Mr. Akshay Dubey reports

CVW SUSTAINABLE ROYALTIES ANNOUNCES THE EXECUTION OF A ROYALTY AGREEMENT AND STRATEGIC PARTNERSHIP WITH RELOCALIZE INC.

CVW Sustainable Royalties Inc. has entered into a gross revenue royalty agreement and strategic partnership with Relocalize Inc., a company with a novel microfactory technology to sustainably produce ice. Pursuant to the royalty agreement, CVW Royalties has agreed to provide Relocalize with $4.0-million of upfront capital for a 25-per-cent royalty on the gross revenues from its first two commercial facilities. The company will also receive a 2-per-cent royalty on the gross revenues from Relocalize's next eight commercial facilities and the option to invest up to $22.5-million in 13 additional facilities which will provide Relocalize with catalytic capital to finance its future growth.

Relocalize has developed a proprietary, modular ice manufacturing and distribution platform designed to decentralize ice production and reduce the environmental footprint associated with traditional long-haul ice supply chains. Relocalize's business model integrates on-site ice production with sustainable packaging and distribution, serving the packaged ice and cold pack markets. This enables customers to access a reliable supply of ice while reducing transportation emissions, logistics costs and waste. Relocalize's technology and operating model have been demonstrated through the successful deployment of a two-year pilot facility, providing a foundation for repeatable expansion. Relocalize is focused on scaling its platform through the development of additional facilities across multiple markets in North America, supporting a more efficient and sustainable cold-chain solution with its first commercial unit currently being commissioned for The Winn-Dixie Company in Florida. It will be located at a distribution centre that serves Winn-Dixie and will produce enough packaged ice to meet the demand of over 100 stores.

"Our strategy is to utilize the royalty model to provide investors with a unique and attractive risk-adjusted way to invest in companies that produce commodities and commodity-like products driving both environmental and economic sustainability. This second transaction reflects our continued efforts to source, diligence and execute transactions as we build a diversified, royalty platform with compelling underlying royalties," said Akshay Dubey, chief executive officer of CVW Royalties. "By partnering with innovative companies such as Relocalize, we see an opportunity to generate positive, commodity-linked returns while supporting the deployment of more sustainable production models. With a pipeline of approximately $900-million of potential royalty opportunities and several transactions at an advanced stage, we believe we are well positioned to support our continued growth and are confident in our ability to execute additional royalty transactions in the near term."

According to Wayne McIntyre, founder and chief executive officer of Relocalize: "This transaction with CVW Royalties has the potential to be transformational for Relocalize. The immediate funding will accelerate our commercialization efforts by speeding deployment of our microfactories in Florida and Quebec, while creating a pathway to finance accelerated growth in 2027 and 2028. We're pleased to welcome CVW Royalties as a long-term strategic partner with deep technical expertise and a leadership team aligned with our objectives of rapid growth and measurable sustainability impact."

Terms of the transaction

CVW Royalties has entered into the royalty agreement with Relocalize pursuant to which the company has agreed to purchase a 25.0-per-cent gross revenue royalty (the Plant City royalty) on Relocalize's Plant City, Fla., facility for $2.5-million. The Plant City facility will produce packaged ice and will be co-located at Winn-Dixie's Plant City distribution centre which is a key customer for Relocalize and also partnered on Relocalize's pilot facility.

Upon the Plant City facility meeting certain operational thresholds, a final investment decision (FID) by Relocalize's board of directors for a subsequent facility, the second facility achieving certain commercial commitments and other customary conditions, CVW Royalties will provide Relocalize with an additional $1.5-million for the purchase of a 25.0-per-cent revenue royalty. The second facility is expected to be located at Relocalize's headquarters in Montreal, Que., and produce cold packs to serve the meal kit delivery, ready-to-eat meals and other convenience-focused end markets requiring cold packaging solutions.

For its investment in the Plant City facility, the company will also receive a 1.25-per-cent revenue royalty on Relocalize's next eight commercial facilities beyond the Plant City facility and the second facility. For its investment in the second facility, the company will receive an additional 0.75-per-cent revenue royalty on Relocalize's next eight commercial facilities beyond the Plant City facility and second facility.

As part of this strategic partnership, CVW Royalties has the option to invest up to $22.5-million to finance up to 13 additional Relocalize facilities. Should CVW Royalties decline to finance a particular facility, Relocalize will have the option to source financing from alternative capital providers. These future royalties are expected to have pari-passu senior security on each physical asset that is financed.

Once CVW Royalties receives aggregate payments from the initial royalty interest equal to 1.25 times the investment amount, being $5.0-million in the aggregate, the Plant City royalty and the second facility royalty will step down to a revenue royalty of 15.0 per cent for the life of the respective facilities.

As part of the royalty agreement, CVW Royalties also has a right of first refusal for future royalty financing on all of Relocalize's facilities for a period of 20 years.

The first investment closed in escrow subject to customary conditions. The second investment is subject to Relocalize meeting certain operational and commercial milestones, and other customary conditions.

About CVW Sustainable Royalties Inc.

CVW Sustainable Royalties invests in innovative technologies which provide returns linked to commodities and which operate in a sustainable manner to help accelerate the world's transition to net zero. CVW Royalties is building a portfolio of royalty-based cash flow streams by partnering with clean technology innovators in the commodity space. CVW Royalties is also the 100-per-cent owner of its proprietary technology, Creating Value from Waste, which is designed to recover bitumen, solvents, critical minerals and water from oil sands froth treatment tailings, which would reduce tailings pond fugitive methane emissions, volatile organic compounds (VOCs) and enhance tailings management for Alberta's oil sands.

About Relocalize Inc.

Relocalize is pioneering the transformation of the food system sustainability through decentralized production. Their autonomous production platforms, strategically positioned in retailer distribution centers, aim to disrupt traditional food and beverage industries by eliminating unnecessary transportation and associated emissions.

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