tremendous progress since July 2023, moving forward to achieve its
milestones as the Company nears commercialization of its innovative
technology. Our interest in the acceleration of this debenture was
based on Northstar's delivery of ERA's Milestone 1, the completion
of detailed engineering design for the Empower Calgary Facility,
our mutual agreement on the first US plant location, and the
extension of our own US market entry of a low carbon asphalt
product through extended exclusivity and a fourth facility. All
these elements give us confidence in Northstar's progress and their
ability to continue deliver on the business plan, objectives, and
milestones. We are excited about Northstar bringing the Empower
Calgary Facility online in the near-term and are looking forward to
working together with Northstar on its development plans for
the United States in 2025 and
beyond."
Acceleration of Phase 2 Securities
Initially, Phase 2 of the Strategic Investment contemplated
Tranche 1 to be conditional upon the completion of the third of
four milestones related to the government grant from ERA,
previously announced by the Company on February 13, 2023 and July
31, 2023. However, TAMKO and the Company have agreed to
accelerate Tranche 1 of Phase 2 of the Strategic Investment and
today have closed the Tranche 1 Private Placement of US$1.8 million.
As part of the Strategic Investment, and subject to the
completion of certain milestones by the Company that are tied to
milestones set out in the ERA grant announced by the Company on
February 13, 2023 and July 31, 2023, TAMKO agreed to purchase two
separate tranches of US$1.8 million
each, totaling US$3.6 million (the
"Principal Amount") of unsecured convertible debentures with a
three year term at 10% interest payable semi-annually in cash or
payment-in-kind (subject to TSX Venture Exchange ("TSXV") rules)
and convertible into units of the Company (the "Units") for no
additional consideration at a conversion price equal to
C$0.29 per Unit. Each Unit consisted
of one Common share in the capital of the Company (a "Common
Share") and one-half of one non-transferable Common Share purchase
warrant (each whole warrant, a "Warrant"). Each Warrant shall
entitle the holder thereof to purchase one additional Common Share
(each, a "Warrant Share") at a price of C$0.50 per Warrant Share with such Convertible
Debentures containing customary blockers and anti-dilution
provisions, until the maturity date, which is 36 months from the
date of issuance. The Convertible Debenture issued in Tranche 1
will mature on May 27, 2027 (the
"Maturity Date") and will bear interest at a rate of 10% per annum
commencing on the date of issuance, with such interest being
computed on the basis of a 360-day year composed of twelve 30-day
months, and payable in cash semi-annually in arrears on the last
day of June and December of each year, commencing on December 31, 2024. Any accrued but unpaid
interest may be converted by the holder of the Convertible
Debenture into Common Shares at a conversion price equal to the
market price in effect on such conversion day (subject to TSXV
rules).
In accordance with the terms of the Convertible Debenture,
twelve (12) months following the issue date, the Company may
provide the holder of the Convertible Debenture with notice of its
intention to prepay all or a portion of the principal amount
together with any accrued but unpaid interest. Within fifteen (15)
days from receipt of such prepayment notice, the holder must elect
to: (i) convert all of the prepayment amount into Units at a
conversion price equal to C$0.29 per
Unit; or (ii) accept the prepayment amount in cash as set out in
the prepayment notice.
There are no finder's fees payable on TAMKO's participation in
the Private Placement.
Use of Proceeds
The net proceeds received by the Company in connection with the
Private Placement will be used for development of the Empower
Calgary Facility, additional development for the facilities in
the United States, working
capital, and general corporate purposes.
The Private Placement remains subject to the final approval of
the TSXV. All securities issued in connection with the Private
Placement will be subject to a statutory four-month hold period in
accordance with applicable securities legislation.
None of the securities sold in connection with the Private
Placement will be registered under the United States Securities Act
of 1933, as amended, and no such securities may be offered or sold
in the United States absent
registration or an applicable exemption from the registration
requirements. This news release shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any
sale of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
About Northstar
Northstar Clean Technologies Inc. is a Canadian clean technology
company focused on the sustainable recovery and reprocessing of
asphalt shingles. Northstar has developed a proprietary design
process for taking discarded asphalt shingles, otherwise destined
for already over-crowded landfills, and extracting the liquid
asphalt for use in new hot mix asphalt, shingle manufacturing and
asphalt flat roof systems, and aggregate and fiber for use in
construction products and other industrial applications. Focused on
the circular economy, Northstar plans to reprocess used or
defective asphalt shingle waste back into its three primary
components for reuse/resale at its first commercial scale up
facility in Calgary, Alberta. As
an emerging innovator in sustainable processing, Northstar's
mission is to be the leader in the recovery and reprocessing of
asphalt shingles in North America,
extracting the recovered components from asphalt shingles that
would otherwise be sent to landfill.
For further information about Northstar, please visit
www.northstarcleantech.com.
On Behalf of the Board of Directors,
Aidan Mills
President & CEO, Director
Cautionary Statement on Forward-Looking Information
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this release. The
TSXV has neither approved nor disapproved the contents of this
press release.
This press release may contain forward‐looking information
within the meaning of applicable securities legislation, which
forward‐looking information reflects the Company's current
expectations regarding future events. Forward-looking statements
are often identified by the words "may", "would", "could",
"should", "will", "intend", "plan", "anticipate", "believe",
"estimate", "expect" or similar expressions. Forward-looking
statements in this press release include, but are not limited to,
statements concerning: (i) final acceptance of the TSXV of the
Private Placement; (ii) that Northstar is positioned well to
continue its next steps in the development of its Empower Calgary
facility; and (iii) the allocation of the use of net proceeds of
the Private Placement as anticipated. Such statements
are subject to risks and uncertainties that may cause actual
results, performance or developments to differ materially from
those contained in the statements, including risks related to
factors beyond the control of the Company as well as those risks
and uncertainties which are more fully described under the heading
"Risk Factors" in the Company's annual information form for the
year ended December 31, 2022 and in
the Company's annual and quarterly management's discussion and
analysis and other filings with the Canadian securities regulatory
authorities under the Company's profile on SEDAR+. Further, the
ongoing labour shortages, high energy costs, inflationary
pressures, rising interest rates, the global financial climate and
the conflict in Ukraine and
surrounding regions are some additional factors that are affecting
current economic conditions and increasing economic uncertainty,
which may impact the Company's operating performance, financial
position, and future prospects. Collectively, the potential impacts
of this economic environment pose risks that are currently
indescribable and immeasurable. Readers are cautioned that
forward-looking statements are not guarantees of future performance
or events and, accordingly, are cautioned not to put undue reliance
on forward-looking statements due to the inherent uncertainty of
such statements. These forward-looking statements are made as of
the date of this news release and, unless required by applicable
law, the Company assumes no obligation to update these
forward-looking statements.
SOURCE Northstar Clean Technologies Inc.