Cielo Waste Solutions Corp. (CMC.V) Earnings Call Transcript & Summary

Welcome to the Annual General and Special Meeting of the holders of common shares of Cielo Waste Solutions Corp. My name is Sheila Leggett, and I'm the Chair of the Board of Cielo, and I will act as Chair for this meeting. With me is Ryan Jackson, CEO of Cielo, who will speak following the formal portion of this meeting and then hold a short question-and-answer session. We are holding the meeting this year by teleconference. Those that are on the call are deemed to be present in person. I would now like to call the meeting to order and appoint Antonina Szaszkiewicz, Legal Counsel for the company, to act as the Secretary of the meeting, and Matthew Kelly and Islam Hussein from Olympia Trust Company, transfer agent for the company, to act as scrutineers of the meeting to report on the shareholders present in person and by proxy and the number of shares represented in person and by proxy and to compute the votes on any poll taken. I have a form of proxy for this meeting provided by Olympia Trust Company. I ask that the notice of meeting, formal proxy, and financial statements of the company be kept by or as directed by the Secretary with the records of this meeting. I received a copy of the scrutineers' report, which shows a quorum to be present. I, therefore, declare this meeting to be regularly constituted and I direct that the scrutineers' report be annexed to the minutes of this meeting. Before commencing the business of the meeting, I'd like to comment on voting procedure. We thank all of you for the votes submitted by proxy. Please keep in mind that if you wish to participate in the formal business of today's meeting, you must be a proxy holder or registered shareholder. That means that your shares are held in your name and not with a broker. Since the meeting is being held by telephone only, those registered shareholders and proxy holders entitled to participate in and vote at this meeting. We'll have an opportunity to show their intentions by selecting "yay" or: "nay" on their keypads when prompted as an equivalent to a show of hands when done in person. The resolution on every resolution, except for the share consolidation resolution, will be voted upon this way. When I prompt you, please press either STAR 1 on your phone pad for yay or STAR 2 for nay. For the share consolidation resolution, we will vote by ballot. All persons that are entitled to vote at today's meeting have received ballots for today's meeting by e-mail and must submit them, if not already submitted no later than 12:00 p.m. Mountain Time during this meeting. If you have a ballot, please return it to the scrutineers by e-mail as they've requested in their e-mail to you. Everyone who has voted already by proxy will be represented in the management proxy ballot. Because of the number of proxies held by management, all resolutions on today's agenda will be approved by the required majority. I will now ask for a motion that the reading of the minutes of the AGM of the shareholders held October 28, 2022, be dispensed with, and the minutes be taken as written and approved.

I move that the reading of the minutes of the previous meeting of the shareholders held on October 28, 2022, be dispensed with, and that such minutes be taken as written and approved.

I second the motion.

All in favor, please press STAR1 for yay, and all opposed, please press STAR 2 for nay. We will pause for a minute as you proceed. This motion is carried. Thank you very much, everyone. The next item of business is the presentation of the company's financial statements and the auditor's report thereon for the years ended April 30, 2023, and 2022. I would suggest that matters arising related to such financial statements, copies of which have been made available to all shareholders via SEDAR+ be held in advance for the question-and-answer period, which will occur later. The meeting materials indicated that if Cielo's transaction with Expander Energy Inc. closes before this meeting, the Board would be fixed at 7. And if it doesn't, it would be fixed at 4. Yesterday evening, Cielo issued a news release for an update on the transaction with Expander, announcing that it will close after the meeting in the coming days. As such, may I now please have a motion to fix the Board of Directors at 4.

I move that the Board of Directors be set at 4.

I second the motion.

All in favor, please press STAR 1 for yay, and all opposed, please press STAR 2 for nay. We will pause for a moment as you proceed. The motion is carried. The terms of office of all 4 incumbent directors are deemed to have expired today pursuant to the company's articles. The Management Information Circular, dated September 15, 2023, contains the names of these 4 persons, each of whom are proposed for election at this meeting. As mentioned, because the transaction with Expander hasn't yet post, the list of nominees will remain at 4. They are: Sheila Leggett, Larry Schafran, Ryan Jackson, the Honorable Peter MacKay. As no other nominations have been made pursuant to the articles of the company or the Business Corporations Act, that is the complete list of nominees.

I move that the 4 directors proposed for election be so elected for the ensuing year.

I second the motion. .

All those in favor. You know the drill now. Please press STAR1 for yay, and all opposed, please press STAR 2 for nay. Again, we'll pause as we get the votes counted. Thank you. I declare that the nominated individuals have received the requisite number of votes cast at the meeting for their election for the ensuing year. They will hold office until the next Annual Meeting of the Shareholders of the company unless their office is earlier vacated in accordance with the articles of the company and the Business Corporations Act based in British Columbia. The next item of business is the appointment of the company's auditor for the ensuing year, along with the remuneration to be paid to the auditor. .

I move that KPMG LLP, Chartered Accountants be appointed as the auditor of the company at remuneration to be set by the directors until the company's next Annual General Meeting of Shareholders or until such firm resigns or is removed from office as provided by law.

I second the motion. .

Again, all those in favor, please press STAR1 for yay, and opposed, please press STAR 2 for nay. Thank you. Motion was carried. The next item of business is to consider and if deemed advisable, to pass with or without variation an ordinary resolution of the disinterested shareholders of the company, reapproving the adoption of the 2022 Rolling Stock Option Plan.

I move that the resolutions authorizing the 2022 Rolling Stock Option Plan as set forth in the circular of the company dated September 15, 2023, be approved as written.

I second the motion.

Again, all in favor, please press STAR 1 for yay, and opposed, please press STAR 2 for nay. Motion carried. The next item of business is to consider and if deemed advisable, to pass with or without variation, a special resolution of the shareholders of the company authorizing a consolidation of securities of up to 1 for 15.

I move that the resolutions authorizing the share consolidation as set forth in the circular of the company dated September 15, 2023, be approved as written. .

I second the motion.

As this matter is being voted upon by ballot, we will adjourn the formal business of this matter until the end of the meeting to allow the scrutineers time to tally the votes. We will confirm the results on this matter after Mr. Jackson completes the Q&A session. In this case, I would request a motion to adjourn the formal portion of this meeting until the results of the share consolidation are available at the end of this meeting.

I move to adjourn the formal portion of this meeting until the result of the share consolidation resolution are available. .

I second the motion. .

Again, please press STAR 1 in favor for yay or if you're opposed, please press STAR 2 for nay. Motion carried. Thank you. I will now turn the floor over to Mr. Jackson for the information portion of this meeting.

Thanks, Sheila. That's stressful, really everything. Anyways, welcome everyone, and certainly appreciate everyone who attended today. This is a very important AGM, they're all important, but obviously, this one has a little bit more of an important ring to it. Before I begin, I'd like to note that any comments made during this presentation may include forward-looking statements about the company's plans, objectives, expectations or intentions that actual results may differ significantly from those projected or suggested due to a variety of factors. Except as required by law, we assume no obligation to publicly update forward-looking statements, and those listening should continue to review our news releases and other disclosure filed on SEDAR+. With that said, I just wanted to provide a quick update. As everyone knows, we have a webinar scheduled for November 7 and we'll be providing details in the coming days around that and look forward to providing a presentation visually as well as over the line so that you can not only see or hear our voices, but see our faces and some of the material that we'll be providing. As a matter of a quick update as it relates to the expander closing as the start, we are very very close. And suffice to say, we have a few final things that we wanted to ensure we're across finish line, not the least of which was appropriate amount of closing conditions that are being met over the next couple of days. What we didn't want to do is have closing covenants beyond the pale that would suggest that this is still closing. We want to be able to close this transaction in its entirety, and that's exactly what we intend on doing in the next couple of days. And we're not talking a couple of weeks, we're talking a couple of days is what the goal is as it relates to the closing with regards to Expander and Cielo. Very excited as a result of what we have planned going forward, as a result of being able to move forward now with. Not only the Carseland facility that we've press released, but also planning and executing on the Dunmore facility as it relates to the CPKC railroad tie disposal deal that we have. We also mentioned in the PR early this morning that I attended a conference down in Atlanta, Georgia. And what that was. And I'm sure that most of you now are had, once you read it, you didn't know that there was a railroad way tie association that existed. Well, I can tell you it does and it's very well attended as well. So Class 1 carriers are rail lines such as CSX Transportation, Norfolk Southern, Union Pacific, Burlington Northern Santa Fe or BNSF, among with a number of short line rail companies. And some of these short line rail companies still have thousands upon thousands of miles of track. So it was an interesting event that I attended and also at the invitation of specific ones that wanted to talk to Cielo. So we were working through a number of different meetings and discussions around the railway tie disposal opportunity. And I can tell you that it's not only a problem in Canada, it's a problem globally. And I'm not talking about just the U.S. I'm talking globally, Australia, Europe, you name it. And the other thing that was of interest, just to provide a little bit of insight was the continued use of hardwood and treated hardwood ties as a result of the miles of track, 130-some-odd thousand miles of track in the U.S. alone, with over 350 million rail ties that support that amount of track. So one thing came out more clear than ever was the need and the desire and the business case around the continued use of hardwood, which was music quite frankly, to my ears because that's something that Cielo with Expander, technology we'll be using to be able to solve that problem. The other part of that problem is that it is a problem, as I mentioned, globally. So as we move forward and as we focus on executing on not only the transaction as a result of Cielo and Expander coming together to solve this problem, but also upcoming and very interesting discussions that we're going to have with those rail companies and others as it relates to hardwood waste, specifically rail ties and beyond. So that's what we are focusing on now is the ability for us to secure feedstock, in addition, of course, to the long-standing road that this has taken for both of our companies, both Expander and Cielo. We are now at the point where we are going to be able to execute on the plans that we both had. And we want to thank everybody for their patience. I know as it relates to the halt, it's been concerning. We feel the number of e-mails and calls on a daily basis around it. I can tell you that's not something that's lost on us. And to use an old construction parlance, we want to make sure we're measuring twice and cutting once. So we will have the ability to lift the halt upon the [ TSXV's ] approval, which is one of the items that we were awaiting as a result of the closing delay, which we expect to have very, very shortly. And I know that there will be some questions with respect to that, and we'll be happy to provide you as much information as we can without obviously selective disclosure, but we hear you. And we want to make sure that you know that you're being heard. And beyond what we can tell you publicly is we have a couple of small items to take care of, and we're working hard on getting that done so that the debenture can lift the halt. Moving forward, we have some projects to build, and we are planning to do exactly that. So now I'll turn it back over to our Chair, Sheila Leggett, to reconvene the formal portion of the meeting and to announce the results of the share consolidation resolution.

Thank you very much, Ryan. Before we do that, [indiscernible] to open the Q&A.

Are we doing Q&A first?

[Operator Instructions] I see that there are no questions coming in.

So we can talk, we got the stretch for another 5 minutes until the -- we don't have quite the votes tabulated yet. So what we're going to do is we're going to go on mute because I don't think that the sound of my voice is something anybody else wants to hear, they heard enough as it is. But we will keep the Q&A open. And now we do have a question. Go ahead, operator.

First question comes from Brent [ Nese ].

Just curious as government approval happened yet?

For the Aldersyde R&D Facility, Brent?

Yes, sir.

We have not received any approval from Alberta Environment and Protected Areas as of yet. No.

So if there are no other questions, we'll go on mute, and we'll be back to announce the results of the ballot. Thanks very much, everyone. The results of the ballot are now available. In order to pass a special majority of at least 2/3 of the vote cast was required, I declare the resolution has passed. As there is no further business, I would request a motion to terminate this meeting.

I move that the meeting be terminated.

I second the motion. .

And one more time, all those in favor, please press STAR 1 for yay, and all opposed, please press STAR 2 for nay. Motion carried. Thank you very much. That completes the business of the Annual General and Special Meeting. Thank you very much for your participation today. Bye-bye.