/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE
SERVICES OR DISSEMINATION IN THE UNITED
STATES/
VANCOUVER, BC, July 31,
2023 /CNW/ - Northstar Clean Technologies Inc. (TSXV:
ROOF) (OTCQB: ROOOF) ("Northstar" or the "Company") is pleased to
announce that the Company has completed an arm's length significant
strategic investment with Allmine Paving LLC ("Allmine"), a party
and subsidiary of TAMKO Building Products LLC ("TAMKO"), one of
America's largest independent manufacturers of residential roofing
shingles, commercial roofing products and waterproofing solutions.
On July 31, 2023, the Company closed
a C$8,480,979.24 (US$6,424,984.27) non-brokered private placement
(the "Private Placement") of preferred shares (each, a "Preferred
Share") in the capital of the Company, as Phase 1 of TAMKO's
strategic investment (the "Strategic Investment").
The Strategic Investment is intended to include two phases:
- Phase 1: C$8,480,979.24
(US$6,424,984.27) of Preferred
Shares; and
- Phase 2: Approximately C$4,720,000 (US$3,580,000) of unsecured three-year
convertible debentures to be purchased in two tranches and
conditional on the attainment of certain milestones as agreed upon
by the parties:
-
- Tranche 1: Approximately C$2,360,000 (US$1,790,000)
- Tranche 2: Approximately C$2,360,000 (US$1,790,000)
Mr. Aidan Mills, President &
CEO and Director of Northstar, stated, "We are thrilled to welcome
TAMKO as a strategic investor in Northstar. TAMKO is a leader in
the shingle manufacturing industry and brings nearly 80 years and
three generations of manufacturing experience. This is the
beginning of a new chapter in Northstar's history. This agreement
is a huge vote of confidence in the Northstar technology and its
applicability to asphalt shingle manufacturing. TAMKO will provide
an invaluable long-term strategic relationship for Northstar going
forward, given its strength in innovation, manufacturing, and
process improvement. We look forward to working with TAMKO to
deliver Northstar's first three US facilities (the "Northstar US
Facilities"), a key part of the Company's expansion plan. We will
also be pleased to welcome a TAMKO representative to the Northstar
board."
Mr. Jeffrey Beyer, Vice President
and Chief Operating Officer of TAMKO, stated, "We are pleased to
work with Northstar to bring the Company's innovative shingle
recycling technology to the United
States. Access to Northstar's technology and processed
materials will allow TAMKO to bring more sustainable products to
market and divert waste from landfills."
The Company issued 29,244,756 Preferred Shares in the private
placement at a price of C$0.29 per
Preferred Share, for aggregate cash consideration of C$8,480,979.24 (US$6,424,984.27). The Company's Preferred Shares
will not be listed on the TSX Venture Exchange (the "TSXV"). Each
Preferred Share is convertible, at the sole option of its holder,
at any time and from time to time, into one common share (each, a
"Common Share") of the Company on a one-for-one basis and provides
the holder with voting rights and dividend rights together and pari
passu with the Common Shares on an "as-converted" basis. Upon
closing of the Private Placement, TAMKO will, through its wholly
owned subsidiary, hold approximately 18.75% of the Company's issued
and outstanding Common Shares, assuming the full conversion of the
Preferred Shares into Common Shares.
Strategic Alliance Memorandum of
Understanding
The Company has also signed a non-binding Memorandum of
Understanding (the "Strategic MOU") with TAMKO dated July 31, 2023, under which Northstar and TAMKO
agreed to work together with respect to the initial Northstar US
Facilities. Among other terms, during the exclusivity period under
the Strategic MOU, TAMKO has agreed to enter into offtake
agreements providing for the acquisition of a significant portion
of the asphalt and aggregate produced by the Northstar US
Facilities. The parties have agreed to work together to determine
the location of each of the Northstar US Facilities.
Phase 2 Securities
As part of the Strategic Investment, and subject to the
completion of certain milestones by the Company that are tied to
milestones set out in the Emissions Reduction Alberta grant
announced by the Company on February 13,
2023 and TSXV approval, TAMKO has agreed to purchase two
separate tranches of C$2,360,000
(US$1,790,000) each, totaling
C$4,720,000 (US$3,580,000), (the "Principal Amount") of
unsecured convertible debentures (the "Convertible Debentures")
with a three year term at 10% interest payable semi-annually in
cash or payment-in-kind (subject to TSXV rules) and convertible
into units of the Company (the "Units") for no additional
consideration at a conversion price equal to the greater of (i)
C$0.29 per Unit or (ii) the minimum
price permitted by the policies of the TSXV.
Each Unit will consist of one Common Share in the capital of the
Company and one-half of one non-transferable Common Share purchase
warrant (each whole warrant, a "Warrant"). Each Warrant shall
entitle the holder thereof to purchase one additional Common Share
(each, a "Warrant Share") at a price of the greater of (i)
C$0.50 per Warrant Share or (ii) the
minimum price permitted by the policies of the TSXV, with such
Convertible Debentures containing customary blockers and
anti-dilution provisions, until the maturity date, which is 36
months from the date of issuance.
Investor Rights Agreement and
Board of Directors Nomination
In connection with the Strategic Investment, Northstar entered
into an investor rights agreement dated July
31, 2023, with Allmine and TAMKO (the "Investor Rights
Agreement"), which grants certain rights to Allmine, including the
right to appoint a director to the Company's board of directors, a
right to participate in future equity offerings, a top up right
in respect of outstanding convertible securities, subject to the
terms of the Investor Rights Agreement. Allmine and TAMKO are also
subject to certain standstill restrictions under the Investor
Rights Agreement. For full details, please find a copy of the
Investor Rights Agreement that will be filed under the Company's
SEDAR profile at www.sedar.com.
Use of Proceeds
Northstar intends to use the net proceeds of the Private
Placement for the development and construction of the Company's
planned asphalt shingle reprocessing facility in Calgary, Alberta (the "Empower Calgary
Facility"), working capital, and general corporate purposes. All
securities issued under the Private Placement are subject to a
statutory hold period ending four months and one day from the
closing date of the Private Placement. No bonuses, finders' fees or
commissions were paid in connection with the Private Placement. The
Private Placement remains subject to final acceptance by the
TSXV.
None of the securities sold in connection with the Private
Placement will be registered under the United States Securities Act
of 1933, as amended, and no such securities may be offered or sold
in the United States 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 securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
Early Warning Disclosure
Allmine, a wholly owned subsidiary of TAMKO (the "Investor"),
acquired 29,244,756 Preferred Shares for an aggregate purchase
price of C$8,480,979.24, representing
100% of the issued and outstanding Preferred Shares and 18.75% of
the issued and outstanding Common Shares on a partially diluted
basis, assuming full conversion of the Preferred Shares.
Immediately prior to the closing of the Private Placement, Investor
did not directly or beneficially own any securities of the
Company.
Investor holds the Preferred Shares for investment purposes.
Investor may, from time to time, acquire additional Common Shares
or other securities of the Company or dispose of some or all of the
securities of the Company it owns at such time. Except for rights
and obligations under the Investor Rights Agreement and the
Strategic MOU (as each are described above), Investor has no other
plans or intentions that relate to or would result in any of the
actions listed in paragraphs (a) through (k) of Item 5 of Form
62-103F1 – Required Disclosure under the Early Warning
Requirements, but depending on market conditions, general
economic conditions and industry conditions, the trading price of
the Common Shares, the Company's business and financial condition
and prospectus and/or other relevant factors, Investor may develop
such plans or intentions in the future. The head office for
Investor is 200 Development Drive, Inwood, WV 25428. The Company's address is
7046 Brown Street, Delta, BC V4G
1G8.
A copy of the early warning report in respect of the Private
Placement may be obtained by contacting Investor and will be filed
under the Company's SEDAR profile at www.sedar.com.
About Northstar
Northstar Clean Technologies Inc. is a Canadian-based 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.
For further information about Northstar, please visit
www.northstarcleantech.com.
On Behalf of the Board of Directors,
Aidan Mills
President & CEO, Director
Cautionary Statement on
Forward-Looking Information
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this release. The
TSXV has neither approved nor disapproved the contents of this
press release.
This press release may contain forward–looking information
within the meaning of applicable securities legislation, which
forward–looking information reflects the Company's current
expectations regarding future events. Forward-looking statements
are often identified by the words "may", "would", "could",
"should", "will", "intend", "plan", "anticipate", "believe",
"estimate", "expect" or similar expressions. Forward-looking
statements in this press release include, but are not limited to,
statements concerning: (i) the anticipated use of proceeds for the
Private Placement; (ii) the anticipated development and building of
the Empower Calgary Facility; (iii) the closing of phase 2 of the
Strategic Investment and TSXV approval thereof; (iv) the receipt of
final approval from the TSXV and other regulatory authorities, if
necessary; (v) Northstar's ability to become a leader in the
recovery and reprocessing of asphalt shingles in North America; (vi) the execution by the
Company and TAMKO of a definitive agreement pursuant to the
Strategic MOU; (vii) Northstar's and TAMKO's ability to
successfully design, build and complete the Northstar-TAMKO
Facilities within anticipated timelines; and (viii) the ability of
Northstar's technology and processed materials to allow TAMKO to
bring more sustainable products to market and divert waste from
landfills. Such statements are subject to risks and uncertainties
that may cause actual results, performance or developments to
differ materially from those contained in the statements, including
risks related to factors beyond the control of the Company as well
as those risks and uncertainties which are more fully described
under the heading "Risk Factors" in the final prospectus of the
Company dated June 18, 2021 and in
the Company's annual and quarterly management's discussion and
analysis and other filings with the Canadian securities regulatory
authorities under the Company's profile on SEDAR. Further, the
ongoing labour shortages, high energy costs, inflationary
pressures, rising interest rates, the global financial climate and
the conflict in Ukraine and
surrounding regions are some additional factors that are affecting
current economic conditions and increasing economic uncertainty,
which may impact the Company's operating performance, financial
position, and future prospects. Collectively, the potential impacts
of this economic environment pose risks that are currently
indescribable and immeasurable. Readers are cautioned that
forward-looking statements are not guarantees of future performance
or events and, accordingly, are cautioned not to put undue reliance
on forward-looking statements due to the inherent uncertainty of
such statements. These forward-looking statements are made as of
the date of this news release and, unless required by applicable
law, the Company assumes no obligation to update these
forward-looking statements.
SOURCE Northstar Clean Technologies Inc.