CVW Royalties Invests $1.5 Million in Relocalize's Montreal Facility

CVW Sustainable Royalties Inc. has announced the funding of an additional $1.5 million under a royalty agreement with Relocalize Inc., bringing the total up-front capital deployed to $4.0 million. This investment will provide CVW Royalties with a 25.0% gross revenue royalty on Relocalize's second commercial facility, which is to be located in Montreal, Quebec. The first investment of $2.5 million was previously used to secure a 25.0% gross revenue royalty on Relocalize's Plant City, Florida facility. With the full $4.0 million now deployed, CVW Royalties has the option to invest up to an additional $22.5 million to fund up to 13 additional Relocalize facilities, with a right of first refusal for future royalty financing on all of Relocalize's facilities for a period of 20 years.

The funding of the second investment follows confirmation that Relocalize has satisfied certain conditions, including a Final Investment Decision (FID) by its Board of Directors.

The Plant City Facility, which produces packaged ice at a distribution centre operated by The Winn-Dixie Company, is now operating and continuing to scale toward full commercial production. The facility currently serves several Winn-Dixie stores, with volumes expected to grow significantly as Relocalize continues to scale operations. Relocalize's Montreal Facility is expected to produce cold packs for the meal kit delivery, ready-to-eat meal, and other convenience-focused end markets. Relocalize has also seen growing interest from participants in the pharmaceutical sector, which the company believes could represent a significant additional market opportunity.

Terms of the transaction include a 25.0% gross revenue royalty on the Plant City Facility and the Montreal Facility, each expected to step down to 15.0% once certain commercial milestones are met. Together with a combined 2.0% revenue royalty on Relocalize's next eight commercial facilities beyond the Plant City Facility and the Montreal Facility, the initial royalty interest is structured to provide a steady stream of revenue. The company also retains the option to invest up to $22.5 million to fund up to 13 additional Relocalize facilities, with a right of first refusal for future royalty financing on all of Relocalize's facilities for a period of 20 years.

CVW Royalties is a royalty platform seeking to build a portfolio of cash flow streams utilizing royalty and royalty-like structures on assets and technologies engaged in the sustainable production of commodities and commodity-like products. The company's current portfolio includes its proprietary CVW™ technology, an interest in two future Northstar Clean Technologies facilities, and a royalty interest in Relocalize's micro-factories.