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Cielo Waste Solutions Corp. (CMC.V)

TSXV - TSXV Real Time Price. Currency in CAD
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0.0900+0.0050 (+5.88%)
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  • g
    gary
    Someone asked about a Rights Offering

    Quite simply, it is a Right provided to existing shareholders to participate in a new share offering at same price and terms as offered new investors. It is typically an anti dilution clause that allows existing shareholders, if they choose, they are not obligated, to put more money into CMC at same price and with warrants as announced a few days ago.

    The problem is that CMC may not want to go through the cost and hassle of preparing documents with the securities regulators and then sending out to existing shareholders etc. plus it takes time and probably easier for CMC to close the $8.5M deal with a few new investors rather than raising small dollar amounts from hundreds of shareholders who may or may not select to participate.

    Will be interesting to see what Ryan says on next call, although if I was wagering, I suspect he will say it was too costly and time consuming to go forward with a Rights Offeting.

    See what happens

    Gary
  • g
    gary
    Just got off a 57 min call with Ryan. I asked and he agreed I could record the discussion. Let me decompress and listen to his answers again. I was able to get most of the questions you all submitted into our discussion.

    I’ll circle back later with a more detailed overview and responses.

    Have a great day

    Gary
  • R
    RVH
    Gary…..thanks again for all the hard work you have put in to keep us novice retail investors up to speed. We are lucky to have someone who is both retired (has the time) and experienced and extremely knowledgeable on these matters. Next meeting at kings landing I’ll buy you the first beer! 🍻
  • s
    stone
    Did anyone here ever buy a lemon of a car when they were young? Then someone like your Dad told you to let it go and "do not throw good money after bad".
    Do not throw good money after bad here. You bought a lemon.
  • g
    gary
    Ryan call

    Part 2

    Medicine Hat facility is still a go. The sign blew down in high winds and due to location and proximity to road, the Ministry asked for its removal.

    The $500K grant for railroad tie recycling is still sitting as a provincial shelf grant.. still fully available .. once CMC completes FS R&D facility, it can them proceed with places like Medicine Hat.. probably 18 months away.

    As for Aldersyde

    1. The process does work, but not with current equipment very well. They are making bio diesel. I suggested they might have 30,000 litres on hand ( Ryan said more than that). I suggested it would be symbolic to show some revenue ( even if small) for retail investor from this 30,000+ inventory. Ryan agreed and said revenue $ should be coming very soon.

    I expressed deep frustration and anger amongst retail investors about mis truths and guidance by Don. Ryan did not disagree with sentiment, but characterized Don as being over exhuberant.,Ryan said that while spending was high, Gregg left the engineering process in very good shape, and strong engineering team to carry on in his absence, THe R&D facility was Gregg’s initiative, and is critical to CMC future. I asked about catalyst and the Chinese problem from last year.. unfortunately I got side tracked and I don’t think I ever got an answer about the current state of the catalyst.

    I mentioned ( I laughed) that several investors want me on the Board. Ryan said he wants to expand Board at next Annual General Meeting (AGM) in September,,and that he would gladly review my background. He said the right things about transparency and candour with shareholders. Hard to know if it is just lip service or sincere.. only time will tell.

    Part 3 to come …
  • g
    gary
    Ryan call

    Part 4

    Overall, Ryan is a polished business guy. He is smart enough to know where the landmine questions are, and to avoid tripping up and run afoul of securities laws

    I don’t think we will ever know what exactly happened behind the scenes with Gregg and the Board.. I would just chalk it up to a difference of opinion. To waste more energy is fruitless.

    Timing of the Echelon announcement is suspect IMO. I have a hard time believing that the 7 cent number wasn’t known or discussed ahead of the June 13th conference call when Ryan made his undervalued comment. However, unless one Launches a lawsuit and documents are provided through Discovery, I doubt we will ever know the true story. Also, what good would that do right now? Only distract mgmt from job at hand if legal was launched.

    Based on my experience, I am giving Ryan a 7/10 benefit of the doubt to prove himself.

    This financing is highly unfavourable to existing shareholders. I gave him an idea to put forth a Rights Offering to allow existing shareholders to participate at same price as new investors. Doesn’t change the past or guarantee the future, but let’s see if Ryan and the Board agree to allowing existing shareholders to get the same deal.. doesn’t cost CMC anything to allow existing the right ( but not the obligation) to tender your the deal.

    IMO, if Ryan says he wants to improve credibility and trust step by step, allowing existing shareholders to join the deal is a first step in that trust rebuild.

    Let’s see what happens

    All for now

    Gary
  • g
    gary
    Ryan call… I will do this in Parts as to keep track of info, and more readable… might take me a day to get all info out

    Part 1.

    I asked what day Greg/Chris “resigned”. I was told on or about the evening of June 6th. I immediately jumped all over that and asked why a Material Adverse Change ( MAC) was kept from being disseminated until June 13th.. I said I felt that was a violation of securities laws by CMC for not informing the market sooner.

    Ryan kinda fumbled for an answer but said there were ongoing discussions that week with Gregg/Chris to stay on as the Echelon financing discussions were underway. Once Gregg resigned, that caused a major mess with Echelon who said they might decide to walk away from CMC as it is a mess.

    Ryan indicated that the Board went to Echelon to raise capital, as the spending rates and cash depletion were too high. I questioned this as the April update said the company was refocusing on the FS R&D facility, and could complete with cash on hand

    Ryan agreed, but mentioned very high spending on G&A that was a concern for the Board. Ryan cannot disclose why Gregg left ( I didn’t ask because I already knew he could not disclose) but this is what I infer happened based on CMC news and my experience

    1. CMC engaged Ecehlon to raise capital and provide financing guidance

    2. Either Evhelon or the Board became very concerned about high cash burn rates at Aldersyde to fix problems

    3. In all likelihood, Gregg and the Board disagreed on next strategic and cash burn steps . So, either Gregg resigned voluntarily, or was terminated ( but allowed to say he resigned.. this occurs a lot with executives)

    4. Echelon announced a MAC with Gregg leaving, and threaten to walk away from deal. I suspect that the Board negotiated for Evhekon to not abandon the process, but the price per share and sweetners ( warrants) were unfavourably repriced to get the deal to happen.

    When i pushed Ryan on his undervalued comment on June 13th before market opened ( stock closed at 14 cents on the Friday), he stands by his undervalued comment at even 20 cents.. ( every CEO I ever met always thinks their stock price is too low). Ryan agrees 100% that 7 cents is very unfair for current shareholders, but CMC needs to raise capital and the whole Gregg situation was terrible timing.

    Ryan through Reliable U have invested almost $7M into CMC; although they have securitized their investment other than ways. He personally has put about $600K into CMC, and will add more

    He would not divulge how much he and Board members are putting in of the $8.5M.. I pressed him to give me a range.. I could not get an answer.

    I asked him to consider Share Purchase Rights for all shareholders where they can choose to put in more $ at same price, terms and conditions as new investors through the Evhelon. He said that was an excellent idea and he will suggest to Ecehlon. I am not sure it will be accepted, but I tried.

    Overall, on financing, the company was spending too much $ on Aldersyde to fix, I suspect caused disagreements with Gregg on speed and path of spend, Gregg leaves and causes the Echelon process to be thrown into turmoil.

    Part 2.. to come
  • a
    arty
    Maybe cmc should sell the edmonton plant and move the tiny r&d unit down to alderslyde. That would self fund them.....

    There really is no reason for them to have the land at this point.

    Hell sell alderslyde as well and just enter a monthly lease for a small shop properly zoned for the mini plant r&d.

    Perhaps they can cut costs even further and just get some grad students at u of c to do this as a thesis project. At least we would know it would get completed on time. Students only have so much time to submit their research!
  • g
    gary
    Ryan call

    Part 3

    We discussed plastics and Ryan said that will be their number 1 focus of R&D facility. He acknowledged he is not an engineer ( nor chemist .. said he failed Grade 11 chemistry lol), he thinks that plastics should be easier than wood mass as it already is a petroleum based product.

    Logically that makes sense but I’m not sure we should take his comment at anymore than just a non chemist comment.

    One thing that did surprise me was that CMC now has to pay a waste disposal cost on its wood mass processing at Aldersyde. I didn’t ask for details, as it kinda doesn’t matter, but Ryan implied they do pay for waste removal rather than it being a freebie.

    I pushed him hard on the economics of Aldersyde, and whether it is uneconomical on a variable or full cost basis. He said full cost based on current equipment and configuration of processing. While better thanks to Gregg’s and team effort, the Aldersyde facility as currently built will never be profitable. To much retrofitting.

    Ryan reiterated that the R&D facility that CMC needs is so critical to determine best plant configuration and various cost drivers.

    He specifically mentioned that CMC has evolved from a “ bench experiment” , ( I read that to mean U of Calgary) to a “ science experiment “ ( Aldersyde) to a commercial venture..he again mentioned different skill sets for various stages of a corporate life.. (I 100% agree with that statement)… he and Board are focussed in taking CMC commercial within next 18 months.

    I pushed him hard on how long to get R&D results.. he said 12 months is reasonable, 18 to 24 of things go badly. ( take this with a grain of salt.. forecasting timelines is a Muggs game at best!)

    He reiterated again need for capital. I again asked if CMC was on verge of bankruptcy due to low cash. He said No, but once financial results are released shortly, we will see the cash burn at Aldersyde the Board felt was no longer tenable. This is where I think Gregg and Board possibly differed in Aldersyde strategy and hence why he “ resigned”

    In closing the call, I indicated there are a lot of very upset retail investors and CMC credibility is basically zero. He agreed that cMC needs to execute better, and he committed to transparency. Again.. nice words .. need to see actions going forward. I mentioned that a Class Action lawsuit against Directors is a risk going forward. He didn’t say anything in response to my comment.
  • g
    gary
    Phone call with Ryan confirmed for Monday morning:

    Send me any questions you want asked and I’ll try to get them in.
  • m
    madhattertoo
    I attended the groundbreaking of the Medicine Hat Cielo plant, I suspect this was never going to be built. The location was at the intersection of the TransCanada Hwy and Hwy 41, an existing dangerous intersection, while being wedged immediately south of the CPM mainline, with a level crossing on Hwy 41. There was no existing access to the property, the groundbreaking access used CPR property. An Alberta Transportation weigh scale is 1/2 mile (estimate) to the east. I have some experience with developing property adjacent to major Alberta highways. I do not believe Alberta Transportation would have approved this site due to setbacks and access so close to a major intersection. I also checked the County of Cypress website for development permit information. I couldn’t find any. It may have existed as construction was to start in 3 or 4 months after the groundbreaking. Don posted a grainy plan layout, but was of such poor quality I could not identify the access points. Some time in the past someone mentioned the sighs were missing, someone speculated the wind blew it down. I have driven by the site, there doesnt area to be any debris, I believe I the poles were remove not blown down
  • s
    stone
    Look at the volume. Look at the price movement.
  • s
    sam
    😭 i got it at 47. Its 9 now what should i do 😢 any hopes?
  • g
    gary
    A few on here have suggested I join the Board.

    First, thanks for the flattering view of support, but that’s not how joining a Board works.

    First, one has to be asked by the Chair ( Don Allan) to join. One can join between Annual General Meetings (AGM) if asked, but every year at the AGM, the power to continue as a Director rests with each shareholder who has the right to vote their shares Yea or Nay for each nominated Director. So even if Don Allan asked me to join midstream, the shareholders at the AGM decide whether I continue or not.

    More importantly, being a Director has liability issues that must be considered, and experience issues too. Other than my CFO experience, what experience from an engineering, chemistry, government relations etc do I really bring to the table? CMC needs well rounded Directors. I’m not sure I would add that much to the group.

    Finally, a Director is very limited in what they can say publicly and when they can say it. There is zero chance I could post anything on here, for example, if I was a Director. And if I had inside information on something ( good or bad) within CMC, there is no way I could “ tip off” those who read this thread. I would be effectively silenced on here.. good or bad.

    Anyway, I haven’t been asked to join the Board. If I am, I will give it due consideration, but realize my voice on here ( or during conference calls), will be silenced should I ever become a CMC Director.

    That’s just how these things work.

    Gary
  • G
    G
    so long
  • g
    gary
    Wow.. tough crowd.. 4 down votes on my simple explanation about Board of Directors.. just shows you how negative some are!
  • j
    justtrying
    Hmmm no news , and climbing, a little pre mature
  • g
    gary
    I want to be crystal clear. I had a brief email exchange with someone that is very familiar with the inside technology at CMC. I promised not to reveal my source, and I won?t.They told me nothing about this financing. In a nutshell, they indicated the technology does work, is very hard to get right, and needs lots of experienced talent to bring to fruition at scale. The R&D lab will really help inform CMC on how to do it correctly, rather than retrofit an old facility. But learnings From Aldersyde are helpful to avoid making mistakes twice.That is why I said I heard some news that was positive ( ? the technology works?) but still a ways time before any real commercialization occurs.. a complete disconnect from what Don was touting last year.One can look at this financing two ways:1. CMC is in desperate financial straits and might just succeed in raising $8.5M? btw.. there is no guarantee it will happen . Echelon is working on a ? best efforts? basis to close the transaction. I fully expect additional concessions ( ie dilution or price) could be required before the deal closes. But assuming it does close, CMC now has capital to build Fort Sask and begin to capture data. Without FS, CMC Is out of business.,So this financing is like throwing a life line to a drowning man.. maybe it helps dave them from death ( ie bankruptcy).. maybe not2. This financing is just a chance for some select few to load up on a whack of shares ( and warrants) at an average cost of about 7.5 cents ( approximate) and then with a few positive stories, the share price bumps up.. think about it.. at 20 cents which was the price only a few weeks ago, these Echelon investors would have a 3 bagger! What really #$%$ me off is Ryan touting the ? deep undervalued? share price several times earlier this week, with full knowledge he is doing a new financing at 7 cents.. this is when the stock closed at 14 cents last Friday? that?s blatant market manipulation to existing shareholders, and a violation of securities laws ( iMO)I won?t hesitate to let Ryan know I?m watching this like white on rice. I lost on paper over $1M on CMC so far.. I accept this paper loss and I don?t blame anyone. I make my own decisions and I win and lose accordingly. However, blatant mis guidance on a conference call to retail investors is a completely different story. Especially since it is obvious that management and the Board will participate at 7 cents pricing! This latest situation has a Class Action lawsuit written all over it. Best to allGary
  • T
    Tipster
    Down 3 mill, time to meet at a bar again and look at garys phone
  • B
    Brendan
    First post here, have been watching this forum for a while. Own 150k shares of Cielo. Assuming Gary is telling the truth (not sure why he would lie) Ryan saying 12 months is a reasonable amount of time to have results from Plastic Testing at Fort Sask is incredible. It would be nice if Ryan incorporates something like that in the next release they do. Once they announce that they’re even testing on plastic this will rise to .50 CAD