Cielo Waste Solutions Corp.

Good afternoon ladies and gentlemen and welcome to the CLO Waste Solutions quarterly investor update conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question and answer session. If you would like to ask a question during this time simply press star then the number one on your telephone keypad. If you would like to withdraw your question please press star then the number two. I would now like to hand the conference over to Mr. Ryan Jackson, Chief Executive Officer, and Ms. Jasdeep Dhaliwal, Chief Financial Officer of Cielo Waste Solutions. Please go ahead.

Thanks, Michelle, and welcome, everyone, and thank you for joining us today. Of course, Cielo is a waste-to-fuel environmental technology company, and today, or rather, as of July 31, 2022, And further to the press release that was issued on September the 30th, 2022, we'd like to provide a synopsis of the financial results for the three months ended July 31st. All of the amounts in the call will be in Canadian dollars. And of course, when we talk about quarterly, we're talking about a fiscal quarterly Q1. I'll turn it over to Jaz to go over the financial highlights.

Good afternoon, everyone. As Ryan mentioned, this is our Q1 quarterly financial results for the period ended July 31st, 2022. So just to do a brief overview of the financial results and as it was welcomed by the shareholders and by our investors, a quick review of the key events that happened within the quarter. So total assets decreased in Q1 by $19.7 million. in compared to April 30th, 2022. This decrease was in PP&E offset by an increase in cash and prepaids. As noted on our income statement, we had a $24.4 million write down or impairment of our assets related to decommissioning of the Alderside facility. Another significant event that happened that we'll touch on in detail in a little bit is Cielo completed a public offering of units issuing 139.6 million units at a price of 0.07 for gross proceeds approximately of 9.8 million. Total liabilities also decreased by 1.1 million. There's a decrease in accounts payable of 1.4 million offset by an increase of 0.1 million in long-term loans. Total non-current liabilities decreased by 2.3 million as of July 31st. And the net loss for CLO for the three month ended for July 31st was 27.6 million an increase of $24.6 million from 3.0 for the three months ended July 31st, 2021. The working capital of $9.0 million July 31st can be compared to $1.2 million at April 30th, 2022. We had financing costs in relation to the capital raised, the short-form perspective, which I will touch on, of $635,000. And other costs were G&A, $900,000 approximately, research and development $550,000, and as I mentioned previously, impairment loss of $25.3 million. Just want to touch on the two key events that we can speak to or transactions that were noted within the quarter. The first one was impairment. As noted in our May 2022 press release, phase two of the Alderside facility was paused due to inflationary period where the budget and the cost to proceed with phase two resulted in increase of double the expected capex. As previously stated, as you're aware, that Alderside facility was a retrofit of a previous biodiesel facility. Moving away from phase two does not impact our ability to move closer to commercialization. but rather takes us directly to the R&D facility to obtain economic data. From an impairment standpoint, though, the trigger in May 2022 was the fact that the assets in Alderside, we had to make an assessment on do they fit into a full-scale facility or R&D facility. Assessments completed by, led by Mr. Ryan Crothers, our EVP operations, resulted in an impairment of $25.3 million. Other questions we've been asked in relation to this, do want to take this opportunity to address frequently asked questions, is when we speak to an R&D facility and we're discussing a write-down of Alderside, are we starting from scratch? And our answer is no, we are not. As noted previously, we tested biomass, which is a wood-derived feedstock. We will be able to take the learnings or the data gathered and enhance that as we work on a scaled-down version in the R&D facility to obtain the necessary economical data. So another term that can be used in synonyms for R&D facilities is optimization. It's the last nine yards, the ability to measure the variables that can be changed at an R&D level in the optimization facility or the R&D facility are now feasible, which Alderside wouldn't allow us. And if we wanted to bring those metrics in, that's what phase two would have been. So that's the impairment piece that we wanted to highlight. The other significant piece for Q1 we'd like to highlight is the capital race that occurred in July. This was a milestone moment for CLOs. So to just our very sophisticated investors, but just want to walk through the process for the few, again, frequently asked questions we have in this area. The short-form perspective process was that a preliminary short-form perspective was filed and filed on CDAR. A question and answer, a disclosure review of all our public disclosures ensued with Alberta Securities Commission. We were able to successfully address their concerns and ensure our disclosures were in line and reflected the true operations and strategic vision of Cielo. As noted in the short-form perspective, under the use of Proceed, we outlined what the use of the proceeds from this raise will be, which is predominantly the R&D facility and minimal support on the GNA, the corporate expenses side. This, to our firm perspective, was filed in Alberta, BC, and Ontario. And in Ontario, investors who could participate in this jurisdiction did. And this was a milestone moment for Cielo because that enhanced review, that additional review of our public disclosures was essential for Cielo because it showed that we do have a strategic plan, a vision, and having the support of the Alberta Securities Commission helped solidify our strategic vision. Those were the top two events we can note. And as mentioned, the use of proceeds is outlined in the short-form prospectus. So as we've been making strategic decisions throughout this quarter and in future quarters, we keep in mind that the use of proceeds from this raise are predominantly for the R&D facility. Other aspects of our results to mention, just because the questions do arise, are quarterly financials are reviewed. It is not an audit completed by KPMG. And other than that, the net loss as previously mentioned was $27 million. noted on the financial statements. Ryan, if nothing further, I'll pass it back to you.