CVW CleanTech Announces Maiden Royalty Investment into Northstar Clean Technologies and $15 million Brokered Private Placement

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CALGARY, Aug. 7, 2024 - CVW CleanTech (TSXV: CVW) (OTCQX: CVWFF) ("CVW CleanTech" or the "Company") announced today that effective today it is entering into a royalty investment with Northstar Clean Technologies Inc. (TSXV: ROOF) (OTCQB: ROOOF) ("Northstar") pursuant to which the Company has agreed to purchase a five-year $14 million second secured 10% convertible debenture of Northstar (the "Convertible Debenture"), which will be convertible into a revenue royalty on Northstar's next two asphalt shingle reprocessing facilities (the "Transaction"). Upon conversion of the Convertible Debenture, and pursuant to the terms of the royalty agreement, CVW CleanTech is entitled to receive recurring royalty payments based on revenues at Northstar's next two facilities, which will be no less than 12% of such revenues. In connection with the Transaction, CVW CleanTech has made an initial payment to Northstar in the amount of $1.5 million. The Transaction is expected to close on or around September 30, 2024.

CVW CleanTech also announces that it has entered into an agreement with Canaccord Genuity Corp. and Eight Capital to act as co-lead agents and joint bookrunners, on behalf of a syndicate of agents (the "Agents"), which also includes Ventum Financial Corporation, in connection with a "commercially reasonable efforts" private placement offering (the "Offering"), consisting of up to 16,666,667 common shares (each, a "Common Share") at an issue price of $0.90 per Common Share (the "Offering Price") for total gross proceeds of up to $15 million. CVW CleanTech has also granted the Agents an option, exercisable in whole or in part, prior to the closing of the Offering, to sell up to an additional 15% of the Common Shares offered under the Offering ("Agents' Option"). Proceeds from the Offering will fund the Transaction and associated costs. The Offering is expected to close on September 5, 2024.

Directors and Special Advisor to the Company Pierre Lassonde are supportive of the Transaction. The Offering is anchored by Mr. Lassonde who intends to personally invest $1,000,000 bringing his ownership in the Company to approximately 8% of the Company. Certain directors of the Company have committed an additional $1,750,000 to the Offering. The Offering is supported by a robust president's list including Pierre Lassonde, Darren Morcombe, other board members and management as well as a Canadian long only fund totaling approximately $9,000,000.

"At CVW CleanTech, our vision is to accelerate clean technologies that sustainably recover valuable commodities, helping drive the world's move to net zero," said Darren Morcombe, Chairman of the Board at CVW CleanTech. "We see a significant market opportunity for CVW CleanTech to partner with clean technology operators and provide strategic financing via royalty structures to create a leading, diversified royalty platform in a sector with strong macroeconomic tailwinds alongside the immense value we expect to create through the commercialization of our own Creating Value from Waste™ technology."

"We are delighted to announce our maiden royalty transaction, and are very pleased to have Northstar Clean Technologies as our first royalty partner. As we diversify our company into a clean tech royalty platform, it presents a transformative opportunity to create shareholder value and accelerate growth," said Akshay Dubey, CEO of CVW CleanTech. "This first royalty transaction clearly illustrates the significant opportunity to provide our shareholders with positive commodity-linked returns by investing alongside clean technology companies supporting the decarbonized and circular economy while generating strong returns and accelerating cash flow generation."

Northstar has developed a patented, proprietary process to recover liquid asphalt (effectively bitumen), aggregate, and fiber from end-of-life and waste asphalt shingles, which would otherwise be destined for landfills. Northstar's unique revenue model includes receiving tipping fees from the collection of asphalt shingles as feedstock supply, alongside sales of liquid asphalt, aggregate and fiber. Northstar's proprietary clean technology has been significantly de-risked by the advancement of its pilot plant in Delta, British Columbia. Northstar is currently constructing a commercial asphalt shingle reprocessing facility in Calgary, Alberta which is expected to commence commissioning by the end of 2024. Northstar has significant expansion plans across Canada and the United States.

Akshay Dubey continued "At the same time, we continue to enthusiastically pursue the commercial deployment of our proprietary Creating Value From Waste™ ("CVW™") technology. The CVW™ technology is a Tier 1 opportunity advanced to the precipice of commercialization, potentially offering tremendous value to our investors with the ability to generate consistent long-term cash flow streams. We believe diversifying into other clean technologies will strengthen our financial position as we pursue the commercial deployment of our proprietary technology."

According to Aidan Mills, President and CEO of Northstar, "The proposed Transaction with CVW CleanTech will be transformational for Northstar. Firstly, the closing of the $14 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 reputable and sophisticated long-term partner in CVW CleanTech who has both technical expertise and support from the highly successful entrepreneurs that make up its leadership team."

In connection with the announcement of its first royalty transaction, CVW CleanTech has updated its website and investor presentation. Investors are encouraged to view the Company's updated materials which can be found at www.cvwcleantech.com.

Terms of the Transaction

Upon announcement of the Transaction, CVW CleanTech has purchased from Northstar an initial five-year unsecured convertible debenture (the "Initial Convertible Debenture") in the amount of $1.5 million. Subject to closing of the Transaction, the Initial Convertible Debenture will be replaced by the larger $14 million Convertible Debenture. The closing of the Transaction is conditional on, among other things, the Company raising not less than $12.5 million in net proceeds under the Offering.

The Convertible Debenture is second lien secured with protections afforded via an intercreditor agreement and a security interest in Northstar's present and after-acquired property. The Convertible Debenture carries a 10% annual coupon rate, with semi-annual interest payments, and a five year term to maturity. Northstar has the option to capitalize the coupon payments for the first three years from the closing of the Transaction.

The royalty percentage will be determined at the conversion date based on the principal amount of Convertible Debenture outstanding at the time, and therefore will increase proportionally with the amount of interest capitalized by Northstar prior to conversion. The Convertible Debenture will automatically convert in two tranches into royalties once either of the next two facilities of Northstar reach agreed-upon volume and revenue thresholds. Upon conversion of the Convertible Debenture, CVW CleanTech will receive a royalty of no less than 12% on the revenue of each of Northstar's next two commercial facilities. In the event that Northstar does not reach agreed-upon volume and revenue thresholds within three years from the closing date of the Transaction for their next two operating facilities, CVW CleanTech may, at its sole discretion, convert half the Convertible Debenture into a royalty on Northstar's Calgary, Alberta facility. Royalty payments to CVW CleanTech are subject to a fixed charge coverage ratio test on the given facility, and any unpaid amounts would accrue for future payment.

The Offering is subject to the receipt of all necessary regulatory approvals including the final approval of the TSX Venture Exchange. All Common Shares issued in connection with the Offering will be subject to a statutory hold period expiring four months and one day following the closing date of the Offering.

Certain subscribers under the Offering are considered to be a "related party" of the Company. Each subscription by a "related party" of the Company is considered to be a "related party transaction" for purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Pursuant to MI 61-101, the Company will file a material change report providing disclosure in relation to each "related party transaction" on SEDAR+ under the Company's profile at www.sedar.com. The Company is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The Company is exempt from the formal valuation requirement in section 5.4 of MI 61-101 in reliance on sections 5.5(a) and (b) of MI 61-101 as the fair market value of the transaction, insofar as it involves interested parties, is not more than the 25% of the Company's market capitalization, and no securities of the Company are listed or quoted for trading on prescribed stock exchanges or stock markets. Additionally, the Company is exempt from minority shareholder approval requirement in section 5.6 of MI 61-101 in reliance on section 5.7(a) as the fair market value of the transaction, insofar as it involves interested parties, is not more than the 25% of the Company's market capitalization. The Offering was approved by the board of directors of the Company.

The Common Shares being offered pursuant to the Offering have not been, nor will they be, registered under the U.S. Securities Act and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons 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 Common Shares in any state in which such offer, solicitation or sale would be unlawful. "United States" and "U.S. person" are as defined in Regulation S under the U.S. Securities Act.

About CVW CleanTech

CVW CleanTech's vision is to invest in innovative technologies which provide returns linked to commodities and which operate in a sustainable manner that helps accelerate the world's transition to net zero. CVW CleanTech is in the process of building a portfolio of royalty-based cash flow streams by partnering with clean technology innovators in the commodity space. CVW CleanTech is the 100% owner of its proprietary technology, Creating Value from Waste™ ("CVW™"), which is designed to recover bitumen, solvents, critical minerals, and water from oil sands froth treatment tailings, which would reduce tailings pond fugitive methane emissions, volatile organic compounds ("VOCs"), and enhance tailings management.

About Northstar Clean Technologies

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.

Disclosure Regarding Forward-Looking Information

This news release contains forward-looking statements and information within the meaning of applicable Canadian securities laws (collectively, "forward-looking information") that reflect the current expectations of management about the future results, performance, achievements, prospects, or opportunities for CVW CleanTech (the "Company").

Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "possible" and similar expressions, or statements that events, conditions or results "will", "may", "could" or "should" occur or be achieved. The forward-looking statements may include statements regarding the intention to complete the Offering and the expected use of proceeds of the Offering, the issuance of the Common Shares, the expected closing dates of the Offering and the Transaction and the Company's objectives, goals or future plans, the potential for the Transaction and the Company's royalty investment strategy to create value, the terms of the Transaction, including the proposed royalty percentages and the facilities subject to such royalty, expected deployment and results of deployment of CVW™ technologies, the adoption of CVW™ technologies by industry participants, estimated recoveries, environmental impacts, benefits and financial results from the implementation and adoption of CVW™ technologies, the prospective terms of the involvement of joint venture and the of the proposed joint venture and all other statements regarding the benefits and implications of the implementation of our technologies and the joint venture or other statements that are not statements of fact. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company may differ materially from those reflected in forward-looking statements due to a variety of risks, uncertainties and other factors. For the reasons set forth above, investors should not place undue reliance on forward-looking statements. Important factors that could cause actual results to differ materially from the Company's expectations include: binding agreements in respect of the joint venture may never be entered into or on the terms set forth in the non-binding agreement; adoption or use of the Company's technologies by industry participant; the ability to advance the technologies of the Company on a timely basis or at all; reliance on estimates prepared by third parties; current estimates and predictions being based on certain assumptions about the industry in which the Company operates and macroeconomic conditions generally; uncertainties in the timing and receipt of regulatory and exchange approvals; uncertainties involved in disputes and litigation; fluctuations in interest rates, commodity prices, currency exchange rates, and other financial conditions, and the resultant effect on viability of investments; changes in the availability, and cost, of technical labour required for our business; price escalation and/ or inflationary pressures affecting the cost of equipment and material required to commercialize our projects; the uncertainty of estimates of capital and operating costs; the need to obtain additional financing and uncertainty as to the availability and terms of future financing; the impact on the Company of increasing inflation; and other risks and uncertainties disclosed in other information released by the Company from time to time and filed with the appropriate regulatory agencies.

All forward looking statements are based on the Company's beliefs and assumptions which are based on information available at the time these assumptions are made, and is necessarily based upon a number of assumptions that, while considered reasonable by the Company, are inherently subject to significant operational, business, economic and regulatory uncertainties and contingencies. The Company has made the following assumptions in relation to the forward-looking statements in this press release: the successful conclusion of the Offering on the terms as announced; the Transaction and the Company's royalty investment strategy will be successfully implemented and will create value for the Company,; that there will be adoption by industry participants of the Company's technologies; the expected environmental and economic benefits to be achieved from CVW™ technologies; the ability of the Company to successfully access various government funding programs; reliance on economic estimations prepared and assumptions made by third parties; that the Company will continue to be able to protect its intellectual property and proprietary technologies; assumptions as to various market and commercial opportunities for the Company and its technologies; and the ability of the Company to continue to develop and commercialize its technologies. The forward-looking statements contained herein are as of the date set out above and are subject to change after this date, and the Company assumes no obligation to publicly update or revise the statements to reflect new events or circumstances, except as may be required pursuant to applicable laws.

Although management believes that the expectations represented by such forward-looking information or statements are reasonable, there is significant risk that the forward-looking information or statements may not be achieved, and the underlying assumptions thereto will not prove to be accurate. Actual results or events could differ materially from the plans, intentions and expectations expressed or implied in any forward-looking information or statements, including the underlying assumptions thereto, as a result of numerous risks, uncertainties and factors including: failure to complete the Offering on the terms as announced or at all; failure to derive benefits form the Transaction and the Company's royalty investment strategy; failure to receive regulatory approvals required for the transactions described in this news release; failure to enter into agreements with industry participants; ; the possibility that opportunities will arise that require more cash than the Company has or can reasonably obtain; dependence on key personnel; dependence on corporate collaborations; potential delays; uncertainties related to early stage of technology and product development; uncertainties as to fluctuation of the stock market; uncertainties as to future expense levels and the possibility of unanticipated costs or expenses or cost overruns; and other risks and uncertainties which may not be described herein.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE CVW CleanTech Inc.