Northstar Clean Technologies announces $14M royalty transaction with CVW CleanTech

NORTHSTAR ANNOUNCES $14.0 MILLION ROYALTY TRANSACTION WITH CVW CLEANTECH (CNW Group/Northstar Clean Technologies Inc.)

VANCOUVER and CALGARY — Northstar Clean Technologies Inc. announces that it has entered into a definitive agreement with CVW CleanTech Inc., pursuant to which CVW CleanTech will provide Northstar with $14.0 million in funding through a five-year 10.0% second secured convertible debenture into revenue royalties on two Northstar facilities.

The Transaction will be separated into two funding tranches from CVW CleanTech to Northstar:

• $1.5 million has been advanced by CVW CleanTech for a five-year 10% unsecured debenture issued by Northstar that is convertible into a royalty agreement applicable to the next Northstar operating facility after the Calgary facility.
• An additional $12.5 million, subject to certain conditions precedent, including CVW CleanTech completing an equity financing prior to September 30, 2024, and Business Development Bank entering into a Subordination Agreement with Northstar and CVW and regulatory approvals, at which time the Initial Debenture will be replaced by the Royalty Debenture in the amount of $14.0 million.

Mr. Aidan Mills, President & CEO and Director of Northstar, stated, “The proposed Transaction with CVW CleanTech will be transformational for Northstar. Firstly, the closing of the $14.0 million in funding will rapidly accelerate the development of our next two facilities and reduce Northstar’s requirement for near term equity capital raising to fund our growth. Secondly, the Transaction will add considerable financing optionality to the Northstar development program, offering Northstar the option, but not the obligation, to work with CVW CleanTech to add royalty financing to future facilities. Finally, the Transaction will add a long-term partner in CVW CleanTech who has both technical expertise and support from the entrepreneurs that make up its leadership team.”

The funding will allow:

• Immediate funding of Northstar development program for Empower 3 and Empower 4
• Increased flexibility managing working capital for Empower Calgary and Northstar development costs
• Deal structured without equity dilution or warrants issued
• Long-term, five-year investment by CVW CleanTech, convertible into royalties on operating facilities