Carbon Streaming Announces Project Update
Carbon Streaming (OTCQB: OFSTF) received a Notice of Adverse Impact from Mast Reforestation regarding the Sheep Creek Stream Agreement. The project has experienced significantly higher mortality rates and slower growth rates than expected among seedlings. As a result, Mast indicated it cannot deliver the agreed 286,229 forecast mitigation units, considering the existing project plan and budget no longer viable.
The company has formally responded to the notice, raising concerns about its timing and characterization. Carbon Streaming is evaluating legal options under the agreement. The company had previously entered a US$15 million pipeline streaming agreement with Mast and invested US$2 million through a convertible note, which was converted into 1.3 million preferred shares valued at $2.6 million in October 2023.
The company expects these developments to materially decrease the fair value of both the Sheep Creek Stream and the Preferred Shares on its consolidated financial statements.
Carbon Streaming (OTCQB: OFSTF) ha ricevuto una Comunicazione di Impatto Negativo da Mast Reforestation riguardante l'Accordo Sheep Creek Stream. Il progetto ha mostrato tassi di mortalità e tassi di crescita significativamente più elevati rispetto alle aspettative per le piantine. Di conseguenza, Mast ha indicato di non poter consegnare le 286.229 unità di mitigazione previste, considerando che l'attuale piano e budget del progetto non sono più sostenibili.
L'azienda ha risposto formalmente alla comunicazione, esprimendo preoccupazioni riguardo ai tempi e alla caratterizzazione della stessa. Carbon Streaming sta valutando opzioni legali in base all'accordo. L'azienda aveva precedentemente stipulato un accordo di streaming di pipeline da 15 milioni di dollari con Mast e investito 2 milioni di dollari tramite una nota convertibile, che è stata convertita in 1,3 milioni di azioni privilegiate del valore di 2,6 milioni di dollari nell'ottobre 2023.
L'azienda prevede che questi sviluppi ridurranno significativamente il valore equo sia dello Sheep Creek Stream che delle Azioni Privilegiate nei suoi bilanci consolidati.
Carbon Streaming (OTCQB: OFSTF) recibió un Aviso de Impacto Adverso de Mast Reforestation en relación con el Acuerdo Sheep Creek Stream. El proyecto ha experimentado tasas de mortalidad y tasas de crecimiento significativamente más altas de lo esperado entre las plántulas. Como resultado, Mast indicó que no puede entregar las 286,229 unidades de mitigación pronosticadas, considerando que el plan y presupuesto del proyecto existentes ya no son viables.
La empresa ha respondido formalmente al aviso, planteando preocupaciones sobre su cronograma y caracterización. Carbon Streaming está evaluando opciones legales bajo el acuerdo. La empresa había firmado previamente un acuerdo de streaming de pipeline por 15 millones de dólares con Mast e invertido 2 millones de dólares a través de un pagaré convertible, que se convirtió en 1.3 millones de acciones preferentes valoradas en 2.6 millones de dólares en octubre de 2023.
La empresa espera que estos desarrollos disminuyan materialmente el valor razonable tanto del Sheep Creek Stream como de las Acciones Preferentes en sus estados financieros consolidados.
Carbon Streaming (OTCQB: OFSTF)는 Mast Reforestation으로부터 Sheep Creek Stream 계약에 대한 부정적 영향 통지를 받았습니다. 이 프로젝트는 묘목의 예상보다 훨씬 더 높은 사망률과 느린 성장률을 겪고 있습니다. 그 결과, Mast는 기존의 프로젝트 계획과 예산이 더 이상 실행 가능하지 않다고 판단하여 합의된 286,229개의 완화 단위를 제공할 수 없다고 밝혔습니다.
회사는 통지에 공식적으로 응답하며 그 타이밍과 성격에 대한 우려를 표명했습니다. Carbon Streaming은 계약에 따라 법적 옵션을 평가하고 있습니다. 이 회사는 이전에 Mast와 1,500만 달러의 파이프라인 스트리밍 계약을 체결하고, 200만 달러를 전환 사채를 통해 투자했으며, 이는 2023년 10월에 260만 달러의 가치가 있는 130만 주 우선주로 전환되었습니다.
회사는 이러한 발전이 Sheep Creek Stream과 우선주 모두의 공정 가치를 재무제표에서 실질적으로 감소시킬 것으로 예상하고 있습니다.
Carbon Streaming (OTCQB: OFSTF) a reçu un Avis d'Impact Négatif de Mast Reforestation concernant l'Accord Sheep Creek Stream. Le projet a connu des taux de mortalité et des taux de croissance significativement plus élevés que prévu parmi les semis. En conséquence, Mast a indiqué qu'il ne pouvait pas livrer les 286,229 unités de mitigation convenues, considérant que le plan de projet et le budget existants ne sont plus viables.
L'entreprise a répondu formellement à l'avis, exprimant des préoccupations quant à son timing et à sa caractérisation. Carbon Streaming évalue les options juridiques en vertu de l'accord. L'entreprise avait précédemment signé un accord de streaming de pipeline de 15 millions de dollars avec Mast et investi 2 millions de dollars par le biais d'une note convertible, qui a été convertie en 1,3 million d'actions préférentielles d'une valeur de 2,6 millions de dollars en octobre 2023.
L'entreprise s'attend à ce que ces développements réduisent considérablement la juste valeur tant du Sheep Creek Stream que des Actions Préférentielles dans ses états financiers consolidés.
Carbon Streaming (OTCQB: OFSTF) erhielt eine Mitteilung über nachteilige Auswirkungen von Mast Reforestation bezüglich der Sheep Creek Stream Vereinbarung. Das Projekt hat signifikant höhere Sterblichkeitsraten und langsamere Wachstumsraten als erwartet bei den Setzlingen erfahren. Daher gab Mast an, dass es die vereinbarten 286.229 prognostizierten Minderungseinheiten aufgrund des bestehenden Projektplans und Budgets nicht liefern kann, da diese nicht mehr tragfähig sind.
Das Unternehmen hat formal auf die Mitteilung reagiert und Bedenken hinsichtlich der zeitlichen Abfolge und Charakterisierung geäußert. Carbon Streaming prüft rechtliche Optionen im Rahmen des Abkommens. Das Unternehmen hatte zuvor einen Pipeline-Streaming-Vertrag über 15 Millionen US-Dollar mit Mast geschlossen und 2 Millionen US-Dollar über eine wandelbare Anleihe investiert, die im Oktober 2023 in 1,3 Millionen Vorzugsaktien im Wert von 2,6 Millionen US-Dollar umgewandelt wurde.
Das Unternehmen erwartet, dass sich diese Entwicklungen erheblich negativ auf den beizulegenden Zeitwert sowohl des Sheep Creek Stream als auch der Vorzugsaktien in seinen konsolidierten Finanzberichten auswirken werden.
- None.
- Project failure: Unable to deliver 286,229 forecast mitigation units
- Higher than expected seedling mortality rates and slower growth rates
- Expected material decrease in fair value of Sheep Creek Stream investment
- Expected material decrease in value of $2.6M preferred shares investment
- US$15M pipeline streaming agreement at risk
TORONTO, Jan. 29, 2025 (GLOBE NEWSWIRE) -- Carbon Streaming Corporation (Cboe CA: NETZ) (OTCQB: OFSTF) (FSE: M2Q) (“Carbon Streaming” or the “Company”) today provided a project update with respect to the Purchase and Sale Agreement dated as of May 9, 2023, as amended pursuant to that First Amending Agreement, dated as of February 7, 2024 (the “Sheep Creek Stream”), among Carbon Streaming, Mast Reforestation SPV I, LLC (“Mast”) and its parent company DroneSeed Co., d/b/a Mast Reforestation (“Mast Parent Co”).
Carbon Streaming has received a Notice of Adverse Impact from Mast and Mast Parent Co under the Sheep Creek Stream Agreement pursuant to which, among other things, Mast advised Carbon Streaming that the Sheep Creek project has experienced significantly higher than expected mortality rates and that the surviving seedlings had exhibited slower than expected growth rates. As a result, Mast indicated to Carbon Streaming that it no longer expects to deliver the agreed-upon 286,229 forecast mitigation units to Carbon Streaming under the Sheep Creek Stream, as Mast no longer considers the existing Sheep Creek project plan and budget to be viable. Carbon Streaming has formally responded to the Notice of Adverse Impact and requested that Mast respond to Carbon Streaming’s significant concerns regarding, among other things, the timing of the delivery of the Notice of Adverse Impact, and the characterization of the cause of the adverse impact. The Company is continuing to evaluate all legal avenues available under the Sheep Creek Agreement.
The Company had entered into a project pipeline streaming agreement (the “Pipeline Agreement”) for up to US
About Carbon Streaming
The Company’s focus is on projects that generate high-quality carbon credits and have a positive impact on the environment, local communities, and biodiversity, in addition to their carbon reduction or removal potential. This approach aligns our strategic interests with those of project partners to create long-term relationships built on a shared commitment to sustainability and accountability and positions us as a trusted source for buyers seeking high-quality carbon credits.
ON BEHALF OF THE COMPANY:
Marin Katusa, Chief Executive Officer
Tel: 365.607.6095
info@carbonstreaming.com
www.carbonstreaming.com
Investor Relations
investors@carbonstreaming.com
Media
media@carbonstreaming.com
Cautionary Statement Regarding Forward-Looking Information
This news release contains certain forward-looking statements and forward-looking information (collectively, “forward-looking information”) within the meaning of applicable securities laws. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future, are forward-looking information, including, without limitation: statements regarding the feasibility of the project under the Sheep Creek Stream and the implications to the Company’s financial statements; statements regarding the fair value of the Sheep Creek Streaming and the Preferred Shares; and statements regarding the Company’s evaluation of legal avenues under the Sheep Creek Stream.
When used in this news release, words such as “estimates”, “expects”, “plans”, “anticipates”, “will”, “believes”, “intends” “should”, “could”, “may” and other similar terminology are intended to identify such forward-looking statements. This forward-looking information is based on the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. They should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. Factors that could cause actual results or events to differ materially from current expectations include, among other things: future engagement with Mast after the date hereof in respect of the Sheep Creek Stream and matters related thereto and arising therefrom; general economic, market and business conditions and global financial conditions, including fluctuations in interest rates, foreign exchange rates and stock market volatility; volatility in prices of carbon credits and demand for carbon credits; change in social or political views towards climate change, carbon credits and ESG initiatives and subsequent changes in corporate or government policies or regulations and associated changes in demand for carbon credits; limited operating history for the Company’s current strategy; risks arising from competition and future acquisition activities; concentration risk; inaccurate estimates of growth strategy; dependence upon key management; impact of corporate restructurings; reputational risk; failure or timing delays for projects to be registered, validated and ultimately developed and for emission reductions or removals to be verified and carbon credits issued (and other risks associated with carbon credits standards and registries); foreign operations and political risks including actions by governmental authorities, including changes in or to government regulation, taxation and carbon pricing initiatives; uncertainties and ongoing market developments surrounding the validation and verification requirements of the voluntary and/or compliance markets; due diligence risks, including failure of third parties’ reviews, reports and projections to be accurate; dependence on project partners, operators and owners, including failure by such counterparties to make payments or perform their operational or other obligations to the Company in compliance with the terms of contractual arrangements between the Company and such counterparties; failure of projects to generate carbon credits, or natural disasters such as flood or fire which could have a material adverse effect on the ability of any project to generate carbon credits; volatility in the market price of the Company’s common shares or warrants; the effect that the issuance of additional securities by the Company could have on the market price of the Company’s common shares or warrants; global health crises, such as pandemics and epidemics; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s Annual Information Form dated as of March 27, 2024 filed on SEDAR+ at www.sedarplus.ca.
Any forward-looking information speaks only as of the date of this news release. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein. Except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise.
FAQ
What caused the Sheep Creek Stream project failure for OFSTF stock?
How many mitigation units will not be delivered in the OFSTF Sheep Creek project?
What is the financial impact of the Sheep Creek failure on OFSTF investments?
How much did OFSTF invest in Mast Reforestation before the project failure?
