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$15 million with Mast and Mast Parent Co, to advance its pipeline of post-wildfire reforestation projects in the Western USA. Carbon Streaming also invested US$2 million into Mast Parent Co through a convertible note (the “Convertible Note”). In October 2023, the Convertible Note was converted into preferred shares of Mast Parent Co upon the execution of a qualifying financing event, resulting in 1.3 million preferred shares of Mast Parent Co (the “Preferred Shares”) being issued to the Company at a fair value of $2.6 million. The Company expects that the facts described above will materially decrease the fair value of the Sheep Creek Stream and the Preferred Shares on the Company’s consolidated financial statements.
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.
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.
