Carbon Neutral Royalty Announces C$15 Million Private Placement of Special Warrants

/NOT FOR DISTRIBUTION TO UNITED STATES NEWS SERVICES OR FOR BROADCASTING IN THE UNITED STATES/

LONDON, March 23, 2022 (GLOBE NEWSWIRE) — Carbon Neutral Royalty Ltd. (“CNR“or the”Company“) (Private) is pleased to announce that it has entered into an agreement with Haywood Securities Inc. and PI Financial Corp., as joint lead managers and joint bookrunners, in their own name and at the name of a syndicate of agents comprising BMO Capital Markets, Corp. Canaccord Genuity and Raymond James Ltd. (collectively, the “Officers) in connection with an “at best” private placement of special warrants of the Company (the “Special warrants”) at a price of C$3.00 per special warrant (the “Issue price”) for total gross proceeds of approximately C$15,000,000 (the “Offer“).

Each unexercised Special Warrant will be deemed to have been exercised, without further payment or action by the holder thereof, for one common share in the capital of the Company (a “Underlying share» and with the special mandates, the «Securities“”Prospectus approval“) which will qualify the issuance of the underlying shares and result in the registration of the ordinary shares of the Company (the “Ordinary actions”) on a recognized North American stock exchange (a “To exchange”); or (ii) the third business day following the completion of a reverse takeover transaction (the “RTO closure”) with another entity (the “OTR”), which RTO will cause the Common Shares to be listed on a stock exchange, as the case may be. Prospectus Qualification and RTO Closing are collectively and individually, as the case may be, referred to herein as a “public event”. In the event that a public offering event has not occurred prior to 4:00 p.m. (Toronto time) on December 20, 2022, each unexercised Special Warrant will be deemed to have been exercised and will be automatically exchanged for 1.1 underlying share without further payment or action by the holder thereof. Each Special Warrant will also be exercisable by the holder thereof at any time after the Closing Date, without payment of additional consideration and subject to adjustment, for one underlying share.

In addition, the Agents have been granted an option to sell up to an additional 15% of the offering in special warrants at the issue price, exercisable at any time by the Agents up to 48 hours before the closing of the offer.

Net proceeds from the offering will be used to advance the Company’s royalty and carbon streaming businesses, as well as for working capital and general corporate purposes.

The offer is expected to close around the week of April 18and, 2022 and is subject to certain closing conditions, including, but not limited to, the receipt of all necessary approvals. The offering is being made by way of private placement in Canada. The Company is not a reporting issuer in Canada. The Special Warrants and the underlying Shares will be subject to an indefinite hold period subject to the occurrence of an IPO Event. For the avoidance of doubt, if and when an IPO Event occurs, the underlying shares will not be subject to any resale restrictions under Canadian law. The Company will use commercially reasonable efforts to obtain any necessary approvals to list the Common Shares, including the Underlying Shares, on any stock exchange pursuant to an IPO Event.

In consideration for their services, the Agents will receive a cash commission equal to 6.0% of the gross proceeds of the Offering, except with respect to purchasers directly arranged by the Company through a list of presidents at in respect of which the cash commission will be 3.0%. .

The securities have not been and will not be registered under the 1933 Act or any US state securities law, and may not be offered or sold in the United States without registration under the United States securities law and all applicable state securities laws or in accordance with the requirements of an applicable exemption. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States, and there will be no sale of such securities in any jurisdiction in which such offer, solicitation or sale would be illegal.

ABOUT THE CARBON NEUTRAL ROYALTY

CNR was founded in July 2021 by an experienced team and assembles a portfolio of high-quality, long-lived carbon credit streams and royalty projects around the world. Our goal is to increase shareholder value by adding accretive acquisitions to our diverse portfolio of assets, focusing on the most experienced developers.

For more information, please visit our website at www.carbonneutralltd.com

ON BEHALF OF CARBON NEUTRAL ROYALTY LTD.

(signed) “Brett Heath”

CONTACT INFORMATION

Carbon Neutral Royalty Ltd.

Brett Heath, Non-Executive Chairman
E-mail: [email protected]

Kristina Pillon, Investor Relations
Phone: 604-908-1695
E-mail: [email protected]

Website: https://www.carbonneutralltd.com/

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements and forward-looking information within the meaning of US and Canadian regulations. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is planned”, “budgets”, “expected”, “estimates”, “forecasts”. “, “predicts”, “projects”, “intends”, “targets”, “aims”, “anticipates” or “believes” or variations (including negative variations) of these words and expressions or may be identified by statements to the effect that certain actions “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be performed. Forward-looking statements and information include , but not limited to, statements regarding the use of proceeds, the closing date and any public events. Forward-looking statements and information are based on forecasts of future results, estimates of amounts not yet determinable and assumptions which, although deemed reasonable by management, are inherently subject to rtant business, economic and competitive uncertainties and contingencies.

Forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond CNR’s ability to control or predict, which may cause CNR’s actual results, performance or achievements to differ materially from those expressed or implied. as such, and are developed based on assumptions about such risks, uncertainties and other factors, including, but not limited to: risks associated with the impact of general business and economic conditions; the risk that the Company’s carbon flow and carbon credits will not be recognized by relevant government authorities, the risks of carbon credits being traded in an emerging market, including risks related to international operations, government regulation environment, delays in the production of carbon credits for projects in which the Company holds carbon credit interests, the actual results of projects in which CNR holds carbon credit interests, the conclusions of economic evaluations and changes to the parameters of the projects as plans are refined; issues relating to the ability to market carbon credits, including price fluctuations, interest rate and currency exchange fluctuations; the interpretation by government entities of tax laws or the implementation of new tax laws; regulatory, political or economic developments in any of the countries where the properties in which CNR holds carbon revenue streams or other interests in carbon credits are located or through which they are held; risks relating to the operators of the properties in which CNR holds a carbon royalty or stream or other carbon credit interests, including changes in the ownership and control of such operators; risks related to global pandemics, including the novel coronavirus (COVID-19) global health pandemic and the spread of other viruses or pathogens; influence of macroeconomic developments; business opportunities offered to, or pursued by CNR; reduced access to debt and equity capital; litigation; title, permit or license disputes relating to interests in any of the properties in which CN holds a royalty, stream or other carbon credit interest; competetion; future sales or issues of debt or equity securities; product use; enforcement of civil judgments; and the risks associated with CNR potentially being a passive foreign investment company within the meaning of US federal tax laws; and other risks and uncertainties disclosed in company documentation. CNR undertakes no obligation to update forward-looking information, except as required by applicable law. This forward-looking information represents management’s best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are cautioned not to place undue reliance on any forward-looking statements or information.

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