# EDGAR Filing Document

**Accession Number:** 0001919776
**File Stem:** 0001104659-26-010521
**Filing Date:** 2026-2
**Character Count:** 1356087
**Document Hash:** f33b8cd8f7912857e0bfae4cc501507d
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-26-010521.hdr.sgml**: 20260205

**ACCESSION NUMBER**: 0001104659-26-010521

**CONFORMED SUBMISSION TYPE**: F-1

**PUBLIC DOCUMENT COUNT**: 34

**FILED AS OF DATE**: 20260205

**DATE AS OF CHANGE**: 20260204

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** LIBERTY DEFENSE HOLDINGS, LTD.
- **CENTRAL INDEX KEY:** 0001919776
- **STANDARD INDUSTRIAL CLASSIFICATION:** SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 000000000
- **STATE OF INCORPORATION:** A1
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** F-1
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-293217
- **FILM NUMBER:** 26600212

**BUSINESS ADDRESS:**
- **STREET 1:** 187 BALLARDVALE STREET
- **STREET 2:** SUITE 110
- **CITY:** WILMINGTON
- **STATE:** MA
- **ZIP:** 01887
- **BUSINESS PHONE:** 888-617-7226

**MAIL ADDRESS:**
- **STREET 1:** 187 BALLARDVALE STREET
- **STREET 2:** SUITE 110
- **CITY:** WILMINGTON
- **STATE:** MA
- **ZIP:** 01887

[**TABLE OF CONTENTS**](#TOC)

#### As filed with the U.S. Securities and Exchange Commission on February 4, 2026.

#### Registration Statement No. 333-

### UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

### FORM F-1

#### REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

### LIBERTY DEFENSE HOLDINGS, LTD.
(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **British Columbia** <br> (State or other jurisdiction of <br> incorporation or organization)  | **3812** <br> (Primary Standard Industrial <br> Classification Code Number)  | **83-0954794** <br> (I.R.S. Employer <br> Identification No.)  |

---

#### 187 Ballardvale Street, Suite 110 Wilmington, Massachusetts 01887 (888) 617-7226
(Address, including zip code and telephone number, including area code, of registrant's principal executive offices)

#### William Frain 187 Ballardvale Street, Suite 110 Wilmington, Massachusetts 01887 (888) 617-7226
(Name, address, including zip code, and telephone number, including area code, of agent for service)

---

| | | |
|:---|:---|:---|
|  ***Copies to:***  |  ***Copies to:***  |  ***Copies to:***  |
| **Stephen Older <br> Barlow Mann <br> Carly Ginley <br> McGuireWoods LLP <br> 1251 6th Avenue, 20th Floor <br> New York, New York 10020 <br> (212) 548-2100**  | **Desmond Balakrishnan <br> McMillan LLP <br> Royal Centre <br> 1055 W Georgia St #1500 <br> Vancouver, BC V6E 4N7, Canada <br> (604) 689-9111**  | **Steven Skolnick <br> Tracy Buffer <br> Lowenstein Sandler LLP <br> 1251 Avenue of the Americas <br> New York, New York 10020 <br> (646) 414-6947**  |

---

**Approximate date of commencement of proposed sale to the public:** As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act.

Emerging growth company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 **The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the United States Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.** 

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The information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

#### SUBJECT TO COMPLETION, DATED FEBRUARY 4, 2026

#### PRELIMINARY PROSPECTUS

### Common Shares
![[MISSING IMAGE: lg_libertydef-4clr.jpg]](lg_libertydef-4clr.jpg)

### LIBERTY DEFENSE HOLDINGS, LTD.
This is the initial public offering in the United States of common shares, no par value (each, a "Common Share" and collectively, "Common Shares"), of Liberty Defense Holdings, Ltd., a British Columbia corporation (the "Company"), in a firm commitment underwritten offering. It is estimated that the initial public offering price will be between US$ and US$ per Common Share.

Our Common Shares are currently listed on the TSX Venture Exchange (the "TSXV") under the symbol "SCAN," quoted on the OTCQB<sup>®</sup> Venture Market (the "OTCQB") under the symbol of "LDDFF" and listed on the Frankfurt Stock Exchange (the "FSE") under the symbol of "E30." We have applied to list the Common Shares being offered hereby on the Nasdaq Capital Market ("Nasdaq") under the symbol "LDHL." No assurance can be given that our application will be approved. It is a condition precedent to the underwriter's obligation to purchase the Common Shares being offered in this offering that Nasdaq approve the listing of our Common Shares. Accordingly, if Nasdaq does not approve the listing of our Common Shares, we will not proceed with this offering.

On January 30, 2026, the closing price of our Common Shares was C$0.155 on the TSXV, US$0.1131 on the OTCQB and €0.0660 on the FSE.

We have assumed an initial public offering price of US$ per Common Share, the midpoint of the range set forth above. The actual initial public offering price per Common Share will not be determined by any particular formula but will rather be determined through negotiations between us and the underwriter at the time of pricing. Therefore, the assumed initial public offering price used throughout this prospectus may not be indicative of the actual initial public offering price.

We are an "emerging growth company" and a "foreign private issuer" as defined under United States federal securities laws and may elect to comply with reduced public company reporting requirements. See "*Implications of Being an Emerging Growth Company"* beginning on page 8 and "*Foreign Private Issuer Status*" beginning on page 9 of this prospectus for more information.

 **Investing in our securities involves a high degree of risk, including the risk of losing your entire investment. See *"Risk Factors*" beginning on page [17](#tRIFA) to read about factors you should consider before buying our securities.** 

 **Neither the United States Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.** 

---

| | | |
|:---|:---|:---|
| | **Per Common <br> Share**  | **Total**  |
| Initial public offering price  | US$ | US$ |
| Underwriting discounts and commissions<sup>(1)</sup>  | US$ | US$ |
| Proceeds, before expenses, to us  | US$ | US$ |

---

(1) See "*Underwriting"* on page 116 for additional information regarding underwriting compensation.

We have granted a 30-day option to the underwriter, exercisable one or more times in whole or in part, to purchase up to an additional Common Shares, representing 15% of the Common Shares sold in this offering, at the initial public offering price, less the underwriting discounts payable by us, solely to cover over-allotments, if any.

The underwriter expects to deliver the Common Shares to the investors through the facilities of the Depository Trust Company on or about , 2026.

### Benchmark, a StoneX Company
The date of this prospectus is , 2026.

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#### **TABLE OF CONTENTS**

---

| | |
|:---|:---|
| [ABOUT THIS PROSPECTUS](#tATP)  | [4](#tATP) |
| [FORWARD-LOOKING STATEMENTS](#tFOST)  | [6](#tFOST) |
| [PROSPECTUS SUMMARY](#tPRSU)  | [7](#tPRSU) |
| [THE OFFERING](#tTHOF)  | [13](#tTHOF) |
| [SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION](#tSHCF)  | [15](#tSHCF) |
| [RISK FACTORS](#tRIFA)  | [17](#tRIFA) |
| [DIVIDEND POLICY](#tDIPO)  | [51](#tDIPO) |
| [MARKET FOR OUR COMMON SHARES](#tMFOC)  | [52](#tMFOC) |
| [CAPITALIZATION](#tCAP)  | [53](#tCAP) |
| [USE OF PROCEEDS](#tUOP)  | [54](#tUOP) |
| [DILUTION](#tDIL)  | [55](#tDIL) |
| [BUSINESS](#tBUS)  | [57](#tBUS) |
|  [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#tMDAA)  | [77](#tMDAA) |
| [DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](#tDSMA)  | [97](#tDSMA) |
| [EXECUTIVE COMPENSATION](#tEXCO)  | [104](#tEXCO) |
| [MAJOR SHAREHOLDERS](#tMASH)  | [112](#tMASH) |
| [CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS](#tCRAR)  | [113](#tCRAR) |
| [SHARES ELIGIBLE FOR FUTURE SALE](#tSEFF)  | [114](#tSEFF) |
| [UNDERWRITING](#tUND)  | [116](#tUND) |
| [LIMITATIONS ON RIGHTS OF NON-CANADIANS](#tLORO)  | [123](#tLORO) |
| [DESCRIPTION OF SHARE CAPITAL](#tDOSC)  | [125](#tDOSC) |
| [CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS](#tCUSF)  | [131](#tCUSF) |
| [CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS](#tCCFI)  | [138](#tCCFI) |
| [LEGAL MATTERS](#tLEMA)  | [140](#tLEMA) |
| [EXPERTS](#tEXP)  | [140](#tEXP) |
| [EXPENSES OF THIS OFFERING](#tEOTO)  | [140](#tEOTO) |
| [WHERE YOU CAN FIND MORE INFORMATION](#tWYCF)  | [140](#tWYCF) |
| [INDEX TO FINANCIAL STATEMENTS](#fITFS)  | [F-1](#fITFS) |

---

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#### ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form F-1 that we filed with the United States Securities and Exchange Commission (the "SEC"). You should read this prospectus carefully. This prospectus contains important information you should consider when making your investment decision.

Neither we nor the underwriter has authorized anyone to provide any information or to make any representations other than the information contained in this prospectus, any amendment or supplement to this prospectus or in any free writing prospectus prepared by or on our behalf or to which we may have referred you. We and the underwriter take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriter have not authorized any other person to provide you with different or additional information. Neither we nor the underwriter is making an offer to sell the Common Shares in any jurisdiction where the offer or sale is not permitted. This offering is being made in the United States and elsewhere solely on the basis of the information contained in this prospectus. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or any sale of the Common Shares. Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus. This prospectus is not an offer to sell or the solicitation of an offer to buy the Common Shares in any circumstances under which such offer or solicitation is unlawful.

For investors outside the United States: Neither we nor the underwriter has done anything that would permit this offering or the possession or distribution of this prospectus in any jurisdiction where action for those purposes is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, this offering of Common Shares and the distribution of this prospectus outside the United States.

We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to the registration statement of which this prospectus is a part were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants may have been accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.

Except as otherwise indicated, references in this prospectus to the "Company," "we," "us" and "our" refer to Liberty Defense Holdings, Ltd. and its consolidated subsidiaries.

#### Enforceability of Civil Liabilities
We are incorporated under the laws of British Columbia. Some of our directors and officers, and the experts named in this prospectus, reside outside the United States, and all or a substantial portion of their assets and a portion of our assets are located outside of the United States. We have appointed an agent for service of process in the United States, but it may be difficult for shareholders who reside in the United States to effect service within the United States upon those directors, officers and experts who are not residents of the United States. It may also be difficult for shareholders who reside in the United States to realize in the United States upon judgments of courts of the United States predicated upon our civil liability and the civil liability of our directors, officers and experts under the United States federal securities laws. Furthermore, because some of our directors and officers reside outside the United States and all or a substantial portion of their assets and a portion of our assets are located outside the United States, any judgment obtained in the United States against us or any of our directors and officers may not be collectible within the United States. There can be no assurance that United States investors will be able to enforce against us, our directors and officers or certain experts named herein who are residents of Canada or other countries outside the United States, any judgments in civil and commercial matters, including judgments under the federal securities laws.

#### Market, Industry and Other Data
This prospectus contains estimates, projections and other information concerning our industry, our business, and the markets for our products. Information that is based on estimates, forecasts, projections,

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market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from our own internal estimates and research as well as from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry and general publications, government data, and similar sources.

In addition, assumptions and estimates of our and our industry's future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "*Risk Factors*." These and other factors could cause our future performance to differ materially from our assumptions and estimates. See "*Forward-Looking Statements*."

#### Trademarks
We own or have rights to various trademarks, service marks and trade names that we use in connection with the operation of our business. This prospectus also contains additional trademarks, trade names and service marks belonging to other companies. Solely for convenience, trademarks, trade names and service marks referred to in this prospectus may appear without the <sup>®</sup>,™ or <sup>SM</sup> symbols, but such references are not intended to indicate, in any way, that we or the applicable licensor to these trademarks, trade names and service marks will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor. We do not intend our use or display of other parties' trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

#### Presentation of Financial Information
Unless otherwise indicated, the audited consolidated financial statements and related notes included in this prospectus have been prepared in accordance with the International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"). None of the audited consolidated financial statements in this prospectus were prepared in accordance with U.S. generally accepted accounting principles. Our functional currency is the Canadian dollar, which is the currency of the primary economic environment in which we operate. However, our consolidated financial statements are presented in U.S. dollars.

#### Exchange Rates
In this prospectus, all dollar amounts referenced, unless otherwise indicated, are expressed in U.S. dollars and are referred to as "US$." Canadian dollars are referred to as "C$." The following table sets out, for the periods indicated, the high, low, and period end indicative rates of exchange for US$1.00 expressed in Canadian dollars as published by the Bank of Canada.

---

| | | | |
|:---|:---|:---|:---|
| | **Nine months ended <br> September 30, 2025 (C$)**  | **Year ended <br> December 31, 2024 (C$)**  | **Year ended <br> December 31, 2023 (C$)**  |
| As of end of period  | 1.3921 | 1.4389 | 1.3226 |
| Low for the period  | 1.3575 | 1.3316 | 1.3128 |
| High for the period  | 1.3941 | 1.4416 | 1.3875 |
| Average rate for the period  | 1.3773 | 1.3698 | 1.3497 |

---

On January 30, 2026, the daily average exchange rate for Canadian dollars in terms of the U.S. dollar, as quoted by the Bank of Canada, was US$1.00 = C$1.3562.

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#### FORWARD-LOOKING STATEMENTS
Certain statements contained in this prospectus constitute forward-looking information or forward-looking statements under applicable securities laws. These statements relate to future events or to our future performance, business prospects or opportunities. All statements other than statements of historical fact may be forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "seek," "anticipate," "plan," "continue," "estimate," "expect," "may," "will," "project," "predict," "forecast," "potential," "targeting," "intend," "could," "might," "should," "believe" and similar expressions) are not statements of historical fact and may be "forward-looking statements."

Examples of forward-looking information in this prospectus include, but are not limited to, statements in respect of: the acceptance by our customers and the marketplace of new technologies and solutions; our ability to attract new customers; our ability to attract and retain personnel; our competitive position and our expectations regarding competition; our ability to comply with our debt service obligations and related covenants; anticipated trends and challenges in our business and the markets in which we operate; development, production, commercialization and sales of our HEXWAVE™ product; maintenance, development and commercialization of existing third party partner relationships; regulatory changes; and our ability to achieve the various development and commercial milestones within our estimated timeframe or at all.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties relating to, among others: limited operating history; history of losses; negative cash flow for the foreseeable future; interruptions to or failures of our infrastructure; uncertainties and assumptions in our revenue forecasts; changes in technology and evolving standards of the security industries; defects or disruptions in our proposed products and services; risks related to loss or infringement of our intellectual property or our infringement of intellectual property belonging to third parties; our dependence on key personnel and the risk of conflicts of interest; competition in our industry; market price volatility of the Common Shares; global economic, political and financial market conditions; failure to manage our growth successfully; our ability to pay dividends; third-party credit risks; currency exchange rate fluctuations; risks related to future dilution and liquidity of the Common Shares; reliance on third parties; reliance on a limited number of products, reliance on development of a prototype; failure to raise additional capital; reliance on permits, certifications and licenses; and failure to meet timelines.

We believe that the expectations reflected in any forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this prospectus should not be unduly relied upon. These statements speak only as of the date of this prospectus and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by law. Actual results may differ materially from those expressed or implied by such forward-looking statements.

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#### PROSPECTUS SUMMARY
 *This summary highlights certain information contained elsewhere in this prospectus. This summary does not contain all of the information that may be important to you. You should read and carefully consider the following summary together with the entire prospectus, including the sections of this prospectus entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus, before deciding to invest in our securities.* 

#### Company Overview
We are an emerging leader in artificial intelligence ("AI")-based contactless security technology for detecting concealed metallic and non-metallic weapons and threats. Our mission is protecting communities and preserving peace of mind through superior security detection solutions, while simultaneously increasing ease of travel and convenience for security at major checkpoints. In furtherance of this mission, we offer two separate security screening solutions: our HEXWAVE™ system and our High-Definition Advanced Imaging Technology Upgrade Kit ("HD-AIT Upgrade Kit").

***HEXWAVE***™

Our flagship HEXWAVE™ system uses millimeter wave ("MMW"), advanced three-dimensional ("3D") imaging, and AI to detect concealed metallic and non-metallic weapons, including traditional metallic guns and knives as well as more novel threats such as liquid, plastic, and powder explosives, 3D printed guns, and other prohibited items — without having to remove common items like cell phones or keys. The system allows for rapid, automated screening using a high throughput, contactless, walkthrough portal, alleviating many of the shortcomings of legacy metal detector-based screening processes. We believe HEXWAVE™ can empower gathering spaces to address the chronic epidemic of mass shootings and terrorist attacks, as well as emerging risks such as 3D printed weapons, in a cost-effective manner while improving the visitor experience. We believe the most promising market opportunities for HEXWAVE™ are certain verticals in the urban security market and in aviation employee screening.

HEXWAVE™'s contactless, 3D-imaging and AI-enabled screening technology represents a new generation of technology for our target urban security and aviation employee screening markets which, according to our estimates, is currently a US$10 billion market opportunity. These markets are based primarily on legacy metal detectors and inefficient processes. This legacy approach presents numerous operational problems and hidden costs, including frequent false alarms caused by the inability to distinguish between dangerous weapons and harmless items. Persistent false alarms often require visitors to undergo a cumbersome resolution process, including emptying of pockets and pat downs that are error-prone, labor and cost-intensive, intrusive, and unpleasant. This also creates long wait times, dangerous crowding, and numerous opportunities for weapons to slip through undetected. The net result is less effective security, unhappy visitors, and stressful working conditions for employees, many of whom may be hire-for-the-day contractors. As a result, venues and facilities in the urban security market generally have faced a choice between operating largely unprotected against random acts of violence (i.e., without security screening) or using systems that significantly impede the flow of customers into and within business facilities.

Unlike traditional walk-through metal detectors, HEXWAVE™ uses advanced sensors, 3D image reconstruction and AI software to reliably detect dangerous weapons while ignoring harmless items like keys, wallets, cell phones and jackets. This means that visitors can walk through HEXWAVE™ without stopping, without removing items from their pockets. HEXWAVE™ significantly reduces the number of false alarms, allowing security staff to focus their attention on high probability threats and increase customer throughput.

We believe that the increasing frequency and severity of violent incidents in public venues is prompting both businesses and governments to adopt more proactive and scalable security screening solutions. This shift is creating a growing, market-driven need for effective, efficient and non-invasive detection technologies that can be broadly deployed across both public and private settings. As a result, we believe that we are well-positioned to become a market leader in the rapidly growing market for next-generation urban security screening technologies.

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HEXWAVE<sup>™</sup> is currently in early commercial deployment. For the nine months ended September 30, 2025 and the year ended December 31, 2024, we have generated approximately US$0.91 million and US$1.01 million, respectively, in revenue from sales of HEXWAVE<sup>™</sup> to early-adopter customers mainly in North America. These include deliveries to customers in the stadium, transportation, and government facility sectors. HEXWAVE<sup>™</sup> is not yet in full-scale mass production, and we continue to focus on optimizing unit economics, reducing production costs, and enhancing system performance through ongoing engineering and supply chain improvements.

Our marketing and sales activities to date have included participation in major security and public safety trade shows, targeted pilot programs at customer venues, and direct sales outreach to key sectors. We are actively expanding our commercial team and building channel partnerships to support broader market rollout in 2026.

For a description of the HEXWAVE™ system, including the AI technology it incorporates, see "*Business — Our Products — HEXWAVE™*."

#### HD-AIT Upgrade Kit
Our HD-AIT Upgrade Kit is being developed pursuant to contracts awarded by the U.S. Transportation Security Administration ("TSA") to create a solution to aging high-definition advanced imaging technology ("HD-AIT") systems currently in use in airports throughout North America. The TSA has announced plans to upgrade over 1,000 body scanners installed at U.S. airports over the next five years, which we believe creates a near-term market opportunity representing approximately US$100 million of potential revenue. In addition, we believe there is global demand for similar upgrades to installed base systems internationally.

As of the date of this prospectus, the HD-AIT Upgrade Kit remains in the product development and TSA certification phase and has not yet been commercialized. In August 2025, we delivered our first unit to the TSA for formal evaluation. Initial commercial sales are anticipated in 2026, subject to successful completion of the TSA's certification process.

 *For a description of the HD-AIT Upgrade Kit, see "Business — Our Products — HD-AIT Upgrade Kit."* 

#### Implications of Being an Emerging Growth Company
As a company with less than US$1.235 billion in revenue for our last fiscal year, we qualify as an "emerging growth company" pursuant to the Jumpstart Our Business Startups Act of 2012, as amended (the "JOBS Act"). As an emerging growth company, we may take advantage of specified reduced reporting and other requirements compared to those that are otherwise applicable generally to public companies. These provisions include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reduced executive compensation disclosure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • exemptions from the requirement to hold a non-binding advisory vote on executive compensation, including golden parachute compensation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • an exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley") in the assessment of the emerging growth company's internal control over financial reporting.

We have elected to take advantage of these reduced reporting and other requirements. We will remain an emerging growth company until the earliest of (a) the last day of the fiscal year during which we have total annual gross revenues of at least US$1.235 billion; (b) the last day of our fiscal year following the fifth anniversary of the completion of this offering; (c) the date on which we have, during the preceding three-year period, issued more than US$1.0 billion in non-convertible debt; or (d) the date on which we are deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which would occur if the market value of our Common Shares that are held by non-affiliates exceeds US$700 million. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.

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#### Foreign Private Issuer Status
We are a foreign private issuer within the meaning of the rules under the Exchange Act. As such, we are exempt from certain provisions applicable to United States domestic public companies. For example:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • for interim reporting, we are permitted to comply solely with our home country requirements, which may be less rigorous than the rules that apply to domestic public companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we are not required to provide the same level of disclosure on certain issues, such as executive compensation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we are not required to comply with Section 16(b) of the Exchange Act establishing insider liability for profits realized from any "short-swing" trading transaction.

#### Corporate Information
We are a corporation domiciled in Canada and were incorporated under the *Business Corporations Act* (Ontario) on June 8, 2012. On July 27, 2020, we continued our jurisdiction of incorporation from Ontario to British Columbia and are now governed by the *Business Corporations Act* (British Columbia) (the "BCBCA"). Our headquarters and corporate office is located at 187 Ballardvale Street, Suite 110, Wilmington, Massachusetts 01887. Our registered office is located at Suite 1500, 1055 West Georgia Street, Vancouver, British Columbia, Canada V6E 4N7. Our internet site is *www.libertydefense.com*; our telephone number is 1.888.617.7226. Information contained on, or available through, our internet site does not constitute part of, and is not deemed incorporated by reference into, this prospectus, and investors should not consider any such information as part of this prospectus.

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#### Risk Factors
Our business is subject to a number of risks which you should be aware before making an investment decision. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth under "*Risk Factors*" in deciding whether to invest in our securities. These risks include but are not limited to the following:

#### Risks Relating to Our Business
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We are an early-stage company with a limited operating history.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We have a history of losses and may not achieve or maintain profitability in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We currently have negative operating cash flows, a working capital deficit, and a history of losses, and these conditions raise substantial doubt about our ability to continue as a going concern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We may not be able to achieve milestones on the expected timeframe or at all, which may impair our ability to execute our business plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Our independent registered public accountants have identified material weaknesses in our internal control over financial reporting. If we fail to remediate such material weaknesses, identify additional material weaknesses in the future or otherwise fail to continue to design, implement and maintain effective internal control over financial reporting, we may not be able to report our financial results accurately.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We may not maintain adequate internal controls over financial processes and reporting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • A significant portion of our business depends on sales to government agencies, which is subject to a number of challenges and risks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Our ability to generate future revenue and profits largely relies on increased production and cost reduction of HEXWAVE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The HD-AIT Upgrade Kit may not achieve TSA certification within our expected timeline, or at all, which could delay commercialization and expected revenue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Our reliance on a limited number of products may subject us to greater risk with regard to changes in customer preference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Rapid technological change could result in obsolescence or short product life cycles of our products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • If the weapons detection technology market fails to grow or grows more slowly than we currently anticipate, our business would be negatively affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Failure to achieve forecasted revenue may affect our operating results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • If our products fail or are perceived to fail to detect threats such as a firearm or other potential weapon or explosive device, or if our products contain undetected errors or defects, these failures or errors could result in injury or loss of life, which could harm our brand and reputation and have an adverse effect on our business and results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We rely on certain license agreements for key technology incorporated into our products, which contain termination and other provisions that could materially and adversely affect our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We rely upon a limited number of third parties for manufacturing, shipping, transportation, logistics, marketing and sales of our products.

#### Risks Relating to Market Conditions
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Our business is impacted by worldwide economic conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Deterioration of economic conditions or weakening in credit or capital markets may have a material adverse effect on our business, results of operations and financial condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We cannot predict the consequences of current or future geopolitical events, but they may adversely affect the markets in which we operate and our results of operations.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Tariffs and related retaliatory tariffs may impact trade between the United States and foreign countries and could increase our manufacturing costs, adversely affect our margins and delivery timelines and impact our ability to compete in applicable markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Any disruption at our places of business due to natural and manmade disasters could delay revenues and increase our expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The effects of an epidemic, pandemic or similar outbreak have negatively impacted and could in the future negatively impact our business and financial results.

#### Risks Relating to Legal Proceedings and Regulatory Compliance
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Our operating results may be harmed if we are not in compliance with various local, provincial and federal tax laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Our business and operations expose us to numerous legal and regulatory requirements, and any violation of these requirements could harm our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Investigations, audits, claims, disputes, enforcement actions, litigation, arbitration, or other legal proceedings could require us to pay potentially large damage awards or penalties and could be costly to defend, which would adversely affect our cash balances and profitability, and could damage our reputation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Environmental matters, including unforeseen costs associated with compliance and remediation efforts and government and third-party claims, could have a material adverse effect on our reputation and our financial position, results of operations, and cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Protecting and defending against intellectual property claims may have a material adverse effect on our business.

#### Risks Relating to Our Financial Condition
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We face substantial capital requirements and may fail to raise additional capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The issuance of debt could impair our ability to obtain additional financing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We are dependent on the Parabilis Credit Facilities, which are short-term, contain restrictive covenants, and include lender remedies that could materially harm us if triggered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Because we have no history of dividends and do not intend to pay any cash dividends for the foreseeable future, capital appreciation, if any, would be your sole source of gain.

#### Risks Related to Ownership of Our Securities
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • You will experience immediate and substantial dilution if you purchase Common Shares in this offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • There is no liquid public market for our Common Shares in the United States and we do not know whether one will develop to provide you with adequate liquidity. If our share price fluctuates after this offering, you could lose a significant part of your investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The liquidity of our Common Shares may be decreased as a result of the Reverse Split.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Management will have broad discretion as to the use of the proceeds from this offering and may not use the proceeds effectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We have no operating experience as a publicly traded company in the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We will incur significantly increased costs and devote substantial management time as a result of operating as a United States public company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Our inability to comply with Nasdaq's continued listing requirements could result in our Common Shares being delisted, which could affect the market price and liquidity of our securities and reduce our ability to raise capital.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Our Common Shares have in the past and may in the future experience extreme share price volatility unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Common Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We are selling a substantial number of Common Shares in this offering, which could cause the price of our Common Shares to decline.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We will need to raise additional financing in the future which may dilute our share capital.

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#### THE OFFERING
Issuer

Liberty Defense Holdings, Ltd.

Common Shares offered by us

Common Shares

Assumed initial public offering price

US$ per Common Share, the midpoint of the range set forth on the cover page of this prospectus

Over-Allotment Option

We have granted a 30-day option to the underwriter, exercisable one or more times in whole or in part, to purchase up to an additional Common Shares, representing 15% of the Common Shares sold in this offering, at the initial public offering price, less the underwriting discounts payable by us, solely to cover over-allotments, if any (the "Over-Allotment Option").

Common Shares to be outstanding after this offering<sup>(1)</sup>

Common Shares (or Common Shares if the underwriter exercises the Over-Allotment Option in full)

Listing

Our Common Shares are listed on the TSXV under the symbol "SCAN," quoted on the OTCQB under the symbol of "LDDFF" and listed on the FSE under the symbol of "E30." We have applied to list our Common Shares on Nasdaq under the symbol "LDHL."

Use of proceeds

We estimate that the net proceeds from this offering will be approximately US$ million (or US$ million if the underwriter exercises the Over-Allotment Option in full), after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, based on the assumed initial public offering price of US$ per Common Share.

We intend to use the net proceeds from this offering for working capital and other general corporate purposes, including commercialization of our HD-AIT Upgrade Kit, business development activities associated with the sale of HEXWAVE™ and recurring engineering and cost reduction efforts for next generation HEXWAVE™. We have not allocated specific amounts of net proceeds for any of these purposes. See "*Use of Proceeds*" for additional information.

Lock-up

We and our directors and executive officers have agreed, subject to certain exceptions, not to sell or otherwise dispose of Common Shares or any securities convertible into or exchangeable for Common Shares for a period of one hundred eighty (180) days after the closing of this offering without the prior written consent of the underwriter. See "*Underwriting*" for additional information.

Risk factors

Investing in our securities involves a high degree of risk. See "*Risk Factors*" for a discussion of factors you should carefully consider before investing in our securities.

(1) The number of our Common Shares to be outstanding after this offering is based on Common Shares issued and outstanding as of , 2025, and excludes, as of that date, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Common Shares issuable upon exercise of outstanding stock options, with a weighted average exercise price of C$ per share, under our Omnibus Long-Term Incentive Plan, as amended;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Common Shares issuable upon exercise of outstanding warrants, with a weighted average exercise price of C$ per share; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Common Shares issuable upon exercise of outstanding restricted share units ("RSUs").

Except as otherwise noted, all information contained in this prospectus assumes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • no exercise of the Over-Allotment Option;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • no purchase of Common Shares in this offering by our directors, officers or existing shareholders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • no exercise of our outstanding options or warrants.

Approval of the listing of our Common Shares on Nasdaq will require us to take certain actions in order to comply with the initial listing requirements under Nasdaq Listing Rules 5505(a) and 5505(b)(1), including the Reverse Split, in order to meet the minimum bid price of US$4.00 per share.

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#### SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
The following tables set forth our summary historical consolidated financial information. You should read the summary historical consolidated financial information in conjunction with "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" and our consolidated financial statements and related notes included elsewhere in this prospectus. We have derived the summary historical consolidated financial information for the years ended December 31, 2024 and 2023 from our audited consolidated financial statements included elsewhere in this prospectus. We have derived the summary historical consolidated financial information as of and for the three and nine months ended September 30, 2025 and 2024 from our amended and restated unaudited condensed consolidated interim financial statements included elsewhere in this prospectus. Our consolidated financial statements have been prepared in accordance with IFRS and are presented in U.S. dollars. Our historical results are not necessarily indicative of the results that should be expected in any future period.

---

| | | |
|:---|:---|:---|
| | **Years ended December 31, <br> (Audited)**  | **Years ended December 31, <br> (Audited)**  |
| **Consolidated Statements of Loss and Comprehensive Loss:**  | **2024 <br> US$**  | **2023 <br> US$**  |
| **Revenue** |  |  |
| &nbsp;&nbsp;&nbsp; HEXWAVE™ revenue  | 1013546 | 120000 |
| &nbsp;&nbsp;&nbsp; Contract revenue  | 1425000 | 1372557 |
| Total revenue  | 2438546 | 1492557 |
| **Cost of revenue** |  |  |
| &nbsp;&nbsp;&nbsp; HEXWAVE™ cost of revenue  | 2033498 | 1546040 |
| &nbsp;&nbsp;&nbsp; Contract cost of revenue  | 2081971 | 1163211 |
| Total cost of revenue  | 4115469 | 2709251 |
| Gross loss  | (1676923) | (1216694) |
|  Engineering, Research and Development and General and Administrative Expenses  | 5756941 | 7890649 |
| Other expenses (income)  | 1411299 | 261700 |
| Net loss  | (8845163) | (9369043) |
| Other comprehensive loss  | 192175 | 31598 |
| **Total loss and comprehensive loss**  | **(8652988)** | **(9337445)** |
| Weighted average number of Common Shares outstanding – basic and diluted  | 17160752 | 12816531 |
| Basic and diluted loss per share  | (0.52) | (0.73) |

---

---

| | | |
|:---|:---|:---|
| | **Nine Months Ended <br> September 30, (Unaudited)**  | **Nine Months Ended <br> September 30, (Unaudited)**  |
| **Consolidated Statements of Loss and Comprehensive Loss:**  | **2025 <br> US$**  | **2024 <br> US$**  |
| **Revenue** |  |  |
| &nbsp;&nbsp;&nbsp; HEXWAVE™ revenue  | 909407 | 1447532 |
| &nbsp;&nbsp;&nbsp; Contract revenue  | 854849 | 1250000 |
| Total revenue  | 1764256 | 2697532 |
| **Cost of revenue** |  |  |
| &nbsp;&nbsp;&nbsp; HEXWAVE™ cost of revenue  | 2112884 | 2408789 |
| &nbsp;&nbsp;&nbsp; Contract cost of revenue  | 1493636 | 1796912 |
| Total cost of revenue  | 3606520 | 4205701 |
| Gross loss  | (1842264) | (1508169) |
| Development and General and Administrative Expenses  | 8160104 | 4343864 |
| Other expenses  | 507838 | 577694 |

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---

| | | |
|:---|:---|:---|
| | **Nine Months Ended <br> September 30, (Unaudited)**  | **Nine Months Ended <br> September 30, (Unaudited)**  |
| **Consolidated Statements of Loss and Comprehensive Loss:**  | **2025 <br> US$**  | **2024 <br> US$**  |
| Net loss  | (10510206) | (6429727) |
| Other comprehensive loss  | 112660 | 113547 |
| **Total comprehensive loss**  | **(10397546)** | **(6316180)** |
| Weighted average number of Common Shares outstanding – basic and diluted  | 55564003 | 16037061 |
| Basic and diluted loss per share  | (0.19) | (0.40) |

---

---

| | | |
|:---|:---|:---|
| | **Years Ended <br> December 31, <br> (Audited)**  | **Years Ended <br> December 31, <br> (Audited)**  |
| **Consolidated Statements of Cash Flows:**  | **2024 <br> US$**  | **2023 <br> US$**  |
| Cash used in operating activities  | (6469264) | (5537021) |
| Cash used in investing activities  | (121217) | (221095) |
| Cash provided by financing activities  | 7781755 | 5069546 |
| Effect of foreign exchange rate changes on cash  | (39008) | 12060 |

---

---

| | | |
|:---|:---|:---|
| | **Nine months <br> Ended September 30, <br> (Unaudited)**  | **Nine months <br> Ended September 30, <br> (Unaudited)**  |
| **Consolidated Statements of Cash Flows:**  | **2025 <br> US$**  | **2024 <br> US$**  |
| Cash used in operating activities  | (8379896) | (3072818) |
| Cash used in investing activities  | (176498) | (125206) |
| Cash provided by financing activities  | 7931412 | 3474239 |
| Effect of foreign exchange rate changes on cash  | 112660 | 113338 |

---

---

| | | |
|:---|:---|:---|
| | **As of September 30, 2025 <br> (Unaudited)**  | **As of September 30, 2025 <br> (Unaudited)**  |
| **Consolidated Statements of Financial Position:**  | **Actual <br> US$**  | **As adjusted<sup>(1)</sup> <br> US$**  |
| Cash  | 640907 |  |
| Total assets  | **6754164** |  |
| Total liabilities  | **8584552** |  |
| Deficit  | (56835418) |  |
| Total shareholders' deficiency  | (1830388) |  |

---

(1) The as adjusted column gives effect to the issuance and sale by us in this offering of Common Shares at the assumed initial public offering price of US$ per Common Share, the midpoint of the range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each US$ increase (decrease) in the assumed initial public offering price of US$ per Common Share would increase (decrease) our as adjusted cash, total assets and total shareholders' deficiency by approximately US$ million, assuming the number of Common Shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of Common Shares offered by us would increase (decrease) our as adjusted cash, total assets and total shareholders' equity (deficit) by approximately US$ million, assuming the assumed initial public offering price of US$ per Common Share remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. This as adjusted information is illustrative only and will depend on the actual initial public offering price and other terms of this offering determined at pricing.

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#### RISK FACTORS
 *You should carefully consider the risks described below and all other information contained in this prospectus before making an investment decision. If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our securities could decline, and you may lose all or part of your investment. This prospectus also contains forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors, including the risks described below and elsewhere in this prospectus. See "Forward Looking Statements."* 

#### Risks Relating to Our Business

#### We are an early-stage company with a limited operating history.
We are an early-stage company with a limited operating history. We have generated limited revenue from contract awards and sales of our products. As such, we are subject to many risks, including under-capitalization, cash shortages, and limitations with respect to personnel, financial and other resources and the lack of revenue. There is no assurance that we will be successful in achieving a return on shareholders' investment and the likelihood of success must be considered in light of our early stage of operations. Our prospects must be considered speculative in light of the risks, expenses, and difficulties frequently encountered by companies in their early stages of operations, particularly in the highly competitive and rapidly evolving markets in which we operate. To attempt to address these risks, we must, among other things, successfully implement our business plan, marketing, and commercialization strategies, respond to competitive developments, and attract, retain, and motivate qualified personnel. A substantial risk is involved in investing in us because, as a smaller commercial enterprise that has fewer resources than an established company, our management may be more likely to make mistakes and may be more vulnerable operationally and financially to any mistakes that may be made, as well as to external factors beyond our control.

#### We have a history of losses and may not achieve or maintain profitability in the future.
We have a history of losses. We are not certain whether or when we will obtain a high enough volume of sales of our products to sustain or increase our growth or achieve or maintain profitability in the future and may continue to incur significant losses in the future. There is no guarantee that we will ever become profitable. Our ability to become profitable will depend largely on the timely productization of our products, coupled with securing timely, cost-effective outsourced manufacturing arrangements and marketing our products. There can be no assurance that any such events will occur or that we will ever become profitable. Even if we achieve profitability, we cannot predict the level of such profitability. If we sustain losses over an extended period of time, we may be unable to continue our business.

 ***We currently have negative operating cash flows, a working capital deficit, and a history of losses, and these conditions raise substantial doubt about our ability to continue as a going concern.***

We have incurred recurring losses and negative cash flows from operating activities since inception, and we expect to continue to incur significant operating losses for the foreseeable future as we seek to scale production of HEXWAVE™ and advance the development and commercialization of the HD-AIT Upgrade Kit. As of September 30, 2025 and December 31, 2024, we maintained a cash balance of approximately US$0.64 million and approximately US$1.2 million, respectively, and experienced a working capital deficiency of approximately US$4.5 million and approximately US$2.7 million, respectively. These conditions raise substantial doubt about our ability to continue as a going concern and as a result the audit report covering the December 31, 2024 consolidated financial statements contains an explanatory paragraph that states that our significant losses and negative operating cash flows raise substantial doubt about the entity's ability to continue as a going concern. Our ability to continue operations depends on our ability to raise additional capital and generate sufficient revenue in future periods. There is no assurance that additional financing will be available on acceptable terms or at all. If we are unable to raise the capital required to fund our operations or achieve positive cash flows, we may need to delay product development, reduce our operating plans, scale back commercialization activities, or take other actions that could materially and adversely

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affect our business, financial condition, and results of operations. For example, in early 2023, we instituted a company-wide furlough as a result of financial restraints.

 ***We may not be able to achieve milestones on the expected timeframe or at all, which may impair our ability to execute our business plan.***

The execution of our business plan poses many challenges and is based on a number of assumptions. There can be no assurance that milestones will be achieved by us within the expected timeframe or at all, which may impair our ability to execute our business plan. If we experience significant cost overruns, or if our business plan is more costly than we anticipate, certain activities may be delayed or eliminated, resulting in changes or delays to our current plans. Also, we may be compelled to secure additional funding (which may or may not be available or available at conditions unfavorable to us) to execute our business plan. We cannot predict with certainty our future revenues or results from our operations. If the assumptions on which our revenues or expenditures forecasts are based change, it may have a material adverse effect on our business, financial condition, results of operations, cash flows or prospects.

 ***Our independent registered public accountants have identified material weaknesses in our internal control over financial reporting. If we fail to remediate such material weaknesses, identify additional material weaknesses in the future or otherwise fail to continue to design, implement and maintain effective internal control over financial reporting, we may not be able to report our financial results accurately.***

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS. A "material weakness" is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected by the company's internal controls on a timely basis.

Our independent registered public accountants have identified material weaknesses in our internal control over financial reporting in connection with the audit of our fiscal year 2024 consolidated financial statements. The material weaknesses primarily relate to (i) not preparing a formal assessment with references to relevant IFRS for impairment of inventory to net realizable values, rights of returns, allocation of deferred contract revenue costs and warranty provisions, (ii) not performing a timely and detailed review of standard costs implemented in the accounting system including overhead allocation to support the accuracy and completeness of standard costs, (iii) not having an effective process in place to ensure that account reconciliations and reviews were performed, and (iv) only requiring single approval for check disbursements.

We have taken steps to remediate these material weaknesses and the underlying causes of such material weaknesses, including (i) establishing quarterly reviews following IFRS guidance on net realizable value calculations, deferred contract revenue costs, warranty provisions and a formal assessment of impaired inventory, (ii) following detailed procedures to review standard costing in a timely manner, (iii) improving our process to review and reconcile all asset and liability accounts with supporting reconciliation working papers, and (iv) implementing a two-signature requirement for all checks written.

While we are working to remediate our material weaknesses as quickly and efficiently as possible, we cannot at this time provide an estimate of the costs we expect to incur or the expected timeline in connection with implementing our remediation plan. These remediation measures may be time-consuming and costly, and might place significant demands on our financial and operational resources. If we are unable to successfully remediate our material weaknesses, identify additional material weaknesses in the future or otherwise fail to continue to design, implement and maintain effective internal control over financial reporting, our financial statements could contain material misstatements, which could result in a failure to meet our future reporting obligations, reduce the market's confidence in our consolidated financial statements, materially adversely affect the trading price of the Common Shares and restrict our future access to the capital markets.

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#### We may not maintain adequate internal controls over financial processes and reporting.
Effective internal controls are necessary for us to provide reliable financial reports and to help prevent fraud. Although we will undertake a number of procedures and will implement a number of safeguards, in each case, in order to help ensure the reliability of our financial reports, including those imposed on us under

Canadian and U.S. securities law, we cannot be certain that such measures will ensure that we will maintain adequate control over financial processes and reporting. For example, we amended and restated our interim condensed consolidated financial statements for the three and nine months ended September 30, 2025 in accordance with section 4.4 of the National Instrument 51-102 *Continuous Disclosure Obligations* to incorporate certain changes following a review of such financial statements performed by our auditors in accordance with applicable standards. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our results of operations or cause us to fail to meet our reporting obligations.

#### A significant portion of our business depends on sales to government agencies, which is subject to a number of challenges and risks.
We derive a significant portion of our revenue from contracts with government agencies, and we believe that the success and growth of our business will continue to depend on our successful procurement of government contracts. Sales to government agencies are subject to a number of challenges and risks. Selling to government agencies can be highly competitive, expensive, and time-consuming, often requiring significant upfront time and expense without any assurance that these efforts will generate a sale. Government demand and payment for our solutions may also be impacted by changes in fiscal or contracting policies, changes in government programs or applicable requirements, the adoption of new laws or regulations or changes to existing laws or regulations, public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our solutions. Accordingly, increasing sales of our products to government entities may be more challenging than selling to commercial organizations, especially given extensive certification, compliance, clearance, and security requirements. In addition, we have experienced delays in TSA contract revenue projects, as well as in additional contract line items that the TSA had planned to exercise in 2025 and 2026. Further delays could have an adverse effect on our business, results of operations, financial condition, and growth prospects.

For example, in 2023, the TSA issued a mandate called "TSA-NA-23-02," which required airports to begin conducting random physical screenings of aviation workers entering certain terminal access points, starting in late September 2023. This presented us with an opportunity to provide advanced security screening solutions in the U.S. aviation worker screening market. However, a group of municipalities and airports challenged the 2023 TSA mandate (*City of Billings, et al. v. Transportation Security Administration et al.*), arguing that the U.S. federal government lacked authority to command state and local governments to enforce federal regulations, that the TSA was required to provide public notice of the new rule and allow for public comment under the Administrative Procedure Act (the "APA"), and that the rule unlawfully compelled local officials to implement a federal scheme. In August 2025, the U.S. Court of Appeals for the D.C. Circuit found that the TSA failed to comply with the notice and comment requirements in accordance with the APA. The court stayed issuance of its order until the TSA either completes an appropriate rulemaking process or decides to forgo the rule. As of the date of this prospectus, it is uncertain whether the TSA will decide to follow proper rulemaking procedures or will determine that the requirements are not necessary. If the court determines that the TSA has not taken acceptable steps to remediate the rulemaking or if the TSA's mandate is abandoned, or if other similar events or activities impact our successful procurement of government contracts, it could have an adverse effect on our business, results of operations, financial condition, and growth prospects.

#### Our ability to generate future revenue and profits largely relies on increased production and cost reduction of HEXWAVE™.
Our ability to generate future revenue or achieve or sustain profitable operations is largely dependent on our ability to increase production and reduce costs of HEXWAVE™. Successfully mass producing HEXWAVE™ in a cost-efficient manner may take several years and significant financial resources, and we may not achieve this objective. If we experience difficulties in the production process, such as capacity

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constraints, quality control problems or other disruptions, we may not be able to mass produce HEXWAVE™ at acceptable costs, which would adversely affect our ability to effectively compete in the market. A failure by us to achieve a low-cost structure through economies of scale or improvements in manufacturing processes would have a material adverse effect on our business, prospects, results of operations and financial condition.

#### The HD-AIT Upgrade Kit may not achieve TSA certification within our expected timeline, or at all, which could delay commercialization and expected revenue.
We expect to gain a second stream of revenue through commercialization of the HD-AIT Upgrade Kit. Commercialization of the HD-AIT Upgrade Kit depends on obtaining certification from the TSA. Although we delivered a unit to the TSA for evaluation in August 2025, the evaluation, testing, and certification processes are complex, iterative, and inherently uncertain. Certification may take longer than we anticipate, may require design or software modifications, or may not be granted at all. Initial commercial sales are anticipated in 2026, subject to successful completion of the TSA's certification process. Any delay or failure to obtain TSA certification could materially delay or prevent commercialization of the HD-AIT Upgrade Kit, limit our ability to compete for airport security opportunities, and adversely affect our projected revenue and growth strategy.

 ***The addressable markets for our HEXWAVE™ system and HD-AIT Upgrade Kit may be materially smaller than we currently estimate, and regulatory, technical, adoption and procurement uncertainties could adversely affect our revenue potential and ability to achieve profitability.***

Our market opportunity estimates for our HEXWAVE™ system and our HD-AIT Upgrade Kit are based on assumptions from industry knowledge, public sources and internal analyses, including expected regulatory requirements, the number and type of systems customers may procure, adoption rates in largely unregulated venues, interoperability with legacy infrastructure and anticipated performance. These assumptions may prove inaccurate or change. Regulatory mandates may be delayed, modified or invalidated, customers may adopt alternative technologies or purchase fewer systems than we expect, certifications may take longer or require additional capabilities, funding and procurement cycles may be constrained, and performance, integration or throughput requirements may differ from our expectations. If the actual addressable markets for our solutions are smaller than we anticipate or our assumptions prove incorrect, our revenues could be materially limited and we may be unable to achieve or maintain profitability, which could cause the value of our securities to decline significantly.

#### Our reliance on a limited number of products may subject us to greater risk with regard to changes in customer preference.
We are currently substantially dependent on HEXWAVE™ as our primary product. In addition, we anticipate that sales of the HD-AIT Upgrade Kit will commence in 2026, subject to successful completion of the TSA's certification process, which will supplement the revenue of HEXWAVE™ for 2026 and beyond. As a result of our reliance on a limited number of products, factors such as changes in customer preferences may have a disproportionately greater impact on us than if we derived significant revenue from multiple lines of products. There can be no assurance that our products will attain or maintain long-term customer appeal. If customer interest in our technology in general declines, or if there is increased competition in the market for active millimeter wave imaging technology, we may experience a significant loss of sales, cancellation of orders from customers, loss of customers, excess inventories, inventory markdowns and deterioration of our brand image, and lower revenues and gross and operating margins as a result of price reductions and may be forced to liquidate excess inventories at a discount, any or all of which would have a material adverse impact on our operating results and growth prospects.

The sales potential of HEXWAVE™ is still at an early commercial stage and we have yet to commence commercial sales of the HD-AIT Upgrade Kit. The ongoing and future demand for our products and solutions, in existing and target industries, is yet to be fully established and is uncertain. There is a risk that we may not be able to obtain and maintain market share or that there is insufficient demand for our products for revenue to be sustainable. Our future performance will be dependent on our ability to design, develop, manufacture, assemble, test, market and support our current products, as well as to continue developing new products and enhancing our current products, in a timely and cost effect manner on behalf of our customers.

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#### Rapid technological change could result in obsolescence or short product life cycles of our products.
Our business is subject to rapid technological changes and evolving industry standards, which could result in product obsolescence or short product life cycles. Failure to keep up with such changes may adversely affect our business. Accordingly, our success is dependent upon our ability to anticipate technological changes in the industries we serve and to successfully identify, obtain, develop and market new products that satisfy evolving industry requirements. Our business depends on the success of HEXWAVE™, which is our primary product. There can be no assurance that we will successfully develop new products or enhance and improve our existing products or that any new products and enhanced and improved existing products will achieve market acceptance. Further, there can be no assurance that competitors will not market products that have perceived advantages over our products, or which render the products currently sold by us obsolete or less marketable. We are subject to the risks of companies operating in the active threat detection business. The market in which we compete is characterized by rapidly changing technology, evolving industry standards, frequent new service and product announcements, introductions and enhancements and changing customer demands. As a result, an investment in our shares is highly speculative and only suitable for investors who recognize the high risks involved and can afford a total loss of investment.

#### If the weapons detection technology market fails to grow or grows more slowly than we currently anticipate, our business would be negatively affected.
We believe our future success will depend in large part on the growth, if any, in the market for weapons detection technology utilizing artificial intelligence. This market is new and rapidly evolving, and as such, it is difficult to predict important market trends, including our potential growth, if any. If this market fails to grow or grows more slowly than we currently anticipate, our business would be negatively affected. While we believe our products address customer needs, the acceptance of our products may be delayed or not materialize. Our revenues and possible profits will depend upon, among other things, our ability to successfully market our products to customers. To date, we have focused on markets that we believe are most likely to adopt our technology. However, there is no assurance that we will be successful in these markets or will be able to expand beyond these markets in the long term.

To date, enterprise and corporate security budgets have allocated a majority of dollars to conventional security solutions, such as walk-through metal detectors. Organizations that use these security products may be satisfied with them or slow to adapt to technical advances and, as a result, these organizations may not adopt their solutions in addition to, or in lieu of, security products they currently use. Further, sophisticated attackers are skilled at adapting to new technologies and developing new methods of breaching organizations' security systems, and changes in the nature of security threats could result in a shift in budgets away from products such as ours. In addition, while recent high visibility attacks at publicly and privately-owned venues have increased market awareness of mass shootings, terrorist or other attacks, if such attacks were to decline, or enterprises or governments perceived that the general level of attacks has declined, our ability to attract new customers and expand our sales to existing customers could be materially and adversely affected. If products such as ours are not viewed by organizations as necessary, or if customers do not recognize the benefit of our products as a critical element of an effective security strategy, our revenue may not grow as quickly as expected, or may decline, and the trading price of our shares could suffer. In addition, it is difficult to predict customer adoption and retention rates, customer demand for our products, the size and growth rate of the market for AI-based contactless security screening, the entry of competitive products or the success of existing competitive products. Any expansion in our market depends on a number of factors, including the cost, performance and perceived value associated with our products and those of our competitors. If these products do not achieve widespread adoption or there is a reduction in demand for products in our market caused by a lack of customer acceptance, technological challenges, competing technologies or products, decreases in corporate spending, weakening economic conditions or otherwise, it could result in reduced customer orders, early terminations, reduced customer retention rates or decreased revenue, any of which would adversely affect our business operations and financial results. You should consider our business and prospects in light of the risks and difficulties we may encounter in this new and evolving market.

If we are unable to attract a sufficient number of new customers, we may be unable to generate revenue growth at the desired rates. The security solutions market is competitive and many of our competitors have

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substantial financial, personnel and other resources that they utilize to develop solutions and attract customers. As a result, it may be difficult for us to add new customers to our customer base. Competition in the marketplace may also lead us to win fewer new customers or result in us providing discounts and other commercial incentives. Additional factors that impact our ability to acquire new customers include the perceived need for AI-based contactless security solutions, the size of our prospective customers' security budgets, the utility and efficacy of our existing and new products, whether proven or perceived, and general economic conditions. These factors may have a meaningful negative impact on future revenues and operating results.

#### Failure to achieve forecasted revenue may affect our operating results.
To commence commercialization of our technology, we may be required to make significant investments in operations. If our product trials are unsuccessful or our business does not develop as quickly as anticipated, or if there is a lack of demand for our products, we may be unable to offset these costs, and our operating results may be adversely affected as a result of high operating expenses, reduced margins, underutilization of capacity and asset impairment charges. Moreover, we must rely largely on our own market research to forecast sales as detailed forecasts are not generally obtainable from other sources at this early stage of the industry.

 ***If our products fail or are perceived to fail to detect threats such as a firearm or other potential weapon or explosive device, or if our products contain undetected errors or defects, these failures or errors could result in injury or loss of life, which could harm our brand and reputation and have an adverse effect on our business and results of operations.***

If our products fail or are perceived to fail to detect and prevent attacks or if our products fail to identify and respond to new and increasingly complex and unpredictable methods of attacks, our business and reputation may suffer. There is no guarantee that our products will detect and prevent all attacks, especially in light of the rapidly changing security landscape to which we must respond, as well as unique factors that may be present in our customers' operating environments. Additionally, our products may falsely detect items that do not actually represent threats. These false positives may impair the perceived reliability of our products and may therefore adversely impact market acceptance of our products, and could result in negative publicity, loss of customers and sales and increased costs to remedy any problem.

Our products, which are complex, may also contain undetected errors or defects when first introduced or as new versions are released. These errors or defects may be found from time to time in the future in new or enhanced products after commercial release. Defects may result in increased vulnerability to attacks, cause our products to fail to detect security threats, or temporarily interrupt our products' ability to screen visitors in a customer's location. Any errors, defects, disruptions in service or other performance problems with our products may damage our customers' business and could harm our reputation. If our products fail to detect security threats for any reason, we may incur significant costs, the attention of our key personnel could be diverted, our customers may delay or withhold payment to us or elect not to renew or cause other significant customer relations problems to arise. We may also be subject to liability claims for damages related to errors or defects in our products. For example, if our products fail to detect weapons or explosive devices that are subsequently used by terrorists to cause casualties at a high profile, public venue, our reputation could be significantly harmed. A material liability claim or other occurrence that harms our reputation or decreases market acceptance of our products may harm our business and operating results. In addition, even claims that ultimately are unsuccessful could result in our expenditure of funds in litigation, divert management's time and other resources, and harm our business and reputation.

 ***If our customers are unable to implement our products successfully, or if we fail to effectively assist our customers in installing our products and provide effective ongoing support and training, customer perceptions of our products may be impaired, or our reputation and brand may suffer.***

Our products are to be deployed in a wide variety of indoor and outdoor environments, including large venues with multiple entry points. If customers are unable to implement our products successfully, customer perceptions of our products may be impaired or our reputation and brand may suffer. Any failure by our customers to appropriately implement our products or any failure of our products to effectively integrate and

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operate within our customers' operating environments could result in customer dissatisfaction, impact the perceived reliability of our products, result in negative press coverage, negatively affect our reputation and harm our financial results.

Successful deployment and operation of our products depends on the knowledge and skill of the customer security personnel charged with setting up, configuring, monitoring, and troubleshooting the equipment in their own environment. Many of our customers experience relatively high turnover in their security personnel, creating opportunities for knowledge and skill gaps that can result, and have resulted, in configuration or operational errors that allow prohibited threats into customer facilities. In these situations, customers can perceive, and have perceived, that our products have failed to perform as designed until and unless they have been able to demonstrate otherwise. There can be no assurance that we will successfully isolate and identify failures due to customer error in the future, and this could result in customer dissatisfaction, impact the perceived reliability of our products, result in negative press coverage, negatively affect our reputation and harm our financial results. The failure of our customers to correctly use our products, or our failure to effectively assist customers in installing our products and provide effective ongoing support and training, may result in an increase in the vulnerability of our customers' facilities and visitors to security threats.

We may need to expand our customer success and support organizations. It can take significant time and resources to recruit, hire and train qualified technical support and service employees. We may not be able to keep up with demand, particularly if the sales of our products exceed our internal forecasts. To the extent that we are unsuccessful in hiring, training and retaining adequate support resources, our ability to provide adequate and timely support to our customers may be negatively impacted, and our customers' satisfaction with our products may be adversely affected. Additionally, in unusual circumstances, if we were to need to rely on our sales engineers to provide post-sales support while we are growing our service organization, our sales productivity may be negatively impacted. Accordingly, our failure to provide satisfactory maintenance and technical support services could have a material and adverse effect on our business and results of operations.

 ***We rely on certain license agreements for key technology incorporated into our products, which contain termination and other provisions that could materially and adversely affect our business.***

Our products system incorporates technology licensed under license agreements with the Massachusetts Institute of Technology ("MIT" and such agreement, the "MIT License Agreement") and Battelle Memorial Institute ("Battelle" and such agreement, the "Battelle License Agreement"). The agreements require us to meet certain development and commercial milestones and to comply with other ongoing obligations. MIT and Battelle have the right to terminate the applicable license agreement if we fail to meet those requirements or otherwise breach the terms of the license. For example, under the MIT License Agreement, MIT may terminate if any of our sublicensees challenges the licensed patent rights. If either license agreement is terminated, we could lose access to core technology that underpins our products system. This would likely result in significant delays in commercialization, increase our development costs, and harm our competitive position. We may also be unable to find a suitable replacement technology or enter into a new license agreement on commercially reasonable terms. Any such termination could materially adversely affect our business, results of operations, and financial condition.

Our licenses under the Battelle License Agreement are non-exclusive and Battelle is reserved significant rights, including the right to practice the licensed patents for research, development, teaching and educational purposes, to non-exclusively license the patents to nonprofit institutions for research, teaching and educational purposes, to grant exclusive licenses in fields and territories not licensed to us and to publish scientific and technical articles related to the patents. These retained rights could enable others to access or develop technology relevant to our products, reduce our competitive advantages or limit the scope of our exclusivity.

We are also subject to certain indemnification obligations under these licenses. These obligations could expose us to substantial defense costs and liabilities, including in connection with third-party claims. Further, our license agreements with MIT and Battelle do not include warranties from the applicable licensor regarding the validity, enforceability or non-infringement of the licensed patent rights or other assurances. If the licensed patent rights are found to be invalid, unenforceable or otherwise insufficient to protect our

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products, we would have limited or no recourse against the applicable licensor and may need to redesign our products, seek alternative technologies or incur additional costs, any of which could materially adversely affect our business, results of operations, and financial condition.

We may enter into license agreements from time to time in addition to the MIT License Agreement and the Battelle License Agreement, in which case similar or additional obligations, limitations and risks as those described above could apply.

 ***Our products and services may be affected from time to time by design and manufacturing defects that could adversely affect our business and result in harm to our reputation.***

Our contactless security screening systems are complex and may contain undetected defects or errors when first introduced or as enhancements are released that, despite testing, are not discovered until after a product has been used. This could result in delayed market acceptance of those products or claims from customers or others, which may result in litigation, increased end user warranty, support and repair or replacement costs, damage to our reputation and business, or significant costs and diversion of support and engineering personnel to correct the defect or error.

Further, our software is not designed to deliver, and TSA certification does not require, 100% detection of any and all concealed weapons or explosive devices. For this reason, or if our products malfunction, it is possible that weapons or explosive material could pass undetected through our screening systems, which could lead to product liability claims. There are also many other factors beyond our control that could lead to liability claims, such as the reliability and competence of the customer's operators and the training of the operators. Such liability claims are likely to exceed any product liability insurance that we may have obtained.

The sale and support of our products entails the risk of product liability claims. Any product liability claim brought against us, regardless of its merit, could result in material expense, diversion of management time and attention, damage to our business and reputation and brand, and cause us to fail to retain existing customers or to fail to attract new customers.

 ***If we do not successfully anticipate market needs and enhance our existing products or develop new products that meet those needs on a timely basis, we may not be able to compete effectively and our ability to generate revenues will suffer.***

Our customers face evolving security risks, which require them to adapt to increasingly complex infrastructures that incorporate a variety of security solutions. We face significant challenges in ensuring that our products effectively identify and respond to these security risks without disrupting the performance of our customers' infrastructures. As a result, we must continually modify and improve our products in response to changes in our customers' infrastructures.

We cannot guarantee that we will be able to anticipate future market needs and opportunities or be able to develop product enhancements or new products to meet such needs or opportunities in a timely manner, if at all. Even if we are able to anticipate, develop and commercially introduce enhancements and new products, there can be no assurance that enhancements or new products will achieve widespread market acceptance.

New products, as well as enhancements to our existing products, could fail to attain sufficient market acceptance for many reasons, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • delays in releasing new products, or product enhancements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • failure to accurately predict market demand and to supply products that meet this demand in a timely fashion;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • inability to protect against new types of attacks or techniques used by terrorists or other sources of threats;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • defects in our products, errors or failures of our products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • negative publicity or perceptions about the performance or effectiveness of our products;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • introduction or anticipated introduction of competing products by our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • installation, configuration or usage errors by our customers; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • easing or changing of regulatory requirements related to security.

If we fail to anticipate market requirements or fail to develop and introduce product enhancements or new products to meet those needs in a timely manner, it could cause us to lose existing customers and prevent the gain of new customers, which would significantly harm our business, financial condition and results of operations.

While we continue to invest significant resources in research and development to ensure that our products continue to address the security risks that our customers face, the introduction of products embodying new technologies could also render our existing products or services obsolete or less attractive to customers. If we spend significant time and effort on research and development and are unable to generate an adequate return on our investment, our business and results of operations may be materially and adversely affected.

#### We may experience delays in product sales due to limitations in our internal marketing, sales and distribution capabilities.
In order to successfully commercialize our products, we must continue to develop our internal marketing, sales and distribution team. The continued development of our marketing, sales and distribution infrastructure will require substantial resources, which may divert the attention of our management and key personnel and defer our product development and commercialization efforts.

Additionally, in marketing, selling and distributing our products, we would likely compete with companies that currently have extensive and well-funded marketing, sales and distribution operations. Despite our marketing, sales and distribution efforts, we may be unable to compete successfully against these companies.

In the event we fail to develop substantial internal marketing, sales and distribution channels, we will experience delays in product sales, which could have a material adverse effect on our prospects, results of operations, financial condition and cash flows.

 ***We rely on distributors as a channel to market and sell our products. Termination of a substantial number of our distributor relationships or an increase in a distributor's sales of our competitors' products could have a material adverse effect on our business, financial condition, results of operations or cash flows.***

We depend on the services of a global distribution network based on certain exclusive and non-exclusive distributor relationships. Our distributors resell our products to our customers, for whom they are also responsible for installation, maintenance, and repair services, among others. While the use of distributors expands the reach and customer base for our products, the maintenance and administration of distributor relationships is costly and time-consuming. In addition, many of the agreements with our distributors are terminable by such distributors without cause. The loss of a substantial number of our distributors for any reason could have a material adverse effect on our business, financial condition, results of operations or cash flows. In certain international jurisdictions, distributors are conferred certain legal rights that could limit our ability to modify or terminate distribution relationships.

Many of the distributors with whom we transact business also offer competitors' products and services to our customers. An increase in the distributors' sales of our competitors' products to our customers, or a decrease in the number of our products the distributor makes available for purchase, could have a material adverse effect on our business, financial condition, results of operations or cash flows.

#### We rely upon a limited number of third parties for manufacturing, shipping, transportation, logistics, marketing and sales of our products.
If the third parties on whom we rely do not properly, successfully or timely carry out their obligations, we may not be able to develop, obtain regulatory approval for, or commercialize our products, which in turn

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may adversely affect our financial performance. Our dependence on a limited number of third parties for services leaves we vulnerable due to our need to secure these parties' services on favorable terms. Loss of, or an adverse effect on, any of our relationships or failure of any of the third parties to perform as expected could have a material and adverse effect on our business, sales, results of operations, financial condition, and reputation.

#### Our success depends on management and key personnel.
Our success will be dependent upon the ability, expertise, judgment, discretion and good faith of our senior management. While employment agreements are customarily used as the primary method of retaining the services of key employees, these agreements cannot assure the continued services of such employees. Any loss of the services of such individuals could have a material adverse effect on business, operating results or financial condition. Our success further depends on the continued ability to identify, attract, retain, and motivate highly qualified management, clinical, and scientific personnel and to develop and maintain important relationships with leading academic institutions, companies, and thought leaders. Competition for highly skilled executives and other employees is high in this industry, especially from larger and better capitalized defense and security companies. We may not be successful in attracting and retaining such personnel. Failure to attract and retain qualified executive officers and other key employees could have a material adverse effect on our business, prospects, financial condition, results of operations, and cash flows, and could impair our ability to perform our contractual obligations efficiently and timely meet our customers' needs and win new business, which could adversely affect our future results. Even if we are able to identify and recruit a sufficient number of new hires, these new hires will require significant training before they achieve full productivity and they may not become productive as quickly as we would like, or at all.

#### Growth may cause pressure on our management and resources.
We expect to experience substantial growth in our business, which comes with growth-related risks including capacity constraints and pressure on our internal systems and controls. The anticipated growth may place significant demands on our management and operational and financial resources. We may not be able to provide the scale of operation necessary to meet the demands associated with our growth. As we grow, we will need to implement new systems and software to help run our operations. As our operations grow in size, scope and complexity, we will need to continue to improve and upgrade our systems and infrastructure to offer an increasing number of customers enhanced services, solutions and features. We may choose to commit significant financial, operational and technical resources in advance of an expected increase in the volume of business, with no assurance that the volume of business will increase. Continued growth could also strain our ability to maintain reliable service levels for existing and new customers, which could adversely affect our reputation and business. Our inability to deal with this growth may have a material adverse effect on our business, financial condition, results of operations and prospects.

 ***We may acquire or invest in other companies or technologies in the future, which could divert management's attention, fail to meet our expectations, result in additional dilution to our shareholders, increase expenses, disrupt our operations, or otherwise harm our operating results.***

Our success will depend, in part, on our ability to expand our markets and grow our business in response to changing technologies, customer needs and competitive pressures. We may seek to grow our business by acquiring complementary businesses, solutions or technologies. The identification of suitable acquisition candidates can be difficult, time-consuming and costly, and we may not be able to successfully complete identified acquisitions. There can be no assurance that we will be able to identify, negotiate or finance future acquisitions successfully, or to integrate such acquisitions with our current business. In addition, we may not be able to successfully assimilate and integrate the business, technologies, solutions, personnel or operations of any company we acquire. The process of integrating an acquired business, technology, service or product into our company may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for ongoing development of our business. Acquisitions may also involve the entry into geographic or business markets in which we have little or no prior experience. Moreover, the anticipated benefits of any acquisition, investment or business relationship may not be realized or we may be exposed to unknown liabilities. For one or more of those transactions, we may, among other things:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • issue additional equity securities that would dilute the holders of the Common Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • use cash that we may need in the future to operate our business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • incur debt on terms unfavorable to us or that we are unable to repay;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • incur large charges or expenses or assume substantial liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • incur unanticipated costs or liabilities associated with the acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • amortize expenses related to goodwill and other intangible assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • suffer inability to generate sufficient revenue to offset acquisition or investment costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • suffer inability to maintain relationships with customers and partners of the acquired business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • experience a significant loss of management personnel during the transition period after a significant acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • experience delays in customer purchases due to uncertainty related to any acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • encounter difficulties retaining key employees of the acquired companies or integrating diverse software codes, accounting systems, personnel, operations or business cultures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • encounter difficulties managing product development and commercialization following a technology acquisition or licensing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • become subject to adverse tax consequences, substantial depreciation or deferred compensation charges.

Acquisitions also increase the risk of unforeseen legal liability, including potential shareholder suits or potential violations of applicable law or industry rules and regulations, arising from prior or ongoing acts or omissions by the acquired businesses that are not discovered by due diligence during the acquisition process or new regulatory restrictions at the federal, state, or local levels. Generally, if an acquired business fails to meet our expectations, our operating results, business, and financial condition may suffer. Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt. Any of these risks could materially adversely affect our business, results of operation and financial condition.

We currently have no understandings, commitments or agreements with respect to any material acquisition and no material acquisition is currently being pursued.

#### Diverting resources from product development to efforts associated with brand development of our company may adversely affect our financial condition.
We believe that continuing to strengthen our brand is critical to achieving widespread acceptance of our company, particularly in light of the competitive nature of our company's market. Promoting and positioning our brand will depend largely on the success of our marketing efforts and our ability to provide high quality services. In order to promote our brand, we will need to increase our marketing budget and otherwise increase our financial commitment to creating and maintaining brand loyalty among users. There can be no assurance that brand promotion activities will yield increased revenues or that any such revenues would offset the expenses incurred by us in building our brand. If we fail to promote and maintain our brand or incur substantial expenses in an attempt to promote and maintain our brand or if our existing or future strategic relationships fail to promote our brand or increase brand awareness, our business, results of operations and financial condition would be materially adversely affected.

#### We are dependent on our suppliers for the maintenance and growth of our business.
We incorporate technology and components from third parties into our products. Our ability to compete and grow will be dependent on having access, at a reasonable cost and in a timely manner, to equipment, parts and components. No assurance can be given that we will be successful in maintaining our required supply of equipment, parts and components.

In particular, we rely on a single-source supplier, Analog Devices Inc. ("ADI"), for certain component parts used in HEXWAVE™. These components account for approximately 22% of our cost of goods sold

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for HEXWAVE™ and are considered safety-critical. We do not maintain a long-term purchase contract with ADI and currently procure these components through standard purchase orders. As a result, any delay, allocation, quality issue, shortage, or termination by ADI could require design modifications, re-testing, recertification, or alternative sourcing, any of which could materially disrupt our manufacturing process, delay production schedules, increase our costs, and adversely affect our and ability to fulfill orders in a timely manner.

We have initiated efforts to evaluate potential design changes intended to reduce our dependency on ADI; however, these efforts are in early stages and due to the technical complexity of the components, a redesign and recertification of our hardware and software systems would be required, and we do not expect any alternate supply path to be commercially implemented before late 2026.

If we are unable to obtain necessary technology and components from third parties, including certain sole suppliers, we may be forced to acquire or develop alternative technology or components, which may require significant time, cost, and effort and may be of lower quality or performance standards. This would limit or delay our ability to offer new or competitive products and increase our costs of production. If alternative technology or components cannot be obtained or developed, we may not be able to offer certain functionality as part of our products, subscriptions, and services. As a result, our margins, market share and results of operations could be significantly harmed.

In addition, we cannot be certain that our suppliers and licensors are not infringing the intellectual property rights of third parties or that our suppliers and licensors have sufficient rights to the technology in all jurisdictions in which we may sell our products. We may not be able to rely on indemnification obligations of third parties if some of our agreements with our suppliers and licensors may be terminated for convenience by them. If we are unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against our suppliers and licensors or against us, or if we are unable to continue to obtain such technology or enter into new agreements on commercially reasonable terms, our ability to develop and sell products, subscriptions, and services containing such technology could be severely limited, and our business could be harmed. Disputes with suppliers and licensors over uses or terms could result in the payment of additional royalties or penalties by us, cancellation or non-renewal of the underlying license or litigation. In the event that we cannot renew and/or expand existing licenses, we may be required to discontinue or limit our use of the operations, products, or offerings that include or incorporate the licensed intellectual property. Any such discontinuation or limitation could have a material and adverse impact on our business, financial condition, and results of operation.

#### Our directors, officers or members of management may have conflicts of interest.
There are potential conflicts of interest to which some of our directors, officers and/or insiders may be subject in connection with our operations. Some of the individuals who will be appointed as our directors or officers are also directors and/or officers of other reporting and non-reporting issuers. In addition, certain of our directors and officers have, in the past, entered into working capital loans with us, of which an aggregate of US$0 and US$74,657 was outstanding as of September 30, 2025 and December 31, 2024, respectively. As of the date of this prospectus, and to the knowledge of our directors and officers, there are no additional existing conflicts of interest between us and any of our directors or officers.

#### Our insurance policies may be inadequate to fully protect us from material judgments and expenses.
Our business is subject to a number of risks, hazards and liabilities, which could result in damage to assets, personal injury or death, delays in operations, monetary losses and possible legal liability.

Although we maintain insurance to protect against certain risks in such amounts as we consider reasonable, our insurance will not cover all the potential risks associated with our operations and is inadequate to protect us from all material judgments and expenses related to potential future claims and other risks such as cybersecurity risks and natural hazards, including earthquakes, fires, and extreme weather conditions, some of which can be worsened by climate change and pandemics. A successful product liability claim could result in substantial cost to us. If insurance coverage is unavailable or insufficient to cover any such claims, our financial resources, results of operations and prospects could be adversely affected. We may also be unable to maintain insurance to cover these risks at economically feasible premiums.

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Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Even if we are fully insured as it relates to a claim, the claim could nevertheless diminish our brand and divert management's attention and resources, which could have a negative impact on our business, prospects, financial condition and results of operations.

 ***Unavailability of adequate director and officer insurance could make it difficult for us to retain and attract qualified directors and could also impact our liquidity.***

Although we have directors' and officers' liability insurance ("D&O insurance") we believe to be adequate to cover risk exposure for us and our directors and officers, who we indemnify to the full extent permitted by law, there is no guaranty that such coverage will be adequate in the event of litigation.

Our coverage needs for D&O insurance may change or increase in the future for various reasons including changes in our market capitalization, changes in trading volume or changes in the listing rules of exchanges or marketplaces on which our securities may trade from time to time. Further, we intend to seek new D&O insurance before listing on Nasdaq. There can be no assurance that we will be able to do so at reasonable rates or at all, or in amounts adequate to cover expenses and liability should litigation occur. Without adequate D&O insurance, the costs of litigation, including amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to us, could have a material adverse effect on our financial condition, results of operations and liquidity. Further, if we are unable to obtain adequate D&O insurance in the future for any reason, we may have difficultly retaining and attracting talented and skilled directors and officers, which could adversely affect our business.

#### Our internal computer systems are vulnerable to damage and failure.
Despite the implementation of security measures and backup storage, our internal computer systems are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war, and telecommunication and electrical failure. Any system failure, accident or security breach that causes interruption in our operations could result in a material disruption of our business. To the extent that any disruption or security breach results in a loss or damage our data or applications, or inappropriate disclosure of confidential or proprietary information, we may incur liability as a result. In addition, our technology program may be adversely affected and the further development of our technology may be delayed. We may also incur additional costs to remedy the damages caused by these disruptions or security breaches.

 ***If the general level of security threats declines or is perceived by our current or potential customers to have declined, our business could be harmed.***

Our business is substantially dependent on enterprises and governments recognizing that mass shootings, terrorist attacks and similar security threats are not necessarily effectively prevented by conventional security products such as walk-through metal detectors. High visibility attacks on prominent enterprises and governments have increased market awareness of the problem of security threats and help to provide an impetus for enterprises and governments to devote resources to protect against security threats, such as testing our products, purchasing them and broadly deploying them within their organizations. If security threats were to decline, or enterprises or governments perceived that the general level of security threats has declined, our ability to attract new customers and expand sales of our products to existing customers could be materially and adversely affected. A reduction in the security threat landscape could harm our business, results of operations, and financial condition.

#### Breaches of security may adversely affect the reputation of our brand.
Our system stores, processes and transmits certain confidential information of our customers. Any compromise of our security or the security of our third-party service providers could damage our reputation and brand and expose us to risk of loss, costly litigation and liability that would substantially harm our business and operating results. We may not adequately assess the internal and external risks posed to the security of our systems and information and may not implement adequate preventative safeguards or take adequate reactionary measures in the event of a security incident. In addition, many jurisdictions have enacted laws requiring companies to notify individuals and often state authorities of data security breaches involving their personal data. These mandatory disclosures regarding a security breach often lead to

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widespread negative publicity, which may cause our prospective customers to lose confidence in the effectiveness of our data security measures. Any security breach, whether successful or not, would harm our reputation and brand, and may result in the loss of customers.

#### We will be reliant on information technology systems and may be subject to damaging cyber-attacks.
Although we have not experienced any material cybersecurity incidents to date, our systems and those of our third-party providers may be vulnerable to evolving cybersecurity threats, which could materially disrupt our operations, compromise data, or result in significant financial or reputational harm.

We use third parties for certain hardware, software, telecommunications and other information technology ("IT") services in connection with our operations. Our operations depend, in part, on how well we and our suppliers protect networks, equipment, IT systems and software against damage from a number of threats, including, but not limited to, cable cuts, damage to physical plants, natural disasters, intentional damage and destruction, fire, power loss, hacking, computer viruses, vandalism and theft. While we generally perform cybersecurity diligence on our key service providers, we do not control our service providers and our ability to monitor their cybersecurity is limited, so we cannot ensure the cybersecurity measures they take will be sufficient to protect any information we share with them. Due to applicable laws and regulations or contractual obligations, we may be held accountable for cybersecurity breaches or other information security incidents attributed to our service providers as they relate to the information we share with them.

Our operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact our reputation and results of operations. To date, we have not experienced any material losses relating to cyber-attacks or other information security breaches, but there can be no assurance that we will not incur such losses in the future. Our risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. Techniques used by others to gain unauthorized access to personal, confidential, proprietary, or sensitive information or disrupt systems and networks for economic or strategic gain are constantly evolving, increasingly sophisticated, increasingly difficult to detect and successfully defend against and may see their frequency increased, and effectiveness enhanced, by the use of AI. Further, cybersecurity risks maybe heightened as a result of ongoing global conflicts such as the military conflict between Russia and Ukraine and the related sanctions imposed by the United States and other countries, or the ongoing conflicts in the Middle East and their regional effects. As a result, cybersecurity and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access is a priority. As cyber threats continue to evolve, we may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.

The occurrence of any unauthorized access to, attacks on cybersecurity breaches of other information security threats to us or our service providers', suppliers' or subcontractors' information technology infrastructure, systems or networks or data, or our failure to make adequate or timely disclosure to the public, regulators, or law enforcement agencies following any such event, could disrupt our infrastructure, systems, or networks or those of our customers, impair our ability to provide services to our customers and may jeopardize the security of data collected, stored, transmitted or otherwise processed through our information technology infrastructure, systems and networks. As a result, we could be exposed to claims, fines, penalties, loss of revenues, product development delays, compromise, corruption, or loss of confidential, proprietary, or sensitive information (including personal information or technical business information), contract terminations and damages, remediation costs and other costs and expenses, regulatory investigations or sanctions, indemnity obligations, and other potential liabilities. Any of the foregoing could adversely affect our reputation, ability to win work on sensitive contracts or loss of current and future contracts (including sensitive U.S. government contracts), business operations and financial results. We have insurance coverage against some cyber-risks and attacks; however, our insurer may deny coverage as to any future claim, our insurance coverage may not be sufficient to offset the impact of a material loss event, and such insurance may increase in cost or cease to be available on commercial terms in the future.

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#### We maintain information in digital form as necessary to conduct our business, including confidential and proprietary information and personal information regarding our employees.
Data maintained in digital form is subject to the risk of intrusion, tampering, and theft. We develop and maintain systems to prevent this from occurring, but it is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Moreover, despite our efforts, the possibility of intrusion, tampering, and theft cannot be eliminated entirely, and risks associated with each of these acts remain. In addition, we provide confidential information, digital content and personal information to third parties when it is necessary to pursue business objectives. While we obtain assurances that these third parties will protect this information and, where appropriate, monitor the protection employed by these third parties, there is a risk that data systems of these third parties may be compromised. We, and the service providers, suppliers and subcontractors on which we rely, are also subject to systems failures, including network, software or hardware failures, whether caused by us, third-party service providers, cybersecurity threats, malicious insiders, natural disasters, power shortages, terrorist attacks, pandemics or other events, which could cause loss of data and interruptions or delays in our business, cause us to incur remediation costs or subject us to claims and damage our reputation. If our data systems or data systems of these third parties are compromised, our ability to conduct our business may be impaired, we may lose profitable opportunities, or the value of those opportunities may be diminished, and we may lose revenue as a result of unlicensed use of our intellectual property. A breach of our network security or other theft or misuse of confidential and proprietary information, digital content or personal employee information could subject our to business, regulatory, litigation, and reputation risk, which could have a materially adverse effect on our business, financial condition, and results of operations. In addition, the failure or disruption of our communications, or those of our service providers, suppliers or subcontractors, could cause us to interrupt or suspend our operations or otherwise adversely affect our business. Our property and business interruption insurance may be inadequate to compensate us for all losses resulting from any system or operational failure or disruption.

 ***We utilize AI, which could expose us to liability or adversely affect our business, especially if we are unable to compete effectively with others in adopting AI.***

We utilize AI, including generative artificial intelligence, machine learning, and similar tools and technologies that collect, aggregate, analyze, or generate data or other materials or content, in connection with our business. There are significant risks involved in using AI and no assurance can be provided that our use of AI will enhance our products or services, produce the intended results, or keep pace with our competitors. For example, AI systems may be flawed, insufficient, of poor quality, rely upon incorrect or inaccurate data, reflect unwanted forms of bias, or contain other errors or inadequacies, any of which may not be easily detectable; AI has been known to produce false or "hallucinatory" inferences or outputs; our use of AI can present ethical issues and may subject us to new or heightened legal, regulatory, ethical, or other challenges; and inappropriate or controversial data practices by developers and end-users, or other factors adversely affecting public opinion of AI, could impair the acceptance of AI solutions, including those incorporated in our products and services. If the AI tools that we use are deficient, inaccurate, or controversial, we could incur operational inefficiencies, competitive harm, legal liability, brand or reputational harm, or other adverse impacts on our business and financial results. If we do not have sufficient rights to use the data or other material or content on which the AI tools we use rely (or if the AI tool itself was developed without sufficient rights to materials on which the AI tool was trained), we also may incur liability through the violation of applicable laws and regulations, third-party intellectual property, data privacy, or other rights, or contracts to which we are a party. Further, because intellectual property issues surrounding copyrighted content used to develop and train AI systems, including issues of whether the output of AI systems violates intellectual property rights in such copyrighted content, are the subject of active litigation in courts in the U.S. and other jurisdictions, the outcomes of such cases could limit our ability to continue using certain AI systems and tools, or otherwise expose us to liability relating to intellectual property infringement or other intellectual property violations.

In addition, AI regulation is rapidly evolving worldwide as legislators and regulators increasingly focus on these powerful emerging technologies. The technologies underlying AI and its uses are subject to a variety of laws and regulations, including intellectual property, data privacy and security, consumer protection, competition, and equal opportunity laws, and are expected to be subject to increased regulation and new

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laws or new applications of existing laws and regulations. AI is the subject of ongoing review by various U.S. governmental and regulatory agencies, and various U.S. states and other foreign jurisdictions are applying, or are considering applying, their own regulations and frameworks, including those addressing platform moderation, data privacy, and security laws and regulations to AI. We may not be able to anticipate how to respond to these rapidly evolving regulations and frameworks, and may need to expend resources to adjust our operations or offerings in certain jurisdictions if the regulations or frameworks are inconsistent across jurisdictions. Furthermore, because AI technology itself is highly complex and rapidly developing, it is not possible to predict all of the legal, operational, or technological risks that may arise relating to the use of AI.

 ***Low barriers to entry and high competition in the industry could impact our ability to obtain contracts and, therefore, affect our future revenues and growth prospects.***

#### We face risks associated with our international business.
A component of our strategy is to expand internationally. Expansion into international markets will require management's attention and resources. We have limited experience in localizing our service, and we believe that many of our competitors are also undertaking expansion into foreign markets. There can be no assurance that we will be successful in expanding into international markets or generating revenues from foreign operations. In addition, there are certain risks inherent in doing business on an international basis.

These risks may include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • legal uncertainty regarding liability, tariffs and other trade barriers and related trade tensions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • laws and policies affecting trade, investment and taxes, including laws and policies relating to the repatriation of funds and withholding taxes, and changes in these laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • failure to comply with U.S. government and foreign laws and regulations applicable to international business, including, without limitation, those related to employment, data privacy and security, taxes, technology transfer, information security, environment, data transfer, import and export controls (including the International Traffic in Arms Regulations administered by the U.S. Department of State and the anti-boycott provisions of the Export Administration Regulations administered by the U.S. Department of Commerce's Bureau of Industry and Security), sanctions, and other administrative, legislative or regulatory actions that could materially interfere with our ability to offer our products or services in certain countries or have an adverse impact on our business with the U.S. government, and expose us to risks and costs of noncompliance with such laws and regulations, in addition to administrative, civil or criminal penalties;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • difficulties in staffing and managing foreign operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • longer payment cycles, different accounting practices, problems in collecting accounts receivable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • changes in local regulatory requirements, including restrictions on content and differing cultural tastes and attitudes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • international jurisdictions where laws are less protective of intellectual property and varying attitudes towards the piracy of intellectual property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • financial instability and increased market concentration of buyers in foreign markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the instability of foreign economies and governments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • fluctuating foreign exchange rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • seasonal reductions in business activity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the spread of communicable diseases in such jurisdictions, which may impact business in such jurisdictions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the ongoing conflict between Russia and Ukraine, which has resulted in the imposition by the U.S. and other nations of restrictive actions against Russia, Belarus and certain banks, companies and individuals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the ongoing conflicts in the Middle East and their regional effects; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • war and acts of terrorism.

We are also subject to the U.S. Foreign Corrupt Practices Act ("FCPA"), the U.K. Bribery Act of 2010 (the "U.K. Bribery Act") and other anti-corruption and anti-bribery laws and regulations in jurisdictions where we do business. These laws and regulations generally prohibit improper payments or offers of improper payments to government officials, political parties, or commercial partners to obtain or retain business or secure an improper business advantage. We have operations, and deal with and make sales to governmental or quasi-governmental entities in non-U.S. countries, including those known to experience corruption, and further expansion of our non-U.S. sales efforts may involve additional regions. Our activities in these countries pose a heightened risk of unauthorized payments or offers of payments by one of our employees or third-party business partners, representatives, and agents that could violate various laws, including the FCPA. The FCPA, U.K. Bribery Act and other applicable anti-bribery and anti-corruption laws may also hold us liable for acts of corruption and bribery committed by our third-party business partners, representatives and agents even if we do not explicitly authorize such activities. We cannot assure you that our employees or other third parties working on our behalf have not engaged or will not engage in conduct in violation of our policies or applicable law for which we might ultimately be held responsible.

We are also required to comply with applicable export controls and economic and trade sanctions laws and regulations, such as those administered and enforced by OFAC, the U.S. Department of State, and the U.S. Department of Commerce. Our global operations expose us to the risk of violating or being accused of violating these laws.

Violations of any of these laws or regulations, including the FCPA and the U.K. Bribery Act, may result in whistleblower complaints, negative media coverage, investigations, imposition of significant legal fees, loss of export privileges, as well as severe criminal or civil sanctions, including suspension or debarment from U.S. government contracting. We may also be subject to other liabilities and adverse effects on our reputation, which could negatively affect our business, results of operations, financial condition, and growth prospects. In addition, responding to any enforcement action may result in a significant diversion of management's attention and resources and significant defense costs and other professional fees. Although our international operations have historically generated a small proportion of our revenues, we are seeking to grow our international business. Our exposure for violating these laws will increase as our non-U.S. presence expands and as we increase sales and operations in foreign jurisdictions. Although we have adopted policies and procedures reasonably designed to promote compliance with such laws, there can be no assurance that such policies or procedures will be effective at all times or protect us against liability under these or other laws for actions taken by our employees and other third parties who are acting on our behalf

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with respect to our business. If we are not in compliance with anti-corruption laws and other laws governing the conduct of business with government entities and/or officials (including local laws) or export controls and economic and trade sanction laws and regulations, we may be subject to criminal and civil penalties and other remedial measures, which could harm our business, financial condition, results of operations, cash flows, and prospects. In addition, investigations of any actual or alleged violations of such laws or policies related to us could harm our business, financial condition, results of operations, cash flows, and prospects.

Any of the above could adversely affect the success of our international operations. To the extent that we expand our international operations and have additional portions of our international revenues denominated in foreign currencies, we could become subject to increased risks relating to foreign currency exchange rate fluctuations. There can be no assurance that one or more of the factors discussed above will not have a material adverse effect on our future international operations and, consequently, on our business, results of operations and financial condition.

#### Risks Relating to Market Conditions

#### Our business is impacted by worldwide economic conditions.
Our anticipated performance will be subject to worldwide economic conditions, such as unemployment levels, interest rates or inflation rates, each of which influence, among other things, consumer trends and the levels of government and private sector security spending.

We expect a number of factors to cause our operating results to fluctuate on a quarterly basis, which may make it difficult to predict our future performance.

Our revenues and operating results could vary significantly from quarter to quarter because of a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. In addition to other risk factors discussed in this section, factors that may contribute to the variability of our quarterly results include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the impact of worldwide economic conditions and their impact on levels of security and defense spending;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • certain fixed costs inherent in our business, which limit our ability to adjust for period-to-period changes in demand;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • system interruptions that impair access to our customers, key vendors or communication with our technology and any related impact on our reputation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our ability to forecast revenues accurately and appropriately plan our expenses; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the impact of fluctuations in currency exchange rates, to the extent that we source material or labor from outside of United States, sell our products outside of United States or operate outside of United States.

In addition, our operating results may not meet the expectations of investors or public market analysts who follow us.

Managing our growth will require significant expenditures and allocation of valuable management resources, and the failure to do so appropriately may harm our business, operating results and financial condition.

 ***Deterioration of economic conditions or weakening in credit or capital markets may have a material adverse effect on our business, results of operations and financial condition.***

Volatile, negative, or uncertain economic conditions, an increase in the likelihood of a recession, or concerns about these or other similar risks may negatively impact our customers' ability and willingness to fund their projects. For example, declines in state and local tax revenues, as well as other economic declines, may result in lower government spending, which could impact the amount of future revenue we receive from governmental entities. Our customers reducing, postponing, or canceling spending on projects in respect

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of which we provide services may reduce demand for our products quickly and with little warning, which could have a material adverse effect on our business, results of operations, and financial condition.

Moreover, instability in the credit or capital markets in the U.S., including as a result of failures of financial institutions and any related market-wide reduction in liquidity, or concerns or rumors about events of these kinds or similar risks, could affect the availability of credit or our credit ratings, making it relatively difficult or expensive to obtain additional capital at competitive rates, on commercially reasonable terms or in sufficient amounts, or at all, thus making it more difficult or expensive for us to access funds or refinance our existing indebtedness, or obtain financing for acquisitions. Such instability could also cause counterparties, including vendors, suppliers, and subcontractors, to be unable to perform their obligations or to breach their obligations to us under our contracts with them.

 ***We cannot predict the consequences of current or future geopolitical events, but they may adversely affect the markets in which we operate and our results of operations.***

Ongoing instability and current conflicts in global markets, including in Eastern Europe, the Middle East, and Asia, and the potential for other conflicts and future terrorist activities and other recent geopolitical events throughout the world, including the ongoing conflict between Russia and Ukraine, the ongoing conflicts in the Middle East and their regional effects, and increased tensions in Asia, have created and may continue to create economic and political uncertainties and impacts that could have a material adverse effect on our business, operations, and profitability. These types of matters cause uncertainty in financial markets and may significantly increase the political, economic and social instability in the geographic areas in which we operate.

In addition, in connection with the current status of international relations with Russia, particularly in light of the conflict between Russia and Ukraine, the U.S. government has imposed enhanced export controls on certain products and sanctions on certain industry sectors and parties in Russia. The governments of other jurisdictions in which we operate may also implement sanctions or other restrictive measures. These potential sanctions and export controls, as well as any responses from Russia, could adversely affect us and/or our supply chain, business partners, or customers.

 ***Tariffs and related retaliatory tariffs may impact trade between the United States and foreign countries and could increase our manufacturing costs, adversely affect our margins and delivery timelines and impact our ability to compete in applicable markets.***

The current U.S. administration has recently made statements and taken actions that has led to significant changes to U.S. and international trade policies, including the imposition of tariffs and export control and sanctions restrictions affecting certain products manufactured abroad. These tariffs have resulted in, and may continue to trigger, retaliatory actions by affected countries, including the imposition of tariffs on the United States by other countries, which has created significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States.

We expect to be impacted by increases in tariffs, in particular for components used in HEXWAVE™ and the HD-AIT Upgrade Kit originating from foreign jurisdictions, including China. We anticipate further general economic disruption and uncertainty surrounding trade stability during the near term, which may increase our component costs. Although we evaluate alternative sourcing strategies, we may not be able to fully mitigate the impact of tariff-related cost increases or pass those increased costs through to customers due to competitive pressures or fixed-price contracts. Any increase in tariffs, imposition of new trade restrictions, or interruption in global supply chains could adversely affect our cost structure, reduce margins, delay product deliveries, or negatively impact our ability to scale production. In addition, retaliatory tariffs on United States goods that apply to our products could affect our competitiveness in applicable markets.

#### Currency fluctuations may have a material effect on us.
Fluctuations in the exchange rate between the United States dollar, other currencies and the Canadian dollar may have a material effect on our results of operations. To date, we have not engaged in currency

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hedging activities. To the extent that we may seek to implement hedging techniques in the future with respect to our foreign currency transactions, there can be no assurance that we will be successful in such hedging activities.

#### Any disruption at our places of business due to natural and manmade disasters could delay revenues and increase our expenses.
Our systems and operations are vulnerable to damage or interruption from earthquakes, volcanoes, fires, floods, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, break-ins and similar events. For example, a significant natural disaster, such as an earthquake, fire or flood, could have a material adverse impact on our business, operating results and financial condition, and our insurance coverage may be insufficient to compensate us for losses that may occur. Our servers may also be vulnerable to computer viruses, break-ins and similar disruptions from unauthorized tampering with our computer systems, which could lead to interruptions, delays, loss of critical data or the unauthorized disclosure of confidential data. We may not have sufficient protection or recovery plans in certain circumstances and our business interruption insurance (as and if carried by us) may be insufficient to compensate us for losses that may occur. As we expect to rely heavily on our servers, computer and communications systems and the internet to conduct our business and provide a high-quality customer experience, such disruptions could negatively impact our ability to run our business, which could have an adverse effect on our operating results.

Further, our business may not be insurable or the insurance may not be purchased due to high cost. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of our company.

#### The effects of an epidemic, pandemic or similar outbreak have negatively impacted and could in the future negatively impact our business and financial results.
Any epidemics, pandemics or similar outbreaks could create economic uncertainty and disruptions to the global economy that could adversely affect our business and financial results, or could significantly curtail the movement of people, goods and services worldwide. For example, the COVID-19 pandemic disrupted our supply chain and limited our ability to conduct research and product development, manufacturing, and other important business activities, which forced us to pay for expedited processing and shipping, resulted in cost markups and adversely affected our business and financial results. Furthermore, if any future epidemics, pandemics or similar outbreaks occur, customer events where our products are used, including concerts, festival and sporting events, may be canceled, postponed or moved to virtual-only experiences. In addition, traffic at transportation hubs where our products are used, such as airports, railways, cruise lines and bus stations, may become more limited. This would have a negative impact on our operations. Additionally, any epidemics, pandemics, or similar outbreaks may cause extreme volatility in financial and other capital markets. This volatility may adversely impact the fair value of our securities which may hamper our ability to raise additional capital to maintain operations.

#### Risks Relating to Legal Proceedings and Regulatory Compliance

#### Our operating results may be harmed if we are not in compliance with various local, provincial and federal tax laws.
Our business will be subject to various local, provincial and federal tax payment and collection requirements. Amounts that we are expected to be required to pay or collect may change as our business develops and expands. As a result, we will need to continually ensure proper taxes are paid or collected and remitted to the appropriate tax agencies. If we do not collect the appropriate taxes from our customers, we may need to pay more than what we have collected. In addition, we may be audited by various agencies to ensure compliance with tax collection requirements. Such audits could result in additional sales or other tax collection obligations, which we may not be able to recover from our customers. Such obligations could have a material adverse impact on our future operating results.

#### Our business and operations expose us to numerous legal and regulatory requirements, and any violation of these requirements could harm our business.
We are subject to numerous state, federal and foreign laws and directives and regulations in the U.S. and abroad that involve matters central to our business, including data privacy and security, employment

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and labor relations, immigration, taxation, anti-corruption, anti-bribery, import-export controls, trade restrictions, internal and disclosure control obligations, securities regulation and anti-competition. Compliance with legal requirements is costly, time-consuming and requires significant resources. Violations of one or more of these legal requirements in the conduct of our business could result in significant fines and other damages, criminal sanctions against us or our officers, prohibitions on doing business and damage to our reputation. Violations of these regulations or contractual obligations related to regulatory compliance in connection with the performance of customer contracts could also result in liability for significant monetary damages, fines and criminal prosecution, unfavorable publicity, and other reputational damage, restrictions on our ability to compete for certain work and allegations by our customers that we have not performed our contractual obligations.

 ***Investigations, audits, claims, disputes, enforcement actions, litigation, arbitration, or other legal proceedings could require us to pay potentially large damage awards or penalties and could be costly to defend, which would adversely affect our cash balances and profitability, and could damage our reputation.***

We may be subject to litigation, claims, investigations, audits, enforcement actions, arbitrations, or other legal proceedings that could negatively affect our business operations and financial position. We may be subject to consumer class action lawsuits. Adverse judgments or settlements in some or all of these legal disputes may result in significant monetary damages, penalties, or injunctive relief against us. Any claims or litigation could be costly to defend, and even if we are successful or fully indemnified or insured, they could damage our reputation and make it more difficult to compete effectively or obtain adequate insurance in the future, and responding to any action may result in a significant diversion of management's attention and resources. Litigation and other claims are subject to inherent uncertainties and management's view of these matters may change in the future. Litigation disputes could cause us to incur unforeseen expenses, occupy a significant amount of management's time and attention, and negatively affect our business operations and financial position.

 ***Environmental matters, including unforeseen costs associated with compliance and remediation efforts and government and third-party claims, could have a material adverse effect on our reputation and our financial position, results of operations, and cash flows.***

Our operations are subject to and affected by various federal, state, local, and foreign environmental laws and regulations, as they may be expanded, changed, or enforced differently over time. Compliance with these existing and evolving environmental laws and regulations requires and is expected to continue to require significant operating and capital costs. We may be subject to substantial administrative, civil, or criminal fines, penalties, or other sanctions (including suspension and debarment) for violations. If we are found to be in violation of the Federal Clean Air Act or the Clean Water Act, the facility or facilities involved in the violation could be placed by the Environmental Protection Agency on a list of facilities that generally cannot be used in performing on U.S. government contracts until the violation is corrected.

Stricter or different remediation standards or enforcement of existing laws and regulations; new requirements, including regulation of new substances; discovery of previously unknown contamination or new contaminants; imposition of fines, penalties, or damages (including natural resource damages); a determination that certain remediation or other costs are unallowable; rulings on allocation or insurance coverage; and/or the insolvency, inability or unwillingness of other parties to pay their share, could require us to incur material additional costs in excess of those anticipated.

We may become a party to legal proceedings and disputes involving government and private parties (including individual and class actions) relating to alleged impacts from pollutants released into the environment, including bodily injury and property damage. These matters could result in material compensatory or other damages, remediation costs, penalties, non-monetary relief, and adverse allowability or insurance coverage determinations. The impact of these factors is difficult to predict, but one or more of them could harm our reputation and business and have a material adverse effect on our financial position, results of operations and cash flow.

#### Protecting and defending against intellectual property claims may have a material adverse effect on our business.
As our business depends substantially on our intellectual property, we could be adversely affected if we do not adequately protect our intellectual property rights. We regard our marks, rights, and trade secrets

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and other intellectual property rights as critical to the success of our business. To protect our investments and our rights in these various intellectual properties, we may rely on a combination of patents, trademark and copyright law, trade secret protection and confidentiality agreements and other contractual arrangements with our employees, clients, strategic partners, acquisition targets and others to protect proprietary rights. These afford only limited protection. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our technology's features, software and functionality or obtain and use information that we consider proprietary. There can be no assurance that the steps taken by us to protect proprietary rights will be adequate or that third parties will not infringe or misappropriate our copyrights, trademarks and similar proprietary rights, or that we will be able to detect unauthorized use and take appropriate steps to enforce rights. Moreover, policing our proprietary rights is difficult and may not always be effective. In particular, we may need to enforce our rights under the laws of countries that do not protect proprietary rights to as great an extent as do the laws of Canada. In addition, although we believe that our proprietary rights do not infringe on the intellectual property rights of others, there can be no assurance that other parties will not assert infringement claims against us. Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources.

Litigation or proceedings before governmental authorities and administrative bodies in the United States, Canada and abroad may be necessary in the future to enforce our intellectual property rights, to protect our patent rights, trade secrets, trademarks and domain names and to determine the validity and scope of the proprietary rights of others. Our efforts to enforce or protect our proprietary rights may be ineffective and could result in substantial costs and diversion of resources and could substantially harm our operating results. Additionally, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation, could delay further sales or the implementation of our products and offerings, impair the functionality of our products and offerings, delay introductions of new features or enhancements, result in our substituting inferior or more costly technologies into our products and offerings, or injure our reputation.

We will rely on trade secrets to protect technology where we do not believe patent protection is appropriate or obtainable. Trade secrets are difficult to protect. While commercially reasonable efforts to protect trade secrets will be used, strategic partners, employees, consultants, contractors or scientific and other advisors may unintentionally or willfully disclose information to competitors. If we are not able to defend patents or trade secrets, then we will not be able to exclude competitors from developing or marketing competing products, and we may not generate enough revenue from product sales to justify the development cost of products or achieve or maintain profitability.

Our exposure to risks associated with the use of intellectual property may increase as a result of acquisitions, as we have a lower level of visibility into the development process with respect to acquired technology or the care taken to safeguard against infringement risks.

 ***Assertions by third parties of infringement or other violations by us of their intellectual property rights, whether or not correct, could result in significant costs and harm to our business and operating results.***

Third parties may make infringement and similar or related claims after we have acquired technology that had not been asserted prior to such acquisition. We are not currently aware of any litigation or other proceedings or claims by third parties that our technologies or methods infringe upon their intellectual property. While it is our practice to undertake pre-filing searches and analyses of developing technologies, we cannot guarantee that we have identified every patent or patent application that may be relevant to the research, development, or commercialization of our products. Moreover, we cannot assure that third parties will not assert valid, erroneous or frivolous patent infringement claims. If we do infringe a third party's rights and are unable to provide a sufficient workaround, we may need to negotiate with holders of those rights to obtain a license to those rights or otherwise settle any infringement claim as a party that makes a claim of infringement against us may obtain an injunction preventing us from shipping products containing the allegedly infringing technology. As the number of products and competitors in the market increase and overlaps occur, claims of infringement, misappropriation, and other violations of intellectual property rights may increase. Any claim of infringement, misappropriation, or other violation of intellectual property

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rights by a third party, even those without merit, could cause us to incur substantial costs defending against the claim and could distract management from the business. Future assertions of patent rights by third parties, and any resulting litigation, may involve patent holding companies or other adverse patent owners who have no relevant product revenues and against whom our own patents may therefore provide little or no deterrence or protection. There can be no assurance that we will not be found to infringe or otherwise violate any third-party intellectual property rights or to have done so in the past.

An adverse outcome of a dispute may require us to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • pay substantial damages, including treble damages, if we are found to have willfully infringed a third party's patents or copyrights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • make substantial payments for legal fees, settlement payments or other costs or damages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • cease selling, making, licensing, or using products that are alleged to infringe or misappropriate the intellectual property of others;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • expend additional development resources to attempt to redesign our products or otherwise develop non-infringing technology, which may not be successful;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • enter into potentially unfavorable royalty or license agreements to obtain the right to use necessary technologies or intellectual property rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • take legal action or initiate administrative proceedings to challenge the validity and scope of the third-party rights or to defend against any allegations of infringement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • indemnify other third parties.

In addition, royalty or licensing agreements, if required or desirable, may be unavailable on terms acceptable to us, or at all, and may require significant royalty payments and other expenditures. Some licenses may also be non-exclusive, and therefore our competitors may have access to the same technology licensed to it. Any of the foregoing events could seriously harm our business, financial condition, and results of operations.

Even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of management and harm our business and operating results. Moreover, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our shares. We expect that the occurrence of infringement claims is likely to grow as the market for our products and solutions grows. Accordingly, our exposure to damages resulting from infringement claims could increase and this could further exhaust our financial and management resources.

#### We may become party to litigation that adversely affects our business.
We may become party to litigation from time to time in the ordinary course of business which could adversely affect our business. Should any litigation in which we become involved be determined against us, such a decision could adversely affect our ability to continue operating and the market price for the Common Shares. Even if we are involved in litigation and win, litigation can redirect significant company resources.

Our commercial success will depend in part on not infringing upon the patents and proprietary rights of other parties and enforcing our own patents and proprietary rights against others. Our research and development programs will be in highly competitive fields in which numerous third parties have issued patents and pending patent applications with claims closely related to the subject matter of our programs. We are not currently aware of any litigation or other proceedings or claims by third parties that our technologies or methods infringe on their intellectual property.

While it is our practice to undertake pre-filing searches and analyses of developing technologies, we cannot guarantee that we have identified every patent or patent application that may be relevant to the research, development, or commercialization of our products. Moreover, we cannot assure that third parties will not assert valid, erroneous, or frivolous patent infringement claims.

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 ***Claims against us relating to any acquisition, licensing or business combination may necessitate seeking claims against the seller for which the seller may not indemnify us or that may exceed the seller's or licensor's indemnification obligations.***

There may be liabilities assumed in any technology acquisition or licensing or business combination that we did not discover or that we underestimated in the course of performing our due diligence. Although a seller or licensor generally will have indemnification obligations to us under a licensing, acquisition or merger agreement, these obligations usually will be subject to financial limitations, such as general deductibles and maximum recovery amounts, as well as time limitations. There is no assurance that our right to indemnification from any seller or licensors will be enforceable, collectible or sufficient in amount, scope or duration to fully offset the amount of any undiscovered or underestimated liabilities that we may incur. Any such liabilities could have a material adverse effect on our business, financial condition, operating results, liquidity, and prospects.

#### Confidentiality arrangements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information.
We have devoted substantial resources to the development of our technology, business operations, and business plans. In order to protect our trade secrets and proprietary information, we rely in significant part on confidentiality arrangements with our employees, licensees, independent contractors, advisors, suppliers and customers. However, we cannot guarantee that we have entered into such agreements with each party that may have or has had access to our trade secrets or proprietary technology and processes. Additionally, although our employees and contractors are subject to confidentiality obligations and use restrictions, this protection may be inadequate to deter or prevent them from infringing, misappropriating, or otherwise violating our confidential information, technology, or other intellectual property or proprietary rights, and can be difficult to enforce. Further, despite these efforts, these arrangements may not be effective to prevent disclosure of confidential information, including trade secrets, and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our technologies that we consider proprietary. In addition, if others independently develop equivalent knowledge, methods, and know-how, we would not be able to assert trade secret rights against such parties. Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary information will be effective.

Moreover, policing unauthorized use of our technologies, trade secrets and intellectual property and enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive, time-consuming, and the outcome is unpredictable. In addition, effective trade secret protection may not be available in every country in which our products are available or where we have employees or independent contractors as some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be disclosed to or independently developed by a competitor or other third party, our competitive position would be materially and adversely harmed. The loss of trade secret protection could make it easier for third parties to compete with our products by copying functionality. In addition, any changes in, or unexpected interpretations of, the trade secret and employment laws in any country in which we operate may compromise our ability to enforce our trade secret and intellectual property rights. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

#### We rely on permits, certifications and licenses to operate our business and produce our products.
Our operations and our products require licenses, certifications and permits from various governmental and regulatory authorities. There can be no assurance that such licenses and permits will be granted, maintained or renewed. Any failure to obtain, maintain or renew any of the licenses and permits required could have a material adverse effect on our business, operating results or financial condition.

Like many other electronic devices, systems such as HEXWAVE™ are subject to environmental standards, FCC compatibility regulations, and electrical safety requirements. Millimeter wavelength scanners used in airports, for example, which generate images of the human subjects raise privacy concerns and regulatory issues associated with the capture of personal data.

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The deployment of HEXWAVE™ to sports and other public venues may require certifications by authorities who are working to apply new performance standards across the urban security marketplace. These certifications may be required by customers as part of their qualifying standards for procurement. This includes, but is not limited to, the National Center for Spectator Sports Safety and Security and the Qualified Anti-Terrorism Technology under the Department of Homeland Security Safety Act. Other standards that are also required is the Underwriters Laboratory Certification. The development activities are accounting for these certifications within the deployment timelines.

 ***Our business is subject to complex and evolving laws and regulations regarding data privacy and security, which could subject us to investigations, claims, or monetary penalties against us, require us to change our business practices, or otherwise adversely affect our revenues and profitability.***

We are subject to various laws and regulations in the U.S. and globally relating to data privacy and security. These laws and regulations are complex, constantly evolving, and may be subject to significant change in the future. In addition, the application, interpretation and enforcement of these laws and regulations are often uncertain, particularly in new and rapidly evolving areas of technology, and may differ in material respects among jurisdictions, interpreted and applied inconsistently among jurisdictions or in a manner that is inconsistent with our current policies and practices, all of which can make compliance challenging and costly, and expose us to relate risks and liabilities.

In the United States, numerous federal, state, and local data privacy and security laws and regulations govern the collection, sharing, use, retention, disclosure, security, storage, transfer, and other processing of personal information. As a contractor supporting defense and national security customers, we are also subject to additional, specific regulatory compliance requirements relating to data privacy and security. Under the U.S Department of Defense Federal Acquisition Regulation Supplement and other federal regulations, we are required to implement the security and privacy controls in the National Institute of Standards and Technology Special Publications on certain of our networks and information technology systems. To the extent that we do not comply with applicable security and control requirements, and there is unauthorized access or disclosure of sensitive information (including personal information), this could potentially result in a contract termination or loss of intellectual property, which could materially and adversely affect our business and financial results and lead to reputational harm. We will also be subject to numerous emerging and currently unspecified cybersecurity requirements under the Federal Acquisition Regulation and through federal regulation, to include the U.S Department of Defense Cybersecurity Maturity Model Certification program, which, once implemented, will require successful assessment by a third party against specified cyber controls. Should we or our supply chain fail to implement these new requirements, this may adversely affect our ability to receive awards or execute on relevant government programs. We are in the process of evaluating our readiness against these new requirements and while we have confidence we will meet or exceed requirements, to the extent we do not, we will be unable to bid on such contract awards, which could adversely impact our revenue and profitability.

The overarching complexity of data privacy and security laws and regulations around the world poses a compliance challenge that could manifest in costs, damages, or liability in other forms as a result of failure to implement proper programmatic controls, failure to adhere to those controls, or the breach of applicable data privacy and security requirements by us, our employees, our business partners (including our service providers, suppliers or subcontractors) or our customers. We also expect that there will continue to be new proposed laws, regulations, and industry standards concerning data privacy and security, and we cannot yet determine the impact such future laws, regulations and standards, or amendments to or re-interpretations of existing laws, regulations or standards, may have on our business. Any failure or perceived failure by us, our service providers, suppliers, subcontractors, or other business partners to comply with applicable laws, regulations, our public privacy policies and other public statements about data privacy and security and other obligations in these areas could result in regulatory or government actions lawsuits against us (including civil claims, such as representative actions and other class action-type litigation), legal liability, monetary penalties, fines, sanctions, damages and other costs, orders to cease or change our processing of data, changes to our business practices, diversion of internal resources, and harm to our reputation, all of which could adversely affect our business, financial condition and results of operations. We may also incur substantial expenses in implementing and maintaining compliance with such laws, regulations, and other obligations.

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#### Risks Relating to Our Financial Condition

#### We face substantial capital requirements and may fail to raise additional capital.
We may require additional capital in the future to support ongoing operations, undertake capital expenditures or commence acquisitions or other business combination transactions. Due to the early stage of the industry in which we operate, we expect to face additional competition from new entrants. To become and remain competitive, we require research and development, marketing, sales and client support. We may not have sufficient resources to maintain research and development, marketing, sales and client support efforts on a competitive basis which could materially and adversely affect our business, financial condition and results of operations. We may not be able to obtain additional debt or equity financing on favorable terms, if at all. If we raise additional equity financing, our shareholders may experience significant dilution of their ownership interests, and the per-share value of the Common Shares could decline. Moreover, any new equity securities that we issue could have rights, preferences and privileges senior to those of the holders of Common Shares. If we engage in debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness and force us to maintain specified liquidity or other ratios. If we need additional capital and cannot raise or otherwise obtain it on acceptable terms, we may not be able to, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • develop or introduce service enhancements to customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • continue to expand our development, sales and marketing and general and administrative functions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • acquire complementary technologies or businesses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • expand our operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • hire, train and retain employees; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • respond to competitive pressures or unanticipated working capital requirements.

#### The issuance of debt could impair our ability to obtain additional financing.
From time to time, we may enter into transactions to acquire assets or the shares of other companies. These transactions may be financed partially or wholly with debt, which may increase our debt levels above industry standards. Our constating documents do not limit the amount of indebtedness that we may incur. The level of our indebtedness from time to time could impair our ability to obtain additional financing in the future on a timely basis, or at all, take advantage of business opportunities that may arise. Our ability to service our debt obligations will depend on our future operations, which are subject to prevailing industry conditions and other factors, many of which are beyond our control.

 ***We are dependent on the Parabilis Credit Facilities, which are short-term, contain restrictive covenants, and include lender remedies that could materially harm us if triggered.***

On August 19, 2024, we entered into a loan and security agreement with PFF, LLC ("Parabilis") providing for a US$1,800,000 secured term loan (the "Parabilis Term Loan") and a secured revolving credit facility with up to US$2,500,000 of capacity (the "Parabilis Revolving Credit Facility," and together with the Parabilis Term Loan, the "Parabilis Credit Facilities"). On August 14, 2025, we amended the Parabilis Term Loan by updating the repayment schedule and providing for additional advances between August 2025 and October 2025 in an aggregate amount of US$0.65 million, which evidenced by a replacement promissory note reflecting a principal balance of approximately US$2.45 million. The promissory includes a confession-of-judgment provision under Virginia law. On September 1, 2025, we amended the Parabilis Revolving Credit Facility by extending the maturity date to May 31, 2026 with automatic one-year renewals, unless Parabilis provides 90-days' notice, and agreeing to pay a 0.083% monthly commitment fee. The Parabilis Credit Facilities are secured and guaranteed and include affirmative and negative covenants, customary events of default, and lender remedies.

If we fail to comply with any covenants, if any events of default occur for which no waiver or amendment is obtained, if Parabilis elects not to renew the Parabilis Revolving Credit Facility or if we are unable to timely refinance the debt obligations subject to such covenants or take other mitigating actions, the holders of

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our indebtedness could, among other things, declare outstanding amounts immediately due and payable and, subject to the terms of relevant financing agreements, repossess or foreclose on collateral. In addition, the confession-of-judgment clause could allow Parabilis to obtain an immediate judgment against us in Virginia without advance notice or hearing, and to accelerate remedies against our assets. Any acceleration or actions to repossess or foreclose on collateral could also result in a downgrade of any credit ratings then applicable to us, which could result in additional events of default or limit our ability to obtain additional financing. Any acceleration or enforcement action could materially and adversely affect our liquidity, business, financial condition, and results of operations.

 ***Because we have no history of dividends and do not intend to pay any cash dividends for the foreseeable future, capital appreciation, if any, would be your sole source of gain.***

To date, we have not paid any dividends on our outstanding Common Shares. At this time, we do not expect to pay any cash dividends in the future in favor of utilizing cash to support the development of our business. Any future determination relating to our dividend policy will be made at the discretion of our board of directors (our "Board") and will depend on a number of factors, including future operating results, capital requirements, financial condition and the terms of any credit facility or other financing arrangements we may obtain or enter into, future prospects and other factors our Board may deem relevant at the time such payment is considered. As a result, shareholders will have to rely on capital appreciation, if any, to earn a return on their investment in the Common Shares in the foreseeable future. See "*Dividend Policy*."

#### We may need to divest assets if there is insufficient capital.
If sufficient capital is not available, we may be required to delay, reduce the scope of, eliminate or divest one or more of our assets or products, any of which could have a material adverse effect on our business, financial condition, prospects, or results of operations.

#### We are subject to liquidity risk due to the slowdown of the global economy.
The ongoing economic slowdown and downturn of global capital markets has generally made the raising of capital by equity or debt financing more difficult. Access to financing has been negatively impacted by the ongoing global economic risks. As such, we are subject to liquidity risks in meeting our development and future operating cost requirements in instances where cash positions are unable to be maintained, or appropriate financing is unavailable. These factors may impact our ability to raise equity or obtain loans and other credit facilities in the future and on terms favorable to us. If uncertain market conditions persist, our ability to raise capital could be jeopardized, which could have an adverse impact on our operations and the trading price of the Common Shares on Nasdaq.

#### Risks Relating to this Offering and Ownership of Our Securities

#### You will experience immediate and substantial dilution if you purchase Common Shares in this offering.
You will incur immediate and substantial dilution if you purchase Common Shares in this offering. After giving effect to the assumed sale by us of Common Shares at an assumed initial public offering price of US$ per Common Share, the midpoint of the range set forth on the cover of this prospectus (excluding the exercise of the Over-Allotment Option to purchase additional Common Shares and after deducting underwriting discounts, commissions and estimated offering expenses payable by us), investors in this offering can expect an immediate dilution of US$ per Common Share. In addition, you may experience further dilution upon subsequent issuances of our securities, the exercise of outstanding options and warrants or if the underwriter exercises the Over-Allotment Option. See "— *We will need to raise additional financing in the future which may dilute our share capital*."

 ***There is no liquid public market for our Common Shares in the United States and we do not know whether one will develop to provide you with adequate liquidity. If our share price fluctuates after this offering, you could lose a significant part of your investment.***

The Common Shares are listed on the TSXV, quoted on the OTCQB and listed on the FSE. Following our planned listing of our Common Shares sold in this offering on Nasdaq, our Common Shares will no

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longer be quoted on the OTCQB. Prior to this offering, there has not been a liquid public market for our Common Shares in the United States. If an active trading market does not develop, you may have difficulty selling any of the Common Shares that you buy. We cannot predict the extent to which investor interest in our company will lead to the development of an active trading market on Nasdaq or otherwise or how liquid that market might become. The initial public offering price for the Common Shares will be determined by negotiations between us and the underwriter and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell our Common Shares at prices equal to or greater than the price paid by you in this offering. In addition to the risks described above, the market price of our Common Shares may be influenced by many factors, some of which are beyond our control, including actual or anticipated variations in our operating results; the failure of financial analysts to cover our Common Shares after this offering or changes in financial estimates by financial analysts, or any failure by us to meet or exceed any of these estimates or changes in the recommendations of any financial analysts that elect to follow our Common Shares or the shares of our competitors; announcements by us or our competitors of significant contracts or acquisitions; technological innovations by us or our competitors; future sales of our Common Shares; and investor perceptions of us and the market in which we operate.

#### The liquidity of our Common Shares may be decreased as a result of the Reverse Split.
The liquidity of our Common Shares may be affected adversely by the Reverse Split given the reduced number of shares that will be outstanding, especially if the market price of our Common Shares does not increase as a result of the Reverse Split. In addition, the Reverse Split may increase the number of shareholders who own odd lots (less than 100 shares) of our Common Shares, creating the potential for such shareholders to experience an increase in the cost of selling their shares and greater difficulty effecting such sales.

Although we believe that a higher market price of our Common Shares may help generate greater or broader investor interest, there can be no assurance that our increased share price following the Reverse Split will actually attract new investors, including institutional investors. In addition, there can be no assurance that the market price of our Common Shares will satisfy the investing requirements of those investors. As a result, the trading liquidity of our Common Shares may not necessarily improve.

#### U.S. Holders of our Common Shares may suffer adverse tax consequences if we are characterized as a passive foreign investment company.
The rules governing "passive foreign investment companies" ("PFICs") can have adverse effects on U.S. Holders (as defined below in "Certain United States Federal Income Tax Considerations") for U.S. federal income tax purposes. Generally, if, for any taxable year, at least 75% of our gross income is passive income, or at least 50% of the value of our assets (generally, using a quarterly average) is attributable to assets that produce passive income or are held for the production of passive income (including cash), we would be characterized as a PFIC for U.S. federal income tax purposes. The determination of whether we are a PFIC, which must be made annually after the close of each taxable year, depends on the particular facts and circumstances and may also be affected by the application of the PFIC rules, which are subject to differing interpretations. Our status as a PFIC will depend on the composition of our income and the composition and value of our assets (including goodwill and other intangible assets), which will be affected by how, and how quickly, we spend any cash that is raised in this offering or in any other subsequent financing transaction.

If we are a PFIC, a U.S. Holder would be subject to adverse U.S. federal income tax consequences, such as ineligibility for certain preferred tax rates on capital gains or on actual or deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements under U.S. federal income tax laws and regulations. A U.S. Holder may in certain circumstances mitigate adverse tax consequences of the PFIC rules by filing an election to treat the PFIC as a qualified electing fund, or QEF, or, if shares of the PFIC are "marketable stock," which such term includes the Common Shares, for purposes of the PFIC rules, by making a mark-to-market election with respect to the shares of the PFIC. U.S. Holders should be aware that, for each tax year, if any, that we are a PFIC, we can provide no assurances that we will satisfy the record keeping requirements of a PFIC, or that we will make available to U.S. Holders the information such U.S. Holders require to make a QEF election with respect to us, and as a result, a QEF election may not be available to U.S. Holders. For more information, see the discussion below under "*Certain United States Federal Income Tax Considerations — Passive Foreign Investment Company ("PFIC")* 

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*Rules*." You should consult your own tax advisors regarding the potential consequences to you if we were or were to become a PFIC, including the availability, and advisability, of, and procedure for making, QEF elections, and mark-to-market elections.

#### Management will have broad discretion as to the use of the proceeds from this offering and may not use the proceeds effectively.
Our management will have broad discretion as to the use of the net proceeds from any offering by us and could use them for purposes other than those contemplated at the time of this offering. Accordingly, you will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. It is possible that the proceeds will be invested in a way that does not yield a favorable, or any, return for our company.

#### We have no operating experience as a publicly traded company in the United States.
We have no operating experience as a publicly traded company in the United States. Although the individuals who now constitute our management team have experience managing a publicly traded company, there is no assurance that the past experience of our management team will be sufficient to operate our company as a publicly traded company in the United States, including timely compliance with the disclosure requirements of the SEC. Following the completion of this offering, we will be required to develop and implement internal control systems and procedures in order to satisfy the periodic and current reporting requirements under applicable SEC regulations and comply with the Nasdaq listing standards. These requirements will place significant strain on our management team, infrastructure and other resources. In addition, our management team may not be able to successfully or efficiently manage our company as a United States public reporting company that is subject to significant regulatory oversight and reporting obligations.

#### As a foreign private issuer, it may be difficult for U.S. investors to enforce civil liabilities against us or our directors, officers and experts.
We are incorporated under the laws of British Columbia, Canada. Some of our directors and officers, and the experts named in this prospectus, reside outside the United States, and all or a substantial portion of their assets and a portion of our assets are located outside the United States. As a result, it may be difficult or impossible for investors in the United States to effect service of process within the United States upon such persons or to enforce against us or them judgments of United States courts predicated upon civil liability provisions of the United States federal securities laws. There is doubt as to the enforceability in Canada of civil liabilities under the Securities Act or the Exchange Act. Consequently, investors may be unable to enforce judgments against us or those persons in Canadian courts, which may limit the remedies available to our shareholders.

#### We will incur significantly increased costs and devote substantial management time as a result of operating as a United States public company.
As a United States public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company or as a Canadian public company. For example, we will be subject to the reporting requirements of the Exchange Act, and will be required to comply with the applicable requirements of Sarbanes-Oxley and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules and regulations subsequently implemented by the SEC and including the establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. We expect that compliance with these requirements will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. In addition, we expect that management and other personnel will need to divert attention from operational and other business matters to devote substantial time to these public company requirements. In particular, we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404, which involve annual assessments of a company's internal controls over financial reporting. We plan to hire additional accounting and financial staff with appropriate public company experience and technical accounting

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knowledge and may need to establish an internal audit function. Furthermore, we expect the premium for director & officer insurance will increase significantly due to a more litigious environment in the United States. At this time, we cannot reasonably predict or estimate the amount of additional costs that we may incur as a result of becoming a United States public company or the timing of such costs.

#### We cannot assure you that we will be able to comply with the minimum bid price requirement of Nasdaq.
The Reverse Split is intended, among other reasons, to allow us to achieve the requisite increase in the market price of our Common Shares to be in compliance with Nasdaq's minimum bid price requirement of US$4.00 per share for initial listing. Although we expect our share price will meet such minimum bid price requirement prior to the effective date of the registration statement of which this prospectus forms a part, there is no guarantee that we will be able to meet Nasdaq's minimum bid price requirement for initial listing or remain above Nasdaq's minimum bid price requirement of US$1.00 for continued listing. If a company's share price falls below $1.00 for 30 consecutive business days, Nasdaq will issue a deficiency notice and provide a compliance period of 180 days to regain compliance. It is not uncommon for the market price of a company's shares to decline in the period following a reverse share split. If the market price of our Common Shares declines, the percentage decline may be greater than would have occurred in the absence of the Reverse Split. In addition, if other factors unrelated to the number of shares of our Common Shares outstanding, such as unfavorable financial or operational results, adversely affect the market price of our Common Shares, that may jeopardize our ability to meet or maintain the minimum bid price requirement with Nasdaq's continued listing standards. If we fail to maintain such compliance, our Common Shares may be subject to delisting, which could materially reduce the liquidity of our shares and impair our access to capital markets.

 ***Our inability to comply with Nasdaq's continued listing requirements could result in our Common Shares being delisted, which could affect the market price and liquidity of our securities and reduce our ability to raise capital.***

We have applied to list our Common Shares on Nasdaq under the symbol "LDHL." No assurance can be given that our application will be approved. However, if such listing is approved, upon completion of this offering, we will be required to meet certain qualitative and financial tests to maintain the listing of our Common Shares on Nasdaq. If we do not maintain compliance with Nasdaq's continued listing requirements within specified periods and subject to permitted extensions, our Common Shares may be recommended for delisting (subject to any appeal we would file). No assurance can be provided that we will comply with these continued listing requirements. Nasdaq has broad discretionary authority over the continued listing of securities, which it could exercise with respect to the listing of our Common Shares. If our Common Shares were delisted, it could be more difficult to buy or sell our Common Shares and to obtain accurate quotations, and the price of our securities could suffer a material decline. Delisting would also impair our ability to raise capital. The delisting of our Common Shares from any other exchange on which they are listed could similarly reduce liquidity, adversely affect the market price of our securities, limit the availability of market quotations and impair our ability to raise capital.

#### An investment in our securities involves significant risks.
Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business and operations and cause the trading price of our securities to decline. If any of the following or other risks occur, our business, prospects, financial condition, results of operations and cash flows could be materially adversely impacted. In that event, the trading price of our securities could decline and security holders could lose all or part of their investment. There is no assurance that risk management steps taken will avoid future loss due to the occurrence of the risks described below or other unforeseen risks.

 ***Our Common Shares have in the past and may in the future experience extreme share price volatility unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Common Shares.***

Recently, there have been instances of extreme share price run-ups followed by rapid price declines and strong share price volatility with a number of recent initial public offerings, especially among companies

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with relatively smaller public floats. As a relatively small-capitalization company with relatively small public float, we have experienced and may continue to experience greater share price volatility, extreme price run-ups, lower trading volume and less liquidity than large-capitalization companies. Our Common Shares are currently listed on the TSXV and the FSE, and the trading price and volume of our Common Shares on those markets have exhibited volatility in the past, including periods of rapid appreciation and decline, wide bid-ask spreads and low trading volumes. Our Common Shares could continue to be subject to similar instances of volatility following our anticipated listing on Nasdaq in connection with this offering. Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Common Shares.

In addition, if the trading volumes of our Common Shares are low, persons buying or selling in relatively small quantities may easily influence prices of our Common Shares. This low volume of trades could also cause the price of our Common Shares to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of our Common Shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. If high spreads between the bid and ask prices of our Common Shares exist at the time of a purchase, the stock would have to appreciate substantially on a relative percentage basis for an investor to recoup their investment. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our Common Shares.

As a result of this volatility, investors may experience losses on their investment in our Common Shares. A volatile market price of our Common Shares also could adversely affect our ability to issue additional Common Shares or other securities and our ability to obtain additional financing in the future.

We cannot assure you that the market price of our Common Shares will not continue to fluctuate or decline, and past trading volatility on the TSXV and FSE should not be considered indicative of future performance on any market, including Nasdaq.

#### Our Common Shares will be traded on different markets and this may result in price variations.
Our Common Shares are listed on the TSXV and the FSE and quoted on the OTCQB and are also anticipated to be listed on Nasdaq following this offering. Trading in our Common Shares on these markets will be made in different currencies and at different times (due to differences in trading days and public holidays). The trading prices of our Common Shares on these markets may differ due to these and other factors. Any decrease in the price of our Common Shares on one of these markets could cause a decrease in the trading price of our Common Shares on the other market. In addition, market conditions in either market may affect the price of our Common Shares on the other. Investors could seek to sell or buy our Common Shares to take advantage of any price differences between the markets through a practice referred to as arbitrage. Any arbitrage activity could create unexpected volatility in the trading price of our Common Shares.

#### We are selling a substantial number of Common Shares in this offering, which could cause the price of our Common Shares to decline.
In this offering, we will sell up to Common Shares (assuming no exercise by the underwriter of the Over-Allotment option). The existence of the potential additional Common Shares in the public market, or the perception that such additional shares may be in the market, could adversely affect the price of our Common Shares. We cannot predict the effect, if any, that market sales of those Common Shares or the availability of those Common Shares for sale will have on the market price of our Common Shares.

#### We will need to raise additional financing in the future which may dilute our share capital.
Our Notice of Articles permit the issuance of an unlimited number of our Common Shares. Future issuance of our Common Shares will result in dilution to the existing shareholders. Additionally, future sales of our Common Shares into the public market may lower the market price for our Common Shares, which may result in losses to our shareholders. Sales of substantial amounts of our Common Shares into the

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public market, or even the perception by the market that such sales may occur, may lower the market price of our Common Shares.

 ***If we are unable to satisfy the requirements of Sarbanes-Oxley or our internal controls over financial reporting are not effective, the reliability of our financial statements may be questioned.***

We will become subject to the requirements of Sarbanes-Oxley if the registration statement of which this prospectus is a part is declared effective by the SEC. Section 404 of Sarbanes-Oxley ("Section 404") requires companies subject to the reporting requirements of United States securities laws to complete a comprehensive evaluation of their internal controls over financial reporting. To comply with this statute, we will be required to document and test our internal control procedures, and our management will be required to assess and issue a report concerning our internal controls over financial reporting in our future annual reports on Form 20-F following this offering, beginning with our second such annual report. Pursuant to the JOBS Act, we will be classified as an "emerging growth company." Under the JOBS Act, emerging growth companies are exempt from certain reporting requirements, including the independent auditor attestation requirements of Section 404(b) of Sarbanes-Oxley. Under this exemption, our independent auditor will not be required to attest to and report on management's assessment of our internal controls over financial reporting during a five-year transition period, except in the event this is accelerated if we lose our status as an "emerging growth company." We will need to prepare for compliance with Section 404 by strengthening, assessing and testing our system of internal controls to provide the basis for our report. However, the continuous process of strengthening our internal controls and complying with Section 404 is complicated and time-consuming. Furthermore, we believe that our business will grow both domestically and internationally, organically and through acquisitions, in which case our internal controls will become more complex and will require significantly more resources and attention to ensure our internal controls remain effective overall. During the course of our testing, management may identify material weaknesses or significant deficiencies, which may not be remedied in a timely manner to meet the deadline imposed by Sarbanes-Oxley. If management cannot favorably assess the effectiveness of our internal controls over financial reporting, or our independent registered public accounting firm identifies material weaknesses in our internal controls, investor confidence in our financial results may weaken, and the market price of our securities may suffer.

 ***We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements applicable to other public companies that are not emerging growth companies.***

We will be an "emerging growth company" as defined in section 3(a) of the Exchange Act (as amended by the JOBS Act), and will continue to qualify as an emerging growth company until the earliest of: (a) the last day of the fiscal year during which we have total annual gross revenues of at least US$1.235 billion; (b) the last day of our fiscal year following the fifth anniversary of the completion of this offering; (c) the date on which we have, during the preceding three-year period, issued more than US$1.0 billion in non-convertible debt; or (d) the date on which we are deemed to be a "large accelerated filer" under the Exchange Act, which would occur if the market value of our Common Shares that are held by non-affiliates exceeds US$700 million.

For so long as we remain an emerging growth company, we are permitted to, and intend to, rely upon exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include not being required to comply with the auditor attestation requirements of Section 404. We cannot predict whether investors will find our securities less attractive because we rely upon certain of these exemptions. If some investors find the securities less attractive as a result, there may be a less active trading market for our securities and the price of our securities may be more volatile. On the other hand, if we no longer qualify as an emerging growth company, we would be required to divert additional management time and attention from development and other business activities and incur increased legal and financial costs to comply with the additional associated reporting requirements, which could negatively impact our business, financial condition and results of operations.

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 ***We are a foreign private issuer within the meaning of the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.***

Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • for interim reporting, we are permitted to comply solely with our home country requirements, which may be less rigorous than the rules that apply to domestic public companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we are not required to provide the same level of disclosure on certain issues, such as executive compensation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we are not required to comply with Section 16(b) of the Exchange Act establishing insider liability for profits realized from any "short-swing" trading transaction.

We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our financial results on a quarterly basis through press releases distributed pursuant to the rules and regulations of Nasdaq. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you if you were investing in a U.S. domestic issuer.

 ***As a foreign private issuer, we are permitted to follow certain home country corporate governance practices that differ significantly from Nasdaq corporate governance listing standards applicable to U.S. domestic issuers, which may afford less protection to shareholders.***

As a foreign private issuer, we are permitted and intend to follow certain home country corporate governance practices instead of those required under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers. These home country corporate governance practices may differ in significant respects and could provide less protection to shareholders than they would have under the Nasdaq rules applicable to domestic issuers.

Specifically, we do not intend to adhere to the following Nasdaq corporate governance requirements and will instead follow the corporate and securities laws, rules, and regulations of the Province of British Columbia, Canada:

• Regularly Scheduled Independent Director Meetings: We are not required to hold regularly scheduled meetings exclusively attended by independent directors. However, we are subject to certain corporate governance disclosure requirements under Canadian securities laws and must disclose whether the independent directors hold executive sessions and, if such executive sessions are held, how many of these meetings have been held since the beginning of our most recently completed financial year. If we do not hold executive sessions, we must describe what our Board does to facilitate open and candid discussion among our independent directors.

• Proxy Delivery Requirements: As a "foreign private issuer", we are exempt from the proxy rules set forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act. We will solicit proxies in accordance with applicable rules and regulations in Canada.

• Shareholder Approval for Certain Transactions: We do not require shareholder approval for certain issuances of securities, including, but not limited to, the acquisition of another company's stock or asset and certain private placements.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

• Quorum Requirement for Shareholders Meetings: Under Canadian law and pursuant to our Notice of Articles, a quorum shall be present at a shareholders meeting if two or more holders of Common Shares representing at least 5% of the total number of voting rights attaching to the said Common Shares entitled to be voted at the meeting are present or represented by proxy.

• Distribution of Annual and Interim Reports: We intend to comply with Nasdaq Listing Rules 5250(d)(1) and 5250(d)(4)(A), but we may not do so or on a consistent basis. We are required to file annual and interim financial statements with the SEC and on SEDAR+, a secure web-based system maintained on behalf of the Canadian Securities Administrators and accessible at www.sedarplus.ca, and to send annually a request form to the registered holders and beneficial owners of our Common Shares that can be used to request a paper copy of our audited annual financial statements and related management discussion and analysis, and a copy of our unaudited interim financial statements and related management discussion and analysis, in each case free of charge.

As a result, shareholders will not have the same rights and protections as they would if we complied with Nasdaq's corporate governance requirements for U.S. domestic issuers.

#### We may lose foreign private issuer status in the future, which could result in significant additional costs and expenses.
While we currently qualify as a foreign private issuer, the determination of foreign private issuer status is made annually on the last business day of an issuer's most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2026. We may in the future lose foreign private issuer status if a majority of the Common Shares are directly or indirectly owned of record by residents of the United States and if we fail to meet the additional requirements necessary to avoid loss of foreign private issuer status, such as if: (i) a majority of the directors or executive officers are United States citizens or residents; (ii) a majority of assets are located in the United States; or (iii) the business is administered principally in the United States. The regulatory and compliance costs to us under United States securities laws as a United States domestic issuer will be significantly more than the costs incurred as an SEC foreign private issuer. If we are not a foreign private issuer, we would be required to file periodic and current reports and registration statements on United States domestic issuer forms with the SEC, which are generally more detailed and extensive than the forms available to foreign private issuers. In addition, we may lose the ability to rely upon exemptions from corporate governance requirements that are available to foreign private issuers.

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#### DIVIDEND POLICY
We have not paid dividends to our shareholders to date. We do not anticipate that we will declare or pay cash dividends on the Common Shares in the foreseeable future. Our current policy is to retain cash flows to finance development and to otherwise reinvest in our business. The declaration and payment of dividends on the Common Shares is at the discretion of our Board. Our dividend policy will be reviewed from time to time by our Board in the context of earnings, financial conditions and other relevant factors.

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#### MARKET FOR OUR COMMON SHARES
Our Common Shares are listed on the TSXV under the symbol "SCAN," quoted on the OTCQB under the symbol of "LDDFF" and listed on the FSE under the symbol of "E30." We have applied to list the Common Shares being offered on Nasdaq under the symbol "LDHL." No assurance can be given that our application will be approved. It is a condition precedent to the underwriter's obligation to purchase the Common Shares being offered in this offering that Nasdaq approve the listing of our Common Shares. Accordingly, if Nasdaq does not approve the listing of our Common Shares, we will not proceed with this offering.

We are authorized to issue an unlimited number of Common Shares. As of January 28, 2026, there were 89,293,651 Common Shares issued and outstanding, and there were approximately 88 record holders of our Common Shares. The transfer agent and registrar of the Common Shares is Computershare Investor Services Inc., located in Vancouver, British Columbia, Canada. For additional details regarding our Common Shares see "*Description of Share Capital.*"

#### Normal Course Issuer Bid
On June 2, 2025, we announced that the TSXV had conditionally approved our notice of intention to conduct a normal course issuer bid ("NCIB"). The NCIB permits us to repurchase for cancellation up to 5,142,844 of our outstanding Common Shares, representing approximately 9.9% of the public float as of May 30, 2025.

The NCIB commenced on June 5, 2025, and will remain open until June 4, 2026, unless earlier completed or terminated. Purchases may be made in open market transactions through the facilities of the TSXV, subject to a maximum of 2% of our issued and outstanding Common Shares in any 30-day period. All shares repurchased under the NCIB will be canceled.

We initiated the NCIB because we believe that, from time to time, the market price of our Common Shares does not fully reflect the underlying value of our business. Accordingly, we view opportunistic share repurchases as a prudent use of corporate funds. We have engaged Research Capital Corporation to act as our broker for the NCIB.

We are not obligated to repurchase any shares under the NCIB and may suspend or terminate the program at any time. As of the date of this prospectus, we have not repurchased any Common Shares under the NCIB. We do not intend to conduct any repurchases during the pendency of this offering.

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#### CAPITALIZATION
The following table sets forth our consolidated capitalization as of September 30, 2025:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • on an actual basis, as determined in accordance with IFRS; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • on an adjusted basis to reflect the net proceeds from the assumed sale of Common Shares in this offering (excluding the Over-Allotment Option) at the assumed initial public offering price of US$ per Common Share, the midpoint of the range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

This table should be read in conjunction with the "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" and "*Use of Proceeds*" sections, as well as our audited and unaudited financial statements, included elsewhere in this prospectus.

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| | | | |
|:---|:---|:---|:---|
| | **As of September 30, 2025**  | **As of September 30, 2025**  | **As of September 30, 2025**  |
| | **Actual**  | **Actual**  | **As adjusted<sup>(1)</sup>**  |
|  | **(unaudited)**  | **(unaudited)**  | **(unaudited)**  |
| Cash  | US$ | &nbsp;&nbsp;&nbsp;&nbsp;640907 | US$ |
| Debt:  |  |  |  |
| &nbsp;&nbsp;&nbsp; Parabilis term loan  |  | 2642526 |  |
| &nbsp;&nbsp;&nbsp; Factoring liability  |  | 797975 |  |
| &nbsp;&nbsp;&nbsp; Lease liabilities – current portion  |  | 236709 |  |
| &nbsp;&nbsp;&nbsp; Lease liabilities – non-current portion  |  | 345534 |  |
| Total Debt  |  | 4022744 |  |
| Shareholders' deficiency: |  |  |  |
| &nbsp;&nbsp;&nbsp; Share capital  |  | 48894901 |  |
| &nbsp;&nbsp;&nbsp; Equity reserves  |  | 6026365 |  |
| &nbsp;&nbsp;&nbsp; Accumulated other comprehensive loss  |  | 83764 |  |
| &nbsp;&nbsp;&nbsp; Deficit  |  | (56835418) |  |
| Total shareholders' deficiency  | US$ | (1830388) | US$ |
| Total capitalization  | US$2,192,356 | US$2,192,356 | US$ |

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(1) Each US$ increase (decrease) in the assumed initial public offering price of US$ per Common Share would increase (decrease) our as adjusted cash, total shareholders' equity (deficit) and total capitalization by approximately US$ million, assuming the number of Common Shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of Common Shares offered by us would increase (decrease) our as adjusted cash, total shareholders' equity (deficit) and total capitalization by approximately US$ million, assuming the assumed initial public offering price of US$ per Common Share remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. This as adjusted information is illustrative only and will depend on the actual initial public offering price and other terms of this offering determined at pricing.

The above discussion is based on 71,984,222 Common Shares issued and outstanding as of September 30, 2025, and excludes, as of that date, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • 5,207,500 Common Shares issuable upon exercise of outstanding stock options, with a weighted average exercise price of C$0.79 per share, under our Omnibus Long-Term Incentive Plan, as amended;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • 29,461,363 Common Shares issuable upon exercise of outstanding warrants, with a weighted average exercise price of C$0.87 per share; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • 382,225 Common Shares issuable upon exercise of outstanding RSUs.

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#### USE OF PROCEEDS
We estimate that the net proceeds from this offering will be approximately US$ million (or US$ million if the underwriter exercises the Over-Allotment Option in full), after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, based on the assumed initial public offering price of US$ per Common Share, the midpoint of the range set forth on the cover page of this prospectus.

We intend to use the net proceeds from this offering for working capital and other general corporate purposes, including for commercialization of our HD-AIT Upgrade Kit, business development activities associated with the sale of HEXWAVE™ and recurring engineering and cost reduction efforts for next generation HEXWAVE™. We have not allocated specific amounts of net proceeds for any of these purposes.

The amounts and timing of our actual expenditures will depend on numerous factors, including the timing and success of our manufacturing and production cycle time, the status of our marketing and business development efforts, and the amount of cash generated by our operations. Our management will have broad discretion to allocate the net proceeds from this offering.

Each US$ increase (decrease) in the assumed initial public offering price of US$ per Common Share, the midpoint of the range set forth on the cover page of this prospectus, would increase (decrease) net proceeds to us by approximately US$ million (or US$ million if the underwriter exercises the Over-Allotment Option in full), assuming the number of Common Shares we sell, as set forth on the cover page of this prospectus, remains the same, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of Common Shares offered by us would increase (decrease) the net proceeds to us by US$ million (or US$ million if the underwriter exercises the Over-Allotment Option in full), assuming the assumed initial public offering price remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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#### DILUTION
If you invest in our Common Shares in this offering, the book value of the Common Shares you purchase will be immediately diluted to the extent of the difference between the initial public offering price per Common Share in this offering and the adjusted net tangible book value per Common Share after giving effect to this offering. Dilution results from the fact that the initial public offering price per Common Share is substantially in excess of the net tangible book value per Common Share. As of September 30, 2025, our net tangible book value (deficit) was US$(0.06) per Common Share. Our net tangible book value per share represents total tangible assets less total liabilities, divided by the number of Common Shares outstanding as of September 30, 2025.

After giving effect to the assumed sale of Common Shares in this offering at an assumed initial public offering price of US$ per Common Share, the midpoint of the range set forth on the cover page of this prospectus after deducting estimated underwriting discounts and commissions and estimated offering expenses, our as adjusted net tangible book value as of September 30, 2025 would have been US$ per Common Share. This represents an immediate increase in as adjusted net tangible book value of US$ per Common Share to existing shareholders and immediate dilution of US$ per Common Share to new investors.

The following table illustrates this dilution per Common Share:

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| | | | |
|:---|:---|:---|:---|
| Assumed initial public offering price per Common Share  |  |  | US$ |
|  Net tangible book value (deficit) per Common Share as of September 30, <br> 2025  | US$ | (0.06) |  |
|  Increase in as adjusted net tangible book value per Common Share attributable to <br> new investors  | US$  | US$  |  |
| As adjusted net tangible book value per Common Share after this offering  |  |  | US$ |
| Dilution per Common Share to new investors participating in this offering  |  |  | US$ |

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If the Over-Allotment Option is exercised in full, the as adjusted net tangible book value will increase to US$ per Common Share, representing an immediate increase in as adjusted net tangible book value to existing shareholders of US$ per Common Share and an immediate dilution of US$ per Common Share to new investors participating in this offering.

A US$1.00 increase in the assumed initial public offering price per Common Share would increase our as adjusted net tangible book value after this offering by US$ per Common Share, and would increase dilution to new investors by US$ per Common Share. An increase of in the number of Common Shares we are offering would increase our as adjusted net tangible book value after this offering by US$ per share, and would decrease dilution to new investors by US$ per Common Share, assuming the assumed initial public offering price per share remains the same.

A US$1.00 decrease in the assumed initial public offering price per Common Share would decrease our as adjusted net tangible book value after this offering by US$ per Common Share, and would decrease dilution to new investors by US$ per Common Share. A decrease of in the number of Common Shares we are offering would decrease our as adjusted net tangible book value after this offering by US$ per share, and would increase dilution to new investors by US$ per Common Share, assuming the assumed initial public offering price per share remains the same.

The following table summarizes, on the as adjusted basis described above as of September 30, 2025, the differences between the existing shareholders and the new investors in this offering with respect to the number of Common Shares purchased from us, the total consideration paid to us and the average price per share that our existing shareholders and the new purchasers in this offering paid. The calculation is based on an assumed initial public offering price of US$ per share, the midpoint of the range set forth on the cover page of this prospectus before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. As the following table shows, new investors purchasing Common Shares in this offering will pay a price per Common Share substantially higher than the weighted average price per Common Share paid by our existing shareholders.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Shares Issued**  | **Shares Issued**  | **Total Consideration**  | **Total Consideration**  | **Average <br> Price Per**  |
| | **Number**  | **Percent**  | **Amount (US$)**  | **Percent**  | **Share (US$)**  |
| Existing shareholders  |  | % |  | % | $|
| New investors  |  | % |  | % | $|
| Total  |  | 100% |  | 100% | $|

---

Assuming the exercise of all of our outstanding options and warrants and settlement of all RSUs, the percentage of Common Shares held by existing shareholders will increase to , or %, of the total number of Common Shares outstanding after this offering, and the number of Common Shares held by new investors in this offering will decrease to , or %, of the total number of Common Shares outstanding after this offering.

The above discussion is based on 71,984,222 Common Shares issued and outstanding as of September 30, 2025, and excludes, as of that date, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • 5,207,500 Common Shares issuable upon exercise of outstanding stock options, with a weighted average exercise price of C$0.79 per share, under our Omnibus Long-Term Incentive Plan, as amended;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • 29,461,363 Common Shares issuable upon exercise of outstanding warrants, with a weighted average exercise price of C$0.87 per share; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • 382,225 Common Shares issuable upon exercise of outstanding RSUs.

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#### BUSINESS

#### Company Overview
We are an emerging leader in AI-based contactless security technology for detecting concealed metallic and non-metallic weapons and threats. Our mission is protecting communities and preserving peace of mind through superior security detection solutions, while simultaneously increasing ease of travel and convenience for security at major checkpoints. In furtherance of this mission, we offer two separate security screening solutions: our HEXWAVE™ system and our HD-AIT Upgrade Kit.

#### HEXWAVE™
Our flagship HEXWAVE™ system uses MMW, advanced 3D imaging, and AI to detect concealed metallic and non-metallic weapons, including traditional metallic guns and knives as well as more novel threats such as liquid, plastic, and powder explosives, 3D printed guns, and other prohibited items — without having to remove common items like cell phones or keys. The system allows for rapid, automated screening using a high throughput, contactless, walkthrough portal, alleviating many of the shortcomings of legacy metal detector-based screening processes. We believe HEXWAVE™ can empower gathering spaces to address the chronic epidemic of mass shootings and terrorist attacks, as well as emerging risks such as 3D printed weapons, in a cost-effective manner while improving the visitor experience. We believe the most promising market opportunities for HEXWAVE™ are certain verticals in the urban security market and in aviation employee screening.

HEXWAVE™'s contactless, 3D-imaging and AI-enabled screening technology represents a new generation of technology for our target urban security and aviation employee screening markets which, according to our estimates, is currently a US$10 billion market opportunity. These markets are based primarily on legacy metal detectors and inefficient processes. This legacy approach presents numerous operational problems and hidden costs, including frequent false alarms caused by the inability to distinguish between dangerous weapons and harmless items. Persistent false alarms often require visitors to undergo a cumbersome resolution process, including emptying of pockets and pat downs that are error-prone, labor and cost-intensive, intrusive, and unpleasant. This also creates long wait times, dangerous crowding, and numerous opportunities for weapons to slip through undetected. The net result is less effective security, unhappy visitors, and stressful working conditions for employees, many of whom may be hire-for-the-day contractors. As a result, venues and facilities in the urban security market generally have faced a choice between operating largely unprotected against random acts of violence (i.e., without security screening) or using systems that significantly impede the flow of customers into and within business facilities.

Unlike traditional walk-through metal detectors, HEXWAVE™ uses advanced sensors, 3D image reconstruction and AI software to reliably detect dangerous weapons while ignoring harmless items like keys, wallets, cell phones and jackets. This means that visitors can walk through HEXWAVE™ without stopping, without removing items from their pockets. HEXWAVE™ significantly reduces the number of false alarms, allowing security staff to focus their attention on high probability threats and increase customer throughput.

We believe that the increasing frequency and severity of violent incidents in public venues is prompting both businesses and governments to adopt more proactive and scalable security screening solutions. This shift is creating a growing, market-driven need for effective, efficient and non-invasive detection technologies that can be broadly deployed across both public and private settings. As a result, we believe that we are well-positioned to become a market leader in the rapidly growing market for next-generation urban security screening technologies.

HEXWAVE™ is currently in early commercial deployment. For the nine months ended September 30, 2025 and the year ended December 31, 2024, we have generated approximately US$0.91 million and US$1.01 million, respectively, in revenue from sales of HEXWAVE™ to early-adopter customers mainly in North America. These include deliveries to customers in the stadium, transportation, and government facility sectors. HEXWAVE™ is not yet in full-scale mass production, and we continue to focus on optimizing unit economics, reducing production costs, and enhancing system performance through ongoing engineering and supply chain improvements.

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Our marketing and sales activities to date have included participation in major security and public safety trade shows, targeted pilot programs at customer venues, and direct sales outreach to key sectors. We are actively expanding our commercial team and building channel partnerships to support broader market rollout in 2026.

For a description of the HEXWAVE™ system, including the AI technology it incorporates, see "— *Our Products — HEXWAVE™*."

#### HD-AIT Upgrade Kit
Our HD-AIT Upgrade Kit is being developed pursuant to contracts awarded by the TSA to create a solution to aging HD-AIT systems currently in use in airports throughout North America. The TSA has announced plans to upgrade over 1,000 body scanners installed at U.S. airports over the next five years, which we believe creates a near-term market opportunity representing approximately US$100 million of potential revenue. In addition, we believe there is global demand for similar upgrades to installed base systems internationally.

As of the date of this prospectus, the HD-AIT Upgrade Kit remains in the product development and TSA certification phase and has not yet been commercialized. In August 2025, we delivered our first unit to the TSA for formal evaluation. Initial commercial sales are anticipated in 2026, subject to successful completion of the TSA's certification process.

For a description of the HD- AIT Upgrade Kit, see "— *Our Products — HD-AIT Upgrade Kit*."

#### Industry Background

#### Urban Security Market and Aviation Worker Screening (HEXWAVE™ Product)
 *Legacy Security Screening Systems* 

We believe that legacy security screening systems generally have been designed based on a limited number of use cases — for example, airports, courthouses and prisons — using antiquated technology and based on the assumption that weapons will be made of or contain metal. The specialized facilities in which security screening has predominantly been deployed often are required by law to meet specific screening regulations using products built to meet technical standards designed for these environments. Many of these standards and regulations have not been updated to account for rapid changes in technology.

The legacy security screening systems developed in this environment have not rapidly advanced to meet an evolving threat landscape that includes, for example, 3D printed guns and knives produced from plastics and non-metal composites, as well as non-metallic explosives. In addition, because the regulated facilities in which legacy security screening systems have been deployed, such as airports and prisons, usually have a local monopoly on the services they provide, they often have not been incentivized to prioritize visitor experience. As a result, we believe that legacy security screening systems are not well-suited to the current threat landscape or to environments where visitor experience is highly valued, such as schools, places of worship, shopping malls or sports and entertainment venues (where security screening often is not deployed). They also generally cannot be adapted for applications other than violence prevention, such as the detection of drugs, liquids, money, stolen goods or other non-metallic contraband.

Security screening at most venues and facilities has historically been designed around metal detectors that require visitors to enter in single-file lines after submitting their pocket contents to manual inspection. This process is usually supported by multiple security guards who perform manual inspections, hand wand scans, and hands-on body "pat downs" to resolve the large numbers of alarms, frequently false positives, generated by the metal detectors. This complex process has numerous shortcomings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Unadaptable and Limited to Metallic Threats**. Legacy metal detectors are not able to detect the growing array non-metallic threats, including 3D printed guns and knives produced from plastics and non-metal composites, as well as liquid, powder and plastic explosives/IEDs. These threats are becoming increasingly prevalent in today's environment. More generally, legacy metal detectors cannot be adapted or customized to detect new types of physical threats or other contraband.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **False Alarm Fatigue**. Legacy metal detectors are not able to differentiate between weapons and harmless metallic items like cellular phones, keys, wallets and steel-toed boots. These items generate large numbers of false alarms. This problem can only be partially mitigated by emptying pockets and separately screening bags. High numbers of false alarms make it difficult for even experienced, well-trained security guards to stay vigilant with every visitor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Ambiguous Alarms.** When alarms occur, security guards may be confused about which visitor triggered the alarm. Even if guards correctly identify the visitor, they have no indication of where the potential threat is located on the visitor's person. This ambiguity extends the duration, error potential, and risk level associated with manual searches to locate the threat.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Frequent Human Error**. Legacy screening technology requires careful people flow orchestration and manual processes to avoid and/or resolve false alarms. There are many opportunities for even well-trained, highly motivated guards to become fatigued, or distracted, allowing weapons to slip through. Additionally, guards may be affected by unconscious bias that causes them to manually search some visitors more thoroughly than others, allowing weapons to enter undetected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Frustrating Delays**. Taking time to form single-file lines, wait their turn to enter, empty pockets, and resolve frequent false alarms creates frustrating delays for visitors at the precise moment when they should be feeling the exhilaration of arrival.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Invasive Contact**. Waiting in large crowds, placing one's personal items in communal bowls and having bags and bodies touched by strangers has never been something visitors want or expect during their arrival experience.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **High Labor Costs**. The intensively manual processes of legacy screening technology require large numbers of security staff. The only way to reduce wait times during peak arrival periods is to deploy equipment and guards up to the limit of what the physical space can accommodate, generating substantial variable labor expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • **Transient Security Staff**. Many venues have a core set of security professionals and managers on staff. For those venues which are event-based, they may hire security staff for each event. Recruiting and hiring security staff for each event can result in a wide variance in the skills and experience of staff conducting the screening.

In addition to the broader urban security market, the limitations of legacy security screening solutions combined with a lack of comprehensive regulations or legal requirements have led to inadequate screening of aviation workers (for example, airport vendor employees and maintenance technicians). Although aviation workers have broad access to security restricted areas, they generally are not subjected to the same level of screening as airline passengers. We estimate that approximately one million U.S. airline and cargo screening employees have unescorted access to security restricted areas, in addition to significant numbers of other aviation vendor employees such as workers at restaurants and convenience and gift shops. This creates significant "insider threat" — i.e., risk that aviation workers may bring contraband, especially non-metallic contraband such as explosives or drugs, into security restricted areas. Such contraband could be used by aviation workers to carry out an attack or passed to an airline passenger within the restricted area. However, in light of the number of workers who need to be screened and the limitations of legacy security screening systems, as well as modern HD-AIT screening systems (i.e., low throughput), regularly screening these workers with such systems could cause a significant burden. We believe that airports need modern equipment to address insider threats in an affordable and effective manner.

The historical emphasis on technical detection performance using outdated standards tested in isolation has drawn attention away from performance of the screening process as a whole system. As noted above, legacy screening technologies effectively detect metal, but they also generate numerous false alarms for harmless items. To bring down the false alarm rate, security teams proactively divert metal items away from the metal detectors into manual checking processes that are vulnerable to human error and may be defeated by a determined attacker. The result is a slow, frustrating process that introduces numerous potential points of failure. The root causes are outdated technical standards, antiquated technology, and the inability of humans to fully compensate for these deficiencies.

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 *Recent Market Entrants* 

In addition to legacy metal detector-based security screening systems, a number of companies have brought to market new security screening solutions that address a number of the shortcomings associated with legacy systems. Certain of these new solutions include systems that utilize AI in order to reduce false alarms and increase throughput. For a discussion of certain of these competitors and their security screening systems, see "— *Competition*."

#### HD-AIT Upgrade Kit
Since 2010, the TSA has deployed more than 1,000 full-body HD-AIT security screening scanners in U.S. airports. These systems require airline passengers to step briefly into a transparent, upright cylinder, where two vertical antenna masts rapidly rotate around the passengers. The system utilizes a transceiver to scan over a two-dimensional aperture and mathematically reconstruct the data into a 3D image of the person being screened. A computer processor then uses ATD algorithms to evaluate the resulting image and identify suspected threats for manual evaluation by TSA staff. The U.S. Department of Homeland Security's ("DHS") Science and Technology Directorate ("DHS S&T") has announced a "Screening at Speed" program in order to develop the next generation of passenger screening to upgrade or replace the existing HD-AIT security screening scanners. DHS S&T has stated that it believes the benefits of these upgrades will include better threat detection, reduced false alarms, fewer pat-downs and decreased secondary screening. In addition, the higher-resolution data obtained from upgraded systems may allow passengers to keep on their light outerwear without having to remove these items of clothing. The S&T Screening at Speed program partnered with the Department of Energy Pacific Northwest National Laboratory ("PNNL") to develop MMW, HD-AIT technology to implement desired upgrades, resulting in the development of a new stand-alone screening portal that may be used to replace existing checkpoint systems and an HD-AIT retrofit kit that can be used to quickly update existing passenger screening systems with the improved technology. We obtained a license from PNNL to commercialize this technology, the only such license granted to date. For more information on this license, see "— Our Products — Our Licenses — Battelle Memorial Institute / PNNL — Intellectual Property used in HD-AIT Upgrade Kit" below. We are currently in development of a HD-AIT Upgrade Kit that has been funded by the TSA for approximately US$6 million and was the only company to receive an award for the S&T Screening at Speed Program. The capability is based on Open Architecture Platform integrating TSA identified "best in class" partners for optimal performance targeted to meet the new classified detection standards issued by DHS.

#### Our Market Opportunity

#### HEXWAVE™
 *Urban Security Market* 

We believe that the current macro trends in firearms ownership, mass shootings and the proliferation of emerging risks such as 3D printed weapons suggest that the need for effective security screening processes is significant and will continue to grow for the foreseeable future.

The aggregate markets associated with the explosives and weapon detection market, according to our estimates, currently total US$10 billion. The complexity of the urban security threat environment has dramatically changed over the last decade, requiring a more proactive approach to preventing violent attacks against communities. Since the September 11, 2001 terrorist attacks in the U.S., the air transportation community has effectively deployed a combination of detection technologies that are being consistently upgraded in an attempt produce products capable of detecting an array of rapidly evolving threats. Resulting detection solutions have focused largely on protecting access to aircraft systems in the form of gated or "point" solutions. In the commercial aviation context, the public is forced to tolerate the delays associated with such inspections due to the extreme risks that explosives or weapons can have on an aircraft and its passengers.

In contrast, venues and facilities in the urban security market generally have faced a choice between operating largely unprotected against random acts of violence (i.e., without security screening) or using systems that significantly impede the flow of customers into and within business facilities. However, we

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believe that the frequency and magnitude of violent attacks in urban security market venues is forcing both businesses and governments to rethink how to implement more proactive measures. According to the Gun Violence Archive, there were more than 500 mass shootings in the U.S. in 2024, up from 271 in 2014. In June 2024, the U.S. Federal Bureau of Investigation ("FBI") released its report "2023 Active Shooter Incidents in the United States." In its report, the FBI designated 48 shootings as active shooter incidents. Although incidents decreased by 4% from 2022 (50 incidents), the number of active shooter incidents increased 60% since 2019 (30 incidents). The 48 active shooter incidents in 2023 occurred in 26 states and represent five categories, including open space, commerce, education, health care, and residence. The FBI designated 229 active shooter incidents from 2019 to 2023. This represents an 89% increase in active shooter incidents (121) from the previous five-year period (2014-2018). The 229 active shooter incidents from 2019 to 2023 occurred in 44 states and the District of Columbia and represent seven location categories including commerce, open space, education, government, residence, health care, and house of worship. We believe the market for countermeasures is growing as a result of these trends, creating a market-driven need for security detection that can be broadly deployed across nearly all public and private facilities. The base requirements for such systems are that they be both highly accurate and nonintrusive to our daily lives.

The current alternatives in the U.S. security screening market are typically restricted to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Solutions principally focusing on metal threats, therefore non-metal threats can potentially go undetected;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Airport solutions which are not well suited to be used across other verticals because they do not enable the requisite throughput;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Solutions that offer limited outdoor application and therefore hinder the capability of providing a layered defense for proactive threat detection;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Solutions requiring large, dedicated areas or space versus integration into existing infrastructure; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Solutions with limited capability for integration into existing security systems command and control.

We believe that our current primary market opportunity is for threat detection screening in the following four vertical urban security markets (listed in order of priority):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.

Correctional Facilities/Prisons — Screening for non-metallics including weapons, drugs, money, cigarettes, contraband;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.

Areas necessitating secured perimeters and secured buildings, such as corporate campuses, national laboratories or government buildings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.

Public venues, such as stadiums (focused on employee and VIP screening), malls and outdoor events/festivals; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.

Transportation hubs, such as airports (curb to passenger gate), rail, cruise lines and bus stations.

Most venues and facilities in our target segments do not fall under regulations or mandates that require the adoption of security screening systems that conform to specific standards. We estimate that, of the US$10 billion market described above, such unregulated facilities represent over 60% of the total worldwide market opportunity for security screening technology and represent a large opportunity for rapid adoption of our innovative weapon screening products.

 *Aviation Worker Screening Market* 

In addition to the broader urban security market described above, we have a tailored opportunity to provide advanced security screening solutions in the U.S. aviation worker screening market. As noted above, in U.S. airports, insider threat poses a real risk, with the potential for employees to exploit secure access and insider knowledge to smuggle contraband and weapons into secured locations. In 2023, the TSA issued a mandate called "TSA-NA-23-02," which required airports to begin conducting random physical screenings of aviation workers entering certain terminal access points, starting in late September 2023. The mandate also required airports to issue an Aviation Workers Screening Assessment by June 2024 and an

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Explosive Detection Screening Equipment ("EDSE") Plan due to be submitted to airports' Federal Security Director for approval in October 2024. Under the TSA's mandate, airports' EDSEs must be capable of detecting the presence of explosives carried on the person, in outer coats and jackets and prevent the introduction of unauthorized weapons, explosives, and incendiaries into a secured area. The deadline for airports to implement their EDSE plan is April 2026. Under the mandate, airports themselves — rather than the TSA — are required to implement the requisite aviation worker screening protocols. However, a group of municipalities and airports challenged the 2023 TSA mandate (*City of Billings, et al. v. Transportation Security Administration et al.*), arguing that the U.S. federal government lacked authority to command state and local governments to enforce federal regulations, that the TSA was required to provide public notice of the new rule and allow for public comment under the APA, and that the rule unlawfully compelled local officials to implement a federal scheme. In August 2025, the U.S. Court of Appeals for the D.C. Circuit found that the TSA failed to comply with the notice and comment requirements in accordance with the APA. The court stayed issuance of its order until the TSA either completes an appropriate rulemaking process or decides to forgo the rule. As of the date of this prospectus, it is uncertain whether the TSA will decide to follow proper rulemaking procedures or will determine that the requirements are not necessary.

If the TSA's mandate is upheld, based on certain assumptions regarding the number of airports covered by the TSA's mandate, average operating time and average number of screening systems per airport, we estimate that airports will require over 500 new screening systems in order to comply with the TSA's mandate. We believe that we would be positioned to capture a significant portion of this market, representing an opportunity for approximately US$50 million in revenue.

#### HD-AIT Upgrade Kit
As described above under "— *Industry Background — HD-AIT Upgrade Kit*," the TSA is expected to upgrade over 1,000 existing HD-AIT security screening scanners over the next five years. As a result of our license from PNNL to commercialize the technology that PNNL developed in partnership with DHS, S&T, and our track record of receiving grants and collaborating successfully with the TSA, we believe that our HD-AIT Upgrade Kit is very well positioned to fill most or all of this demand, representing an opportunity for approximately US$100 million in revenue over the life of the upgrades.

In addition to legacy AIT security screening scanners that will be upgraded in the U.S., airports in other countries also have legacy AIT security screening scanners deployed. We believe that our HD-AIT Upgrade Kit is compatible and can be used with all of these systems, and we expect for there to be pressure to upgrade these systems. The applicable certification standards for HD-AIT security screening systems in the U.S. and Europe are classified but will require expanded threat detection capability, by size and region, lower false alarm rates, and certain minimum processing time and throughput requirements. Based on early testing, we believe that our HD-AIT Upgrade Kit will meet these standards and enable significantly higher throughput per system by lowering false alarm and passenger touch rates.

Outside of the aviation context, there are legacy AIT security screening scanners deployed at locations such as nuclear power plants, high-profile soft targets (for example, the 9/11 Ground Zero Museum) and government buildings (such as the U.S. Capitol, courthouses and other facilities). Although at present there is no regulatory mandate to update the security screening scanners at such facilities, we believe that there will be strong market demand from these facilities for our HD-AIT Upgrade Kit once approved and deployed at US airports.

#### Our Growth Strategy
The key elements of our growth strategy within our target market include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ***Develop Initial Customer Successes in Specific Target Metropolitan Areas*** 

Decision-makers at our prospective customers are often professionally connected to decision-makers at other prospective customers in different vertical industries within a specific target metropolitan area. We have established a successful pattern of targeting and winning first adopter customers in specific vertical industries and then leveraging that success to solicit referrals at other venues and facilities across the metropolitan area in other vertical industries. We have developed a playbook

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for executing this pattern through orchestration of our direct sales resources and channel partners in a manner that we believe will continue to scale as we develop the available market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ***Expand and Activate Our Distribution Channels*** 

We have a global distribution network based on certain exclusive and non-exclusive distributor relationships with Rapiscan Systems, Inc. ("Rapiscan"), Viken Detection Corp. ("Viken"), K2 Security Screening Group ("K2"), and Isotec Security Inc. ("Isotec"), among others, and we continue to seek additional distributors for our products. These distributors are actively seeking sales opportunities in approximately 20 U.S. states and more than five countries around the world. We also previously engaged The Chertoff Group to provide strategic advisory services in connection with our efforts to pursue growth opportunities in the U.S. government (including the TSA) and adjacent market. We intend to continue to develop our distribution network by adding further geographic coverage and sales capacity. We plan to continue to cultivate field level collaboration between our direct sales team and our distributors to develop the ability of the distributors to find, develop, close, and service customers independently.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ***Concentrate Marketing and Sales Effort in Specific Target Accounts in Specific Vertical Industries*** 

Through our experience to date we have developed a proprietary list of target vertical industries, developed a list of target accounts within those industries, and identified target decision-makers in our target accounts. We believe that our target account list represents the best immediate growth opportunities for our business. Over time, we plan to adjust our target account list to reflect current market conditions and the capabilities of our products. We plan to continue to execute advertising, content marketing, lead generation, trade shows, in-house demonstrations and sales development activities to our target account list to create qualified sales opportunities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ***Promote Awareness by Gathering and Leveraging Our Customer Community*** 

We believe that we can successfully seek referrals from existing customers and partners to other prospective qualified customers, sell additional capacity to existing customers and sell new add-on software enhancements and services to existing customers. We are continuing to develop and expand our customer success function within the global revenue organization to focus on helping customers successfully deploy our products and cultivate referrals, expansion, and upsell opportunities. Our buyers are naturally collaborative on security best practices due to their vested interest in collective deterrence and the likelihood that any security event will have a negative collective impact at the metropolitan, regional or industry level.

#### Our Competitive Strengths
We are an innovator in the security screening industry with a mission of protecting communities and preserving peace of mind through superior security detection solutions. We believe our collective expertise coupled with the following competitive strengths will allow us to establish a leadership position in next-generation security screening and expand our market opportunity:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ***Superior Detection Effectiveness of Metallic and Non-Metallic Threats Based on Artificial Intelligence Software*** 

We believe that real-world screening operations based on our products detect more actual weapon threats with fewer false alarms than similar screening operations based on old walk-through metal detectors. HEXWAVE™'s Automated Threat Detection using AI and deep learning interprets the high volume of data and 3D radar images produced by the antenna array and receiver to determine whether there is a threat item concealed on a person. Our AI and deep learning algorithm have been developed by our team of industry experts, who have previously and successfully brought to market industry-leading AI algorithms and products used in the aviation security screening market. we have acquired over 2.5 million individual image frames, captured from over 12,000 scans of live mock passengers using the HEXWAVE™ system, to create the existing data set enabling the training of large AI models and enhancing detection performance. This data set continues to grow as our products are deployed in more venues and facilities. As a result, HEXWAVE™ is able to accurately identify both metallic and non-metallic concealed weapons or threat objects on a person.

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This detection capability is critical in an environment of constantly evolving threats, which include liquid, powder, and plastic explosives, 3D printed guns, ceramic knives and ghost guns, among other threats, clearing the path to meet and exceed robust detection and screening performance requirements across multiple markets. The ability to detect both metallic and non-metallic threats is extremely limited in the urban security market today.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ***Mobility and Flexibility Enabling a Layered Security Screening Approach.*** 

HEXWAVE™'s mobility and flexibility allow customers to rapidly deploy in multiple locations indoors and outdoors as needed for their security screening requirements and as a layered security screening approach. HEXWAVE™'s stand-alone 3D image capture and antenna array architecture enables a standard portal configuration to an arrayed kiosk arrangement for scanning pedestrians as they move through a pre-screening area. The mobile and indoors/outdoors features of HEXWAVE™ are central to its operational agility to be deployed across a security detection space. These capabilities provide the means for a "layered defense" across the full spectrum of urban security environments with a modular configuration that can be deployed across the full market space.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ***Reliable Precision*** 

Our technology uses 3D radar imaging combined with artificial intelligence to identify both metallic and non-metallic threats, including explosives, liquids, and even 3D-printed weapons. We continually train and update algorithms through rigorous data collection in the factory and at customer locations to improve the detection capability for new and existing threats. This dramatically reduces the number of false alarms and allows visitors to walk through the system at normal pace, without emptying their pockets. The result is a visitor experience that is more similar to walking through a shoplifting prevention system at a department store than an airport security checkpoint.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ***Increased Throughput***

Visitors pass through the HEXWAVE™ system at normal walking pace, in a continuous "S-curve" configuration. This configuration, combined with low false alarm rates, makes screening with our products up to twice as fast as old screening processes. In addition to improved visitor experience, faster throughput helps reduce the size of crowds in entry areas, which can be an attractive soft target for threat actors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ***Automated and Targeted*** 

As visitors pass through the HEXWAVE™ system, our technology provides security officers with an immediate and visible go/no-go decision for automatic threat detection. If a potential threat is detected, HEXWAVE™ alerts security officers to the specific location of the potential threat by means of a highlighted digital human avatar, so security guards know exactly where to look to resolve the alarm. This reduces the potential for human error and accelerates the resolution process.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ***Significant Cost Savings*** 

Because our technology generates so few false alarms and scans visitors more quickly than legacy metal detector systems, far fewer security guards and equipment is required, allowing venues to reduce overall operational costs and making security screening financially feasible at more venues and events.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ***Continuous Improvement***

Unlike analog alternatives, our products use artificial intelligence software to classify threats based on a large and growing digital data set that makes it possible to improve detection accuracy over time, adapt to new threats and customize detection capability for specific items.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ***Key Strategic Global Partners*** 

We have signed global strategic partnership agreements with Rapiscan and Viken. Each of these strategic partners has a globally recognized brand, a large global distribution network, global systems integration and support capabilities, and global customer networks full of potential prospects for

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our contactless security screening solutions. We believe that these strategic partners will provide us with significant leverage and global reach that will allow us to rapidly scale our business and guide customers to success.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ***Visionary and Experienced Management Team*** 

Our management team brings significant security industry relationships and expertise working with the development of security related technologies, specifically MMW applications which encompass HEXWAVE™ and HD-AIT Upgrade Kit. This includes industry experts on 3D imaging capability and algorithm development for the automatic detection of threats vs. non-threats, as well as experience leading the development of ground-breaking sensing products for the military, medical, industrial, and commercial markets, including body scanners that can be seen deployed across most United States and European Union airport checkpoints.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ***Self-Reinforcing Adoption Cycle*** 

We believe that as we acquire more customers and deploy more of our products, we gather more digital data that helps us improve the detection accuracy and performance of our systems. As the accuracy of our systems increases, we believe more prospective customers will be attracted to our products and more engaged prospects will choose to purchase our products. We anticipate that this cycle will continue to operate in the future, creating ongoing competitive advantages for us and for our distributor partners.

#### Our Products
We provide security solutions for concealed threat detection in high volume foot traffic areas. We currently offer two next generation security technologies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Our flagship HEXWAVE™ product is a walk-through security portal designed to provide discrete, modular and scalable protection to provide layered, stand-off detection capability, providing a means to proactively counter evolving threats in aviation employee and urban security environments. The integrated active 3D imaging sensor using proven MMW technology and Automatic Threat Detection using AI is designed to detect both metallic and non-metallic firearms, knives, explosives and other threats and contraband.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Our High-Definition Advanced Imaging Technology TSA Upgrade Kit is being developed pursuant to contracts awarded by the TSA to create a solution to aging HD-AIT systems currently in use in airports throughout North America and also can be implemented to upgrade HD-AIT systems around the globe. Both our flagship HEXWAVE™ product and our HD-AIT Upgrade Kit depend on critical patented technology and processes that we have licensed from third parties. See "— *Our Licenses*" below for more information.

![[MISSING IMAGE: img_hexwave-4clr.jpg]](img_hexwave-4clr.jpg)

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#### HEXWAVE™
Our flagship product is HEXWAVE™, a walk-through security portal designed to provide discrete, modular and scalable protection to provide layered, stand-off detection capability, providing a means to proactively counter evolving threats in aviation employee and urban security environments. The integrated active 3D imaging sensor using proven MMW technology and Automatic Threat Detection using AI is designed to detect both metallic and non-metallic firearms, knives, explosives and other threats. In addition, HEXWAVE™'s AI algorithms can be customized and trained for specific items of interest like drugs, alcohol, stolen merchandise or other contraband and immediately sent to the customer. HEXWAVE™ supports a maximum screening throughput of 700 people per hour. HEXWAVE™ became commercially available in October 2023.

HEXWAVE™ sends low power signal to capture reflected data used to create real time 3D images which can detect weapons through clothing. Images are never stored or presented to an operator. If a threat is detected, the location of the threat is identified on a mannequin like image (see below) for improved alarm resolution. The active microwave imaging technology uses deep learning algorithms to identify metal and non-metal threats. The technology can be used in both indoor and outdoor applications in a modular form that enables it to be easily scalable to a stand-off, layered mode for virtually any facility that has defined entrances and controlled perimeters. Further, the architecture of the technology makes it suitable for deployment across ultra-wide band frequencies, enabling it to be adaptable to international regulatory environments. Because HEXWAVE™ emits radio frequency energy, FCC certification is required to market and sell HEXWAVE in the U.S. We received FCC certification for HEXWAVE™ in the U.S. and Canada in February and April 2024, respectively.

![[MISSING IMAGE: img_secpersonal-4clr.jpg]](img_secpersonal-4clr.jpg)

#### Security Personnel Interface Showing Threat Detected
A high-level overview of how HEXWAVE™ functions is described below in the figure below.

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![[MISSING IMAGE: fc_highlevel-4clr.jpg]](fc_highlevel-4clr.jpg)

HEXWAVE™ consists of four principal subsystems that work together to create its threat detection platform:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • First, the Antenna Array and Transceiver emits a form of safe low energy into a detection space and captures the reflection of that energy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Secondly, the 3D Radar Image Generation converts the captured data into 3D image of the target area in real time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The third subsystem is the Automated Threat Detection using AI and deep learning that interprets the high volume of data and 3D radar images determine whether there is a threat item within the detection space; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The fourth subsystem is Smart IoT Functionality, which communicates the decision produced in the third subsystem to existing security screening infrastructure and personnel.

The AI and deep learning systems used in HEXWAVE™'s third subsystem are our proprietary are closed-source algorithm models, which are built on leading industry standard open-source libraries (i.e., transformers) used by AI product industry leaders. Our AI algorithms were customized to enable ultra-fast execution of ATD in "real time." Our AI algorithms were developed by our team of industry experts, who have previously and successfully brought to market industry-leading AI algorithms used in the aviation security screening market. The AI algorithms have been trained on a data set comprising over 2.5 million individual image frames, captured from over 12,000 scans of live mock passengers using the HEXWAVE™ system. These mock passengers are chosen to produce a carefully selected distribution of body types and genders that represent the cross-section and variety of body types that are seen in actual screening environments. In these trials, each mock passenger conceals one of a large variety of simulated metallic and non-metallic threats (e.g. guns, knives, explosives, flares, etc.) over various parts of their bodies as required by a particular threat detection application (e.g., airports, court houses, etc.). Each millimeter wave scan generated by the passenger as he or she walks through the system (captured at 20 times per second) is marked over the location of the threat and input into the training model. After the model is trained with at least 10,000 scans, it is subjected to a threat detection validation process, in which a smaller test set is generated, typically with 300 to 600 unmarked image scans from a distribution of mock passengers with various threats concealed in different places on the body. Models used in the test set are not included in the training set in order to provide a more accurate prediction of performance in actual screening environments. These test scans are fed into the algorithm to provide threat detection prediction on locations of the body, and humans score the AI predicted detection and location as compared to the actual threat type and location, if any, for each test scan. The overall detection performance and false alarms are recorded. Our data set continues to grow as our products are deployed in more venues and facilities, and as we continue to conduct additional trials. The AI and deep learning systems analyze MMW images generated for people walking through the HEXWAVE™ system at a rate of

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20 times per second, similar to how a high-speed camera would track a walking person. This enables people to be screened at normal walking speeds. The AI algorithm predicts the presence and location of the threat by placing a rectangle representing the size and location of the detected threat over the location on the image where the algorithm determined the threat is concealed. This is an on-going process with trials occurring on a monthly basis and software updates issued on a quarterly basis (or sooner as may be required by customer installations).

The radar energy emitted by the Antenna Array and Transceiver is safe for use on humans. Further, HEXWAVE™ does not gather or use any personally identifiable information, as only the AI programming utilizes the images and 3D data.

![[MISSING IMAGE: img_hidait-4clr.jpg]](img_hidait-4clr.jpg)

#### HD-AIT Upgrade Kit (Liberty upgrade integrates into existing TSA AIT screening devices)

#### HD-AIT Upgrade Kit
Our HD-AIT Upgrade Kit is being developed pursuant to contracts awarded by the TSA to create a solution to aging HD-AIT systems currently in use in airports throughout North America and also can be implemented to upgrade HD-AIT systems around the globe. The HD-AIT Upgrade Kit uses MMW, high-definition imaging and will incorporate AI to produce greater detection capabilities (including detection of new and emerging threats) and lower false alarm rates for a better passenger experience. The AI used in connection with the HD-AIT Upgrade Kit will be supplied by up to three TSA-approved vendors (not including our company) chosen by TSA as part of its Open Architecture program. These vendors do not produce any HD-AIT hardware systems. All AI vendor algorithms will be trained by threat example scans produced by legacy HD-AIT systems incorporating our HD-AIT Upgrade Kit prior to receipt of TSA certification.

The HD-AIT Upgrade Kit is designed to enhance the capabilities of existing TSA AIT screening devices using open architecture, allowing the use of third-party hardware and software components. According to the TSA, open architecture is a technology-design approach for software and hardware that uses widely accepted standards to ensure interoperability across tools and platforms regardless of the technology designer, manufacturer, or supplier. Out HD-AIT Upgrade kit meets new detection standards issued by the DHS. In January 2025, we received formal waiver authorization approval from the FCC. In June 2025, we submitted the system to provide the test data for the full authorization enabling us to market and deliver the HD-AIT Upgrade Kit in compliance with FCC rules and regulations applicable to the marketing of radio frequency devices. In August 2025, we delivered our first unit to the TSA for formal evaluation. Initial commercial sales are anticipated in 2026, subject to successful completion of the TSA's certification process.

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The contracts awarded by the TSA include defined technical milestones, evaluation phases, and government acceptance criteria, and may require us to provide software, hardware, integration support, or technical data on specified timelines. The TSA may modify, delay, or terminate these contracts at its discretion, including for convenience, and payment is typically subject to successful completion of milestones or delivery of contract deliverables. Failure to achieve required performance standards, meet milestone schedules, or provide requested technical information could result in reduced payments, delays in TSA evaluation or certification, or termination of the contract. TSA funding and continued engagement do not guarantee certification or procurement, and TSA certification is not assured. Any delay, modification, or termination of our TSA contracts could adversely affect our development timelines, commercialization plans, and expected revenue for the HD-AIT Upgrade Kit.

#### Revenue Model
We sell our HEXWAVE™ products under a purchase agreement (product sale where title transfers to the customer) by which the customer agrees to pay a one-time upfront fee for the equipment, and we expect to sell our HD-AIT Upgrade Kit products primarily under this type of arrangement. In addition, purchasers of our HEXWAVE™ scanners may purchase a subscription for software operating system and standard AI algorithm updates. The subscription service is typically offered for a period of five years and may be paid in advance or on an annual basis. In addition, we offer an annual maintenance and support service plan to repair any faulty or damaged parts on the HEXWAVE™ following a one-year warranty on the product. To date, substantially all purchasers of HEXWAVE™ scanners also have purchased this maintenance and AI subscription. In addition, in partnership with Amsource Capital, we are now offering flexible leasing options for HEXWAVE™ of up to seven years with monthly payment options.

#### Our Licenses
 *Massachusetts Institute of Technology — Intellectual Property used in HEXWAVE™* 

We have entered into agreements with MIT and MIT's Lincoln Laboratory ("MIT LL"), including the MIT License Agreement, a related Technology Transfer Agreement (the "Technology Transfer Agreement"), and a related Cooperative Research and Development Agreement ("CRADA"), pursuant to which we have obtained an exclusive license for patents, design assets and MIT LL technical expertise related to active 3D imaging technology that are the core technology behind our HEXWAVE™ product. The obligations under the Technology Transfer Agreement and the CRADA have now been completed. We may consider extending the CRADA (and therefore changing its scope) if we determine that additional MIT LL technical expertise related to active 3D imaging technology is required.

Pursuant to the MIT License Agreement, we were granted the exclusive rights to MIT's patent in "multistatic sparse array topology for FFT-based field imaging" (MIT Case No. l 8409L) (the "MIT Patent"), which is utilized in the video rate millimeter wave image reconstruction process allowing for detection with continuous motion. Subject to our compliance with its terms and the satisfaction of certain conditions, the MIT License Agreement will remain in effect until the expiration of all licensed patents in December 2035. Pursuant to the MIT License, we have made the following license maintenance payments to MIT (in addition to patent filing costs an annual maintenance fee): US$20,000 in 2019; US$50,000 in 2020; US$60,000 in 2021; US$100,000 in 2022; US$nil in 2023; US$40,000 in 2024; and US$200,000 in 2025. Beginning in 2026 and each year thereafter, we will be required to pay MIT an annual maintenance fee of US$350,000. In addition, we are required to pay MIT a royalty of 5.7% of all "net sales" of HEXWAVE™ products and services (including sales of scanners, maintenance and AI subscriptions and implementation services). Annual maintenance fees are applied to royalty payments due from us to MIT in the respective calendar year. During the nine months ended September 30, 2025 and the year ended December 31, 2024, we accrued US$34,042 and US$105,993, respectively, of royalty payments to MIT. The royalties paid will offset the minimum maintenance fee due each year.

The MIT License Agreement also requires us to achieve certain milestones. As of the date of this prospectus, we had achieved all milestones that we are required to achieve, except that we must achieve annual "net sales" of HEXWAVE™ products and services as follows: US$5,000,000 in 2025; US$10,000,000 in 2026; US$15,000,000 in 2027; US$20,000,000 in 2028; and US$25,000,000 in 2029 and every calendar year thereafter.

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In addition, under the MIT License Agreement, in the event of an asset sale or a change of control (as defined in the MIT License Agreement), we would be required to pay to MIT 5% of the first US$5,000,000 of consideration in connection with such a transaction, plus 3.5% of the consideration received above US$5,000,000 up to US$25,000,000, plus 2.5% of any consideration in excess of US$25,000,000.

In the event MIT determines that we (or any of our affiliates) have not fulfilled our obligations under the MIT License Agreement, it will provide us written notice of such determination, upon which we and MIT will confer to attempt in good faith to resolve the issue. If, within 60 days of our receipt of such notice from MIT, we have not either fulfilled the relevant obligation or agreed with MIT upon a mutually acceptable schedule of revised obligations, MIT has the right to terminate the MIT License Agreement. As of the date of this prospectus, we are not in default of any obligations under the MIT License Agreement.

If the MIT License Agreement were to be terminated, we could lose access to proprietary technologies that are foundational to our HEXWAVE™ system, which could materially and adversely affect our ability to manufacture, commercialize, and improve the system. Such a termination could also impair our competitive position, harm our reputation, and require us to pursue costly alternatives, including the redevelopment of affected technology or entering into alternative license arrangements on less favorable terms. As a result, the termination of the MIT License Agreement could have a material adverse effect on our business, results of operations, and financial condition.

 *Battelle Memorial Institute / PNNL — Intellectual Property used in HD-AIT Upgrade Kit* 

In 2021, we entered into the Battelle License Agreement with Battelle (which operates the PNNL), to license the millimeter wave-based, HD-AIT body scanner technology that is the core technology behind our HD-AIT Upgrade Kit product. Subject to our compliance with its terms and the satisfaction of certain conditions, the Battelle License Agreement provides us with non-exclusive license for the life of the patents. The patents licensed to us pursuant to the Battelle License Agreement have expirations dates ranging from 2042-2043. As consideration for the Battelle License Agreement, we paid Battelle US$60,000 in initial licensing fees in 2021, in addition to US$50,000 for past patenting expenses. We also are required to reimburse Battelle for certain ongoing patenting expenses.

Under the Battelle License Agreement, we are required to pay Battelle a royalty of 5% of "net sales" of HD-AIT Upgrade Kit products and services and 25% of any sublicensing revenues (if sublicensing is permitted). As of the date of this prospectus, we have not entered into, and have no plans to enter into, any arrangements that would result in sublicensing revenues. No royalties are payable to Battelle for the use of any patents subject to the Battelle License Agreement on behalf of the U.S. government for which the U.S. government has a royalty-free right to use such patent. During the nine months ended September 30, 2025 and the year ended December 31, 2024, we did not record any additional accruals beyond the minimum royalty payable. Under the Battelle License Agreement, we are required to make annual minimum royalty payments, even if we do not have any sales of licensed products or services. For the years 2021 through 2024, we paid a combined minimum royalty payments of US$400,000. In 2024 and each year thereafter, we are required to pay a minimum annual royalty of US$200,000. These royalties have been accrued for 2025. If the actual royalties we pay to Battelle in a given year meet exceed US$200,000, then the minimum annual royalty requirement is satisfied; however, if such actual royalty payments in a given year are less than US$200,000, we are required to pay to Battelle an amount equal to US$200,000 minus the actual royalties paid.

The Battelle License Agreement also requires us to achieve certain milestones. We are currently in discussions with Batelle to update the timeline for milestone deadlines. As of the date of this prospectus, we have met all milestones required to date. We are in active discussions and planning for future development activities.

If we breach any of our remaining obligations under the Battelle License Agreement and do not remedy such breach in full within 60 days after receiving notice thereof from Battelle, then Battelle is entitled to terminate the Battelle License Agreement.

#### Our Customers
We began selling our HEXWAVE™ units in 2023. Since that time, our principal categories of customers have included regional airports, courthouses and correctional facilities, universities and research laboratories.

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As discussed under "— *Our Market Opportunity*" above, we believe that the HEXWAVE™ system will appeal to a wide array of customers and expect that our customer base will diversify as we continue to advance our marketing and sales efforts.

In August 2025, we delivered our first unit to the TSA for formal evaluation. Initial commercial sales are anticipated in 2026, subject to successful completion of the TSA's certification process. After the HD-AIT Upgrade Kit is delivered in the U.S., we believe that, over time, we can successfully market this product to airports in the European Union and Asia, as well as non-aviation customers such as government building and high-profile soft targets that employ legacy HD-AIT security screening systems in the U.S. and abroad.

#### Research and Development
We believe that the urban security screening market is poised for rapid technological advancements across software, cloud services, and sensors. We invest significant resources into ongoing research and development programs because we believe our ability to grow our market position depends, in part, on breakthrough technologies that offer a unique value proposition for our customers and differentiation versus our competitors. Our research and development team, which is responsible for both the development of new products and improvements to our existing product portfolio, consists of talented and dedicated engineers, technicians, scientists, and other professionals. Our primary areas of focus in research and development include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.

Continued improvement of the detection algorithm performance including assessing the ability to detect new threats;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.

Integration of complementary technologies to broaden the performance capabilities for certain market verticals (e.g. biometrics, access control, and metal detection);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.

New MMW architecture designed to achieve radical cost reduction and penetrate budget-constrained markets; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.

Development and integration of a shoe screener capability into existing body scanners at U.S. airports.

#### Sales and Marketing
We sell our security products and solutions through our own two-person direct sales force. We have also strategically partnered with industry leading companies to sell our HEXWAVE and HD-AIT Upgrade Kits on a global basis. These strategic partners include Rapiscan, Viken, K2 and Isotec, among others. Our international distribution network is run exclusively by Rapiscan. Our distributors resell our products to our customers, for whom they are also responsible for performing installation, systems integration, and local support and maintenance services, with backup technical support services provided by our internal support team. Many resellers have an existing customer base that offer third-party physical security products including x-ray machines, cameras, access control systems, and video monitoring systems in their respective territories and regions, which provides an opportunity to cross-sell our contactless security screening products. To augment the reach of our distribution network, we also intend to grow our direct sales efforts focused primarily on serving major vertical markets and expanding our footprint.

We also sell to local, state and federal government agencies and the sales cycle is similar to selling to commercial entities. In most cases, the potential customer identifies the need for screening technology of individuals, requests a presentation and virtual or on-site demonstration of the technology, and then a formal request for proposal. Depending on the agency, this process can take anywhere from three to nine months until an award is made.

Our sales and marketing team strategies are focused on helping to accelerate sales growth by (i) driving market awareness, (ii) developing comprehensive sales and marketing content, tools, and campaigns for each stage of the sales process and (iii) scaling those campaigns via our global distribution network. Our security screening products, and our customers' successes are identified and exposed through key government contracts and relationships at the TSA and airports that were early adopters of the technology. We also utilize public relations and communications efforts that span mainstream, business, and trade press across

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the security sector generally, social media and in key verticals such as government facilities (federal, state and local), airports and aviation worker screening, correctional institutions, and national laboratories. Our internal marketing team develops content in multiple formats and delivery methods to facilitate marketing campaigns and sales enablement.

#### Manufacturing and Suppliers
We currently source all components of HEXWAVE™ and our HD-AIT Upgrade Kit directly from third-party suppliers and assemble them at our facility in Wilmington, Massachusetts. To meet anticipated demand for our product lines, we are exploring options to use one or more domestic contract manufacturing partners to assemble sub-modules and assemblies, in which case final integration and testing of our products would continue to occur at our corporate headquarters.

We rely on several key third-party suppliers for critical components of our systems. Notably, we are dependent on ADI as the sole-source supplier of certain component parts used in our HEXWAVE™ product. These components are essential to the functionality of HEXWAVE™ and collectively represent approximately 22% of the total cost of goods sold per unit. We procure these components from ADI through standard purchase orders and do not have a long-term supply agreement in place. As a result, any delay, allocation, quality issue, shortage of raw materials, or termination by ADI could require design modifications, re-testing, recertification, or alternative sourcing, any of which could materially disrupt our manufacturing process, delay production schedules, increase our costs, and adversely affect our and ability to fulfill orders in a timely manner.

We have initiated efforts to evaluate potential design changes intended to reduce our dependency on ADI; however, these efforts are in early stages and due to the technical complexity of the components, a redesign and recertification of our hardware and software systems would be required, and we do not expect any alternate supply path to be commercially implemented before late 2026.

We maintain safety stock of critical components where feasible and closely monitor inventory levels to mitigate risk. However, disruptions in the supply chain could still materially affect production schedules and customer deliveries.

#### Intellectual Property
Our ability to drive innovation in the security screening market depends in part upon our ability to protect our core technology and intellectual property. We attempt to protect our intellectual property rights, both in the United States and abroad, through a combination of patent (through our MIT License Agreement and Battelle License Agreement), trademark, copyright and trade secret laws, as well as nondisclosure and invention assignment agreements with our consultants and employees and through non-disclosure agreements with our vendors and business partners. Certain critical aspects of the 3D imaging and high-definition imaging technology that is incorporated into our HEXWAVE™ and HD-AIT Upgrade Kit products are protected through the patents we have licensed via the MIT License Agreement and the Battelle License Agreement. Although our licenses under the Battelle License Agreement currently are non-exclusive, we believe that, in light of the current competitive landscape, the technological advancements we have made in our HD-AIT Upgrade Kit product over the past four years and our extensive collaboration with the TSA provide us with significant protection if these patents were to be licensed to a potential competitor. In addition, intellectual property comprising and underlying our advanced threat detection AI algorithms is unpatented. As of the date of this prospectus, we believe that we have adequate protection for this intellectual property through a combination of non-disclosure agreements, customization of our AI algorithms to our application and trade secret protection.

As of December 31, 2025, we had in-licensed three patents through the MIT License Agreement and the Battelle License Agreement. In addition, we have three issued United States trademarks.

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#### Employees
The following table sets forth the number of employees we had at the end of each fiscal year indicated below:

---

| | | | |
|:---|:---|:---|:---|
| **Year**  | **Full Time**  | **Part Time**  | **Total**  |
| Fiscal year 2023  | 24 | 2 | 26 |
| Fiscal year 2024  | 18 | 0 | 18 |
| Fiscal year 2025  | 20 | 0 | 20 |

---

We believe that our employees are critical to our success. As of January 28, 2026, we had 21 full-time employees based primarily in our corporate office located in Wilmington, Massachusetts. We also engage numerous consultants and contractors to supplement our permanent workforce. A majority of our employees are engaged in research and development and go-to-market related functions. We consider our relations with our employees to be good. We view our employees as an important competitive advantage, and our management team has an in-depth knowledge of our target vertical markets and of the security industry in general.

#### Seasonality
The U.S. government's fiscal year ends on September 30 of each year. While not certain, it is not uncommon for U.S. government agencies to award extra tasks or complete other contract actions in the timeframe leading up to the end of its fiscal year in order to avoid the loss of unexpended fiscal year funds, which may favorably impact our third fiscal quarter. Other than working with commercial customers on their fiscal budget timing, we do not see any seasonality in the security and detection business.

#### Property, Plants and Equipment
We do not own any real estate property.

In March 2021, we relocated our head office to Boston, MA, and entered into a lease agreement for its corporate office at 187 Ballardvale Street, Suite 110, Wilmington, MA 01887. The lease covers 5,814 square feet and extends until March 2028. In February 2023, we amended the lease to include an additional 4,106 rentable square feet on the second floor, extending the term for this space through March 2028.

Additionally, in February 2023, we entered into a lease agreement for a 1,042-square-foot office located at 4725 Peachtree Corners Circle, Suite 375, Peachtree Corners, GA 30092, originally expiring January 2026. In March 2025, the landlord advised that the property will be redeveloped and terminated the lease effective September 30, 2025, with rent waived from April through September.

#### Government Regulations
Our products and technologies are subject to various U.S. federal, state foreign laws, regulations, certifications, and standards, including those applicable to aviation security screening, public safety, electromagnetic emissions, data protection, the deployment of millimeter-wave and artificial intelligence-based technologies, health and safety, anti-corruption and export controls. We believe that we are in material compliance with all such laws, regulations, and permitting requirements.

Regulatory requirements applicable to security screening systems may change over time or vary across jurisdictions, and compliance may require additional testing, certification, or product modifications. In particular, HEXWAVE™ deployments may be subject to local permitting, privacy assessments, or other approvals depending on jurisdiction. Also, our HD-AIT Upgrade Kit is subject to evaluation and certification by the TSA before it may be deployed in TSA-regulated airport security operations. The TSA maintains detailed technical and Security Threat Detection performance standards that screening technologies must meet to be approved for procurement and operational use. The certification process includes secret-level laboratory evaluation of threat detection performance, on-site testing in airport environments, and formal review of system performance, reliability, and safety. There is no guarantee that our HD-AIT Upgrade Kit will be approved, and delays or failure to obtain TSA certification could adversely affect our ability to

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commercialize this product in the U.S. aviation security market. In addition, even after initial approval, future modifications to the system may require additional review or recertification. Because regulatory frameworks in our markets continue to evolve, we may be required to update, modify, or enhance our systems to maintain compliance.

#### Export and Trade Matters
We are subject to anti-corruption laws and regulations imposed by governments around the world with jurisdiction over our operations, including the FCPA, as well as the laws of the countries where we do business. We are also subject to various trade restrictions, including trade and economic sanctions and export controls, imposed by governments around the world with jurisdiction over our operations. For example, in accordance with trade sanctions administered by the Office of Foreign Assets Control of the Department of Treasury and the U.S. Department of Commerce, we are prohibited from engaging in transactions involving certain persons and certain designated countries or territories, including Cuba, Iran, Syria, North Korea and the Crimea, Donetsk and Luhansk Regions of Ukraine. In recent years, the United States government has a renewed focus on export matters. For example, there are increasing controls on our current and future products may be subject to these heightened regulations, which could increase our compliance costs. Although our current marketing strategy focuses primarily on federal and state government and urban security markets within the U.S., we have sold HEXWAVE™ systems in certain foreign countries, consisting of the Netherlands, Chile, Columbia, Canada and Malaysia, and we believe there is a significant market opportunity for our products in other foreign markets. To the extent we expand our sales efforts in markets outside the U.S., our compliance with applicable anti-corruption, sanctions and export control laws will become increasingly important.

#### Competition

#### HEXWAVE™
We have experienced, and expect to continue to experience, competition from a number of companies, including other vendors of security screening systems. A variety of security screening technologies compete with our proprietary technologies, including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Handheld or walk-through metal detectors, which are currently used in airports and also are the primary screening solution in the non-aviation checkpoint market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Passive screening systems based on passive infrared or terahertz technology, which demonstrate modest fidelity but good stand-off range (i.e., the distance at which the screening solution can be effectively placed from screened subjects). These systems have accuracy limitations and environmental limitations (such as temperature) which limit outdoor and indoor applications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Active screening systems based on microwave resonance, MMW or microwave 3D imaging technology. Systems based on microwave resonance demonstrate limited range, can be used indoors only and are highly susceptible to environmental factors. MMW systems are widely used and recognized in the marketplace and generally demonstrate very good fidelity and utilize AI capabilities but are subject to low range and commercialization for outdoor applications is challenging. Systems based on microwave 3D imaging generally demonstrate moderate fidelity, utilize AI capabilities, have long range, are housed in modular, movable architecture and can be utilized in indoor and outdoor applications.

In addition to legacy handheld and walk-through metal detectors, there are a number of companies and products in the next-generation security screening space in the North American urban security market, which include, among others, Evolv Technologies Holdings, Inc. (product: Evolv Express), Xtract One Technologies, Inc. (product: SmartGateway), Thruvision Group plc (product: LPC71 Series), and Leidos (product: ProVision), Rohde & Schwartz (product: QPS 201 and QPS Walk). These companies, individually and between them, address a number of the key performance indicators for next-generation security screening systems and are constantly developing and improving their respective technologies. However, we believe that the HEXWAVE™ system's features provide the most versatile detection solution on the market.

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#### HD-AIT Upgrade Kit
We compete with Leidos Wideband System, a solution being developed by Leidos, which developed and manufactured the original ProVision<sup>®</sup> and ProVision<sup>®</sup> 2 systems, which are the existing MMW HD-AIT scanners in place at most U.S. airports. We believe that both our HD-AIT Upgrade Kit and the Leidos Wideband System ultimately will be able to meet TSA's enhanced detection standards, as well as enhanced standard expected to become effective in the European Union, which are the primary drivers of market demand to upgrade existing HD-AIT security scanning systems.

Although Leidos manufactured the existing HD-AIT security screening systems and has certain advantages as a larger company (including potentially better ability to support the national infrastructure of upgraded HD-AIT security screening systems), we believe that the HD-AIT Upgrade Kit will have a number of competitive advantages as compared to the Leidos Wideband System, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The HD-AIT Upgrade Kit is based on technology licensed from PNNL, which is DHS S&T's partner for its Screening at Speed program, and TSA has spent in excess of US$6 million with PNNL to develop the underlying technology. As a result of our Battelle License, TSA has awarded us over US$2.2 million in contract support specifically to develop the HD-AIT Upgrade Kit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The HD-AIT Upgrade Kit scans over a wider range of frequencies (10 to 40 GHz) as compared to the Leidos Wideband System (20 to 40 GHz), which translates to improved passenger MMW image details that we believe will translate to improved threat detection with lower false alarm and passenger touch rates than the Leidos Wideband System for the same algorithms used. In addition, we believe scanning over a wider range of frequencies will allow passengers to wear a wider range and more layers of clothing as compared to the Leidos Broadband System, without compromising threat detection capability. We expect this to result in significantly less divestiture of clothing and faster throughput compared to the Leidos Wideband System.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We have collaborated directly with TSA, pursuant to contracts awarded by TSA, to develop a standard process to host the software of all five TSA Open Architecture compliant vendors on our cloud-based system. As described in the TSA's Open Architecture Roadmap (July 2023), implementing an Open Architecture approach to the aviation screening environment is a key priority for TSA. Based on our collaboration with TSA, on August 11, 2025, we demonstrated that the HD-AIT Upgrade Kit fully functions with all TSA's selected Open Architecture third-party vendor software, however it is unknown what level of support the Leidos Wideband System will have for the Open Architecture.

#### Legal Proceedings
We are from time to time subject to various claims, lawsuits, and other legal and administrative proceedings arising in the ordinary course of business. We are not currently engaged in any litigation or criminal proceedings.

#### Corporate History and Information
We were incorporated on June 8, 2012 pursuant to the *Business Corporations Act* (Ontario) under the name "Gulfstream Acquisition 1 Corp." We were listed on the TSXV as a "capital pool company" under the TSXV's Policy 2.4 — *Capital Pool Companies* on June 14, 2013.

Liberty Defense Holdings, Inc. ("LPC") was incorporated on April 30, 2018 pursuant to the *Business Corporations Act* (Ontario) as "Trovec Holdings Inc." On October 4, 2018, LPC changed its name from Trovec Holdings Inc. to "Liberty Defense Holdings, Inc."

On April 4, 2019, in connection with the Qualifying Transaction (as defined below), LPC amalgamated with 2675553 Ontario Limited, a wholly-owned subsidiary of the Company, to form the LDH GS Amalco Corp. ("LDH GS Amalco"). Also on April 4, 2019, we completed the acquisition of all of the issued and outstanding shares of the LDH GS Amalco by way of a reverse take-over (the "Qualifying Transaction") under the rules of the TSXV and concurrently changed its name to "Liberty Defense Holdings, Ltd." At that time, the LDH GS Amalco became our wholly-owned subsidiary.

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On July 27, 2020, we continued our jurisdiction of incorporation from Ontario to British Columbia and are now governed by the BCBCA.

On March 17, 2021, we completed a business combination transaction with DrawDown Detection Inc. ("DrawDown") by way of a three- cornered amalgamation, pursuant to which: (i) we effected a consolidation of its outstanding Common Shares on the basis of one (1) post-consolidation Common Share for each six and two tenth (6.2) pre-consolidation Common Shares; and (ii) the security holders of DrawDown became security holders of the Company and DrawDown amalgamated with 1246043 B.C. Ltd., a subsidiary of the Company, and became our wholly owned subsidiary (the "RTO Transaction").

#### Intercorporate Relationships
As of the date of this prospectus, we have two wholly-owned direct subsidiaries, LDH GS Amalco and DrawDown, and two wholly-owned indirect subsidiaries, Liberty Defense Technologies, Inc., a Massachusetts corporation, and DrawDown Technologies Inc., a Delaware corporation.

Our corporate structure is set out below.

![[MISSING IMAGE: fc_structure-4c.jpg]](fc_structure-4c.jpg)

(1) Formerly Gulfstream Acquisition 1 Corp.

(2) Formed by the amalgamation of LPC and 2675553 Ontario Limited upon completion of the Qualifying Transaction.

(3) Formed by the amalgamation of DrawDown Detection Inc. and 1246043 B.C. Ltd. upon completion of the RTO Transaction.

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#### MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 *You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes and other financial information included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.* 

#### Overview
We are an emerging leader in AI-based contactless security technology for detecting concealed metallic and non-metallic weapons and threats. Our mission is protecting communities and preserving peace of mind through superior security detection solutions, while simultaneously increasing ease of travel and convenience for security at major checkpoints. In furtherance of this mission, we offer two separate security screening solutions: our HEXWAVE™ system and our HD-AIT Upgrade Kit.

Since our inception, we have generated limited revenue from contract awards from the TSA, PNNL and sales of HEXWAVE™ units, while we simultaneously have incurred substantial operating expenses. Accordingly, we have incurred significant operating losses and negative cash flows from operations, and we expect to continue to incur significant expenses and operating losses in the foreseeable future as we advance the commercialization of HEXWAVE™ and HD-AIT.

#### Key Factors Affecting Our Operating Results
We believe that our performance and future success depend on many factors that present significant opportunities for us but also pose risks and challenges.

#### Backlog Orders
As of September 30, 2025, we had a HEXWAVE™ order backlog of approximately $1.45 million comprised of signed purchase orders not subject to cancellation.

Production of the remaining units to fulfill the backlog is ongoing. We expect to complete fulfillment of the remaining backlog, including additional orders currently in production, during the first half of 2026. As demand continues to grow, additional purchase orders may increase the overall backlog in the near term.

#### Other Revenue Visibility and Timing Considerations
As of the date of this prospectus, we have completed the sale and delivery of thirty (30) HEXWAVE™ units. Although HEXWAVE™ is a new product with no historical sales data or comparable benchmarks, discussions with prospective customers support optimism in the growth potential for HEXWAVE™ sales in future periods. However, limited funding may impact our ability to follow up with clients, invest in marketing and promote the HEXWAVE™ product effectively, potentially delaying its visibility and adoption by potential customers.

We have experienced delays in TSA contract revenue projects, as well as in additional contract line items that the TSA had planned to exercise in 2025 and 2026, and may experience similar delays in the future. As a result of these delays, guaranteed revenue of $357,759 originally planned for early 2025 will fall into the first quarter of 2026, as the TSA HD-AIT Phase II B was awarded September 29, 2025.

#### General Economic and Market Conditions
We continue to operate in a challenging global economic environment, characterized by constrained capital markets and slower customer procurement cycles. These conditions, which began in 2024, have persisted through 2025 and continue to affect the timing of purchase orders for HEXWAVE™ units.

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We expect that our results of operations, including our revenue and cost of revenue, may fluctuate or continue to fluctuate based on, among other things, the impact of rising inflation and interest rates on business spending; supply chain issues and the impacts on our manufacturing capabilities; public health emergencies; geopolitical conflicts and war, including the conflicts in Europe and the Middle East; tariffs and recessionary trends. We remain committed to overcoming these challenges and have taken proactive measures to mitigate these challenges and position ourselves for growth. These measures include increasing product awareness through targeted marketing and investor relations activities; focusing on advancing customer pilots and demonstrations to strengthen the sales pipeline; and maintaining operational readiness to scale production as purchase commitments are secured.

Management also recognizes that current capital market conditions directly affect our liquidity and working capital position. As at September 30, 2025, we had a working capital deficiency of $4.5 million and contractual obligations of $8.6 million. Continued access to external financing will therefore be critical to support operations and growth initiatives until we are able to generate sustainable revenues from commercial sales.

#### Adoption of our Security Screening Products
We believe the world will continue to focus on the safety and security of people in the places where they gather. Many of these locations, such as schools, places of worship, shopping malls or sports and entertainment venues, are moving toward a more frictionless security screening experience. We believe we are well-positioned to take advantage of this opportunity due to our proprietary technologies and distribution capabilities. Our products are designed to empower venues and facilities to realize the full benefits of contactless security screening, including a rapid visitor throughput and minimal security staff to screened visitor physical contact. The degree to which potential and current customers recognize these benefits and invest in our products will affect our financial results.

#### Sales Mix, Pricing, Product Cost and Margins
We began selling our HEXWAVE™ units in 2023. Since that time, our principal categories of customers have included regional airports, courthouses and correctional facilities, universities and research laboratories. We sell our HEXWAVE™ products under a purchase agreement (product sale where title transfers to the customer) by which the customer agrees to pay a one-time upfront fee for the equipment. In addition, purchasers of our HEXWAVE™ scanners may purchase a subscription for our software operating system and standard AI algorithm updates. The subscription service is typically offered for a period of five years and may be paid in advance or on an annual basis. In addition, we offer an annual maintenance and support service plan to repair any faulty or damaged parts on the HEXWAVE™ following a one-year warranty on the product. To date, substantially all purchasers of HEXWAVE™ scanners also have purchased this maintenance and AI subscription. In addition, in partnership with Amsource Capital, we are now offering flexible leasing options for HEXWAVE™ of up to seven years with monthly payment options.

In August 2025, we delivered our first HD-AIT Upgrade Kit unit to the TSA for formal evaluation. Initial commercial sales are anticipated in 2026, subject to successful completion of the TSA's certification process. After the HD-AIT Upgrade Kit is delivered in the U.S., we believe that, over time, we can successfully market this product to airports in the European Union and Asia, as well as non-aviation customers such as government building and high-profile soft targets that employ legacy HD-AIT security screening systems in the U.S. and abroad.

Going forward, we expect our products to be adopted in a variety of vertical industry markets and geographic regions, primarily within the United States. Pricing may vary by region or vertical market due to market-specific dynamics. As a result, our financial performance depends, in part, on the mix of sales, bookings, and business in different markets during a given period. In addition, we are subject to price competition, and our ability to compete in key markets will depend on the success of our investments in new technologies and cost improvements as well as our ability to efficiently and reliably introduce cost-effective contactless security screening products to our customers.

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#### Continued Investment and Innovation
Our performance is significantly dependent on the investment we make in our research and development efforts and on our ability to be at the forefront of the security screening industry. It is essential that we continually identify and respond to rapidly evolving customer requirements, develop, and introduce innovative new products, enhance existing products and generate customer demand for our products. We believe that investment in our security screening products will contribute to long-term revenue growth, but it may adversely affect our near-term profitability.

#### Segments
We operate through three distinct segments: Corporate, HEXWAVE™ and Contract. Our operating segments are based on the reports which are reviewed by the chief operating decision maker ("CODM") in making strategic resource allocation decisions. We consider our CODM to be our CEO, who evaluates the operations of each reportable segment. The CODM reviews the net income (loss) of each of these segments in allocating resources and evaluating operating performance.

The Corporate reporting segment covers our non-allocated, general overhead expenses, such as legal, compliance, accounting, head-office staff, and other such items. This reporting segment is reviewed for cost control and budgetary considerations. The HEXWAVE™ segments covers revenues associated with the sale of our HEXWAVE™ product and related subscription services. The Contract segment covers revenues associated with contract awards with PNNL and TSA.

Our Contract segment and HEXWAVE™ segment contributed 48.0% and 52.0% of our revenue, respectively, for the nine months ended September 30, 2025, compared to 46.3% and 53.7% for the nine months ended September 30, 2024.

Our Contract segment and HEXWAVE™ segment contributed 58.4% and 41.6% of our revenue, respectively, for the year ended December 31, 2024, compared to 92.0% and 8.0% for the year ended December 31, 2023.

As at September 30, 2025, December 31, 2024 and 2023, all non-current assets are in the United States.

For the nine months ended September 30, 2025, revenues from four customers represented approximately 91% of HEXWAVE™ revenues. Of these customers, one accounted for approximately $390,000, or 43%, of HEXWAVE™ revenues; a second accounted for approximately $238,000, or 26%; a third accounted for approximately $109,959, or 12%; and a fourth accounted for approximately $108,500, or 12%. For the nine months ended September 30, 2024, revenues from two customers represented approximately 84% of HEXWAVE™ revenues. Of these customers, one accounted for approximately $1,080,000, or 75%, of HEXWAVE™ revenues; and a second accounted for approximately $142,032, or 10%.

All such customers were located in the United States for the nine months ended September 30, 2025. For the nine months ended September 30, 2024, all such customers were located in the United States, except for the customer generating $142,032 of revenue, which was located in Canada. No other individual customer accounted for 8% or more of total revenues during either of the nine months ended September 30, 2025 and 2024.

For the year ended December 31, 2024, revenues from five customers represented approximately 94% of HEXWAVE™ revenues. Of these customers, one accounted for approximately $470,736, or 46%, of HEXWAVE™ revenues; a second accounted for approximately $142,032, or 14%; a third accounted for approximately $130,000, or 13%; a fourth accounted for approximately $119,900, or 12%; and a fifth accounted for approximately $100,500, or 10%. For the year ended December 31, 2023, revenues from one customer accounted for $120,000, or 100%, of HEXWAVE™ revenues.

For the year ended December 31, 2024, all such customers were located in the United States, except for the customer generating $142,032 of revenue, which was located in Canada, the customer generating $50,378 of revenue, which was located in Netherlands and the customer generating $119,900 of revenue, which was located in Chile. For the year ended December 31, 2023, all such customers were located in the United States.

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For the nine months ended September 30, 2025 and 2024, all revenue from Contract segment was earned from one customer in the United States.

For the years ended December 31, 2024 and 2023, all revenue from Contract segment was earned from one customer in the United States.

#### Components of Our Results of Operations

#### Revenue
We derive our revenue primarily from HEXWAVE™ sales and subscription services and contract revenue from the TSA and PNNL. We expect to gain a second stream of HEXWAVE™ revenue through commercialization of the HD-AIT Upgrade Kit, subject to TSA certification. In August 2025, we delivered our first unit to the TSA for formal evaluation. Assuming TSA certification is obtained in early 2026, we expect initial commercial sales to commence during 2026.

 *HEXWAVE™ Revenue* 

Revenue in our HEXWAVE™ segment consists primarily of sales of our HEXWAVE™ product and related subscription services. At the point of sale, customers agree to pay a one-time upfront fee for the equipment. Revenue arising from the sale of HEXWAVE™ units is recognized as we fulfill our performance obligations upon delivery and successful commissioning of the product to the customer. Purchasers of our HEXWAVE™ scanners may purchase a subscription for software operating system and standard AI algorithm updates. The subscription service is typically offered for a period of five years and may be paid in advance or on an annual basis. Revenue from upfront sales of HEXWAVE™ units is initially recorded as deferred revenue until the obligation of shipment and delivery is fulfilled. Subsequently, upon meeting this obligation, the deferred revenue is recognized as earned revenue, net of provisions for estimated sales return.

 *Contract Revenue* 

Contract revenue consists primarily of contract revenue from the TSA and PNNL. Historically, we have received grant revenue from the TSA, but the composition of revenue is expected to change with a decrease or cessation in grant revenue and an increase in revenue from sales of HEXWAVE™ and our other products as we continue our commercialization efforts. We typically transfer control of goods and services, and satisfy performance obligations, over time. Therefore, we recognize revenue over time as these performance obligations are satisfied.

#### Cost of Revenue
 *HEXWAVE™ Cost of Revenue* 

HEXWAVE™ cost of revenue consists primarily of manufacturing expenses, including raw materials, components, and assembly, as well as labor costs for production and quality control. Additionally, it includes amortization of licensed technologies and intellectual property related to the technology, software integration, and depreciation of property and equipment. Shipping and logistics expenses, such as freight, air transportation, customs, and tariffs, also contribute to the cost. Lastly, warranty and customer support costs, including installation, training, maintenance and service obligations, are factored into the overall cost of revenue.

HEXWAVE™ cost of subscription services revenue consists primarily of technology infrastructure expenses, including cloud hosting, software maintenance, and data processing. It also includes customer support and service costs, such as technical assistance, system monitoring, and remote updates. Additionally, labor costs, cybersecurity measures, and ongoing software development contribute to the overall expenses. Lastly, depreciation and amortization of software and hardware used in the service delivery, along with administrative and compliance costs, are also key components. Under revenue arrangements for our HEXWAVE™ segment, we incur cost in advance of recognizing revenue. These are recorded as costs and carried forward until the related revenues are recognized, at which time it is expensed.

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 *Contract Cost of Revenue* 

Contract cost of revenue consists primarily of direct labor expenses, including wages and benefits for employees involved in contract fulfillment, as well as costs for materials, equipment, and specialized components required for project execution. It also encompasses any payments to subcontractors and third-party service providers, along with expenses for technology, software, and system integrations. Additionally, project management overheads, such as administrative support, facility costs, and compliance expenses, contribute to the overall cost. Lastly, amortization and depreciation of property and equipment and intellectual property are used in contract delivery. Under contract revenue arrangements, we incur costs in advance of recognizing revenue. These costs are recorded as contract costs and carried forward until the related revenues are recognized, at which time it is expensed.

#### Engineering and Research and Development Expenses
Engineering and research and development expenses consist primarily of costs incurred in connection with our research and engineering activities and include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • product development and technology costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • personnel expenses, including salaries, benefits and stock-based compensation expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • consulting fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • facility costs, including, rent and administration, depreciation, amortization and maintenance expense; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • travel expenses

We anticipate that our engineering and research and development expenses will increase in the future to support continued engineering and research and development activities, including our ongoing and planned research and development related to HEXWAVE™ production development, software development and advancing other technologies, such as HD-AIT.

#### General and Administrative Expenses
General and administrative expenses consist primarily of personnel-related expenses such as salaries, benefits, and stock-based compensation, for our personnel in executive and other administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters and professional fees paid for accounting, auditing, consulting and tax services, as well as other costs such as consulting fees, insurance costs, investor and public relations, and travel expenses.

We anticipate that our general and administrative expenses will increase in the future to support continued engineering and research and development activities, including our ongoing and planned research and development related to HEXWAVE™ production development, software development and advancing other technologies, such as HD-AIT. We also anticipate we will incur increased accounting, audit, legal, regulatory, compliance, director and officer insurance, and investor and public relations expenses associated with operating as a public company in the U.S.

#### Other Expense (income)
Other expense (income) consists of interest expense, accretion expense and foreign exchange loss (gain) and other income consisting of small amounts of engineering material sold to a third party.

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#### Results of Operations

#### Comparison of Nine Months Ended September 30, 2025 and 2024
The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024:

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| | | | |
|:---|:---|:---|:---|
| | **Nine Months Ended September 30,**  | **Nine Months Ended September 30,**  | |
| | **2025**  | **2024**  | **Change**  |
|  | **US$**  | **US$**  | **US$**  |
| **Revenue** |  |  |  |
| &nbsp;&nbsp;&nbsp; HEXWAVE™ revenue  | 909407 | 1447532 | (538125) |
| &nbsp;&nbsp;&nbsp; Contract revenue  | 854849 | 1250000 | (395151) |
| Total revenue  | 1764256 | 2697532 | (933276) |
| **Cost of revenue** |  |  |  |
| &nbsp;&nbsp;&nbsp; HEXWAVE™ cost of revenue  | 2112884 | 2408789 | 295905 |
| &nbsp;&nbsp;&nbsp; Contract cost of revenue  | 1493636 | 1796912 | 303276 |
| Total cost of revenue  | 3606520 | 4205701 | (599181) |
| Gross loss  | (1842264) | (1508169) | (334095) |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp; Engineering and Research and Development  | 2058666 | 1744426 | 314237 |
| &nbsp;&nbsp;&nbsp; General and administrative  | 6101438 | 2599438 | 3502000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses  | 8160104 | 4343864 | 3816240 |
| Loss from operations  | (10002368) | (5852033) | (4150335) |
| Other expense (income)  | 507838 | 577694 | (69856) |
| Net loss  | (10510206) | (6429727) | (4080479) |

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#### Revenue
 *HEXWAVE™ Revenue* 

HEXWAVE™ revenue for the nine months ended September 30, 2025 was US$909,407, compared to US$1,447,532 for the nine months ended September 30, 2024, a decrease of US$538,125 (37.2%). The decrease primarily reflects lower HEXWAVE™ unit deliveries and lower subscription and service revenue recognized during the period, as several customer deployment schedules shifted into later periods. Deliveries of HEXWAVE™ units during the nine months ended September 30, 2025 decreased to 12 units at an average selling price per unit of approximately US$71,792, compared to 20 units at an average selling price per unit of approximately US$72,376 delivered during the comparable period in 2024. The lower volume of deliveries in the nine months ended September 30, 2025 was primarily attributable to timing-related factors, including customer site readiness, installation scheduling, and the deferral of certain customer deployments into subsequent periods, as well as management's focus on manufacturing optimization and operational efficiency initiatives during the period.

Subsequent to September 30, 2024, and during the three months ended December 31, 2024, we recorded net negative revenue and net negative cost of revenue primarily as a result of the return of six HEXWAVE™ units by a customer. These units had been sold and recognized as revenue earlier in fiscal year 2024, and upon return, we reversed the previously recognized revenue and related cost of revenue in accordance with our accounting policy.

 *Contract Revenue* 

Contract revenue for the nine months ended September 30, 2025 was US$854,849, compared to US$1,250,000 in the same period of 2024, a decrease of US$395,151 (31.6%). The decrease reflects the completion of major milestones under the TSA contracts during 2024, resulting in lower milestone-based revenue recognized in 2025. This was partially offset by continued activity and remaining deliverables under these contracts, including software support and integration work recognized during the period.

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 *Total Revenue* 

Total revenue for the nine months ended September 30, 2025 was US$1,764,256, compared to US$2,697,532 in the prior year, a decrease of US$933,276 (34.6%). The decrease was primarily due to lower HEXWAVE™ unit deliveries and the completion of significant milestones under the TSA contracts in 2024, which resulted in reduced contract and milestone revenue recognized in 2025.

#### Cost of Revenue
 *HEXWAVE™ Cost of Revenue* 

HEXWAVE™ cost of revenue for the nine months ended September 30, 2025 was US$2,112,884, compared to US$2,408,789 for the comparable period in 2024, representing a decrease of US$295,905, or 12.3%. While HEXWAVE™ revenue declined more significantly during the period due to lower unit delivery volumes, cost of revenue did not decrease proportionately, primarily due to the presence of fixed and semi-fixed manufacturing and deployment costs. These costs include labor, facility and equipment costs, certain supplier commitments, and overhead required to maintain production capability and customer support, regardless of shipment volume.

As a result, the reduction in delivery volumes had a less pronounced impact on cost of revenue, reflecting limited short-term operating leverage in our current production scale. Management continues to focus on improving unit economics through manufacturing optimization, supplier cost reductions, and scale efficiencies, which are expected to improve gross margins as delivery volumes increase.

 *Contract Cost of Revenue* 

Contract cost of revenue for the nine months ended September 30, 2025 was US$1,493,636, compared to US$1,796,912 for the nine months ended September 30, 2024, a decrease of US$303,276 (16.9%). The decrease was driven by fewer milestone-based costs and lower engineering and contract activity under the TSA agreements, following the completion of major milestones in 2024.

 *Total Cost of Revenue* 

Total cost of revenue for the nine months ended September 30, 2025 was US$3,606,520, compared to US$4,205,701 for the same period in the prior year, a decrease of US$599,181 (14.2%). This reflects lower production and delivery activity for both HEXWAVE™ units and contract-related work, consistent with the decline in total revenues year-over-year. The reduction also reflects fewer milestone-based costs incurred on TSA contracts compared to 2024.

#### Operating Expenses
 *Engineering and Research and Development Expenses* 

Engineering and research and development expenses for the nine months ended September 30, 2025 were US$2,058,666, compared to US$1,744,426 for the nine months ended September 30, 2024, an increase of US$314,240, or 15.3%. The increase was primarily due to higher salaries and consulting expenses and increased product development and technology costs to support continued enhancements to HEXWAVE™ and related threat-detection technologies.

The increase in research and development expenses reflects our ongoing focus on advancing our licensed technologies, with a particular emphasis on refining HEXWAVE™ production, software enhancements, and threat detection capabilities, as well as furthering the development of HD-AIT.

 *General and Administration Expenses* 

General and administrative expenses for the nine months ended September 30, 2025 were US$6,101,438, compared to US$2,599,438 for the nine months ended September 30, 2024, an increase of US$3,502,000, or 134.7%. The increase was primarily due to higher stock-based compensation, increased legal and

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professional fees related to financing and regulatory activities, and higher office, administrative, and investor relations expenses as we expanded our commercialization and corporate initiatives.

During the nine months ended September 30, 2025, we incurred:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • US$1,287,457 in salaries and consulting fees, compared to US$1,375,216 in the prior year, a decrease of US$87,759, reflecting changes in staffing levels and consulting activity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • US$769,076 in legal and professional fees, compared to US$239,513 in the prior year, an increase of US$529,563, primarily related to financing transactions, regulatory filings, uplisting preparation and corporate initiatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • US$1,099,231 in stock-based compensation, compared to US$296,406 in the prior year, an increase of US$802,825, reflecting the impact of new stock options and RSU grants issued in late 2024 and in 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • US$2,945,674 in office, rent, administration, travel, and miscellaneous expenses, compared to US$688,303 in the prior year period, an increase of US$2,257,371, largely due to the amortization of prepaid marketing and consulting arrangements, higher facility and administrative costs, increased investor relations expenditures, and expanded corporate activities.

The significant year-over-year increase in general and administrative expenses reflects our heightened financing, commercialization, corporate development, and investor relations activities the nine month period ended September 30, 2025.

 *Other Expense (Income)* 

Other expenses for the nine months ended September 30, 2025, were US$507,838, compared to US$577,694 for the same period in 2024, representing a decrease of US$69,856 or 12.1%. The decrease was primarily due to lower interest expense, which declined to US$483,898 from US$566,266 in the prior year period, reflecting reduced borrowings and lower related financing costs.

We also recorded a foreign exchange loss of US$28,611 during the nine months ended September 30, 2025, compared to a loss of US$11,428 in the prior year period, with the increase of US$17,183 reflecting fluctuations in exchange rates and transaction volumes. Our functional currency is the Canadian dollar, and holding financial assets and liabilities in other currencies, primarily the U.S. dollar, continues to result in foreign exchange gains or losses.

In addition, we recorded other income, net of expenses of US$(4,671) for the nine months ended September 30, 2025, compared to nil in the prior year period.

Overall, the year-over-year reduction in other expenses was driven by the decline in interest costs, partially offset by higher foreign exchange losses.

#### Net Loss
 *Corporate* 

Corporate net loss for the nine months ended September 30, 2025, was US$4,338,868, compared to US$1,696,754 for the same period in 2024, an increase of US$2,642,114 or 155.7%. The increase was primarily driven by higher general and administrative expenses, including increased salaries and consulting fees, legal and professional fees associated with financing and regulatory activities, expanded investor relations efforts, and higher stock-based compensation. These increases reflect our continued focus on financing transactions, SEC filing preparation, and uplisting activities during the period. The increase was partially offset by a US$69,856 decrease in other expenses, primarily due to lower interest expense.

 *HEXWAVE™* 

HEXWAVE™ net loss for the nine months ended September 30, 2025, was US$3,021,690, compared to US$1,987,849 for the same period in 2024, representing an increase of US$1,033,841, or 52%. The increase was driven primarily by higher salaries and consulting expenses supporting production and deployment

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activities, as well as higher general and administrative and legal expenses allocated to the segment. These increases occurred despite a US$295,905 decrease in HEXWAVE™ cost of revenue (from US$2,408,789 to US$2,112,884), reflecting lower production volumes and no unit shipments during the period. The impact of these factors was partially offset by lower stock-based compensation and modestly reduced depreciation and administrative expenses.

 *Contract* 

Contract net loss for the nine months ended September 30, 2025 was US$3,149,648, compared to a net loss of US$2,745,124 for the same period in 2024, representing an increase in segment net loss of US$404,524, or 14.7%. The increase was primarily driven by higher operating expenses related to TSA development activities, including increased engineering, administrative, and legal costs allocated to the segment. This occurred despite a US$303,276 decrease in contract cost of revenue (from US$1,796,912 to US$1,493,636), reflecting lower milestone activity as TSA contracts approached completion. The increase in segment net loss reflects slower milestone recognition, reduced contract revenue compared to 2024, and higher project-related expenses incurred during the period.

 *Total Net Loss* 

Total net loss for the nine months ended September 30, 2025 was US$10,510,206, compared to US$6,429,727 for the nine months ended September 30, 2024, an increase of US$4,080,479, or 63.5%. The increase was primarily driven by significantly higher corporate general and administrative expenses — including salaries and consulting, legal and professional fees, stock-based compensation, and investor relations costs — as well as increased operating expenses allocated to the HEXWAVE™ and Contract segments. These increases were incurred while revenue remained constrained due to lower HEXWAVE™ shipments and reduced recognition of TSA contract milestones. These impacts were partially offset by lower interest expense. The higher net loss reflects our continued investments in commercialization, regulatory compliance, and financing activities during the period.

#### Comparison of Years Ended December 31, 2024 and 2023
The following table summarizes our results of operations for the years ended December 31, 2024 and 2023:

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,**  | **Year Ended December 31,**  | |
| | **2024**  | **2023**  | **Change**  |
|  | **US$**  | **US$**  | **US$**  |
| **Revenue** |  |  |  |
| &nbsp;&nbsp;&nbsp; HEXWAVE™ revenue  | 1013546 | 120000 | 893546 |
| &nbsp;&nbsp;&nbsp; Contract revenue  | 1425000 | 1372557 | 52443 |
| Total revenue  | 2438546 | 1492557 | 945989 |
| **Cost of revenue** |  |  |  |
| &nbsp;&nbsp;&nbsp; HEXWAVE™ cost of revenue  | 2033498 | 1546040 | 487458 |
| &nbsp;&nbsp;&nbsp; Contract cost of revenue  | 2081971 | 1163211 | 918760 |
| Total cost of revenue  | 4115469 | 2709251 | 1406218 |
| Gross loss  | (1676923) | (1216694) | (460229) |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp; Engineering and Research and Development  | 2267739 | 4022458 | $(1754719) |
| &nbsp;&nbsp;&nbsp; General and administrative  | 3489202 | 3868191 | (378989) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses  | 5756941 | 7890649 | (2133708) |
| Loss from operations  | (7433864) | (9107343) | 1673479 |
| Other expense (income)  | 1411299 | 261700 | 1149599 |
| Net loss  | (8845163) | (9369043) | $523880 |

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#### Revenue
 *HEXWAVE™ Revenue* 

HEXWAVE™ revenue for the year ended December 31, 2024 was US$1,013,546, compared to US$120,000 for the year ended December 31, 2023. This increase of US$893,546 was primarily due to the fulfillment of backlogged orders and an increase in new customer deployments. In 2024, we sold 15 HEXWAVE™ units at prices ranging from approximately US$60,000 to US$120,000 per unit, depending on configuration and customer requirements. In 2023, revenue of US$120,000 was generated from the sale of 2 HEXWAVE™ units.

 *Contract Revenue* 

Contract revenue for the year ended December 31, 2024 was US$1,425,000, compared to US$1,372,557 for the year ended December 31, 2023. This increase of US$52,443 was primarily due to the completion of HD-AIT milestones and Open Architecture completions.

 *Total Revenue* 

Total revenue for the year ended December 31, 2024 was US$2,438,546, compared to US$1,492,557 for the year ended December 31, 2023. This increase of US$945,989 was primarily due to increased contract revenue from the TSA as well as increased sales of HEXWAVE™ units.

#### Cost of Revenue
 *HEXWAVE™ Cost of Revenue* 

HEXWAVE™ cost of revenue for the year ended December 31, 2024 was US$2,033,498, compared to US$1,546,040 for the year ended December 31, 2023. The increase in HEXWAVE™ cost of revenue from $1,546,040 in 2023 to $2,033,498 in 2024, an increase of $487,458, or 31.5%, was primarily attributable to an increase in the number of units produced and delivered. However, the increase in cost of revenue was not directly proportional to the increase in HEXWAVE™ revenue, which rose by $893,546. This disproportionate change was due to several factors, including limited production scale, higher per-unit component costs during initial low-volume manufacturing, and underutilized fixed overhead related to facility and staffing expenses that did not scale with output during the period. We anticipate unit cost reductions and improved gross margins as volume increases and production matures.

 *Contract Cost of Revenue* 

Contract cost of revenue for the year ended December 31, 2024 was US$2,081,971, compared to US$1,163,211 for the year ended December 31, 2023. This increase in contract cost of revenue from $1,163,211 in 2023 to $2,081,971 in 2024, an increase of $918,760, or 78.9%, was largely driven by increased consulting, engineering, and development expenses incurred to complete key technical milestones under our TSA-funded HD-AIT and Open Architecture programs. The related contract revenue only increased by $52,443, due to the timing of revenue recognition, as certain milestones achieved in 2024 will result in revenue recognition in future periods. Additionally, some of the contract work in 2024 required subcontracting and external technical resources, which increased upfront costs relative to recognized revenue. We expect gross margins on contract revenue to improve as we transition from development to deployment stages and milestone billing aligns more closely with incurred expenses.

 *Total Cost of Revenue* 

Total cost of revenue for the year ended December 31, 2024 was US$4,115,469, compared to US$2,709,251 for the year ended December 31, 2023. This increase of US$1,406,218 was primarily due to the increase of HEXWAVE™ units produced, as well as the increase in contract milestones completed.

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#### Operating Expenses
 *Engineering and Research and Development Expenses* 

Engineering and research and development expenses for the year ended December 31, 2024 was US$2,267,739, compared to US$4,022,458 for the year ended December 31, 2023. This decrease of US$1,754,719 was primarily related to the manufacturing and contract costs expenses reclassed to cost of revenue. These expenses were attributed to the ongoing research and development of our licensed technologies, with a focus on advancing various potential technologies under review. During the year ended December 31, 2024, we incurred US$1,655,580 in salaries and consulting fees that relate to HEXWAVE™ enhanced production development, software development and advancing the technologies under review such as HD-AIT. It also includes US$148,675 in product development & technology costs, US$98,008 in stock-based compensation, and US$248,979 in depreciation. During the comparative period, year ended December 31, 2023, we incurred US$370,073 product development and technology costs, US$89,302 in stock-based compensation, and US$2,766,601 in salaries and consulting fees that relate to software development and general R&D activities in connection to activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding of the licensed technologies. The significant variance in salaries and consulting fees primarily stems from reallocating decreasing consulting during the year and moving production salaries and costs to cost of revenue as we commenced production, albeit not at full scale. Shipments of production have continued to ship slowly with the intention to progressively increase production volumes in the near future.

 *General and Administration Expenses* 

General and administrative expenses for the year ended December 31, 2024 were US$3,489,202, compared to US $3,868,191 for the year ended December 31, 2023. This decrease of US$378,989 was primarily due to the following reasons: Total expenses of US$1,809,724 were incurred mainly in connection to consulting fees, salaries and payroll related benefits. The large increase from the previous year is due to consulting fees for the private placement that occurred in December 2024. Other expenses totaling US$1,424,258 were incurred from legal and professional fees and travel promotion and investor relations. Stock based compensation decreased from US$511,699 for the year ended December 31, 2023, to US$255,220 for the same period during the current year. This decrease year over year was in connection with the cancellation of stock-based compensation for employees and consultants who have left our company and were offset with employees and consultants who have being issued stock options and RSUs during 2024.

Consulting fees, salaries, and benefits for the year ended December 31, 2024, increased from US$1,482,860 in fiscal 2023 to US$1,809,724 in fiscal 2024, reflecting our increase of contractors to fill necessary roles within the organization, as well as a large amount of consulting fees paid in the fourth quarter of 2024 in relation to the private placement. Office, rent, administration, travel, and miscellaneous expenses decreased from US$1,574,621 in fiscal 2023 to US$965,868 in fiscal 2024. The decrease is mainly due to a portion of operating expenses such as rent and utilities having a portion reclassed to cost of sales for production allocation, as well as a reduction in the MIT License fees for 2024.

 *Other Expense (Income)* 

Other expense (income) for the year ended December 31, 2024 was US$1,411,299, compared to US$261,700 for the year ended December 31, 2023. This increase of US$1,149,599 was primarily due to the following: We incurred interest expense totaling US$808,989 compared to US$283,247 during the year ended December 31, 2023. The large increase relates to the increase of interest expense from the interest-bearing loans, as well as the factoring loan. A foreign exchange loss of US$12,760 was recorded for the year ended December 31, 2024, contrasting with a gain of US$18,469 for the same period in 2023. The increase in foreign exchange loss compared to the previous year can be attributed to lower volatility in foreign exchange rates and reduced transactions affected by foreign exchange, significantly fewer than the prior year. Our functional currency is the Canadian dollar, and holding financial assets and liabilities in other currencies, mainly the U.S. dollar, leads to foreign exchange gains or losses.

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#### Net Loss
 *Corporate* 

Corporate net loss for the year ended December 31, 2024, was US$2,865,188, compared to US$2,244,260 for the year ended December 31, 2023. This increase of US$620,928, or 27.7%, was primarily driven by: 1) A US$859,358 increase in other expenses (from US$81,424 to US$940,782), mainly related to interest and financing costs, 2) A US$184,906 increase in salaries and consulting (from US$697,946 to US$882,852), and 3) A US$84,173 increase in legal and professional fees (from US$234,393 to US$318,566). These were partially offset by: 1) A US$259,736 decrease in general and administrative expenses (from US$629,496 to US$369,760), and 2) A US$247,773 decrease in stock-based compensation (from US$601,001 to US$353,228).

 *HEXWAVE™* 

HEXWAVE™ net loss for the year ended December 31, 2024 was US$2,808,452, up from US$1,901,044 for the year ended December 31, 2023 — an increase of US$907,408, or 47.7%. Key contributors to the increase included: 1) A US$487,458 increase in cost of revenue (from US$1,546,040 to US$2,033,498), reflecting higher production volume, 2) A US$800,509 increase in salaries and consulting (from US$284,121 to US$1,084,630), 3) A US$255,657 increase in general and administrative + legal expenses (from US$102,363 to US$358,020), and 4) A US$416,292 swing in other expense, from income of US$323,688 in 2023 to expense of US$92,604 in 2024. These increases were partially offset by: 1) A US$158,962 decrease in combined product development and depreciation (from US$412,208 to US$253,246), and 2) A US$893,546 increase in revenue (from US$120,000 to US$1,013,546), as units sold increased from 2 in 2023 to 15 in 2024.

 *Contract* 

Contract net loss for the year ended December 31, 2024 was US$3,171,523, compared to a net loss of US$5,223,739 for the year ended December 31, 2023, representing a decrease in net loss of US$2,052,216, or 39.3%. The decrease in Contract net loss was primarily driven by lower operating expenses and reduced contract development activity, following the completion of certain major TSA-funded development milestones in 2023.

Specifically, the improvement in net loss reflects: 1) lower engineering and development activity as several development programs transitioned toward completion, 2) reduced use of external consultants and subcontractors compared to 2023, and 3) improved alignment of contract costs with recognized revenue, as fewer high-cost development activities were incurred in 2024. These factors were partially offset by continued cost of revenue associated with ongoing TSA contract obligations and support activities.

 *Total Net Loss* 

Total net loss for the year ended December 31, 2024 was US$8,845,163, compared to US$9,369,043 in 2023 a decrease of US$523,880, or 5.6%. This improvement occurred despite higher cost of revenue and operating expenses, due to a US$946,000 increase in total revenue (from US$1.49 million to US$2.44 million). The benefit of higher revenues was partially offset by a US$1,149,599 increase in other expenses (from US$261,700 to US$1,411,299), primarily within the corporate and HEXWAVE™ segments. The net result reflects revenue growth and partially contained expense growth across the business.

#### Liquidity and Capital Resources

#### Sources of Liquidity
Since our inception, we have generated limited revenue from contract award revenues from the TSA, PNNL and sales of HEXWAVE™ units, while we simultaneously have incurred substantial operating expenses. Accordingly, we have incurred significant operating losses and negative cash flows from operations, and we expect to continue to incur significant expenses and operating losses in the foreseeable future as we advance the commercialization of HEXWAVE™ and HD-AIT.

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As of September 30, 2025 and December 31, 2024, we maintained a cash balance of US$640,907 and US$1,153,229, respectively, and experienced a working capital deficiency of US$4,452,151 and US$2,652,516, respectively. Current liabilities amounted to US $8,239,018 as of September 30, 2025, primarily attributed to loans and expenses associated with commencing production, ongoing development of our licensed technologies, and maintaining licenses and our public registry in good standing. Current liabilities amounted to US$6,607,387 as of December 31, 2024, primarily attributed to the Parabilis Credit Facilities, our factoring arrangement with Bengal Capital, Inc., working capital loans with certain of our directors and officers, and expenses associated with commencing production, ongoing development of our licensed technologies, maintaining licenses and our public registry in good standing.

During the nine months ended September 30, 2025, we generated net cash from financing activities of US$7,931,412. Financing inflows consisted primarily of US$6,120,797 from the issuance of units pursuant to private placements, net of share issuance costs; US$2,075,555 from the exercise of warrants; US$650,000 from the Parabilis term loan; and US$350,000 from factoring arrangements. These inflows were partially offset by repayments of factoring of US$840,250, repayments of the Parabilis term loan of US$183,017, repayments of related-party working capital loans of US$74,658, repayments of third-party working capital loans of US$26,250, and repayments of lease liabilities of US$140,765.

During the nine months ended September 30, 2024, we generated net cash from financing activities of US$3,474,239, primarily from US$1,983,567 from the issuance of units pursuant to private placements, net of share issuance costs; US$1,800,000 from the Parabilis term loan; US$1,551,166 from factoring arrangements; US$653,175 from third-party working capital loans; US$82,000 from related-party working capital loans; and US$87,367 from the exercise of warrants. These proceeds were partially offset by repayments of factoring of US$1,567,031, repayments of third-party working capital loans of US$687,570, repayments of related-party working capital loans of US$220,281, repayments of lease liabilities of US$185,081, and repayment of the CEBA loan of US$23,073.

#### Future Funding Requirements
We incurred a total loss during the nine months ended September 30, 2025 and the year ended December 31, 2024 of US$10,510,206 and US$8,652,988, respectively, and cash outflows from operating activities of US$8,379,896 and US$6,469,264, respectively. In order to fully commercialize HEXWAVE™, we will require additional funds to achieve our development timeline and bring HEXWAVE™ to market. We have certain committed development milestones over the next twelve months and based on our current forecasted operational and development spend, we will require additional funds to meet these milestones. While we have been successful in arranging financing in the past, the success of such initiatives cannot be assured. This material uncertainty casts significant doubt upon our ability to continue as a going concern.

Based upon our current operating plan, we estimate that our future revenues and existing cash and cash equivalents as of the date of this prospectus, together with the estimated net proceeds from this offering, will be sufficient to fund our projected operating expenses and capital expenditure requirements through June 30, 2026. However, we have based this estimate on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us.

The application of the going concern concept is dependent upon our ability to generate future profitable operations and receive continued financial support from our creditors and shareholders. If we cannot generate positive future cashflows, this will delay the production timeline and shipments to backlogged orders, in addition to delaying necessary product cost reductions and improvements caused by the lack of funds to hire, produce, and execute the necessary product updates and revisions. Continued equity and/or debt financing is critical in order to ramp production up in order to become profitable.

Subsequent to September 30, 2025, we received gross proceeds of C$2,614,674 for the issuance of Common Shares pursuant to private placements.

Management plans to continue to pursue equity and/or debt financing to support operations. There can be no assurance that these financing efforts will be successful. Failure to maintain the support of creditors and obtain additional external financing will cause us to curtail operations and our ability to continue as a going concern will be impaired. The outcome of these matters cannot be predicted at this time.

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#### Material Cash Requirements for Known Contractual Obligations
During the nine months ended September 30, 2025 and the year ended December 31, 2024, we had contractual obligations in the amount of US$8,584,552 and US$8,050,980, respectively. As of September 30, 2025, contractual obligations for less than one year were US$8,239,018, which included accounts payable and accrued liabilities of US$4,391,772, term-loan of US$2,642,526, credit line liabilities of US$797,975, and lease liabilities of US$236,707. As of September 30, 2025, contractual obligations for one to three years consisted of lease liabilities of US$345,534. As of September 30, 2025, there were no contractual obligations due beyond three years.

#### Other Capital Requirements and Additional Royalty Obligations
We enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation typically consist only of payments for products or services provided or expenses incurred, including non-cancellable obligations of service providers, up to the date of cancellation.

In connection with our patent rights under the MIT License Agreement, we are obligated to pay MIT (in addition to patent filing costs and annual maintenance fees) as follows: (1) US$40,000 for 2024, US$200,000 for 2025, and US$350,000 for 2026 and thereafter; and (2) a royalty of 5.7% of our future net sales. During the nine months ended September 30, 2025 and the year ended December 31, 2024, we accrued royalty payments of US$34,042 and US$105,993, respectively.

Under the Battelle License Agreement, we are obligated to pay a 5% royalty on net sales and a 25% royalty on all sublicensing revenues if permitted under the contractual guidelines. During the nine months ended September 30, 2025 and the year ended December 31, 2024, we accrued no royalty payments. We are also required to pay a minimum royalty amount of US$200,000 per year unless the agreement is terminated.

#### Cash Flows
The following table provides information regarding our cash flows for the nine months ended September 30, 2025 and 2024 and the years ended December 31, 2024 and 2023:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30,**  | **Nine Months Ended September 30,**  | **Year Ended December 31,**  | **Year Ended December 31,**  |
| | **2025**  | **2024**  | **2024**  | **2023**  |
|  | **US$**  | **US$**  | **US$**  | **US$**  |
| Cash used in operating activities  | (8379896) | (3072818) | (6469264) | (5537021) |
| Cash used in investing activities  | (176498) | (125206) | (121217) | (221095) |
| Cash provided by financing activities  | 7931412 | 3474239 | 7781755 | 5069546 |
| Effect of foreign exchange rate changes on cash  | 112660 | 113338 | (39008) | 12060 |
| Net change in cash and cash equivalents  | 640907 | 390516 | 1153229 | 963 |

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 *Operating Activities* 

During the nine months ended September 30, 2025, we used net cash of US$8,379,896 in operating activities, compared to US$3,072,818 during the same period in 2024. The increase in cash used in operations primarily reflects a higher net loss in 2025, adjusted for non-cash items. Non-cash charges and credits during the period included stock-based compensation of US$1,135,285 (September 30, 2024 — US$396,091), amortization recorded in cost of revenues of US$381,711 (September 30, 2024 — US$871,023), depreciation of US$197,214 (September 30, 2024 — US$321,665), inventory impairment of US$233,676 (September 30, 2024 — US$143,488), lease liability interest of US$32,697 (September 30, 2024 — US$53,691), accrued interest of US$253,856 (September 30, 2024 — US$57,075), credit line fees of US$304,554 (September 30, 2024 — US$15,900), and a loss on disposal of lease assets of US$18,514 (September 30, 2024 — US$29,233).

Changes in non-cash working capital used US$390,169 of cash during the nine months ended September 30, 2025, compared to cash provided of US$1,179,059 during the same period in 2024. These changes included a decrease in receivables and prepaid expenses of US$525,024 (September 30, 2024 —

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US$217,729 decrease), a decrease in inventory of US$360,015 (September 30, 2024 — US$964,272 increase), and a decrease in deferred revenue of US$9,964 (September 30, 2024 — US$1,135,970 increase). These decreases were partially offset by an increase in accounts payable and accrued liabilities of US$235,882 (September 30, 2024 — US$703,454 decrease) and an increase in contract costs of US$268,952 (September 30, 2024 — nil).

The change in working capital during the 2025 period was primarily driven by lower production and shipment volumes, changes in the timing of customer deployments, and reduced contract activity compared to the prior year period. Specifically, the decrease in inventory of US$360,015 reflects lower manufacturing activity and the utilization of previously produced HEXWAVE™ units to support customer deployments during the period, compared to the US$964,272 increase in inventory in 2024 when production volumes were higher.

The decrease in receivables and prepaid expenses of US$525,024 was primarily attributable to lower sales volumes, improved collection timing, and reduced prepaid expenditures related to marketing, consulting, and operational activities compared to the prior year period. The decrease in deferred revenue of US$9,964 reflects the recognition of previously deferred revenue as contractual performance obligations were satisfied during the period, partially offset by fewer new advance customer payments compared to 2024. These changes were partially offset by an increase in contract costs of US$268,952, reflecting ongoing engineering, development, and support activities under TSA contracts for which revenue recognition is expected in future periods.

Overall, the changes in working capital reflect our lower level of production and contract activity during the nine months ended September 30, 2025 compared to the same period in 2024.

Operating cash flows for the nine months ended September 30, 2025 and 2024 reflect ongoing gross losses, research and development expenditures, and general and administrative expenses, including salaries, consulting fees, and promotional and investor relations activities.

During the year ended December 31, 2024, we used cash of US$6,469,264 in operating activities, primarily as a result of a net loss and comprehensive loss of US$8,845,163. This use of cash was partially offset by non-cash and other operating adjustments, including impaired inventory of US$233,568, impairment of contract costs of US$115,730, stock-based compensation of US$384,703 (of which US$31,475 was recorded in cost of sales), lease liability interest of US$69,652, accrued interest of US$294,304, depreciation of US$396,315 (including US$147,336 recorded in cost of sales), amortization of US$922,221 recorded in cost of sales, a loss on debt settlement of US$563,996, credit line fees of US$74,449, factoring fees of US$289,684, and foreign exchange loss of US$230,974. In addition, changes in non-cash working capital resulted in a net cash outflow of US$1,228,930, driven by: (1) an increase in accounts receivable, reflecting higher HEXWAVE™ shipments in the fourth quarter of 2024 and timing of milestone invoices under TSA contracts; (2) an increase in inventories, as we ramped up production to fulfill an expanded backlog of HEXWAVE™ orders; (3) a decrease in prepaid expenses, partially offsetting working capital outflows; and (4) an increase in accounts payable and accrued liabilities, related to raw materials procurement, engineering services, and development subcontractors.

These working capital shifts reflect our scaling of commercial operations, including initial deliveries of HEXWAVE™ and ongoing fulfillment of TSA contracts.

 *Investing Activities* 

During the nine months ended September 30, 2025, we incurred cash used in investing activities was US$176,498, relating to additions to property and equipment, compared to US$125,206 during the same period in 2024.

During the year ended December 31, 2024, we incurred US$121,217 in cash used for investing activities, consisting of US$94,106 for additions to property and equipment and US$27,111 for additions to intangible assets.

During the year ended December 31, 2023, we incurred US$221,095 in cash used for investing activities, which pertains to additions to intangible assets from the MIT & PNNL patents and additions to property and equipment regarding NPI 0.5 prototypes.

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 *Financing Activities* 

Net cash provided by financing activities during the nine months ended September 30, 2025 was US$7,931,412, compared to US$3,474,239 during the same period in 2024. Financing cash inflows in 2025 were primarily attributable to net proceeds of US$6,120,797 from the issuance of Common Shares through private placements (September 30, 2024 — US$1,983,567), proceeds of US$2,075,555 from the exercise of warrants (September 30, 2024 — US$87,367), proceeds of US$650,000 from the Parabilis Term Loan (September 30, 2024 — US$1,800,000), and proceeds of US$350,000 from factoring arrangements (September 30, 2024 — US$1,551,166). These inflows were partially offset by repayments of loans and factoring totaling US$840,250 (2024 — US$1,567,031), including repayments of related party working capital loans of US$74,658 (September 30, 2024 — US$220,281), third-party working capital loans of US$26,250 (September 30, 2024 — US$687,570), and repayments of the Parabilis Term Loan of US$183,017 (2024 — nil), as well as repayments of lease liabilities of US$140,765 (September 30, 2024 — US$185,081).

By comparison, financing activities during the nine months ended September 30, 2024 primarily consisted of net proceeds of US$1,983,567 from private placements and US$735,175 from loan financings, partially offset by repayments of US$930,924 in loans and US$185,081 in lease liabilities. In addition, during the first half of 2024, we completed multiple private placements and investments on January 15, February 12, and June 27, 2024, generating aggregate gross proceeds of US$2,222,978.

During the year ended December 31, 2024, net cash of US$7,781,755 was provided by financing activities, primarily consisting of US$6,989,017 in proceeds from shares issued, US$927,555 in net proceeds from debt, and lease repayments of US$247,412.

During the year ended December 31, 2023, net cash amounting to US$5,069,546 was provided by financing activities, which was associated primarily with the issuance of Common Shares through private placements proceeds of US$3,656,081 proceeds from factoring US$1,265,132 and proceeds from loans US$1,713,716.

#### Indebtedness

#### Related Party Loans
We have received working capital loans from certain of our directors and officers. These loans, unsecured and non-interest bearing, lack specified maturity dates. As of September 30, 2025 and December 31, 2024, an aggregate of $0 and $74,657, respectively, was outstanding under such related party loans.

#### Parabilis Credit Facilities
On August 22, 2024, we entered into a loan and security agreement with Parabilis providing for the Parabilis Term Loan and the Parabilis Revolving Credit Facility. The Parabilis Credit Facilities are secured by all of our tangible and intangible personal property, wherever located, whether currently owned or acquired in the future.

 *Term Loan* 

The Parabilis Term Loan has a term of 104 weeks with an annual interest rate of 17.99% and is scheduled to mature on August 15, 2026. On August 14, 2025, we amended the Parabilis Term Loan by updating the repayment schedule and providing for additional advances between August 2025 and October 2025 in an aggregate amount of US$0.65 million, which is evidenced by a replacement promissory note reflecting a principal balance of approximately US$2.45 million. As of December 31, 2024 and September 30, 2025, US$1,921,687 and US$2,642,526, respectively, was outstanding under the Parabilis Term Loan. The September 30, 2025 balance was classified entirely as current. As of December 31, 2024, US$983,476 was classified as current and US$938,211 was classified as non-current.

 *Revolving Credit Facility* 

The Parabilis Revolving Credit Facility originally had a maturity date of August 31, 2025, with the option for extension at Parabilis' sole discretion. The Parabilis Revolving Credit Facility carries an interest rate of 14.99% per annum.

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The borrowing base for the Parabilis Revolving Credit Facility is determined based on the following percentages: 90% of eligible billed receivables, 65% of eligible unbilled receivables, and 30% of eligible delivery orders. The aggregate of eligible billed and unbilled receivables, along with eligible delivery orders, establishes our borrowing capacity under the credit line. When invoicing occurs, payments on the invoices are applied directly to the outstanding principal and interest on the credit line.

On September 1, 2025, we amended the Parabilis Revolving Credit Facility by extending the maturity date to May 31, 2026 with automatic one-year renewals, unless Parabilis provides 90-days' notice, and agreeing to pay a 0.083% monthly commitment fee. As of September 30, 2025 and December 31, 2024, US$797,975 and US$983,671, respectively, was outstanding under the Parabilis Revolving Credit Facility.

#### Bengal Capital Factoring Arrangement
On June 22, 2023, we engaged in a factoring arrangement with Bengal Capital, Inc. (the "Factor"). Per the agreement, we submit invoices or purchase orders to the Factor after credit approval, receiving 80% of the gross amount. The Factor assumes ownership of these accounts with full recourse. Furthermore, we are subject to a 4% monthly factoring fee based on the face value of the accounts. No collateral is used per the agreement; however, we are obligated to pay the balance regardless of receiving payment for advanced orders.

During the year ended December 31, 2024, we did not receive any funds and incurred factoring fees of $289,684, with repayments of $1,397,031, under the Factor. During the nine months ended September 30, 2025, we did not receive any funds, incur any factoring fees, or make any repayments under the Factor. As a result, no factoring liability was outstanding as of September 30, 2025.

#### Potential Impact of Tariffs
The current U.S. administration has recently made statements and taken actions that has led to significant changes to U.S. and international trade policies, including the imposition of tariffs and export control and sanctions restrictions affecting certain products manufactured abroad. These tariffs have resulted in, and may continue to trigger, retaliatory actions by affected countries, including the imposition of tariffs on the United States by other countries, which has created significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States.

We have been and expect to continue to be impacted by increases in tariffs, in particular for components used in HEXWAVE™ and the HD-AIT Upgrade Kit originating from foreign jurisdictions, including China. We anticipate further general economic disruption and uncertainty surrounding trade stability during the near term, which may increase our component costs. Although we evaluate alternative sourcing strategies, we may not be able to fully mitigate the impact of tariff-related cost increases or pass those increased costs through to customers due to competitive pressures or fixed-price contracts. Any increase in tariffs, imposition of new trade restrictions, or interruption in global supply chains could adversely affect our cost structure, reduce margins, delay product deliveries, or negatively impact our ability to scale production. In addition, retaliatory tariffs on United States goods that apply to our products could affect our competitiveness in applicable markets. See "*Risk Factors — Risks Relating to Market Conditions — Tariffs and related retaliatory tariffs may impact trade between the United States and foreign countries and could impact our ability to compete in applicable markets*".

#### Off-Balance Sheet Arrangements
We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

#### Critical Accounting Policies and Significant Judgments and Estimates
Full disclosure of our accounting policies and significant accounting estimates and judgments in accordance with IFRS can be found in Note 3 of our audited consolidated financial statements for the year

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ended December 31, 2024 included elsewhere in this prospectus, and have remained substantially unchanged and are still applicable to us unless otherwise indicated.

#### Stock-Based Compensation
We grant RSUs, deferred share units ("DSUs"), and stock options to directors, officers, and consultants pursuant to a stock option plan described in Note 13 of our audited consolidated financial statements. We use the fair value method to account for all share-based awards granted, modified, or settled, and the Black-Scholes Option Pricing Model to determine the fair value of stock options granted. As such, a share-based payment is recorded based on the estimated fair value of options with a corresponding credit to contributed surplus. Any consideration received plus the amounts recognized in the contributed surplus will be transferred to share capital on the exercise of stock options. The amounts remain in contributed surplus for stock options which expire unexercised. Stock options with graded vesting schedules are accounted for as separate grants with different vesting periods and fair values. Changes to the estimated number of share options that will eventually vest are accounted for prospectively. Options issued to non-employees are valued based on the fair value of the services provided unless the fair value of the services provided cannot be measured reliably, in which case, the fair value is measured by reference to the fair value of the equity instruments granted.

#### Fair Value of Financial Instruments
As at December 31, 2024, our financial instruments comprise cash, accounts receivable, accounts payable and accrued liabilities, loans payable, term loan, lease liabilities and factoring liability. The fair values of our financial instruments approximate their carrying values due to their short-term maturity or market interest rates.

#### Recent Accounting Pronouncements
The following new standards and amendments to standards and interpretations, which become effective for current periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Amendments to IAS 1 — Classification of Liabilities as Current or Non-current. The amendment clarified the guidance on whether a liability should be classified as either current or non-current. The amendments are applied retrospectively for annual periods beginning on or after January 1, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Amendments to IFRS 16 — Lease liability in a Sale and Leaseback. The amendment clarifies how a seller-lessee subsequently measures sale and leaseback transactions that satisfy the requirements in IFRS 15 to be accounted for as a sale. These amendments are effective for annual periods beginning on or after January 1, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Amendments to IAS 7 — Requiring entities to provide qualitative and quantitative information about their supplier finance arrangements. In connection with the amendments to IAS 7, the IASB also issued amendments to IFRS 7 requiring entities to disclose whether they have accessed, or have access to, supplier finance arrangements that would provide the entity with extended payment terms or the suppliers with early payment terms. These amendments are effective on January 1, 2024.

We did not encounter any material effects from the implementation of new standards or amendments in 2024.

The following new standards and amendments were issued but not yet effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • IFRS 18 Presentation and Disclosure in Financial Statements — In April 2024, the IASB issued IFRS 18 which replaces IAS 1 — Presentation of Financial Statements. This standard introduces a new structure for financial statements, aiming to improve comparability and transparency. IFRS 18 is effective for annual periods beginning on or after January 1, 2027.

We are currently assessing the impact that IFRS 18 will have on our consolidated financial statements.

#### Quantitative and Qualitative Disclosures about Market Risks
As of December 31, 2025, our financial instruments comprise cash, accounts receivables, accounts payable and accrued liabilities, loans payable, term loan, lease liabilities and factoring liability. Our financial

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instruments are exposed to certain financial risks including credit risk, liquidity risk, foreign currency risks, equity price risk and capital risk management. Details of each risk are laid out in the notes to our audited consolidated financial statements as of December 31, 2024 and our amended and restated unaudited condensed consolidated interim financial statements as of September 30, 2025, and are summarized below:

#### Liquidity Risk
Liquidity risk is the risk that we will not be able to meet our financial obligations as they fall due. We manage liquidity risk through the management of our capital structure. To mitigate this risk, we have a planning and budgeting process in place to determine the funds required to support our ongoing operations and capital expenditures. We ensure that sufficient funds are raised from equity offerings or debt financings to meet our operating requirements, after considering existing cash balances, expected exercise of share purchase warrants, and stock options. Our ability to continue as a going concern involves significant judgements and estimates while determining forecasted cashflows and is dependent on our ability to obtain financing. As at September 30, 2025, we had cash of US$640,907 (December 31, 2024 — US$1,153,229) to settle current liabilities of US$8,239,018 (December 31, 2024 — US$6,607,387).

#### Credit Risk
Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations, including accounts receivable terms. Our cash is held through large Canadian, international, and foreign national financial institutions. Our receivables primarily consist of GST receivable due from the Canadian government and trade receivables that we continue to collect. These trade receivables are primarily with continuing customers and are not subject to significant credit risk. As at December 31, 2024, our trade receivables totaling US$130,000 are from three customers (December 31, 2023 — US$nil). Our maximum exposure to credit risk is limited to the carrying amount of cash and accounts receivables.

#### Market Risk
 *Interest Rate Risk* 

Interest rate risk arises from changes in market rates of interest that could adversely affect us. We currently have interest-bearing financial instruments in relation to loans and factoring liability Our exposure to interest rate risk is minimal as the interest rates are at a fixed percentage on the loans payable, term loans and factoring liability.

 *Foreign Currency Risk* 

We are exposed to currency risk by having balances and transactions in currencies that are different from its functional currency. We operate in foreign jurisdictions, which uses the U.S. dollar. We do not use derivative instruments to reduce upward, and downward risk associated with foreign currency fluctuations.

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| | | |
|:---|:---|:---|
| Financial assets denominated in foreign currencies  | US$ | 1370259 |
| Financial liabilities denominated in foreign currencies  |  | (882206) |
| **Net exposure**  | **US$** | **488053** |

---

A 10% change in the U.S. dollar exchange rate relative to the Canadian dollar would change our comprehensive loss by US$33,948.

 *Price Risk* 

We are exposed to price risk with respect to equity prices. Equity price risk is defined as the potential adverse impact on our earnings due to movements in individual equity prices or general movements in the level of the stock market. We closely monitor individual equity movements, and the stock market to determine the appropriate course of action to be taken by us.

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 *Capital Risk Management* 

We manage Common Shares and share purchase warrants as capital. Our objectives when managing capital are to safeguard our ability to continue as a going concern in order to pursue the development of our products and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.

We manage our capital structure and make adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, we may attempt to issue new shares, issue debt, acquire or dispose of assets, or adjust the amount of cash on hand.

In order to facilitate the management of our capital requirements, we prepare expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions.

In order to maximize ongoing development efforts, we do not pay out dividends. Our investment policy is to keep our cash treasury on deposit in an interest-bearing chartered bank account. Cash consists of cash on held with banks.

We expect our current capital resources will be sufficient to carry out our operations and product development plans for the foreseeable future. We are not subject to externally imposed capital requirements.

There has been no change to our approach to capital management during the year ended December 31, 2025.

#### Emerging Growth Company Accounting Election
We are an "emerging growth company" as defined in Section 2(A) of the Securities Act of 1933, as amended. However, because we prepare our financial statements in accordance with IFRS as issued by the IASB, we are not permitted to take advantage of the extended transition period for complying with new or revised accounting standards under the JOBS Act. Accordingly, we adopt new or revised IFRS standards as required by all IFRS filers.

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#### DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

#### Directors and Executive Officers
The following table sets forth certain information concerning our executive officers, directors and director nominees as of the date of this prospectus. Unless otherwise stated, the business address of our executive officers and directors is our corporate office located at 187 Ballardvale Street, Suite 110, Wilmington, Massachusetts 01887.

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| | |
|:---|:---|
| **Name**  | **Position**  |
|  ***Executive Officers:*** |  |
| Jason Burinescu | Executive Chairman and Director |
| William Frain | Chief Executive Officer and Director |
| Bryan Cunningham | President |
| Omar Garcia Abrego | Chief Financial Officer and Corporate Secretary  |
|  ***Independent Directors and Independent Director Nominees:*** |  |
| Arjun Grewal | Independent Director |
| Linda Jacksta | Independent Director |
|  | Independent Director Nominee |

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The following are brief biographies of our executive officers, directors and director nominees.

#### Jason Burinescu (Executive Chairman and Director)
Jason Burinescu joined the Company in February 2025 and is a Managing Partner of Vision Equity Partner Solutions, an investment and advisory firm ("Vision"), since April 2024. Before Vision, Jason led business development and served as a senior member of the investment team at Fletch Equity, a Los Angeles based private equity firm that has completed more than US$1 billion in total transaction value, from January 2020 to March 2024. His investment experience is further augmented by his experience as a senior operating executive at a number of firms that he helped scale including SaaS cyber security company Vera, which was successfully acquired by Help Systems (private equity backed by TA Associates and Harvest Partners), and media companies Leftfield Pictures, which was acquired by ITV and Renegade 83, which was acquired by Entertainment One, now part of Lions Gate.

#### William Frain (Chief Executive Officer and Director)
William Frain has served as Chief Executive Officer and a director of the Company since 2021. He has also served as Chief Executive Officer of DrawDown since 2018. Mr. Frain has over 25 years of management experience with international operations, government affairs and customer relations in the security industry. Mr. Frain was the Senior Vice President for L-3 Communications Securities and Detection Systems, Inc. ("L3 SDS"), the world's leading supplier of security inspection systems. L3 SDS, is a global aerospace and national security company with approximately 38,000 employees worldwide and sales of approximately US$11 billion in 2017. Mr. Frain served as part of the management team for L3 SDS over twenty-five years in a variety of capacities, including General Manager, CFO, product line management and global sales and field service support. In addition, Mr. Frain led global sales, business development and key account management for L3 SDS. In 1993, Mr. Frain joined Vivid Technologies, Inc. ("Vivid"). As CFO, Mr. Frain led Vivid's initial public offering on NASDAQ in 1996. In 2015, Mr. Frain completed the Wharton Executive Leadership Program, University of Pennsylvania and also received his Bachelor of Science degree from the School of Management, Boston College.

#### Bryan Cunningham (President)
Bryan Cunningham has served as President of the Company since January 2025. He is a lawyer, senior security expert, former CIA intelligence officer, and technology executive, who has a long career protecting

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the US and allied critical assets at home and around the globe against emerging threats. Mr. Cunningham is a long-time senior counsel and adviser to Palantir Technologies PLTR-Q. Since 2010, he has served as Executive Director of Palantir's outside advisory board on privacy and civil liberties and has been a key officer at several other tech startups. Mr. Cunningham previously served as Deputy Legal Adviser to National Security Advisor Condoleezza Rice, worked with the US 9/11 Commission, and has been a senior advisor to the Chertoff Group. Mr. Cunningham has been involved in the critical aviation security space since shortly after 9/11, drafting significant portions of the Homeland Security Act and providing security and regulatory advice and counsel to the American Association of Airline Executives. He was awarded the National Intelligence Medal of Achievement for helping stand up the first US terrorism threat integration center and has served on numerous security-related government and private task forces.

#### Omar Garcia Abrego (Chief Financial Officer and Corporate Secretary)
Omar Garcia Abrego has served as Chief Financial Officer and Corporate Secretary of the Company since 2021. Mr. Abrego has also served as Chief Financial Officer of DrawDown since 2018. He is a Canadian Chartered Professional Accountant (CPA, CA) with over 25 years of progressive international accounting experience with public and private companies. Most recently, Mr. Abrego was the CFO of Luca Mining Corp., a TSXV listed company. Additionally, Mr. Abrego has held multiple senior positions in various companies such as Candelaria Mining Corporation., Auryn Resources Inc., Cayden Resources Inc. (which was sold to Agnico Eagle Mining Limited for $205 million in November 2014), Farallon Mining Ltd. (which was also sold to Nyrstar NV for $420 million in January 2011), Graymont Limited and Deloitte LLP. Mr. Abrego holds a Bachelor of Public Accounting degree from Instituto Tecnológico y de Estudios Superiores de Monterrey and is also a Certified Public Accountant by the Mexican Institute of Public Accountants.

#### Arjun Grewal (Independent Director)
Arjun Grewal has served as a director of the Company since 2021. Since 2018, he has served as the Client Advocacy Program Lead for IBM Canada Ltd. Focused on collecting, analyzing, and actioning client feedback, Mr. Grewal is actively involved in managing and testing client experience improvements. Mr. Grewal is a 19-year veteran of the Canadian Armed Forces. Mr. Grewal served 12 years of his career with the Canadian Special Operations Forces, having deployed on operations globally. Mr. Grewal advises and provides valuable insights to the Company, particularly in military and tactical contexts.

#### Linda Jacksta (Independent Director)
Linda Jacksta has served as a director of the Company since 2021. She has over 35 years of experience with U.S. Customs & Border Protection ("CBP"), the largest law enforcement agency in the federal government. Her most recent role was serving as the Deputy Executive Assistant Commissioner for Operations Support where she directed CBP intelligence, forensics, incident management, and international affairs functions. Since 2021, Ms. Jacksta has served as President and Chief Executive Officer of the J2 Consulting Group LLC and studied at Thomas Edison State University. She also completed the Senior Executive Fellow program at the Harvard Kennedy School of Government in Boston and received the prestigious Presidential Rank Award, Meritorious Executive, for her leadership contributions to the U.S. federal government.

#### (Independent Director Nominee)

#### Share Ownership
As of January 28, 2026, our directors and executive officers, as a group, beneficially owned a total of 1,967,929 Common Shares, representing beneficial ownership of 2.20% of the Common Shares.

The table below sets forth the number of Common Shares beneficially owned by our directors and executive officers as of January 28, 2026. The persons listed below are deemed to be the beneficial owners of Common Shares underlying options, RSUs, and warrants that are exercisable within 60 days from the above date, including "out-of-the money" options, but any such options, RSUs and warrants are not treated

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as outstanding for the purpose of computing any other person's ownership percentage. The percentages shown below are based on 89,293,651 outstanding Common Shares as of January 28, 2026.

#### Shareholdings of Directors and Executive Officers

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Name of Beneficial Owner**  | **Common <br> Shares Held**  | **Options**  | **RSUs**  | **Warrants**  | **Number of <br> Common Shares <br> Beneficially <br> Owned**  | **Percent of <br> Outstanding <br> Common <br> Shares**  |
| Jason Burinescu  |  | 475000 |  |  | 475000 | \* |
| Bryan Cunningham  | 80000 | 137500 |  |  | 217500 | \* |
| William Frain  | 266133<sup>(1)</sup> | 320000 | 94975 | 57083 | 738191 | \* |
| Omar Garcia Abrego  | 129738 | 197500 |  |  | 327238 | \* |
| Arjun Grewal  |  | 95000 | 10000 |  | 105000 | \* |
| Linda Jacksta  |  | 95000 | 10000 |  | 105000 | \* |
| **Total**  | 475871 | 1320000 | 114975 | 57083 | 1967929 | 2.20% |

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\*

Indicates percentage of less than one percent.

(1) Excludes 500,000 Common Shares held by William Frain's spouse.

See "*Executive Compensation — Outstanding Equity Awards*" for the details of our directors' and officers' stock options and RSUs outstanding as of December 31, 2025.

#### Corporate Governance
We intend to use foreign private issuer exemptions with respect to certain Nasdaq listing requirements. Following our home country governance practices, as opposed to the requirements that would otherwise apply to a company listed on Nasdaq, may provide less protection than is accorded to investors under Nasdaq listing requirements applicable to U.S. domestic issuers.

National Instrument 58-101 — *Disclosure of Corporate Governance Practices*, requires all reporting issuers to provide certain annual disclosure of their corporate governance practices with respect to the corporate governance guidelines (the "Guidelines") adopted in National Policy 58-201 — *Corporate Governance Guidelines*. The Guidelines are not prescriptive, but have been used, or will be used in connection with the consummation of this offering, by us in adopting our corporate governance practices. Our Board and our management consider good corporate governance to be an integral part of the effective and efficient operation of Canadian corporations. Our approach to corporate governance is set out below.

#### Board of Directors
Our directors are elected annually and hold office until the next annual general meeting of the shareholders or until their successors are duly elected or appointed.

#### Director Independence
Our Board has determined that, upon consummation of this offering, three members of our Board will be "independent," as defined under Nasdaq rules and for purposes of Canadian securities laws. Therefore, a majority of the directors on our Board will be independent. Messrs. Burinescu and Frain are not considered independent by virtue of their respective management positions.

For purposes of Nasdaq rules, an independent director means a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, subject to certain additional limitations. A director is considered to be independent for the purposes of Canadian securities laws if the director has no direct or indirect material relationship to the company. A material relationship is a relationship that could, in the view of the board of directors, be reasonably expected

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to interfere with the exercise of a director's independent judgment. Certain individuals, such as our employees and executive officers, are deemed by Canadian securities laws to have material relationships with us.

We will take steps to ensure that adequate structures and processes will be in place following the consummation of this offering to permit our Board to function independently of management, including for purposes of encouraging an objective process for nominating directors and determining executive compensation.

#### Corporate Governance Guidelines
Our Board will adopt corporate governance guidelines that serve as a flexible framework within which our Board and its committees operate. These guidelines will cover a number of areas including the duties and responsibilities of the Board, director independence, executive sessions of independent directors, board leadership structure, director terms and limitations on board service, Chief Executive Officer evaluations, management development and succession planning, director nomination, qualification and election, director orientation and continuing education, Board agenda, materials and information, director access to company employees and independent advisors, Board communication with shareholders and others, director compensation and annual Board and committee performance evaluations. A copy of our corporate governance guidelines will be posted on our website at *www.libertydefense.com*.

#### Codes of Ethics
We will adopt a Code of Business Conduct and Ethics ("Code of Conduct") in connection with this offering, which will be applicable to all of our directors, officers and employees. The Code of Conduct will set out our fundamental values and standards of behavior that are expected from our directors, officers and employees with respect to all aspects of our business. The objective of the Code of Conduct will be to provide guidelines for maintaining our integrity, reputation and honesty with a goal of honoring others' trust in us at all times. In addition, we will also adopt a Code of Ethics of our Chief Executive Officer and Financial Officers ("Code of Ethics"), which will be applicable to our Chief Executive Officer, Chief Financial Officer, controller or principal accounting officer, or other persons performing similar functions, which is a "code of ethics" as defined in Item 16B of Form 20-F promulgated by the SEC. A copy of our Code of Ethics will be posted on our website at *www.libertydefense.com*.

#### Insider Trading Policy
Prior to the effectiveness of the registration statement of which this prospectus is a part, we intend to adopt an insider trading policy to set forth basic guidelines for trading in our securities and to preserve our confidential information so as to avoid any situation that might have the potential to damage our reputation, or which could constitute a violation of applicable securities law by our officers, directors, or employees. Under this policy, "insiders" (i.e., officers, members of our Board and other individuals having access to material non-public information) will be prohibited from trading in Common Shares and other securities on the basis of such material non-public information until after the information has been disclosed to the public. The obligation not to trade on inside information applies not only to our insiders, but also to persons who obtain such information from insiders and use it to their advantage. Thus, liability may be imposed upon us, our insiders and also outsiders who are the source of leaks of material information not yet disclosed to the public and the leaks coincide with purchases or sales of our securities (i) by such insiders or outsiders, (ii) by the us, or (iii) by "tippees" (including relatives, friends, investment analysts, etc.).

#### Conflicts of Interest
There may from time to time be potential conflicts of interest to which some of our directors or officers will be subject in connection with our operations. Some of the individuals appointed as our directors or officers are also directors and/or officers of other reporting and non-reporting issuers. Conflicts, if any, will be subject to the procedures and remedies provided for under the BCBCA.

Our directors are required by law to act honestly and in good faith with a view to our best interests and to disclose any interests that they may have in any material contract or material transaction. If a conflict of

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interest arises at a meeting of our Board, any director in a conflict is required to disclose his or her interest and abstain from voting on such matter. Our directors and officers are aware of the existence of laws governing accountability of directors and officers for corporate opportunity and requiring disclosures by directors of conflicts of interest and are required to comply with such laws in respect of any directors' and officers' conflicts of interest or in respect of any breaches of duty by any of our directors or officers.

#### Audit Committee

#### Composition
The current members of our Audit Committee are Arjun Grewal (Chair), Willian Frain and Linda Lee Jacksta. Upon consummation of this offering, the members our Audit Committee will be Arjun Grewal (Chair), Linda Lee Jacksta and . Our Board has determined that qualifies as an "audit committee financial expert" as defined in applicable SEC rules. In addition, our Board has determined that each member of our Audit Committee is "independent," as required by Nasdaq rules, Rule 10A-3 of the Exchange Act and Canadian securities laws.

#### Relevant Education and Experience
The education and related experience of each of the members of the Audit Committee that is relevant to the performance of his responsibilities as a member of the Audit Committee is described below:

**Arjun Grewal** currently serves as the Client Advocacy Program Lead for IBM Canada Ltd. Focused on collecting, analyzing, and giving effect to client feedback. Mr. Grewal is actively involved in managing and testing client experience improvements. Mr. Grewal is a 19-year veteran of the Canadian Armed Forces and served 12 years of his career with the Canadian Special Operations Forces, having been deployed on operations globally.

**Linda Lee Jacksta** is a senior border security and intelligence leader with more than 35 years of service to the DHS CBP. As a member of the Senior Executive Service (SES), she developed and implemented a wide range of solutions to address some of the agency's most complex challenges. She led efforts to address border security threats and operational challenges, established an enterprise data analytics organization leveraging data for critical decision-making, developed extensive Intelligence Community (IC) partnerships, and was instrumental in formation of the agency's National Use of Force Control Board.

In her most recent role as Deputy Executive Assistant Commissioner, Operations Support, Ms. Jacksta led and directed the intelligence, international affairs, planning and requirements development, data analytics, emergency preparedness, forensic/scientific services, and use of force policy functions in support of mission effectiveness for CBPs 60,000 employees. Currently, Ms. Jacksta is President and CEO of J2 Consulting Group, a Board Member of Defense Holdings, Ltd. and a Principal at Deep Water Point (a GTSC Strategic Partner).

#### Audit Committee Charter
Our Board intends to adopt a new written charter for the Audit Committee, which will set out the Audit Committee's responsibilities, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewing the financial statements to be included in our annual report and review with the Board and the auditors the results of the annual audit and reviews any financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewing and recommending to the Board for approval, where appropriate, financial information contained in any prospectuses, annual information forms, annual reports to shareholders, management proxy circulars, press releases, material change disclosures of a financial nature and similar disclosure documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewing with our management and with our auditor and assessing significant accounting principles and disclosure issues and alternative treatments under IFRS all with a view to gaining reasonable assurance that financial statements present fairly, in all material respects, our financial position, cash flows and the results of our operations in accordance with IFRS;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewing and assessing the adequacy and effectiveness of our system of internal control and management information systems, risk management policies and procedures, and financial reporting of any transaction between us, and investigating any alleged fraud;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewing and discussing with our management our major financial risk exposures and the steps taken to monitor and control such exposures, including the use of any financial derivatives and hedging activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewing, discussing and investigating any alleged fraud involving our management or employees in relation to the internal controls, including our management's response to any allegations of fraud;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewing the financial reporting of any transaction between us and any officer, director or other "related party" or any entity in which any such person has a financial interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • recommending an auditor for nomination and the auditors compensation to the Board, overseeing the work of the auditors, establishing communication with the auditors, reviewing the independence of the auditor, the audit plan, the performance of the auditors, and the results of the external audit and the report thereon;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • monitoring and periodically reviewing our corporate policies and associated procedures, and hiring policies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • providing broad oversight of our financial, risk and control related activities.

#### Pre-Approval Policies and Procedures
The Audit Committee will pre-approve all non-audit services to be provided to us by our external auditors. The Audit Committee may delegate to one or more of its members the authority to pre-approve non-audit services but preapproval by such member or members so delegated shall be presented to the full Audit Committee at its first scheduled meeting following such pre- approval.

#### External Audit Service Fees
The following table sets forth the fees paid by us by our external auditors, Davidson & Company LLP, Chartered Professional Accountants, for services rendered in the last two fiscal years:

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| | | |
|:---|:---|:---|
| **Nature of Services**  | **2024 (C$)**  | **2023 (C$)**  |
| Audit Fees<sup>(1)</sup>  | 244693 | 100246 |
| Audit Related Fees<sup>(2)</sup>  | 73201 | 85822 |
| Tax Fees<sup>(3)</sup>  |  |  |
| All Other Fees<sup>(4)</sup>  |  |  |
| **Total**  | **317894** | **186068** |

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(1) "Audit fees" include aggregate fees billed by our external auditor in each of the last two fiscal years for audit fees.

(2) "Audited related fees" include the aggregate fees billed in each of the last two fiscal years for assurance and related services by our external auditor that are reasonably related to the performance of the audit or review of our financial statements and are not reported under "Audit fees" above. The services provided include employee benefit audits, due diligence assistance, accounting consultations on proposed transactions, internal control reviews and audit or attest services not required by legislation or regulation.

(3) "Tax fees" include the aggregate fees billed in each of the last two fiscal years for professional services rendered by our external auditor for tax compliance, tax advice and tax planning. The services provided include tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions, and requests for rulings or technical advice from tax authorities.

(4) "All other fees" include the aggregate fees billed in each of the last two fiscal years for products and services provided by our external auditor, other than "Audit fees," "Audit related fees" and "Tax fees" above.

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#### Compensation Committee

#### Composition
The current members of our Compensation Committee are Arjun Grewal (Chair) and William Frain. Upon consummation of this offering, the members of our Compensation Committee will be Arjun Grewal (Chair), Linda Jacksta and . Our Board has determined that each such member satisfies the "independence" requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market.

#### Charter
Our Board intends to adopt a written charter for the Compensation Committee, which will set out the Compensation Committee's responsibilities, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewing, overseeing and evaluating our compensation policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • assessing the effectiveness of the Board, each of its committees and individual directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • administering any stock option or purchase plan or any other compensation incentive programs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • assessing the performance of our officers and other members of our executive management team;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewing and approving the compensation paid us, if any, to our consultants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewing and making recommendations to the Board on an annual basis concerning the level and nature of the compensation payable, if any, to our directors and officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewing the performance objectives for senior executive officers and recommends any changes to the Board for consideration;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewing on an annual basis the compensation of our directors and recommends any changes to the Board for consideration.

#### Corporate Governance Committee

#### Composition
The current members of our Corporate Governance Committee are Arjun Grewal (Chair) and William Frain. Upon consummation of this offering, the members of the Corporate Governance Committee will be Arjun Grewal (Chair), and . Our Board has determined that each member of the nomination committee is "independent" as defined in the applicable Nasdaq rules.

#### Charter
Our Board intends to adopt a written charter for the Corporate Governance Committee, which will set out the Corporate Governance Committee's responsibilities, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • making recommendations to the Board with respect to the size, composition and structure of the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • making recommendations to the Board with respect to the preferred experience and qualifications of new directors to be elected by shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • making recommendations to the Board with respect to qualified candidates for nomination for election to the Board at each annual general meeting of shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • making recommendations to the Board with respect to the appointment of qualified directors to each committee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • making recommendations to the Board with respect to developing and overseeing an orientation program for new directors and a continuing education program for current directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • making recommendations to the Board with respect to Board succession; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • conducting annual performance assessments of the Board.

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#### EXECUTIVE COMPENSATION
The following table sets out all compensation paid, and in-kind benefits granted, by the Company and its subsidiaries to each executive officer and director for services in all capacities provided to the Company and its subsidiaries for the year ended December 31, 2025, including any contingent or deferred compensation accrued for the year, even if payable at a later date.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Executive Officer and Director Compensation for 2025 Fiscal Year<sup>(1)</sup>**  | **Executive Officer and Director Compensation for 2025 Fiscal Year<sup>(1)</sup>**  | **Executive Officer and Director Compensation for 2025 Fiscal Year<sup>(1)</sup>**  | **Executive Officer and Director Compensation for 2025 Fiscal Year<sup>(1)</sup>**  | **Executive Officer and Director Compensation for 2025 Fiscal Year<sup>(1)</sup>**  |
| **Name and position**  | **Salary/Fees<sup>(2)</sup>**  | **Bonus<sup>(3)</sup>**  | **Stock <br> Options<sup>(4)</sup>**  | **Total <br> Compensation**  |
|  **Jason Burinescu <br> *Executive Chairman and Director***  | $25000 |  | $32191 | $129442 |
|  **William Frain <br> *Chief Executive Officer and Director***  | $278279 | $50000 | $34337 | $433258 |
|  **Omar Garcia Abrego <br> *Chief Financial Officer and Corporate Secretary***  | $189426 |  | $51506 | $216368 |
|  **Arjun Grewal**<sup>(3)</sup> <br> *Director*  | $30000 |  | $12876 | $53875 |
|  **Linda Lee Jacksta**<sup>(4)</sup> <br> *Director*  | $30000 |  | $12876 | $53875 |
|  **Daryl Rebeck<sup>(5)</sup> <br> *Former Executive Chairman***  | $27867 |  |  | $27867 |

---

(1) All amounts are in US$ unless otherwise specified.

(2) Amounts disclosed in this column include base salary or compensation paid to our executive officers and monthly fees paid to our directors.

(3) The Bonus column includes a $50,000 bonus awarded to Mr. Frain in 2023, which remains unpaid as at December 31, 2025. All of these amounts have been accrued but not paid.

(4) Represents the grant date value of the stock options granted to our executive officers or directors on July 2, 2025 or September 9, 2025, as applicable, for the number of shares as follows: (i) Mr. Burinescu, 250,000 shares; (ii) Mr. Frain, 200,000 shares; (iii) Mr. Abrego, 300,000 shares; (iv) Mr. Grewal, 75,000 shares; and (v) Ms. Jacksta: 75,000 shares. Each option has an exercise price per share of C$0.24 or C$0.265, as applicable, and an expiration date of July 2, 2027 or September 9, 2030, as applicable. The grant date value of the stock options was determined using the Black-Scholes option model. See "— *Outstanding Equity Awards*" for additional details of our directors' and officers' stock options.

(5) Daryl Rebeck was appointed Executive Chairman of the Company on March 17, 2021, and resigned on February 25, 2025.

#### Pension, Retirement, or Similar Benefits
We and our subsidiaries have not set aside or accrued any amounts to provide pension, retirement, or similar benefits to our executive officers or directors.

#### Stock Awards

#### Omnibus Long-Term Incentive Plan — Summary of Material Terms
Our executive officers and directors, together with all other employees, consultants, and service providers of the Company and its subsidiaries, are eligible to participate in the Company's Omnibus Long-Term Incentive Plan, as amended and restated from time to time (the "Incentive Plan"). The Incentive Plan is administered by the Board or a committee of the Board consisting of no fewer than three directors. It was established effective March 27, 2019, and was most recently approved by our shareholders at the Company's annual general meeting on December 7, 2023. This summary of the Incentive Plan's material terms is qualified in its entirety by the text of the Incentive Plan, which is attached hereto as Exhibits 10.1, 10.2 and 10.3.

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***Awards.*** The Incentive Plan provides for the grant of stock options, RSUs and DSUs to eligible participants. Awards are subject to the terms and conditions of the Incentive Plan and applicable award agreement. The award agreements may contain such terms as are considered necessary for compliance with any laws or regulations of any country or jurisdiction applicable to a participant or the Company.

***Share Subject to the Plan***. The maximum number of Common Shares available for the grant and issuance of awards under the Incentive Plan and all other equity compensation plans sponsored by the Company as of any time shall not exceed ten percent (10%) of the Common Shares outstanding at such time on a non-diluted basis (the "Plan Limit"). Stock options can be granted from the remaining Common Shares up to the Plan Limit. The maximum number of Common Shares that can be issued to any one participant in a one-year period shall not exceed five percent (5%) of the Common Shares outstanding at such time (or two percent (2%) in the case of a consultant or a service provider who engages in certain investor relations activities on behalf of the Company).

***Stock Options***. A stock option entitles a participant to acquire a designated number of Common Shares from the Company for a specified option price during the applicable exercise period. The Board determines the option price, which is generally required to be no less than the market value of the underlying shares at the time of grant, and the expiration date, which cannot be more than ten (10) years after the grant date. Stock options are subject to vesting terms determined by the Board. The option price for a stock option can be paid in cash or, with the Board's approval, by net exercise or cashless exercise.

***Restricted Share Units***. An RSU represents the right to acquire Common Shares from the Company at purchase price (which may be zero) determined by the Board, subject to such restrictions, vesting, and other conditions as the Board may determine at the time of grant. Vesting conditions may be based on continuing employment or other service, and/or the achievement of preestablished performance goals and objectives. The minimum vesting period for an RSU is one year, and no vesting period for an RSU can end later than December 31 of the third calendar year following the calendar year in which the RSU is granted. Unless otherwise specified in an award agreement, one-third of the RSUs granted to a participant shall vest on each of the first three anniversaries of the grant date. Unless otherwise specified in an award agreement, vested RSUs may be settled in shares, cash, or a combination thereof, at any time after they vest and prior to the expiration date, which shall not be later than five years after the vesting date.

***Deferred Share Units***. A DSU represents the right to receive a designated number of Common Shares, their equivalent value in cash, or a combination of cash and shares, at any time during the period beginning on the date the participant ceases to be an eligible participant in the Incentive Plan (the "Termination Date") and ending on December 15 of the second calendar year following the calendar year that includes the participant's Termination Date (or such shorter period as may be specified in the award agreement). DSUs are subject to a minimum vesting period of at least one year following the grant date. The Board may award dividend equivalents in respect of DSUs on the same basis as cash dividends declared and paid on the Common Shares underlying such DSUs. Dividend equivalents will be credited to a participant's account in the form of additional DSUs, subject to the same terms and conditions as the DSUs to which such dividend equivalents are credited.

***Effects of Termination***. If a participant's employment or other service is terminated by the Company for cause (including for, among other things, gross misconduct, theft, fraud, breach of confidentiality, or breach of the Company's code of conduct), the participant shall immediately forfeit all vested and unvested awards. If a participant retires, any unvested award will continue to vest in accordance with its terms, and any vested awards will remain exercisable for six months thereafter (or until the expiration date, if earlier), subject to the participant's continuing compliance with applicable post-termination restricted covenants. If a participant breaches any such restrictive covenants following retirement, the participant will be required to pay the Company any amounts realized on exercise of an award after such retirement. If a participant voluntarily terminates employment or other service, all unvested awards shall be forfeited, and any vested awards shall remain exercisable for 90 days thereafter (or until the expiration date, if earlier). If the participant's employment or other service is terminated by the Company without cause, the participant shall be entitled to accelerated vesting of unvested awards on a pro-rata basis, and vested awards (after giving effect to such acceleration) shall remain exercisable for 90 days thereafter (or until the expiration date, if earlier). If a participant's employment or other service terminates due to the participant's death, all unvested awards shall immediately vest and remain exercisable for 180 days thereafter. If a participant is terminated without

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cause or resigns for good reason, in either case, within 12 months after a change in control of the Company (or after the date on which the Company has signed a written agreement to effect any such change in control), the participant's unvested awards shall vest and may be exercised within 30 days after such termination.

***Effects of Change in Control***. In connection with a change in control of the Company, the Board has the right to provide for the conversion or exchange on any outstanding awards into or for options, rights, units or other securities of substantially equivalent (or greater) value in any entity participating in or resulting from such change in control. The Board may also change the performance criteria or accelerate the vesting and/or expiration of outstanding awards to provide that the applicable performance conditions have been fully achieved and the awards are fully vested and conditionally exercisable upon (or prior to) the completion of the change in control. The Board also has the power to modify the terms of the Incentive Plan or any award to assist participants to tender into a take-over bid or other transaction leading to a change in control, including by permitting participants to conditionally exercise their awards.

***Other Corporate Transactions***. In the event of a subdivision, consolidation, reclassification, reorganization, or other change in the Common Shares, a consolidation, merger, reorganization, amalgamation, plan of arrangement, spin-off, dividend payment, or recapitalization of the Company with or into another corporation, or distribution to the Company's shareholders (other than an ordinary course dividend in cash or shares), the number and kind of Common Shares deliverable to a participant upon vesting or exercise of an award, and/or the price payable under the award for such Common Shares, shall be adjusted by the Board to maintain the participant's economic rights in respect of their awards.

***Plan Amendment and Termination***. The Board may amend the Incentive Plan or any award at any time subject to such shareholder approval as may be required by the principal stock exchange on which the shares are listed. Amendments requiring shareholder approval include, but are not limited to, amendments that would: (i) expand the class of eligible participants; (ii) increase the maximum number or percentage of shares issuable under the Incentive Plan in the aggregate or to any participant or class of participants; (iii) change the method for determining exercise prices of options; (iv) extend the term of an award; (v) add a net exercise provision; (vi) reduce the exercise price of any award; or (vii) replace an existing award with a substitute award having a lower exercise price.

Subject to any required regulatory approval, the Board may terminate the Incentive Plan at any time without the consent of the participants, provided such termination shall not materially and adversely affect any awards previously granted under the Incentive Plan.

#### Outstanding Equity Awards
The following table discloses all equity awards granted to our executive officers and directors that were outstanding as of December 31, 2025.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Executive Officer and Director Outstanding Equity Awards**  | **Executive Officer and Director Outstanding Equity Awards**  | **Executive Officer and Director Outstanding Equity Awards**  | **Executive Officer and Director Outstanding Equity Awards**  | **Executive Officer and Director Outstanding Equity Awards**  | **Executive Officer and Director Outstanding Equity Awards**  |
| **Name and Position**  | **Type of <br> Award<sup>(1)</sup>**  | **Grant <br> Date**  | **Number of <br> Underlying <br> Common <br> Shares**  | **Exercise <br> Price<sup>(2)</sup> <br> (C$)**  | **Expiration <br> Date**  |
|  **Jason Burinescu<sup>(3)</sup> <br> *Executive Chairman and Director***  | Stock Options  | 07/02/2025  | 250000 | 0.24 | 07/02/2027  |
|  **Jason Burinescu<sup>(3)</sup> <br> *Executive Chairman and Director***  | Stock Options  | 12/30/2024  | 350000 | 0.80 | 12/30/2029  |
|  **William Frain<sup>(4)</sup> <br> *Chief Executive Officer and Director***  | RSU  | 10/16/2023  | 41850 | n/a | 10/16/2028  |
|  **William Frain<sup>(4)</sup> <br> *Chief Executive Officer and Director***  | RSU  | 4/26/2022  | 20000 | n/a | 4/26/2027  |
|  **William Frain<sup>(4)</sup> <br> *Chief Executive Officer and Director***  | RSU  | 6/10/2021  | 8125 | n/a | 6/10/2026  |
|  **William Frain<sup>(4)</sup> <br> *Chief Executive Officer and Director***  | RSU  | 4/7/2021  | 25000 | n/a | 4/7/2026  |
|  **William Frain<sup>(4)</sup> <br> *Chief Executive Officer and Director***  | Stock Options  | 9/9/2025  | 200000 | 0.265 | 9/9/2030  |
|  **William Frain<sup>(4)</sup> <br> *Chief Executive Officer and Director***  | Stock Options  | 12/30/2024  | 350000 | 0.80 | 12/30/2029  |
|  **William Frain<sup>(4)</sup> <br> *Chief Executive Officer and Director***  | Stock Option  | 4/26/2022  | 20000 | 4.10 | 4/26/2027  |
|  **William Frain<sup>(4)</sup> <br> *Chief Executive Officer and Director***  | Stock Option  | 4/7/2021  | 25000 | 5.00 | 4/7/2026  |
|  **William Frain<sup>(4)</sup> <br> *Chief Executive Officer and Director***  | Operational <br> Performance <br> Shares  | n/a  | 200000 | n/a | n/a  |
|  ***Omar Garcia Abrego**<sup>(5)</sup> <br> Chief Financial Officer and Corporate Secretary*  | Stock Options  | 9/9/2025  | 300000 | 0.265 | 9/9/2030  |
|  ***Omar Garcia Abrego**<sup>(5)</sup> <br> Chief Financial Officer and Corporate Secretary*  | Stock Options  | 12/30/2024  | 50000 | 0.80 | 12/30/2029  |
|  ***Omar Garcia Abrego**<sup>(5)</sup> <br> Chief Financial Officer and Corporate Secretary*  | Stock Option  | 10/16/2023  | 7500 | 1.90 | 10/16/2028  |
|  ***Omar Garcia Abrego**<sup>(5)</sup> <br> Chief Financial Officer and Corporate Secretary*  | Stock Option  | 4/26/2022  | 5000 | 4.10 | 4/26/2027  |
|  ***Omar Garcia Abrego**<sup>(5)</sup> <br> Chief Financial Officer and Corporate Secretary*  | Stock Option  | 4/7/2021  | 10000 | 5.00 | 4/7/2026  |
|  **Arjun Grewal<sup>(6)</sup> <br> *Director***  | Stock Options  | 9/9/2025  | 75000 | 0.265 | 9/9/2030  |
|  **Arjun Grewal<sup>(6)</sup> <br> *Director***  | RSU  | 10/16/2023  | 10000 | n/a | 10/16/2028  |
|  **Arjun Grewal<sup>(6)</sup> <br> *Director***  | Stock Option  | 12/30/2024  | 75000 | 0.80 | 12/30/2029  |
|  **Arjun Grewal<sup>(6)</sup> <br> *Director***  | Stock Option  | 4/26/2022  | 7500 | 4.10 | 4/26/2027  |
|  **Arjun Grewal<sup>(6)</sup> <br> *Director***  | Stock Option  | 4/7/2021  | 12500 | 5.00 | 4/7/2026  |
|  **Linda Lee Jacksta<sup>(7)</sup> <br> *Director***  | RSU  | 10/16/2023  | 10000 | n/a | 10/16/2028  |
|  **Linda Lee Jacksta<sup>(7)</sup> <br> *Director***  | Stock Options  | 9/9/2025  | 75000 | 0.265 | 9/9/2030  |
|  **Linda Lee Jacksta<sup>(7)</sup> <br> *Director***  | Stock Options  | 12/30/2024  | 75000 | 0.80 | 12/30/2029  |
|  **Linda Lee Jacksta<sup>(7)</sup> <br> *Director***  | Stock Option  | 4/26/2022  | 7500 | 4.10 | 4/26/2027  |
|  **Linda Lee Jacksta<sup>(7)</sup> <br> *Director***  | Stock Option  | 7/28/2021  | 12500 | 5.50 | 7/28/2026  |
|  **Daryl Rebeck<sup>(8)</sup> <br> *Former Executive Chairman***  | RSU  | 10/16/2023  | 30000 | n/a | 10/16/2028  |
|  **Daryl Rebeck<sup>(8)</sup> <br> *Former Executive Chairman***  | RSU  | 4/26/2022  | 20000 | n/a | 4/26/2027  |
|  **Daryl Rebeck<sup>(8)</sup> <br> *Former Executive Chairman***  | RSU  | 4/7/2021  | 25000 | n/a | 4/7/2026  |
|  **Daryl Rebeck<sup>(8)</sup> <br> *Former Executive Chairman***  | Stock Option  | 12/30/2024  | 350000 | 0.80 | 12/30/2029  |
|  **Daryl Rebeck<sup>(8)</sup> <br> *Former Executive Chairman***  | Stock Option  | 4/26/2022  | 20000 | 4.10 | 4/26/2027  |
|  **Daryl Rebeck<sup>(8)</sup> <br> *Former Executive Chairman***  | Stock Option  | 4/7/2021  | 25000 | 5.00 | 4/7/2026  |
|  **Bryan Cunningham** <br> *President*  | Stock Options  | 9/9/2025  | 150000 | 0.265 | 9/9/2030  |
|  **Bryan Cunningham** <br> *President*  | Stock Options  | 12/30/2024  | 125000 | 0.80 | 12/30/2029  |

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(1) Each stock option represents the right to purchase the specified number of underlying Common Shares for the applicable exercise price during the period beginning on the applicable vesting date and ending on the expiration date. Each RSUs represents the right to elect to receive the specified number of Common Shares upon exercise of the RSU during the period beginning on the grant date and ending on the expiration date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(2) The exercise prices for each stock option is specified in Canadian dollars.

(3) The stock options granted to Mr. Burinescu on 07/02/2025 vest in four quarterly installments during the period beginning on 7/02/2025 and ending on 07/02/2026. The stock options granted on 12/30/2024 vest in eight quarterly installments during the period beginning on 12/30/2024 and ending on 12/30/2026.

(4) The RSU granted to Mr. Frain on 10/16/2023 vested in full on 10/16/2024. The RSU granted to Mr. Frain on 4/26/2022 vested in full on 4/26/2024. The RSU granted to Mr. Frain on 6/10/2021 vested in full on 6/10/2022. The RSU granted to Mr. Frain on 4/7/2021 vested in full on 4/7/2024. The stock options granted to Mr. Frain on 09/09/2025 vest in four quarterly installments during the period beginning on 09/09/2025 and ending on 09/09/2026. The stock options granted to Mr. Frain on 12/30/2024 vest in eight quarterly installments during the period beginning on 12/30/2024 and ending on 12/30/2026. The stock option granted to Mr. Frain on 4/26/2022 vested in eight quarterly installments during the period beginning on 4/26/2022 and ending on 4/26/2024. The stock option granted to Mr. Frain on 4/7/2021 vested in four semiannual installments during the period beginning on 4/7/2021 and ending on 4/7/2023. On 03/17/21, the Company deposited 200,000 Operational Performance Shares into escrow for the benefit of Mr. Frain. These shares will be released upon the achievement of specific performance milestones. Once the milestones are met, the shares will be distributed.

(5) The stock options granted to Mr. Garcia on 09/09/2025 vest in four quarterly installments during the period beginning on 09/09/2025 and ending on 09/09/2026. The stock options granted to Mr. Garcia on 12/30/2024 vest in eight quarterly installments during the period beginning on 12/30/2024 and ending on 12/30/2026. The stock option granted to Mr. Garcia on 10/16/2023 vests in eight quarterly installments during the period beginning on 10/16/2024 and ending on 10/16/2025. The stock option granted to Mr. Garcia on 4/26/2022 vested in eight quarterly installments during the period beginning on 4/26/2022 and ending on 4/26/2024. The stock option granted to Mr. Garcia on 4/7/2021 vested in four semiannual installments during the period beginning on 4/7/2021 and ending on 4/7/2023.

(6) The stock options granted to Mr. Grewal on 09/09/2025 vest in four quarterly installments during the period beginning on 09/09/2025 and ending on 09/09/2026. The stock options granted to Mr. Grewal on 12/30/2024 vest in eight quarterly installments during the period beginning on 12/30/2024 and ending on 12/30/2026. The RSU granted to Mr. Grewal on 10/16/2023 vested in full on 10/16/2024. The stock option granted to Mr. Grewal on 4/26/2022 vested in eight quarterly installments during the period beginning on 4/26/2022 and ending on 4/26/2024. The stock option granted to Mr. Grewal on 4/7/2021 vested in four semiannual installments during the period beginning on 4/7/2021 and ending on 4/7/2023.

(7) The stock options granted to Ms. Jacksta on 09/09/2025 vest in four quarterly installments during the period beginning on 09/09/2025 and ending on 09/09/2026. The stock options granted to Mr. Jacksta on 12/30/2024 vest in eight quarterly installments during the period beginning on 12/30/2024 and ending on 12/30/2026. The RSU granted to Ms. Jacksta on 10/16/2023 vested in full on 10/16/2024. The stock option granted to Ms. Jacksta on 4/26/2022 vested in eight quarterly installments during the period beginning on 4/26/2022 and ending on 4/26/2024. The stock option granted to Ms. Jacksta on 7/28/2021 vested in eight quarterly installments during the period beginning on 7/28/2021 and ending on 7/28/2023.

(8) The stock options granted to Mr. Rebeck on 12/30/2024 vest in eight quarterly installments during the period beginning on 12/30/2024 and ending on 12/30/2026. The RSU granted to Mr. Rebeck on 10/16/2023 vested in full on 10/16/2024. The RSU granted to Mr. Rebeck on 4/26/2022 vested in full on 4/26/2024. The RSU granted to Mr. Rebeck on 4/7/2021 vested in full on 4/7/2024. The stock option granted to Mr. Rebeck on 4/26/2022 vested in eight quarterly installments during the period beginning on 4/26/2022 and ending on 4/26/2024. The stock option granted to Mr. Rebeck on 4/7/2021 vested in four semiannual installments during the period beginning on 4/7/2021 and ending on 4/7/2023.

(9) The stock options granted to Mr. Cunningham on 09/09/2025 vest in four quarterly installments during the period beginning on 09/09/2025 and ending on 09/09/2026. The stock options granted to Mr. Cunningham on 12/30/2024 vest in eight quarterly installments during the period beginning on 12/30/2024 and ending on 12/30/2026.

#### Service Contracts with Executive Officers and Directors
The following are summaries of the terms of all service contracts with the Company's executive officers and directors that provide for benefits upon termination of service, as in effect on December 31, 2025. Our

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service contracts with our non-employee directors do not provide for benefits upon termination of service and, as such, are not described below. These summaries are qualified in their entirety by the terms of the service agreements, which are attached hereto as Exhibits 10.21, 10.22 and 10.23.

#### William Frain — CEO and Director
Mr. Frain is party to an employment agreement dated December 7, 2018 (the "Frain Employment Agreement") with DrawDown Technologies, Inc., a wholly-owned US subsidiary of DrawDown ("DrawDown US"), pursuant to which Mr. Frain serves as the Chief Executive Officer of DrawDown US. Mr. Frain's term of employment under the Frain Employment Agreement (the "Term") began on January 7, 2019, for an initial two-year period that is automatically renewed for successive one-year periods thereafter until terminated by either party. Mr. Frain is entitled to: (i) an annual base salary of US$275,000, subject to annual review and discretionary increase by the Board; (ii) an annual bonus for each year during the Term, based upon the achievement of annual performance goals established by the Board and subject to his continued employment through December 31 of such year; (iii) equity awards under DrawDown's executive equity compensation program; (iv) health insurance coverage, with the employer paying 100% of the cost of individual coverage and 50% of the additional cost for family coverage; (v) other benefits, including, without limitation, retirement savings, dental, disability, employee life, group life, AD&D, travel accident insurance, and fringe benefits, if any, provided by the company and its affiliates, on the same terms and conditions generally applicable to other executives; (vi) 20 vacation days per year; and (vii) business expense reimbursement in accordance with the applicable policy of the company and its affiliates.

Upon his termination of employment for any reason, Mr. Frain is entitled to (i) payment of any earned but unpaid base salary; (ii) reimbursement for any previously incurred but unreimbursed business expenses; and (iii) receipt of any vested or earned amounts or benefits under any benefit plan in which he participates. If Mr. Frain's employment is terminated by the company without "cause" or by Mr. Frain for "good reason" (as such terms are defined in the Frain Employment Agreement), then subject to his execution and non-revocation of a severance agreement and a release of claims, Mr. Frain will also be entitled a lump sum payment equal to the sum of (a) any annual bonus earned but unpaid as of his termination date plus (b) the base salary that, but for such termination of employment, he would have continued receiving until the earlier of (I) the last day of the Term and (II) the first anniversary of his termination date.

#### Omar Garcia Abrego — Chief Financial Officer and Corporate Secretary
Mr. Garcia is party to an executive employment agreement dated January 1, 2025 (the "Garcia Employment Agreement") with the Company. Under the terms of the Garcia Employment Agreement, Mr. Garcia is entitled to: (i) a base salary of C$240,000 per annum from January 1, 2025 to May 31, 2025, which increased to C$310,000 per annum effective June 1, 2025; (ii) a target bonus equal to 30% of base salary, plus a one-time bonus of C$30,000 upon successful NASDAQ uplisting, and an additional performance-based bonus of up to C$20,000 for 2025 subject to the achievement of certain goals and objectives during 2025; (iii) participation in the Company's stock option plan and other equity-based incentive programs, subject to Board and regulatory approval; (iv) five weeks of paid vacation per calendar year; (v) employee health and benefit coverage as per the Company's standard plans; and (vi) reimbursement for professional development and designation-related membership dues.

If terminated without cause, Mr. Garcia is entitled to: (i) continuation of benefits for 12 months; (ii) acceleration of all unvested equity awards and at least 90 days to exercise such awards; (iii) payment of any accrued but unused vacation; (iv) a severance payment equal to twelve months' compensation and bonus, subject to execution of a full release. In the event of termination within one year following a Change of Control (and under specific qualifying conditions), Mr. Garcia is entitled to the same termination entitlements as set out above under a "termination without cause."

Mr. Garcia is also bound by standard non-solicitation and confidentiality provisions and has fiduciary obligations consistent with his role as CFO of a public company.

Prior to his employment agreement, Mr. Gracia was party to a consulting agreement dated January 1, 2022, (the "Consulting Agreement") with the Company, pursuant to which Mr. Garcia serves as the Company's Chief Financial Officer and Corporate Secretary. The term of the Consulting Agreement (the

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"Term") began on January 1, 2022, and continued until its replacement by the Garcia Employment Agreement. During the Term, Mr. Garcia was entitled to (i) a fee of C$11,000 per month for consulting services (plus any taxes payable on such services), subject to not less than annual review and discretionary increase by the Company; (ii) bonuses based on the achievement of performance goals determined by the Company's Chief Executive Officer and approved by the Company's Compensation Committee; (iii) stock options granted from time to time at the discretion of the Board; and (iv) business expense reimbursement in accordance with the Company's guidelines, as in effect from time to time. The Consulting Agreement also imposed obligations on Mr. Garcia to protect the Company's confidential information, assign intellectual property rights to the Company, and refrain from soliciting the Company's employees, independent contractors, consultants, suppliers, licensors, licensees, contractors, agents, strategic partners, or other providers of products or services to the Company from terminating or modifying such relationships for a 12-month period following termination of the Consulting Agreement for any reason.

Mr. Garcia was permitted to terminate the Consulting Agreement and resign from his position as CFO and Corporate Secretary for any reason by providing the Company two months' written notice. The Company was able to waive such notice in whole or in part by paying Mr. Garcia an amount equal to the fees for the balance of such two-month notice period. The Company was permitted to terminate the Consulting Agreement at any time with or without "just cause" (as defined in the Consulting Agreement). If the Consulting Agreement had been terminated by Mr. Garcia for any reason or by the Company for just cause, Mr. Garcia would not have been entitled to any severance payments or unearned bonuses (other than any payments in lieu of notice described above).

If the Company had terminated the Consulting Agreement without just cause, Mr. Garcia would have been entitled to the following benefits: (i) accelerated vesting of all outstanding unvested equity awards, which would have remained exercisable for period of not less than 90 days thereafter; and (ii) pay in lieu of notice equal to the sum of (a) three months of fees plus (b) an additional one month of fees for each full year that Mr. Garcia had been engaged by the Company, up to an aggregate maximum of six months of fees.

In lieu of the foregoing, if the Consulting Agreement had been terminated by the Company without just cause or by Mr. Garcia for "good reason" (as defined in the Consulting Agreement) within one year following a "change of control" (as defined in the Consulting Agreement), Mr. Garcia would have been entitled to a lump sum termination payment equal to two times the amount that he would have received if the Company had terminated the Consulting Agreement outside of such one-year period, up to an aggregate maximum of twelve months of fees.

#### Daryl Rebeck — Former Executive Chairman
Prior to his resignation on February 24, 2025, Mr. Rebeck was party to an employment agreement dated June 1, 2021 (the "Rebeck Employment Agreement") with the Company, pursuant to which Mr. Rebeck served as the Company's Executive Chairman and a Senior Member of the Executive Team. During the term of the Rebeck Employment Agreement, Mr. Rebeck was entitled to: (i) an annual salary of C$240,000; (ii) bonuses equal to one percent (1%) of any equity raised for the Company during financing activities; (iii) a family health coverage plan that covers health, dental and vision; (iv) stock options and RSUs as may be approved by the Board and the regulatory bodies; (v) 20 vacation days per year; and (vi) reimbursement of reasonable business expenses in accordance with the Company's policies in effect from time to time. On January 1, 2024, Mr. Rebeck was furloughed by the Company, and the Rebeck Employment Agreement was amended to temporarily suspend salary payments but not medical benefits. Mr. Rebeck's salary payments were reinstated in February 2024.

Either party could terminate the Rebeck Employment Agreement for just cause or due to the other party's material default of any obligation, representation, or warranty thereunder. Upon termination of the Rebeck Employment Agreement for any reason, Mr. Rebeck was entitled to his monthly salary for the month in which such termination occurred. In addition, if the Company terminated the Rebeck Employment Agreement for any reason other than just cause or Mr. Rebeck's material default of any obligation, representation, or warranty thereunder, Mr. Rebeck would be entitled to a termination fee equal to six months' base salary plus six months of benefits.

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#### Oversight and Description of Executive Officer and Director Compensation
The Compensation Committee is charged with reviewing, overseeing and evaluating our compensation policies, and the Corporate Governance Committee is charged with reviewing, overseeing and evaluating our governance and nominating policies. Our compensation policies and programs are designed to be competitive with comparable companies in the defense technology industry and to recognize and reward executive performance consistent with the success of our business. These policies and programs are intended to attract and retain capable and experienced people. Our compensation policy is to ensure that our compensation goals and objectives, as applied to the actual compensation paid to our CEO and other executive officers, are aligned with our overall business objectives and with shareholder interests.

#### Securities Authorized for Issuance under Equity Compensation Plans
The following table sets forth equity compensation plan information of our issued and outstanding share capital as of December 31, 2025.

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| | | | |
|:---|:---|:---|:---|
| **Plan Category**  | **Number of securities to <br> be issued upon exercise of <br> outstanding options, deferred <br> share units and <br> restricted share units <br> (a)**  | **Weighted-average <br> exercise price of <br> outstanding options, <br> deferred share units <br> and restricted <br> share units <br> (b)**  | **Number of securities <br> remaining available <br> for future issuance <br> under equity <br> compensation plans <br> (excluding securities <br> reflected in column (a)) <br> (c)**  |
|  Equity compensation plans approved by the securityholders – Omnibus Long-Term Incentive Plan  | <br>Options: 4,987,500 <br> DSUs: nil <br> RSUs: 693,927  | <br>Options: C$0.80 <br> DSUs: N/A <br> RSUs: N/A  | <br>2,853,617 combined  |
|  Equity compensation plans not approved by the securityholders  | N/A  | N/A  | N/A  |
| **Total**  | Options: 4,987,500 <br> DSUs: nil <br> RSUs: 693,927  | Options: C$0.80 <br> DSUs: N/A <br> RSUs: N/A  | 2,853,617 combined  |

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#### MAJOR SHAREHOLDERS

#### Major Shareholders
To the knowledge of our directors and executive officers, as of January 28, 2026, there are no persons or corporations that beneficially owned, directly or indirectly, or exercised control or direction over, Common Shares carrying 5% or more of the voting rights attached to all our outstanding Common Shares.

There have not been any significant changes in the percentage ownership by persons who beneficially own 5% of the outstanding voting rights attached to our Common Shares in the last three (3) years.

Our major shareholders do not have different voting rights from other shareholders. Based on available information, as of January 28, 2026, there were a total of 88 record holders of our Common Shares, holding a total of 89,293,651 Common Shares. In addition, based on available information, as of January 28, 2026, 49 of the record holders were residents of the United States, holding a total of 2,269,592 Common Shares, which represents approximately 2.54% of our total issued and outstanding Common Shares.

We are a publicly owned company, and our Common Shares are owned by Canadian residents, United States residents, and residents of other countries. To our knowledge, we are not directly owned or controlled by another corporation, any foreign government or any other natural or legal person(s), whether severally or jointly. We are not aware of any arrangement, the operation of which may result in a change of control of us.

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#### CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
We have adopted an audit committee charter, which requires the Audit Committee to review all related-party transactions on an ongoing basis and to approve all such transactions in accordance with applicable legal and regulatory requirements. In addition to the executive officer and director compensation arrangements discussed in "*Executive Compensation*," we describe below each material transaction, or series of related transactions, since January 1, 2023, to which we have been a party, and in which any director, executive officer, major shareholder, or their immediate family members or affiliates had a direct or indirect material interest. For purposes of this disclosure, a related party includes: (a) enterprises that directly or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, our company; (b) associates; (c) individuals owning, directly or indirectly, an interest in the voting power of our company that gives them significant influence over our company, and close members of any such individual's family; (d) key management personnel, that is, those persons having authority and responsibility for planning, directing and controlling the activities of our company, including directors and senior management of companies and close members of such individuals' families; and (e) enterprises in which a substantial interest in the voting power is owned, directly or indirectly, by any person described in (c) or (d) or over which such a person is able to exercise significant influence.

#### Private Placement Participation by a Related Party
We closed a non-brokered private placement on June 8, 2023, whereby a total of 1,021,606 units were purchased at a purchase price of C$2.00 per share, with a total 510,803 share purchase warrants at an exercise price of C$3.00 per share, which expired on June 9, 2025. Daryl Rebeck, Former Executive Chairman, participated in this private placement as to a purchase of 50,000 units for an aggregate purchase price of CAD$100,000. This participation was reviewed and approved in accordance with our related party transaction policy.

#### Related Party Loans
Since January 1, 2023, we have received an aggregate of approximately US$787,908 in working capital loans from Jay Adelaar, our Senior Vice President of Capital Markets; Nicole Ridgedale, the spouse of Daryl Rebeck, our former Board chair; and Jennifer Frain, the spouse of Bill Frain, our Chief Executive Officer. These loans were unsecured, non-interest bearing and lack specified maturity dates. As of September 30, 2025, there was no outstanding balance on these working capital loans.

These loans were reviewed and approved in accordance with applicable legal and regulatory requirements. The terms were considered fair and reasonable to us and no more favorable than terms available from third parties.

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#### SHARES ELIGIBLE FOR FUTURE SALE
Our Common Shares are listed on the TSXV under the symbol "SCAN," quoted on the OTCQB under the symbol of "LDDFF" and listed on the FSE under the symbol of "E30." Upon completion of this offering, we will have Common Shares issued and outstanding (or Common Shares if the underwriter exercises the Over-Allotment Option in full). All of the Common Shares sold in this offering will be freely transferable by persons other than by our "affiliates" without restriction or further registration under the Securities Act. The remaining Common Shares will be "restricted securities," as that term is defined in Rule 144 under the Securities Act. Subject to the lock-up agreements described below, these restricted securities are eligible for public sale only if they are registered under the Securities Act or if they qualify for an exemption from registration under Rule 144 or Rule 701 under the Securities Act, which are summarized below. Restricted securities may also be sold outside of the United States to non-U.S. persons in accordance with Rule 904 of Regulation S. Future sales of substantial amounts of our Common Shares in the public market, or the perception that such sales may occur, could adversely affect market prices prevailing from time to time.

In addition, as of September 30, 2025, (i) up to an aggregate of 29,461,363 Common Shares are issuable upon the exercise of outstanding common share purchase warrants, which are exercisable at a weighted average exercise price of C$0.87 per Common Share, (ii) up to an aggregate of 5,207,500 Common Shares are issuable upon the exercise of outstanding stock options at a weighted average exercise price of C$0.79 per Common Share and (iii) up to an aggregate of 382,225 Common Shares issuable with respect to outstanding RSUs, which are subject to vesting. Any Common Shares underlying warrants, options or RSUs held by our directors and officers will be subject to the lock-up agreement described below under "*Lock-Up Agreements.*"

#### Rule 144
In general, under Rule 144 as currently in effect, once we have been subject to the public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, a person who is not deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least six months, including the holding period of any prior owner other than our affiliates, is entitled to sell those shares without complying with the manner of sale, volume limitation or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then that person would be entitled to sell those shares without complying with any of the requirements of Rule 144.

In general, under Rule 144, as currently in effect, our affiliates or persons selling shares on behalf of our affiliates are entitled to sell, within any three-month period, a number of Common Shares that does not exceed the greater of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • 1% of the number of Common Shares then outstanding, which will equal approximately Common Shares immediately after this offering; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the average weekly trading volume of our Common Shares on Nasdaq during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales under Rule 144 by our affiliates or persons selling shares of our Common Shares on behalf of our affiliates are also subject to certain manner-of-sale provisions and notice requirements and to the availability of current public information about us.

#### Rule 701
In general, under Rule 701 of the Securities Act as currently in effect, each of our employees, consultants or advisors who purchases Common Shares from us in connection with a compensatory stock plan or other written agreement executed prior to the completion of this offering is eligible to resell those Common Shares in reliance on Rule 144, but without compliance with some of the restrictions, including the holding

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period, contained in Rule 144. However, the Rule 701 shares would remain subject to lock-up agreements described below and would only become eligible for sale when the lock-up period expires.

#### Registration Statements on Form S-8
Following the completion of this offering, we may file one or more registration statements on Form S-8 under the Securities Act, which would become effective immediately upon filing, to register all of the Common Shares reserved for issuance under our equity incentive plans that may be in effect from time to time. Shares covered by these registration statements will then be eligible for sale in the public markets, subject to vesting restrictions, any applicable lock-up agreements described below and Rule 144 limitations applicable to affiliates.

#### Lock-up Agreements
We and our directors and executive officers have agreed, subject to certain exceptions, not to sell or otherwise dispose of Common Shares or any securities convertible into or exchangeable for Common Shares for a period of one hundred eighty (180) days after the closing of this offering without the prior written consent of the underwriter. See "*Underwriting.*"

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#### UNDERWRITING
We will enter into an underwriting agreement with The Benchmark Company, LLC, acting as the underwriter in this offering ("Benchmark" or the "underwriter"). Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriter, and the underwriter has agreed to purchase from us the number of Common Shares set forth opposite its name in the following table at the initial public offering price less the underwriting discounts set forth in the cover page of this prospectus:

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| | |
|:---|:---|
| **Underwriter**  | **Number of <br> Shares**  |
| The Benchmark Company, LLC  | |
| TOTAL  |  |

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The underwriter has committed to purchase all of the shares offered by us other than those shares covered by the Over-Allotment Option described below, if it purchases any shares. The obligations of the underwriter may be terminated upon the occurrence of certain events specified in the underwriting agreement. Furthermore, pursuant to the underwriting agreement, the underwriter's obligations are subject to customary conditions, representations and warranties contained in the underwriting agreement, such as receipt by the underwriter of officers' certificates and legal opinions.

We have agreed to indemnify the underwriter against specified liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriter may be required to make in respect of those liabilities.

The underwriter is offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by its counsel and other conditions contained in the underwriting agreement. The underwriter reserves the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

#### Over-Allotment Option
We have granted the underwriter an option to purchase from us, at the initial public offering price less the underwriting discounts and commissions, up to an additional Common Shares, solely to cover over-allotments, if any. The underwriter may exercise the Over-Allotment Option, in whole or in part, for our Common Shares, any time during the 30-day period from the date of the closing of this offering. If this option is exercised in full, the total price to the public will be $ and the total net proceeds before expenses to us will be $.

#### Underwriting Discount, Commissions and Expenses
The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriter. These amounts are shown assuming both no exercise and full exercise of the Over-Allotment Option.

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| | | | |
|:---|:---|:---|:---|
| | **Total**  | **Total**  | **Total**  |
| | **Per Share**  | **No Exercise**  | **Full Exercise**  |
| Initial public offering price  |  | $— | $— |
| Underwriting discounts and commissions  |  | $— | $— |
| Proceeds, before expenses, to us  |  | $— | $— |

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The underwriter has advised us that it proposes initially to offer the shares to the public at the initial public offering price set forth on the cover page of this prospectus and to dealers at that price less a concession not in excess of $ per share. After the initial public offering, the public offering price, concession and discount may be changed.

We have agreed to pay all of the reasonable, necessary and accountable out-of-pocket expenses relating to the offering, including Benchmark's out-of-pocket and accountable expenses up to a maximum aggregate allowance of $175,000 (including, but not limited to, the fees and expenses of its legal counsel up to $150,000).

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We have paid a $25,000 expense advance to the underwriter, which shall be applied against actual out-of-pocket-accountable expenses, which will be returned to us to the extent such out-of-pocket accountable expenses are not actually incurred in accordance with FINRA Rule 5110(g)(4)(A).

We estimate that the total expenses of the offering payable by us, excluding the total underwriting discount, will be approximately $.

#### Discretionary Accounts
The underwriter does not intend to confirm sales of the shares offered hereby to any accounts over which they have discretionary authority.

#### Lock-Up Agreements
Our officers and directors have agreed not to, without the prior written consent of the underwriter, directly or indirectly, offer to sell, sell or otherwise transfer or dispose of any Common Shares (or enter into any transaction or device that is designed to, or could be expected to, result in the transfer or disposition by any person at any time in the future of our Common Shares), enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of Common Shares, make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any of Common Shares or securities convertible into or exercisable or exchangeable for Common Shares or any other of our securities or publicly disclose the intention to do any of the foregoing, subject to customary exceptions, for a period of one hundred eighty (180) days from the date of closing of this offering.

Unless otherwise agreed by the underwriter, we have agreed that for a period of one hundred eighty (180) days from the closing of this offering, each of us and our successors will not, subject to certain exceptions, (a) offer, sell, or otherwise transfer or dispose of, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; or (b) file or caused to be filed any registration statement with the SEC relating to the offering of any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock.

#### Tail Financing
We have agreed that Benchmark shall be entitled to compensation with respect to future financings consummated solely with respect to investors (a) with whom the Company has had a conference call or a meeting arranged by *Benchmark* during the term of Benchmark's engagement with the Company and (b) provided that the future financing is consummated at any time within the nine (9) month period following the earlier to occur of the expiration or termination of the engagement letter between *Benchmark* and the Company or the closing of this offering; provided however, the Company would not be required to pay Benchmark such fee if Benchmark is terminated for cause by the Company as provided in FINRA Rule 5110(g)(5)(B).

#### Right of First Refusal
We have granted Benchmark the right to act as lead or joint investment banker, lead or joint book-runner, lead or joint placement agent, and/or investment banker/advisor, for any of our future public equity offerings, including all equity linked financings, during the six (6) month period following the completion of this initial public; provided however, such right shall be terminated if Benchmark is terminated for cause by the Company as provided in FINRA Rule 5110(g)(5)(B).

#### Determination of Offering Price
The public offering price was negotiated between Benchmark and us. In determining the initial public offering price of our Common Shares, Benchmark considered:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the history and prospects for the industry in which we compete;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our financial information;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the ability of our management and our business potential and earning prospects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the prevailing securities markets at the time of this offering; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the recent market prices of, and the demand for, publicly traded shares of generally comparable companies, as well as the recent market price of our Common Shares.

#### Stabilization

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Stabilizing transactions permit bids to purchase securities so long as the stabilizing bids do not exceed a specified maximum and are engaged in for the purpose of preventing or retarding a decline in the market price of the securities while the offering is in progress.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Syndicate covering transactions involve purchases of securities in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of securities to close out the short position, the underwriter will consider, among other things, the price of securities available for purchase in the open market as compared with the price at which they may purchase securities through exercise of the option. If the underwriter sells more securities than could be covered by exercise of the option and, therefore, has a naked short position, the position can be closed out only by buying securities in the open market. A naked short position is more likely to be created if the underwriter is concerned that after pricing there could be downward pressure on the price of the securities in the open market that could adversely affect investors who purchase in the offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Penalty bids permit the underwriter to reclaim a selling concession from a syndicate member when the securities originally sold by that syndicate member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our securities or preventing or retarding a decline in the market price of our securities. As a result, the price of our securities in the open market may be higher than it would otherwise be in the absence of these transactions. Neither we nor the underwriter make any representation or prediction as to the effect that the transactions described above may have on the price of our securities. These transactions may be effected on Nasdaq, in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.

#### Passive Market Making
In connection with this offering, the underwriter may engage in passive market making transactions in our Common Shares. Passive market making consists of displaying bids limited by the prices of independent market makers and effecting purchases limited by those prices in response to order flow. Rule 103 of Regulation M promulgated by the SEC limits the amount of net purchases that each passive market maker may make and the displayed size of each bid. Passive market making may stabilize the market price of the Common Shares at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.

#### Other Relationships
The underwriter and its affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. The underwriter and its respective affiliates have provided, and may in the future provide, a variety of these services to us and to persons and entities with relationships with us, for which they received or will receive customary fees and expenses.

#### Electronic Distribution
A prospectus in electronic format may be made available on the internet sites or through other online services maintained by the underwriter or its affiliates. In those cases, prospective investors may view offering

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terms online and, depending upon the underwriter, prospective investors may be allowed to place orders online. The underwriter may agree with us to allocate a specific number of Common Shares for the sale to online brokerage account holders. Any such allocation for online distributions will be made by the underwriter on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriter's website and any information contained in any other website maintained by the underwriter is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or the underwriter in its capacity as underwriter and should not be relied upon by investors.

#### Offer Restrictions Outside the United States
Other than in the United States, no action has been taken by us or the underwriter that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

#### Listing
We have applied to list the Common Shares being offered hereby on Nasdaq under the symbol "LDHL." No assurance can be given that our application will be approved. It is a condition precedent to the underwriter's obligation to purchase the Common Shares being offered in this offering that Nasdaq approve the listing of our Common Shares. Accordingly, if Nasdaq does not approve the listing of our Common Shares, we will not proceed with this offering. Our Common Shares are currently listed on the TSXV under the symbol "SCAN," quoted on the OTCQB under the symbol of "LDDFF" and listed on the FSE under the symbol of "E30."

#### Transfer Agent and Registrar
The transfer agent and registrar of the Common Shares is Computershare Investor Services Inc., located at its offices in Vancouver, British Columbia, Canada.

#### Selling Restrictions

#### Canada
The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45 106 *Prospectus Exemptions* or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31 103 *Registration Requirements, Exemptions and Ongoing Registrant Obligations*. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for particulars of these rights or consult with a legal advisor.

Pursuant to section 3A.3 of National Instrument 33 105 *Underwriting Conflicts* (NI 33 105), the underwriter is not required to comply with the disclosure requirements of NI 33 105 regarding underwriter conflicts of interest in connection with this offering.

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#### European Economic Area
In relation to each Member State of the European Economic Area (each, a "Member State"), no Common Shares have been offered or will be offered pursuant to this offering to the public in that Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Member State or, where appropriate, approved in another Member State and notified to the competent authority in that Member State, all in accordance with the Prospectus Regulation (as defined herein), except that offers of shares may be made to the public in that Member State at any time under the following exemptions under the Prospectus Regulation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to any legal entity which is a qualified investor as defined under Article 2 of the Prospectus Regulation (as defined herein);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation), subject to obtaining the prior consent of the underwriter for any such offer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • in any other circumstances falling within Article 1(4) of the Prospectus Regulation, provided that no such offer of Common Shares shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation and each person who initially acquires any shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and with each of the representatives and us that it is a "qualified investor" as defined in the Prospectus Regulation.

In the case of any Common Shares being offered to a financial intermediary as that term is used in Article 5 of the Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the shares acquired by it in the offer have not been acquired on a nondiscretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any Common Shares to the public other than their offer or resale in a Member State to qualified investors as so defined or in circumstances in which the prior consent of the representatives has been obtained to each such proposed offer or resale.

For the purposes of this provision, the expression an "offer to the public" in relation to any Common Shares in any Member State means the communication in any form and by means of sufficient information on the terms of the offer and the Common Shares to be offered so as to enable an investor to decide to purchase Common Shares, and the expression "Prospectus Regulation" means Regulation (EU) 2017/1129 (as amended).

#### United Kingdom
No Common Shares have been offered or will be offered pursuant to the offering to the public in the United Kingdom prior to the publication of a prospectus in relation to the Common Shares which has been approved by the Financial Conduct Authority, except that the Common Shares may be offered to the public in the United Kingdom at any time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to any legal entity which is a qualified investor as defined under Article 2 of the UK Prospectus Regulation (as defined herein);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the UK Prospectus Regulation), subject to obtaining the prior consent of the underwriter for any such offer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • in any other circumstances falling within Section 86 of the Financial Services and Markets Act 2000 ("FSMA")

*provided* that no such offer of the Common Shares shall require any underwriter to publish a prospectus pursuant to Section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.

For the purposes of this provision, the expression an "offer to the public" in relation to the Common Shares in the United Kingdom means the communication in any form and by any means of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide to

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purchase or subscribe for any Common Shares and the expression "UK Prospectus Regulation" means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 and each person who initially acquires any Common Shares or to whom any offer is made will be deemed to have represented, warranted and agreed to and with each of the underwriter and us that it is a qualified investor within the meaning of Article 2(e) of the UK Prospectus Regulation.

Each person in the UK who receives any communication in respect of, or who acquires any of our Common Shares under, the offers to the public contemplated in this prospectus, or to whom our Common Shares are otherwise made available, will be deemed to have represented, warranted, acknowledged, and agreed to and with us, the underwriter, and its affiliates that it meets the criteria outlined in this section.

This prospectus is only for distribution to and directed at: (i) in the United Kingdom, persons having professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") and high net worth entities falling within Article 49(2)(a) to (d) of the Order; (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc.") of the Financial Promotion Order; (iii) persons who are outside the United Kingdom; and (iv) persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "Relevant Persons"). The Common Shares will only be available to, and any invitation, offer, or agreement to subscribe for, purchase, or otherwise acquire such shares will be engaged only with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this prospectus or any of its contents.

#### Switzerland
The shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange, or the SIX, or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering or marketing material relating to the offering, or the shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA, and the offer of shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes, or CISA. Accordingly, no public distribution, offering or advertising, as defined in CISA, its implementing ordinances and notices, and no distribution to any non-qualified investor, as defined in CISA, its implementing ordinances and notices, shall be undertaken in or from Switzerland, and the investor protection afforded to acquirers of interests in collective investment schemes under CISA does not extend to acquirers of shares.

#### Australia
No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission, or the ASIC, in relation to the offering.

This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001, or the Corporations Act, and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.

Any offer in Australia of the shares may only be made to persons, the Exempt Investors, who are "sophisticated investors" (within the meaning of section 708(8) of the Corporations Act), "professional investors" (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or

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more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.

The shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian on-sale restrictions.

This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.

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#### LIMITATIONS ON RIGHTS OF NON-CANADIANS
We are incorporated pursuant to the laws of the Province of British Columbia, Canada. There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of Common Shares, other than withholding tax requirements. Any such remittances to United States residents are generally subject to withholding tax, however no such remittances are likely in the foreseeable future. See "*Certain Canadian Federal Income Tax Considerations*" below.

There is no limitation imposed by Canadian law or by the charter or other constituent documents of our company on the right of a non-resident to hold or vote Common Shares. However, the Investment Canada Act has rules regarding certain acquisitions of shares by non-Canadians, along with other requirements under that legislation.

The following discussion summarizes the principal features of the Investment Canada Act for a non-Canadian (as defined under the Investment Canada Act) who proposes to acquire Common Shares in this offering. The discussion is general only; it is not a substitute for independent legal advice from an investor's own advisor; and it does not anticipate statutory or regulatory amendments.

The Investment Canada Act is a federal statute of broad application regulating the establishment and acquisition of Canadian businesses by non-Canadians, including individuals, governments or agencies thereof, corporations, partnerships, trusts or joint ventures (each an "entity"). Investments by non-Canadians to acquire control over existing Canadian businesses or to establish new ones are either reviewable or notifiable under the Investment Canada Act. If an investment by a non-Canadian to acquire control over an existing Canadian business that is not a Canadian "cultural business" is reviewable under the Investment Canada Act, the Investment Canada Act generally prohibits implementation of the investment unless, after review, the Minister of Innovation, Science and Industry (the "Minister") is satisfied that the investment is likely to be of net benefit to Canada.

A non-Canadian would acquire control of our company for the purposes of the Investment Canada Act through the acquisition of our Common Shares if the non-Canadian acquired a majority of the voting interests in our company.

Further, the acquisition of less than a majority but one-third or more of the voting interests in our company by a non-Canadian would be presumed to be an acquisition of control of our company unless it could be established that, on the acquisition, our company was not controlled in fact by the acquirer through the ownership of such voting interests.

For a direct acquisition that would result in an acquisition of control of our company, subject to the exception for "WTO investors" that are controlled by persons who are nationals or permanent residents of World Trade Organization ("WTO") member nations, a proposed investment generally would be reviewable where the value of the acquired assets is C$5 million or more.

For a proposed indirect acquisition by an investor other than a so-called "WTO" investor that would result in an acquisition of control of our company through the acquisition of a non-Canadian parent entity, the investment generally would be reviewable where the value of the assets of the entity carrying on the Canadian business, and of all other entities in Canada, the control of which is acquired, directly or indirectly is C$50 million or more.

In the case of a direct acquisition by a "WTO investor" that is not a state-owned enterprise, the threshold is significantly higher. An investment in our Common Shares by a WTO investor that is not a state-owned enterprise would be reviewable only if it was an investment to acquire control of our company and the enterprise value of our assets was equal to or greater than a specified amount, which is published by the Minister after its determination for any particular year. For 2025, this amount is C$1.386 billion (unless the investor is controlled by persons who are nationals or permanent residents of countries that are party to one of a list of certain free trade agreements, in which case the amount is C$2.079 billion for 2025); each year, both thresholds are adjusted by a GDP (Gross Domestic Product) based index.

The higher WTO threshold for direct investments and the exemption for indirect investments do not apply where the relevant Canadian business is carrying on a "cultural business". The acquisition of a

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Canadian business that is a "cultural business" is subject to lower review thresholds under the Investment Canada Act because of the perceived sensitivity of the cultural sector. We do not believe that our company is a Canadian cultural business as the term "cultural business" is defined in the Investment Canada Act.

If the Minister has reasonable grounds to believe that an investment by a non-Canadian "could be injurious to national security", the Minister may send the non-Canadian a notice indicating that an order for review of the investment may be made. The review of an investment on the grounds of national security may occur whether or not an investment is otherwise subject to review on the basis of net benefit to Canada or otherwise subject to notification under the Investment Canada Act.

Certain transactions, except those to which the national security provisions of the Investment Canada Act may apply, relating to the acquisition of our Common Shares, are exempt from the Investment Canada Act, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)

the acquisition of our Common Shares by a person in the ordinary course of that person's business as a trader or dealer in securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)

the acquisition of control of our company in connection with the realization of security granted for a loan or other financial assistance and not for a purpose related to the provisions of the Investment Canada Act, if the acquisition is subject to approval under the *Bank Act*, the *Cooperative Credit Associations Act*, the *Insurance Companies Act* or the *Trust and Loan Companies Act*; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)

the acquisition of control of our company by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of our company, through the ownership of voting interests, remains unchanged.

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#### DESCRIPTION OF SHARE CAPITAL
 *The following description of the material terms of our securities includes a summary of specified provisions of our Notice of Articles (the "Articles"). This description is qualified by reference to the Articles, a copy of which has been filed with the SEC as an exhibit to the registration statement of which this prospectus forms a part.* 

#### Authorized Capital
Our authorized capital consists of an unlimited number of Common Shares, no par value. We are not authorized to issue any preferred shares.

#### Common Shares
All of our issued Common Shares are fully paid and non-assessable. We do not own any of our Common Shares.

As of January 28, 2026 and September 30, 2025, there were 89,293,651 and 71,984,222 Common Shares, respectively, issued and outstanding.

#### Warrants
As of January 28, 2026 and September 30, 2025, there were 36,514,876 and 29,461,363 Common Share purchase warrants, respectively, outstanding with a weighted average exercise price of C$0.75 and C$0.87, respectively. As of January 28, 2026, the following Common Share purchase warrants are outstanding:

---

| | | |
|:---|:---|:---|
| **Number of Warrants**  | **Exercise <br> Price (C$)**  | **Expiry Date**  |
| 15305422 | $0.35 | July 28, 2026  |
| 1782764  | $3.00 | October 5, 2026  |
| 60723  | $2.00 | October 5, 2026  |
| 2032312  | $0.55 | December 18, 2026  |
| 526566 | $1.51 | January 12, 2027  |
| 15171 | $2.00 | January 12, 2027  |
| 100000  | $1.51 | February 5, 2027  |
| 909091  | $2.00 | February 28, 2027  |
| 212170  | $1.65 | March 20, 2027  |
| 1515500  | $2.05 | March 20, 2027  |
| 19051  | $2.00 | June 27, 2027  |
| 465033  | $1.51 | August 13, 2027  |
| 144674  | $2.75 | October 27, 2027  |
| 958335  | $5.00 | October 27, 2027  |
| 7941671 | $0.30 | December 31, 2027  |
| 356162 | $0.30 | December 31, 2027  |
| 3943207 | $0.30 | January 15, 2028  |
| 227024 | $0.30 | January 15, 2028  |

---

#### Options
As of January 28, 2026 and September 30, 2025, there were 4,987,500 and 5,207,500 options, respectively, to purchase Common Shares outstanding with a weighted average exercise price of C$0.80 and C$0.79, respectively, which have been issued to our directors, officers, employees, and consultants pursuant to the terms and conditions of the Incentive Plan, which is described in detail under "*Executive Compensation*." As of January 28, 2026, the following options are outstanding:

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| | | |
|:---|:---|:---|
| **Number of Options**  | **Exercise <br> Price (C$)**  | **Expiry Date**  |
| 83000  | $5.00 | April 7, 2026  |
| 12500 | $5.50 | July 28, 2026  |
| 5000 | $6.50 | July 28, 2026  |
| 42500  | $4.60 | November 1, 2026  |
| 10000  | $3.60 | January 14, 2027  |
| 50000 | $0.59 | April 15, 2027  |
| 118500  | $4.10 | April 26, 2027  |
| 6000  | $2.20 | November 21, 2027  |
| 5000  | $1.80 | April 26, 2028  |
| 80000  | $1.90 | October 16, 2028  |
| 2325000  | $0.80 | December 30, 2029  |
| 150000 | $0.84 | April 30, 2030  |
| 250000 | $0.24 | July 2, 2027  |
| 1850000 | $0.265 | September 9, 2030  |

---

#### Restricted Share Units
As of January 28, 2026 and September 30, 2025, there were 693,927 and 382,225 outstanding RSUs, respectively. As of January 28, 2026, the following RSUs are outstanding:

---

| | | |
|:---|:---|:---|
| **Number of RSUs<sup>(1)</sup>**  | **Exercise <br> Price (C$)**  | **Expiry Date**  |
| 25000 | N/A | April 7, 2026  |
| 20875 | N/A | June 10, 2026  |
| 15000 | N/A | January 14, 2027  |
| 10000 | N/A | April 24, 2027  |
| 133850 | N/A | October 16, 2028  |
| 117500 | N/A | February 28, 2029  |
| 50000 | N/A | January 1, 2029  |
| 321702 | N/A | December 12, 2029  |

---

(1) There are 372,225 restricted share units that are exercisable.

A reconciliation of the number of Common Shares outstanding at the beginning and end of the fiscal period ended September 30, 2025 can be found in Note 12 of our amended and restated unaudited condensed consolidated interim financial statements for the fiscal period ended September 30, 2025 included elsewhere in this prospectus.

#### Changes in Our Share Capital During the Last Three Fiscal Years
Unless otherwise indicated, each "unit" consisted of one Common Share and either one-half or one whole Common Share purchase warrant. "Special warrants" automatically convert into units on the stated terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Fiscal year ended December 31, 2023: We issued an aggregate of 2,858,870 Common Shares, consisting of (i) 1,026,106 shares issued in three non-brokered private placement tranches on April 14, 2023, May 9, 2023, and June 8, 2023 (C$2.00 per unit); (ii) 1,782,764 shares issued in a non-brokered private placement on October 5, 2023 (C$2.00 per unit); and (iii) 50,000 shares issued as a corporate finance fee on October 5, 2023.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Fiscal year ended December 31, 2024: We issued an aggregate of 28,788,535 Common Shares, consisting of (i) 1,599,159 shares issued in two tranches of a private placement on January 15, 2024 and February 5, 2024 (C$1.50 per unit;), and 909,091 shares issued to Viken on February 26, 2024 (C$1.50 per unit; each unit including one share and one warrant); (ii) 101,841 shares issued on settlement of RSUs on March 22, 2024, May 23, 2024, September 25, 2024, October 16, 2024, November 19, 2024 and November 29, 2024; (iii) 60,000 shares issued upon warrant exercises on April 29, 2024, May 1, 2024, May 7, 2024 and May 8, 2024; (iv) 1,562,500 shares issued on December 10, 2024 in settlement of indebtedness through the issuance of units; and (v) 25,000,000 shares issued on December 18, 2024 in a non-brokered private placement at C$0.32 per unit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Fiscal year ending December 31, 2025: We issued an aggregate of 42,005,597 Common Shares, consisting of (i) 5,414,275 shares issued upon the exercise of warrants on January 13, 2025; (ii) 214,100 shares issued on settlement of RSUs on January 23, 2025, February 18, 2025, February 21, 2025, March 3, 2025, May 20, 2025 and December 8, 2025; (iii) 3,034,500 shares issued in connection with warrant exercises and an overnight marketed public offering, including 3,031,000 shares issued on March 20, 2025 in an offering of units at C$1.65 per unit and 3,500 shares issued upon warrant exercise on April 1, 2025; (iv) 20,000,000 shares issued on July 29, 2025 in a non-brokered private placement at C$0.22 per unit; (v) 5,414,551 shares issued upon the exercise of warrants between October 7, 2025 and November 4, 2025; and (iv) 7,941,671 shares issued on December 31, 2025 in a non-brokered private placement at C$0.22 per unit.

#### Notice of Articles

#### Objects and Purposes
The Articles do not contain a description of our objects and purposes. There is no restriction contained in our Articles on the business that we may carry on.

#### Voting on Certain Proposal, Arrangement, Contract or Compensation by Directors
Other than as disclosed below, the Articles do not restrict our directors' powers to: (a) vote on a proposal, arrangement or contract in which the directors are materially interested; or (b) to vote with regard to compensation payable to themselves or any other members of their body in the absence of an independent quorum.

Article 17 of the Articles deals with a director's disclosable interest (as defined in the BCBCA) in contracts or transactions into which the we have entered or proposes to enter. Article 17.2 provides that a director who holds such a disclosable interest is not entitled to vote on any directors' resolution to approve such contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.

Pursuant to the BCBCA, a director holds a disclosable interest in a contract or transaction if (a) the contract or transaction is material to our company, (b) we have entered, or proposes to enter, into the contract or transaction, and (c) the director has a material interest in the contract or transaction or the director is a director or senior officer of, or has a material interest in, a person who has a material interest in the contract or transaction. Pursuant to the BCBCA, a director does not have a disclosable interest in a number of prescribed situations, including without limitation in respect of a contract or transaction merely because the contract or transaction relates to the remuneration of the director in that person's capacity as a director of our company.

The directors may act notwithstanding any vacancy in our Board, but if we have has fewer directors in office than the number set pursuant to the Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or of summoning a meeting of shareholders for the purpose of filling any vacancies on our Board or, subject to the BCBCA, for any other purpose. The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is deemed to be set at two directors or, if the number of directors is set at one, is deemed to be set at one director, and that director may constitute a meeting.

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#### Borrowing Powers of Directors
Pursuant to Article 8 of the Articles, we, if authorized by the directors, may: (i) borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate; (ii) issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of our company or any other person and at such discounts or premiums and on such other terms as they consider appropriate; (iii) guarantee the repayment of money by any other person or the performance of any obligation of any other person; and (iv) mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of our present and future assets and undertaking.

Amendment to the borrowing powers described above requires an amendment to the Articles by special resolution at a meeting of shareholders. Under the Articles, the majority of votes required for the Company to pass a special resolution at a meeting of shareholders is two-thirds of the votes cast on the resolution.

#### Qualifications of Directors
The Articles do not specify a retirement age for directors.

Directors are not required to be a shareholder of our company.

Section 124 of the BCBCA provides that an individual is not qualified to become or act as a director of a company if that individual is: (1) under the age of 18 years; (2) found by a court, in Canada or elsewhere, to be incapable of managing the individual's own affairs; (3) an undischarged bankrupt; or (4) convicted in or out of the Province of British Columbia of an offence in connection with the promotion, formation or management of a corporation or unincorporated business, or of an offence involving fraud, unless (a) the court orders otherwise; (b) 5 years have elapsed since the last to occur of (i) the expiration of the period set for suspension of the passing of sentence without a sentence having been passed; (ii) the imposition of a fine; (iii) the conclusion of the term of any imprisonment; and (iv) the conclusion of the term of any probation imposed; or (c) a pardon was granted or issued, or a record suspension ordered, under the Criminal Records Act (Canada) and the pardon or record suspension, as the case may be, has not been revoked or ceased to have effect. A director who ceases to be qualified to act as a director of our company must promptly resign.

Section 120 of the BCBCA provides that a public company must have at least three directors.

#### Rights, Preference and Restrictions
The holders of the Common Shares are entitled to one vote per share at meetings of shareholders, to receive dividends if, as and when declared by our Board (subject to the rights of securities, if any, having priority over the Common Shares) and to receive pro rata the remaining property and assets of our company upon our dissolution or winding-up (subject to the rights of securities, if any, having priority over the Common Shares).

The Common Shares do not carry any pre-emptive, subscription, redemption, conversion rights, sinking fund provisions, liability to further capital calls by us, or provisions discriminating against any existing or prospective holder of Common Shares as a result of such shareholder owning a substantial number of Common Shares.

The rights of our shareholders may be altered only with the approval of the holders of two thirds or more of the Common Shares voted at a meeting of our shareholders called and held in accordance with the Articles and applicable law.

#### Shareholder Meetings
The BCBCA provides that: (i) a general meeting of shareholders must be held in the Province of British Columbia, unless otherwise provided in the Articles or as approved by ordinary resolution of shareholders; (ii) we must hold an annual general meeting of shareholders not later than 15 months after the last preceding annual general meeting and once in every calendar year; (iii) for the purpose of determining

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shareholders entitled to receive notice of or vote at a meeting of shareholders, the directors may set a date as the record date for that determination, provided that such date shall not precede by more than 2 months (or, in the case of a general meeting requisitioned by shareholders under the BCBCA, by more than 4 months) or be less than 21 days before the date on which the meeting is to be held; (iv) a quorum for the transaction of business at a meeting of our shareholders is the quorum established by the Articles (Article 11.3 of the Articles provide that the quorum for the transaction of business at a meeting of shareholders is two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of Common Shares entitled to vote at the meeting, are present in person; (v) the holders of not less than 5% of the issued shares entitled to vote at a meeting may requisition the directors to call a meeting of shareholders for the purpose of transacting any business that may be transacted at a general meeting; and (vi) the Court may, on its own motion or on our application, upon the application of a director or the application of a shareholder entitled to vote at the meeting: (a) order that a meeting of shareholders be called, held and conducted in a manner that the Court considers appropriate; and (b) give directions it considers necessary as to the call, holding and conduct of the meeting.

#### Limitations on Ownership of Securities
Except as provided in the *Investment Canada Act*, there are no limitations specific to the rights of non-Canadians to hold or vote the Common Shares under the laws of Canada or the Province of British Columbia or in our constating documents.

#### Change in Control
There are no provisions in our constating documents or under applicable corporate law that would have the effect of delaying, deferring or preventing a change in the control of our company, or that would operate with respect to any proposed merger, acquisition or corporate restructuring involving us or any of our subsidiaries.

#### Ownership Threshold
There are no provisions in our constating documents or under applicable corporate law requiring share ownership to be disclosed. Securities legislation in Canada requires that shareholder ownership (as well as ownership of an interest in, or right or obligation associated with, a related financial instrument of a security of our company) must be disclosed once a person beneficially owns or has control or direction over, directly or indirectly, securities of a reporting issuer carrying more than 10% of the voting rights attached to all the reporting issuer's outstanding voting securities. This threshold is higher than the 5% threshold under United States securities legislation at which shareholders must report their share ownership.

#### Changes to Capital
There are no conditions imposed by the Articles governing changes in the capital where such conditions are more significant than is required by the corporate laws of the Province of British Columbia for as long as we are a public company. Otherwise, Section 26.3 of the Articles provides that no share or designated security may be sold, transferred or otherwise disposed of without the consent of the directors and the directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition.

#### Exchange Controls
Canada has no system of exchange controls. There are no Canadian governmental laws, decrees, or regulations relating to restrictions on the repatriation of our capital or earnings to non-resident investors. There are no laws in Canada or exchange control restrictions affecting the remittance of dividends or other payments made by us in the ordinary course to non-resident holders of the Common Shares by virtue of their ownership of such Common Shares, except as discussed below under the sections "*Certain United States Federal Income Tax Consequences*" and "*Certain Canadian Federal Income Tax Considerations*."

There are no limitations under the laws of Canada or in our organizing documents on the right of foreigners to hold or vote our securities, except that the *Investment Canada Act* may require that a "non-Canadian" not acquire "control" of our company without prior review and approval by the Minister of

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Innovation, Science and Economic Development, where applicable thresholds are exceeded. The acquisition of one-third or more of our voting shares would give rise a rebuttable presumption of an acquisition of control, and the acquisition of more than fifty percent of our voting shares would be deemed to be an acquisition of control. In addition, the *Investment Canada Act* provides the Canadian government with broad discretionary powers in relation to national security to review and potentially prohibit, condition or require the divestiture of, any investment in our company by a non-Canadian, including non-control level investments. "Non-Canadian" generally means an individual who is neither a Canadian citizen nor a permanent resident of Canada within the meaning of the *Immigration and Refugee Protection Act* (Canada) who has been ordinarily resident in Canada for not more than one year after the time at which he or she first became eligible to apply for Canadian citizenship, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.

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#### CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of certain U.S. federal income tax considerations generally applicable to the ownership and disposition of our Common Shares by a U.S. Holder (as defined below) that acquires our Common Shares in this offering. This summary is for general information purposes only and does not purport to be a complete discussion of all potential tax considerations that may be relevant to a particular person's decision to acquire our Common Shares.

This summary is based on the U.S. Internal Revenue Code of 1986, as amended (which we refer to as the "Code"), the regulations promulgated under the Code (which we refer to as the "U.S. Treasury Regulations"), the income tax treaty between Canada and the United States (which we refer to as the "Treaty"), published rulings of the U.S. Internal Revenue Service (which we refer to as the "IRS"), published administrative positions of the IRS, and U.S. court decisions that are applicable, in each case, as in effect and available as of the date hereof. Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied on a retroactive or prospective basis which could affect the U.S. federal income tax considerations described in this summary. No ruling from the IRS has been requested, or will be obtained, regarding the U.S. federal income tax considerations applicable to U.S. Holders as discussed in this summary. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the positions taken in this summary.

 **THIS SUMMARY IS FOR GENERAL INFORMATION PURPOSES ONLY AND DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OR LISTING OF ALL POTENTIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS THAT MAY APPLY TO A U.S. HOLDER AS A RESULT OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF COMMON SHARES PURSUANT TO THIS OFFERING.** 

For purposes of this discussion, a "U.S. Holder" is a beneficial owner of our Common Shares that is, for U.S. federal income tax purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • an individual who is a citizen or resident of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • an estate the income of which is includable in gross income for U.S. federal income tax purposes regardless of its source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • a trust (i) the administration of which is subject to the primary supervision of a court within the United States and which has one or more U.S. persons, as described in Section 7701(a)(30) of the Code, who have the authority to control all substantial decisions of the trust, or (ii) that has validly elected under applicable Treasury Regulations to be treated as a U.S. person.

If an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes holds our Common Shares, the U.S. federal income tax consequences to such partnership and its partners of the ownership and disposition of our Common Shares generally will depend in part on the activities of the partnership and the status of such partners. This summary does not address the tax consequences to any such partner or partnership. Partners of entities or arrangements that are classified as partnerships for U.S. federal income tax purposes should consult their tax advisors regarding the U.S. federal income tax consequences of the ownership and disposition of our Common Shares.

This discussion applies only to a U.S. Holder that holds our Common Shares as "capital assets" within the meaning of Section 1221 of the Code (generally, property held for investment). Unless otherwise provided, this summary does not discuss reporting requirements. In addition, this discussion does not address any tax consequences other than the certain U.S. federal income tax consequences explicitly discussed below, such as U.S. state and local tax consequences, U.S. estate and gift tax consequences, and non-U.S. tax consequences, and does not describe all of the U.S. federal income tax consequences that may be relevant in

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light of a U.S. Holder's particular circumstances, including alternative minimum tax consequences, the Medicare tax on certain net investment income, and tax consequences to holders that are subject to special provisions under the Code, including, but not limited to, holders that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • are tax exempt organizations, qualified retirement plans, individual retirement accounts, or other tax deferred accounts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • are brokers or dealers in securities or currencies or holders that are traders in securities that elect to apply a mark-to-market accounting method;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • have a "functional currency" for U.S. federal income tax purposes other than the U.S. dollar;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • own our Common Shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • acquire our Common Shares in connection with the exercise of employee stock options or otherwise as compensation for services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • are partnerships, S-corporations or other pass-through entities for U.S. federal income tax purposes (or investors in such partnerships, S-corporations and entities);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • are subject to special tax accounting rules or are required to accelerate the recognition of any item of gross income with respect to our Common Shares as a result of such income being recognized on an applicable financial statement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • are controlled foreign corporations or passive foreign investment companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • own, have owned or will own (directly, indirectly, or by attribution) 10% or more of the total combined voting power or value of our outstanding shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • hold our Common Shares in connection with trade or business conducted outside of the United States or in connection with a permanent establishment or other fixed place of business outside of the United States; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • are former U.S. citizens or former long-term residents of the United States.

This summary does not address the tax consequences of transactions effected prior or subsequent to, or concurrently with, any purchase of Common Shares pursuant to this prospectus (whether or not any such transactions are undertaken in connection with the purchase of Common Shares pursuant to this prospectus).

 **Each U.S. Holder is urged to consult its tax advisor regarding the application of U.S. federal taxation to its particular circumstances, and the state, local, non-U.S. and other tax considerations of the ownership and disposition of our Common Shares.** 

 **The foregoing discussion of certain U.S. federal income tax considerations is for general information only and is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership and disposition of our Common Shares. U.S. Holders should consult their tax advisors concerning the tax consequences applicable to their particular situations.** 

#### Taxation of Distributions to U.S. Holders
Subject to the PFIC rules discussed below, a U.S. Holder generally will be required to include in gross income, in accordance with such U.S. Holder's method of accounting for U.S. federal income tax purposes, as dividends, the amount of any distribution (including a deemed distribution) of cash or other property (other than certain distributions of our shares or rights to acquire our shares) paid on our Common Shares to the extent the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Distributions (including deemed distributions) in excess of such earnings and profits generally will be applied against and reduce a U.S. Holder's basis in the Common Shares held by such U.S. Holder (but not below zero) and, to the extent in excess of such basis,

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will be treated as capital gain from the sale or exchange of such Common Shares (the treatment of which is described under "— Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of our Common Shares to U.S. Holders" below). Because we do not intend to determine our earnings and profits on the basis of U.S. federal income tax principles, we expect that distributions, if issued, will generally be reported to U.S. Holders as dividends.

Dividends paid by us will be taxable to a corporate U.S. Holder at regular rates and will not be eligible for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received from other domestic corporations. With respect to individuals and other non-corporate U.S. Holders, dividends generally will be taxed at the lower applicable long-term capital gains rate (see "— *Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of our Common Shares to U.S. Holders*" below) applicable to "qualified dividend income," provided that certain conditions are satisfied, including that (i) our Common Shares on which the dividends are paid are readily tradable on an established securities market in the United States or we are eligible for the benefits of the Treaty, and (ii) we are not a PFIC (as defined below) (nor treated as such with respect to a U.S. Holder) at the time the dividend was paid or in the previous year. If such requirements are not satisfied, a dividend paid by a non-U.S. corporation to a U.S. Holder will be taxed at ordinary income tax rates. The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding the application of such rules.

#### Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of our Common Shares to U.S. Holders
Subject to the PFIC rules discussed below, a U.S. Holder generally will recognize a capital gain or loss on the sale or other taxable disposition of our Common Shares. The amount of gain or loss recognized by a U.S. Holder on a sale or other taxable disposition generally will be equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition, and (ii) such U.S. Holder's adjusted tax basis in the Common Shares so disposed of. A U.S. Holder's adjusted tax basis in the Common Shares held by such U.S. Holder generally will equal the U.S. Holder's acquisition cost reduced by any prior distributions treated as a return of capital.

Any capital gain or loss recognized generally will be long-term capital gain or loss if the U.S. Holder's holding period for such Common Shares exceeds one year. Long-term capital gain realized by a non-corporate U.S. Holder may be taxed at rates of taxation lower than the rates applicable to ordinary income and short-term capital gains, while short-term capital gains are subject to U.S. federal income tax at the rates applicable to ordinary income. The deductibility of capital losses is subject to various limitations.

Any gain or loss recognized by a U.S. Holder will generally be U.S. source gain or loss for foreign tax credit purposes. Consequently, a U.S. Holder may not be able to use the foreign tax credit arising from any non-U.S. tax imposed on the disposition of Common Shares unless such credit can be applied (subject to applicable limitations) against tax due on other income treated as derived from non-U.S. sources. U.S. Holders are advised to consult their tax advisors regarding the tax consequences if a foreign tax is imposed on a disposition of Common Shares, including the availability of the foreign tax credit under its particular circumstances and the effects of any applicable income tax treaties, any proposed or final Treasury Regulations, and IRS guidance.

#### Passive Foreign Investment Company ("PFIC") Rules
A non-U.S. corporation will be classified as a PFIC for U.S. federal income tax purposes if either (i) at least 75% of its gross income in a taxable year, including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income, or (ii) at least 50% of its assets in a taxable year (ordinarily determined based on fair market value and averaged quarterly over the year), including its pro rata share of the assets of any corporation in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce, passive income. Passive income generally includes, among other things, dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business), and gains from the disposition of assets giving rise to passive income. Cash is generally a passive asset for these purposes.

Although PFIC status is determined annually, an initial determination that a non-U.S. corporation is a PFIC generally will apply for subsequent years to a U.S. Holder who held its stock while it was a PFIC,

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whether or not it meets the test for PFIC status in those subsequent years. Based on current business plans and financial expectations, the Company expects that it should not be a PFIC for its current tax year and expects that it should not be a PFIC for the foreseeable future. No opinion of legal counsel or ruling from the IRS concerning the status of the Company as a PFIC has been obtained or is currently planned to be requested. PFIC classification is fundamentally factual in nature, generally cannot be determined until the close of the tax year in question, and is determined annually. Additionally, the analysis depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. Consequently, there can be no assurance that the Company has never been, is not, and will not become a PFIC for any tax year during which U.S. Holders hold Common Shares.

If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our Common Shares and such U.S. Holder did not make either a timely mark-to-market election or a qualified electing fund (which we refer to as "QEF") election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) our Common Shares, as described below, such U.S. Holder generally will be subject to special rules with respect to (i) any gain recognized by such U.S. Holder on the sale or other disposition of our Common Shares (which may include gain realized by reason of transfers of our Common Shares that would otherwise qualify as nonrecognition transactions for U.S. federal income tax purposes), and (ii) any "excess distribution" made to such U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of such U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of our Common Shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder's holding period for the Common Shares held by such U.S. Holder). Under these special tax rules:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • such U.S. Holder's gain or excess distribution will be allocated ratably over such U.S. Holder's holding period for the Common Shares held by such U.S. Holder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the amount allocated to such U.S. Holder's taxable year in which such U.S. Holder recognized the gain or received the excess distribution, or to the period in such U.S. Holder's holding period before the first day of our first taxable year in which we are a PFIC, will be taxed as ordinary income;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the amount allocated to other taxable years (or portions thereof) of such U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to such U.S. Holder without regard to such U.S. Holder's other items of income and loss for such year; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • an additional amount equal to the interest charge generally applicable to underpayments of tax will be imposed on such U.S. Holder with respect to the tax attributable to each such other taxable year of such U.S. Holder.

In general, if we are determined to be a PFIC, a U.S. Holder may be able to avoid application of the PFIC tax consequences described above with respect to our Common Shares by making a timely and valid QEF election (if eligible to do so) to include in income its pro rata share of our net capital gains (as long-term capital gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends. A U.S. Holder generally may make a separate election to defer the payment of taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an interest charge.

Alternatively, if a U.S. Holder, at the close of such U.S. Holder's taxable year, owns shares in a PFIC that are treated as marketable stock, such U.S. Holder may make a mark-to-market election with respect to such shares for such taxable year. If such U.S. Holder makes a valid mark-to-market election for the first taxable year of such U.S. Holder in which such U.S. Holder holds (or is deemed to hold) our Common Shares and for which we are determined to be a PFIC, such U.S. Holder generally will not be subject to the PFIC rules described above with respect to the Common Shares held by such U.S. Holder. Instead, in general, such U.S. Holder will include as ordinary income in each taxable year the excess, if any, of the fair market value of the Common Shares held by such U.S. Holder at the end of such U.S. Holder's taxable year over such U.S. Holder's adjusted basis in such Common Shares. These amounts of ordinary income would not be eligible for the favorable tax rates applicable to qualified dividend income or long-term capital gains. Such U.S. Holder also generally will recognize an ordinary loss in respect of the excess, if any, of its adjusted basis in such Common Shares over the fair market value of such Common Shares at the end of such U.S.

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Holder's taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). Such U.S. Holder's basis in such Common Shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of such Common Shares will be treated as ordinary income.

The mark-to-market election is available only for stock that is regularly traded on a national securities exchange that is registered with the SEC or on a "qualified exchange or other market," as defined in the applicable U.S. Treasury Regulations. If made, a mark-to-market election would be effective for the taxable year for which the election was made and for all subsequent taxable years, unless our Common Shares ceased to qualify as "marketable stock" for purposes of the PFIC rules or the IRS consented to the revocation of the election. U.S. Holders are urged to consult their tax advisors regarding the availability and tax consequences of a mark-to-market election with respect to our Common Shares under their particular circumstances.

If we are or become a PFIC and, at any time, have a non-U.S. subsidiary that is classified as a PFIC, U.S. Holders generally would be deemed to own a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described above if we receive a distribution from, or dispose of all or part of our interest in, the lower-tier PFIC, or U.S. Holders otherwise were deemed to have disposed of an interest in the lower-tier PFIC. There can be no assurance that we will have timely knowledge of the status of any such lower-tier PFIC. Additionally, we may not hold a controlling interest in any such lower-tier PFIC, and, therefore, there can be no assurance that we will be able to cause such lower-tier PFIC to provide such required information. A mark-to-market election generally would not be available with respect to such lower-tier PFIC. U.S. Holders are urged to consult their tax advisors regarding the tax issues raised by lower-tier PFICs.

A U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder, may have to file an IRS Form 8621 (or any successor form), whether or not a QEF or mark-to-market election is made, and such other information as may be required by the U.S. Treasury Department. Failure to do so, if required, will extend the statute of limitations until such required information is furnished to the IRS (potentially including with respect to items that do not relate to a U.S. Holder's investment in our Common Shares).

Certain additional adverse rules may apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether the U.S. Holder makes a QEF election. These rules include special rules that apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC. Subject to these special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. U.S. Holders should consult with their own tax advisors regarding the potential application of the PFIC rules to the ownership and disposition of Common Shares, and the availability of certain U.S. tax elections under the PFIC rules.

In addition, U.S. Holders of PFICs are required to file an annual report with the IRS containing such information as Treasury Regulations and/or other IRS guidance may require, which filing obligation would generally commence in the first tax year in which the Company is classified as a PFIC and in which such U.S. Holder holds Common Shares. In addition to penalties, a failure to satisfy such reporting requirements may result in an extension of the time period during which the IRS can assess a tax. U.S. Holders should consult their own tax advisors regarding the requirements of filing such information returns under these rules, including the requirement to file an IRS Form 8621 annually.

The rules dealing with PFICs and with the QEF and mark-to-market elections are very complex and are affected by various factors in addition to those described above. Accordingly, U.S. Holders of our Common Shares should consult their tax advisors concerning the application of the PFIC rules to our Common Shares under their particular circumstances. U.S. Holders should be aware that, for each tax year, if any, that the Company is a PFIC, the Company can provide no assurances that it will satisfy the record keeping requirements of a PFIC, or that it will make available to U.S. Holders the information such U.S. Holders require to make a QEF or mark-to-market election with respect to the Company or any subsidiary PFIC.

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#### Additional Tax Considerations
<u>Receipt of Foreign Currency</u> 

The amount of any distribution paid to a U.S. Holder in foreign currency or on the sale, exchange or other taxable disposition of Common Shares generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). If the foreign currency received is not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any U.S. Holder who receives payment in foreign currency and engages in a subsequent conversion or other disposition of the foreign currency may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes. Different rules apply to U.S. Holders who use the accrual method of tax accounting. Each U.S. Holder should consult its own U.S. tax advisor regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.

<u>Foreign Tax Credit</u> 

Subject to the PFIC rules discussed above, a U.S. Holder that pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on the Common Shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income tax paid. Generally, a credit will reduce a U.S. Holder's U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder's income subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign taxes paid or accrued (whether directly or through withholding) by a U.S. Holder during a year. The foreign tax credit rules are complex and involve the application of rules that depend on a U.S. Holder's particular circumstances. Accordingly, each U.S. Holder should consult its own tax advisor regarding the foreign tax credit rules.

<u>Information Reporting; Backup Withholding Tax</u> 

Under U.S. federal income tax laws certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on U.S. Holders that hold certain specified foreign financial assets in excess of certain threshold amounts. The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person. U. S. Holders may be subject to these reporting requirements unless their Common Shares are held in an account at certain financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should consult their own tax advisors regarding the requirements of filing information returns, including the requirement to file IRS Form 8938.

Payments made within the U.S., or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of the Common Shares generally may be subject to information reporting and backup withholding tax, currently at the rate of 24%, if a U.S. Holder (a) fails to furnish its correct U.S. taxpayer identification number (generally on IRS Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that it has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons, such as U.S. Holders that are corporations, generally are excluded from these information reporting and backup withholding tax rules. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder's U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner.

The discussion of reporting requirements set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess a tax and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any

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unsatisfied reporting requirement. Each U.S. Holder should consult its own tax advisors regarding the information reporting and backup withholding rules.

 **THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES.** 

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#### CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary, as of the date hereof, of the principal Canadian federal income tax considerations generally applicable to the holding and disposition of Common Shares acquired pursuant to this offering by a holder who, at all relevant times, (a) for the purposes of the *Income Tax Act* (Canada) (the "Tax Act"), (i) is not resident, or deemed to be resident, in Canada, (ii) deals at arm's length with, and is not affiliated with, the Company, (iii) beneficially owns Common Shares as capital property, (iv) does not use or hold the Common Shares in the course of carrying on, or otherwise in connection with, a business or a part of a business carried on or deemed to be carried on in Canada, and (v) is not a "registered non-resident insurer" or "authorized foreign bank" within the meaning of the Tax Act, or other holder of special status, and (b) for the purposes of the Canada-United States Income Tax Convention (1980), as amended (the "Convention"), is a resident of the U.S., has never been a resident of Canada, does not have and has not had, at any time, a permanent establishment or fixed base in Canada, and is a qualifying person or otherwise qualifies for the full benefits of the Convention. Common Shares will generally be considered to be capital property to a holder unless such Common Shares are held in the course of carrying on a business of buying or selling securities or an adventure or concern in the nature of trade. Holders who meet all the criteria in clauses (a) and (b) are referred to herein as a "U.S. Holder" or "U.S. Holders."

This summary does not deal with special situations, such as the particular circumstances of traders or dealers or holders who have entered or will enter into a "derivative forward agreement" (as defined in the Tax Act) in respect of any of the Common Shares. Such holders and other holders who do not meet the criteria in clauses (a) and (b) should consult their own tax advisors.

This summary is based upon the current provisions of the Tax Act and the regulations thereunder (the "Regulations") and counsel's understanding of the current administrative policies and assessing practices of the Canada Revenue Agency (the "CRA") made publicly available prior to the date hereof. It also takes into account all proposed amendments to the Tax Act and the Regulations publicly released by the Minister of Finance (Canada) (the "Tax Proposals") prior to the date hereof and assumes that all such Tax Proposals will be enacted as currently proposed. No assurance can be given that the Tax Proposals will be enacted in the form proposed or at all. This summary does not otherwise take into account or anticipate any changes in law, whether by way of legislative, judicial or administrative action or interpretation, nor does it take into account tax laws of any province or territory of Canada or of any other jurisdiction outside Canada.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular U.S. Holder and no representation with respect to the federal income tax consequences is made to any particular U.S. Holder or prospective U.S. Holder. The tax consequences to a U.S. Holder will depend on the holder's particular circumstances. Accordingly, U.S. Holders should consult with their own tax advisors for advice with respect to their own particular circumstances.

#### Currency Conversion
In general, for purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of the Common Shares must be converted into Canadian dollars based on the applicable exchange rate quoted by the Bank of Canada for the relevant day or such other rate of exchange that is acceptable to the CRA.

#### Dividends
Amounts paid or credited or deemed to be paid or credited as, on account or in lieu of payment, or in satisfaction of, dividends on the Common Shares to a U.S. Holder will be subject to Canadian withholding tax. Under the Convention, the rate of Canadian withholding tax on dividends paid or credited by the Company to a U.S. Holder that beneficially owns such dividends is generally 15% unless the beneficial owner is a company that owns at least 10% of the Company's voting stock at that time, in which case the rate of Canadian withholding tax is reduced to 5%.

#### Dispositions
Upon the disposition of a Security, a U.S. Holder will realize a capital gain (or capital loss) in the taxation year of the disposition equal to the amount by which the U.S. Holder's proceeds of disposition, net

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of any reasonable costs of disposition, exceed (or are exceeded by) the adjusted cost base to the U.S. Holder of the particular Security immediately before the disposition or deemed disposition.

A U.S. Holder will not be subject to tax under the Tax Act in respect of any capital gain realized by such U.S. Holder on a disposition of Securities, unless such Securities constitute "taxable Canadian property" (as defined in the Tax Act) of the U.S. Holder at the time of disposition and the U.S. Holder is not entitled to relief under the Convention.

Provided that the Common Shares are listed on a designated stock exchange for purposes of the Tax Act (which currently includes the Nasdaq) at the time of the disposition, a Common Share will generally not constitute taxable Canadian property of a U.S. Holder at such time unless: (a) at any time during the 60-month period immediately preceding the disposition or deemed disposition of the Common Share: (i) 25% or more of the issued shares of any class or series of the share capital of the Company were owned by, or belonged to, one or any combination of (x) the U.S. Holder, (y) persons with whom the U.S. Holder did not deal at arm's length (within the meaning of the Tax Act) and (z) partnerships in which the U.S. Holder or a person referred to in (y) held a membership interest directly or indirectly through one or more partnerships; and (ii) more than 50% of the fair market value of the Common Share was derived directly or indirectly from one or any combination of: (A) real or immovable property situated in Canada, (B) Canadian resource property (as defined in the Tax Act), (C) timber resource property (as defined in the Tax Act), and (D) options in respect of, or interests in, or for civil law rights in, property described in any of (A) through (C) above, whether or not such property exists; or (b) the Common Share is otherwise deemed under the Tax Act to be taxable Canadian property.

If a Common Share is taxable Canadian property to a U.S. Holder, any capital gain realized on the disposition or deemed disposition of such Common Share may not be subject to Canadian federal income tax pursuant to the terms of the Convention. U.S. Holders whose Common Shares may be taxable Canadian property should consult their own tax advisors.

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#### LEGAL MATTERS
McGuireWoods LLP, New York, New York, is acting as counsel to our Company regarding U.S. securities law. McMillan LLP, Vancouver, Canada, is acting as counsel to our Company regarding Canadian securities law and has provided an opinion on the validity of the securities being offered pursuant to this prospectus. Lowenstein Sandler LLP, New York, New York, is acting as counsel for the underwriter.

#### EXPERTS
Davidson & Company LLP, our current independent accountant, has consented to the inclusion of its report with respect to Liberty Defense Holdings, Ltd.'s consolidated financial statements as of and for the year ended December 31, 2024 in this prospectus, in the form and context in which they are included, and has authorized the contents of that part of the Registration Statement. The audit report covering the December 31, 2024 consolidated financial statements contains an explanatory paragraph that states that the Company's significant losses and negative operating cash flows raise substantial doubt about the entity's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty.

The business address of Davidson & Company LLP is 609 Granville St #1200, Vancouver, BC V7Y 1H4, Canada. Davidson & Company LLP has been our independent accountant for the preceding three years and is registered with both the Canadian Public Accountability Board and the United States Public Company Accounting Oversight Board.

#### EXPENSES OF THIS OFFERING
The estimated expenses payable by us in connection with the offering described in this prospectus (other than the underwriting discounts and commissions) will be as set forth in the table below. With the exception of the SEC registration fee, the FINRA filing fee, and Nasdaq listing fee, all amounts are estimates. All such expenses will be borne by us.

---

| | |
|:---|:---|
| **Item**  | **Amount**  |
| SEC registration fee  | US |
| FINRA filing fee  | US |
| Nasdaq listing fee  | US |
| Printing and engraving expenses  | US |
| Legal fees and expenses  | US |
| Accounting fees and expenses  | US |
| Miscellaneous expenses  | US |
| Total  | US |

---

#### WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement (including amendments and exhibits to the registration statement) on Form F-1 under the Securities Act. This prospectus, which is part of the registration statement, does not contain all of the information set forth in the registration statement. For further information, we refer you to the registration statement and the exhibits and schedules filed as part of the registration statement. If a document has been filed as an exhibit to the registration statement, we refer you to the copy of the document that has been filed. Each statement in this prospectus relating to a document filed as an exhibit is qualified in all respects by the filed exhibit. You should read this prospectus and the documents that we have filed as exhibits to the registration statement of which this prospectus is a part completely. The SEC maintains an internet site at www.sec.gov, from which you can electronically access the registration statement and its exhibits.

Additional information relating to us may be found on SEDAR, the system for electronic document analysis and retrieval, at www.sedar.com. Upon effectiveness of the registration statement of which this prospectus forms a part, we will be subject to the informational requirements of the Exchange Act that are

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applicable to foreign private issuers, and under those requirements will be filing reports with the SEC. Those other reports or other information may be inspected without charge at the locations described below. As a foreign private issuer, we are exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements. In addition, we are not required under the Exchange Act to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as United States companies whose securities are registered under the Exchange Act. However, we will file with the SEC, within 120 days after the end of each fiscal year, or such applicable time as required by the SEC, an annual report on Form 20-F containing financial statements audited by an independent registered public accounting firm, and will furnish to the SEC, under cover of a current report on Form 6-K, unaudited quarterly financial information.

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#### INDEX TO FINANCIAL STATEMENTS

---

| | |
|:---|:---|
| **Consolidated Financial Statements for the Years Ended December 31, 2024 and 2023** |  |
| [Independent Auditor's Report (PCAOB ID No. 731)](#tIAR)  | [F-2](#tIAR) |
| [Consolidated Statements of Financial Position](#tIAR11)  | [F-3](#tIAR11) |
| [Consolidated Statements of Loss and Comprehensive Loss](#tIAR12)  | [F-4](#tIAR12) |
| [Consolidated Statements of Changes in Shareholders' Equity (Deficiency)](#tIAR13)  | [F-5](#tIAR13) |
| [Consolidated Statements of Cash Flows](#tIAR14)  | [F-6](#tIAR14) |
| [Notes to the Consolidated Financial Statements](#tIAR15)  | [F-8](#tIAR15) |
|  **Amended and Restated Condensed Consolidated Interim Financial Statements for the Three and Nine Months Ended September 30, 2025 and 2024**  |  |
| [Notice to Reader](#tNTR)  | [F-48](#tNTR) |
| [Consolidated Statements of Financial Position](#tIAR1)  | [F-50](#tIAR1) |
| [Consolidated Statements of Loss and Comprehensive Loss](#tIAR2)  | [F-51](#tIAR2) |
| [Consolidated Statements of Changes in Shareholders' Deficiency](#tIAR3)  | [F-52](#tIAR3) |
| [Consolidated Statements of Cash Flows](#tIAR4)  | [F-53](#tIAR4) |
| [Notes to the Condensed Consolidated Interim Financial Statements](#tNTCC5)  | [F-54](#tNTCC5) |

---

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![[MISSING IMAGE: hdr_dandccomp-bwlr.jpg]](hdr_dandccomp-bwlr.jpg)

#### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders

Liberty Defense Holdings, Ltd.

#### Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Liberty Defense Holdings Ltd. (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of loss and comprehensive loss, cash flows, and changes in shareholders' equity for the years ended December 31, 2024 and 2023, and the related notes and schedules (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years ended December 31, 2024 and 2023, in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board.

#### Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company incurred a net loss during the year ended December 31, 2024 of $8,845,163 and had cash outflows from operating activities of $6,469,264. These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

#### Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company's auditor since 2021.

#### /s/ DAVIDSON & COMPANY LLP
Chartered Professional Accountants

Vancouver, Canada

June 17, 2025

![[MISSING IMAGE: ftr_nexia-4clr.jpg]](ftr_nexia-4clr.jpg)

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#### Liberty Defense Holdings, Ltd.

#### Consolidated Statements of Financial Position (Expressed in U.S. dollars)

---

| | | | |
|:---|:---|:---|:---|
| **As at:**  | **Note**  | **December 31, <br> 2024**  | **December 31, <br> 2023**  |
|  |  | **$**  | **$**  |
| **Assets** |  |  |  |
| Current assets: |  |  |  |
| &nbsp;&nbsp;&nbsp; Cash  |  | 1153229 | 963 |
| &nbsp;&nbsp;&nbsp; Accounts receivable, prepaids and deposits  | 4  | 1664376 | 257885 |
| &nbsp;&nbsp;&nbsp; Inventory  | 5  | 868314 | 1255077 |
| &nbsp;&nbsp;&nbsp; Contract costs  | 16  | 268952 |  |
| &nbsp;&nbsp;&nbsp; Lease receivable  | 11  |  | 7048 |
|  |  | 3954871 | 1520973 |
| Non-current assets: |  |  |  |
| &nbsp;&nbsp;&nbsp; Property and equipment  | 6  | 759937 | 1043876 |
| &nbsp;&nbsp;&nbsp; Intangible assets  | 7  | 2571693 | 3266803 |
|  |  | 3331630 | 4310679 |
| **Total assets**  |  | 7286501 | 5831652 |
| **Liabilities** |  |  |  |
| Current liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities  | 18  | 4155890 | 3862675 |
| &nbsp;&nbsp;&nbsp; Loans payable  | 8 & 18  | 100907 | 530062 |
| &nbsp;&nbsp;&nbsp; Parabilis term-loan  | 9  | 983476 |  |
| &nbsp;&nbsp;&nbsp; Factoring liability  | 10  | 983671 | 1107347 |
| &nbsp;&nbsp;&nbsp; Deferred revenue  | 15  | 180000 | 180000 |
| &nbsp;&nbsp;&nbsp; CEBA loan  | 8  |  | 29445 |
| &nbsp;&nbsp;&nbsp; Lease liabilities  | 11  | 203443 | 247412 |
|  |  | 6607387 | 5956941 |
| Non-current liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp; Non-current lease liabilities  | 11  | 505382 | 639173 |
| &nbsp;&nbsp;&nbsp; Non-current Parabilis term loan  | 9  | 938211 |  |
| **Total liabilities**  |  | 8050980 | 6596114 |
| **Shareholders' deficiency** |  |  |  |
| &nbsp;&nbsp;&nbsp; Share capital  | 12  | 40717157 | 32565254 |
| &nbsp;&nbsp;&nbsp; Share subscriptions received in advance  | 12  |  | 224915 |
| &nbsp;&nbsp;&nbsp; Equity reserves  | 13  | 4872472 | 4146489 |
| &nbsp;&nbsp;&nbsp; Accumulated other comprehensive income (loss)  |  | (28896) | (221071) |
| &nbsp;&nbsp;&nbsp; Deficit  |  | (46325212) | (37480049) |
| Total shareholders' deficiency  |  | (764479) | (764462) |
| **Total liabilities and shareholders' deficiency**  |  | 7286501 | 5831652 |

---

Nature of operations and going concern (note 1)

Subsequent events (note 23)

Approved on behalf of the Board of Directors:

 *"William Frain" <br> Director* *"Jason Burinescu" <br> Director* 

The accompanying notes form an integral part of these consolidated financial statements.

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#### Liberty Defense Holdings, Ltd.

#### Consolidated Statements of Loss and Comprehensive Loss (Expressed in U.S. dollars, except number of shares)

---

| | | | |
|:---|:---|:---|:---|
| | **Note**  | **Years ended December 31,**  | **Years ended December 31,**  |
| | **Note**  | **2024**  | **2023**  |
| |  | **$**  | **$**  |
| **Revenue**  | 15 & 16  |  |  |
| &nbsp;&nbsp;&nbsp; HEXWAVE revenue  |  | $1013546 | $120000 |
| &nbsp;&nbsp;&nbsp; Contract revenue  |  | 1425000 | 1372557 |
| &nbsp;&nbsp;&nbsp; **Total Revenue**  |  | 2438546 | 1492557 |
| **Cost of revenue** |  |  |  |
| &nbsp;&nbsp;&nbsp; HEXWAVE cost of revenue  |  | 2033498 | 1546040 |
| &nbsp;&nbsp;&nbsp; Contract cost of revenue  |  | 2081971 | 1163211 |
| **Total cost of revenue**  |  | 4115469 | 2709251 |
| **Gross loss**  |  | (1676923) | (1216694) |
| **Engineering and Research and Development Expenses:** |  |  |  |
| &nbsp;&nbsp;&nbsp; Product development & technology costs  |  | 148675 | 370073 |
| &nbsp;&nbsp;&nbsp; Salaries and consulting fees  | 18  | 1655580 | 2766601 |
| &nbsp;&nbsp;&nbsp; Stock-based compensation  | 13 & 18  | 98008 | 89302 |
| &nbsp;&nbsp;&nbsp; Depreciation  | 6  | 248979 | 526686 |
| &nbsp;&nbsp;&nbsp; Office, rent & administration, travel and miscellaneous  |  | 116497 | 269796 |
| **General & Administration Expenses** |  |  |  |
| &nbsp;&nbsp;&nbsp; Salaries and consulting fees  | 18  | 1809724 | 1482860 |
| &nbsp;&nbsp;&nbsp; Legal and professional fees  |  | 458390 | 299011 |
| &nbsp;&nbsp;&nbsp; Stock-based compensation  | 13 & 18  | 255220 | 511699 |
| &nbsp;&nbsp;&nbsp; Office, rent & administration, travel, and miscellaneous  |  | 965868 | 1574621 |
|  |  | 5756941 | 7890649 |
| **Operating Loss**  |  | $**(7433864)** | $**(9107343)** |
| **Other expense (income):** |  |  |  |
| &nbsp;&nbsp;&nbsp; Other expense (income)  | 12  | 589550 | (3078) |
| &nbsp;&nbsp;&nbsp; Interest expense  |  | 808989 | 283247 |
| &nbsp;&nbsp;&nbsp; Foreign exchange loss (gain)  |  | 12760 | (18469) |
|  |  | 1411299 | 261700 |
| **Net loss for the year**  |  | **(8845163)** | **(9369043)** |
| **Other comprehensive loss** |  |  |  |
| &nbsp;&nbsp;&nbsp; Items that may be reclassified subsequently to profit or (loss)  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign currency translation adjustment  |  | 192175 | 31598 |
| **Total loss and comprehensive loss for the year**  |  | **(8652988)** | **(9337445)** |
| Weighted average number of common shares outstanding: |  |  |  |
| &nbsp;&nbsp;&nbsp; Basic and diluted  |  | 17160752 | 12816531 |
| Loss per share: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic and diluted loss per common share  | 14  | (0.52) | (0.73) |

---

The accompanying notes form an integral part of these consolidated financial statements.

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#### Liberty Defense Holdings, Ltd.

#### Consolidated Statements of Changes in Shareholders' Equity (Deficiency) (Expressed in U.S. dollars, except number of shares)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Note**  | **Number of <br> common <br> shares**  | **Share <br> capital**  | **Equity <br> reserves**  | **Share <br> subscriptions <br> received in <br> advance**  | **Accumulated <br> other <br> comprehensive <br> income (loss)**  | **Deficit**  | **Total**  |
|  |  |  | **$**  | **$**  | **$**  | **$**  | **$**  | **$**  |
| **Balance as at December 31, 2022**  |  | **11683941** | **28936296** | **3518365** | **—** | **(252669)** | **(28111006)** | **4090986** |
| &nbsp;&nbsp;&nbsp; Private placement, net of share issue cost  | 12  | 2858871 | 3656081 |  |  |  |  | 3656081 |
| &nbsp;&nbsp;&nbsp; Share subscriptions received in advance  | 12  |  |  |  | 224915 |  |  | 224915 |
| &nbsp;&nbsp;&nbsp; Fair value of compensation warrants  | 12  |  | (48729) | 48729 |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Fair value of warrants allocated to share capital on expiry  | 12  |  | 396285 | (396285) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Residual value allocated to <br> warrants  | 12  |  | (374679) | 374679 |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Stock based compensation  | 13  |  |  | 601001 |  |  |  | 601001 |
| &nbsp;&nbsp;&nbsp; Foreign currency translation adjustment  |  |  |  |  |  | 31598 |  | 31598 |
| &nbsp;&nbsp;&nbsp; Loss for the year  |  |  |  |  |  |  | (9369043) | (9369043) |
| **Balance as at December 31, 2023**  |  | **14542812** | **32565254** | **4146489** | **224915** | **(221071)** | **(37480049)** | **(764462)** |
| **Balance as at December 31, 2023**  |  | **14542812** | **32565254** | **4146489** | **224915** | **(221071)** | **(37480049)** | **(764462)** |
| &nbsp;&nbsp;&nbsp; Private placement, net of share issue cost  | 12  | 27064194 | 7478484 |  | (224915) |  |  | 7253569 |
| &nbsp;&nbsp;&nbsp; Expired broker warrants allocated to share capital on expiry  | 12  |  | 312815 | (312815) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Residual value allocated to <br> warrants  | 12  |  | (562251) | 562251 |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Residual value of warrants exercised  | 12  |  | 15275 | (15275) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Fair value of broker warrants  | 12  |  | (393138) | 393138 |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Warrants exercised for cash  | 12  | 60000 | 87367 |  |  |  |  | 87367 |
| &nbsp;&nbsp;&nbsp; Shares issued on debt settlement  | 12  | 1562500 | 927332 |  |  |  |  | 927332 |
| &nbsp;&nbsp;&nbsp; Restricted shares units exercised  | 12  | 101841 | 286019 | (286019) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Stock based compensation  | 13  |  |  | 384703 |  |  |  | 384703 |
| &nbsp;&nbsp;&nbsp; Foreign currency translation adjustment  |  |  |  |  |  | 192175 |  | 192175 |
| &nbsp;&nbsp;&nbsp; Loss for the year  |  |  |  |  |  |  | (8845163) | (8845163) |
| **Balance as at December 31, 2024**  |  | **43331347** | **40717157** | **4872472** | **—** | **(28896)** | **(46325212)** | **(764479)** |

---

The accompanying notes form an integral part of these consolidated financial statements.

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#### Liberty Defense Holdings, Ltd.

#### Consolidated Statements of Cash Flows (Expressed in U.S. dollars)

---

| | | |
|:---|:---|:---|
| | **Years ended December 31,**  | **Years ended December 31,**  |
| | **2024**  | **2023**  |
|  | **$**  | **$**  |
| **Cash (used in) provided by:** |  |  |
| **Operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp; Loss and comprehensive loss for the year  | (8845163) | (9369043) |
| &nbsp;&nbsp;&nbsp; Items not involving cash:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lease liability interest  | 69652 | 80049 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued interest  | 294304 | 222497 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation  | 396315 | 593169 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization recorded in cost of revenue  | 922221 | 695465 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss of settlement of debt  | 563996 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss on disposal of property and equipment  | 29233 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock based compensation  | 384703 | 601001 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment of inventory  | 233568 | 344158 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment of contract costs  | 115730 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Factoring fees  | 289684 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Credit Line Parabilis fees  | 74449 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign exchange  | 230974 |  |
| &nbsp;&nbsp;&nbsp; Changes in non-cash working capital:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amounts receivable and prepaids  | (1406491) | 56808 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory  | 105692 | (1200199) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract costs  | (384682) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities  | 456551 | 2259074 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue  |  | 180000 |
| **Cash used in operating activities**  | (6469264) | (5537021) |
| **Investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp; Additions to intangible assets  | (27111) | (111232) |
| &nbsp;&nbsp;&nbsp; Additions to property and equipment  | (94106) | (109863) |
| **Cash used in investing activities**  | (121217) | (221095) |
| **Financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp; Proceeds from issuance of units, net of share issue costs  | 6989017 | 3656081 |
| &nbsp;&nbsp;&nbsp; Proceeds from share subscriptions received in advance  |  | 224915 |
| &nbsp;&nbsp;&nbsp; Proceeds from Parabilis term loan  | 1800000 |  |
| &nbsp;&nbsp;&nbsp; Proceeds from Parabilis credit line  | 1551166 |  |
| &nbsp;&nbsp;&nbsp; Repayments from Parabilis credit line  | (641944) |  |
| &nbsp;&nbsp;&nbsp; Proceeds from working capital loans – Related Parties  | 82000 | 140089 |
| &nbsp;&nbsp;&nbsp; Repayments of working capital loans – Related Parties  | (71485) |  |
| &nbsp;&nbsp;&nbsp; Proceeds from working capital loans  | 927555 | 1573627 |
| &nbsp;&nbsp;&nbsp; Repayments of working capital loans  | (1274405) | (1213966) |

---

The accompanying notes form an integral part of these consolidated financial statements.

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---

| | | |
|:---|:---|:---|
| | **Years ended December 31,**  | **Years ended December 31,**  |
| | **2024**  | **2023**  |
|  | **$**  | **$**  |
| &nbsp;&nbsp;&nbsp; Proceeds from factoring  |  | 1265132 |
| &nbsp;&nbsp;&nbsp; Repayments on factoring  | (1397031) | (349970) |
| &nbsp;&nbsp;&nbsp; Repayment of CEBA loan  | (30121) |  |
| &nbsp;&nbsp;&nbsp; Proceeds from warrants exercised  | 87367 |  |
| &nbsp;&nbsp;&nbsp; Lease receivable collected  | 7048 | 20827 |
| &nbsp;&nbsp;&nbsp; Repayment of leases liabilities  | (247412) | (247189) |
| **Cash provided by financing activities**  | 7781755 | 5069546 |
| &nbsp;&nbsp;&nbsp; Effect of foreign exchange rate changes on cash  | (39008) | 12060 |
| **Effect of foreign exchange rate changes on cash**  | (39008) | 12060 |
| **Increase (decrease) in cash**  | 1152266 | (676510) |
| **Cash, beginning of the year**  | 963 | 677473 |
| **Cash, end of the year**  | 1153229 | 963 |

---

During the year ended December 31, 2024 and 2023, the Company paid $nil and $nil in income taxes, and paid $783,225 and $93,065 in interest respectively.

---

| | | |
|:---|:---|:---|
| **Supplemental cash flow information** |  |  |
| &nbsp;&nbsp;&nbsp; Fair value of compensation brokers warrants  | $393138 | $48729 |
| &nbsp;&nbsp;&nbsp; Fair value of shares issued for corporate finance fee  |  | 79299 |
| &nbsp;&nbsp;&nbsp; Residual value allocated to warrants  | 562251 | 374679 |
| &nbsp;&nbsp;&nbsp; ROU asset additions  |  | 414562 |
| &nbsp;&nbsp;&nbsp; PP&E included in accounts payable  |  | 24526 |
| &nbsp;&nbsp;&nbsp; Inventory transfer to PP&E  | 47503 | 86566 |
| &nbsp;&nbsp;&nbsp; Intangible assets included in accounts payable  | 200000 | 162407 |
| &nbsp;&nbsp;&nbsp; Fair value on expiry of warrants  | 312815 | 396285 |
| &nbsp;&nbsp;&nbsp; Restricted share units exercised  | 286019 |  |
| &nbsp;&nbsp;&nbsp; Fair value of warrants exercised  | 15275 |  |
| &nbsp;&nbsp;&nbsp; Loans settled with private placement proceeds  | 264552 |  |

---

The accompanying notes form an integral part of these consolidated financial statements.

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
1. Nature of operations and going concern

Liberty Defense Holdings, Ltd. ("Liberty" or the "Company") is a publicly traded company listed on the TSX Venture Exchange (TSXV: SCAN), the Frankfurt Stock Exchange (Frankfurt: L2D), and the OTCQB (OTCQB: LDDFF). The Company was incorporated under the Business Corporations Act (Ontario) on June 8, 2012. On July 27, 2020, Liberty continued its jurisdiction of incorporation from Ontario to British Columbia and is now governed by the Business Corporations Act (British Columbia).

The Company's registered and records office is located at 1055 West Georgia Street, Suite 1500, Royal Centre, P.O. Box 11117, Vancouver, British Columbia, V6E 4N7, Canada. Its head office is located at 187 Ballardvale Street, Suite 110, Wilmington, Massachusetts, 01887, USA.

The Company is engaged in the development and commercialization of advanced security detection technologies. Liberty's flagship product, HEXWAVE, utilizes millimeter wave technology and advanced 3D imaging to detect concealed threats. In addition to HEXWAVE, the Company has licensed High-Definition Advanced Imaging Technology (HD-AIT) for body and shoe scanning.

#### Going concern
These consolidated financial statements have been prepared using IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board applicable to a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business. The Company incurred a net loss during the year ended December 31, 2024, of $8,845,163 and had cash outflows from operating activities of $6,469,264. Given the current stage of operations, the Company's ability to continue as a going concern is contingent on its ability to obtain additional financing. While the Company has been successful in arranging financing in the past, the success of such initiatives cannot be assured. These events and conditions indicate that a material uncertainty exists that raises substantial doubt upon the Company's ability to continue as a going concern.

These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and consolidated statement of financial position classifications that would be necessary were the going concern assumption deemed to be inappropriate. These adjustments could be material.

2. Basis of presentation

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with IFRS.

These consolidated financial statements were approved for issuance by the Board of Directors on June 17, 2025.

(b) Basis of measurement

These consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments which are measured at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

(c) Functional and presentation currency

The functional currency of the Company is the Canadian dollar and the functional currencies of its subsidiaries are outlined in Note 2(d), and the presentation currency of these consolidated financial

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
2. Basis of presentation (continued)

(c) Functional and presentation currency (continued)

statements is the U.S. dollar ("USD"); therefore, references to $ means USD and CAD$ are to Canadian dollars.

(d) Basis of consolidation

These consolidated financial statements include the financial statements of Liberty Defense Holdings, Ltd., and the entities controlled by the Company (its subsidiaries), as follows:

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| | | | |
|:---|:---|:---|:---|
| **Subsidiary**  | **Place of <br> Incorporation**  | **Functional <br> Currency**  | **Beneficial <br> Interest**  |
| Liberty Defense Technologies, Inc. ("LDT")  | United States  | USD | 100% |
| DrawDown Detection, Inc. ("DDD")  | Canada  | CAD | 100% |
| LDH GS Amalco Corp.  | Canada  | CAD | 100% |
| DrawDown Technologies, Inc. ("DDT")  | United States  | CAD | 100% |

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LDH GS Amalco Corp. is dormant and has no operations.

Control exists when the Company has power over an investee, exposure, or rights, to variable returns from its involvement with the investee and the ability to use its power over the investee to affect the amount of the Company's returns. All intercompany balances and transactions have been eliminated upon consolidation.

(e) Critical accounting estimates and judgments

The preparation of financial statements in conformity with IFRS, requires management to select accounting policies and make estimates and judgments that may have a significant impact on the consolidated financial statements. Estimates are continuously evaluated and are based on management's experience and expectations of future events that are believed to be reasonable under the circumstances. Actual outcomes may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

<u>Functional currency</u> 

The functional currency for the Company is the currency of the primary economic environment in which the entity operates. The Company has determined the functional currency of the Company, DDD and DDT as the Canadian dollar (CAD$). The functional currency of LDT is USD. Determination of functional currency may involve certain judgments to determine the primary economic environment, and the Company reconsider the functional currency if there is a change in events and conditions that determined the primary economic environment.

<u>Estimated useful lives and depreciation and amortization of property and equipment and intangible assets</u> 

Depreciation and amortization of property and equipment and intangible assets are dependent upon estimates of economic useful lives, which are determined through the exercise of judgment. Should the economic useful life, or depreciation rates differ from the initial estimate, an adjustment would be made in the consolidated statement of loss and comprehensive loss on a prospective basis.

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
2. Basis of presentation (continued)

(e) Critical accounting estimates and judgments (continued)

<u>Impairment of intangible assets and other long-lived assets</u> 

Significant estimates and judgments are required in testing intangible assets and other long-lived assets, including right-of-use assets, for impairment. Management uses estimates or exercises judgment in assessing indicators of impairment, defining a CGU, forecasting future cash flows, estimating replacement cost models, and in determining other key assumptions such as discount rates and earnings multipliers used for assessing fair value (less costs of disposal) or value in use.

<u>Stock based compensation</u> 

The Company determines the fair value of stock options granted using the Black-Scholes option pricing model. This option pricing model requires the development of market-based subjective inputs, including the risk-free interest rate, expected price volatility and expected life of the option. Changes in these inputs and the underlying assumption used to develop them can materially affect the fair value estimate.

<u>Treatment of development costs</u> 

Costs to develop products are capitalized to the extent that the criteria for recognition as intangible assets in IAS 38 — Intangible Assets are met. Management will use significant judgement to determine if the intangible asset is either in the research, development, or commercialization phase. As the asset moves from the research to development phase, criteria are required to prove that the asset is in the development phase. This includes the intangible asset being technically, and economically feasible, the intangible asset is intended to be complete, has the ability to be sold, show that it will generate future economic benefits, the Company has adequate technical, financial, and other resources to complete the development, and the intangible asset has the ability to measure reliability the expenditure attribute to the intangible asset during its development. Management considers these factors in aggregate and applies significant judgment to determine whether the product is feasible and is in the development phase. Costs associated in the development phase that would be considered additions include labor associated with the design, construction, and testing of the pre-production or pre-use of the prototypes and models, tools, dies involving new technology, construction, and testing of a chosen alternative for new or improved materials, devices, products, processes, systems, or services.

<u>Warranty provisions</u> 

Warranty provisions are recognized for the future obligations to provide services for the repairs and maintenance of products sold to customers. The Company assesses its warranty provision based on experience. The actual costs incurred may differ from those amounts estimated.

<u>Right of returns</u> 

The Company estimates sales returns based on historical return patterns, current sales performance, and management's expectations regarding future returns. These estimates require the use of judgment and are updated regularly to reflect the most current trends and information available. Although the Company does not have a return policy in place, it recognizes a refund liability for the expected value of returned goods. Correspondingly, an asset is recognized for the right to recover products from customers upon settling the refund liability. Returned products are subsequently resold to other customers where applicable<u>.</u> 

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
2. Basis of presentation (continued)

(e) Critical accounting estimates and judgments (continued)

<u>Lease</u> 

The right of use assets and liabilities are measured at the present value of future lease payments discounted using the rate implicit in the lease or incremental borrowing rate for the Company if the rate implicit in the lease is not readily determined. These assumptions will impact the valuation of right of use assets and liabilities and finance cost.

<u>Income taxes</u> 

The provision for income taxes and composition of income tax assets and liabilities requires management's judgment. The application of income tax legislation also requires judgment to interpret legislation and to apply those findings to the Company's transactions.

<u>Deferred tax assets and liabilities</u> 

Management judgment and estimates are required in assessing whether deferred tax assets and deferred tax liabilities are recognized in the consolidated statements of financial position. Judgements are made as to whether future taxable profits will be available to recognize deferred tax assets. Assumptions about the generation of future taxable profits depend on management's estimates of future cash flows. These depend on estimates of future production and sales volumes, prices, operating costs, and other capital management transactions. These judgments and estimates are subject to risk and uncertainty and changes in circumstances may alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognized on the consolidated statements of financial position and the benefit of other tax losses and temporary differences not yet recognized.

<u>Going concern of operations</u> 

These consolidated financial statements do not give effect to adjustments, if any, that would be necessary should the Company be unable to continue as a going concern. If the going concern assumption was not used, then the adjustments required to report the Company's assets and liabilities on a liquidation basis could be material to these financial statements.

<u>Contract revenue recognition</u> 

Contract revenue is recognized once the Company transfers control of goods and services and satisfies performance obligations. The continuous transfer of control of goods and services to the customer is often supported by the customer's physical possession or legal title to the work in process, as well as contractual clauses that provide the Company with a present right to payment for work performed to date. As a result, significant assumptions are used to determine when these performance obligations are satisfied. Changes to these assumptions could impact the revenue recognized during the reported period.

<u>Inventory</u> 

Inventory is valued at the lower of cost and net realizable value. Cost of inventory includes cost of purchase (purchase price, import duties, transport, handling, and other costs directly attributable to the acquisition of inventories), estimated cost of conversion, and other costs incurred in bringing the inventories to their present location and condition. Net realizable value for inventories is the estimated selling price in

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
2. Basis of presentation (continued)

(e) Critical accounting estimates and judgments (continued)

the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Provisions are made in profit or loss of the current period on any difference between cost and net realizable values.

<u>Contract costs</u> 

Deferred cost of sales is recorded at the lower of cost and net realizable value. Management applies judgment and estimates in determining costs that are incurred in the current reporting period but are to be allocated to future performance obligations.

3. Material Accounting Policy Information

(a) Cash

Cash consists of cash on hand and demand deposits.

(b) Foreign currency transactions

The financial statements of entities with functional currencies other than U.S. dollars are translated into U.S. dollars for presentation purposes as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Assets and liabilities are translated at the closing rate at the date of that statement of financial position

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Income and expenses and other comprehensive income are translated at exchange rates at the date of the transaction

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • All resulting exchange differences are recognized in other comprehensive loss.

Transactions in currencies other than the functional currency of an entity are recorded at the rate of exchange prevailing on the date of the transaction. Monetary assets and liabilities that are denominated in foreign currencies are translated at the rate prevailing at each reporting date. Foreign currency translation differences arising on translation into the functional currency of an entity are recognized in the consolidated statement of loss and comprehensive loss.

(c) Inventory

The Company's inventory consists of raw materials, work-in-process ("WIP") and finished goods. The costing method the Company uses is weighted average. Inventories are measured at the lower of cost and net realizable value. The cost of WIP and finished goods includes the cost of raw materials and cost of conversion. The cost of conversion includes costs directly related to the units of production, such as direct labour, and fixed and variable production overheads, based on normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. At each reporting period, management evaluates the provision for obsolete and slow-moving inventory which may be reversed in subsequent periods, should the value subsequently be recovered.

(d) Property and equipment

Property and equipment are carried at cost, less accumulated depreciation, and accumulated impairment losses, if any. Cost comprises the fair value of consideration given to acquire an asset and includes the direct

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
3. Material Accounting Policy Information (continued)

(d) Property and equipment (continued)

charges associated with bringing the asset to the location and condition necessary for putting it into use along with the future cost of dismantling and removing the asset. When parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property and equipment. Property and equipment with an original cost of $5,000 or less is expensed on acquisition. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:

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| | |
|:---|:---|
| **Asset**  | **Life**  |
| Leasehold improvements | The term of the lease |
| Equipment | Three to seven years |
| Prototypes | One year |

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Prototypes are internally generated assets used as a preliminary model for development of the Company's product. Incurred costs on these prototypes are initially accounted for as construction in process ("CIP") and includes directly attributable costs necessary to create, produce and prepare the asset to be capable of operating in the manner intended by management. Once the prototypes being built are completed and functional, the CIP is transferred to fixed assets and begins depreciation on a straight-line basis over the estimated useful life.

Depreciation methods and useful lives are reviewed at each financial year-end and adjusted if appropriate. If any, gains, and losses on disposal of property and equipment are determined by comparing the proceeds from disposal with the carrying amount of property and equipment and are recognized net within other income (expense) in the consolidated statement of loss and comprehensive loss.

(e) Intangible assets

Intangible assets can be acquired by separate purchases, as part of a business combination, by government grant, by exchange of assets and by self-creation.

<u>Research and development costs</u> 

Expenditure in research and development activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding is recognized in the consolidated statement of loss and comprehensive loss as an expense when incurred.

Expenditure in development activities where research results are used in planning and designing the production of new or substantially improved products and processes is recognized as an intangible asset if the product or process is technically and commercially feasible, if there is an intention and ability to complete the project and then use or sell it and expect economic benefits from the project, if the Company has sufficient resources to complete development and if it is able to measure reliably the cost during development. The recognized expenditure incurred includes not only the costs caused by its production and indirect costs that can be attributed to it and recognized by the market but also the cost of borrowing in relation to its acquisition.

On initial recognition, an intangible asset is measured at cost. After initial recognition, the Company monitors intangible assets according to the cost model, whereby their cost is decreased by any accumulated depreciation and any accumulated impairment losses.

<u>Amortization</u> 

Intangible assets are classified as those with finite useful lives and those with indefinite useful lives. The carrying amount of an intangible asset with a finite useful life is reduced by depreciation and impairments.

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
3. Material Accounting Policy Information (continued)

(e) Intangible assets (continued)

Depreciation of intangible fixed assets begins to be calculated when the asset is available for use. The adequacy of the depreciation period and the depreciation method are reviewed at least at each financial year-end. Any adjustments necessary are accounted for as a change in an accounting estimate.

Depreciation is calculated on a straight-line basis, beginning the following day in the month when the asset is available for use over the life of the asset. The useful lives of the assets will vary depending on the analysis conducted and comparable assets will be taken into consideration. The current useful lives are as follows:

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| | |
|:---|:---|
| **Asset**  | **Life**  |
| MIT License | Fourteen years |
| Battelle License | Three years |
| Intellectual Property | Seven years |

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Intangible assets with indefinite useful life are tested for impairment at least on the balance sheet date. These assets are not subject to amortization. The useful life is reassessed to determine whether the assets need not be treated as having finite useful life, and the effect is accounted as a change in an accounting estimate.

(f) Warranty provision

The Company provides product warranties on certain products pursuant to the contract and purchase orders and makes provision for the anticipated cost of these warranties through cost of sales; this provision is reviewed periodically to assess its adequacy in the light of actual warranty costs incurred.

(g) Refund liabilities

The Company recognizes a refund liability when it receives consideration from a customer and expects to refund some or all of that consideration.

In accordance with IFRS 15, revenue is recognized only for the portion of consideration the Company expects to be entitled to, excluding amounts anticipated to be refunded. A refund liability is measured at the amount of consideration the Company expects to refund to customers.

Simultaneously, the Company recognizes an asset for its right to recover products from customers upon settling the refund liability. This asset is measured at the carrying amount of the inventory expected to be returned, adjusted for any expected costs to recover the goods and potential impairment.

At each reporting period, the Company updates the measurement of the refund liability and the corresponding asset to reflect changes in expectations about the amount of refunds and returns

(h) Impairment of non-financial assets

Long-lived assets are reviewed for impairment at the end of each reporting period or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
3. Material Accounting Policy Information (continued)

(h) Impairment of non-financial assets (continued)

assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount and the fair value less costs to sell.

The carrying amounts of the Company's non-financial assets, other than deferred tax assets if any, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated.

For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit" or "CGU"). The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs.

An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss.

Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. A reversal of an impairment loss is recognized immediately in the consolidated statement of loss and comprehensive loss.

(i) Financial instruments

The Company recognizes financial assets and liabilities on its financial statements when it becomes a party to the contract creating the asset or liability.

 *Classification* 

The Company classifies its financial instruments in the following categories: at fair value through profit and loss ("FVTPL"), at fair value through other comprehensive income (loss) ("FVTOCI"), or at amortized cost.

On initial recognition, all financial assets and liabilities are recorded by the Company at fair value, net of attributable transaction costs, except for financial assets and liabilities classified as FVTPL for which

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
3. Material Accounting Policy Information (continued)

(i) Financial instruments (continued)

transaction costs are expensed in the period in which they are incurred. The classification of the Company's financial instruments is as follows:

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| | |
|:---|:---|
| **Financial assets/liabilities**  | **Classification IFRS 9**  |
| Cash | Amortized cost  |
| Accounts receivable | Amortized cost  |
| Lease receivable | Amortized cost  |
| Accounts payable and accrued liabilities | Amortized cost  |
| CEBA loan | Amortized cost  |
| Loans payable | Amortized cost  |
| Parabilis term loan | Amortized cost  |
| Factoring liability | Amortized cost  |
| Lease liabilities | Amortized cost  |

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<u>Amortized cost</u> 

Financial assets that meet the following conditions are measured subsequently at amortized cost:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

The amortized cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortization using effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. Interest income is recognized using the effective interest method.

<u>Fair value through other comprehensive income ("FVTOCI")</u> 

Financial assets that meet the following conditions are measured at FVTOCI:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition, the Company may make an irrevocable election (on an instrument-by-instrument basis) to designate investments in equity instruments that would otherwise be measured at fair value through profit or loss to present subsequent changes in fair value in other comprehensive income. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination. Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in OCI. The cumulative gain or loss is not reclassified to profit or loss on disposal of the equity instrument, instead, it is transferred to retained earnings.

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
3. Material Accounting Policy Information (continued)

(i) Financial instruments (continued)

The Company does not have any financial assets classified as FVTOCI.

<u>Fair value through profit or loss ("FVTPL")</u> 

By default, all other financial assets are measured subsequently at FVTPL.

The Company, at initial recognition, may also irrevocably designate a financial asset as measured at FVTPL if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases.

<u>Fair value through profit or loss ("FVTPL") (continued)</u> 

Financial assets measured at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognized in profit or loss to the extent they are not part of a designated hedging relationship.

<u>Financial liabilities and equity</u> 

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs. The repurchase of the Company's own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments. Financial liabilities that are not contingent consideration of an acquirer in a business combination, held for trading or designated as at FVTPL, are measured at amortized cost using the effective interest method.

<u>Financial instruments designated as hedging instruments</u> 

The Company does not currently apply, nor has it historically applied, hedge accounting to financial instruments.

<u>Impairment</u> 

The Company recognizes a loss allowance for expected credit losses on its financial assets. The amount of expected credit losses is updated at each reporting period to reflect changes in credit risk since initial recognition of the respective financial instruments.

(j) Income taxes

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
3. Material Accounting Policy Information (continued)

(j) Income taxes (continued)

transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantially enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax assets and liabilities, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis, or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(k) Share capital

Common shares are classified as equity. Transactions costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effect.

(l) Share-based payments

The Company grants restricted share units, deferred share units, and stock options to directors, officers, and consultants pursuant to a stock option plan described in Note 13. The Company uses the fair value method to account for all share-based awards granted, modified, or settled, and the Black-Scholes Option Pricing Model to determine the fair value of stock options granted. As such, a share-based payment is recorded based on the estimated fair value of options with a corresponding credit to equity reserves. Any consideration received plus the amounts recognized in the equity reserves will be transferred to share capital on the exercise of stock options. The amounts remain in equity reserves for stock options which expire unexercised. Stock options with graded vesting schedules are accounted for as separate grants with different vesting periods and fair values. Changes to the estimated number of share options that will eventually vest are accounted for prospectively. Options issued to non-employees are valued based on the fair value of the services provided unless the fair value of the services provided cannot be measured reliably, in which case, the fair value is measured by reference to the fair value of the equity instruments granted.

(m) Warrants issued in equity financial transactions

The Company uses the residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component. The fair value of the common shares issued in the private placements was determined to be the more easily measurable component and were valued at their fair value, as determined by the quoted bid price on the issuance date. The balance, if any, was allocated to the attached warrants. Any fair value attributed to the warrants on exercise is recorded as equity. If warrants issued to brokers or finders are subsequently cancelled or expire without being exercised, then the historical fair value of the equity reserve is transferred from reserve to share capital. If the warrants are exercised the related reserves are reclassified from reserves to share capital.

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
3. Material Accounting Policy Information (continued)

(n) Earnings (loss) per share

The Company presents basic and diluted earnings (loss) per share ("EPS") data for its common shares. Basic EPS is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period adjusted for own shares held. Diluted EPS per share is calculated by dividing the earnings (loss) by the weighted average number of common shares outstanding assuming that the proceeds to be received on the exercise of dilutive stock options and warrants are used to repurchase common shares at the average market price during the period.

In the Company's case, diluted loss per share is the same as basic loss per share, as the effect of outstanding share options and warrants on loss per share would be anti-dilutive.

(o) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether it has the right to obtain substantially all of the economic benefits from and to direct the use of the identified asset.

At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices.

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset, or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case, the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of asset leased.

Lease payments included in the measurement of the lease liability comprise the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • fixed payments, including in-substance fixed payments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
3. Material Accounting Policy Information (continued)

(o) Leases (continued)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • amounts expected to be payable under a residual value guarantee; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension, or termination option, or if there is a revised in-substance fixed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in the statement of loss and comprehensive loss if the carrying amount of the right-of-use asset has been reduced to zero.

Leases for which the Company is a lessor, are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.

When the Company is an intermediate lessor, it accounts for the head lease and the sublease as two separate contracts. The sublease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease. Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line basis over the lease term. Amounts due from lessees under finance leases are recognized as receivables at the amount of the Company's net investment in the leases. Finance lease income is allocated to reporting periods so as to reflect a constant periodic rate of return on the Company's net investment outstanding in respect of the leases.

Short-term leases and leases of low-value assets:

The Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including office equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(p) Revenue recognition

Contract Revenue:

When determining the proper revenue recognition methods for contracts, the Company will evaluate each contract to determine if it meets the recognition criteria. A contract will be identified if both parties to the contract have approved the contract and are committed to perform their respective obligations, each party's rights and payment terms can be identified regarding the goods or services to be transferred, and collectability of consideration is probable.

Performance obligations are determined throughout each contract. The Company's contracts are based on a specific set of tasks that are identified and agreed upon, as well as the transaction price is determined and agreed upon between both parties. Each contract accounts for the timing of these tasks at different points,

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
3. Material Accounting Policy Information (continued)

(p) Revenue recognition (continued)

either on completion of a task or on a monthly/quarterly basis. The total transaction price is allocated to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. The satisfaction of the performance obligations is typically measured with either the input method or the output method.

The Company typically transfers control of goods and services, and satisfies performance obligations, over time. Therefore, the Company recognizes revenue over time as these performance obligations are satisfied. This continuous transfer of control to the customer is often supported by the customer's physical possession or legal title to the work in process, as well as contractual clauses that provide the Company with a present right to payment for work performed to date. These costs include labor, materials, other direct and allocations of indirect costs.

The transaction price is determined by considering the terms of the contract. Typically, the contracts the Company enters into are contracts that already have a fixed price set to them. These contracts still go through a significant amount of consideration and estimates to provide the transaction price. When determining the transaction price, or work to be completed in the transaction price, estimates of labor, material, travel, other direct costs, and indirect costs are considered. Costs that the Company will recognize as expense are general and administrative costs (besides the costs explicitly chargeable to the contract), costs of wasted materials labor and other resources, costs related to satisfied performance obligations, and all costs for which an entity cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations.

HEXWAVE units:

Revenue arising from the sale of HEXWAVE units is recognized as the Company fulfills its performance obligations upon delivery and successful commissioning of the product to the customer. Additionally, the Company generates revenue through other streams related to HEXWAVE technology, including subscription sales, installation, and training services. Revenue from upfront sales of HEXWAVE units is initially recorded as deferred revenue until the obligation of shipment and delivery is fulfilled. Subsequently, upon meeting this obligation, the deferred revenue is recognized as earned revenue, net of provisions for estimated sales return.

(q) Contract costs

Under contract revenue arrangements, the Company incurs costs in advance of recognizing revenue. These costs are recorded as contract costs and carried forward until the related revenues are recognized, at which time it is expensed. Deferred cost of sales is recorded at the lower of cost and net realizable value.

(r) Factoring arrangements

The Company engages in factoring arrangements as a means of managing its accounts receivable and optimizing its working capital. Under these arrangements, the Company sells certain accounts receivable to a third-party financial institution (the 'Factor'). Upon entering into a factoring arrangement, the Company recognizes a financial asset for the rights to receive cash flows from the factored receivables if and only if derecognition conditions are met. In cases where derecognition criteria are not met, the Company continues to recognize the financial asset in its entirety and recognizes a corresponding financial liability for the consideration received.

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
3. Material Accounting Policy Information (continued)

(r) Factoring arrangements (continued)

The Company evaluates whether derecognition criteria are met, considering the nature of the contractual rights and obligations. If the Company retains substantially all the risks and rewards of ownership of the transferred asset, the financial asset is not derecognized. Consequently, the associated liability is measured at fair value reflecting the rights and obligations retained by the Company.

The Company continues to recognize the financial asset and associated liability at each reporting period. Any income on the transferred asset and any expense incurred on the financial liability, including associated financing fees or discounts, are recognized in subsequent periods over the term of the factoring arrangement.

(s) Changes in accounting standards

The following new standards and amendments became effective for the current periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Amendments to IAS 1 — Classification of Liabilities as Current or Non-current. The amendment clarified the guidance on whether a liability should be classified as either current or non-current. The amendments are applied retrospectively for annual periods beginning on or after January 1, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Amendments to IFRS 16 — Lease liability in a Sale and Leaseback. The amendment clarifies how a seller-lessee subsequently measures sale and leaseback transactions that satisfy the requirements in IFRS 15 to be accounted for as a sale. These amendments are effective for annual periods beginning on or after January 1, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Amendments to IAS 7 — Requiring entities to provide qualitative and quantitative information about their supplier finance arrangements. In connection with the amendments to IAS 7, the IASB also issued amendments to IFRS 7 requiring entities to disclose whether they have accessed, or have access to, supplier finance arrangements that would provide the entity with extended payment terms or the suppliers with early payment terms. These amendments are effective on January 1, 2024.

The Company did not encounter any material effects from the implementation of these new standards or amendments in 2024.

The following new standards and amendments were issued but not yet effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • IFRS 18 Presentation and Disclosure in Financial Statements — In April 2024, the IASB issued IFRS 18 which replaces IAS 1 — Presentation of Financial Statements. This standard introduces a new structure for financial statements, aiming to improve comparability and transparency. IFRS 18 is effective for annual periods beginning on or after January 1, 2027.

The Company is currently assessing the impact that, IFRS 18, will have on its consolidated financial statements.

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
4. Accounts Receivable, Prepaids and Deposits

---

| | | |
|:---|:---|:---|
| | **December 31, <br> 2024**  | **December 31, <br> 2023**  |
| Accounts receivable  | $255148 | $25494 |
| Prepaids and deposits  | 1409228 | 232391 |
|  | $**1664376** | $**257885** |

---

5. Inventory

---

| | | |
|:---|:---|:---|
| | **December 31, <br> 2024**  | **December 31, <br> 2023**  |
| Raw materials  | $211553 | $734824 |
| Work-in-progress  | 128761 | 467940 |
| Finished goods  |  | 52313 |
| Right of return on finished goods  | 528000 |  |
|  | $**868314** | $**1255077** |

---

The Company reclassified finished goods inventory of $nil (December 31, 2023, $86,556) to property and equipment related to a HEXWAVE prototype unit. The Company reclassified work in process assemblies of $48,185 (December 31, 2023, $nil) to property and equipment related to the engineering prototype HEXWAVE unit. The engineering prototype HEXWAVE unit was disassembled and upgraded to be used for testing and development of enhanced algorithms.

As of December 31, 2024, the Company recognized an impairment expense of $233,568 (December 31, 2023 — $344,158). The Company recorded right of returns totaling $528,000 (2023 — $nil).

During the year ended December 31, 2024, the Company expensed $1,799,930 of inventory to cost of revenue (December 31, 2023, $258,055).

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
6. Property and Equipment

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Equipment**  | **Right of Use <br> Asset**  | **Prototype**  | **Construction in <br> Process**  | **Total**  |
| **Cost** |  |  |  |  |  |
| At December 31, 2022  | $222954 | $772312 | $584859 | $88715 | $1668840 |
| Additions  |  | 414562 | 86556 | 134389 | 635507 |
| Transfers  |  |  | 171899 | (171899) |  |
| At December 31, 2023  | $222954 | $1186874 | $843314 | $51205 | $2304347 |
| Additions  | 25241 |  | 48185 | 68183 | 141609 |
| Disposals  |  |  | (116933) |  | (116933) |
| **At December 31, 2024**  | $248195 | $1186874 | $774566 | $119388 | $2329023 |
| **Accumulated Depreciation** |  |  |  |  |  |
| At December 31, 2022  | $71717 | $234982 | $360662 | $— | $667361 |
| Depreciation for the year  | 59059 | 192581 | 341529 |  | 593169 |
| At December 31, 2023  | $130776 | $427563 | $702191 | $— | $1260530 |
| Depreciation for disposal  |  |  | (87700) |  | (87700) |
| Depreciation for the year  | 58788 | 189499 | 148028 |  | 396315 |
| **At December 31, 2024**  | $189564 | $617062 | $762519 | $— | $1569145 |
| **Foreign exchange movement** |  |  |  |  |  |
| At December 31, 2023  | $— | $59 | $— | $— | $59 |
| **At December 31, 2024**  | $— | $59 | $— | $— | $59 |
| **Net Book Value** |  |  |  |  |  |
| At December 31, 2023  | $92178 | $759370 | $141123 | $51205 | $1043876 |
| **At December 31, 2024**  | $**58631** | $**569871** | $**12047** | $**119388** | $**759937** |

---

On February 1, 2023, the Company entered into two new office lease agreements, each with a term of thirty-six months. The first lease resulted in the recognition of an initial right-of-use asset totaling $58,386, using an implicit interest rate of 9.68%, and the second lease resulted in the recognition of an initial right-of-use asset totaling $356,176, using an implicit interest rate of 9.81%.

During the year ended December 31, 2024, equipment depreciation recorded to cost of revenue was $147,336 (December 31, 2023 — $66,483). During the year ended December 31, 2024, the Company disposed of assets with a carrying value of $29,233 (December 31, 2023 — $nil) for $nil proceeds (December 31, 2023 — $nil).

7. Intangible Assets

The continuity of the Company's intangible assets is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **MIT <br> license**  | **Battelle <br> license**  | **Intellectual <br> property**  | **Total**  |
| Balance, December 31, 2022  | $441225 | $59430 | $3229808 | $3730463 |
| Additions  |  | 231805 |  | 231805 |
| Amortization  | (34108) | (67985) | (593372) | (695465) |
| Balance, December 31, 2023  | $407117 | $223250 | $2636436 | $3266803 |
| Additions  |  | 227111 |  | 227111 |
| Amortization  | (34108) | (450361) | (437752) | (922221) |
| **Balance, December 31, 2024**  | $**373009** | $**—** | $**2198684** | $**2571693** |

---

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
7. Intangible Assets (continued)

Intangible assets including MIT license and Battelle license, encompassing payments in connection to reimbursement of global patent filing costs and annual maintenance fees. Additionally, intellectual property was generated through the reverse take over ("RTO") transaction closed during the year ended December 31, 2021, and became ready for use during the year ended December 31, 2022. The remaining useful life of the intangible assets are as follows: MIT license 11 years, Battelle license nil years, and intellectual property 4 years.

During the year ended December 31, 2024, $922,221 of amortization expense was allocated to cost of revenues (December 31, 2023 — $695,465).

(a) MIT License Agreements

The Company, through its wholly owned subsidiary Liberty Defense Technologies Inc. ("LDT"), has entered into agreements with the Massachusetts Institute of Technology ("MIT") and MIT's Lincoln Laboratory ("MIT LL"), including an exclusive patent licence agreement between MIT and LDT dated September 10, 2018, as amended from time to time (the "Licence Agreement"), a technology transfer agreement between LDT and MIT LL, effective August 24, 2018 (the "Technology Transfer Agreement"), and a cooperative research and development agreement between LDT and MIT dated as of December 21, 2018 ("CRADA"), such agreements providing LDT with an exclusive licence for patents, design assets and MIT LL technical expertise related to active three-dimensional imaging technology that are the technology behind the HEXWAVE product.

The obligations under the Technology Transfer Agreement and the CRADA have now been completed. Liberty may consider extending the CRADA (and therefore changing its scope) if it determines that additional MIT LL technical expertise related to active three-dimensional imaging technology is required. Pursuant to the License Agreement, LDT has been granted the exclusive rights to MIT's patent in "multistatic sparse array topology for FFT-based field imaging" (MIT Case No. l 8409L) (the "Patent"), which is being utilized in the development and application of the HEXWAVE product. The License Agreement is to be in effect until the expiration of the Patent, which is 11 years (December 2035). In granting LDT such patent rights, the Company shall pay MIT, in addition to patent filling costs, an annual fees as follows: 1) $20,000 for 2019 (paid); $50,000 for 2020 (paid); $60,000 for 2021 (paid); $100,000 for 2022 (paid); $nil for 2023, $40,000 for 2024 (payable), $200,000 for 2025, and $350,000 for 2026 and thereafter; and 2) a royalty of 5.7% of all future net sales of the Company.

During the year ended December 31, 2024, the Company accrued royalty payments of $105,993 (December 31, 2023, $nil). The Company shall also be required to achieve certain milestones.

(b) Battelle Memorial License Agreement

On March 22, 2021, the Company, through its wholly owned subsidiary DrawDown Detection, Inc. has entered into an agreement ("Battelle License Agreement") with Battelle Memorial Institute ("Battelle"), which operates the Pacific Northwest National Laboratory ("PNNL"), to license the millimeter wave-based, High-Definition Advanced Imaging Technology (HD-AIT) body scanner and shoe scanner technologies. The agreement, as amended from time to time, provides the Company with a three-year exclusive license for certain patents which will convert to a non-exclusive license for the remaining life of the patents. The agreement also provides the Company with non-exclusive license for certain patents for life.

As consideration for the Battelle License Agreement, the Company paid $30,000 upon signing and $30,000 six months after.

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
7. Intangible Assets (continued)

(b) Battelle Memorial License Agreement (continued)

Under the Battelle License Agreement, the Company shall pay a five percent royalty on net sales and a twenty-five percent royalty on all sublicensing revenues if permitted under the contract guidelines.

The Company is required to pay a minimum royalty amount as follows, unless the agreement is terminated:

---

| | |
|:---|:---|
| | **Amounts**  |
| Year 2021 (paid)  | $50000 |
| Year 2022 (paid)  | 50000 |
| Year 2023 (payable)  | 100000 |
| Year 2024 and each year thereafter (payable)  | 200000 |

---

The Company is obligated to achieve certain milestones in the next fifteen months and reimburse Battelle for ongoing patenting expenses, as well as past patenting expenses in the total amount of $50,000, from which $50,000 has been paid.

As at December 31, 2024, the Company has a balance of $290,566 payable (December 31, 2023, $100,000).

8. Loans Payable

(a) Related Party Loans

During the year ended December 31, 2024 and 2023, the Company received working capital loans from related parties. These loans, unsecured and non-interest bearing, lack specified maturity dates. Repayments will be made as adequate financing becomes available to the Company.

---

| | |
|:---|:---|
| | **Amounts**  |
| **Balance, December 31, 2022**  | $**—** |
| Additions  | 1381120 |
| Repayments  | (1052426) |
| **Balance, December 31, 2023**  | $**328694** |
| Additions  | 82000 |
| Repayments  | (336037) |
| **Balance, December 31, 2024**  | $**74657** |

---

(b) Short Term Loans

During the year ended December 31, 2023, the Company received a secured business line of credit from American Express, subject to a general security agreement on the Company's assets, with various draws. The interest rate on the amount withdrawn varied from 7.49% to 25.71% over a six-month term. The monthly payments fluctuated based on the amount withdrawn from the line of credit with amounts ranging from $1,782 to $10,624 per month. During the year ended December 31, 2024, the Company borrowed $11,900 (2023 — $166,210) from this line of credit. The loan matured on June 25, 2024. During the year ended December 31, 2024, the Company fully repaid this loan.

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
8. Loans Payable (continued)

(b) Short Term Loans (continued)

During the year ended December 31, 2023, the Company secured an unsecured business line of credit of $83,036 from BlueVine Capital. The credit facility had a twenty-six-week term, an interest rate of 1.10%, and required weekly payments of $3,906. The loan matured on June 5, 2024, and was fully repaid.

During the year ended December 31, 2023, the Company received a secured business line of credit with Headway Capital, subject to a general security agreement of the Company's assets, with one draw for a period of seventeen-months with a monthly interest rate of 4.17%. During the year ended December 31, 2024, the Company borrowed $21,275 (2023 — $83,350) from this line of credit. The loan matures on January 31, 2025. During the year ended December 31, 2024, the Company fully repaid this loan.

During the year ended December 31, 2024, the Company obtained a secured business loan of $420,000 from Blade Funding with a 32-week term. The loan carries an annual interest rate of 11.50%, requires weekly payments of $13,125. It is scheduled to mature on January 19, 2025. As at December 31, 2024, the balance outstanding was $26,250 (December 31, 2023 — $nil). Subsequent to the year ended December 31, 2024, the balance was fully repaid.

On July 2, 2024, the Company received a short-term loan of $250,000 from 1087207 BC Ltd. The loan had a minimum upfront interest payment of $20,000, in which the Company received $230,000, net. During the year ended December 31, 2024, the balance owed was paid in full.

During the year ended December 31, 2024, the Company received $350,394 in non-interest-bearing short-term loans. During the year ended December 31, 2024, the Company fully repaid these loans.

---

| | |
|:---|:---|
| | **Total**  |
| **Balance, December 31, 2022**  | $**—** |
| Additions  | 332596 |
| Repayments  | (161540) |
| Accrued Interest  | 30312 |
| **Balance, December 31, 2023**  | $**201368** |
| Additions  | 1053569 |
| Repayments  | (1260419) |
| Accrued Interest  | 31732 |
| **Balance, December 31, 2024**  | $**26250** |

---

(c) CEBA Loan

The Company obtained a CAD$40,000 Canada Emergency Business Account loan ("CEBA") on May 5, 2020, with a 0% interest rate applicable until January 18, 2024 (the "Term Period"). The loan was used to cover payroll, rent, and utilities in compliance with the loan agreement guidelines. Under the terms of the loan, if 75% of the principal amount was repaid by the end of the Term Period, the remaining 25% would be forgiven.

The Company did not repay the required amount by the end of the Term Period, resulting in the loan being converted to a term facility. As of June 30, 2024, the outstanding balance of $29,269 (December 31, 2023 — $29,445) began accruing interest at an annual rate of 5%.

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
8. Loans Payable (continued)

(c) CEBA Loan (continued)

As at December 31, 2023, the net present value of the CEBA loan was $29,445, which was recorded as a current liability. During the year ended December 31, 2024, the CEBA loan was fully repaid.

9. Parabilis Term Loan

On August 22, 2024, the Company secured a $1,800,000 business term loan from Parabilis (PFF, LLC). The loan has a term of 104 weeks with an annual interest rate of 17.99% and is scheduled to mature on August 15, 2026. Repayments are set to commence in March 2025 with monthly payments of $125,299 for eighteen months. See Note 10(a) regarding collateral.

---

| | |
|:---|:---|
| | **Amounts**  |
| **Balance, December 31, 2022 and 2023**  | $**—** |
| Additions  | 1800000 |
| Interest and fees  | 121687 |
| **Balance, December 31, 2024**  | $**1921687** |
| Current  | $983476 |
| Non-Current  | $938211 |

---

10. Factoring Liability

(a) Parabilis Credit Line

On August 22, 2024, the Company entered into a secured revolving credit line agreement with Parabilis (PFF, LLC) for up to $2,500,000. The borrowing base for the credit line is determined based on the following percentages: 90% of eligible billed receivables, 65% of eligible unbilled receivables, and 30% of eligible delivery orders. The aggregate of eligible billed and unbilled receivables, along with eligible delivery orders, establishes the Company's borrowing capacity under the credit line.

When invoicing occurs, payments on the invoices are applied directly to the outstanding principal and interest on the credit line. The revolving credit facility has a maturity date of August 31, 2025, with the option for extension at Parabilis' sole discretion. The facility carries an interest rate of 14.99% per annum, subject to re-evaluation on June 1, 2025, at which point the rate may increase to a maximum of 16.99% per annum.

The Parabilis term loan and credit line are secured by all tangible and intangible personal property of the Company, wherever located, whether currently owned or acquired in the future.

---

| | |
|:---|:---|
| | **Amounts**  |
| **Balance, December 31, 2022 and 2023**  | $**—** |
| Additions  | 1551166 |
| Accrued factoring Fee  | 74449 |
| Repayments  | (641944) |
| **Balance, December 31, 2024**  | $**983671** |

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
10. Factoring Liability (continued)

(b) Bengal Capital Factoring

On June 22, 2023, the Company engaged in a factoring arrangement with Bengal Capital, Inc. (the "Factor"). Per the agreement, the Company submits invoices or purchase orders to the Factor after credit approval, receiving 80% of the gross amount. The Factor assumes ownership of these accounts with full recourse. Furthermore, the Company is subject to a 4% monthly factoring fee based on the face value of the accounts. No collateral is used per the agreement; however, the Company is obligated to pay the balance regardless of receiving payment for advanced orders.

During the year ended December 31, 2024, the Company received funds of $nil (2023 — $1,265,132) and incurred factor fees of $289,684 (2023 — $192,185) with repayments of $1,397,031 (2023 — $349,970).

The factoring liability as at December 31, 2024, and 2023 is as follows:

---

| | |
|:---|:---|
| | **Amounts**  |
| **Balance, December 31, 2022**  | $**—** |
| Additions  | 1265132 |
| Accrued factoring Fee  | 192185 |
| Repayments  | (349970) |
| **Balance, December 31, 2023**  | $**1107347** |
| Accrued factoring Fee  | 289684 |
| Repayments  | (1397031) |
| **Balance, December 31, 2024**  | $**—** |

---

For accounting purposes, the factored trade receivable remains recorded in trade receivables, while the financing costs are amortized over the financing period.

11. Leases

The Company's lease liabilities as at December 31, 2024, and 2023, are as follows:

---

| | |
|:---|:---|
| | **Right of <br> use <br> liability**  |
| Balance, December 31, 2022  | $638306 |
| Additions  | 414562 |
| Finance costs  | 81032 |
| Lease payments  | (247189) |
| Foreign exchange movement  | (126) |
| Balance, December 31, 2023  | $886585 |
| Finance costs  | 69652 |
| Lease payments  | (247412) |
| **Balance, December 31, 2024**  | $**708825** |

---

During the year ended December 31, 2024, the Company recorded a lease expense of $nil (December 31, 2023 — $23,317, respectively) related to short-term leases not meeting the criteria for capitalization under IFRS 16.

------

[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
11. Leases (continued)

Minimum lease payments are as follows:

---

| | | |
|:---|:---|:---|
| | **December 31, <br> 2024**  | **December 31, <br> 2023**  |
| Maturity analysis – contractual undiscounted cash flows |  |  |
| One year or less  | $257461 | $247412 |
| Two to five years  | 558358 | 815820 |
| Six and thereafter  |  |  |
| Total lease liabilities  | $815819 | $1063232 |
| **Lease liabilities included in the statement of financial position**  | $**708825** | $**886585** |
| Current  | $203443 | $247412 |
| Non-current  | $505382 | $639173 |

---

The Company's lease receivable balances as at December 31, 2024, and 2023, are as follows:

---

| | |
|:---|:---|
| | **Amounts**  |
| Balance, December 31, 2022  | $26837 |
| Accretion  | 983 |
| Payments received  | (20827) |
| Foreign exchange movement  | 55 |
| Balance, December 31, 2023  | $7048 |
| Accretion  | 78 |
| Payments received  | (6928) |
| Foreign exchange movement  | (198) |
| **Balance, December 31, 2024**  | $**—** |

---

As a result of the completion of the RTO in March 2021, the Company's head office was moved to Boston, MA. Therefore, the previous head office space was subleased until the expiry of the headlease (April 2024). The Company fair valued the lease receivable by present valuing the expected lease receivable payments over the life of the lease. The Company used an interest rate of 5.55%, the interest rate implicit in the lease. As at December 31, 2024, the minimum undiscounted sublease payments receivable is $nil (December 31, 2023 — $7,129).

12. Share Capital

On November 26, 2024, Liberty completed a share consolidation on a 10 to 1 basis, converting every 10 old common shares into 1 new common share. All common shares and per-share data presented in the Company's consolidated financial statements have been retroactively adjusted to reflect this consolidation unless otherwise noted.

(a) Common share transactions for the year ended December 31, 2024

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; i)

On January 12, 2024, the Company closed the initial tranche of a Listed Issuer Financing Exemption (LIFE) private placement of units, raising gross proceeds of $662,554 (CAD$886,000). As of December 31, 2023, the Company had received $224,915 of these proceeds. This tranche involved the issuance of 590,068 units at a price of CAD$1.50 per unit. Each unit consisted of one

------

[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
12. Share Capital (continued)

(a) Common share transactions for the year ended December 31, 2024 (continued)

common share and one purchase warrant, allowing the holder to purchase an additional common share at CAD$2.00 per share within 36 months. The warrants were allocated a residual value of $154,596. Additionally, the Company issued 15,171 broker warrants to agents under identical terms and conditions with a fair value of $4,508. Agent commissions totaling $17,110 were paid.

ii)

Subsequently, on February 5, 2024, the Company closed the final tranche of the same non-brokered private placement, raising an additional $112,285 (CAD$150,000). This tranche involved the issuance of 100,000 units under the same terms and conditions as the initial tranche. Each unit consisted of one common share and one purchase warrant, allowing the holder to purchase an additional common share at CAD$2.00 per share within 36 months. The warrants were allocated a residual value of $37,428.

iii)

On February 26, 2024, the Company closed an investment by Viken Detection Corp. ("Viken") pursuant to which Viken purchased 909,091 units of the Company at an issue price of CAD$1.50 per unit for total gross proceeds of $1,000,000 (CAD$1,363,636). Each unit comprised one common share and one purchase warrant. Each warrant entitles Viken to purchase one additional common share of the Company at an exercise price of CAD$2.00 for a period of 36 months. The warrants were allocated a residual value of $166,667. Additionally, the Company also incurred cash costs in connection to filing and legal expenses in the amount of $27,116 were also paid. These warrants contain blocker language restricting the exercise of the warrants in the event such exercise results in Viken holding more than 9.9% of the outstanding voting securities of the Company.

iv)

On March 17, 2024, a total of 199,636 finder warrants expired with an exercise price of CAD$3.30. These broker warrants had a fair value of $312,815 and the reserve value was reclassified to share capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; v)

During the year ended December 31, 2024, a total of 101,841 common shares were issued pursuant to the exercise of RSUs with a fair value of $286,019.

vi)

During the year ended December 31, 2024, a total of 60,000 shares were issued pursuant to the exercise of 60,000 warrants, resulting in proceeds of $87,367 (CAD$120,000). Residual value in the amount of $15,275 was reversed.

vii)

On August 13, 2024, the Company closed the first tranche of a non-brokered private placement for gross proceeds of $508,864 (CAD$697,550). The Company issued 465,035 special warrants of the Company at a price of CAD$1.50 per Unit. Each special warrant will automatically convert into one Unit. Each Unit shall consist of one common share and one share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share of the Company at a price of CAD$2.00 within a period of 36 months. These special warrants were converted into one Unit on August 13, 2024. The warrants were allocated a residual value of $203,560. The Company paid the agents 19,051 broker warrants with a fair value of $5,757. Each broker warrant will be exercisable to purchase one common share for a period of 36 months at an exercise price of CAD$2.00. Additionally, the Company also incurred cash costs in connection to private placement in the amount of $30,995.

------

[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
12. Share Capital (continued)

(a) Common share transactions for the year ended December 31, 2024 (continued)

viii)

On December 18, 2024, the Company closed a non-brokered private placement for gross proceeds of $5,585,812 (CAD$8,000,000). The Company issued 25,000,000 units (each a "Unit") of the Company at a price of CAD$0.32 per Unit. Each Unit comprised of one common share and one-half common share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share of the Company at a price of CAD$0.55 for a period of 24 months and are subject to an accelerated expiry at the Company's election under certain conditions. The Company paid the agents $274,123 in finders fees and issued 1,251,062 finder warrants with a fair value of $382,873. Each finder's warrant will be exercisable to purchase one common share for a period of 24 months at an exercise price of CAD$0.55. Additionally, the Company also incurred cash costs in connection to private placement in the amount of $41,687.

ix)

The Company settled a total of $363,336 (CAD$520,947) of indebtedness with a certain creditor by issuing 1,562,500 units valued at $927,332 and follows the same terms as the units issued on December 18, 2024, non-brokered private placement. The Company recognized a loss on extinguishment of debt totalling $563,996 (included in other expenses (2023 – $nil).

(b) #### Common share transactions for the year ended December 31, 2023
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; i)

On March 11, 2023, a total of 109,813 finder warrants expired with an exercise price of CAD$4.00. These broker warrants had a fair value at $188,021 and the reserve value was reclassified to share capital.

ii)

On April 14, 2023, the Company closed the first tranche of a non-brokered private placement for gross proceeds of $1,007,249 (CAD$1,341,212). The Company issued 670,606 units (each a "Unit") of the Company at a price of CAD$2.00 per Unit. Each Unit comprised of one common share and one-half share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share of the Company at a price of CAD$3.00 within a period of 24 months. The warrants were allocated a residual value of $100,727. The Company paid the agents 21,525 broker warrants with a fair value of $5,498. Each broker warrant will be exercisable to purchase one common share for a period of 24 months at an exercise price of CAD$3.00. Additionally, the Company also incurred cash costs in connection to private placement in the amount of $39,594.

iii)

On May 9, 2023, the Company closed the second tranche of a non-brokered private placement for gross proceeds of $296,116 (CAD$397,000). The Company issued 198,500 units (each a "Unit") of the Company at a price of CAD$2.00 per Unit. Each Unit comprised of one common share and one-half share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share of the Company at a price of CAD$3.00 within a period of 24 months. The warrants were allocated a residual value of $22,712. The Company paid the agents 13,895 broker warrants with a fair valued at $3,816. Each broker warrant will be exercisable to purchase one common share for a period of 24 months at an exercise price of CAD$3.00. Additionally, the Company also incurred cash costs in connection to private placement in the amount of $20,803. The Company also issued 4,500 units for gross proceeds of $6,713, which were issued in order to offset invoices due to a vendor.

iv)

On June 8, 2023, the Company closed the third and final tranche of a non-brokered private placement for gross proceeds of $228,547 (CAD$305,000). The Company issued 152,500 units (each a "Unit") of the Company at a price of CAD$2.00 per Unit. Each Unit comprised of one common share and one-half share purchase warrant. Each warrant entitles the holder thereof to

------

[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
12. Share Capital (continued)

(b) #### Common share transactions for the year ended December 31, 2023 (continued)
purchase one additional common share of the Company at a price of CAD$3.00 within a period of 24 months. The warrants were allocated a residual value of $57,137. The Company paid the agents 9,275 broker warrants with a fair valued of $1,893. Each broker warrant will be exercisable to purchase one common share for a period of 24 months at an exercise price of CAD$3.00. Additionally, the Company also incurred cash costs in connection to filing and legal expenses in the amount of $66,900.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; v)

On June 17, 2023, a total of 105,690 broker warrants expired with an exercise price of CAD$5.00. These broker warrants had a fair value of $208,264, and the reverse value was reclassified to share capital.

vi)

On October 5, 2023, the Company closed a non-brokered private placement for gross proceeds of $2,588,066 (CAD$3,565,527). The Company issued 1,782,764 units (each a "Unit") of the Company at a price of CAD$2.00 per Unit. Each Unit comprised of one common share and one common share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share of the Company at a price of CAD$3.00 for a period of 36 months. The warrants were allocated a residual value of $194,105. The Company paid the agents 60,723 broker warrants with a fair value of $37,523. Each broker warrant will be exercisable to purchase one common share for a period of 36 months at an exercise price of CAD$2.00. Additionally, the Company also incurred cash costs in connection to filing and legal expenses in the amount of $336,600, as well as the Company issued 50,000 shares as corporate finance fee with a fair value of $72,586.

vii)

On December 6, 2023, and subsequently amended on December 29, 2023, the Company announced a non-brokered private placement, intending to sell up to 786,667 units at CAD$1.50 per unit, aiming for gross proceeds of CAD$1,180,000. Each unit comprises one common share and one purchase warrant, with each warrant allowing the holder to purchase one share at an exercise price of CAD$2.00 for 36 months. As of December 31, 2023, the Company received proceeds of $224,915 (CAD$305,000) for share subscriptions, net of share issuance costs, ahead of closing the private placement.

13. Equity Reserves

(a) Share-based compensation

The Company maintains an Omnibus Equity Incentive Plan (the "Incentive Plan") which is comprised of stock options, restricted share units ("RSUs") and deferred share units ("DSUs"). The maximum number of common shares reserved for issuance, in the aggregate, under the Incentive Plan is 10% of the aggregate number of common shares issued and outstanding to be granted to directors, officers, employees, and consultants under certain restrictions.

Unless the Board decides, or the grant agreement specifies otherwise, the stock options will vest in two years with quarterly intervals following the date of such grant. The Board shall fix the exercise price of any stock option when such stock option is granted, which shall not be less than the closing price of the common shares on the Exchange on the day prior to the date of grant (the "Market Value"). A stock option shall be exercisable during a period established by the Board, which shall commence on the date of the grant and shall terminate no later than ten (10) years after the date of grant of the award or such shorter period as the Board may determine.

------

[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
13. Equity Reserves (continued)

(a) Share-based compensation (continued)

With respect to RSUs, the specific provisions of the RSU plan, eligibility, vesting period, terms of the RSUs and the number of RSUs granted are to be determined by the Board of Directors at the time of the grant.

With respect to PSUs, the specific provisions of the PSU plan, eligibility, vesting period, terms of the PSUs and the number of PSUs granted are to be determined by the Board of Directors at the time of the grant.

The continuity of the number of stock options issued and outstanding are as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **Number of <br> stock options**  | **Weighted <br> average**  | **Weighted <br> average**  |
| **Outstanding, December 31, 2022**  | 565460 | CAD$ | 5.62 |
| Cancelled  | (21000) |  | 4.31 |
| Granted  | 124500 |  | 1.90 |
| **Outstanding, December 31, 2023**  | **668960** | **CAD$** | **4.94** |
| Cancelled  | (74250) |  | 4.35 |
| Expired  | (82460) |  | 12.42 |
| Granted  | 2715000 |  | 0.80 |
| **Outstanding, December 31, 2024**  | **3227250** | **CAD$** | **1.29** |

---

As at December 31, 2024, the number of stock options outstanding and exercisable were:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Outstanding**  | **Outstanding**  | **Outstanding**  | **Exercise able**  | **Exercise able**  |
| **Expiry date**  | **Number of stock <br> options**  | **Exercise price**  | **Exercise price**  | **Remaining <br> contractual life <br> (years)**  | **Number of stock <br> options**  |
| 07-Apr-26  | 118000 | CAD$ | 5.00 | 1.27 | 118000 |
| 10-Jun-26  | 10000 | CAD$ | 5.00 | 1.44 | 10000 |
| 28-Jul-26  | 12500 | CAD$ | 5.50 | 1.57 | 12500 |
| 28-Jul-26  | 9000 | CAD$ | 6.50 | 1.57 | 9000 |
| 01-Nov-26  | 46500 | CAD$ | 4.60 | 1.84 | 46500 |
| 14-Jan-27  | 10000 | CAD$ | 3.60 | 2.04 | 10000 |
| 26-Apr-27  | 153500 | CAD$ | 4.10 | 2.32 | 153500 |
| 26-May-27  | 10000 | CAD$ | 3.80 | 2.40 | 10000 |
| 16-Aug-27  | 18500 | CAD$ | 2.90 | 2.62 | 18500 |
| 21-Nov-27  | 6000 | CAD$ | 2.20 | 2.89 | 6000 |
| 26-Apr-28  | 9500 | CAD$ | 1.80 | 3.32 | 7125 |
| 16-Oct-28  | 108750 | CAD$ | 1.90 | 3.79 | 54375 |
| 30-Dec-29  | 2715000 | CAD$ | 0.80 | 4.99 |  |
| **December 31, 2024**  | **3227250** |  |  |  | **455500** |

---

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
13. Equity Reserves (continued)

(a) Share-based compensation (continued)

During the fiscal year ended December 31, 2024, the Company recognized stock-based compensation related to stock options totaling $70,004 (December 31, 2023 — $226,360). Of this amount, $31,475 was recorded as stock-based compensation in the cost of revenue (December 31, 2023 – $nil).

The fair value of the stock options granted were estimated using the Black-Scholes option valuation model with the following weighted average assumptions:

---

| | | |
|:---|:---|:---|
| | **December 31, <br> 2024**  | **December 31, <br> 2023**  |
| Risk-free interest rate  | 3.04%  | 4.16%  |
| Expected dividend yield  | Nil  | Nil  |
| Stock price volatility  | 145.18%  | 80.98%  |
| Expected life (in years)  | 5 years  | 5 years  |
| Stock price  | CAD$0.85  | CAD$1.10  |

---

(b) Restricted share units ("RSU")

#### Restricted share units granted for the year ended December 31, 2024:
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; i)

On February 28, 2024, the Company granted 147,500 RSUs to employees of the Company; these RSUs shall be settled with common shares of the Company, have an exercise period that expires on February 28, 2029, and vest at 100% on February 28, 2025.

ii)

A total of 132,248 RSUs were canceled.

#### Restricted share units granted for the year ended December 31, 2023:
iii)

On August 19, 2024, the Company granted 30,000 RSUs to a consultant; these RSUs shall be settled with common shares of the Company, have an exercise period that expires on August 19, 2029, and vests as follows: 25% on November 19, 2024, 25% on February 19, 2025, 25% on May 19, 2025, 25% on August 19, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; i)

On September 1, 2023, the Company granted 20,000 RSUs to a consultant of the Company; these RSUs shall be settled with common shares of the Company, are restricted until September 1, 2028, and vest 100% on September 1, 2024.

ii)

On October 16, 2023, the Company granted 325,698 RSUs to directors, officers, employees, and consultants of the Company; these RSUs shall be settled with common shares of the Company, are restricted until October 16, 2028, and vest 100% on October 16, 2024.

------

[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
13. Equity Reserves (continued)

(b) Restricted share units ("RSU") (continued)

The following table summarizes the movements in outstanding RSUs:

---

| | | | |
|:---|:---|:---|:---|
| | **Number of <br> equity settled <br> RSUs**  | **Grant Price**  | **Grant Price**  |
| **Outstanding, December 31, 2022**  | **247216** | **CAD$** | **5.04** |
| Granted  | 345698 |  | 1.70 |
| **Outstanding, December 31, 2023**  | **592914** | **CAD$** | **3.09** |
| Granted  | 177500 |  | 1.22 |
| Cancelled  | (132248) |  | 2.82 |
| Exercised  | (101841) |  | 3.79 |
| **Outstanding, December 31, 2024**  | **536325** | **CAD$** | **2.41** |

---

A total of 391,950 RSU's were vested as at December 31, 2024.

The estimated fair value of the equity settled RSUs granted as of December 31, 2024, was $144,355 (December 31, 2023 — $435,444) and will be recognized as an expense over the vesting period of the RSUs. The fair value of the equity settled RSUs as at the grant date was determined with reference to the market value of the common shares of the Company at the grant date.

During the fiscal year ended December 31, 2024, the Company recognized stock-based compensation related to RSUs in the amount of $277,579 (December 31, 2023 — $385,869).

(c) Share purchase warrants

The continuity of the number of share purchase warrants outstanding is as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **Warrants <br> outstanding**  | **Exercise <br> Price**  | **Exercise <br> Price**  |
| **Outstanding, December 31, 2022**  | **4691738** | **CAD$** | **5.40** |
| Issued  | 2401235 |  | 2.97 |
| Expired  | (1791003) |  | 6.42 |
| **Outstanding, December 31, 2023**  | **5301970** | **CAD$** | **3.96** |
| Issued  | 16630724 |  | 0.73 |
| Expired  | (1797726) |  | 4.81 |
| Exercised  | (60000) |  | 2.00 |
| **Outstanding, December 31, 2024**  | **20074968** | **CAD$** | **1.22** |

---

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
13. Equity Reserves (continued)

(c) Share purchase warrants (continued)

The fair value of the compensation warrants was estimated using the Black-Scholes option valuation model with the following weighted average assumptions:

---

| | | |
|:---|:---|:---|
| | **December 31, <br> 2024**  | **December 31, <br> 2023**  |
| Risk-free interest rate  | 3.07%  | 3.53%  |
| Expected dividend yield  | Nil  | Nil  |
| Stock price volatility  | 72.95%  | 63.89%  |
| Expected life (in years)  | 2.03 years  | 2 years  |
| Share price on grant date  | CAD$0.83  | CAD$1.80  |
| Fair value share purchase warrants  | CAD$0.43  | CAD$0.40  |

---

The outstanding number of share purchase warrants is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Outstanding**  | **Outstanding**  | **Outstanding**  | **Outstanding**  |
| **Expiry date**  | **Number of <br> warrants**  | **Exercise price**  | **Exercise price**  | **Remaining <br> contractual life <br> (years)**  |
| 13-Apr-25  | 356,828(a) | CAD$ | 3.00 | 0.28 |
| 09-May-25  | 115395 | CAD$ | 3.00 | 0.35 |
| 08-Jun-25  | 85525 | CAD$ | 3.00 | 0.44 |
| 05-Oct-26  | 1782764 | CAD$ | 3.00 | 1.76 |
| 05-Oct-26  | 60723 | CAD$ | 2.00 | 1.76 |
| 18-Dec-26  | 14,532,312(a) | CAD$ | 0.55 | 1.96 |
| 12-Jan-27  | 545,237(a)(b) | CAD$ | 2.00 | 2.03 |
| 05-Feb-27  | 100,000(b) | CAD$ | 2.00 | 2.10 |
| 28-Feb-27  | 909091 | CAD$ | 2.00 | 2.16 |
| 27-Jun-27  | 19051 | CAD$ | 2.00 | 2.49 |
| 13-Aug-27  | 465,033(b) | CAD$ | 2.00 | 2.62 |
| 27-Oct-27  | 144674 | CAD$ | 2.75 | 2.82 |
| 27-Oct-27  | 958335 | CAD$ | 5.00 | 2.82 |
|  | **20074968** |  |  |  |

---

(a) Subsequent to the year ended December 31, 2024, a total of 5,417,775 warrants were exercised and 7,442,553 warrants expired without being exercised (note 23).

(b) Subsequent to the year ended December 31, 2024, the exercise price of these warrants was amended to CAD$1.51 (note 23).

(d) Performance Shares

On March 17, 2021, Liberty deposited into escrow, and held in escrow, Operational Performance Shares ("OPS") and Capital Market Performance Shares ("CMPS") for certain directors, officers, and consultants of the Company upon the Company achieving certain performance milestones. Once these

------

[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
13. Equity Reserves (continued)

(d) Performance Shares (continued)

milestones were achieved the shares would be released. These performance shares included 200,000 of OPS and 877,300 of CMPS. In order to fair value these performance shares, management estimated the probability that the Company would issue the performance shares.

All CMPS have been issued in previous years upon the completion of all required milestones.

<u>Operational Performance Shares</u> 

As at December 31, 2024, and 2023, none of the 200,000 OPS have been issued as neither of the two milestones have been met. The estimated fair value of the OPS is CAD$800,000 which had an estimated vesting period between December 2024 and December 2025. The estimated vesting period has been adjusted to December 2025 and December 2026. During the fiscal year ended December 31, 2024, the Company recorded stock-based compensation in connection to OPS in the amounts of $37,120 (December 31, 2023 — $(11,226)).

14. Loss Per Share

Basic loss per share amount is calculated by dividing the net loss for the year by the weighted average number of common shares outstanding during the year.

---

| | | |
|:---|:---|:---|
| | **Year ended December 31,**  | **Year ended December 31,**  |
| | **2024**  | **2023**  |
| Loss attributable to common shareholders  | $(8845163) | $(9369043) |
| Weighted average number of shares  | 17160752 | 12816531 |
| Basic and diluted loss per share  | $(0.52) | $(0.73) |

---

The Company incurred net losses for the year ended December 31, 2024, and 2023, therefore all outstanding stock options share purchase warrants, restricted share units, and performance share units, if any, have been excluded from the calculation of diluted loss per share since the effect would be anti-dilutive.

15. Revenue

Revenue recognized for the years ended December 31, 2024, and 2023, relates to contract revenue from the Transportation Security Administration ("TSA") (Note 16), as well as sales of HEXWAVE units. As at December 31, 2024, the Company recorded refund liabilities of $609,264 (included in accounts payable and accrued liabilities) (2023 – $nil).

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
15. Revenue (continued)

Deferred revenue as of December 31, 2024, was $180,000 (December 31, 2023 — $180,000).

---

| | | |
|:---|:---|:---|
| | **Year ended December 31,**  | **Year ended December 31,**  |
| **Revenue**  | **2024**  | **2023**  |
| Battelle Contract Award  | $— | $32557 |
| TSA Contract Award HD-AIT  | 200000 | 1265000 |
| TSA OA Development  | 795000 | 75000 |
| HD-AIT Phase II A  | 296944 |  |
| HD-AIT Phase II  | 133056 |  |
| HEXWAVE units  | 1013546 | 120000 |
| **Total Revenue**  | $**2438546** | $**1492557** |

---

16. Contract Awards

During the year ended December 31, 2024, the Company recognized total contract revenue of $1,425,000, recorded in revenue (December 31, 2023 — $1,372,557). Future revenue related to these contracts will be recognized as performance obligations are satisfied. It is estimated that future revenues will be recognized on the same basis according to the following timelines:

---

| | | |
|:---|:---|:---|
| | **Year ended December 31,**  | **Year ended December 31,**  |
| **Contract Award Revenue Expected in Future Years**  | **2025**  | **2026**  |
| TSA Contract Award HD-AIT  | $457905 |  |
| TSA OA Development  | 246944 |  |
| HD-AIT Phase II A  | 150000 |  |
| **Total estimated contract revenues**  | $**854849** | $**—** |

---

(a) Battelle HD-AIT Shoe Scanner

On May 12, 2022, the Company received a contract award for $212,697 from Battelle, Pacific Northwest Division's Contract. The contract award is to work hand in hand with PNNL to develop the High Definition — Advanced Imaging Technology ("HD-AIT") Retrofit Kits. On July 31, 2023, there was a contract modification decreasing the total allotment from $212,697 to $100,000. With developing the HD-AIT Retrofit Kits, the Battelle Memorial License and patent will be utilized in the HD-AIT technology development. The contract award was completed in fiscal year ended 2023 and has been closed. During the year ended December 31, 2024, as part of the contract award the Company received $nil and had a receivable of $nil (December 31, 2023, $32,558 and had a receivable of $nil, respectively).

(b) TSA HD-AIT Upgrade

On September 30, 2022, the Company received a contract award of $1,747,905 from the Transportation Security Administration ("TSA") for the HD-AIT Wide Band Upgrade Kit. On September 28, 2023, the contract was modified to include an additional milestone, increasing the total contract value to $1,922,905.

The contract award supports the development of millimeter-wave imaging system prototypes to enhance and upgrade the current imaging technology used in passenger security screening applications. The project is scheduled to be completed over twenty-seven months, with invoices issued upon the achievement of specified milestones according to the agreed-upon timeline.

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
16. Contract Awards (continued)

(b) TSA HD-AIT Upgrade (continued)

As of December 31, 2024, the Company had received $200,000 and recorded a receivable of $nil (December 31, 2023 — $1,265,000 and $nil, respectively). The remaining contract balance as of December 31, 2024, was $457,905 (December 31, 2023 — $657,905).

The Company is required to submit quarterly invoices as follows:

---

| | |
|:---|:---|
| **TSA HD-AIT Upgrade**  | **Amounts**  |
| **Year 2023**  | $1265000 |
| **Year 2024** |  |
| &nbsp;&nbsp;&nbsp; Milestone 5 A (Q1 2024) (payment received)  | 200000 |
| **Year 2025** |  |
| &nbsp;&nbsp;&nbsp; Milestone 5B (Q1 2025)  | 100000 |
| &nbsp;&nbsp;&nbsp; Milestone 6 (Q2 2025)  | 357905 |
| **Total Contract Value**  | $**1922905** |

---

(c) TSA Open Architecture

On September 29, 2023, the Company received a contract award for $1,116,944 from TSA for the Open Architecture Development. The contract award is to develop a system-level approach that addresses TSA's request for implementation of a Checkpoint Open Architecture for On-Person Screening (OPS) systems that enable modularity and enhances security effectiveness. The project will be performed over a period of twenty-one months, and invoices will be issued once the milestones are reached based on the agreed upon timeline. As at December 31, 2024, the Company received $795,000 and had a receivable of $nil (December 31, 2023 — $75,000 and $nil, respectively). The balance remaining on the contract as of December 31, 2024, was $246,944 (December 31, 2023 — $1,041,944). The Company is required to submit quarterly invoices as follows:

---

| | |
|:---|:---|
| **TSA Open Architecture**  | **Amounts**  |
| **Year 2023**  | $75000 |
| **Year 2024** |  |
| &nbsp;&nbsp;&nbsp; Milestone 2 (Q1 2024) (payment received)  | 200000 |
| &nbsp;&nbsp;&nbsp; Milestone 3 (Q2 2024) (payment received)  | 250000 |
| &nbsp;&nbsp;&nbsp; Milestone 4 (Q3 2024) (payment received)  | 170000 |
| &nbsp;&nbsp;&nbsp; Milestone 5 (Q4 2024) (payment received)  | 175000 |
| **Year 2025** |  |
| &nbsp;&nbsp;&nbsp; Milestone 6 (Q1 2025)  | 175000 |
| &nbsp;&nbsp;&nbsp; Milestone 7 (Q2 2025)  | 71944 |
| **Total Contract Value**  | $**1116944** |

---

(d) TSA HD-AIT Phase II

On September 29, 2023, the Company received a contract award of $133,056 from the Transportation Security Administration ("TSA") for HD-AIT Phase II. This award is a follow-on option under the existing

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
16. Contract Awards (continued)

(d) TSA HD-AIT Phase II (continued)

HD-AIT development program, aimed at advancing Phase II to finalize a hardware design that supports future compliance efforts.

The project was scheduled to be completed over three months, with invoices issued upon reaching agreed-upon milestones. As of December 31, 2024, the Company had received the full contract amount of $133,056 and recorded a receivable of $nil (December 31, 2023 – $nil, respectively). The remaining contract balance as of December 31, 2024, was $nil (December 31, 2023 – $133,056), as the agreement was completed on February 20, 2024.

(e) TSA HD-AIT Phase II A

On September 5, 2024, the Company received a contract award for $446,944 from TSA for the HD-AIT Phase II A option. The contract award is a follow-on option to the current HD-AIT development program to execute phase II to drive to a final hardware design capable of supporting future compliance efforts. The project will be performed over a period of twelve months, and invoices will be issued once the milestones are reached based on the agreed upon timeline. As at December 31, 2024, the Company received $296,944 and had a receivable of $nil (December 31, 2023 – $nil, respectively). The balance remaining on the contract as of December 31, 2024, was $150,000 (December 31, 2023 – $nil).

---

| | |
|:---|:---|
| **TSA HD-AIT Phase II A**  | **Amounts**  |
| **Year 2024** |  |
| &nbsp;&nbsp;&nbsp; Milestone 1(Q3 2024) (payment received)  | $296944 |
| **Year 2025** |  |
| &nbsp;&nbsp;&nbsp; Milestone 2(Q2 2025)  | 150000 |
| **Total Contract Value**  | $**446944** |

---

As of December 31, 2024, the Company recorded contract costs of $268,952, representing costs incurred for contract milestones not yet achieved (December 31, 2023, $nil). As of December 31, 2024, the Company recorded an impairment of the contract costs of $115,730 (December 31, 2023, $nil).

17. Collaboration Agreements

#### Transportation Security Administration's ("TSA") On-Person Screening Capability Program
On October 20, 2021, the Company received a $500,000 contract award from the Transportation Security Administration ("TSA") as part of the TSA On-Person Screening Capability Program. The award was designated for the demonstration and evaluation of the Company's HEXWAVE technology and its expanded capabilities for screening aviation workers, aiming to enhance threat detection and throughput performance.

To access funding under this award, Liberty was required to deploy its HEXWAVE technology at specified locations to collect and share data with TSA on identified threats. This data was used to further develop algorithms to improve threat recognition with the desired probability of detection.

During the year ended December 31, 2024, the Company received $nil in connection with this award and recorded a receivable of $nil (December 31, 2023 — $272,834 and $nil, respectively). The remaining contract balance as of December 31, 2024, was $nil (December 31, 2023 – $nil), as the agreement was completed on November 30, 2023.

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
18. Related Party Transactions

#### Compensation of key management personnel:
Key management personnel include persons having the authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The key management personnel of the Company are the members of the Company's executive management team and Board of Directors. Compensation provided to key management personnel is as follows:

---

| | | |
|:---|:---|:---|
| | **Year ended December 31,**  | **Year ended December 31,**  |
| | **2024**  | **2023**  |
| G&A Salaries  | $620846 | $1033320 |
| G&A Stock-based compensation  | 115805 | 418318 |
| G&A Consulting fees<sup>(1)</sup>  | 96358 | 97805 |
|  | $**833009** | $**1549443** |

---

(1) Consulting fees were paid or payable to the CFO of the Company.

As of December 31, 2024, the Company had a balance payable of $421,319 to key management personnel (December 31, 2023, — $614,547). This payable balance includes accounts payable and accrued liabilities relating to compensation to directors, officers, or their related companies, included in compensation of key management personnel. These related party balances are unsecured, non-interest bearing and have no specific terms of settlement.

During the year ended December 31, 2024, the Company paid Nicole Ridgedale Communications, a related party, $23,340 (December 31, 2023 — $59,583) for consulting services and stock-based compensation. These amounts were recorded under salaries and consulting fees within general and administrative expenses.

As of December 31, 2024, the Company had no outstanding balance owed to Nicole Ridgedale Communications (December 31, 2023 — $23,340). This related party balance was unsecured, non-interest-bearing, and had no specific terms of settlement.

During the year ended December 31, 2024, the Company received working capital loans in the amount of $82,000 (December 31, 2023 — $1,381,120) from directors, officers, or their related parties, and repaid $336,036. Of the $336,036 repaid, $264,552 was offset through private placement proceeds. As at December 31, 2024, the outstanding balance is $74,658 (note 8) (December 31, 2023 — $328,694).

19. Financial Instruments

As at December 31, 2024, the Company's financial instruments comprise cash, accounts receivables, accounts payable and accrued liabilities, loans payable, term loan, lease liabilities and factoring liability. The fair values of the Company's financial instruments approximate their carrying values due to their short-term maturity or market interest rates.

Fair value of financial instruments:

Financial instruments recorded at fair value on the consolidated statements of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The three levels of the fair value hierarchy are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities.

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
19. Financial Instruments (continued)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Level 2 — Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Level 3 — Inputs that are not based on observable market data.

The Company's activities expose it to financial risks of varying degrees of significance, which could affect its ability to achieve its strategic objectives for growth and shareholder returns. The principal financial risks to which the Company is exposed are credit risk, liquidity risk and currency risk. The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework and reviews the Company's policies on an ongoing basis.

(a) Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations, including accounts receivable terms. The Company's cash is held through large Canadian, international, and foreign national financial institutions. The Company's receivables primarily consist of GST receivable due from the Canadian government and trade receivables that the Company continues to collect. These trade receivables are primarily with continuing customers and are not subject to significant credit risk. As at December 31, 2024, the Company's trade receivables totalling $130,000 are from three customers (2023 – $nil). The Company's maximum exposure to credit risk is limited to the carrying amount of cash and accounts receivables.

(b) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. To mitigate this risk, the Company has a planning and budgeting process in place to determine the funds required to support its ongoing operations and capital expenditures. The Company ensures that sufficient funds are raised from equity offerings or debt financings to meet its operating requirements, after considering existing cash balances, expected exercise of share purchase warrants, and stock options. The Company's ability to continue as a going concern involves significant judgements and estimates while determining forecasted cashflows and is dependent on the Company's ability to obtain financing (note 1). As at December 31, 2024, the Company had cash of $1,153,229 (December 31, 2023 — $963) to settle current liabilities of $6,607,387 (December 31, 2023 — $5,956,941.

(c) Market risk

This risk refers to the potential fluctuations in the fair value or future cash flows of a financial instrument due to changes in market prices. The Company is exposed to the following significant market risks:

Interest rate risk

Interest rate risk arises from changes in market rates of interest that could adversely affect the Company. The Company currently has interest-bearing financial instruments in relation to loans and factoring liability (note 8, 9 and 10). The Company's exposure to interest rate risk is minimal as the interest rates are at a fixed percentage on the loans payable, term loans and factoring liability.

Foreign currency risk

The Company is exposed to currency risk by having balances and transactions in currencies that are different from its functional currency. The Company operates in foreign jurisdictions, which uses the U.S.

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
19. Financial Instruments (continued)

(c) Market risk (continued)

dollar. The Company does not use derivative instruments to reduce upward, and downward risk associated with foreign currency fluctuations.

---

| | |
|:---|:---|
| | **Amounts <br> US dollars**  |
| Financial assets denominated in foreign currencies  | $1370259 |
| Financial liabilities denominated in foreign currencies  | (882206) |
| **Net exposure**  | $**488053** |

---

A 10% change in the U.S. dollar exchange rate relative to the Canadian dollar would change the Company's comprehensive loss by $33,948.

Price risk

The Company is exposed to price risk with respect to equity prices. Equity price risk is defined as the potential adverse impact on the Company's earnings due to movements in individual equity prices or general movements in the level of the stock market.

The Company closely monitors individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

20. Capital Risk Management

The Company manages common shares, stock options, performance share units, restricted share units, and share purchase warrants as capital. The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue the development of its products and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue debt, acquire or dispose of assets, or adjust the amount of cash on hand.

In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions.

In order to maximize ongoing development efforts, the Company does not pay out dividends. The Company's investment policy is to keep its cash treasury on deposit in an interest-bearing chartered bank account. Cash consists of cash on held with banks.

The Company expects its current capital resources will be sufficient to carry its operations, and product development plans for the foreseeable future. Except for the security pledged in certain short term loans and the factoring liability as outlined in Notes 8 and 9 respectively, the Company is not subject to externally imposed capital requirements.

There has been no change to the Company's approach to capital management during the year ended December 31, 2024.

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
21. Income Tax

The reconciliation of income tax provision computed at Canadian federal and provincial statutory tax rates to the reported income tax provision is:

---

| | | |
|:---|:---|:---|
| | **Year ended December 31,**  | **Year ended December 31,**  |
| | **2024**  | **2023**  |
| Loss for the year  | $(8845163) | $(9369043) |
| Statutory tax rate  | 26.5% | 26.5% |
| Expected income tax (recovery)  | $(2344000) | $(2483000) |
| Change in statutory, foreign tax, foreign exchange rates and other  | (120000) | (505000) |
| Permanent differences  | 318000 | 403000 |
| Share issue cost  |  | (153000) |
|  Adjustment to prior years provision versus statutory tax returns and expiry of <br> non-capital losses  | (591000) | 1078000 |
| Change in unrecognized deductible temporary differences  | 2737000 | 1660000 |
| **Total income tax expense (recovery)**  | $**—** | $**—** |

---

The significant components of the Company's unrecognized deferred tax assets and liabilities are as follows:

---

| | | |
|:---|:---|:---|
| | **Year ended December 31,**  | **Year ended December 31,**  |
| | **2024**  | **2023**  |
| **Deferred tax assets (liabilities)** |  |  |
| Property and equipment & Intangible assests  | $(54000) |  |
| Non-capital losses  | 54000 |  |
| **Net deferred tax assets (liabilities) recognized**  | $**—** | $**—** |

---

The significant components of the Company's temporary differences, unused tax credits and unused tax losses that have not been included on the consolidation statement of financial position are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Temporary Differences**  | **2024**  | **Expiry Date <br> Range**  | **2023**  | **Expiry Date <br> Range**  |
|  | **$**  | $— | **$**  | $— |
|  Property and equipment & Intangible <br> assests  |  | No expiry date  |  | No expiry date  |
| Share issue costs  |  | 2044 to 2048  |  | 2043 to 2047  |
| Right-of-Use Assets/Lease liabilty  |  | No expiry date  |  | No expiry date  |
| R&D  |  | No expiry date  |  | No expiry date  |
| Non-capital losses  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Canada  |  | 2030 to 2044  |  | 2030 to 2043  |
| &nbsp;&nbsp;&nbsp; USA  |  | No expiry date  |  | No expiry date  |

---

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#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
22. Segmented Information

The Company operates through three distinct segments: Corporate, HEXWAVE and Contract. The operating segments of the Company are based on the reports which are reviewed by the chief operating decision maker ("CODM") in making strategic resource allocation decisions. The Company considers its CODM to be its CEO, who evaluate the operations of each reportable segment.

The CODM reviews the net income (loss) of each of these segments in allocating resources and evaluating operating performance. The corporate reporting segment covers the Company's non-allocated, general overhead expenses, such as legal, compliance, accounting, head-office staff, and other such items. This reporting segment is reviewed for cost control and budgetary considerations.

The following tables summarize the Company's segments for the year ended December 31, 2024 and 2023:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the year ended December 31, 2024**  | **For the year ended December 31, 2024**  | **For the year ended December 31, 2024**  | **For the year ended December 31, 2024**  |
| | **Corporate**  | **HEXWAVE**  | **Contract**  | **Total**  |
|  | **$**  | **$**  | **$**  | **$**  |
| Revenue  |  | 1013546 | 1425000 | 2438546 |
| Cost of revenue  |  | 2033498 | 2081971 | 4115469 |
| Net loss for the year  | (2865188) | (2808452) | (3171523) | (8845163) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the year ended December 31, 2023**  | **For the year ended December 31, 2023**  | **For the year ended December 31, 2023**  | **For the year ended December 31, 2023**  |
| | **Corporate**  | **HEXWAVE**  | **Contract**  | **Total**  |
|  | **$**  | **$**  | **$**  | **$**  |
| Revenue  |  | 120000 | 1372557 | 1492557 |
| Cost of revenue  |  | 1546040 | 1163211 | 2709251 |
| Net loss for the year  | (2244260) | (1901044) | (5223739) | (9369043) |

---

All revenue from contract segment was earned from one customer in the United States (2023 — one customer).

For HEXWAVE sales completed during the year ended December 31, 2024, revenues from external customers attributable to Canada, the United States, Chile and the Netherlands, were $142,032 (2023 – $nil), $701,236 (2023 – $120,000), $119,900 (2023 – $nil), and $50,378 (2023 – $nil) respectively. The determination of revenues by geographic area is based on the location of the customer.

During the year ended December 31, 2024, revenues from five customers each representing 10% or more of HEXWAVE<sup>TM</sup> revenues collectively accounted for approximately 94% of HEXWAVE<sup>TM</sup> revenues. The breakdown of revenues from these major customers are as follows: $470,736, $142,032, $130,000, $119,900 and $100,500. During the year ended December 31, 2023, revenue from one customer made up of 100% of the Hexwave revenue.

#### Geographic Breakdown
As at December 31, 2024, and 2023, all non-current assets are in the United States.

All revenue from contract segment was earned from one customer in the United States (2023 — one customer).

For the year ended December 31, 2024, revenue from five customers represented 94% of the HEXWAVE revenue (2023 — one customer represented 100%).

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Notes to the Consolidated Financial Statements

#### (Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the years ended December 31, 2024, and 2023
23. Subsequent Events

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The Company received CAD$2,977,851 from the exercise of 5,414,275 share purchase warrants after electing, on December 31, 2024, to exercise its acceleration right for a total of 12,500,000 warrants granted on December 19, 2024, pursuant to a private placement. As a result, the remaining 7,085,725 unexercised warrants expired.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • 1,095,099 share purchase warrants with an original exercise price of CAD$2.00 was amended to CAD$1.51. All other terms and conditions remain unchanged (note 13 (c)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On March 20, 2025, the Company closed a non-brokered private placement for gross proceeds of $3,479,351 (CAD$5,001,150). The Company issued 3,031,000 units (each a "Unit") of the Company at a price of CAD$1.65 per Unit. Each Unit comprised of one common share and one-half common share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share of the Company at a price of CAD$2.05 for a period of 24 months and is subject to an accelerated expiry at the Company's election under certain conditions. In connection with the non-brokered private placement, the Company issued 212,170 finder warrants. Each finder's warrant will be exercisable to purchase one common share for a period of 24 months at an exercise price of CAD$1.65.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On April 1, 2025, the Company received CAD$5,285 from the exercise of 3,500 warrants. As a result, a total of 3,500 common shares were issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • 196,600 common shares have been issued pursuant to the exercise of RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On April 2, 2025, the Company granted 150,000 stock options to consultants. Each stock option is exercisable for one common share of the Company at an exercise price CAD$0.84 per share. These stock options vest 12.5% after three months from the grant date, and 12.5% every three months thereafter, expiring on April 2, 2030.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On April 13, 2025, 557,748 warrants expired.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On April 15, 2025, the Company granted 50,000 stock options to a consultant. Each stock option is exercisable for one common share of the Company at an exercise price CAD$0.59 per share. These stock options vest immediately as of the grant date, expiring on April 15, 2027.

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#### LIBERTY DEFENSE HOLDINGS, LTD.
Amended and Restated Interim Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2025 and 2024

Notice to Reader

On January 29, 2025, Liberty Defense Holdings, Ltd. (the "Issuer") filed the amended and restated interim condensed consolidated financial statements for the three and nine months ended September 30, 2025, of the Issuer (the "Interim Financial Statements") in accordance with section 4.4 of the National Instrument 51-102 Continuous Disclosure Obligations.

The Interim Financial Statements have been refiled to incorporate changes following a review of the Interim Financial Statements performed by the Issuer's auditors in accordance with applicable standards. The changes to the Interim Financial Statements are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.

Updated the board of director approval from November 28, 2025, to January 28, 2026;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.

Correction of inventory impairment $(62,497) (Note 5);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.

Correction of prepaids overstated $85,283 (Note 4);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.

Correction of revenue and receivables overstated $20,000 (Note 15);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.

Correction of deferred revenue understated $75,041 (Note 15):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.

Correction of cost of revenue and accounts payable and accrued liabilities understated $(85,893);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.

Correction of royalty accrual understated $(150,000) (Note 7).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.

Correction of stock-based compensation overstated $(153,781) (Note 13)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.

Other immaterial changes.

<u>Reconciliation of previously reported vs restated balances</u> 

---

| | | | |
|:---|:---|:---|:---|
| | **Previously <br> reported <br> ($)**  | **Adjustments <br> ($)**  | **Restated <br> ($)**  |
| <u>Line item</u> |  |  |  |
| Total assets  | 6921945 | (167781) | 6754164 |
| Total liabilities  | 8273618 | 310934 | 8584552 |
| Shareholders' deficiency  | (1351673) | (478715) | (1830388) |
|  Loss and comprehensive loss for the nine months period ended September 30, 2025  | (10312297) | (85249) | (10397546) |

---

January 29, 2026

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Responsibility For Unaudited Condensed Interim Consolidated

Financial Statements for the Three and Nine Months Ended

September 30, 2025, and 2024

The accompanying unaudited condensed interim consolidated financial statements of Liberty Defense Holdings, LTD. and all information in this financial report are the responsibility of the Board of Directors and Management. The interim unaudited condensed consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), including International Accounting Standard ("IAS") 34 — Interim Financial Reporting and, where appropriate, include management's best estimates and judgements. Management maintains a system of internal control designed to provide reasonable assurance that assets are safeguarded from loss or unauthorized use, and that financial information is timely and reliable. However, any system of internal control over financial reporting, no matter how well designed and implemented, has inherent limitations and may not prevent or detect all misstatements. The Board of Directors is responsible for reviewing and approving the unaudited condensed interim consolidated financial statements. The Board of Directors carries out this responsibility principally though its Audit Committee. The Board of Directors appoints the Audit Committee, and all of its members are independent directors. The Audit Committee meets periodically with Management and the auditors to review internal controls, audit results, accounting principles and related matters. The Board of Directors approves the unaudited condensed interim consolidated financial statements on recommendation form the Audit Committee.

---

| | |
|:---|:---|
| **<u>"William Frain"</u>**  | **<u>"Omar Garcia"</u>**  |
| Director, Chief Executive Officer  | Chief Financial Officer  |

---

January 29, 2026

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Amended and Restated Condensed Interim Consolidated Statements of Financial Position (Unaudited — Expressed in U.S. dollars)

---

| | | | |
|:---|:---|:---|:---|
| **As at:**  | **Note**  | **September 30, <br> 2025**  | **December 31, <br> 2024**  |
|  |  | **$**  | **$**  |
| **Assets** |  |  |  |
| **Current assets:** |  |  |  |
| &nbsp;&nbsp;&nbsp; Cash  |  | 640907 | 1153229 |
| &nbsp;&nbsp;&nbsp; Accounts receivable, prepaids and deposits  | 4  | 2189400 | 1664376 |
| &nbsp;&nbsp;&nbsp; Inventory  | 5  | 956560 | 868314 |
| &nbsp;&nbsp;&nbsp; Contract costs  | 16  |  | 268952 |
| **Total current assets**  |  | **3786867** | **3954871** |
| **Non-current assets:** |  |  |  |
| &nbsp;&nbsp;&nbsp; Property and equipment  | 6  | 825025 | 759937 |
| &nbsp;&nbsp;&nbsp; Intangible assets  | 7  | 2142272 | 2571693 |
|  |  | 2967297 | 3331630 |
| **Total assets**  |  | **6754164** | **7286501** |
| **Liabilities** |  |  |  |
| **Current Liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities  |  | 4391772 | 4155890 |
| &nbsp;&nbsp;&nbsp; Loans payable  | 8  |  | 100907 |
| &nbsp;&nbsp;&nbsp; Parabilis term-loan  | 9  | 2642526 | 983476 |
| &nbsp;&nbsp;&nbsp; Factoring and credit line liability  | 10  | 797975 | 983671 |
| &nbsp;&nbsp;&nbsp; Deferred revenue  | 15  | 170036 | 180000 |
| &nbsp;&nbsp;&nbsp; Lease liabilities  | 11  | 236709 | 203443 |
| **Total current liabilities**  |  | **8239018** | **6607387** |
| **Non-current liabilities:** |  |  |  |
| &nbsp;&nbsp;&nbsp; Non-current lease liabilities  | 11  | 345534 | 505382 |
| &nbsp;&nbsp;&nbsp; Non-current Parabilis term loan  | 9  |  | 938211 |
| **Total liabilities**  |  | **8584552** | **8050980** |
| **Shareholders' deficiency** |  |  |  |
| &nbsp;&nbsp;&nbsp; Share capital  | 12  | 48894901 | 40717157 |
| &nbsp;&nbsp;&nbsp; Equity reserves  | 13  | 6026365 | 4872472 |
| &nbsp;&nbsp;&nbsp; Accumulated other comprehensive income (loss)  |  | 83764 | (28896) |
| &nbsp;&nbsp;&nbsp; Deficit  |  | (56835418) | (46325212) |
| **Total shareholders' deficiency**  |  | **(1830388)** | **(764479)** |
| **Total liabilities and shareholders' deficiency**  |  | **6754164** | **7286501** |

---

Nature of operations and going concern (note 1)

Subsequent events (note 22)

Approved on behalf of the Board of Directors:

*"William Frain"* Director *"Jason Burinescu"* Director

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Amended and Restated Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Unaudited — Expressed in U.S. dollars, except share and per share amounts)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **For the three months ended**  | **For the three months ended**  | **For the nine months ended**  | **For the nine months ended**  |
| | | **September 30, <br> 2025**  | **September 30, <br> 2024**  | **September 30, <br> 2025**  | **September 30, <br> 2024**  |
|  |  | **$**  | **$**  | **$**  | **$**  |
| **Revenue** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; HEXWAVE revenue  | 15  | 129049 | 650000 | 909407 | 1447532 |
| &nbsp;&nbsp;&nbsp; Contract revenue  | 16  | 150000 | 466944 | 854849 | 1250000 |
| &nbsp;&nbsp;&nbsp; **Total revenue**  |  | **279049** | **1116944** | **1764256** | **2697532** |
| **Cost of revenue** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; HEXWAVE cost of revenue  |  | 838101 | 886225 | 2112884 | 2408789 |
| &nbsp;&nbsp;&nbsp; Contract cost of revenue  |  | 394939 | 979947 | 1493636 | 1796912 |
| **Total cost of revenue**  |  | **1233040** | **1866172** | **3606520** | **4205701** |
| **Gross loss**  |  | **(953991)** | **(749228)** | **(1842264)** | **(1508169)** |
| **Engineering and research and development expenses:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Product development & technology costs  |  | 79417 | (59967) | 263754 | 103429 |
| &nbsp;&nbsp;&nbsp; Salaries and consulting fees  | 18  | 522163 | 501717 | 1542588 | 1247999 |
| &nbsp;&nbsp;&nbsp; Stock-based compensation  | 13 & 18  | 134 | 28816 | 15240 | 82220 |
| &nbsp;&nbsp;&nbsp; Depreciation  | 6  | 57300 | 58066 | 189809 | 208407 |
| &nbsp;&nbsp;&nbsp; Office, rent & administration, travel, and miscellaneous  |  | 9766 | 51466 | 47275 | 102371 |
| **General & administration expenses** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Salaries and consulting fees  | 18  | 273845 | 494754 | 1287457 | 1375216 |
| &nbsp;&nbsp;&nbsp; Legal and professional fees  |  | 80693 | 98209 | 769076 | 239513 |
| &nbsp;&nbsp;&nbsp; Stock-based compensation  | 13 & 18  | 122412 | 137115 | 1099231 | 296406 |
| &nbsp;&nbsp;&nbsp; Office, rent & administration, travel, and miscellaneous  |  | 719821 | 251039 | 2945674 | 688303 |
|  |  | 1865551 | 1561215 | 8160104 | 4343864 |
| **Operating loss**  |  | **(2819542)** | **(2310443)** | **(10002368)** | **(5852033)** |
| **Other expense:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Other income, net  |  | (3341) |  | (4671) |  |
| &nbsp;&nbsp;&nbsp; Interest expense  |  | 142966 | 121055 | 483898 | 566266 |
| &nbsp;&nbsp;&nbsp; Foreign exchange loss  |  | 8597 | 1691 | 28611 | 11428 |
|  |  | 148222 | 122746 | 507838 | 577694 |
| **Net loss for the period**  |  | **(2967764)** | **(2433189)** | **(10510206)** | **(6429727)** |
| **Other comprehensive loss** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Items that may be reclassified subsequently to profit or (loss)  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Foreign currency translation adjustment  |  | (129790) | (36045) | 112660 | 113547 |
| **Total comprehensive loss for the period**  |  | **(3097554)** | **(2469234)** | **(10397546)** | **(6316180)** |
|  Weighted average number of common shares outstanding  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Basic and diluted  |  | 65675798 | 16463645 | 55564003 | 16037061 |
| Loss per share |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Basic and diluted loss per common share  | 14  | (0.05) | (0.15) | (0.19) | (0.40) |

---

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Amended and Restated Condensed Interim Consolidated Statements of Changes in Shareholders' Deficiency (Unaudited — Expressed in U.S. dollars, except share and per share amounts)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Note**  | **Number of <br> common <br> shares**  | **Share <br> capital**  | **Equity <br> reserves**  | **Share <br> subscriptions <br> received in <br> advance**  | **Accumulated <br> other <br> comprehensive <br> income (loss)**  | **Accumulated <br> deficit**  | **Total <br> shareholders' <br> deficiency**  |
|  |  | **#**  | **$**  | **$**  | **$**  | **$**  | **$**  | **$**  |
| **Balance as at December 31, 2023**  |  | **14542812** | **32565254** | **4146489** | **224915** | **(221071)** | **(37480049)** | **(764462)** |
| &nbsp;&nbsp;&nbsp; Issue of private placement, net of share issue cost  | 12  | 2064190 | 2208482 |  | (224915) |  |  | 1983567 |
| &nbsp;&nbsp;&nbsp; Residual value allocated to warrants  | 12  |  | (562250) | 562250 |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Residual value of warrants exercised  | 12  |  | 15275 | (15275) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Restricted share units issued  | 12  | 66341 | 246934 | (246934) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Warrants exercised for cash  | 12  | 60000 | 87367 |  |  |  |  | 87367 |
| &nbsp;&nbsp;&nbsp; Stock-based compensation  | 13  |  |  | 396091 |  |  |  | 396091 |
| &nbsp;&nbsp;&nbsp; Fair value of broker warrants allocated to share capital  | 13  |  | (10265) | 10265 |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Fair value of warrants allocated to <br> share capital on expiry  | 13  |  | 312816 | (312816) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Foreign currency translation adjustment  |  |  |  |  |  | 113547 |  | 113547 |
| &nbsp;&nbsp;&nbsp; Loss for the period  |  |  |  |  |  |  | (6429727) | (6429727) |
| **Balance as at September 30, 2024**  |  | **16733343** | **34863613** | **4540070** | **—** | **(107524)** | **(43909776)** | **(4613617)** |
| **Balance as at December 31, 2024**  |  | **43331347** | **40717157** | **4872472** | **—** | **(28896)** | **(46325212)** | **(764479)** |
| &nbsp;&nbsp;&nbsp; Issue of private placement, net of share issue cost  | 12  | 23031000 | 6120797 |  |  |  |  | 6120797 |
| &nbsp;&nbsp;&nbsp; Warrants exercised  | 12  | 5417775 | 2075555 |  |  |  |  | 2075555 |
| &nbsp;&nbsp;&nbsp; Residual value allocated to warrants  | 12  |  | (263584) | 263584 |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Restricted shares units exercised  | 12  | 204100 | 374067 | (374067) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Fair value of broker warrants allocated to share capital  | 13  |  | (129091) | 129091 |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Stock-based compensation  | 13  |  |  | 1135285 |  |  |  | 1135285 |
| &nbsp;&nbsp;&nbsp; Foreign currency translation adjustment  |  |  |  |  |  | 112660 |  | 112660 |
| &nbsp;&nbsp;&nbsp; Loss for the period  |  |  |  |  |  |  | (10510206) | (10510206) |
| **Balance as at September 30, 2025**  |  | **71984222** | **48894901** | **6026365** | **—** | **83764** | **(56835418)** | **(1830388)** |

---

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.

#### Amended and Restated Condensed Interim Consolidated Statements of Cash Flows (Unaudited — Expressed in U.S. dollars)

---

| | | | |
|:---|:---|:---|:---|
| | | **For the nine months ended**  | **For the nine months ended**  |
| | **Note**  | **September 30, <br> 2025**  | **September 30, <br> 2024**  |
|  |  | **$**  | **$**  |
| **Operating activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp; Loss and comprehensive loss for the period  |  | (10510206) | (6429727) |
| &nbsp;&nbsp;&nbsp; Items not involving cash:  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lease liability interest  | 11  | 32697 | 53691 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued interest  | 9  | 253856 | 57075 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation  | 6  | 197214 | 321665 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization  | 7  | 381711 | 871023 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss on disposal of lease  | 11  | (18514) | 29233 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation  | 13  | 1135285 | 396091 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment of inventory  | 5  | 233676 | 143488 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Factoring fees  | 10  |  | 289684 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Credit line Parabilis interest and fees  | 10  | 304554 | 15900 |
| &nbsp;&nbsp;&nbsp; Changes in non-cash working capital  | 17  | (390169) | 1179059 |
| Net cash used in operating activities  |  | (8379896) | (3072818) |
| **Investing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp; Additions to intangible assets  | 7  |  | (14089) |
| &nbsp;&nbsp;&nbsp; Additions to property and equipment  | 6  | (176498) | (111117) |
| Net cash used in investing activities  |  | (176498) | (125206) |
| **Financing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp; Proceeds from issuance of units, net of share issue costs  | 12  | 6120797 | 1983567 |
| &nbsp;&nbsp;&nbsp; Proceeds from working capital loans – related parties  | 8  |  | 82000 |
| &nbsp;&nbsp;&nbsp; Repayment of working capital loans – related parties  | 8  | (74658) | (220281) |
| &nbsp;&nbsp;&nbsp; Proceeds from working capital loans  | 8  |  | 653175 |
| &nbsp;&nbsp;&nbsp; Repayments from working capital loans  | 8  | (26250) | (687570) |
| &nbsp;&nbsp;&nbsp; Proceeds from Parabilis term loan  | 9  | 650000 | 1800000 |
| &nbsp;&nbsp;&nbsp; Repayments on Parabilis term loan  | 9  | (183017) |  |
| &nbsp;&nbsp;&nbsp; Proceeds from factoring and credit lines  | 10  | 350000 | 1551166 |
| &nbsp;&nbsp;&nbsp; Repayments on factoring and credit lines  | 10  | (840250) | (1567031) |
| &nbsp;&nbsp;&nbsp; Repayment of CEBA loan  | 8  |  | (23073) |
| &nbsp;&nbsp;&nbsp; Proceeds from warrants exercised  | 12  | 2075555 | 87367 |
| &nbsp;&nbsp;&nbsp; Repayment of leases liabilities  | 11  | (140765) | (185081) |
| Net cash provided by financing activities  |  | 7931412 | 3474239 |
| Effect of foreign exchange rate changes on cash  |  | 112660 | 113338 |
| Change in cash  |  | (512322) | 389553 |
| Cash, beginning of the period  |  | 1153229 | 963 |
| **Cash, end of the period**  |  | **640907** | **390516** |

---

During the nine months ended September, 2025 and 2024, the Company paid $nil and $nil in income taxes, and paid $483,898 and $283,497 in interest respectively.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.
 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

1. Nature of operations and going concern

Liberty Defense Holdings, Ltd. ("Liberty" or the "Company") is a publicly traded company listed on the TSX Venture Exchange (TSXV: SCAN), the Frankfurt Stock Exchange (Frankfurt: L2D), and the OTCQB (OTCQB: LDDFF). The Company was incorporated under the Business Corporations Act (Ontario) on June 8, 2012. On July 27, 2020, Liberty continued its jurisdiction of incorporation from Ontario to British Columbia and is now governed by the Business Corporations Act (British Columbia).

The Company's registered and records office is located at 1055 West Georgia Street, Suite 1500, Royal Centre, P.O. Box 11117, Vancouver, British Columbia, V6E 4N7, Canada. Its head office is located at 187 Ballardvale Street, Suite 110, Wilmington, Massachusetts, 01887, USA.

The Company is engaged in the development and commercialization of advanced security detection technologies. Liberty's flagship product, HEXWAVE, utilizes millimeter wave technology and advanced 3D imaging to detect concealed threats. In addition to HEXWAVE, the Company has licensed High-Definition Advanced Imaging Technology (HD-AIT) for body and shoe scanning.

#### Going concern
These condensed consolidated interim financial statements have been prepared using IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board applicable to a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business. The Company incurred in a total loss during the nine months ended September 30, 2025, of $10,510,206 and had cash outflows from operating activities of $8,379,896. Given the current stage of operations, the Company's ability to continue as a going concern is contingent on its ability to obtain additional financing. While the Company has been successful in arranging financing in the past, the success of such initiatives cannot be assured. These events and conditions indicate that a material uncertainty exists that may cast significant doubt upon the Company's ability to continue as a going concern.

These condensed consolidated interim financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and condensed interim consolidated statement of financial position classifications that would be necessary were the going concern assumption deemed to be inappropriate. These adjustments could be material.

2. Basis of presentation

(a) Statement of compliance

These condensed consolidated interim financial statements have been prepared in conformity with International Accounting Standard ("IAS") 34, Interim Financial Reporting, using the same accounting policy information as detailed in the Company's audited annual consolidated financial statements for the year ended December 31, 2024, and do not include all the information required for full annual financial statements in accordance with IFRS Accounting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"). It is suggested that these financial statements be read in conjunction with the annual audited consolidated financial statements.

The Board of Directors approved these amended and restated condensed consolidated interim financial statements for issue on January 30, 2026.

(b) Basis of measurement

These condensed consolidated interim financial statements have been prepared on a historical cost basis except for certain financial instruments which are measured at fair value. In addition, these condensed

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[**TABLE OF CONTENTS**](#TOC2)

#### Liberty Defense Holdings, Ltd.
 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

2. Basis of presentation (continued)

(b) Basis of measurement (continued)

consolidated interim financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

(c) Functional and presentation currency

The functional currency of the Company is the Canadian dollar and the functional currencies of its subsidiaries are outlined in Note 2(d), and the presentation currency of these condensed consolidated interim financial statements is the U.S. dollar ("USD"); therefore, references to $ means USD and CAD$ are to Canadian dollars.

(d) Basis of consolidation

These condensed consolidated interim financial statements include the financial statements of Liberty Defense Holdings, Ltd., and the entities controlled by the Company (its subsidiaries), as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Subsidiary**  | **Place of <br> Incorporation**  | **Functional <br> Currency**  | **Beneficial <br> Interest**  |
| Liberty Defense Technologies, Inc. ("LDT")  | United States  | USD | 100% |
| LDH GS Amalco Corp.  | Canada  | CAD | 100% |
| DrawDown Detection, Inc. ("DDD")  | Canada  | CAD | 100% |
| DrawDown Technologies, Inc. ("DDT")  | United States  | CAD | 100% |

---

Control exists when the Company has power over an investee, exposure, or rights, to variable returns from its involvement with the investee and the ability to use its power over the investee to affect the amount of the Company's returns. All intercompany balances and transactions have been eliminated upon consolidation.

(e) Critical accounting estimates and judgments

The preparation of financial statements in conformity with IFRS, requires management to select accounting policies and make estimates and judgments that may have a significant impact on the condensed consolidated interim financial statements. Estimates are continuously evaluated and are based on management's experience and expectations of future events that are believed to be reasonable under the circumstances. Actual outcomes may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The Company's critical accounting judgements and estimates were presented in Note 2 of the annual audited consolidated financial statements and have been consistently applied in the preparation of these condensed consolidated interim financial statements. No new estimates and judgements were applied for the period ended September 30, 2025.

3. Material Accounting Policy Information

These condensed consolidated interim financial statements do not include all note disclosures required by IFRS for annual financial statements and, therefore, should be read in conjunction with the audited

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[**TABLE OF CONTENTS**](#TOC2)

 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

3. Material Accounting Policy Information (continued)

financial statements for the year ended December 31, 2024. In the opinion of management, all adjustments considered necessary for fair presentation of the Company's financial position, results of operations and cash flows have been included. Operating results for the nine months ended September 30, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

4. Accounts Receivable, Prepaids and Deposits

---

| | | |
|:---|:---|:---|
| | **September 30, <br> 2025**  | **December 31, <br> 2024**  |
| Accounts receivables  | $878063 | $255148 |
| Prepaids and deposits  | 1311337 | 1409228 |
|  | $**2189400** | $**1664376** |

---

5. Inventory

---

| | | |
|:---|:---|:---|
| | **September 30, <br> 2025**  | **December 31, <br> 2024**  |
| Raw materials  | $596475 | $211553 |
| Work-in-progress  | 291556 | 128761 |
| Finished Goods  | 68529 |  |
| Right of return on finished goods  |  | 528000 |
|  | $**956560** | $**868314** |

---

The Company reclassified finished goods and work-in-progress assemblies of $85,803 (December 31, 2024, $nil) to property and equipment related to the engineering prototype HEXWAVE unit. The engineering prototype HEXWAVE unit was disassembled and upgraded to be used for testing and development of enhanced algorithms.

During the period ended September 30, 2025, the Company recognized an impairment expense of $233,676 (September 30, 2024 — $143,488).

During the period ended September 30, 2025, the Company expensed $1,128,318 of inventory to cost of revenue (September 30, 2024, $1,883,015).

During the period September 30, 2025, the Company recorded $47,710 of amortization capitalized to inventory (September 30, 2024, $nil).

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[**TABLE OF CONTENTS**](#TOC2)

 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

6. Property and Equipment

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Equipment**  | **Right of Use <br> Asset**  | **Prototype**  | **Construction <br> in <br> Process**  | **Total**  |
| **Cost** |  |  |  |  |  |
| At December 31, 2023  | $222954 | $1186874 | $843314 | $51205 | $2304347 |
| Additions  | 25241 |  | 48185 | 68183 | 141609 |
| Disposals  |  |  | (116933) |  | (116933) |
| At December 31, 2024  | $248195 | $1186874 | $774566 | $119388 | $2329023 |
| Additions  |  |  | 85803 | 176499 | 262302 |
| Disposals  |  |  |  |  |  |
| **At September 30, 2025**  | $248195 | $1186874 | $860369 | $295887 | $2591325 |
| **Accumulated Depreciation** |  |  |  |  |  |
| At December 31, 2023  | $130776 | $427563 | $702191 | $— | $1260530 |
| Depreciation for disposal  |  |  | (87700) |  | (87700) |
| Depreciation for the year  | 58788 | 189499 | 148028 |  | 396315 |
| At December 31, 2024  | $189564 | $617062 | $762519 | $— | $1569145 |
| Depreciation for the period  | 19959 | 150908 | 26347 |  | 197214 |
| **At September 30, 2025**  | $209523 | $767970 | $788866 | $— | $1766359 |
| **Foreign Exchange Movement** |  |  |  |  |  |
| At December 31, 2024  | $— | $59 | $— | $— | $59 |
| **At September 30, 2025**  | $— | $59 | $— | $— | $59 |
| **Net Book Value** |  |  |  |  |  |
| At December 31, 2024  | $58631 | $569871 | $12047 | $119388 | $759937 |
| **At September 30, 2025**  | $**38672** | $**418963** | $**71503** | $**295887** | $**825025** |

---

During the nine months ended September 30, 2025, equipment depreciation recorded to cost of revenue was $7,404 (December 31, 2024 — $147,336).

7. Intangible Assets

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **MIT <br> licenses**  | **Battelle <br> license**  | **Intellectual <br> property**  | **Total**  |
| Balance, December 31, 2023  | $407117 | $223250 | $2636436 | $3266803 |
| Additions  |  | 227111 |  | 227111 |
| Amortization  | (34108) | (450361) | (437752) | (922221) |
| Balance, December 31, 2024  | $373009 | $— | $2198684 | $2571693 |
| Additions  |  |  |  |  |
| Amortization  | (25581) |  | (403840) | (429421) |
| **Balance, September 30, 2025**  | $**347428** | $**—** | $**1794844** | $**2142272** |

---

Intangible assets including MIT license and Battelle license, encompassing payments in connection to reimbursement of global patent filing costs and annual maintenance fees. Additionally, intellectual property

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[**TABLE OF CONTENTS**](#TOC2)

 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

7. Intangible Assets (continued)

was generated through the reverse take over ("RTO") transaction closed during the year ended December 31, 2021, and became ready for use during the year ended December 31, 2022. The remaining useful life of the intangible assets are as follows: MIT license 10.25 years, Battelle license nil years, and intellectual property 3.25 years.

During the nine months ended September 30, 2025, $381,711 of amortization expense was allocated to cost of revenues (September 30, 2024 — $871,023).

(a) MIT License Agreements

The Company, through its wholly owned subsidiary Liberty Defense Technologies Inc. ("LDT"), has entered into agreements with the Massachusetts Institute of Technology ("MIT") and MIT's Lincoln Laboratory ("MIT LL"), including an exclusive patent licence agreement between MIT and LDT dated September 10, 2018, as amended from time to time (the "Licence Agreement"), a technology transfer agreement between LDT and MIT LL, effective August 24, 2018 (the "Technology Transfer Agreement"), and a cooperative research and development agreement between LDT and MIT dated as of December 21, 2018 ("CRADA"), such agreements providing LDT with an exclusive licence for patents, design assets and MIT LL technical expertise related to active three-dimensional imaging technology that are the technology behind the HEXWAVE product.

The obligations under the Technology Transfer Agreement and the CRADA have now been completed. Liberty may consider extending the CRADA (and therefore changing its scope) if it determines that additional MIT LL technical expertise related to active three-dimensional imaging technology is required. Pursuant to the License Agreement, LDT has been granted the exclusive rights to MIT's patent in "multistatic sparse array topology for FFT-based field imaging" (MIT Case No. l 8409L) (the "Patent"), which is being utilized in the development and application of the HEXWAVE product. The License Agreement is to be in effect until the expiration of the Patent, which is 11 years (December 2035). In granting LDT such patent rights, the Company shall pay MIT, in addition to patent filling costs, an annual fees as follows: 1) $20,000 for 2019 (paid); $50,000 for 2020 (paid); $60,000 for 2021 (paid); $100,000 for 2022 (paid); $nil for 2023, $40,000 for 2024 (payable), $200,000 for 2025 (payable), and $350,000 for 2026 and thereafter; and 2) a royalty of 5.7% of all future net sales of the Company.

During the nine months ended September 30, 2025, the Company accrued royalty payments of $34,042 (December 31, 2024, $105,993). The Company shall also be required to achieve certain milestones.

(b) Battelle Memorial License Agreement

On March 22, 2021, the Company, through its wholly owned subsidiary DrawDown Detection, Inc. has entered into an agreement ("Battelle License Agreement") with Battelle Memorial Institute ("Battelle"), which operates the Pacific Northwest National Laboratory ("PNNL"), to license the millimeter wave-based, High-Definition Advanced Imaging Technology (HD-AIT) body scanner and shoe scanner technologies. The agreement, as amended from time to time, provides the Company with a three-year exclusive license for certain patents which will convert to a non-exclusive license for the remaining life of the patents. The agreement also provides the Company with non-exclusive license for certain patents for life.

As consideration for the Battelle License Agreement, the Company paid $30,000 upon signing and $30,000 six months after.

Under the Battelle License Agreement, the Company shall pay a five percent royalty on net sales and a twenty-five percent royalty on all sublicensing revenues if permitted under the contract guidelines.

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[**TABLE OF CONTENTS**](#TOC2)

 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

7. Intangible Assets (continued)

(b) Battelle Memorial License Agreement (continued)

The Company is required to pay a minimum royalty amount as follows, unless the agreement is terminated:

---

| | |
|:---|:---|
| | **Amounts**  |
| Year 2021 (paid)  | $50000 |
| Year 2022 (paid)  | 50000 |
| Year 2023 (paid)  | 100000 |
| Year 2024 ($55,000 payable)  | 200000 |
| Year 2025 and each year thereafter (payable)  | 200000 |

---

The Company is obligated to achieve certain milestones in the next fifteen months and reimburse Battelle for ongoing patenting expenses, as well as past patenting expenses in the total amount of $50,000, from which $50,000 has been paid.

As at September 30, 2025, the Company has a balance payable of $205,000 (December 31, 2024, $290,566).

8. Loans Payable

(a) Related Party Loans

During the nine months ended September 30, 2025, and the fiscal year ended December 31, 2024, the Company received working capital loans from related parties. These loans, unsecured and non-interest bearing, lack specified maturity dates. Repayments will be made as adequate financing becomes available to the Company.

---

| | |
|:---|:---|
| | **Amounts**  |
| **Balance, December 31, 2023**  | $**328694** |
| Additions  | 82000 |
| Repayments  | (336036) |
| **Balance, December 31, 2024**  | $**74658** |
| Additions  |  |
| Repayments  | (74658) |
| **Balance, September 30, 2025**  | $**—** |

---

(b) Short Term Loans

During the year ended December 31, 2023, the Company received a secured business line of credit from American Express, subject to a general security agreement on the Company's assets, with various draws. The interest rate on the amount withdrawn varied from 7.49% to 25.71% over a six-month term. The monthly payments fluctuated based on the amount withdrawn from the line of credit with amounts ranging from $1,782 to $10,624 per month. During the year ended December 31, 2024, the Company borrowed $11,900 (2023 — $166,210) from this line of credit. The loan matured on June 25, 2024, and was fully repaid.

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[**TABLE OF CONTENTS**](#TOC2)

 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

8. Loans Payable (continued)

(b) Short Term Loans (continued)

During the year ended December 31, 2023, the Company secured an unsecured business line of credit of $83,036 from BlueVine Capital. The credit facility had a twenty-six-week term, an interest rate of 1.10%, and required weekly payments of $3,906. The loan matured on June 5, 2024, and was fully repaid.

During the year ended December 31, 2023, the Company received a secured business line of credit with Headway Capital, subject to a general security agreement of the Company's assets, with one draw for a period of seventeen-months with a monthly interest rate of 4.17%. During the year ended December 31, 2024, the Company borrowed $21,275 (2023 — $83,350) from this line of credit. The loan matured on January 31, 2025. During the nine months ended September 30, 2025, the Company fully repaid this loan.

During the year ended December 31, 2024, the Company obtained a secured business loan of $420,000 from Blade Funding with a 32-week term. The loan carries an annual interest rate of 11.50%, requires weekly payments of $13,125. It is scheduled to mature on January 19, 2025. During the nine months ended September 30, 2025, the Company fully repaid this loan.

On July 2, 2024, the Company received a short-term loan of $250,000 from 1087207 BC Ltd. The loan had a minimum upfront interest payment of $20,000, in which the Company received $230,000, net, and was fully repaid.

During the year ended December 31, 2024, the Company received $350,394 in non-interest-bearing short-term loans. As of September 30, 2024, the Company fully repaid these loans.

---

| | |
|:---|:---|
| | **Amounts**  |
| **Balance, December 31, 2023**  | $**201368** |
| Additions  | 1053569 |
| Repayments  | (1260419) |
| Accrued interest  | 31732 |
| **Balance, December 31, 2024**  | $**26250** |
| Repayments  | (26250) |
| **Balance, September 30, 2025**  | $**—** |

---

9. Parabilis Term Loan

On August 22, 2024, the Company secured a $1,800,000 business term loan from PFF, LLC ("Parabilis"). The loan has a term of 104 weeks with an annual interest rate of 17.99% and is scheduled to mature on August 15, 2026. The agreement was amended on March 15, 2025, July 15, 2025, and amended again on August 14, 2025, with additional advancements totaling $650,000 and amending the payment schedule. Repayments of principal are set to commence in October 2025 with interest only payments through September 2025. The remaining contractual repayments are equal to the carrying value of the term loan and are payable in eleven months. See Note 10(a) regarding collateral.

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[**TABLE OF CONTENTS**](#TOC2)

 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

9. Parabilis Term Loan (continued)

---

| | |
|:---|:---|
| | **Amounts**  |
| **Balance, December 31, 2023**  | $**—** |
| Additions  | 1800000 |
| Interest and fees  | 121687 |
| **Balance, December 31, 2024**  | $**1921687** |
| Additions  | 650000 |
| Interest and fees  | 253856 |
| Repayments  | (183017) |
| **Balance, September 30, 2025**  | $**2642526** |
| Current  | $2642526 |
| Non-current  |  |

---

10. Factoring and Credit Line Liabilities

(a) Parabilis Credit Line

On August 22, 2024, the Company entered into a secured revolving credit line agreement with Parabilis for up to $2,500,000. The borrowing base for the credit line is determined based on the following percentages: 90% of eligible billed receivables, 65% of eligible unbilled receivables, and 30% of eligible delivery orders. The aggregate of eligible billed and unbilled receivables, along with eligible delivery orders, establishes the Company's borrowing capacity under the credit line.

When invoicing occurs, payments on the invoices are applied directly to the outstanding principal and interest on the credit line. The revolving credit facility had a maturity date of August 31, 2025, which was then amended on September 1, 2025, to mature on May 31, 2026, and will automatically renew for one-year periods unless the lender has notified the borrower at least 90 days in advance of the current maturity date will not renew. The facility carries an interest rate of 14.99% per annum, subject to re-evaluation on June 1, 2025. As of September 30, 2025, the interest rate has remained at 14.99% per annum.

The Parabilis term loan and credit line are secured by all tangible and intangible personal property of the Company, wherever located, whether currently owned or acquired in the future.

---

| | |
|:---|:---|
| | **Amounts**  |
| **Balance, December 31, 2023**  | $**—** |
| Additions  | 1551166 |
| Interest and fees  | 74449 |
| Repayments  | (641944) |
| **Balance, December 31, 2024**  | $**983671** |
| Additions  | 350000 |
| Interest and fees  | 304554 |
| Repayments  | (840250) |
| **Balance, September 30, 2025**  | $**797975** |

---

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[**TABLE OF CONTENTS**](#TOC2)

 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

10. Factoring and Credit Line Liabilities (continued)

(b) Bengal Capital Factoring

On June 22, 2023, the Company engaged in a factoring arrangement with Bengal Capital, Inc. (the "Factor"). Per the agreement, the Company submits invoices or purchase orders to the Factor after credit approval, receiving 80% of the gross amount. The Factor assumes ownership of these accounts with full recourse. Furthermore, the Company is subject to a 4% monthly factoring fee based on the face value of the accounts. No collateral is used per the agreement; however, the Company is obligated to pay the balance regardless of receiving payment for advanced orders.

The factoring liability as at September 30, 2025, and December 31, 2024, is as follows:

---

| | |
|:---|:---|
| | **Amounts**  |
| **Balance, December 31, 2023**  | $**1107347** |
| Accrued factoring Fee  | 289684 |
| Repayments  | (1397031) |
| **Balance, December 31, 2024 & September 30, 2025**  | $**—** |

---

For accounting purposes, the factored trade receivable remains recorded in trade receivables, while the financing costs are amortized over the financing period.

11. Leases

The Company's lease liabilities as at September 30, 2025, and December 31, 2024, are as follows:

---

| | |
|:---|:---|
| | **Right of use <br> liability**  |
| Balance, December 31, 2023  | $886585 |
| Finance costs  | 69652 |
| Lease payments  | (247412) |
| Balance, December 31, 2024  | $708825 |
| Finance costs  | 32697 |
| Lease cancelation  | (18514) |
| Lease payments  | (140765) |
| **Balance, September 30, 2025**  | $**582243** |
| Less current portion  | 236709 |
| **Non-current lease liability**  | $**345534** |

---

During the nine months ended September 30, 2025, the Company was notified of the Atlanta lease being nulled due to the owners selling the building. The lease was canceled but the Company's right to the building was retained.

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[**TABLE OF CONTENTS**](#TOC2)

 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

11. Leases (continued)

Minimum lease payments are as follows:

---

| | | |
|:---|:---|:---|
| | **September 30, <br> 2025**  | **December 31, <br> 2024**  |
| Maturity analysis – contractual undiscounted cash flows |  |  |
| One year or less  | $236707 | $257461 |
| Two to five years  | 419003 | 558358 |
| Six and thereafter  |  |  |
| Total lease liabilities  | $655710 | $815819 |
| **Lease liabilities included in the statement of financial position**  | $**582243** | $**708825** |
| Current  | $236709 | $203443 |
| Non-current  | $345534 | $505382 |

---

12. Share Capital

(a) Common share transactions for the nine months ended September 30, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; i)

On January 6, 2025, the Company received $2,071,851 (CAD$2,977,851) from the exercise of 5,414,275 share purchase warrants after electing, on December 31, 2024, to exercise its acceleration right for a total of 12,500,000 warrants granted on December 19, 2024, pursuant to a private placement. As a result, the remaining 7,085,725 unexercised warrants expired.

ii)

On March 20, 2025, the Company closed a non-brokered private placement for gross proceeds of $3,479,351 (CAD$5,001,150). The Company issued 3,031,000 units (each a "Unit") of the Company at a price of CAD$1.65 per Unit. Each Unit comprised of one common share and one-half common share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share of the Company at a price of CAD$2.05 for a period of 24 months and is subject to an accelerated expiry at the Company's election under certain conditions. The warrants were allocated a residual value of $263,584. In connection with the non-brokered private placement, the Company issued 212,170 finder warrants. Each finder's warrant will be exercisable to purchase one common share for a period of 24 months at an exercise price of CAD$1.65. The broker warrants were allocated a fair value of $84,183 (CAD$121,004). Additionally, the Company paid commissions and legal expenses of $420,423 (CAD$600,650).

iii)

On April 1, 2025, the Company received $3,704 (CAD$5,285) from the exercise of 3,500 warrants. As a result, a total of 3,500 common shares were issued.

iv)

On July 29, 2025, the Company closed a non-brokered private placement for gross proceeds of $3,199,767 (CAD$4,400,000). The Company issued 20,000,000 units (each a "Unit") of the Company at a price of CAD$0.22 per Unit. Each Unit comprised of one common share and one common share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share of the Company at a price of CAD$0.35 for a period of 12 months and is subject to an accelerated expiry at the Company's election under certain conditions. The warrants were allocated a residual value of $nil. Additionally, the Company issued 719,973 broker warrants with a fair value of $44,908 (CAD$61,753). The Company paid commissions and legal expenses of $138,087(CAD$189,781).

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[**TABLE OF CONTENTS**](#TOC2)

 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

12. Share Capital (continued)

(a) Common share transactions for the nine months ended September 30, 2025 (continued)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; v)

During the nine months ended September 30, 2025, a total of 204,100 common shares were issued pursuant to the exercise of RSUs with a fair value of $374,067.

(b) Common share transactions for the year ended December 31, 2024

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; i)

On January 12, 2024, the Company closed the initial tranche of a Listed Issuer Financing Exemption (LIFE) private placement of units, raising gross proceeds of $662,554 (CAD$886,000). As of December 31, 2023, the Company had received $224,915 of these proceeds. This tranche involved the issuance of 590,068 units at a price of CAD$1.50 per unit. Each unit consisted of one common share and one purchase warrant, allowing the holder to purchase an additional common share at CAD$2.00 per share within 36 months. The warrants were allocated a residual value of $154,596. Additionally, the Company issued 15,171 broker warrants to agents under identical terms and conditions with a fair value of $4,508. Agent commissions totaling $17,110 were paid.

ii)

Subsequently, on February 5, 2024, the Company closed the final tranche of the same non-brokered private placement, raising an additional $112,285 (CAD$150,000). This tranche involved the issuance of 100,000 units under the same terms and conditions as the initial tranche. Each unit consisted of one common share and one purchase warrant, allowing the holder to purchase an additional common share at CAD$2.00 per share within 36 months. The warrants were allocated a residual value of $37,428.

iii)

On February 26, 2024, the Company closed an investment by Viken Detection Corp. ("Viken") pursuant to which Viken purchased 909,091 units of the Company at an issue price of CAD$1.50 per unit for total gross proceeds of $1,000,000 (CAD$1,363,636). Each unit comprised one common share and one purchase warrant. Each warrant entitles Viken to purchase one additional common share of the Company at an exercise price of CAD$2.00 for a period of 36 months. The warrants were allocated a residual value of $166,667. Additionally, the Company also incurred cash costs in connection to filing and legal expenses in the amount of $27,116 were also paid. These warrants contain blocker language restricting the exercise of the warrants in the event such exercise results in Viken holding more than 9.9% of the outstanding voting securities of the Company.

iv)

On March 17, 2024, a total of 199,636 finder warrants expired with an exercise price of CAD$3.30. These broker warrants had a fair value of $312,815 and the reserve value was reclassified to share capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; v)

During the year ended December 31, 2024, a total of 101,841 common shares were issued pursuant to the exercise of RSUs with a fair value of $286,019.

vi)

During the year ended December 31, 2024, a total of 60,000 shares were issued pursuant to the exercise of 60,000 warrants, resulting in proceeds of $87,367 (CAD$120,000). Residual value in the amount of $15,275 was reversed.

vii)

On August 13, 2024, the Company closed the first tranche of a non-brokered private placement for gross proceeds of $508,864 (CAD$697,550). The Company issued 465,035 special warrants of the Company at a price of CAD$1.50 per Unit. Each special warrant will automatically convert into one Unit. Each Unit shall consist of one common share and one share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share of the Company at a

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[**TABLE OF CONTENTS**](#TOC2)

 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

12. Share Capital (continued)

(b) Common share transactions for the year ended December 31, 2024 (continued)

price of CAD$2.00 within a period of 36 months. These special warrants were converted into one Unit on August 13, 2024. The warrants were allocated a residual value of $203,560. The Company paid the agents 19,051 broker warrants with a fair value of $5,757. Each broker warrant will be exercisable to purchase one common share for a period of 36 months at an exercise price of CAD$2.00. Additionally, the Company also incurred cash costs in connection to private placement in the amount of $30,995.

viii)

On December 18, 2024, the Company closed a non-brokered private placement for gross proceeds of $5,585,812 (CAD$8,000,000). The Company issued 25,000,000 units (each a "Unit") of the Company at a price of CAD$0.32 per Unit. Each Unit comprised of one common share and one-half common share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share of the Company at a price of CAD$0.55 for a period of 24 months and are subject to an accelerated expiry at the Company's election under certain conditions. The Company paid the agents $274,123 in finders fees and issued 1,251,062 finder warrants with a fair value of $382,873. Each finder's warrant will be exercisable to purchase one common share for a period of 24 months at an exercise price of CAD$0.55. Additionally, the Company also incurred cash costs in connection to private placement in the amount of $41,687.

ix)

The Company settled a total of $363,336 (CAD$520,947) of indebtedness with a certain creditor by issuing 1,562,500 units valued at $927,332 and follows the same terms as the units issued on December 18, 2024, non-brokered private placement. The Company recognized a loss on extinguishment of debt totalling $563,996 (included in other expenses (2023 — $nil).

13. Equity Reserves

(a) Share-based compensation

The Company maintains an Omnibus Equity Incentive Plan (the "Incentive Plan") which is comprised of stock options, restricted share units ("RSUs") and deferred share units ("DSUs"). The maximum number of common shares reserved for issuance, in the aggregate, under the Incentive Plan is 10% of the aggregate number of common shares issued and outstanding to be granted to directors, officers, employees, and consultants under certain restrictions.

Unless the Board decides, or the grant agreement specifies otherwise, the stock options will vest in two years with quarterly intervals following the date of such grant. The Board shall fix the exercise price of any stock option when such stock option is granted, which shall not be less than the closing price of the common shares on the Exchange on the day prior to the date of grant (the "Market Value"). A stock option shall be exercisable during a period established by the Board, which shall commence on the date of the grant and shall terminate no later than ten (10) years after the date of grant of the award or such shorter period as the Board may determine.

With respect to RSUs, the specific provisions of the RSU plan, eligibility, vesting period, terms of the RSUs and the number of RSUs granted are to be determined by the Board of Directors at the time of the grant.

With respect to PSUs, the specific provisions of the PSU plan, eligibility, vesting period, terms of the PSUs and the number of PSUs granted are to be determined by the Board of Directors at the time of the grant.

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[**TABLE OF CONTENTS**](#TOC2)

 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

13. Equity Reserves (continued)

(a) Share-based compensation (continued)

The continuity of the number of stock options issued and outstanding are as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **Number of stock <br> options**  | **Weighted <br> average exercise**  | **Weighted <br> average exercise**  |
| **Outstanding, December 31, 2023**  | 668960 | CAD$ | 4.94 |
| Cancelled  | (74250) |  | 4.35 |
| Expired  | (82460) |  | 12.42 |
| Granted  | 2715000 |  | 0.80 |
| **Outstanding, December 31, 2024**  | **3227250** | **CAD$** | **1.29** |
| Cancelled  | (469750) |  | 1.54 |
| Granted  | 2450000 |  | 0.30 |
| **Outstanding, September 30, 2025**  | **5207500** | **CAD$** | **0.79** |

---

As at September 30, 2025, the number of stock options outstanding and exercisable were:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Outstanding**  | **Outstanding**  | **Outstanding**  | **Exercisable**  | **Exercisable**  |
| **Expiry date**  | **Number of stock <br> options**  | **Exercise price**  | **Exercise price**  | **Remaining <br> contractual life <br> (years)**  | **Number of stock <br> options**  |
| 7-Apr-26  | 83000 | CAD$ | 5.00 | 0.52 | 83000 |
| 28-Jul-26  | 12500 | CAD$ | 5.50 | 0.82 | 12500 |
| 28-Jul-26  | 5000 | CAD$ | 6.50 | 0.82 | 5000 |
| 1-Nov-26  | 42500 | CAD$ | 4.60 | 1.09 | 42500 |
| 14-Jan-27  | 10000 | CAD$ | 3.60 | 1.29 | 10000 |
| 15-Apr-27  | 50000 | CAD$ | 0.59 | 1.54 | 50000 |
| 26-Apr-27  | 128500 | CAD$ | 4.10 | 1.57 | 128500 |
| 2-Jul-27  | 250000 | CAD$ | 0.24 | 1.75 |  |
| 21-Nov-27  | 6000 | CAD$ | 2.20 | 2.14 | 6000 |
| 26-Apr-28  | 5000 | CAD$ | 1.80 | 2.57 | 5000 |
| 16-Oct-28  | 100000 | CAD$ | 1.90 | 3.05 | 100000 |
| 30-Dec-29  | 2365000 | CAD$ | 0.80 | 4.25 | 1018125 |
| 2-Apr-30  | 150000 | CAD$ | 0.84 | 4.51 | 18750 |
| 30-Sep-30  | 2000000 | CAD$ | 0.27 | 4.95 |  |
| **September 30, 2025**  | **5207500** |  |  |  | **1479375** |

---

During the nine months ended September 30, 2025, the Company recognized stock-based compensation related to stock options totaling $1,032,541 (September 30, 2024 — $62,442). Of this amount, $20,814 was recorded as stock-based compensation in the cost of revenue (September 30, 2024 — $17,465).

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[**TABLE OF CONTENTS**](#TOC2)

 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

13. Equity Reserves (continued)

(a) Share-based compensation (continued)

The fair value of the stock options granted were estimated using the Black-Scholes option valuation model with the following weighted average assumptions:

---

| | | |
|:---|:---|:---|
| | **September 30, <br> 2025**  | **December 31, <br> 2024**  |
| Risk-free interest rate  | 2.50%  | 3.04%  |
| Expected dividend yield  | Nil  | Nil  |
| Stock price volatility  | 155.64%  | 145.18%  |
| Expected life (in years)  | 4.6 years  | 5 years  |
| Stock price  | CAD$0.30  | CAD$0.80  |

---

(b) Restricted share units ("RSU")

#### Restricted share units granted for the nine months ended September 30, 2025:
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; i)

During the nine months ended September 30, 2025, a total of 204,100 common shares were issued pursuant to the exercise of RSUs.

The estimated fair value of the equity settled RSUs granted as of September 30, 2025, was $6,915 (September 30, 2024 — $159,963) and will be recognized as an expense over the vesting period of the RSUs. The fair value of the equity settled RSUs as at the grant date was determined with reference to the market value of the common shares of the Company at the grant date.

#### Restricted share units granted for the year ended December 31, 2024:
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; i)

On February 28, 2024, the Company granted 147,500 RSUs to employees of the Company; these RSUs shall be settled with common shares of the Company, have an exercise period that expires on February 28, 2029, and vest at 100% on February 28, 2025.

ii)

A total 132,248 RSUs were cancelled.

The following table summarizes the movements in outstanding RSUs:

---

| | | |
|:---|:---|:---|
| | **Number of <br> equity settled <br> RSUs**  | **Grant Price**  |
| **Outstanding, December 31, 2023**  | **592914** | **CAD$3.09**  |
| Granted  | 177500 | 1.22  |
| Cancelled  | (132248) | 2.82  |
| Exercised  | (101841) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.79  |
| **Outstanding, December 31, 2024**  | **536325** | **CAD$2.41**  |
| Granted  | 50000 | 0.27  |
| Exercised  | (204100) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.64  |
| **Outstanding, September 30, 2025**  | **382225** | **CAD$2.00**  |

---

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#### Liberty Defense Holdings, Ltd.
 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

13. Equity Reserves (continued)

(b) Restricted share units ("RSU") (continued)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Outstanding**  | **Outstanding**  | **Outstanding**  | **Exercisable**  | **Exercisable**  |
| **Expiry date**  | **Number of <br> restricted share <br> units**  | **Grant Price**  | **Grant Price**  | **Remaining <br> contractual life <br> (years)**  | **Number of <br> restricted share <br> units**  |
| 7-Apr-26  | 25000 | CAD$ | 5.80 | 0.52 | 25000 |
| 10-Jun-26  | 20875 | CAD$ | 5.50 | 0.69 | 20875 |
| 15-Jan-27  | 15000 | CAD$ | 3.70 | 1.29 | 15000 |
| 26-Apr-27  | 10000 | CAD$ | 4.40 | 1.57 | 10000 |
| 16-Oct-28  | 133850 | CAD$ | 1.70 | 3.05 | 133850 |
| 28-Feb-29  | 127500 | CAD$ | 1.30 | 3.42 | 127500 |
| 1-Jan-29  | 50000 | CAD$ | 0.27 | 3.26 |  |
| **September 30, 2025**  | **382225** |  |  |  | **332225** |

---

A total of 332,225 RSU's were vested as at September 30, 2025.

During the nine months ended September 30, 2025, the Company recognized stock-based compensation related to RSUs in the amount of $25,017 (September 30, 2024 — $234,278).

(c) Share purchase warrants

The continuity of the number of share purchase warrants outstanding is as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **Warrants <br> outstanding**  | **Exercise <br> Price**  | **Exercise <br> Price**  |
| **Outstanding, December 31, 2023**  | **5301970** | **CAD$** | **3.96** |
| Issued  | 16630724 |  | 0.73 |
| Expired  | (1797726) |  | 4.81 |
| Exercised  | (60000) |  | 2.00 |
| **Outstanding, December 31, 2024**  | **20074968** | **CAD$** | **1.22** |
| Issued  | 22447643 |  | 0.48 |
| Expired  | (7643473) |  | 0.73 |
| Exercised  | (5417775) |  | 0.55 |
| **Outstanding, September 30, 2025**  | **29461363** | **CAD$** | **0.87** |

---

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[**TABLE OF CONTENTS**](#TOC2)

 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

13. Equity Reserves (continued)

(c) Share purchase warrants (continued)

The fair value of the compensation warrants was estimated using the Black-Scholes option valuation model with the following weighted average assumptions:

---

| | | |
|:---|:---|:---|
| | **September 30, <br> 2025**  | **December 31, <br> 2024**  |
| Risk-free interest rate  | 2.90%  | 3.52%  |
| Expected dividend yield  | Nil  | Nil  |
| Stock price volatility  | 89.00%  | 69.78%  |
| Expected life (in years)  | 1.23 years  | 3 years  |
| Share price on grant date  | CAD$0.50  | CAD$0.86  |
| Fair value share purchase warrants  | CAD$0.20  | CAD$0.43  |

---

The outstanding number of share purchase warrants is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Outstanding**  | **Outstanding**  | **Outstanding**  | **Outstanding**  |
| **Expiry date**  | **Number of <br> warrants**  | **Exercise price**  | **Exercise price**  | **Remaining <br> contractual life <br> (years)**  |
| 28-Jul-26  | 20719973 | CAD$ | 0.35 | 0.82 |
| 5-Oct-26  | 1782764 | CAD$ | 3.00 | 1.01 |
| 5-Oct-26  | 60723 | CAD$ | 2.00 | 1.01 |
| 18-Dec-26  | 2032312 | CAD$ | 0.55 | 1.22 |
| 12-Jan-27  | 526566 | CAD$ | 1.51 | 1.28 |
| 12-Jan-27  | 15171 | CAD$ | 2.00 | 1.28 |
| 5-Feb-27  | 100000 | CAD$ | 1.51 | 1.35 |
| 28-Feb-27  | 909091 | CAD$ | 2.00 | 1.41 |
| 27-Jun-27  | 19051 | CAD$ | 2.00 | 1.74 |
| 13-Aug-27  | 465033 | CAD$ | 1.51 | 1.87 |
| 20-Mar-27  | 1515500 | CAD$ | 2.05 | 1.47 |
| 20-Mar-27  | 212170 | CAD$ | 1.65 | 1.47 |
| 27-Oct-27  | 144674 | CAD$ | 2.75 | 2.07 |
| 27-Oct-27  | 958335 | CAD$ | 5.00 | 2.07 |
|  | **29461363** |  |  |  |

---

During the nine months ended September 30, 2025, a total of 1,095,099 share purchase warrants with an original exercise price of CAD$2.00 were repriced to CAD$1.51. All other terms and conditions remained unchanged.

(d) Performance Shares

On March 17, 2021, Liberty deposited into escrow, and held in escrow, Operational Performance Shares ("OPS") and Capital Market Performance Shares ("CMPS") for certain directors, officers, and consultants of the Company upon the Company achieving certain performance milestones. Once these

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 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

13. Equity Reserves (continued)

(d) Performance Shares (continued)

milestones were achieved the shares would be released. These performance shares included 200,000 of OPS and 877,300 of CMPS. In order to fair value these performance shares, management estimated the probability that the Company would issue the performance shares.

All CMPS have been issued in previous years upon the completion of all required milestones.

<u>Operational Performance Shares</u> 

As at September 30, 2025, none of the 200,000 OPS have been issued as neither of the two milestones have been met. The estimated fair value of the OPS is CAD$800,000 which had an estimated vesting period between December 2024 and December 2025. The estimated vesting period has been adjusted to December 2025 and December 2026. During the nine months ended September 30, 2025, the Company recorded stock-based compensation in connection to OPS in the amounts of $77,727 (September 30, 2024 — $99,371).

---

| | | | |
|:---|:---|:---|:---|
| | **Number of <br> equity settled**  | **Weighted <br> average price**  | **Weighted <br> average price**  |
| Outstanding, December 31, 2023 and 2024  | 200000 | CAD$ | 4.00 |
| Released from escrow  |  |  |  |
| **Outstanding, September 30, 2025**  | **200000** | **CAD$** | **4.00** |

---

14. Loss Per Share

Basic loss per share amount is calculated by dividing the net loss for the year by the weighted average number of common shares outstanding during the year.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months <br> ended September,**  | **Three months <br> ended September,**  | **Nine months <br> ended September 30,**  | **Nine months <br> ended September 30,**  |
| | **2025**  | **2024**  | **2025**  | **2024**  |
| Loss attributable to common shareholders  | $(2967764) | $(2433189) | $(10510206) | $(6429727) |
| Weighted average number of shares  | 65675798 | 16463645 | 55564003 | 16037061 |
| Basic and diluted loss per share  | $(0.05) | $(0.15) | $(0.19) | $(0.40) |

---

The Company incurred net losses for the nine months ended September 30, 2025, and 2024, therefore all outstanding stock options share purchase warrants, restricted share units, and performance share units, if any, have been excluded from the calculation of diluted loss per share since the effect would be anti-dilutive.

15. Revenue

Revenue recognized for the nine months ended September 30, 2025, and 2024, relates to contract revenue from the Transportation Security Administration ("TSA") (Note 16), as well as sales of HEXWAVE units.

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[**TABLE OF CONTENTS**](#TOC2)

 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

15. Revenue (continued)

Deferred revenue as of September 30, 2025, was $170,036 (December 31, 2024 — $180,000).

---

| | |
|:---|:---|
| **Deferred Revenue**  | **Amounts**  |
| **Outstanding, December 31, 2023 & 2024**  | **180000** |
| Additions  | 124995 |
| Refunds  | (120000) |
| Recognized revenue  | (14959) |
| **Outstanding, September 30, 2025**  | **170036** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Revenue**  | **Three months <br> ended September 30,**  | **Three months <br> ended September 30,**  | **Nine months <br> ended September 30,**  | **Nine months <br> ended September 30,**  |
| **Revenue**  | **2025**  | **2024**  | **2025**  | **2024**  |
| TSA Contract Award HD-AIT  |  |  | 457905 | 200000 |
| TSA OA Development  |  | 170000 | 246944 | 620000 |
| HD-AIT Phase II  |  |  |  | 133056 |
| HD-AIT Phase III  | 150000 | 296944 | 150000 | 296944 |
| HEXWAVE units  | 129049 | 650000 | 861500 | 1446032 |
| HEXWAVE Software & Warranty  |  |  | 47907 | 1500 |
| **Total Revenue**  | $**279049** | $**1116944** | $**1764256** | $**2697532** |

---

16. Contract Awards

During the nine months ended September 30, 2025, the Company recognized total contract revenue of $854,297, recorded in revenue (nine months ended September 30, 2024 — $1,250,000). Future revenue related to these contracts will be recognized as performance obligations are satisfied. It is estimated that future revenues will be recognized on the same basis according to the following timelines:

---

| | | |
|:---|:---|:---|
| **Contract Award Revenue Expected in Future Years**  | **Year ended December 31,**  | **Year ended December 31,**  |
| **Contract Award Revenue Expected in Future Years**  | **2025**  | **2026**  |
| HD-AIT Phase II B  | 357759 |  |
| **Total estimated contract revenues**  | $**357759** | $**—** |

---

(a) TSA HD-AIT Upgrade

On September 30, 2022, the Company received a contract award of $1,747,905 from the Transportation Security Administration ("TSA") for the HD-AIT Wide Band Upgrade Kit. On September 28, 2023, the contract was modified to include an additional milestone, increasing the total contract value to $1,922,905. The contract award supports the development of millimeter-wave imaging system prototypes to enhance and upgrade the current imaging technology used in passenger security screening applications.

During the period ended September 30, 2025, the Company received $457,905 and recorded a receivable of $nil (nine months ended September 30, 2024 — $200,000 and $nil, respectively). The remaining contract balance as of September 30, 2025, was $nil (December 31, 2024 — $457,905).

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 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

16. Contract Awards (continued)

(a) TSA HD-AIT Upgrade (continued)

The Company is required to submit quarterly invoices as follows:

---

| | |
|:---|:---|
| **TSA HD-AIT Upgrade**  | **Amounts**  |
| **Year 2023**  | $1265000 |
| **Year 2024**  | 200000 |
| **Year 2025**  |  |
| &nbsp;&nbsp;&nbsp; Milestone 5B (Q1 2025) (paid)  | 100000 |
| &nbsp;&nbsp;&nbsp; Milestone 6 (Q2 2025) (paid)  | 357905 |
| **Total Contract Value**  | $**1922905** |

---

(b) TSA Open Architecture

On September 29, 2023, the Company received a contract award for $1,116,944 from TSA for the Open Architecture Development. The contract award is to develop a system-level approach that addresses TSA's request for implementation of a Checkpoint Open Architecture for On-Person Screening (OPS) systems that enable modularity and enhances security effectiveness. The project will be performed over a period of twenty-one months, and invoices will be issued once the milestones are reached based on the agreed upon timeline. During the period ended September 30, 2025, the Company received $246,944 and had a receivable of $nil (three and nine months ended September 30, 2024 — $620,000 and $nil, respectively). The balance remaining on the contract as of September 30, 2025, was $nil (December 31, 2024 — $246,944).

---

| | |
|:---|:---|
| **TSA Open Architecture**  | **Amounts**  |
| **Year 2023**  | $75000 |
| **Year 2024**  | 795000 |
| **Year 2025** |  |
| &nbsp;&nbsp;&nbsp; Milestone 6 (Q1 2025) (paid)  | 175000 |
| &nbsp;&nbsp;&nbsp; Milestone 7 (Q2 2025) (paid)  | 71944 |
| **Total Contract Value**  | $**1116944** |

---

(c) TSA HD-AIT Phase II

On September 29, 2023, the Company received a contract award of $133,056 from the Transportation Security Administration ("TSA") for HD-AIT Phase II. This award is a follow-on option under the existing HD-AIT development program, aimed at advancing Phase II to finalize a hardware design that supports future compliance efforts. The project was scheduled to be completed over three months, with invoices issued upon reaching agreed-upon milestones. During the period ended September 30, 2025, the Company had received the full contract amount of $133,056 and recorded a receivable of $nil (three months ended September 30, 2024 — $133,056, respectively). The remaining contract balance as of September 30, 2025, was $nil (December 31, 2024 — $nil), as the agreement was completed on February 20, 2024.

(d) TSA HD-AIT Phase II A

On September 5, 2024, the Company received a contract award for $446,944 from TSA for the HD-AIT Phase II A option. The contract award is a follow-on option to the current HD-AIT development

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 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

16. Contract Awards (continued)

(d) TSA HD-AIT Phase II A (continued)

program to execute phase II to drive to a final hardware design capable of supporting future compliance efforts. The project will be performed over a period of twelve months, and invoices will be issued once the milestones are reached based on the agreed upon timeline. During the period ended September 30, 2025, the Company received $150,000 and had a receivable of $nil (three months ended September 30, 2024 — $nil, and $296,944 respectively). The balance remaining on the contract as of September 30, 2025, was $nil (December 31, 2024 — $150,000).

---

| | |
|:---|:---|
| **TSA HD-AIT Phase II A**  | **Amounts**  |
| **Year 2024**  | $296944 |
| **Year 2025** |  |
| &nbsp;&nbsp;&nbsp; Milestone 2 (Q3 2025) (paid)  | 150000 |
| **Total Contract Value**  | $**446944** |

---

(e) TSA HD-AIT Phase II B

On September 29, 2025, the Company received a contract award for $357,759 from TSA for the HD-AIT Phase II B option. The contract award is a follow-on option to the current HD-AIT development program to execute phase II to drive to a final hardware design capable of supporting future compliance efforts. The project will be performed over a period of three months, and invoices will be issued once the milestones are reached based on the agreed upon timeline. As at September 30, 2025, the Company received $nil and had a receivable of $nil (three months ended September 30, 2024 — $nil, and $nil respectively). The balance remaining on the contract as of September 30, 2025, was $357,759 (December 31, 2024 — $nil).

---

| | |
|:---|:---|
| **TSA HD-AIT Phase II B**  | **Amounts**  |
| **Year 2026** |  |
| &nbsp;&nbsp;&nbsp; Milestone 3 (Q1 2025)  | $100000 |
| &nbsp;&nbsp;&nbsp; Milestone 4 (Q1 2025)  | $175000 |
| &nbsp;&nbsp;&nbsp; Milestone 5 (Q1 2025)  | 82759 |
| **Total Contract Value**  | $**357759** |

---

As of September 30, 2025, the Company recorded contract costs of $nil, representing costs incurred for contract milestones not yet achieved (December 31, 2024, $268,952). As of September 30, 2025, the Company recorded an impairment of the contract costs of $nil (December 31, 2024, $115,730).

17. Supplemental Disclosure with Respect to Cash Flows

During the nine months ended September 30, 2025, and 2024, the Company paid $nil in income taxes in both periods, and paid interest of $483,898 and $283,497, respectively.

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 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

17. Supplemental Disclosure with Respect to Cash Flows (continued)

---

| | | |
|:---|:---|:---|
| | **Nine months ended September 30,**  | **Nine months ended September 30,**  |
| | **2025**  | **2024**  |
| **Changes in non-cash working capital** |  |  |
| &nbsp;&nbsp;&nbsp; Amounts receivable and prepaids  | $(525024) | $(217729) |
| &nbsp;&nbsp;&nbsp; Inventory  | (360015) | 964272 |
| &nbsp;&nbsp;&nbsp; Contract cost  | 268952 |  |
| &nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities  | 235882 | (703454) |
| &nbsp;&nbsp;&nbsp; Deferred revenue  | (9964) | 1135970 |
| **Net changes in non-working capital**  | $**(390169)** | $**1179059** |
| **Supplemental cash flow information** |  |  |
| &nbsp;&nbsp;&nbsp; Fair value of compensation brokers warrants  | $129091 | $10265 |
| &nbsp;&nbsp;&nbsp; Residual value allocated to warrants  | 263584 | 426663 |
| &nbsp;&nbsp;&nbsp; Fair value of warrants allocated to share capital on expiry  |  | (312816) |
| &nbsp;&nbsp;&nbsp; Transfer of reserves on exercise of RSUs  | 374067 | 246518 |
| &nbsp;&nbsp;&nbsp; Stock based compensation recorded in cost of revenue  | 20814 |  |
| &nbsp;&nbsp;&nbsp; Reclassification from reserves upon warrant exercised  |  | 87367 |
| &nbsp;&nbsp;&nbsp; Transfer from inventory to PP&E  | 85803 |  |
| &nbsp;&nbsp;&nbsp; Intangibles capitalized to inventory  | 47710 |  |

---

18. Related Party Transactions

#### Compensation of key management personnel:
Key management personnel include persons having the authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The key management personnel of the Company are the members of the Company's executive management team and Board of Directors. Compensation provided to key management personnel is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended September 30,**  | **Three months ended September 30,**  | **Nine months ended September 30,**  | **Nine months ended September 30,**  |
| | **2025**  | **2024**  | **2025**  | **2024**  |
| G&A Salaries  | $385401 | $171686 | $1061266 | $485108 |
| G&A Stock-based compensation  | 166095 | 77548 | 693419 | 136004 |
| G&A Consulting fees<sup>(1)</sup>  |  | 24192 |  | 72788 |
|  | $**551496** | $**273426** | $**1754685** | $**693901** |

---

(1) Consulting fees were paid or payable to the CFO of the Company.

As of September 30, 2025, the Company had a balance payable of $197,021 to key management personnel (December 31, 2024, — $421,319). This payable balance includes accounts payable and accrued liabilities relating to compensation to directors, officers, or their related companies, included in compensation of key management personnel. These related party balances are unsecured, non-interest bearing and have no specific terms of settlement.

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#### Liberty Defense Holdings, Ltd.
 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

18. Related Party Transactions (continued)

During the nine months ended September 30, 2025, the Company received working capital loans in the amount of $nil (December 31, 2024 — $82,000) from directors, officers, or their related parties, and repaid $74,658. As at September 30, 2025, the outstanding balance is $nil (Note 8(a)) (December 31, 2024 — $74,658).

19. Financial Instruments

As at September 30, 2025, the Company's financial instruments comprise cash, accounts receivables, accounts payable and accrued liabilities, loans payable, term loan, lease liabilities and factoring liability. The fair values of the Company's financial instruments approximate their carrying values due to their short-term maturity or market interest rates.

Fair value of financial instruments:

Financial instruments recorded at fair value on the consolidated statements of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The three levels of the fair value hierarchy are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Level 2 — Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Level 3 — Inputs that are not based on observable market data.

The Company's activities expose it to financial risks of varying degrees of significance, which could affect its ability to achieve its strategic objectives for growth and shareholder returns. The principal financial risks to which the Company is exposed are credit risk, liquidity risk and currency risk. The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework and reviews the Company's policies on an ongoing basis.

(a) Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations, including accounts receivable terms. The Company's cash is held through large Canadian, international, and foreign national financial institutions. The Company's receivables primarily consist of GST receivable due from the Canadian government and trade receivables that the Company continues to collect. These trade receivables are primarily with continuing customers and are not subject to significant credit risk. As at September 30, 2025, the Company's trade receivables totalling $773,263 are from four customers (December 31, 2024 — $130,000). The Company's maximum exposure to credit risk is limited to the carrying amount of cash and accounts receivables.

(b) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. To mitigate this risk, the Company has a planning and budgeting process in place to determine the funds required to support its ongoing operations and capital expenditures. The Company ensures that sufficient funds are raised from equity offerings or debt financings to meet its operating requirements, after considering existing cash balances, expected exercise of share purchase warrants, and stock options. The Company's ability to continue as a going concern involves significant judgements and estimates while determining forecasted cashflows and is dependent on the Company's ability to obtain financing (Note 1). As at September 30, 2025,

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 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

19. Financial Instruments (continued)

(b) Liquidity risk (continued)

the Company had cash of $640,907 (December 31, 2024 — $1,153,229) to settle current liabilities of $8,239,018 (December 31, 2024 — $6,607,387).

(c) Market risk

This risk refers to the potential fluctuations in the fair value or future cash flows of a financial instrument due to changes in market prices. The Company is exposed to the following significant market risks:

Interest rate risk

Interest rate risk arises from changes in market rates of interest that could adversely affect the Company. The Company currently has interest-bearing financial instruments in relation to loans and factoring liability (Note 8, 9 and 10). The

Company's exposure to interest rate risk is minimal as the interest rates are at a fixed percentage on the loans payable, term loans and factoring and credit line liability.

Foreign currency risk

The Company is exposed to currency risk by having balances and transactions in currencies that are different from its functional currency. The Company operates in foreign jurisdictions, which uses the U.S. dollar. The Company does not use derivative instruments to reduce upward, and downward risk associated with foreign currency fluctuations.

---

| | |
|:---|:---|
| | **Amounts <br> CAD dollars**  |
| Financial assets denominated in foreign currencies  | $182454 |
| Financial liabilities denominated in foreign currencies  | (643290) |
| **Net exposure**  | $**(460836)** |

---

A 10% change in the U.S. dollar exchange rate relative to the Canadian dollar would change the Company's comprehensive loss by $(33,687).

Price risk

The Company is exposed to price risk with respect to equity prices. Equity price risk is defined as the potential adverse impact on the Company's earnings due to movements in individual equity prices or general movements in the level of the stock market.

The Company closely monitors individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

20. Capital Risk Management

The Company manages common shares, stock options, performance share units, restricted share units, and share purchase warrants as capital. The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue the development of its products and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.

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 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

20. Capital Risk Management (continued)

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue debt, acquire or dispose of assets, or adjust the amount of cash on hand.

In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions.

In order to maximize ongoing development efforts, the Company does not pay out dividends. The Company's investment policy is to keep its cash treasury on deposit in an interest-bearing chartered bank account. Cash consists of cash on held with banks.

The Company expects its current capital resources will be sufficient to carry its operations, and product development plans for the foreseeable future. Except for the security pledged in certain term loans and credit lines as outlined in Notes 10(a) respectively, the Company is not subject to externally imposed capital requirements.

There has been no change to the Company's approach to capital management during the nine months ended September 30, 2025.

21. Segmented Information

The Company operates through three distinct segments: Corporate, HEXWAVE and Contract. The operating segments of the Company are based on the reports which are reviewed by the chief operating decision maker ("CODM") in making strategic resource allocation decisions. The Company considers its CODM to be its CEO, who evaluate the operations of each reportable segment.

The CODM reviews the net income (loss) of each of these segments in allocating resources and evaluating operating performance. The corporate reporting segment covers the Company's non-allocated, general overhead expenses, such as legal, compliance, accounting, head-office staff, and other such items. This reporting segment is reviewed for cost control and budgetary considerations.

The following tables summarize the Company's segments for the nine and three months ended September 30, 2025, and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the nine months ended September 30, 2025**  | **For the nine months ended September 30, 2025**  | **For the nine months ended September 30, 2025**  | **For the nine months ended September 30, 2025**  |
| | **Corporate**  | **HEXWAVE**  | **Contract**  | **Total**  |
|  | **$**  | **$**  | **$**  | **$**  |
| Revenue  |  | 909407 | 854849 | 1764256 |
| Cost of revenue  |  | 2112884 | 1493636 | 3606520 |
| Net loss for the year  | (4338868) | (3021690) | (3149648) | (10510206) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended September 30, 2025**  | **For the three months ended September 30, 2025**  | **For the three months ended September 30, 2025**  | **For the three months ended September 30, 2025**  |
| | **Corporate**  | **HEXWAVE**  | **Contract**  | **Total**  |
|  | **$**  | **$**  | **$**  | **$**  |
| Revenue  |  | 129049 | 150000 | 279049 |
| Cost of revenue  |  | 838101 | 394939 | 1233040 |
| Net loss for the year  | (937181) | (1161222) | (869361) | (2967764) |

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 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

21. Segmented Information (continued)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the nine months ended September 30, 2024**  | **For the nine months ended September 30, 2024**  | **For the nine months ended September 30, 2024**  | **For the nine months ended September 30, 2024**  |
| | **Corporate**  | **HEXWAVE**  | **Contract**  | **Total**  |
|  | **$**  | **$**  | **$**  | **$**  |
| Revenue  |  | 1447532 | 1250000 | 2697532 |
| Cost of revenue  |  | 2408789 | 1796912 | 4205701 |
| Net loss for the year  | (1696754) | (1987849) | (2745124) | (6429727) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended September 30, 2024**  | **For the three months ended September 30, 2024**  | **For the three months ended September 30, 2024**  | **For the three months ended September 30, 2024**  |
| | **Corporate**  | **HEXWAVE**  | **Contract**  | **Total**  |
|  | **$**  | **$**  | **$**  | **$**  |
| Revenue  |  | 650000 | 466944 | 1116944 |
| Cost of revenue  |  | 886225 | 979947 | 1866172 |
| Net loss for the year  | (488065) | (816952) | (1128172) | (2433189) |

---

#### Geographic Breakdown
As at September 30, 2025, and December 31, 2024, all non-current assets are in the United States.

All revenue from contract segment was earned from one customer in the United States (2024 — one customer).

For the period ended September 30, 2025, revenues from the HEXWAVE segment attributable to the Company's country of domicile, Canada, were approximately $nil, (September 30, 2024, $142,032). Revenues attributable to customers in the United States totaled approximately $909,407 (2024 — $1,305,000). Revenues from all other foreign countries in aggregate totaled $nil (2024 — $nil). The determination of revenues by geographic area is based on the location of the customer.

For the period ended September 30, 2025, the Company reported HEXWAVE revenues from major customers over 10% of its total HEXWAVE revenues as follows: $390,000 (2024 — $65,000), $238,000 (2024 — $nil), $109,959 (2024 — $nil), $108,500 (2024 — $nil), $nil (2024 — $1,080,000) and $nil (2024 — $142,032).

22. Subsequent Events

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Subsequent to September 30, 2025, an aggregate of 5,414,551 common shares were issued pursuant to the exercise of 5,414,551 warrants, for gross proceeds of CAD$1,895,093. In addition, on December 8, 2025, the Company issued 10,000 common shares pursuant to the vesting and settlement of 10,000 RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On December 31, 2025, the Company closed the first tranche of a non-brokered private placement for gross proceeds of CAD$1,747,168, through the issuance of 7,941,671 units at a price of CAD$0.22 per unit. Each unit comprised one common share and one common share purchase warrant, with each warrant entitling the holder to acquire one additional common share at an exercise price of CAD$0.30 per share, exercisable from March 2, 2026, to December 31, 2027. The Company issued an aggregate of 356,162 broker warrants to agents under terms and conditions substantially identical to those of the unit warrant.

Subsequently, on January 15, 2026, the Company closed the second and final tranche of the same non-brokered private placement for additional gross proceeds of CAD$867,506, through the issuance of

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#### Liberty Defense Holdings, Ltd.
 **Notes to the Amended and Restated Condensed Consolidated Interim Financial Statements (Unaudited — Expressed in U.S. dollars, unless otherwise stated and per share amounts) For the three and nine months ended September 30, 2025, and 2024** 

22. Subsequent Events (continued)

3,943,207 units at a price of CAD$0.22 per unit. Each unit comprised one common share and one common share purchase warrant, with each warrant entitling the holder to acquire one additional common share at an exercise price of CAD$0.30 per share, exercisable from March 17, 2026, to January 15, 2028.

In connection with the private placement, the Company issued an aggregate of 227,024 broker warrants to agents under terms and conditions substantially identical to those of the unit warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On December 12, 2025, the Company granted 321,702 RSUs to a consultant. The RSUs vest in full on December 12, 2026, and expire on December 12, 2029, if not settled prior to that date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • A total of 220,000 stock options were cancelled.

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### Common Shares
![[MISSING IMAGE: lg_libertydef-4clr.jpg]](lg_libertydef-4clr.jpg)

### LIBERTY DEFENSE HOLDINGS, LTD.

#### PRELIMINARY PROSPECTUS

### Benchmark, a StoneX Company
, 2026

Through and including , 2026 (the 25<sup>th</sup> day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

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#### PART II

#### INFORMATION NOT REQUIRED IN PROSPECTUS

#### Item 6. Indemnification of Directors and Officers.
Division 5 of Part 5 of the *Business Corporations Act* (British Columbia) provides that a corporation may (a) indemnify an eligible party against all eligible penalties to which the eligible party is or may be liable and (b) after the final disposition of an eligible proceeding, pay the expenses (not including judgments, penalties, fines or amounts paid in settlement of a proceeding) actually and reasonably incurred by an eligible party in respect of that proceeding.

An "eligible party" means an individual who (a) is or was a director or officer of the corporation, (b) is or was a director or officer of another corporation (i) at a time when the other corporation is or was an affiliate of the corporation, or (ii) at the request of the corporation, or (c) at the request of the corporation, is or was, or holds or held a position equivalent to that of, a director or officer of a partnership, trust, joint venture or other unincorporated entity.

An "eligible proceeding" means a proceeding in which an eligible party or any of the heirs and personal or other legal representatives of the eligible party, by reason of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, the corporation or an associated corporation (a) is or may be joined as a party, or (b) is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding.

A corporation must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by the eligible party in respect of that proceeding if the eligible party (a) has not been reimbursed for those expenses, and (b) is wholly successful, on the merits or otherwise, in the outcome of the proceeding or is substantially successful on the merits in the outcome of the proceeding.

A corporation may pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an eligible party in respect of that proceeding, provided the corporation first receives from the eligible party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited, the eligible party will repay the amounts advanced.

Notwithstanding any of the foregoing, a corporation must not indemnify an eligible party or pay the expenses of an eligible party if any of the following circumstances apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • if the indemnity or payment is made under an earlier agreement to indemnify or pay expenses and, at the time that the agreement to indemnify or pay expenses was made, the corporation was prohibited from giving the indemnity or paying the expenses by its memorandum or articles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • if the indemnity or payment is made otherwise than under an earlier agreement to indemnify or pay expenses and, at the time that the indemnity or payment is made, the corporation is prohibited from giving the indemnity or paying the expenses by its memorandum or articles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • if, in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and in good faith with a view to the best interests of the corporation or the associated corporation, as the case may be;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • in the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have reasonable grounds for believing that the eligible party's conduct in respect of which the proceeding was brought was lawful.

If an eligible proceeding is brought against an eligible party by or on behalf of the corporation or by or on behalf of an associated corporation, the corporation must not (a) indemnify the eligible party in respect of the proceeding or (b) pay the expenses of the eligible party in respect of the proceeding.

A corporation may purchase and maintain insurance for the benefit of an eligible party or the heirs and personal or other legal representatives of the eligible party against any liability that may be incurred by reason of the eligible party being or having been a director or officer of, or holding or having held a

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position equivalent to that of a director or officer of, the corporation or an associated corporation. We maintain insurance policies relating to certain liabilities that our directors and officers may incur in such capacities.

Our Articles provide that, subject to the *Business Corporations Act* (British Columbia), the Company must indemnify directors, former directors or alternate directors of the Company and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Company must, in advance of the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director and alternate director is deemed to have contracted with the Company on this term.

The failure of a director, alternate director or officer of the Company to comply with the *Business Corporations Act* (British Columbia) or our Articles does not invalidate any indemnity to which he or she is entitled to under the Articles.

The Articles also provide that the Company may indemnify any person, subject to any restrictions in the *Business Corporations Act* (British Columbia).

Our Articles defines the following terms: (1) an "eligible penalty" means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an "eligible proceeding"; (2) an "eligible party" means a director, former director or alternate director of the Company; (3) an "eligible proceeding" means a legal proceeding or investigative action (whether current, threatened, pending or completed), in which an eligible party or any of the heirs and personal or other legal representatives of the eligible party, by reason of the eligible party being or having been a director or alternate director of the Company (a) is or may be joined as a party, or (b) is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding; and (4) "expenses" has the meaning set out in the *Business Corporations Act* (British Columbia).

Our Articles provide that the Company may purchase and maintain insurance for the benefit of any person (or his or her heirs or legal personal representatives) who is or was a director, alternative director, officer, employee or agent, or held or holds such position or a position equivalent to the foregoing (each, an "insured party") with respect to (i) the Company; (ii) a corporation at a time when the corporation was an affiliate of the Company; (iii) at the request of the Company, served in such capacity with respect to a corporation, partnership, trust, joint venture or other unincorporated entity, against any liability that may be incurred by him or her acting in such capacity**.** 

We intend to enter into an indemnification agreement with each of our officers and directors pursuant to which they will be indemnified by us, subject to certain limitations, for any liabilities incurred by them in connection with their role as officers or directors of the Company.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

#### Item 7. Recent sales of unregistered securities.
The following information relates to all securities issued or sold by us within the past three years and not registered under the Securities Act. The issuances of securities described below were exempt from registration under the Securities Act in reliance on Regulation S promulgated under the Securities Act regarding sales by an issuer in offshore transactions, Regulation D under the Securities Act, Rule 701 under the Securities Act and/or pursuant to Section 4(a)(2) of the Securities Act regarding transactions not involving a public offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On April 14, 2023, the Company closed the first tranche of a non-brokered private placement for gross proceeds of US$1,007,249 (C$1,341,212). The Company issued 670,606 units of the Company at a price of C$2.00 per unit. Each unit comprised one common share and one-half share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company at a price of C$3.00 within a period of 24 months. The warrants were allocated a residual value of

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US$100,725. The Company paid the agents 21,525 broker warrants with a fair value of US$5,498. Each broker warrant will be exercisable to purchase one common share for a period of 24 months at an exercise price of C$3.00. Additionally, the Company incurred cash costs in connection with the private placement in the amount of US$39,594. All securities issued under the private placement are subject to a hold period expiring four months and one day after the closing date of the private placement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On May 9, 2023, the Company closed the second tranche of a non-brokered private placement for gross proceeds of US$296,116 (C$397,000). The Company issued 198,500 units at a price of C$2.00 per unit. Each unit comprised one common share and one-half share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company at a price of C$3.00 within a period of 24 months. The warrants were allocated a residual value of US$22,712. The Company paid the agents 13,895 broker warrants with a fair value of US$3,816. Each broker warrant is exercisable to purchase one common share for a period of 24 months at an exercise price of C$3.00. Additionally, the Company incurred cash costs in connection with the private placement in the amount of US$20,803. The Company also issued 4,500 units for gross proceeds of US$6,713, which were issued to offset invoices due to a vendor. All securities issued under the private placement are subject to a hold period expiring four months and one day after the closing date of the private placement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On June 8, 2023, the Company closed the third and final tranche of a non-brokered private placement for gross proceeds of US$228,547 (C$305,000). The Company issued 152,500 units at a price of C$2.00 per unit. Each unit comprised one common share and one-half share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company at a price of C$3.00 within a period of 24 months. The warrants were allocated a residual value of US$57,137. The Company paid the agents 9,275 broker warrants with a fair value of US$1,893. Each broker warrant will be exercisable to purchase one common share for a period of 24 months at an exercise price of C$3.00. Additionally, the Company incurred cash costs in connection with filing and legal expenses in the amount of US$66,900. All securities issued under the private placement are subject to a hold period expiring four months and one day after the closing date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On October 5, 2023, the Company closed a non-brokered private placement for gross proceeds of US$2,588,066 (C$3,565,527). The Company issued 1,782,764 units at a price of C$2.00 per unit. Each unit comprised one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company at a price of C$3.00 for a period of 36 months. The warrants were allocated a residual value of US$194,105. The Company paid the agents 60,723 broker warrants with a fair value of US$37,523. Each broker warrant will be exercisable to purchase one common share for a period of 36 months at an exercise price of C$2.00. Additionally, the Company incurred cash costs in connection with filing and legal expenses in the amount of US$336,600 and issued 50,000 shares as a corporate finance fee with a fair value of US$72,586. All securities issued under the private placement are subject to a hold period expiring four months and one day after the closing date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On December 6, 2023, and subsequently amended on December 29, 2023, the Company announced a non-brokered private placement intending to sell up to 786,667 units at C$1.50 per unit, aiming for gross proceeds of C$1,180,000. Each unit comprises one common share and one purchase warrant, with each warrant allowing the holder to purchase one share at an exercise price of C$2.00 for 36 months. As of December 31, 2023, the Company received proceeds of US$224,915 (C$305,000) for share subscriptions, net of share issuance costs, ahead of closing the private placement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On January 15, 2024, the Company closed the initial tranche of a Listed Issuer Financing Exemption (LIFE) private placement of units, raising gross proceeds of US$662,554 (C$886,000). As of December 31, 2023, the Company had received US$224,915 of these proceeds. This tranche involved the issuance of 590,068 units at a price of C$1.50 per unit. Each unit consisted of one common share and one purchase warrant, allowing the holder to purchase an additional common share at C$2.00 per share within 36 months. The warrants were allocated a residual value of US$154,596. Additionally, the Company issued 15,171 broker warrants to agents under identical terms and conditions with a fair value of US$4,508. Agent commissions totaling US$17,110 were paid. All securities issued are subject to a hold period expiring four months and one day after the closing date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Subsequently, on February 5, 2024, the Company closed the final tranche of the same non-brokered private placement, raising an additional US$112,285 (C$150,000). This tranche involved the issuance of 100,000 units under the same terms and conditions as the initial tranche. The warrants were allocated a residual value of US$37,428.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On February 26, 2024, the Company closed an investment by Viken, pursuant to which Viken purchased 909,091 units at an issue price of C$1.50 per unit for total gross proceeds of US$1,000,000 (C$1,363,636). Each unit comprised one common share and one purchase warrant. Each warrant entitles Viken to purchase one additional common share at an exercise price of C$2.00 for a period of 36 months. The warrants were allocated a residual value of US$166,667. Additionally, the Company incurred cash costs in connection with filing and legal expenses in the amount of US$27,116. These warrants contain blocker language restricting the exercise of the warrants if such exercise results in Viken holding more than 9.9% of the outstanding voting securities of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On March 22, 2024, a total of 5,000 common shares were issued pursuant to the exercise of RSUs with a fair value of US$8,371 (C$11,363).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On April 29, 2024, a total of 3,650 shares were issued pursuant to the exercise of 3,650 warrants, resulting in proceeds of US$5,346 (C$7,300).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On May 1, 2024, a total of 1,250 shares were issued pursuant to the exercise of 1,250 warrants, resulting in proceeds of US$1,815 (C$2,500).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On May 7, 2024, a total of 7,100 shares were issued pursuant to the exercise of 7,100 warrants, resulting in proceeds of US$10,377 (C$14,200).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On May 8, 2024, a total of 48,000 shares were issued pursuant to the exercise of 48,000 warrants, resulting in proceeds of US$69,829 (C$96,000).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On May 23, 2024, a total of 11,341 shares were issued pursuant to the exercise of 11,341 RSUs with a fair value of US$36,090 (C$49,331).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On August 13, 2024, the Company closed the first tranche of a special warrant financing for gross proceeds of US$508,864 (C$697,550). The Company issued 465,035 special warrants at a price of C$1.50 per unit. Each special warrant will automatically convert into one unit, consisting of one common share and one share purchase warrant. Each warrant entitles the holder to purchase one additional common share at a price of C$2.00 within a period of 36 months. The warrants were allocated a residual value of US$203,560. The Company paid the agents 19,051 broker warrants with a fair value of US$5,757. Each broker warrant will be exercisable to purchase one common share for a period of 36 months at an exercise price of C$2.00. Additionally, the Company incurred cash costs in connection with the private placement in the amount of US$30,995.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On September 25, 2024, a total of 50,000 common shares were issued pursuant to the exercise of RSUs with a fair value of US$33,490 (C$45,000).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On October 16, 2024, a total of 10,000 common shares were issued pursuant to the exercise of RSUs with a fair value of US$12,331 (C$17,000).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On November 19, 2024, a total of 7,500 common shares were issued pursuant to the exercise of RSUs with a fair value of US$4,897 (C$6,750).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On November 29, 2024, a total of 18,000 common shares were issued pursuant to the exercise of RSUs with a fair value of US$21,856 (C$30,600).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On December 10, 2024, the Company settled a total of $363,336 (C$520,947) of indebtedness with a certain creditor by issuing 1,562,500 units valued at $927,332 that follow the same terms as the units issued on December 18, 2024, non-brokered private placement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On December 18, 2024, the Company closed a non-brokered private placement of 25,000,000 units at a price of C$0.32 per unit for gross proceeds of C$8,000,000. Each Unit comprised of one common share and one-half common share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share of the Company at a price of CAD$0.55 for a period of 24 months and are subject to an accelerated expiry at the Company's election under certain conditions.

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The Company also issued 1,251,062 finder warrants which are exercisable to purchase one common share for a period of 24 months at an exercise price of CAD$0.55.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On January 13, 2025, the Company received C$2,977,851 from the exercise of 5,414,275 warrants after electing, on December 31, 2024, to exercise its acceleration right for all 12,500,000 warrants granted on December 19, 2024, pursuant to a private placement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On January 23, 2025, a total of 98,500 common shares were issued pursuant to the exercise of 98,500 RSUs with a fair value of C$131,005.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On February 18, 2025, a total of 7,500 common shares were issued pursuant to the exercise of 7,500 RSUs with a fair value of C$6,375.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On February 21, 2025, a total of 8,100 common shares were issued pursuant to the exercise of 8,100 RSUs with a fair value of C$16,119.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On March 3, 2025, a total of 75,000 common shares were issued pursuant to the exercise of 75,000 RSUs with a fair value of C$117,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On March 20, 2025, the Company closed an overnight marketed public offering of 3,031,000 units at a price of C$1.65 per unit for gross proceeds of C$5,001,150. Each unit is comprised of one common share and one-half common share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share of the Company at a price of CAD$2.05 for a period of 24 months and is subject to an accelerated expiry at the Company's election under certain conditions. In connection with the non-brokered private placement, the Company issued 212,170 finder warrants. Each finder's warrant will be exercisable to purchase one common share for a period of 24 months at an exercise price of CAD$1.65.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On April 1, 2025, the Company received C$5,285 from the exercise of 3,500 warrants. As a result, a total of 3,500 common shares were issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On April 2, 2025, the Company granted 150,000 stock options to consultants. Each stock option is exercisable for one common share of the Company at an exercise price of C$0.84 per share. These stock options vest 12.5% after three months from the grant date, and 12.5% every three months thereafter, expiring on April 2, 2030.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On April 15, 2025, the Company granted 50,000 stock options to a consultant. Each stock option is exercisable for one common share of the Company at an exercise price of C$0.59 per share. These stock options vest immediately as of the grant date and expire on April 15, 2027.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On May 20, 2025, a total of 7,500 common shares were issued pursuant to the exercise of 7,500 RSUs with a fair value of C$6,375.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On July 2, 2025, the Company granted 250,000 stock options to Jason Burinescu. Each Option is exercisable for one common share of the Company at an exercise price of C$0.24 per share. These stock options vest 1/4 on October 2, 2025, 1/4 on January 2, 2026, 1/4 on April 2, 2026, 1/4 on July 2, 2026, expiring on July 2, 2027.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On July 29, 2025, the Company closed the non-brokered private placement of 20,000,000 units at the price of C$0.22 per unit for gross proceeds of C$4,400,000. Each Unit will consist of one common share in the capital of the Company and one Common Share purchase warrant. Each warrant will entitle the holder thereof to purchase one Common Share of the Company from September 27, 2025 until July 28, 2026 at the exercise price of C$0.35. Additionally, the Company issued 719,973 broker warrants with the same terms and conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On August 7, 2025, the Company issued 50,000 restricted share units to consultants, which will vest on January 1, 2026 and will expire on January 1, 2029.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On August 19, 2025, a total of 7,500 common shares were issued pursuant to the exercise of 7,500 RSUs with a fair value of C$6,375.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On September 9, 2025, the Company granted 2,000,000 stock options to directors and officers, investor relations service providers, employees, and consultants. Each Option entitles the holder to

------

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acquire one common share of the Company at an exercise price of $0.265 per share, vests in four equal installments of 25% on December 9, 2025, March 9, 2026, June 9, 2026, and September 9, 2026, and will expire on September 9, 2030.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • From October 7, 2025 to November 4, 2025 the Company received C$1,685,093 from the exercise of 5,414,551 warrants. As a result, a total of 5,414,551 common shares were issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On December 8, 2025, a total of 10,000 common shares were issued pursuant to the exercise of 10,000 RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On December 12, 2025, the Company issued 321,702 restricted share units to consultants, which will vest on December 12, 2026 and will expire on December 12, 2029.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On December 31, 2025, the Company closed the non-brokered private placement of 7,941,671 units at the price of C$0.22 per unit for gross proceeds of C$1,747,168. Each Unit will consist of one common share in the capital of the Company and one Common Share purchase warrant. Each warrant will entitle the holder thereof to purchase one Common Share of the Company from March 2, 2026 until December 31, 2027 at the exercise price of C$0.30. Additionally, the Company issued 356,162 broker warrants with the same terms and conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • On January 15, 2026, the Company closed the non-brokered private placement of 3,943,207 units at the price of C$0.22 per unit for gross proceeds of C$867,506. Each Unit will consist of one common share in the capital of the Company and one Common Share purchase warrant. Each warrant will entitle the holder thereof to purchase one Common Share of the Company from March 17, 2026 until January 15, 2028 at the exercise price of C$0.30. Additionally, the Company issued 227,024 broker warrants with the same terms and conditions.

#### Item 8. Exhibits and Financial Statement Schedules.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a) The following documents are filed as part of this registration statement:

---

| | |
|:---|:---|
| **Exhibit <br> No.**  | **Description**  |
| &nbsp;&nbsp; 1.1\* | Form of Underwriting Agreement |
| &nbsp;&nbsp; 3.1\* | Notice of Articles |
| &nbsp;&nbsp; 5.1\* | Opinion of McMillan LLP |
| 10.1+ | [Omnibus Long-Term Incentive Plan dated March 27, 2019](tm261972d2_ex10-1.htm)  |
| 10.2+ | [Omnibus Long-Term Incentive Plan, as amended on October 25, 2022](tm261972d2_ex10-2.htm) |
| 10.3+ | [Omnibus Long-Term Incentive Plan, as amended on October 26, 2023](tm261972d2_ex10-3.htm) |
| 10.4\* | Exclusive Patent License Agreement, dated September 10, 2018, by and between Liberty Defense Technologies, Inc. and Massachusetts Institute of Technology |
| 10.5\* | First Amendment to Exclusive Patent License Agreement, dated March 4, 2019, by and between Liberty Defense Technologies, Inc. and Massachusetts Institute of Technology |
| 10.6\* | Second Amendment to Exclusive Patent License Agreement, dated March 28, 2019, by and between Liberty Defense Technologies, Inc. and Massachusetts Institute of Technology |
| 10.7\* | Third Amendment to Exclusive Patent License Agreement, dated September 20, 2019, by and between Liberty Defense Technologies, Inc. and Massachusetts Institute of Technology |
| 10.8\* | Fourth Amendment to Exclusive Patent License Agreement, dated March 12, 2020, by and between Liberty Defense Technologies, Inc. and Massachusetts Institute of Technology |
| 10.9\* | Fifth Amendment to Exclusive Patent License Agreement, dated August 1, 2022, by and between Liberty Defense Technologies, Inc. and Massachusetts Institute of Technology |
| 10.10\* | Sixth Amendment to Exclusive Patent License Agreement, dated April 1, 2023, by and between Liberty Defense Technologies, Inc. and Massachusetts Institute of Technology |
| 10.11\* | Seventh Amendment to Exclusive Patent License Agreement, dated June 1, 2024, by and between Liberty Defense Technologies, Inc. and Massachusetts Institute of Technology |

---

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---

| | |
|:---|:---|
| **Exhibit <br> No.**  | **Description**  |
| 10.12\* | Technology Transfer Agreement, dated August 24, 2018, by and between Liberty Defense Technologies, Inc. and Massachusetts Institute of Technology |
| 10.13\* | Cooperative Research and Development Agreement, dated December 21, 2018, by and between Liberty Defense Technologies, Inc. and Massachusetts Institute of Technology |
| 10.14 | [Loan and Security Agreement, dated as of August 19, 2024, between Liberty Defense Technologies, Inc. and PFF, LLC](tm261972d2_ex10-14.htm)  |
| 10.15 | [Amendment No. 1 to Loan and Security Agreement, dated as of March 15, 2025, between Liberty Defense Technologies, Inc. and PFF, LLC](tm261972d2_ex10-15.htm)  |
| 10.16 | [Amendment No. 2 to Loan and Security Agreement, dated as of July 15, 2025, between Liberty Defense Technologies, Inc. and PFF, LLC](tm261972d2_ex10-16.htm)  |
| 10.17 | [Amendment No. 3 to Loan and Security Agreement, dated as of August 14, 2025, between Liberty Defense Technologies, Inc. and PFF, LLC](tm261972d2_ex10-17.htm)  |
| 10.18 | [Amendment No. 4 to Loan and Security Agreement, dated as of September 1, 2025, between Liberty Defense Technologies, Inc. and PFF, LLC](tm261972d2_ex10-18.htm)  |
| 10.19\* | Factoring Agreement, by and between Bengal Capital Inc. and Liberty Defense Holdings Ltd., dated as of June 22, 2023 |
| 10.20\* | License Agreement, dated as of March 22, 2021, between DrawDown Technologies Inc. and Battelle Memorial Institute |
| 10.21+\*  | Employment Agreement, dated as of December 7, 2018, between William Frain and DrawDown Technologies, Inc. |
| 10.22+\*  | Employment Agreement, dated as of January 1, 2025, between Omar Garcia and Liberty Defense Holdings Ltd. |
| 10.23+\*  | Employment Agreement, dated as of February 25, 2025, between Daryl Rebeck and Liberty Defense Holdings Ltd. |
| 10.24\* | Form of Indemnification Agreement |
| 21.1\* | List of Subsidiaries |
| 23.1 | [Consent of Davidson & Company LLP](tm261972d2_ex23-1.htm)  |
| 23.2\* | Consent of McMillan LLP (included in Exhibit 5.1) |
| 24.1 | [Power of Attorney (included on signature page)](#tSIG)  |
| 99.1\* | Consent of , to be named as a director |
| 107 | [Filing Fee Table](tm261972d1_ex-filingfees.htm)  |

---

\*

To be filed by amendment.

+

Indicates management contract or compensatory plan.

#### Item 9. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 6, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

------

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The undersigned registrant hereby undertakes that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1)

For the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)

Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (§ 230.424 of this chapter);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)

Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)

The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)

Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2)

For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (3)

For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

------

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#### SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Wilmington, Commonwealth of Massachusetts, on this 4th day of February, 2026.

---

| |
|:---|
| **LIBERTY DEFENSE HOLDINGS, LTD.** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; By: <br>/s/ William Frain <br>Name: William Frain <br> Title: Chief Executive Officer  |

---

#### POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints William Frain, Omar Garcia and Jason Burinescu as his or her true and lawful attorneys-in-fact, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities to sign any and all amendments (including post-effective amendments) to this registration statement and to sign a registration statement pursuant to Section 462(b) of the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated:

---

| | | |
|:---|:---|:---|
| **SIGNATURE**  | **TITLE**  | **DATE**  |
| /s/ William Frain <br>William Frain  | Chief Executive Officer, Director <br> (*Principal Executive Officer*) | February 4, 2026  |
| /s/ Omar Garcia Abrego <br>Omar Garcia Abrego  | Chief Financial Officer <br> (*Principal Financial and Accounting* <br> *Officer*) | February 4, 2026  |
| /s/ Jason Burinescu <br>Jason Burinescu  | Executive Chairman | February 4, 2026  |
| /s/ Linda Jacksta <br>Linda Jacksta  | Director | February 4, 2026  |
| /s/ Arjun Grewal <br>Arjun Grewal  | Director | February 4, 2026  |

---

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#### SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Pursuant to the requirements of the Securities Act of 1933, the undersigned, the duly authorized representative in the United States of Liberty Defense Holdings, Ltd., has signed this registration statement February 4, 2026.

#### Liberty Defense Holdings, Ltd.

---

| | |
|:---|:---|
| /s/ William Frain  | /s/ William Frain  |
| Name: | William Frain |
| Title: | Chief Executive Officer <br>|

---

------

## Exhibit 10.1

**Exhibit 10.1**

**<u>LIBERTY DEFENSE HOLDINGS, LTD.</u>**

**OMNIBUS LONG-TERM INCENTIVE PLAN**

**March 27, 2019**

**TABLE OF CONTENTS**

**ARTICLE 1 DEFINITIONS**

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 1.1 | Definitions. | 1 |
| **ARTICLE 2** | **ARTICLE 2** | **ARTICLE 2** |
| **PURPOSE AND ADMINISTRATION OF THE PLAN; GRANTING OF AWARDS** | **PURPOSE AND ADMINISTRATION OF THE PLAN; GRANTING OF AWARDS** | **PURPOSE AND ADMINISTRATION OF THE PLAN; GRANTING OF AWARDS** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.1 | Purpose of the Plan | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.2 | Implementation and Administration of the Plan | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.3 | Eligible Participants | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.4 | Shares Subject to the Plan | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.5 | Granting of Awards | 9 |
| **ARTICLE 3 <br> OPTIONS** | **ARTICLE 3 <br> OPTIONS** | **ARTICLE 3 <br> OPTIONS** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.1 | Nature of Options | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.2 | Option Awards | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.3 | Option Price | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.4 | Option Term | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.5 | Exercise of Options | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.6 | Method of Exercise and Payment of Purchase Price | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.7 | Option Grant Agreements | 11 |
| **ARTICLE 4 <br> DEFERRED SHARE UNITS** | **ARTICLE 4 <br> DEFERRED SHARE UNITS** | **ARTICLE 4 <br> DEFERRED SHARE UNITS** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.1 | Nature of DSUs | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.2 | DSU Awards | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.3 | Redemption of DSUs | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.4 | Termination of Unvested DSU Awards | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.5 | DSU Grant Agreements | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.6 | Award of Dividend Equivalents | 14 |
| **ARTICLE 5 <br> RESTRICTED SHARE UNITS** | **ARTICLE 5 <br> RESTRICTED SHARE UNITS** | **ARTICLE 5 <br> RESTRICTED SHARE UNITS** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.1 | Nature of RSUs | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.2 | RSU Awards | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.3 | Restriction Period | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.4 | Performance Criteria and Performance Period | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.5 | RSU Vesting Determination Date | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.6 | Settlement of RSUs | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.7 | Determination of Amounts | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.8 | RSU Grant Agreements | 16 |

---

(ii) ---

| | | |
|:---|:---|:---|
| **ARTICLE 6 <br> GENERAL CONDITIONS** | **ARTICLE 6 <br> GENERAL CONDITIONS** | **ARTICLE 6 <br> GENERAL CONDITIONS** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.1 | General Conditions Applicable to Awards | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.2 | General Conditions Applicable to Awards | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.3 | Unfunded Plan | 19 |
| **ARTICLE 7 <br> ADJUSTMENTS AND AMENDMENTS** | **ARTICLE 7 <br> ADJUSTMENTS AND AMENDMENTS** | **ARTICLE 7 <br> ADJUSTMENTS AND AMENDMENTS** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.1 | Adjustment to Shares Subject to Outstanding Awards | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.2 | Amendment or Discontinuance of the Plan | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.3 | Change in Control | 22 |
| **ARTICLE 8 <br> MISCELLANEOUS** | **ARTICLE 8 <br> MISCELLANEOUS** | **ARTICLE 8 <br> MISCELLANEOUS** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.1 | Use of an Administrative Agent and Trustee | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.2 | Tax Withholding | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.3 | Reorganization of the Corporation | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.4 | Governing Laws | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.5 | Severability | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.6 | Effective Date of the Plan | 24 |

---

**ADDENDA**

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A | FORM OF OPTION GRANT AGREEMENT |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Schedule A | ELECTION TO EXERCISE STOCK OPTIONS |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B | FORM OF DSU GRANT AGREEMENT |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix C | FORM OF RSU GRANT AGREEMENT |

---

(iii) **LIBERTY DEFENSE HOLDINGS, LTD.**

**OMNIBUS LONG-TERM INCENTIVE PLAN**

Liberty Defense Holdings, Ltd. (the "**Corporation**") hereby establishes an omnibus long-term incentive plan for certain qualified directors, officers, employees, consultants and service providers providing ongoing services to the Corporation and its Affiliates (as defined herein) that can have an impact on the Corporation's long-term results.

**ARTICLE 1 <br> DEFINITIONS**

---

| | |
|:---|:---|
| **Section 1.1** | **Definitions.** |

---

Where used herein or in any amendments hereto or in any communication required or permitted to be given hereunder, the following terms shall have the following meanings, respectively, unless the context otherwise requires:

"**Account**" means an account maintained for each Participant on the books of the Corporation which will be credited with Awards in accordance with the terms of this Plan;

"**Affiliates**" has the meaning given to this term in the *Securities Act* (Ontario), as such legislation may be amended, supplemented or replaced from time to time;

"**Associate**", where used to indicate a relationship with a Participant, means (i) any partner of that Participant, and (ii) the spouse of that Participant and that Participant's children, as well as that Participant's relatives and that Participant's spouse's relatives, if they share that Participant's residence;

"**Awards**" means Options, RSUs and DSUs granted to a Participant pursuant to the terms of the Plan;

"**Black-Out Period**" means a period of time when, pursuant to any policies of the Corporation, any securities of the Corporation may not be traded by certain persons designated by the Corporation;

"**Board**" has the meaning ascribed thereto in Section 2.2(1) hereof;

"**Business Day**" means a day other than a Saturday, Sunday or statutory holiday, when Canadian chartered banks are generally open for business in Toronto, Ontario, Canada, for the transaction of banking business;

"**Cash Equivalent**" means the amount of money equal to the Market Value multiplied by the number of vested RSUs or DSUs in the Participant's Account, net of any applicable taxes in accordance with Section 8.2, on the RSU Settlement Date or the date the Corporation receives, or is deemed to receive, the DSU Redemption Notice, as applicable;

"**Change in Control**" means the occurrence of any of the following events: (i) the acquisition, directly or indirectly, by any Person or group of Persons acting jointly or in concert, within the meaning of National Instrument 62-104 - *Takeover Bids and Issuer Bids* (or any successor instrument thereto), of a beneficial interest in voting or equity securities of the Corporation, together with all voting or equity securities of the Corporation at the time held beneficially, directly or indirectly by such person or persons acting jointly or in concert, equal to more than 50% of the votes associated with the outstanding voting securities of the Corporation; (ii) a merger, consolidation, plan of arrangement or reorganization of the Corporation that results in the beneficial, direct or indirect transfer of more than 50% of the total voting power of the resulting entity's outstanding securities to a person, or group of persons acting jointly and in concert, who are different from the person(s) that have, beneficially, directly or indirectly, more than 50% of the total voting power prior to such transaction; (iii) any sale, lease, exchange or other transfer (in one transaction or series of related transactions) of all or substantially all of the Corporation's property and assets, or (iv) the Corporation's shareholders approving any plan or proposal for the liquidation or dissolution of the Corporation**;**

"**Code of Conduct**" means any code of conduct adopted by the Corporation, as modified from time to time;

"**Committee**" has the meaning ascribed thereto in Section 2.2(1) hereof;

"**Consultant**" has the meaning given to the term in Policy 4.4 of the TSXV Corporate Finance Policies, as same may be amended, supplemented or replaced from time to time;

"**Corporation**" means Liberty Defense Holdings, Ltd., a corporation existing under the *Business Corporations Act* (Ontario), as amended from time to time;

"**Disinterested Shareholder Approval**" means the approval of a majority of shareholders of the Corporation voting at a duly called and held meeting of such shareholders, excluding votes of Insiders to whom Options or Awards may be granted under the Plan;

"**Dividend Equivalent**" means a cash equivalent in value to a dividend paid on a Share credited to a Participant's Account;

"**DSU**" means a deferred share unit, which is a bookkeeping entry equivalent in value to a Share credited to a Participant's Account in accordance with Article 4 hereof;

"**DSU Awards**" means DSUs granted to a Participant pursuant to the terms of the Plan;

"**DSU Grant Agreement**" means a written letter agreement between the Corporation and a Participant evidencing the grant of DSUs and the terms and conditions thereof, substantially in the form of Appendix "B";

"**DSU Redemption Notice**" has the meaning ascribed thereto in Section 4.3(1) hereof;

"**Eligible Director**" means members of the Board who, at the time of execution of a Grant Agreement, and at all times thereafter while they continue to serve as a member of the Board, are not officers, senior executives or other Employees of the Corporation or a Subsidiary, consultants or service providers providing ongoing services to the Corporation and its Affiliates;

"**Eligible Participants**" has the meaning ascribed thereto in Section 2.3(1) hereof;

"**Employee**" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) an individual who is considered an employee of the Corporation or its subsidiary under the *Income Tax Act* (Canada) (and for
whom income tax, employment insurance and CPP deductions must be made at source);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) an individual who works full-time for the Corporation or its subsidiary providing services normally provided by an employee and who
is subject to the same control and direction by the Corporation over the details and methods of work as an employee of the Corporation,
but for whom income tax deductions are not made at source;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) an individual who works for the Corporation or its subsidiary on a continuing and regular basis for a minimum amount of time per week
(the number of hours should be disclosed in the submission) providing services normally provided by an employee and who is subject to
the same control and direction by the Corporation over the details and methods of work as an employee of the Corporation, but for whom
income tax deductions are not made at source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any employee of the Corporation or an Affiliate. Directors who are not otherwise employed by the Corporation or an Affiliate shall
not be considered Employees under this Plan;

"**Employment Agreement**" means, with respect to any Participant, any written employment agreement between the Corporation or an Affiliate and such Participant;

"**Exchange**" the principal stock exchange on which the Shares are listed, including TSXV or TSX;

"**Exchange Hold Period**" has the meaning given to the term in Policy 1.1 of the TSXV Corporate Finance Policies, as same may be amended, supplemented or replaced from time to time;

"**Exercise Notice**" means a notice in writing signed by a Participant and stating the Participant's intention to exercise a particular Award, if applicable;

"**Grant Agreement**" means an agreement evidencing the grant to a Participant of an Award, including an Option Grant Agreement, a DSU Grant Agreement, a RSU Grant Agreement or an Employment Agreement;

"**Insider**" has the meaning given to the term in Policy 1.1 of the TSXV Corporate Finance Policies, as same may be amended, supplemented or replaced from time to time;

"**Investor Relations Activities**" has the meaning given to the term in Policy 1.1 of the TSXV Corporate Finance Policies, as same may be amended, supplemented or replaced from time to time;

"**Investor Relations Individual**" means a Person who supplies Investor Relations Activities.

"**Market Value**" means, at any date when the market value of Shares of the Corporation is to be determined, the closing price of the Shares on the Trading Day prior to the date of grant on the principal stock exchange on which the Shares are listed, or if the Shares of the Corporation are not listed on any stock exchange, the value as is determined solely by the Board, acting reasonably and in good faith;

"**Option**" means an option granted by the Corporation to a Participant entitling such Participant to acquire a designated number of Shares from treasury at the Option Price, subject to the provisions hereof;

"**Option Grant Agreement**" means a written letter agreement between the Corporation and a Participant evidencing the grant of Options and the terms and conditions thereof, substantially in the form set out in Appendix "A";

"**Option Price**" has the meaning ascribed thereto in Section 3.3 hereof;

"**Option Term**" has the meaning ascribed thereto in Section 3.4 hereof;

"**Outstanding Issue**" means the number of Shares that are outstanding as at a specified time, on a non-diluted basis;

"**Participant's Account**" means an account maintained for each Participant's participation in DSUs and/or RSUs under the Plan;

"**Participants**" means Eligible Participants that are granted Awards under the Plan;

"**Performance Criteria**" means criteria established by the Board which, without limitation, may include criteria based on the Participant's personal performance and/or the financial performance of the Corporation and/or of its Affiliates, and that may be used to determine the vesting of the Awards, when applicable;

"**Performance Period**" means the period determined by the Board pursuant to Section 5.3 hereof;

"**Person**" means an individual, corporation, company, cooperative, partnership, trust, unincorporated association, entity with juridical personality or governmental authority or body, and pronouns which refer to a Person shall have a similarly extended meaning;

"**Plan**" means this omnibus long-term incentive plan, as amended and restated from time to time;

"**Reserved Amount**" has the meaning ascribed thereto in Section 2.4(2) hereof;

"**Restriction Period**" means the period determined by the Board pursuant to Section 5.3 hereof;

"**RSU**" means a right awarded to a Participant to receive a payment in the form of Shares as provided in Article 4 hereof and subject to the terms and conditions of this Plan;

"**RSU Awards**" means RSUs granted to a Participant pursuant to the terms of the Plan;

"**RSU Grant Agreement**" means a written letter agreement between the Corporation and a Participant evidencing the grant of RSUs and the terms and conditions thereof, substantially in the form of Appendix "C";

"**RSU Settlement Date**" has the meaning determined in Section 5.6(1)(a);

"**RSU Settlement Notice**" means a notice by a Participant to the Corporation electing the desired form of settlement of vested RSUs.

"**RSU Vesting Determination Date**" has the meaning described thereto in Section 5.5 hereof;

"**Share Compensation Arrangement**" means a stock option, stock option plan, employee stock purchase plan, long-term incentive plan or any other compensation or incentive mechanism involving the issuance or potential issuance of Shares to one or more full-time employees, directors, officers, insiders, service providers or consultants of the Corporation or a Subsidiary including a share purchase from treasury by a full-time employee, director, officer, insider, service provider or consultant which is financially assisted by the Corporation or a Subsidiary by way of a loan, guarantee or otherwise;

"**Shares**" means the common shares in the capital of the Corporation;

"**Subsidiary**" means a corporation, company, partnership or other body corporate that is controlled, directly or indirectly, by the Corporation;

"**Successor Corporation**" has the meaning ascribed thereto in Section 7.1(3) hereof;

"**Tax Act**" means the *Income Tax Act* (Canada) and its regulations thereunder, as amended from time to time;

"**Termination Date**" means the date on which a Participant ceases to be an Eligible Participant;

"**Trading Day**" means any day on which the TSXV or TSX is opened for trading;

"**TSX**" means the Toronto Stock Exchange; and

"**TSXV**" means the TSX Venture Exchange.

**ARTICLE 2**

**PURPOSE AND ADMINISTRATION OF THE PLAN; GRANTING OF AWARDS**

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| | |
|:---|:---|
| **Section 2.1** | **Purpose of the Plan.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The purpose of the Plan is to permit the Corporation to grant Awards to Eligible Participants, subject to certain conditions as hereinafter
set forth, for the following purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to increase the interest in the Corporation's welfare of those Eligible Participants, who share responsibility for the management,
growth and protection of the business of the Corporation or a Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) to provide an incentive to such Eligible Participants to continue their services for the Corporation or a Subsidiary and to encourage
such Eligible Participants whose skills, performance and loyalty to the objectives and interests of the Corporation or a Subsidiary are
necessary or essential to its success, image, reputation or activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) to reward the Participants for their performance of services while working for the Corporation or a Subsidiary; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) to provide a means through which the Corporation or a Subsidiary may attract and retain able Persons to enter its employment or into
contractual arrangements.

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| | |
|:---|:---|
| **Section 2.2** | **Implementation and Administration of the Plan.** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Plan shall be administered and interpreted by the Board or, if the Board by resolution so decides, by a committee appointed by
the Board (the "**Committee**") and consisting of not less than three (3) members of the Board. If a Committee is
appointed for this purpose, all references to the term "**Board**" will be deemed to be references to the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Board may, from time to time, as it may deem expedient, adopt, amend and rescind rules and regulations for carrying out the
provisions and purposes of the Plan, subject to any applicable rules of the Exchange. Subject to the provisions of the Plan, the
Board is authorized, in its sole discretion, to make such determinations under, and such interpretations of, and take such steps and actions
in connection with, the proper administration of the Plan as it may deem necessary or advisable. The interpretation, construction and
application of the Plan and any provisions hereof made by the Board shall be final and binding on all Eligible Participants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) No member of the Board shall be liable for any action or determination taken or made in good faith in the administration, interpretation,
construction or application of the Plan or any Award granted hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Any determination approved by a majority of the Board shall be deemed to be a determination of that matter by the Board.

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| | |
|:---|:---|
| **Section 2.3** | **Eligible Participants.** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Persons who shall be eligible to receive Awards ()"**Eligible Participants**") shall be the directors, officers,
senior executives and other Employees of the Corporation or a Subsidiary, Consultants and service providers providing ongoing services
to the Corporation and its Affiliates, who the Board may determine from time to time, in its sole discretion, to hold contributory positions
in the Corporation or a Subsidiary. In determining Awards to be granted under the Plan, the Board shall give due consideration to the
value of each Eligible Participant's present and potential future contribution to the Corporation's success. For greater certainty,
a Person whose employment with the Corporation or a Subsidiary has ceased for any reason, or who has given notice or been given notice
of such cessation, whether such cessation was initiated by such Employee, service provider, the Corporation or such Subsidiary, as the
case may be, shall cease to be eligible to receive Awards hereunder as of the date on which such Person provides notice to the Corporation
or the Subsidiary, as the case may be, in writing or verbally, of such cessation, or on the Termination Date for any cessation of a Participant's
employment initiated by the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For Eligible Participants who are Employees, Consultants or Eligible Directors of the Corporation, the Corporation and the Participant
are responsible for ensuring and confirming that the Participant is a bona fide Employee, Consultant or Eligible Director, as the case
may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Participation in the Plan shall be entirely voluntary and any decision not to participate shall not affect an Eligible Participant's
relationship or employment with the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Notwithstanding any express or implied term of this Plan to the contrary, the granting of an Award pursuant to the Plan shall in no
way be construed as a guarantee of employment or appointment by the Corporation to the Participant.

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| | |
|:---|:---|
| **Section 2.4** | **Shares Subject to the Plan.** |

---

Subject to adjustment pursuant to provisions of Article 7 hereof, and as may be approved by the Exchange and the shareholders of the Corporation from time to time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The total number of Shares reserved and available for the grant and issuance of Options shall not exceed ten percent (10%) of the
Outstanding Issue less the Reserved Amount referenced in Section 2.4(2), or such other number as may be approved by the TSXV and
the shareholders of the Corporation from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The total number of Shares reserved and available for the grant and issuance of RSUs and DSUs shall not exceed 1,200,000 Shares (the
 "**Reserved Amount** ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The maximum number of Shares issued, at any time, under this Plan and any other proposed or established Share Compensation Arrangement,
shall not exceed ten percent (10%) of the Outstanding Issue from time to time. For greater certainty, the number of Shares reserved and
available for grant and issuance pursuant to DSUs, RSUs and Options shall not, in aggregate, exceed ten percent (10%) of the Outstanding
Issue from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The maximum number of Shares issued to Eligible Participants who are Insiders, at any time, under this Plan and any other proposed
or established Share Compensation Arrangement, shall not exceed ten percent (10%) of the Outstanding Issue from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) The maximum number of Shares issued to any one Person (and companies wholly owned by that Person) within any one (1) year period
shall not exceed five percent (5%) of the Outstanding Issue, calculated on the date an Option is granted to the Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) The maximum number of Shares issued to any one Consultant, within any one (1) year period, under this Plan and any other proposed
or established Share Compensation Arrangement, shall not exceed two percent (2%) of the Outstanding Issue from time to time, calculated
at the date an Option is granted to the Consultant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) The maximum number of Shares issued to all Investor Relations Individuals, within any one (1) year period, under this Plan and
any other proposed or established Share Compensation Arrangement, shall not exceed two percent (2%) of the Outstanding Issue from time
to time, calculated at the date an Option is granted to such Investor Relations Individuals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Any Award granted pursuant to the Plan and any other Share Compensation Arrangement, prior to a Participant becoming an Insider, shall
be included for the purposes of the limits set out in Section 2.4(3) and Section 2.4(5).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) The maximum number of Awards, excluding Options, issued to any one Eligible Participant shall not exceed (i) 1% of the Outstanding
Issue at the date such Award is granted, and (ii) 2% of the Outstanding Issue within the most recent twelve (12) month period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) Shares in respect of which an Award is granted under the Plan, but not exercised prior to the termination of such Award or not vested
or settled prior to the termination of such Award due to the expiration, termination, cancellation or lapse of such Award, shall be available
for Awards to be granted thereafter pursuant to the provisions of the Plan.

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| | |
|:---|:---|
| **Section 2.5** | **Granting of Awards.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Any Award granted under the Plan shall be subject to the requirement that, if at any time counsel to the Corporation shall determine
that the listing, registration or qualification of the Shares subject to such Award, if applicable, upon any securities exchange or under
any law or regulation of any jurisdiction, or the consent or approval of any securities exchange or any governmental or regulatory body,
is necessary as a condition of, or in connection with, the grant or exercise of such Award or the issuance or purchase of Shares thereunder,
if applicable, such Award may not be accepted or exercised in whole or in part unless such listing, registration, qualification, consent
or approval shall have been effected or obtained on conditions acceptable to the Board. Nothing herein shall be deemed to require the
Corporation to apply for or to obtain such listing, registration, qualification, consent or approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Any Award granted under the Plan shall be subject to the requirement that the Corporation has the right to place any restriction or
legend on any securities issued pursuant to this Plan including, but in no way limited to, placing a legend to the effect that the securities
have not been registered under the *United States Securities Act of 1933* and may not be offered or sold in the United States unless
registration or an exemption from registration is available.

**ARTICLE 3<br> OPTIONS**

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| | |
|:---|:---|
| **Section 3.1** | **Nature of Options.** |

---

An Option is an option granted by the Corporation to a Participant entitling such Participant to acquire a designated number of Shares from treasury at the Option Price, subject to the provisions hereof.

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| | |
|:---|:---|
| **Section 3.2** | **Option Awards.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to the provisions set forth in this Plan and any shareholder or regulatory approval which may be required, the Board shall,
from time to time by resolution, in its sole discretion, (i) designate the Eligible Participants who may receive Options under the
Plan, (ii) fix the number of Options, if any, to be granted to each Eligible Participant and the date or dates on which such Options
shall be granted, and (iii) determine the price per Share to be payable upon the exercise of each such Option (the "**Option Price**") and the relevant vesting provisions (including Performance Criteria, if applicable) and Option Term for such Eligible
Participants, subject to the terms and conditions prescribed in this Plan, in any Option Grant Agreement and any applicable rules of
the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Board shall also, from time to time by resolution, in its sole discretion, (i) designate the Investor Relations Individuals
who may receive Options under the Plan, (ii) fix the number of Options, if any, to be granted to each Investor Relations Individual
and the date or dates on which such Options shall be granted, and (iii) determine the Option Price and the relevant vesting provisions
(including Performance Criteria, if applicable) and Option Term
for such Investor Relations Individuals, the whole subject to the terms and conditions prescribed in this Plan, in any Option Grant Agreement
and any applicable rules of the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Each Option granted shall be subject to vesting terms as set forth in the Option Grant Agreement or as otherwise specified by the
Board.

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| | |
|:---|:---|
| **Section 3.3** | **Option Price.** |

---

The Option Price for Shares that are the subject of any Option shall be fixed by the Board when such Option is granted, but shall not be less than the Market Value of such Shares at the time of the grant. Where the exercise price of an Option is at a discount to the Market Value, all Options and any Shares issued under such Options exercised prior to the expiry of the Exchange Hold Period shall be legended with the Exchange Hold Period commencing on the date the Options were granted.

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| | |
|:---|:---|
| **Section 3.4** | **Option Term.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Board shall determine, at the time of granting the particular Option, the period during which the Option is exercisable, commencing
on the date such Option is granted to the Participant and ending as specified in this Plan, or in the Option Grant Agreement, but in no
event shall an Option expire on a date which is later than ten (10) years from the date the Option is granted ()"**Option Term** ").
Unless otherwise determined by the Board, all unexercised Options shall be cancelled at the expiry of such Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Should the expiration date for an Option fall within a Black-Out Period or within nine (9) Business Days following the
expiration of a Black-Out Period, such expiration date shall be automatically extended without any further act or formality to that date
which is the tenth (10th) Business Day after the end of the Black-Out Period, such tenth (10th) Business Day to be considered the expiration
date for such Option for all purposes under the Plan. Notwithstanding Section 7.2 hereof, the ten (10) Business Day period referred
to in this Section 3.4 may not be extended by the Board. Notwithstanding the foregoing, in the event that a Participant receives
Shares in satisfaction of an Award during a Black-Out Period, the Corporation shall advise such Participant of the same in writing and
such Participant shall not be entitled to sell or otherwise dispose of such Shares until such Black-Out Period has expired.

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| | |
|:---|:---|
| **Section 3.5** | **Exercise of Options.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to the provisions of this Plan, a Participant shall be entitled to exercise an Option granted to such Participant at any time
prior to the expiry of the Option Term, subject to vesting limitations which may be imposed by the Board at the time such Option is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Prior to its expiration or earlier termination in accordance with the Plan, each Option shall be exercisable as to all or such part
or parts of the optioned Shares and at such time or times and/or pursuant to the achievement of such Performance Criteria (if applicable) and/or other vesting conditions
as the Board at the time of granting the particular Option, may determine in its sole discretion. For greater certainty, no Option shall
be exercised by a Participant during a Black-Out Period.

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| | |
|:---|:---|
| **Section 3.6** | **Method of Exercise and Payment of Purchase Price.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to the provisions of the Plan and the alternative exercise procedures set out herein, an Option granted under the Plan may
be exercisable (from time to time as provided in Section 3.5 hereof) by the Participant (or by the liquidator, executor or administrator,
as the case may be, of the estate of the Participant) by delivering a fully completed Exercise Notice to the Corporation at its registered
office to the attention of the Chief Financial Officer & Corporate Secretary of the Corporation (or the individual that the Chief
Financial Officer & Corporate Secretary of the Corporation may from time to time designate), together with a bank draft, certified
cheque or other form of payment acceptable to the Corporation in an amount equal to the aggregate Option Price of the Shares to be purchased
pursuant to the exercise of the Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Where Shares are to be issued to the Participant pursuant to the terms of this Section 3.6, as soon as practicable following
the receipt of the Exercise Notice and, if Options are exercised in accordance with the terms of Section 3.6(1), the required bank
draft, certified cheque or other acceptable form of payment, the Corporation shall duly issue such Shares to the Participant as fully
paid and non-assessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Upon the exercise of an Option pursuant to Section 3.6(1), the Corporation shall, as soon as practicable after such exercise
but no later than ten (10) Business Days following such exercise, forthwith cause the transfer agent and registrar of the Shares
to either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) deliver to the Participant (or to the liquidator, executor or administrator, as the case may be, of the estate of the Participant)
a certificate in the name of the Participant representing in the aggregate such number of Shares as the Participant (or to the liquidator,
executor or administrator, as the case may be, of the estate of the Participant) shall have then paid for and as are specified in such
Exercise Notice; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the case of Shares issued in uncertificated form, cause the issuance of the aggregate number of Shares the Participant (or the
liquidator, executor or administrator, as the case may be, of the estate of the Participant) shall have then paid for and as are specified
in such Exercise Notice to be evidenced by a book position on the register of the shareholders of the Corporation to be maintained by
the transfer agent and registrar of the Shares.

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| | |
|:---|:---|
| **Section 3.7** | **Option Grant Agreements.** |

---

Options shall be evidenced by an Option Grant Agreement or included in an Employment Agreement or other services agreement, in such form not inconsistent with the Plan as the Board may from time to time determine, provided that the substance of Article 3 and Article 6 hereof be included therein. The Option Grant Agreement shall contain such terms that may be considered necessary in order that the Option will comply with any provisions respecting options in the income tax or other laws in force in any country or jurisdiction of which the Participant may from time to time be a resident or citizen or the rules of any regulatory body having jurisdiction over the Corporation.

**ARTICLE 4 <br> DEFERRED SHARE UNITS**

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| | |
|:---|:---|
| **Section 4.1** | **Nature of DSUs.** |

---

A DSU is an Award attributable to a Participant's duties of an office, directorship or employment and that, upon settlement, entitles the recipient Participant to receive such number of Shares as determined by the Board, or to receive the Cash Equivalent or a combination thereof, as the case may be, and is payable after the Termination Date for the Participant.

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| | |
|:---|:---|
| **Section 4.2** | **DSU Awards.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Board shall, from time to time by resolution, in its sole discretion, (i) designate the Eligible Participants (who, for purposes
of the grant of DSUs, shall not include Consultants) who may receive DSU Awards under the Plan, (ii) fix the number of DSU Awards
to be granted to each Eligible Participant and the date or dates on which such DSU Awards shall be granted, and (iii) determine the
relevant conditions and vesting provisions for such DSU Awards, subject to the terms and conditions prescribed in this Plan and in any
DSU Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Each DSU shall be subject to vesting terms as set forth in the DSU Grant Agreement or as otherwise specified by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Subject to vesting and other conditions and provisions set forth herein and in the DSU Grant Agreement, each DSU awarded shall entitle
the Participant to one (1) Share, or the Cash Equivalent, or a combination thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The DSUs are structured so as to be considered to be a plan described in section 7 of the Tax Act or any successor to such provision.

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| | |
|:---|:---|
| **Section 4.3** | **Redemption of DSUs.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Each Participant shall be entitled to redeem his or her DSUs during the period commencing on the Business Day immediately following
the Termination Date and ending on December 15 of the first calendar year following the Termination Date, or a shorter such redemption
period set out in the relevant DSU Grant Agreement, by providing a written notice of settlement to the Corporation setting out the number
of DSUs to be settled and the particulars regarding the registration of the Shares issuable upon settlement (the "**DSU Redemption Notice** "). In the event of the death of a Participant, the DSU Redemption Notice shall be filed by the administrator or liquidator
of the estate of the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) If a DSU Redemption Notice is not received by the Corporation on or before December 15 of the first calendar year following the
Termination Date, the Participant shall be deemed to have delivered a DSU Redemption Notice on that December 15 and the Corporation
shall redeem all of the Participant's DSUs in exchange for Shares to be delivered to the Participant, administrator or liquidator
of the estate of the Eligible Director, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) For the purposes of determining the number of Shares from treasury to be issued and delivered to an Eligible Director upon redemption
of DSUs pursuant to Section 4.3, such calculation will be made on the date the Corporation receives, or is deemed to receive, the
DSU Redemption Notice and be the whole number of Shares equal to the whole number of DSUs then recorded in the Eligible Director's
Account which the Eligible Director requests or is deemed to request to redeem pursuant to the DSU Redemption Notice. Shares issued from
treasury will be issued in consideration for the past services of the Eligible Director to the Corporation and the entitlement of the
Eligible Director under this Plan shall be satisfied in full by such issuance of Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) For purposes of determining the Cash Equivalent of DSUs to be made pursuant to Section 4.3, such calculation will be made on
the date the Corporation receives, or is deemed to receive, the DSU Redemption Notice and will be based on the Market Value on that date
multiplied by the number of vested DSUs in the Participant's Account to settle in cash.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Subject to Section 4.3(5), settlement of DSUs shall take place as soon as commercially and reasonably possible following receipt
or deemed receipt of the DSU Redemption Notice through delivery of a share certificate to the Participant or the entry of the Participant's
name on the share register for the Shares, or in the case of settlement of DSUs for their Cash Equivalent, delivery of a cheque to the
Participant representing the Cash Equivalent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Notwithstanding any other provision of this Plan, in the event that (i) a DSU Redemption Notice is received during a Black-Out
Period or other trading restriction imposed by the Corporation; or (ii) the Participant has not delivered a DSU Redemption Notice
and the 90th day following the Termination Date falls during a Black-Out Period or other trading restriction imposed by the Corporation,
then settlement of the applicable DSUs shall be automatically extended to the tenth (10th) Business Day following the date that such Black-Out
Period or other trading restriction is lifted, terminated or removed. Notwithstanding the foregoing, in the event that a Participant receives
Shares in satisfaction of an Award during a Black-Out Period, the Corporation shall advise such Participant of the same in writing and
such Participant shall not be entitled to sell or otherwise dispose of such Shares until such Black-Out Period has expired.

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| | |
|:---|:---|
| **Section 4.4** | **Termination of Unvested DSU Awards.** |

---

If, as of the date the Corporation receives, or is deemed to receive, the DSU Redemption Notice, a vesting condition applicable to a DSU Award has not been satisfied or, at the discretion of the Board, waived, then such DSU Award, or portion thereof to which the vesting condition applies, shall terminate.

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| | |
|:---|:---|
| **Section 4.5** | **DSU Grant Agreements.** |

---

DSUs shall be evidenced by a DSU Grant Agreement in such form not inconsistent with the Plan as the Board may from time to time determine. The DSU Grant Agreement shall contain such terms that may be considered necessary in order that the DSU will comply with any provisions respecting deferred share units in the income tax or other laws in force in any country or jurisdiction of which the Participant may from time to time be a resident or citizen or the rules of any regulatory body having jurisdiction over the Corporation.

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| | |
|:---|:---|
| **Section 4.6** | **Award of Dividend Equivalents.** |

---

Dividend Equivalents may, as determined by the Board in its sole discretion, be awarded in respect of unvested DSUs in a Participant's Account on the same basis as cash dividends declared and paid on Shares as if the Participant was a shareholder of record of Shares on the relevant record date. Dividend Equivalents, if any, will be credited to the Participant's Account in additional DSUs, the number of which shall be equal to a fraction where (a) the numerator is the product of (i) the number of DSUs in such Participant's Account on the date that dividends are paid multiplied by (ii) the dividend paid per Share, and (b) the denominator is the Market Value of one Share calculated on the date that dividends are paid. Any additional DSUs credited to a Participant's Account as a Dividend Equivalent pursuant to this Section 4.6 shall be subject to the same terms and conditions, including vesting conditions, as the underlying DSU Award.

**ARTICLE 5 <br> RESTRICTED SHARE UNITS**

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| | |
|:---|:---|
| **Section 5.1** | **Nature of RSUs.** |

---

A RSU is an Award entitling the recipient to acquire Shares, at such purchase price (which may be zero) as determined by the Board, subject to such restrictions, vesting and conditions as the Board may determine at the time of grant. Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives.

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| | |
|:---|:---|
| **Section 5.2** | **RSU Awards.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Board shall, from time to time by resolution, in its sole discretion, (i) designate the Eligible Participants who may receive
RSUs under the Plan, (ii) fix the number of RSUs, if any, to be granted to each Eligible Participant and the date or dates on which
such RSUs shall be granted, (iii) determine the relevant conditions and vesting provisions (including the applicable Performance
Period and Performance Criteria, if any) and the Restriction Period of such RSUs, (provided, however, that no such Restriction Period
shall exceed the three (3) years referenced in Section 4.5), and (iv) any other terms and conditions applicable to the
granted RSUs, which need not be identical and which, without limitation, may include non-competition provisions,
subject to the terms and conditions prescribed in this Plan and in any RSU Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Each RSU shall be subject to vesting terms as set forth in the RSU Grant Agreement or as otherwise specified by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The RSUs are structured so as to be considered to be a plan described in section 7 of the Tax Act or any successor to such provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Subject to the vesting and other conditions and provisions set forth herein and in the RSU Grant Agreement, the Board shall determine
whether each RSU awarded to a Participant shall entitle the Participant: (i) to receive one Share issued from treasury; (ii) to
receive the Cash Equivalent of one (1) Share; or (iii) to elect to receive either One Share from treasury, the Cash Equivalent
of one (1) Share or a combination of cash and Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) RSUs shall be settled by the Participant at any time beginning on the first Business Day following their RSU Vesting Determination
Date but no later than the RSU Settlement Date (as such terms are defined in Sections 5.5 and 5.6, respectively).

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| | |
|:---|:---|
| **Section 5.3** | **Restriction Period.** |

---

The applicable restriction period in respect of a particular RSU Award shall be determined by the Board but in all cases shall end no later than December 31 of the calendar year which is three (3) years after the calendar year in which the Award is granted ("**Restriction Period**"). For example, the Restriction Period for a grant made in June 2019 shall end no later than December 31, 2022. Subject to the Board's determination, any vested RSUs with respect to a Restriction Period will be paid to Participants in accordance with Article 5 no later than the end of the Restriction Period. Unless otherwise determined by the Board, all unvested RSUs shall be cancelled on the RSU Vesting Determination Date and, in any event, no later than the last day of the Restriction Period.

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| | |
|:---|:---|
| **Section 5.4** | **Performance Criteria and Performance Period.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) For each award of RSUs, the Board shall establish the period in which any Performance Criteria and other vesting conditions must be
met in order for a Participant to be entitled to receive Shares in exchange for all or a portion of the RSUs held by such Participant
(the "**Performance Period** "), provided that such Performance Period may not expire after the end of the Restriction Period,
being no longer than three (3) years after the calendar year in which the Award was granted. For example, a Performance Period determined
by the Board to be for a period of three (3) financial years will start on the first day of the financial year in which the award
is granted and will end on the last day of the second financial year after the year in which the grant was made. In such a case, for a
grant made on January 4, 2019, the Performance Period will start on January 1, 2019 and will end on December 31, 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For each award of RSUs, the Board shall establish any Performance Criteria and other vesting conditions which must be met during the
Performance Period in order for a Participant to be entitled to receive Shares in exchange for his or her RSUs.

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| | |
|:---|:---|
| **Section 5.5** | **RSU Vesting Determination Date.** |

---

The vesting determination date means the date on which the Board determines if the Performance Criteria and/or other vesting conditions with respect to a RSU have been met (the "**RSU Vesting Determination Date**"), and as a result, establishes the number of RSUs that become vested, if any. For greater certainty, the RSU Vesting Determination Date must fall after the end of the Performance Period, if any, but no later than the last day of the Restriction Period. Unless otherwise specified in the RSU Grant Agreements, one-third (1/3) of RSUs awarded pursuant to a RSU Grant Agreement shall vest on each of the first three anniversaries of the date of grant.

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| | |
|:---|:---|
| **Section 5.6** | **Settlement of RSUs.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Except as otherwise provided in the RSU Grant Agreement, in the event that the vesting conditions, the Performance Criteria and Performance
Period, if applicable, of an RSU are satisfied:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all of the vested RSUs covered by a particular grant may, subject to Section 5.6(4), be settled at any time beginning on the
first Business Day following their RSU Vesting Determination Date but no later than the date that is five (5) years from their RSU
Vesting Determination Date (the "**RSU Settlement Date** "); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a Participant is entitled to deliver to the Corporation, on or before the RSU Settlement Date, an RSU Settlement Notice in respect
of any or all vested RSUs held by such Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Subject to Section 5.6(4), settlement of RSUs shall take place promptly following the RSU Settlement Date and take the form set
out in the RSU Settlement Notice through:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) in the case of settlement of RSUs for their Cash Equivalent, delivery of a cheque to the Participant representing the Cash Equivalent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the case of settlement of RSUs for Shares, delivery of a share certificate to the Participant or the entry of the Participant's
name on the share register for the Shares; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in the case of settlement of the RSUs for a combination of Shares and the Cash Equivalent, a combination of (a) and (b) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If an RSU Settlement Notice is not received by the Corporation on or before the RSU Settlement Date, settlement shall take the form
of Shares issued from treasury as set out in Section 5.7(2).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Notwithstanding any other provision of this Plan, in the event that a RSU Settlement Date falls during a Black-Out Period or other
trading restriction imposed by the Corporation and the Participant has not delivered a RSU Settlement Notice, then such RSU Settlement
Date shall be automatically extended to the tenth (10th) Business Day following the date that such Black-Out Period or other trading restriction
is lifted, terminated or removed. Notwithstanding the foregoing, in the event that a Participant receives Shares in satisfaction of an
Award during a Black-Out Period, the Corporation shall advise such Participant of the same in writing and such Participant shall not be
entitled to sell or otherwise dispose of such Shares until such Black-Out Period has expired.

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| | |
|:---|:---|
| **Section 5.7** | **Determination of Amounts.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)  **<u>Cash Equivalent of RSUs</u>** . For purposes of determining the Cash Equivalent of RSUs to be made pursuant to Section 5.6,
such calculation will be made on the RSU Settlement Date and shall equal the Market Value on the RSU Settlement Date multiplied by the
number of vested RSUs in the Participant's Account which the Participant desires to settle in cash pursuant to the RSU Settlement
Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)  **<u>Payment in Shares; Issuance of Shares from Treasury</u>** . For the purposes of determining the number of Shares from treasury
to be issued and delivered to a Participant upon settlement of RSUs pursuant to Section 5.6, such calculation will be made on the
RSU Settlement Date and be the whole number of Shares equal to the whole number of vested RSUs then recorded in the Participant's
Account which the Participant desires to settle pursuant to the RSU Settlement Notice. Shares issued from treasury will be issued in consideration
for the past services of the Participant to the Corporation and the entitlement of the Participant under this Plan shall be satisfied
in full by such issuance of Shares.

---

| | |
|:---|:---|
| **Section 5.8** | **RSU Grant Agreements.** |

---

RSUs shall be evidenced by a RSU Grant Agreement or included in an Employment Agreement or other services agreement, in such form not inconsistent with the Plan as the Board may from time to time determine, provided that the substance of Article 4 and Article 6 hereof be included therein. The RSU Grant Agreement shall contain such terms that may be considered necessary in order that the RSU will comply with any provisions respecting restricted share units in the income tax or other laws in force in any country or jurisdiction of which the Participant may from time to time be a resident or citizen or the rules of any regulatory body having jurisdiction over the corporation.

**ARTICLE 6 <br> GENERAL CONDITIONS**

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| | |
|:---|:---|
| **Section 6.1** | **General Conditions Applicable to Awards.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Each Award, as applicable, shall be subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Employment** - The granting of an Award to a Participant shall not impose upon the Corporation or a Subsidiary any obligation
to retain the Participant in its employ in any capacity. For greater certainty, the granting of Awards to a Participant shall not impose
any obligation on the Corporation to grant any awards in the future nor shall it entitle the Participant to receive future grants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Rights as a Shareholder** - Neither the Participant nor such Participant's personal representatives or legatees shall have
any rights whatsoever as shareholder in respect of any Shares covered by such Participant's Awards until the date of issuance of
a share certificate to such Participant (or to the liquidator, executor or administrator, as the case may be, of the estate of the Participant)
or the entry of such person's name on the share register for the Shares. Without in any way limiting the generality of the foregoing,
no adjustment shall be made for dividends or other rights for which the record date is prior to the date such share certificate is issued
or entry of such person's name on the share register for the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Conformity to Plan** – In the event that an Award is granted or a Grant Agreement is executed which does not conform in
all particulars with the provisions of the Plan, or purports to grant Awards on terms different from those set out in the Plan, the Award
or the grant of such Award shall not be in any way void or invalidated, but the Award so granted will be adjusted to become, in all respects,
in conformity with the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Non-Transferability** – Except as set forth herein, Awards are not transferable. Awards may be exercised only by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Participant to whom the Awards were granted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) with the Corporation's prior written approval and subject to such conditions as the Corporation may stipulate, such Participant's
family or retirement savings trust or any registered retirement savings plans or registered retirement income funds of which the Participant
is and remains the annuitant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) upon the Participant's death, the legal representative of the Participant's estate; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) upon the Participant's incapacity, the legal representative having authority to deal with the property of the Participant,

provided that any such legal representative in (iii) or (iv) shall first deliver evidence satisfactory to the Corporation of entitlement to exercise any Award. A person exercising an Award may subscribe for Shares only in the person's own name or in the person's capacity as a legal representative.

---

| | |
|:---|:---|
| **Section 6.2** | **General Conditions Applicable to Awards.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Each Award shall be subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Termination for Cause.** Upon a Participant ceasing to be an Eligible Participant for "**cause** ", all unexercised
vested and unvested Awards granted to such Participant shall terminate on the effective date of the termination as specified in the notice
of termination. For the purposes of the Plan, the determination by the Corporation that the Participant was discharged for cause shall
be binding on the Participant. "**Cause**" shall include, among other things, gross misconduct, theft, fraud, breach of
confidentiality or breach of the Corporation's Code of Conduct and any reason determined by the Corporation to be cause for termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Retirement.** In the case of a Participant's retirement, any unvested Awards held by the Participant as at the Termination
Date will continue to vest in accordance with their vesting schedules, and all vested Awards held by the Participant at the Termination
Date may be exercised until the earlier of the expiry date of the Awards or six (6) months following the Termination Date, provided
that if the Participant is determined to have breached any post-employment restrictive covenants in favour of the Corporation, then any
Awards held by the Participant, whether vested or unvested, will immediately expire and the Participant shall pay to the Corporation any
 "in-the-money" amounts realized upon exercise of Awards following the Termination Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Resignation**. In the case of a Participant ceasing to be an Eligible Participant due to such Participant's resignation,
subject to any later expiration dates determined by the Board, all Awards shall expire on the earlier of ninety (90) days after the effective
date of such resignation, or the expiry date of the Award, to the extent such Awards were vested and exercisable by the Participant on
the effective date of such resignation and all unexercised unvested Awards granted to such Participant shall terminate on the effective
date of such resignation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Termination or Cessation.** In the case of a Participant ceasing to be an Eligible Participant for any reason (other than for
 "**cause** ", resignation or death), the number of Awards that may vest is subject to proration over the applicable vesting
or performance period and shall expire on the earlier of ninety (90) days after the effective date of the Termination Date, or the expiry
date of the Awards. For greater certainty, the proration calculation referred to above shall be net of previously vested Awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **Death.** If a Participant dies while in his or her capacity as an Eligible Participant, all unvested Awards will immediately
vest and all Awards will expire one hundred eighty (180) calendar days after the death of such Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **Change in Control.** If a participant is terminated without "**cause**" or resigns for good reason during the
twelve (12) month period following a Change in Control, or after the Corporation has signed a written agreement to effect a change in
control but before the change in control is completed, then any unvested Awards will immediately
vest and may be exercised within thirty (30) calendar days of such date. In the case of an Investor Relations Individual, where the Corporation
has signed a written agreement to effect a change in control and before the change in control is completed, any unvested Awards may, subject
to prior acceptance by the Exchange, vest immediately and be exercised within thirty (30) calendar days of such Exchange approval.

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| | |
|:---|:---|
| **Section 6.3** | **Unfunded Plan.** |

---

Unless otherwise determined by the Board, this Plan shall be unfunded. To the extent any Participant or his or her estate holds any rights by virtue of a grant of Awards under this Plan, such rights (unless otherwise determined by the Board) shall be no greater than the rights of an unsecured creditor of the Corporation. Notwithstanding the foregoing, any determinations made shall be such that the Plan continuously meets the requirements of paragraph 6801(d) of the Income Tax Regulations, adopted under the Tax Act or any successor provision thereto.

**ARTICLE 7 <br> ADJUSTMENTS AND AMENDMENTS**

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| | |
|:---|:---|
| **Section 7.1** | **Adjustment to Shares Subject to Outstanding Awards.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) In the event of any subdivision of the Shares into a greater number of Shares at any time after the grant of an Award to a Participant
and prior to the expiration of the term of such Award, the Corporation shall deliver to such Participant, at the time of any subsequent
exercise or vesting of such Award in accordance with the terms hereof, in lieu of the number of Shares to which such Participant was theretofore
entitled upon such exercise or vesting of such Award, but for the same aggregate consideration payable therefor, such number of Shares
as such Participant would have held as a result of such subdivision if, on the record date thereof, the Participant had been the registered
holder of the number of Shares to which such Participant was theretofore entitled upon such exercise or vesting of such Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) In the event of any consolidation of Shares into a lesser number of Shares at any time after the grant of an Award to any Participant
and prior to the expiration of the term of such Award, the Corporation shall deliver to such Participant at the time of any subsequent
exercise or vesting of such Award in accordance with the terms hereof, in lieu of the number of Shares to which such Participant was theretofore
entitled upon such exercise or vesting of such Award, but for the same aggregate consideration payable therefor, such number of Shares
as such Participant would have held as a result of such consideration if, on the record date thereof, the Participant had been the registered
holder of the number of Shares to which such Participant was theretofore entitled upon such exercise or vesting of such Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If, at any time after the grant of an Award to any Participant, and prior to the expiration of the term of such Award, the Shares
shall be reclassified, reorganized or otherwise changed, otherwise than as specified in Section 7.1(1) or Section 7.1(2) hereof
or, subject to the provisions of Section 7.2(3) hereof, the Corporation shall consolidate, merge or amalgamate with or into another corporation
(the corporation resulting or continuing from such consolidation, merger or amalgamation being herein called the "**Successor Corporation** "),
the Participant shall be entitled to receive, upon the subsequent exercise or vesting of Award, in accordance with the terms hereof and
shall accept in lieu of the number of Shares then subscribed for but for the same aggregate consideration payable therefor, the aggregate
number of shares of the appropriate class or other securities of the Corporation or the Successor Corporation (as the case may be) or
other consideration from the Corporation or the Successor Corporation (as the case may be) that such Participant would have been entitled
to receive as a result of such reclassification, reorganization or other change of shares or, subject to the provisions of Section 7.2(3) hereof,
as a result of such consolidation, merger or amalgamation, if on the record date of such reclassification, reorganization or other change
of shares or the effective date of such consolidation, merger or amalgamation, as the case may be, such Participant had been the registered
holder of the number of Shares to which such Participant was immediately theretofore entitled upon such exercise or vesting of such Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) If, at any time after the grant of an Award to any Participant and prior to the expiration of the term of such Award, the Corporation
shall make a distribution to all holders of Shares or other securities in the capital of the Corporation, or cash, evidences of indebtedness
or other assets of the Corporation (excluding an ordinary course dividend in cash or shares, but including, for greater certainty, shares
or equity interests in a subsidiary or business unit of the Corporation or one of its subsidiaries or cash proceeds of the disposition
of such a subsidiary or business unit), or should the Corporation effect any transaction or change having a similar effect, then the price
or the number of Shares to which the Participant is entitled upon exercise or vesting of Award shall be adjusted to take into account
such distribution, transaction or change. The Board shall determine the appropriate adjustments to be made in such circumstances in order
to maintain the Participants' economic rights in respect of their Awards in connection with such distribution, transaction or change.

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| | |
|:---|:---|
| **Section 7.2** | **Amendment or Discontinuance of the Plan.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Board may amend the Plan or any Award at any time without the consent of the Participants, provided that such amendment shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) not adversely alter or impair any Award previously granted except as permitted by the provisions of Article 7 hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) be in compliance with applicable law and subject to any regulatory approvals including, where required, the approval of the TSXV;
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) be subject to shareholder approval, where required by law, the requirements of the Exchange or the provisions of the Plan, provided
that shareholder approval shall not be required for the following amendments and the Board may make any changes which may include but
are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) amendments of a general "**housekeeping**" or clerical nature that, among others, clarify, correct or rectify any ambiguity,
defective provision, error or omission in the Plan; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) changes that alter, extend or accelerate the terms of vesting or settlement applicable to any Award (other than in respect of any
Options held by Investor Relations Individuals for which prior approval of the TSXV shall be required at all times when the Corporation
is listed on the TSXV).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Notwithstanding Section 7.2(1)(c), the Board shall be required to obtain Disinterested Shareholder Approval to make the following
amendments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any change to the maximum number of Shares issuable from treasury under the Plan, except such increase by operation of Section 2.4
and in the event of an adjustment pursuant to Article 7;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any amendment which reduces the exercise price of any Award, as applicable, after such Awards have been granted or any cancellation
of an Award and the substitution of that Award by a new Award with a reduced price, except in the case of an adjustment pursuant to Article 7;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any amendment which extends the expiry date of any Award or the Restriction Period of any RSU beyond the original expiry date, except
in case of an extension due to a Black-Out Period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any amendment which would permit a change to the pool of Eligible Participants, including a change which would have the potential
of broadening or increasing participation by Insiders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any amendment which increases the maximum number of Shares that may be (i) issuable to Insiders and Associates of such Insiders
at any time; or (ii) issued to Insiders and Associates of such Insiders under the Plan and any other proposed or established Share
Compensation Arrangement in a one-year period, except in case of an adjustment pursuant to Article 7; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) any amendment to the amendment provisions of the Plan, provided that Shares held directly or indirectly by Insiders benefiting from
the amendments in Section 7.2(2)(b) and Section 7.2(2)(c) shall be excluded when obtaining such shareholder approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Board may, by resolution, but subject to applicable regulatory approvals, decide that any of the provisions hereof concerning
the effect of termination of the Participant's employment shall not apply for any reason acceptable to the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The Board may, subject to regulatory approval, discontinue the Plan at any time without the consent of the Participants, provided
that such discontinuance shall not materially and adversely affect any Awards previously granted to a Participant under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Notwithstanding any other provision of this Plan, at all times when the Corporation is listed on the TSXV:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Corporation shall be required to obtain prior TSXV acceptance of any amendment to this Plan; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Corporation shall be required to obtain Disinterested Shareholder Approval in compliance with the applicable policies of the TSXV
for this Plan if the Plan, together with all of the Corporation's previously established and outstanding equity compensation plans
or grants, could permit at any time: (1) the aggregate number of Shares reserved for issuance under Awards granted to Insiders (as
a group) at any point in time exceeding 10% of the Outstanding Issue; and (2) the grant to Insiders (as a group), within a 12 month
period, of an aggregate number of Awards exceeding 10% of the issued Shares, calculated at the date an Award is granted to any Insider.

---

| | |
|:---|:---|
| **Section 7.3** | **Change in Control** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Notwithstanding anything else in this Plan or any Grant Agreement, the Board has the right to provide for the conversion or exchange
of any outstanding Awards into or for options, rights, units or other securities of substantially equivalent (or greater) value in any
entity participating in or resulting from a Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Upon the Corporation entering into an agreement relating to a transaction which, if completed, would result in a Change in Control,
or otherwise becoming aware of a pending Change in Control, the Corporation shall give written notice of the proposed Change in Control
to the Participants, together with a description of the effect of such Change in Control on outstanding Awards, not less than seven (7) days
prior to the closing of the transaction resulting in the Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Board may, in its sole discretion, change the Performance Criteria or accelerate the vesting and/or the expiry date of any or
all outstanding Awards to provide that, notwithstanding the Performance Criteria and/or vesting provisions of such Awards or any Grant
Agreement, such designated outstanding Awards shall be fully performed and/or vested and conditionally exercisable upon (or prior to)
the completion of the Change in Control, provided that the Board shall not, in any case, authorize the exercise of Awards pursuant to
this Section 7.3(3) beyond the expiry date of the Awards. If the Board elects to change the Performance Criteria or accelerate
the vesting and/or the expiry date of the Awards, then if any of such Awards are not exercised within seven (7) days after the Participants
are given the notice contemplated in Section 7.3(2) (or such later expiry date as the Board may prescribe), such unexercised
Awards shall, unless the Board otherwise determines, terminate and expire following the completion of the proposed Change in Control.
If, for any reason, the Change in Control does not occur within the contemplated time period, the satisfaction of the Performance Criteria,
the acceleration of the vesting and the expiry date of the Awards shall be retracted and vesting shall instead revert to the manner provided
in the Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) To the extent that the Change in Control would also result in a capital reorganization, arrangement, amalgamation or reclassification
of the share capital of the Corporation and the Board does not change the Performance Criteria or accelerate the vesting and/or the expiry
date of Awards pursuant to Section 7.3(3), the Corporation shall make adequate provisions to ensure that, upon completion of the
proposed Change in Control, the number and kind of shares subject to outstanding Awards and/or the Option Price per share of Options shall
be appropriately adjusted (including by substituting the Awards for awards to acquire securities in any successor entity to the Corporation)
in such manner as the Board considers equitable to prevent substantial dilution or enlargement of the rights granted to Participants.
The Board may make changes to the terms of the Awards or the Plan to the extent necessary or desirable to comply with any rules, regulations
or policies of any stock exchange on which any securities of the Corporation may be listed, provided that the value of previously granted
Awards and the rights of Participants are not materially adversely affected by any such changes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Notwithstanding anything else to the contrary herein, in the event of a potential Change in Control, the Board shall have the power,
in its sole discretion, to modify the terms of this Plan and/or the Awards (including, for greater certainty, to cause the vesting of
all unvested Awards) to assist the Participants to tender into a take-over bid or other transaction leading to a Change in Control. For
greater certainty, in the event of a take-over bid or other transaction leading to a Change in Control, the Board shall have the power,
in its sole discretion, to permit Participants to conditionally exercise their Awards, such conditional exercise to be conditional upon
the take-up by such offeror of the Shares or other securities tendered to such take-over bid in accordance with the terms of such take-over
bid (or the effectiveness of such other transaction leading to a Change in Control). If, however, the potential Change in Control referred
to in this Section 7.3(5) is not completed within the time specified therein (as the same may be extended), then notwithstanding
this Section 7.3(5) or the definition of "**Change in Control** ": (i) any conditional exercise of vested
Awards shall be deemed to be null, void and of no effect, and such conditionally exercised Awards shall for all purposes be deemed not
to have been exercised, (ii) Shares which were issued pursuant to the exercise of awards which vested pursuant to this Section 7.3
shall be returned by the Participant to the Corporation and reinstated as authorized but unissued Shares, and (iii) the original terms applicable to Awards which vested pursuant to this Section 7.3 shall be reinstated.

**ARTICLE 8 <br> MISCELLANEOUS**

---

| | |
|:---|:---|
| **Section 8.1** | **Use of an Administrative Agent and Trustee.** |

---

The Board may in its sole discretion appoint from time to time one or more entities to act as administrative agent to administer the Awards granted under the Plan and to act as trustee to hold and administer the assets that may be held in respect of Awards granted under the Plan, the whole in accordance with the terms and conditions determined by the Board in its sole discretion. The Corporation and the administrative agent will maintain records showing the number of Awards granted to each Participant under the Plan.

---

| | |
|:---|:---|
| **Section 8.2** | **Tax Withholding.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Notwithstanding any other provision of this Plan, all distributions, delivery of Shares or payments to a Participant (or to the liquidator,
executor or administrator, as the case may be, of the estate of the Participant) under the Plan shall be made net of applicable source
deductions. If the event giving rise to the withholding obligation involves an issuance or delivery of Shares, then, the withholding obligation
may be satisfied by (a) having the Participant elect
to have the appropriate number of such Shares sold by the Corporation, the Corporation's transfer agent and registrar or any trustee
appointed by the Corporation pursuant to Section 8.1 hereof, on behalf of and as agent for the Participant as soon as permissible
and practicable, with the proceeds of such sale being delivered to the Corporation, which will in turn remit such amounts to the appropriate
governmental authorities, or (b) any other mechanism as may be required or appropriate to conform with local tax and other rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Notwithstanding the first paragraph of this Section 8.2, the applicable tax withholdings may be waived where the Participant
directs in writing that a payment be made directly to the Participant's registered retirement savings plan in circumstances to which
regulation 100(3) of the regulations of the Tax Act apply.

---

| | |
|:---|:---|
| **Section 8.3** | **Reorganization of the Corporation.** |

---

The existence of any Awards shall not affect in any way the right or power of the Corporation or its shareholders to make or authorize any adjustment, recapitalization, reorganization or other change in the Corporation's capital structure or its business, or any amalgamation, combination, merger or consolidation involving the Corporation or to create or issue any bonds, debentures, shares or other securities of the Corporation or the rights and conditions attaching thereto or to affect the dissolution or liquidation of the Corporation or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar nature or otherwise.

---

| | |
|:---|:---|
| **Section 8.4** | **Governing Laws.** |

---

The Plan and all matters to which reference is made herein shall be governed by and interpreted in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

---

| | |
|:---|:---|
| **Section 8.5** | **Severability.** |

---

The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision and any invalid or unenforceable provision shall be severed from the Plan.

---

| | |
|:---|:---|
| **Section 8.6** | **Effective Date of the Plan.** |

---

The Plan was approved by the Board and shall take effect on ●, 2019.

**APPENDIX "A"**

**<u>FORM OF OPTION GRANT AGREEMENT</u>**

**LIBERTY DEFENSE HOLDINGS, LTD.**

**OPTION GRANT AGREEMENT**

This Stock Option Grant Agreement (the "**Option Grant Agreement**") is entered into between Liberty Defense Holdings, Ltd. (the "**Corporation**"), and the optionee named below (the "**Optionee**") pursuant to and on the terms and subject to the conditions of the Corporation's omnibus long-term incentive plan (the "**Plan**"). Capitalized terms used and not otherwise defined in this Option Grant Agreement shall have the meanings set forth in the Plan.

The terms of the option (the "**Option**"), in addition to those terms set forth in the Plan, are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  **<u>Optionee</u>** . The Optionee is ● and the address of the Optionee is currently ●.

2.  **<u>Number of Shares</u>** . The Optionee may purchase up to ● Shares of the Corporation
 (the "**Option Shares**") pursuant to this Option, as and to the extent that the Option
 vests and becomes exercisable as set forth in section 6 of this Option Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  **<u>Option Price</u>** . The exercise price is Cdn $● per Option Share (the "**Option Price** ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.  **<u>Date Option Granted</u>** . The Option was granted on ●.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.  **<u>Term of Option</u>** . The Option terminates on ●. (the "**Expiry Date** ").

6.  **<u>Vesting</u>** . The Option to purchase Option Shares shall vest and become exercisable as
 follows: ●.

7.  **<u>Exercise of Options</u>** . In order to exercise the Option, the Optionee shall notify the Corporation in the form annexed
hereto as SCHEDULE A, whereupon the Corporation shall use reasonable efforts to cause the Optionee to receive a certificate representing
the relevant number of fully paid and non-assessable Shares in the Corporation.

8.  **<u>Transfer of Option</u>** . The Option is not transferable or assignable except in accordance with the Plan.

9.  **<u>Inconsistency</u>** . This Option Grant Agreement is subject to the terms and conditions of the Plan and, in the event of any
inconsistency or contradiction between the terms of this Option Grant Agreement and the Plan, the terms of the Plan shall govern.

10.  **<u>Severability</u>** . Wherever possible, each provision of this Option Grant Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this Option Grant Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision or any other jurisdiction, but this Option Grant Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.

A - 1

11.  **<u>Entire Agreement</u>** . This Option Grant Agreement and the Plan embody the entire agreement and understanding among the parties
and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may
have related to the subject matter hereof in any way.

12.  **<u>Successors and Assigns</u>** . This Option Grant Agreement shall bind and enure to the benefit of the Optionee and the Corporation
and their respective successors and permitted assigns.

13.  **<u>Time of the Essence</u>** . Time shall be of the essence of this Agreement and of every part hereof.

14.  **<u>Governing Law</u>** . This Agreement and the Option shall be governed by and interpreted and enforced in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable therein.

15.  **<u>Counterparts</u>** . This Option Grant Agreement may be executed in separate counterparts, each of which is deemed to be an
original and all of which taken together constitute one and the same agreement.

***[Remainder of this page left intentionally blank; Signature page follows]***

A - 2

By signing this Agreement, the Optionee acknowledges that the Optionee has been provided a copy of and has read and understands the Plan and agrees to the terms and conditions of the Plan and this Option Grant Agreement.

IN WITNESS WHEREOF the parties hereof have executed this Option Grant Agreement as of the<u> </u> day of<u> </u>, 20<u> </u>.

---

| | |
|:---|:---|
| **LIBERTY DEFENSE HOLDINGS, LTD.** | **LIBERTY DEFENSE HOLDINGS, LTD.** |
| By: |  |
|  | Name: |
|  | Title: |

---

A - 3

**SCHEDULE A**

**ELECTION TO EXERCISE STOCK OPTIONS**

---

| | |
|:---|:---|
| **TO:** | **LIBERTY DEFENSE HOLDINGS, LTD. (the** "**Corporation**"**)** |
| **DATE:** | <u> </u>,<u> </u> |

---

The undersigned Optionee hereby elects to exercise Options granted by the Corporation to the undersigned pursuant to an Option Grant Agreement dated<u> </u>, 20<u> </u> under the Corporation's omnibus long-term incentive plan (the "**Plan**"), for the number Shares set forth below. Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Plan.

---

| | |
|:---|:---|
| Number of Shares to be Acquired: | <u> </u> |
| Option Price (per Share): | $<u> </u> |
| Aggregate Purchase Price: | $<u> </u> |
| Amount enclosed that is payable on account of any source deductions relating to this Option exercise (contact the Corporation for details of such amount): | <br> $<u> </u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◻ Or check here if alternative arrangements have been made with the Corporation; |  |

---

The undersigned hereby tenders a certified cheque, bank draft or other form of payment confirmed as acceptable by the Corporation for such aggregate purchase price, and, if applicable, all source deductions, and directs such Shares to be registered in the name of<u> </u>.

***[Remainder of this page left intentionally blank; Signature page follows]***

IN WITNESS WHEREOF the parties hereof have executed this Option Grant Agreement as of the<u> </u> day of<u> </u>, 20<u> </u>.

**[Insert Optionee's Name]**

**APPENDIX "B"**

**FORM OF DSU GRANT AGREEMENT**

**LIBERTY DEFENSE HOLDINGS, LTD.**

**DEFERRED SHARE UNIT GRANT AGREEMENT**

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Name:** | **[name of DSU Participant]** |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Award Date:** | **[insert date]** |

---

Liberty Defense Holdings, Ltd. (the "**Corporation**") has adopted the omnibus long term incentive plan (the "**Plan**"). Your award is governed in all respects by the terms of the Plan, and the provisions of the Plan are hereby incorporated by reference. For greater certainty, the provisions set out in Article 4 and Article 6 of the Plan applicable to DSUs shall be deemed to form part of this DSU Grant Agreement *mutatis mutandis*. Capitalized terms used and not otherwise defined in this DSU Grant Agreement shall have the meanings set forth in the Plan. If there is a conflict between the terms of this DSU Grant Agreement and the Plan, the terms of the Plan shall govern.

---

| | |
|:---|:---|
| **Your Award** | The Corporation hereby grants to you ● DSUs. |

---

---

| | |
|:---|:---|
|  | On behalf of the Corporation: |
|  | **LIBERTY DEFENSE HOLDINGS, LTD.** |
| Name: |  |
| Title: |  |

---

B- 1

**APPENDIX "C"**

**FORM OF RSU GRANT AGREEMENT**

**LIBERTY DEFENSE HOLDINGS, LTD.**

**RESTRICTED SHARE UNIT GRANT AGREEMENT**

This restricted share unit agreement ("**RSU Grant Agreement**") is entered into between Liberty Defense Holdings, Ltd. (the "**Corporation**") and the Participant named below (the "**Recipient**") of the restricted share units ("**RSUs**") pursuant to the Corporation's omnibus long-term incentive plan (the "**Plan**"). Capitalized terms used and not otherwise defined in this RSU Grant Agreement shall have the meanings set forth in the Plan.

The terms of the RSUs, in addition to those terms set forth in the Plan, are as follows:

1. **Recipient**. The Recipient is ● and the address of the Recipient is currently ●.

2. **Grant of RSUs**. The Recipient is hereby granted ● RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **Settlement**. The RSUs shall be settled as follows:

---

| | | |
|:---|:---|:---|
| *(Select one of the following three options):* | *(Select one of the following three options):* | *(Select one of the following three options):* |
| (a) | ◻ | One Share issued from treasury per RSU. |
| (b) | ◻ | Cash Equivalent of one Share per RSU. |
| (c) | ◻ | Either (a), (b), or a combination thereof, at the election of the Recipient. |

---

**Restriction Period**. In accordance with Section 5.3 of the Plan, the restriction period in respect of the RSUs granted hereunder, as determined by the Board, shall commence on ● and terminate on ●.

4. **Performance Criteria**. ●.

5. **Performance Period**. ●.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **Vesting**. The RSUs will vest as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **Transfer of RSUs**. The RSUs granted hereunder are not-transferable or assignable except in accordance with the Plan.

C- 1

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **Inconsistency**. This RSU Grant Agreement is subject to the terms and conditions of the Plan and, in the event of any inconsistency
or contradiction between the terms of this RSU Grant Agreement and the Plan, the terms of the Plan shall govern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **Severability**. Wherever possible, each provision of this RSU Grant Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this RSU Grant Agreement is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any
other provision or any other jurisdiction, but this RSU Grant Agreement shall be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **Entire Agreement**. This RSU Grant Agreement and the Plan embody the entire agreement and understanding among the parties and
supersede and pre-empt any prior understandings, agreements or representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **Successors and Assigns**. This RSU Grant Agreement shall bind and enure to the benefit of the Recipient and the Corporation and
their respective successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **Time of the Essence**. Time shall be of the essence of this Agreement and of every part hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **Governing Law**. This RSU Grant Agreement and the RSUs shall be governed by and interpreted and enforced in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **Counterparts**. This RSU Grant Agreement may be executed in separate counterparts, each of which is deemed to be an original
and all of which taken together constitute one and the same agreement.

***[Remainder of page left intentionally blank; Signature page follows]***

C- 2

By signing this RSU Grant Agreement, the Participant acknowledges that he or she has been provided with, has read and understands the Plan and this RSU Grant Agreement.

IN WITNESS WHEREOF the parties hereof have executed this RSU Grant Agreement as of the<u> </u> day of<u> </u>, 20<u> </u>.

---

| | |
|:---|:---|
| **LIBERTY DEFENSE HOLDINGS, LTD.** | **LIBERTY DEFENSE HOLDINGS, LTD.** |
| By: |  |
|  | Name: |
|  | Title: |

---

C- 3

## Exhibit 10.2

**Exhibit 10.2**

**LIBERTY DEFENSE HOLDINGS, LTD.**

**OMNIBUS LONG-TERM INCENTIVE PLAN**

**March 27, 2019, as Amended October 25, 2022**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| Article 1 Definitions | Article 1 Definitions | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 1.1 | Definitions | 1 |
| Article 2 Purpose and Administration of the Plan; Granting Of Awards | Article 2 Purpose and Administration of the Plan; Granting Of Awards | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.1 | Purpose of the Plan | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.2 | Implementation and Administration of the Plan | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.3 | Eligible Participants | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.4 | Shares Subject to the Plan | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.5 | Granting of Awards | 8 |
| Article 3 Options | Article 3 Options | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.1 | Nature of Options | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.2 | Option Awards | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.3 | Option Price | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.4 | Option Term | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.5 | Exercise of Options | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.6 | Method of Exercise and Payment of Purchase Price | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.7 | Cashless Exercise | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.8 | Option Grant Agreements | 12 |
| Article 4 Deferred Share Units | Article 4 Deferred Share Units | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.1 | Nature of DSUs | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.2 | DSU Awards | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.3 | Redemption of DSUs | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.4 | Termination of Unvested DSU Awards | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.5 | DSU Grant Agreements | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.6 | Award of Dividend Equivalents. | 15 |
| Article 5 Restricted Share Units | Article 5 Restricted Share Units | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.1 | Nature of RSUs | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.2 | RSU Awards | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.3 | Restriction Period | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.4 | Performance Criteria and Performance Period | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.5 | RSU Vesting Determination Date | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.6 | Settlement of RSUs | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.7 | Determination of Amounts | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.8 | RSU Grant Agreements | 19 |

---

---

| | | |
|:---|:---|:---|
| Article 6 General Conditions | Article 6 General Conditions | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.1 | General Conditions Applicable to Awards | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.2 | General Conditions Applicable to Awards | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.3 | Unfunded Plan | 21 |
| Article 7 Adjustments and Amendments | Article 7 Adjustments and Amendments | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.1 | Adjustment to Shares Subject to Outstanding Awards | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.2 | Amendment or Discontinuance of the Plan | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.3 | Change in Control | 25 |
| Article 8 Miscellaneous | Article 8 Miscellaneous | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.1 | Use of an Administrative Agent and Trustee | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.2 | Tax Withholding | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.3 | Reorganization of the Corporation. | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.4 | Governing Laws | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.5 | Severability | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.6 | Effective Date of the Plan | 27 |

---

Appendix "A" Form Of Option Grant Agreement

Schedule A Election to Exercise Stock Options

Appendix "B" Form of DSU Grant Agreement

Appendix "C" Form Of RSU Grant Agreement

**LIBERTY DEFENSE HOLDINGS, LTD.**

**OMNIBUS LONG-TERM INCENTIVE PLAN**

Liberty Defense Holdings, Ltd. (the "**Corporation**") hereby establishes an omnibus longterm incentive plan for certain qualified directors, officers, Employees, Consultants and service providers providing ongoing services to the Corporation and its Affiliates (as defined herein) that can have an impact on the Corporation's long-term results.

**ARTICLE 1**

**DEFINITIONS**

**Section 1.1** **Definitions.**

Where used herein or in any amendments hereto or in any communication required or permitted to be given hereunder, the following terms shall have the following meanings, respectively, unless the context otherwise requires:

"**Account**" means an account maintained for each Participant on the books of the Corporation which will be credited with Awards in accordance with the terms of this Plan;

"**Affiliates**" has the meaning given to this term in the *Securities Act* (British Columbia), as such legislation may be amended, supplemented or replaced from time to time;

"**Associate**", where used to indicate a relationship with a Participant, means (i) any partner of that Participant, and (ii) the spouse of that Participant and that Participant's children, as well as that Participant's relatives and that Participant's spouse's relatives, if they share that Participant's residence;

"**Awards**" means Options, RSUs and DSUs granted to a Participant pursuant to the terms of the Plan;

"**Black-Out Period**" means a period of time when, pursuant to any policies of the Corporation, any securities of the Corporation may not be traded by certain Persons designated by the Corporation;

"**Board**" has the meaning ascribed thereto in Section 2.2(1) hereof;

"**Business Day**" means a day other than a Saturday, Sunday or statutory holiday, when Canadian chartered banks are generally open for business in Vancouver, British Columbia, Canada, for the transaction of banking business;

"**Cash Equivalent**" means the amount of money equal to the Market Value multiplied by the number of vested RSUs or DSUs in the Participant's Account, net of any applicable taxes in accordance with Section 8.2, on the RSU Settlement Date or the date the Corporation receives, or is deemed to receive, the DSU Redemption Notice, as applicable;

"**Change in Control**" means the occurrence of any of the following events: (i) the acquisition, directly or indirectly, by any Person or group of Persons acting jointly or in concert, within the meaning of National Instrument 62-104 - Takeover Bids and Issuer Bids (or any successor instrument thereto), of a beneficial interest in voting or equity securities of the Corporation, together with all voting or equity securities of the Corporation at the time held beneficially, directly or indirectly by such person or persons acting jointly or in concert, equal to more than 50% of the votes associated with the outstanding voting securities of the Corporation; (ii) a merger, consolidation, plan of arrangement or reorganization of the Corporation that results in the beneficial, direct or indirect transfer of more than 50% of the total voting power of the resulting entity's outstanding securities to a person, or group of persons acting jointly and in concert, who are different from the person(s) that have, beneficially, directly or indirectly, more than 50% of the total voting power prior to such transaction; (iii) any sale, lease, exchange or other transfer (in one transaction or series of related transactions) of all or substantially all of the Corporation's property and assets, or (iv) the Corporation's shareholders approving any plan or proposal for the liquidation or dissolution of the Corporation;

"**Code of Conduct**" means any code of conduct adopted by the Corporation, as modified from time to time;

"**Committee**" has the meaning ascribed thereto in Section 2.2(1) hereof;

"**Consultant**" has the meaning given to the term in Policy 4.4 of the TSXV Policies, as same may be amended, supplemented or replaced from time to time;

"**Corporation**" means **Liberty Defense Holdings, Ltd.**, a corporation existing under the *Business Corporations Act* (British Columbia), as amended from time to time;

"**Disinterested Shareholder Approval**" means the approval of a majority of shareholders of the Corporation voting on a resolution at a duly called and held meeting of such shareholders, excluding votes of Insiders to whom Options or Awards may be granted under the Plan;

"**Dividend Equivalent**" means a cash equivalent in value to a dividend paid on a Share credited to a Participant's Account;

"**DSU**" means a deferred share unit, which is a bookkeeping entry equivalent in value to a Share credited to a Participant's Account in accordance with Article 4 hereof;

"**DSU Awards**" means DSUs granted to a Participant pursuant to the terms of the Plan;

"**DSU Grant Agreement**" means a written letter agreement between the Corporation and a Participant evidencing the grant of DSUs and the terms and conditions thereof, substantially in the form of Appendix "B" hereto;

"**DSU Redemption Notice**" has the meaning ascribed thereto in Section 4.3(1) hereof;

"**Eligible Director**" means a member of the Board who, at the time of execution of a Grant Agreement, and at all times thereafter while they continue to serve as a member of the Board, are not officers, senior executives or other Employees of the Corporation or a Subsidiary, consultants or service providers providing ongoing services to the Corporation and its Affiliates;

"**Eligible Participants**" has the meaning ascribed thereto in Section 2.3(1) hereof;

"**Employee**" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) an individual who is considered
 an employee of the Corporation or its subsidiary under the *Income Tax Act* (Canada)
 (and for whom income tax, employment insurance and CPP deductions must be made at source);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) an individual who works full-time
 for the Corporation or its subsidiary providing services normally provided by an employee
 and who is subject to the same control and direction by the Corporation over the details
 and methods of work as an employee of the Corporation, but for whom income tax deductions
 are not made at source;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) an individual who works for the
 Corporation or its subsidiary on a continuing and regular basis for a minimum amount of time
 per week (the number of hours should be disclosed in the submission) providing services normally
 provided by an employee and who is subject to the same control and direction by the Corporation
 over the details and methods of work as an employee of the Corporation, but for whom income
 tax deductions are not made at source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any employee of the Corporation
 or an Affiliate. Directors who are not otherwise employed by the Corporation or an Affiliate
 shall not be considered Employees under this Plan;

"**Employment Agreement**" means, with respect to any Participant, any written employment agreement between the Corporation or an Affiliate and such Participant;

"**Exchange**" the principal stock exchange on which the Shares are listed, including the TSXV or the TSX;

"**Exchange Hold Period**" has the meaning given to the term in Policy 1.1 of the TSXV Policies, as same may be amended, supplemented or replaced from time to time;

"**Exercise Notice**" means a notice in writing signed by a Participant and stating the Participant's intention to exercise a particular Award, if applicable;

"**Exercise Price**" means the amount payable per Share on the exercise of an Option, as determined in accordance with the terms hereof;

"**Grant Agreement**" means an agreement evidencing the grant to a Participant of an Award, including an Option Grant Agreement, a DSU Grant Agreement, an RSU Grant Agreement or an Employment Agreement;

"**Insider**" has the meaning given to the term in Policy 1.1 of the TSXV Policies, as same may be amended, supplemented or replaced from time to time;

"**Investor Relations Activities**" has the meaning given to the term in Policy 1.1 of the TSXV Policies, as same may be amended, supplemented or replaced from time to time;

"**Investor Relations Individual**" means a Person who provides Investor Relations Activities to the Corporation or a shareholder of the Corporation;

"**Market Value**" means, at any date when the market value of Shares of the Corporation is to be determined, the closing price of the Shares on the Trading Day prior to the date of grant on the principal stock exchange on which the Shares are listed, or if the Shares of the Corporation are not listed on any stock exchange, the value as is determined solely by the Board, acting reasonably and in good faith;

"**Option**" means an option granted by the Corporation to a Participant entitling such Participant to acquire a designated number of Shares from treasury at the Option Price, subject to the provisions hereof;

"**Option Grant Agreement**" means a written letter agreement between the Corporation and a Participant evidencing the grant of Options and the terms and conditions thereof, substantially in the form set out in Appendix "A" hereto;

"**Option Price**" has the meaning ascribed thereto in Section 3.3 hereof;

"**Option Term**" has the meaning ascribed thereto in Section 3.4 hereof;

"**Outstanding Issue**" means the number of Shares that are outstanding as at a specified time, on a non-diluted basis;

"**Participant's Account**" means an account maintained for each Participant's participation in DSUs and/or RSUs under the Plan;

"**Participants**" means Eligible Participants that are granted Awards under the Plan;

"**Performance Criteria**" means criteria established by the Board which, without limitation, may include criteria based on the Participant's personal performance and/or the financial performance of the Corporation and/or of its Affiliates, and that may be used to determine the vesting of the Awards, when applicable;

"**Performance Period**" means the period determined by the Board pursuant to Section 5.3 hereof;

"**Person**" means an individual, corporation, company, cooperative, partnership, trust, unincorporated association, entity with juridical personality or governmental authority or body, and pronouns which refer to a Person shall have a similarly extended meaning;

"**Plan**" means this Omnibus Long-term Incentive Plan, as amended and restated from time to time;

"**Reserved Amount**" has the meaning ascribed thereto in Section 2.4(2) hereof;

"**Restriction Period**" means the period determined by the Board pursuant to Section 5.3 hereof;

"**RSU**" means a right awarded to a Participant to receive a payment in the form of Shares as provided in Article 4 hereof and subject to the terms and conditions of this Plan;

"**RSU Awards**" means RSUs granted to a Participant pursuant to the terms of the Plan;

"**RSU Grant Agreement**" means a written letter agreement between the Corporation and a Participant evidencing a grant of RSUs and the terms and conditions thereof, such RSU Grant Agreement to be substantially in the form of Appendix "C" hereto;

"**RSU Settlement Date**" has the meaning determined in Section 5.6(1)(a);

"**RSU Settlement Notice**" means a notice by a Participant to the Corporation electing the desired form of settlement of vested RSUs.

"**RSU Vesting Determination Date**" has the meaning described thereto in Section 5.5 hereof;

"**Share Compensation Arrangement**" means a stock option, stock option plan, employee stock purchase plan, long-term incentive plan or any other compensation or incentive mechanism involving the issuance or potential issuance of Shares to one or more full-time employees, directors, officers, Insiders, service providers or Consultants of the Corporation or a Subsidiary including a Share purchase from treasury by a full-time employee, director, officer, Insider, service provider or Consultant which is financially assisted by the Corporation or a Subsidiary by way of a loan, guarantee or otherwise;

"**Shares**" means the common shares in the capital of the Corporation;

"**Subsidiary**" means a corporation, company, partnership or other body corporate that is controlled, directly or indirectly, by the Corporation;

"**Successor Corporation**" has the meaning ascribed thereto in Section 7.1(3) hereof;

"**Tax Act**" means the *Income Tax Act* (Canada) and its regulations thereunder, as amended from time to time;

"**Termination Date**" means the date on which a Participant ceases to be an Eligible Participant;

"**Trading Day**" means any day on which the TSXV or TSX is open for trading;

"**TSX**" means the Toronto Stock Exchange;

"**TSXV**" means the TSX Venture Exchange; and

"**TSXV Policies**" refers to policies contained within the TSX Venture Exchange Corporate Finance Manual.

**"VWAP**" means the volume-weighted average trading price of the Shares on the Exchange calculated by dividing the total value by the total volume of the Shares traded for the five trading days immediately preceding the exercise of the subject Option, provided that the Exchange may exclude internal crosses and certain other special terms trades from the calculation.

**ARTICLE 2**

**PURPOSE AND ADMINISTRATION OF THE PLAN; GRANTING OF AWARDS**

**Section 2.1** **Purpose of the Plan.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The purpose of the Plan is to
 permit the Corporation to grant Awards to Eligible Participants, subject to certain conditions
 as hereinafter set forth, for the following purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to increase the interest in the
 Corporation's welfare of those Eligible Participants, who share responsibility for
 the management, growth and protection of the business of the Corporation or a Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) to provide an incentive to such
 Eligible Participants to continue their services for the Corporation or a Subsidiary and
 to encourage such Eligible Participants whose skills, performance and loyalty to the objectives
 and interests of the Corporation or a Subsidiary are necessary or essential to its success,
 image, reputation or activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) to reward the Participants for
 their performance of services while working for the Corporation or a Subsidiary; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) to provide a means through which
 the Corporation or a Subsidiary may attract and retain able Persons to enter its employment
 or into contractual arrangements.

**Section 2.2** **Implementation and Administration of the Plan.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Plan shall be administered
 and interpreted by the Board or, if the Board by resolution so decides, by a committee appointed
 by the Board (the "**Committee**") and consisting of not less than three (3) members
 of the Board. If a Committee is appointed for this purpose, all references to the term "Board"
 will be deemed to be references to the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Board may, from time to time,
 as it may deem expedient, adopt, amend and rescind rules and regulations for carrying
 out the provisions and purposes of the Plan, subject to any applicable rules of the
 Exchange. Subject to the provisions of the Plan, the Board is authorized, in its sole discretion,
 to make such determinations under, and such interpretations of, and take such steps and actions
 in connection with, the proper administration of the Plan as it may deem necessary or advisable.
 The interpretation, construction and application of the Plan and any provisions hereof made
 by the Board shall be final and binding on all Eligible Participants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) No member of the Board shall be
 liable for any action or determination taken or made in good faith in the administration,
 interpretation, construction or application of the Plan or any Award granted hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Any determination approved by
 a majority of the Board shall be deemed to be a determination of that matter by the Board.

**Section 2.3** **Eligible Participants.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Persons who shall be eligible
 to receive Awards ()"**Eligible Participants**") shall be the directors, officers,
 senior executives and other Employees of the Corporation or a Subsidiary, Consultants and
 service providers providing ongoing services to the Corporation and its Affiliates, who the
 Board may determine from time to time, in its sole discretion, to hold contributory positions
 in the Corporation or a Subsidiary. In determining Awards to be granted under the Plan, the
 Board shall give due consideration to the value of each Eligible Participant's present
 and potential future contribution to the Corporation's success. For greater certainty,
 a Person whose employment with the Corporation or a Subsidiary has ceased for any reason,
 or who has given notice or been given notice of such cessation, whether such cessation was
 initiated by such Employee, service provider, the Corporation or such Subsidiary, as the
 case may be, shall cease to be eligible to receive Awards hereunder as of the date on which
 such Person provides notice to the Corporation or the Subsidiary, as the case may be, in
 writing or verbally, of such cessation, or on the Termination Date for any cessation of a
 Participant's employment initiated by the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For Eligible Participants who
 are Employees, Consultants or Eligible Directors of the Corporation, the Corporation and
 the Participant are responsible for ensuring and confirming that the Participant is a bona
 fide Employee, Consultant or Eligible Director, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Participation in the Plan shall
 be entirely voluntary and any decision not to participate shall not affect an Eligible Participant's
 relationship or employment with the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Notwithstanding any express or
 implied term of this Plan to the contrary, the granting of an Award pursuant to the Plan
 shall in no way be construed as a guarantee of employment or appointment by the Corporation
 to the Participant.

**Section 2.4** **Shares Subject to the Plan.**

Subject to adjustment pursuant to provisions of Article 7 hereof, and as may be approved by the Exchange and the shareholders of the Corporation from time to time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The total number of Shares reserved
 and available for the grant and issuance of Options shall not exceed ten percent (10%) of
 the Outstanding Issue less the Reserved Amount referenced in Section 2.4(2), or such
 other number as may be approved by the TSXV and the shareholders of the Corporation from
 time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The total number of Shares, in
 aggregate, reserved and available for the grant and issuance of RSUs and DSUs shall not exceed
 1,200,000 Shares (the "**Reserved Amount** ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The maximum number of Shares issued,
 at any time, under this Plan and all other proposed or established Share Compensation Arrangements,
 shall not exceed ten percent (10%) of the Outstanding Issue from time to time. For greater
 certainty, the number of Shares reserved and available for grant and issuance pursuant to
 DSUs, RSUs and Options shall not, in aggregate, exceed ten percent (10%) of the Outstanding
 Issue from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The maximum number of Shares issued to Eligible Participants who are Insiders, at any point in time, under this Plan and all other proposed
or established Share Compensation Arrangements, shall not exceed ten percent (10%) of the Outstanding Issue from time to time, pursuant
to section 4.11(b) of TSXV Policy 4.4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) The maximum number of Shares granted, pursuant to all proposed or established Share Compensation Arrangements, in any twelve (12) month
period, to Eligible Participants who are Insiders, shall not exceed ten percent (10%) of the Outstanding Issue from time to time, pursuant
to section 4.11(c) of TSXV Policy 4.4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) The maximum number of Shares issued to any one Person (and companies wholly owned by that Person) within any one (1) year period shall
not exceed five percent (5%) of the Outstanding Issue, calculated on the date an Option is granted to the Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) The maximum number of Shares issued to any one Consultant, within any one (1) year period, under this Plan and all other proposed or established
Share Compensation Arrangements, shall not exceed two percent (2%) of the Outstanding Issue calculated as at the date any Security Based
Compensation is granted or issued to any Insider.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) The maximum number of Shares issued, in aggregate, to all Investor Relations Individuals, within any twelve (12) month period, under this
Plan and any other proposed or established Share Compensation Arrangements, shall not exceed two percent (2%) of the Outstanding Issue
from time to time, calculated at the date an Option is granted to such Investor Relations Individuals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) Investor Relations Individuals are eligible pursuant to this Plan to receive only Awards of Options. Investor Relations Individuals are
not eligible to receive DSUs, RSUs or any Award other than Options, pursuant to this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) Any Award granted pursuant to the Plan and any other Share Compensation Arrangements, prior to a Participant becoming an Insider, shall
be included for the purposes of the limits set out in Section 2.4(3) and Section 2.4(6).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) The maximum number of Awards, excluding Options, issued to any one Eligible Participant shall not exceed: (i) 1% of the Outstanding Issue
at the date such Award is granted; and (ii) 2% of the Outstanding Issue within the most recent twelve (12) month period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) Shares in respect of which an Award is granted under the Plan, but not exercised prior to the termination of such Award or not vested
or settled prior to the termination of such Award due to the expiration, termination, cancellation or lapse of such Award, shall be available
for Awards to be granted thereafter pursuant to the provisions of the Plan.

**Section 2.5** **Granting of Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Any Award granted under the Plan
 shall be subject to the requirement that, if at any time counsel to the Corporation shall
 determine that the listing, registration or qualification of the Shares subject to such Award,
 if applicable, upon any securities exchange or under any law or regulation of any jurisdiction,
or the consent or approval of any securities exchange or any governmental or regulatory body, is necessary as a condition of, or in connection
with, the grant or exercise of such Award or the issuance or purchase of Shares thereunder, if applicable, such Award may not be accepted
or exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained
on conditions acceptable to the Board. Nothing herein shall be deemed to require the Corporation to apply for or to obtain such listing,
registration, qualification, consent or approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Any Award granted under the Plan
 shall be subject to the requirement that the Corporation has the right to place any restriction
 or legend on any securities issued pursuant to this Plan including, but in no way limited
 to, placing a legend to the effect that the securities have not been registered under the
 United States Securities Act of 1933 and may not be offered or sold in the United States
 unless registration or an exemption from registration is available.

**ARTICLE 3** 

**OPTIONS**

**Section 3.1** **Nature of Options.**

An Option is an option granted by the Corporation to a Participant entitling such Participant to acquire a designated number of Shares from treasury at the Option Price, subject to the provisions hereof.

**Section 3.2** **Option Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to the provisions set
 forth in this Plan and any shareholder or regulatory approval which may be required, the
 Board shall, from time to time by resolution, in its sole discretion, (i) designate
 the Eligible Participants who may receive Options under the Plan, (ii) fix the number of Options,
if any, to be granted to each Eligible Participant and the date or dates on which such Options shall be granted, and (iii) determine
the price per Share to be payable upon the exercise of each such Option (the "**Option Price**") and the relevant vesting
provisions (including Performance Criteria, if applicable) and Option Term for such Eligible Participants, subject to the terms and conditions
prescribed in this Plan, in any Option Grant Agreement and any applicable rules of the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Board shall also, from time
 to time by resolution, in its sole discretion,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) designate the Investor Relations Individuals who may receive Options
 under the Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) fix the number of Options, if any, to be granted to each Investor Relations
 Individual and the date or dates on which such Options shall be granted,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) determine the Option Price and the Option Term for such Investor Relations
 Individuals,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) determine relevant vesting provisions (including Performance Criteria,
 if applicable) for such Investor Relations Individuals, provided vesting of the Options will occur in stages over a
period of not less than twelve (12) months with a maximum of 25% of the Options vesting in any three (3) month period, provided
that there can be no acceleration of the vesting requirements applicable to Options granted to Investor Relations Individuals; and

the whole being subject to the terms and conditions prescribed in this Plan, in any Option Grant Agreement and any applicable rules of the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Each Option granted shall be subject to vesting terms as set
forth in the Option Grant Agreement or as otherwise specified by the Board.

**Section 3.3** **Option Price.**

The Option Price for Shares that are the subject of any Option shall be fixed by the Board when such Option is granted, but shall not be less than the Market Value of such Shares at the time of the grant. Where the Exercise Price of an Option is at a discount to the Market Value, all Options and any Shares issued under such Options exercised prior to the expiry of the Exchange Hold Period shall be legended with the Exchange Hold Period commencing on the date the Options were granted.

**Section 3.4** **Option Term.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Board shall determine, at
 the time of granting the particular Option, the period during which the Option is exercisable,
 commencing on the date such Option is granted to the Participant and ending as specified
 in this Plan, or in the Option Grant Agreement, but in no event shall an Option expire on
 a date which is later than ten (10) years from the date the Option is granted ()"**Option Term** "). Unless otherwise determined by the Board, all unexercised Options shall
 be cancelled at the expiry of such Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Should the expiration date for
 an Option fall within a Black-Out Period or within nine (9) Business Days following
 the expiration of a Black-Out Period, such expiration date shall be automatically extended
 without any further act or formality to that date which is the tenth (10th) Business Day
 after the end of the Black-Out Period, such tenth (10th) Business Day to be considered the
 expiration date for such Option for all purposes under the Plan. Notwithstanding Section 7.2
 hereof, the ten (10) Business Day period referred to in this Section 3.4 may not
 be extended by the Board. Notwithstanding the foregoing, in the event that a Participant
 receives Shares in satisfaction of an Award during a Black-Out Period, the Corporation shall
 advise such Participant of the same in writing and such Participant shall not be entitled
 to sell or otherwise dispose of such Shares until such Black-Out Period has expired.

**Section 3.5** **Exercise of Options.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to the provisions of this
 Plan, a Participant shall be entitled to exercise an Option granted to such Participant at
 any time prior to the expiry of the Option Term, subject to vesting limitations which may
 be imposed by the Board at the time such Option is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Prior to its expiration or earlier
 termination in accordance with the Plan, each Option shall be exercisable as to all or such
 part or parts of the optioned Shares and at such time or times and/or pursuant to the achievement
 of such Performance Criteria (if applicable) and/or other vesting conditions as the Board
 at the time of granting the particular Option, may determine in its sole discretion. For
 greater certainty, no Option shall be exercised by a Participant during a Black-Out Period.

**Section 3.6** **Method of Exercise and Payment of Purchase Price.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to the provisions of the
 Plan and the alternative exercise procedures set out herein, an Option granted under the
 Plan may be exercisable (from time to time as provided in Section 3.5 hereof) by the
 Participant (or by the liquidator, executor or administrator, as the case may be, of the
 estate of the Participant) by delivering a fully completed Exercise Notice to the Corporation
 at its registered office to the attention of the Chief Financial Officer & Corporate
 Secretary of the Corporation (or the individual that the Chief Financial Officer &
 Corporate Secretary of the Corporation may from time to time designate), together with a
 bank draft, certified cheque or other form of payment acceptable to the Corporation in an
 amount equal to the aggregate Option Price of the Shares to be purchased pursuant to the
 exercise of the Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Where Shares are to be issued
 to the Participant pursuant to the terms of this Section 3.6, as soon as practicable
 following the receipt of the Exercise Notice and, if Options are exercised in accordance
 with the terms of Section 3.6(1), the required bank draft, certified cheque or other
 acceptable form of payment, the Corporation shall duly issue such Shares to the Participant
 as fully paid and non-assessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Upon the exercise of an Option
 pursuant to Section 3.6(1), the Corporation shall, as soon as practicable after such
 exercise but no later than ten (10) Business Days following such exercise, forthwith
 cause the transfer agent and registrar of the Shares to either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) deliver to the Participant (or
 to the liquidator, executor or administrator, as the case may be, of the estate of the Participant)
 a certificate in the name of the Participant representing in the aggregate such number of
 Shares as the Participant (or to the liquidator, executor or administrator, as the case may
 be, of the estate of the Participant) shall have then paid for and as are specified in such
 Exercise Notice; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the case of Shares issued in
 uncertificated form, cause the issuance of the aggregate number of Shares the Participant
 (or the liquidator, executor or administrator, as the case may be, of the estate of the Participant)
 shall have then paid for and as are specified in such Exercise Notice to be evidenced by
 a book position on the register of the shareholders of the Corporation to be maintained by
 the transfer agent and registrar of the Shares.

**Section 3.7** **Cashless Exercise**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to the provisions of this
 Plan (including, without limitation Section 8.2) and, upon prior approval of the Board,
 once an Option has vested and become exercisable, an Optionee may elect to exercise such
 Option by either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) excluding Options held by any Investor Relations Service Individual, a "net exercise" procedure in which the Corporation issues to the Optionee, Shares equal to the number determined by dividing (i) the product of the number of Options being exercised multiplied by the difference between the VWAP of the underlying Shares and the Exercise Price of the subject Options by (ii) the VWAP of the underlying Shares; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a broker assisted "cashless exercise" in which the Corporation delivers a copy of irrevocable instructions to a broker engaged for such purposes by the Corporation to sell the Shares otherwise deliverable upon the exercise of the Options and to deliver promptly to the Corporation an amount equal to the Exercise Price and all applicable required withholding obligations a determined by the Corporation against delivery of the Shares to settle the applicable trade.

An Option may be exercised pursuant to this Section 3.7 from time to time by delivery to the Corporation, at its head office or such other place as may be specified by the Corporation of (i) written notice of exercise specifying that the Optionee has elected to effect such a cashless exercise of such Option, the method of cashless exercise, and the number of Options to be exercised and (ii) the payment of an amount for any tax withholding or remittance obligations of the Optionee or the Corporation arising under applicable law and verified by the Corporation to its satisfaction (or by entering into some other arrangement acceptable to the Corporation in its discretion, if any). The Participant shall comply with Section 8.2 of this Plan with regard to any applicable required withholding obligations and with such other procedures and policies as the Corporation may prescribe or determine to be necessary or advisable from time to time including prior written consent of the Board in connection with such exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) In the event of a net exercise
 pursuant to Section 3.7(1)(a) or a cashless exercise pursuant to Section 3.7(1)(b),
 the number of Options exercised, surrendered or converted, and not the number of Shares actually
 issued by the Corporation, must be included in calculating the limits set forth in Section 2.4
 of this Plan.

**Section 3.8** **Option Grant Agreements.**

Options shall be evidenced by an Option Grant Agreement or included in an Employment Agreement or other services agreement, in such form not inconsistent with the Plan as the Board may from time to time determine, provided that the substance of Article 3 and Article 6 hereof be included therein. The Option Grant Agreement shall contain such terms that may be considered necessary in order that the Option will comply with any provisions respecting options in the income tax or other laws in force in any country or jurisdiction of which the Participant may from time to time be a resident or citizen or the rules of any regulatory body having jurisdiction over the Corporation.

**ARTICLE 4**<br> **DEFERRED SHARE UNITS**

**Section 4.1** **Nature of DSUs.**

A DSU is an Award attributable to a Participant's duties of an office, directorship or employment and that, upon settlement, entitles the recipient Participant to receive such number of Shares as determined by the Board, or to receive the Cash Equivalent or a combination thereof, as the case may be, and is payable after the Termination Date for the Participant.

**Section 4.2** **DSU Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Board shall, from time to
 time by resolution, in its sole discretion, (i) designate the Eligible Participants
 (who, for purposes of the grant of DSUs, shall not include Consultants) who may receive DSU
 Awards under the Plan, (ii) fix the number of DSU Awards to be granted to each Eligible
 Participant and the date or dates on which such DSU Awards shall be granted, and (iii) determine
 the relevant conditions and vesting provisions for such DSU Awards, subject to the terms
 and conditions prescribed in this Plan and in any DSU Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Each DSU shall be subject to vesting
 terms as set forth in the DSU Grant Agreement or as otherwise specified by the Board, and,
 pursuant to TSXV Policy 4.4, s. 4.6, in all instances DSUs will not vest until a minimum
 of one year following award of the DSUs has passed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Subject to vesting and other conditions
 and provisions set forth herein and in the DSU Grant Agreement, each DSU awarded shall entitle
 the Participant to one (1) Share, or the Cash Equivalent, or a combination thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The DSUs are structured so as
 to be considered to be a plan described in section 7 of the Tax Act or any successor to such
 provision.

**Section 4.3** **Redemption of DSUs.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Each Participant shall be entitled
 to redeem his or her DSUs, during the period commencing on the Business Day immediately following
 the Termination Date and ending on December 15 of the second calendar year following
 the Termination Date, or a shorter redemption period set out in the relevant DSU Grant Agreement,
 provided such shorter redemption period is a minimum of one year following the date of grant
 of the DSUs, pursuant to TSXV Policy 4.4, s. 4.6, and such one-year vesting period is stated
 in the DSU Redemption Notice. A Participant may redeem his or her DSUs by providing a written
 notice of settlement to the Corporation setting out the number of DSUs to be settled and
 the particulars regarding the registration of the Shares issuable upon settlement (the "**DSU Redemption Notice** "). Pursuant to TSXV Policy 4.4, s. 4.6, acceleration of vesting
 is permitted if a Participant ceases to be eligible as a Participant in connection with a
 change of control, take-over bid, reverse-take-over or other similar transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) In the event of the death of a
 Participant, the DSU Redemption Notice shall be filed by the administrator or liquidator
 of the estate of the Participant. Pursuant to TSXV Policy 4.4, s. 4.6, acceleration of the vesting
date is permitted in the case of the death of a Participant, and the required minimum of one year vesting period prior to the date of
redemption is waived, and such must be stated in the DSU Redemption Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If a DSU Redemption Notice is
 not received by the Corporation on or before December 15 of the second calendar year
 following the Termination Date, the Participant shall be deemed to have delivered a DSU Redemption
 Notice on that December 15 and the Corporation shall redeem all of the Participant's
 DSUs in exchange for Shares to be delivered to the Participant, administrator or liquidator
 of the estate of the Eligible Director, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) For the purposes of determining
 the number of Shares from treasury to be issued and delivered to an Eligible Director upon
 redemption of DSUs pursuant to Section 4.3, such calculation will be made on the date
 the Corporation receives, or is deemed to receive, the DSU Redemption Notice and be the whole
 number of Shares equal to the whole number of DSUs, having vested within one year from the
 date of grant, then recorded in the Eligible Director's Account which the Eligible
 Director requests or is deemed to request to redeem pursuant to the DSU Redemption Notice.
 Shares issued from treasury will be issued in consideration for the past services of the
 Eligible Director to the Corporation and the entitlement of the Eligible Director under this
 Plan shall be satisfied in full by such issuance of Shares. Provided, however, that if, upon
 receipt by the Corporation of a DSU Redemption Notice pursuant to Section 4.3 hereof,
 the Corporation does not have a sufficient number of Shares reserved and available for issuance
 under this Plan, the Corporation will make payment of a cash amount to a Participant for
 a value equal to the number of DSUs multiplied by the Market Value, subject to any applicable
 deductions and withholdings, in lieu of issuing Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) For purposes of determining the
 Cash Equivalent of DSUs to be made pursuant to Section 4.3, such calculation will be
 made on the date the Corporation receives, or is deemed to receive, the DSU Redemption Notice
 and will be based on the Market Value on that date multiplied by the number of vested DSUs
 in the Participant's Account to settle in cash.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Subject to Section 4.3(6),
 settlement of DSUs shall take place as soon as commercially and reasonably possible following
 receipt or deemed receipt of the DSU Redemption Notice through delivery of a share certificate
 to the Participant or the entry of the Participant's name on the share register for
 the Shares, or in the case of settlement of DSUs for their Cash Equivalent, delivery of a
 cheque to the Participant representing the Cash Equivalent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Notwithstanding any other provision
 of this Plan, in the event that (i) a DSU Redemption Notice is received during a Black-Out
 Period or other trading restriction imposed by the Corporation; or (ii) the Participant
 has not delivered a DSU Redemption Notice and the 90th day following the Termination Date
 falls during a Black-Out Period or other trading restriction imposed by the Corporation,
 then settlement of the applicable DSUs shall be automatically extended to the tenth (10<sup>th</sup>)
 Business Day following the date that such Black-Out Period or other trading restriction
is lifted, terminated or removed. Notwithstanding the foregoing, in the event that a Participant receives Shares in satisfaction of an
Award during a Black-Out Period, the Corporation shall advise such Participant of the same in writing and such Participant shall not
be entitled to sell or otherwise dispose of such Shares until such Black-Out Period has expired.

**Section 4.4** **Termination of Unvested DSU Awards.**

If, as of the date the Corporation receives, or is deemed to receive, the DSU Redemption Notice, a vesting condition applicable to a DSU Award has not been satisfied or, at the discretion of the Board, waived, then such DSU Award, or portion thereof to which the vesting condition applies, shall terminate.

**Section 4.5** **DSU Grant Agreements.**

DSUs shall be evidenced by a DSU Grant Agreement in such form not inconsistent with the Plan as the Board may from time to time determine. The DSU Grant Agreement shall contain such terms that may be considered necessary, including the date of vesting of the DSU a minimum of one year from the date of award, in order that the DSU will comply with any provisions respecting deferred share units in the income tax or other laws in force in any country or jurisdiction of which the Participant may from time to time be a resident or citizen or the rules of any regulatory body having jurisdiction over the Corporation.

**Section 4.6** **Award of Dividend Equivalents.**

Dividend Equivalents may, as determined by the Board in its sole discretion, be awarded in respect of unvested DSUs in a Participant's Account on the same basis as cash dividends declared and paid on Shares as if the Participant was a shareholder of record of Shares on the relevant record date. Dividend Equivalents, if any, will be credited to the Participant's Account in additional DSUs, the number of which shall be equal to a fraction where (a) the numerator is the product of (i) the number of DSUs in such Participant's Account on the date that dividends are paid multiplied by (ii) the dividend paid per Share, and (b) the denominator is the Market Value of one Share calculated on the date that dividends are paid. Any additional DSUs credited to a Participant's Account as a Dividend Equivalent pursuant to this Section 4.6 shall be subject to the same terms and conditions, including vesting conditions, as the underlying DSU Award.

Provided, however, that if, upon receipt by the Corporation of a DSU Redemption Notice pursuant to Section 4.3 hereof, the Corporation does not have a sufficient number of Shares reserved and available for issuance under this Plan, the Corporation will make payment of a cash amount to a Participant for a value equal to the number of DSUs multiplied by the Market Value, subject to any applicable deductions and withholdings, in lieu of issuing Shares.

**ARTICLE 5** **<br> RESTRICTED SHARE UNITS**

**Section 5.1** **Nature of RSUs.**

An RSU is an Award entitling the recipient to acquire Shares, at such purchase price (which may be zero) as determined by the Board, subject to such restrictions, vesting and conditions as the Board may determine at the time of grant. Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives.

**Section 5.2** **RSU Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Board shall, from time to
 time by resolution, in its sole discretion, (i) designate the Eligible Participants
 who may receive RSUs under the Plan, (ii) fix the number of RSUs, if any, to be granted
 to each Eligible Participant and the date or dates on which such RSUs shall be granted, (iii) determine
 the relevant conditions and vesting provisions (including the applicable Performance Period
 and Performance Criteria, if any) and the Restriction Period of such RSUs, (provided, however,
 that no such Restriction Period shall exceed the three (3) years referenced in Section 5.4),
 and (iv) any other terms and conditions applicable to the granted RSUs, which need not
 be identical and which, without limitation, may include non-competition provisions, subject
 to the terms and conditions prescribed in this Plan and in any RSU Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Each RSU shall be subject to
 vesting terms as set forth in the RSU Grant Agreement or as otherwise specified by the Board,
 and, pursuant to TSXV Policy 4.4, s. 4.6, in all instances RSUs will not vest until a minimum
 of one year following award of the RSUs has passed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The RSUs are structured so as
 to be considered to be a plan described in section 7 of the Tax Act or any successor to such
 provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Subject to the vesting and other
 conditions and provisions set forth herein and in the RSU Grant Agreement, the Board shall
 determine whether each RSU awarded to a Participant shall entitle the Participant: (i) to
 receive one Share issued from treasury; (ii) to receive the Cash Equivalent of one (1) Share;
 or (iii) to elect to receive either One Share from treasury, the Cash Equivalent of
 one (1) Share or a combination of cash and Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) RSUs shall be settled by the
 Participant at any time beginning on the first Business Day following their RSU Vesting Determination
 Date but no later than the RSU Settlement Date (as such terms are defined in Section 5.5
 and 5.6, respectively).

**Section 5.3** **Restriction Period.**

The applicable restriction period in respect of a particular RSU Award shall be determined by the Board but in all cases shall end no later than December 31 of the calendar year, which is three (3) years after the calendar year in which the Award is granted ("**Restriction Period**"). For example, the Restriction Period for a grant made in June 2023 shall end no later than December 31, 2026. Subject to the Board's determination, any vested RSUs with respect to a Restriction Period will be paid to Participants in accordance with Article 5 no later than the end of the Restriction Period. Unless otherwise determined by the Board, all unvested RSUs shall be cancelled on the RSU Vesting Determination Date and, in any event, no later than the last day of the Restriction Period, but no earlier than one year from the date of the award of the RSUs to be settled.

**Section 5.4** **Performance Criteria and Performance Period.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) For each award of RSUs, the Board
 shall establish the period in which any Performance Criteria and other vesting conditions
 must be met in order for a Participant to be entitled to receive Shares in exchange for all
 or a portion of the RSUs held by such Participant (the "**Performance Period** "),
 provided that such Performance Period may not expire after the end of the Restriction Period,
 being a minimum of one year from the date of award of the RSUs, and ending no longer than
 three (3) years after the calendar year in which the Award was granted. For example,
 a Performance Period determined by the Board to be for a period of three (3) financial
 years will start on the first day of the financial year in which the award is granted and
 will end on the last day of the second financial year after the year in which the grant was
 made. In such a case, for a grant made on January 4, 2023, the Performance Period will
 start on January 4, 2024 and will end on December 31, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For each award of RSUs, the Board
 shall establish any Performance Criteria and other vesting conditions which must be met during
 the Performance Period in order for a Participant to be entitled to receive Shares in exchange
 for his or her RSUs.

**Section 5.5** **RSU Vesting Determination Date.**

The vesting determination date means the date on which the Board determines if the Performance Criteria and/or other vesting conditions with respect to a RSU have been met (the "**RSU Vesting Determination Date**"), and as a result, establishes the number of RSUs that become vested, if any. For greater certainty, the RSU Vesting Determination Date must fall after the end of the Performance Period, if any, but no later than the last day of the Restriction Period. Unless otherwise specified in the RSU Grant Agreements, one-third (1/3) of RSUs awarded pursuant to an RSU Grant Agreement shall vest on each of the first three anniversaries of the date of grant. Provided that no RSUs may vest prior to one year from the date of award of such RSU. Acceleration of vesting is permitted in connection with the death of a Participant; or in connection with a change of control, take-over bid, reverse-take-over or other similar transaction.

**Section 5.6** **Settlement of RSUs.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Except as otherwise provided
 in the RSU Grant Agreement, in the event that the vesting conditions, the Performance Criteria
 and Performance Period, if applicable, of an RSU are satisfied:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all of the vested RSUs covered
 by a particular grant may, subject to Section 5.6(5), be settled at any time beginning
 on the first Business Day following their RSU Vesting Determination Date but no later than
 the date that is five (5) years from their RSU Vesting Determination Date (the "**RSU Settlement Date** "); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a Participant is entitled to deliver
 to the Corporation, on or before the RSU Settlement Date, an RSU Settlement Notice in respect
 of any or all vested RSUs held by such Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Subject to Section 5.6(5),
 settlement of RSUs shall take place promptly following the RSU Settlement Date and take the
 form set out in the RSU Settlement Notice through:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) in the case of settlement of
 RSUs for their Cash Equivalent, delivery of a cheque to the Participant representing the
 Cash Equivalent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the case of settlement of RSUs
 for Shares, delivery of a share certificate to the Participant or the entry of the Participant's
 name on the share register for the Shares; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in the case of settlement of
 the RSUs for a combination of Shares and the Cash Equivalent, a combination of (a) and
 (b) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If an RSU Settlement Notice is
 not received by the Corporation on or before the RSU Settlement Date, settlement shall take
 the form of Shares issued from treasury as set out in Section 5.7(2).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) If, upon receipt by the Corporation
 of a RSU Settlement Notice pursuant to Section 5.6 hereof, the Corporation does not
 have a sufficient number of Shares reserved and available for issuance under this Plan, the
 Corporation will make payment of a cash amount to a Participant for a value equal to the
 number of RSUs multiplied by the Market Value, subject to any applicable deductions and withholdings,
 in lieu of issuing Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Notwithstanding any other provision
 of this Plan, in the event that a RSU Settlement Date falls during a Black-Out Period or
 other trading restriction imposed by the Corporation and the Participant has not delivered
 a RSU Settlement Notice, then such RSU Settlement Date shall be automatically extended to
 the tenth (10<sup>th</sup>) Business Day following the date that such Black-Out Period or
 other trading restriction is lifted, terminated or removed. Notwithstanding the foregoing,
 in the event that a Participant receives Shares in satisfaction of an Award during a Black-Out
 Period, the Corporation shall advise such Participant of the same in writing and such Participant
 shall not be entitled to sell or otherwise dispose of such Shares until such Black-Out Period
 has expired.

**Section 5.7** **Determination of Amounts.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) **Cash Equivalent of RSUs**.
 For purposes of determining the Cash Equivalent of RSUs to be made pursuant to Section 5.6,
 such calculation will be made on the RSU Settlement Date and shall equal the Market Value
 on the RSU Settlement Date multiplied by the number of vested RSUs in the Participant's
 Account which the Participant desires to settle in cash pursuant to the RSU Settlement Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) **Payment in Shares; Issuance of Shares from Treasury**. For the purposes of determining the number of Shares from treasury
 to be issued and delivered to a Participant upon settlement of RSUs pursuant to Section 5.6,
 such calculation will be made on the RSU Settlement Date and be the whole number
of Shares equal to the whole number of vested RSUs then recorded in the Participant's Account which the Participant desires to
settle pursuant to the RSU Settlement Notice. Shares issued from treasury will be issued in consideration for the past services of the
Participant to the Corporation and the entitlement of the Participant under this Plan shall be satisfied in full by such issuance of
Shares.

**Section 5.8** **RSU Grant Agreements.**

RSUs shall be evidenced by an RSU Grant Agreement or included in an Employment Agreement or other services agreement, in such form not inconsistent with the Plan as the Board may from time to time determine, provided that the substance of Article 4 and Article 6 hereof be included therein. The RSU Grant Agreement shall contain such terms that may be considered necessary in order that the RSU will comply with any provisions respecting restricted share units in the income tax or other laws in force in any country or jurisdiction of which the Participant may from time to time be a resident or citizen or the rules of any regulatory body having jurisdiction over the corporation.

**ARTICLE 6** **<br> GENERAL CONDITIONS**

**Section 6.1** **General Conditions Applicable to Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Each Award, as applicable, shall
 be subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Employment** – The
 granting of an Award to a Participant shall not impose upon the Corporation or a Subsidiary
 any obligation to retain the Participant in its employ in any capacity. For greater certainty,
 the granting of Awards to a Participant shall not impose any obligation on the Corporation
 to grant any awards in the future nor shall it entitle the Participant to receive future
 grants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Rights as a Shareholder** –
 Neither the Participant nor such Participant's personal representatives or legatees
 shall have any rights whatsoever as shareholder in respect of any Shares covered by such
 Participant's Awards until the date of issuance of a share certificate to such Participant
 (or to the liquidator, executor or administrator, as the case may be, of the estate of the
 Participant) or the entry of such person's name on the share register for the Shares.
 Without in any way limiting the generality of the foregoing, no adjustment shall be made
 for dividends or other rights for which the record date is prior to the date such share certificate
 is issued or entry of such person's name on the share register for the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Conformity to Plan** –
 In the event that an Award is granted or a Grant Agreement is executed which does not conform
 in all particulars with the provisions of the Plan, or purports to grant Awards on terms
 different from those set out in the Plan, the Award or the grant of such Award shall not
 be in any way void or invalidated, but the Award so granted will be adjusted to become, in
 all respects, in conformity with the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Non-Assignable and Non-Transferable** – All Awards are exercisable only by the Participant to whom they were awarded
 and will not be assignable or transferable. Awards may be exercised only by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Participant to whom the Awards
 were granted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) upon the Participant's
 death, the legal representative of the Participant's estate; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) upon the Participant's
 incapacity, the legal representative having authority to deal with the property of the Participant,

provided that any such legal representative in (ii) or (iii) shall first deliver evidence satisfactory to the Corporation of legal representation and the right to exercise an Award.

**Section 6.2** **General Conditions Applicable to Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Each Award shall be subject to
 the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Termination for Cause**.
 Upon a Participant ceasing to be an Eligible Participant for "cause", all unexercised
 vested and unvested Awards granted to such Participant shall terminate on the effective date
 of the termination as specified in the notice of termination. For the purposes of the Plan,
 the determination by the Corporation that the Participant was discharged for cause shall
 be binding on the Participant. "Cause" shall include, among other things, gross
 misconduct, theft, fraud, breach of confidentiality or breach of the Corporation's
 Code of Conduct and any reason determined by the Corporation to be cause for termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Retirement**. In the case
 of a Participant's retirement, any unvested Awards held by the Participant as at the
 Termination Date will continue to vest in accordance with their vesting schedules, and all
 vested Awards held by the Participant at the Termination Date may be exercised until the
 earlier of the expiry date of the Awards or six (6) months following the Termination
 Date, provided that if the Participant is determined to have breached any post-employment
 restrictive covenants in favour of the Corporation, then any Awards held by the Participant,
 whether vested or unvested, will immediately expire and the Participant shall pay to the
 Corporation any "in-the-money" amounts realized upon exercise of Awards following
 the Termination Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Resignation**. In the case
 of a Participant ceasing to be an Eligible Participant due to such Participant's resignation,
 subject to any later expiration dates determined by the Board, all Awards shall expire on
 the earlier of ninety (90) days after the effective date of such resignation, or the expiry
 date of the Award, to the extent such Awards were vested and exercisable by the Participant
 on the effective date of such resignation and all unexercised unvested Awards granted to
 such Participant shall terminate on the effective date of such resignation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Termination or Cessation**.
 In the case of a Participant ceasing to be an Eligible Participant for any reason (other
 than for "cause", resignation or death), the number of Awards that may vest is subject
to proration over the applicable vesting or performance period and shall expire on the earlier of ninety (90) days after the effective
date of the Termination Date, or the expiry date of the Awards. For greater certainty, the proration calculation referred to above shall
be net of previously vested Awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **Death**. If a Participant
 dies while in his or her capacity as an Eligible Participant, all unvested Awards will immediately
 vest and all Awards will expire one hundred eighty (180) calendar days after the death of
 such Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **Change in Control**. If a
 participant is terminated without "cause" or resigns for good reason during the
 twelve (12) month period following a Change in Control, or after the Corporation has signed
 a written agreement to effect a change in control but before the change in control is completed,
 then any unvested Awards will immediately vest and may be exercised within thirty (30) calendar
 days of such date. In the case of an Investor Relations Individual, where the Corporation
 has signed a written agreement to effect a change in control and before the change in control
 is completed, any unvested Awards may, subject to prior acceptance by the Exchange, vest
 immediately and be exercised within thirty (30) calendar days of such Exchange approval.

**Section 6.3** **Unfunded Plan.**

Unless otherwise determined by the Board, this Plan shall be unfunded. To the extent any Participant or his or her estate holds any rights by virtue of a grant of Awards under this Plan, such rights (unless otherwise determined by the Board) shall be no greater than the rights of an unsecured creditor of the Corporation. Notwithstanding the foregoing, any determinations made shall be such that the Plan continuously meets the requirements of paragraph 6801(d) of the Income Tax Regulations, adopted under the Tax Act or any successor provision thereto.

**ARTICLE 7** <br> **ADJUSTMENTS AND AMENDMENTS**

**Section 7.1** **Adjustment to Shares Subject to Outstanding Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) In the event of any subdivision
 of the Shares into a greater number of Shares at any time after the grant of an Award to
 a Participant and prior to the expiration of the term of such Award, the Corporation shall
 deliver to such Participant, at the time of any subsequent exercise or vesting of such Award
 in accordance with the terms hereof, in lieu of the number of Shares to which such Participant
 was theretofore entitled upon such exercise or vesting of such Award, but for the same aggregate
 consideration payable therefor, such number of Shares as such Participant would have held
 as a result of such subdivision if, on the record date thereof, the Participant had been
 the registered holder of the number of Shares to which such Participant was theretofore entitled
 upon such exercise or vesting of such Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) In the event of any consolidation
 of Shares into a lesser number of Shares at any time after the grant of an Award to any Participant
 and prior to the expiration of the term of such Award, the Corporation shall deliver
to such Participant at the time of any subsequent exercise or vesting of such Award in accordance with the terms hereof, in lieu of the
number of Shares to which such Participant was theretofore entitled upon such exercise or vesting of such Award, but for the same aggregate
consideration payable therefor, such number of Shares as such Participant would have held as a result of such consideration if, on the
record date thereof, the Participant had been the registered holder of the number of Shares to which such Participant was theretofore
entitled upon such exercise or vesting of such Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If, at any time after the grant
 of an Award to any Participant, and prior to the expiration of the term of such Award, the
 Shares shall be reclassified, reorganized or otherwise changed, otherwise than as specified
 in Section 7.1(1) or Section 7.1(2) hereof or, subject to the provisions
 of Section 7.1(3) hereof, the Corporation shall consolidate, merge, reorganize
 or amalgamate with or into another corporation (the corporation resulting or continuing from
 such consolidation, merger, reorganization, amalgamation, plan of arrangement, spin-off,
 dividend payment or recapitalization, being herein called the "**Successor Corporation** "),
 the Participant shall be entitled to receive, upon the subsequent exercise or vesting of
 Award, in accordance with the terms hereof and shall accept in lieu of the number of Shares
 then subscribed for but for the same aggregate consideration payable therefor, the aggregate
 number of shares of the appropriate class or other securities of the Corporation or the Successor
 Corporation (as the case may be) or other consideration from the Corporation or the Successor
 Corporation (as the case may be) that such Participant would have been entitled to receive
 as a result of such reclassification, reorganization or other change of shares or, subject
 to the provisions of Section 7.2(3) hereof, as a result of such consolidation,
 merger, reorganization, amalgamation, plan of arrangement, spin-off, dividend payment or
 recapitalization, if on the record date of such reclassification, reorganization or other
 change of shares or the effective date of such consolidation, merger reorganization, amalgamation,
 plan of arrangement, spin-off, dividend payment or recapitalization, as the case may be,
 such Participant had been the registered holder of the number of Shares to which such Participant
 was immediately theretofore entitled upon such exercise or vesting of such Award. Provided
 that all adjustments made to the aggregate number of shares of the appropriate class or other
 securities of the Corporation or the Successor Corporation (as the case may be) or other
 consideration from the Corporation or the Successor Corporation (as the case may be) that
 such Participant would have been entitled to receive as a result of such reclassification,
 reorganization or other change of shares or, subject to the provisions of Section 7.2(3) hereof,
 as a result of such consolidation, merger, reorganization, amalgamation, plan of arrangement,
 spin-off, dividend payment or recapitalization, shall be subject to Exchange approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) If, at any time after the grant
 of an Award to any Participant and prior to the expiration of the term of such Award, the
 Corporation shall make a distribution to all holders of Shares or other securities in the
 capital of the Corporation, or cash, evidences of indebtedness or other assets of the Corporation
 (excluding an ordinary course dividend in cash or shares, but including, for greater certainty,
 shares or equity interests in a subsidiary or business unit of the Corporation or one of
 its subsidiaries or cash proceeds of the disposition of such a subsidiary or business unit),
 or should the Corporation effect any transaction or change having a similar effect, then
 the price or the number of Shares to which the Participant is entitled upon exercise or vesting
of Award shall be adjusted to take into account such distribution, transaction or change. The Board shall determine the appropriate adjustments
to be made in such circumstances in order to maintain the Participants' economic rights in respect of their Awards in connection
with such distribution, transaction or change.

**Section 7.2** **Amendment or Discontinuance of the Plan.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Board may amend the Plan or
 any Award at any time subject to Shareholder approval as a condition to Exchange acceptance
 of the amendment. For greater certainty, without limitation, amendments to any of the following
 provisions of this Plan will be subject to Shareholder approval, in particular amendments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to persons eligible to be granted
 or issued security based compensation under this Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) to the maximum number or percentage,
 as the case may be, of Listed Shares that may be issuable upon exercise of Options or conversion
 of DSUs or RSUs under this Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) to the limits under this Plan
 on the amount of Options, DSUs or RSUs that may be granted or issued to any one person or
 any category of persons (such as, for example, Insiders);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) to the method for determining
 the Exercise Price of Stock Options;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) to the maximum term of any Award
 granted under this Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) to the expiry and termination
 provisions applicable to any Award granted under this Plan, including the addition of a blackout
 period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) to include the addition of a
 Net Exercise provision; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) to any method or formula for
 calculating prices, values or amounts under this Plan that may result in a benefit to a Participant,
 including but not limited to the formula for calculating the appreciation of a Stock Appreciation
 Right.

Provided that shareholder approval shall not be required for the following amendments and the Board may make any changes which may include but are not limited to amendments of a general "housekeeping" or clerical nature that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) correct typographical errors;
 and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) clarify existing provisions
 of this Plan, that do not have the effect of altering the scope, nature and intent of such
 provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Notwithstanding Section 7.2(1),
 the Board shall be required to obtain Disinterested Shareholder Approval to make the following
 amendments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any change to the maximum number
 of Shares issuable from treasury under the Plan, except such increase by operation of Section 2.4
 and in the event of an adjustment pursuant to Article 7;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any amendment which reduces the
 Exercise Price of any Award, as applicable, after such Awards have been granted or any cancellation
 of an Award and the substitution of that Award by a new Award with a reduced price, except
 in the case of an adjustment pursuant to Article 7;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any amendment which extends the
 expiry date of any Award or the Restriction Period of any RSU beyond the original expiry
 date, except in case of an extension due to a Black-Out Period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any amendment which would permit
 a change to the pool of Eligible Participants, including a change which would have the potential
 of broadening or increasing participation by Insiders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any amendment which increases
 the maximum number of Shares that may be (i) issuable to Insiders and Associates of
 such Insiders at any time; or (ii) issued to Insiders and Associates of such Insiders
 under the Plan and any other proposed or established Share Compensation Arrangement in a
 one-year period, except in case of an adjustment pursuant to Article 7; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) any amendment to the amendment
 provisions of the Plan, provided that Shares held directly or indirectly by Insiders benefiting
 from the amendments in Section 7.2(2)(b) and Section 7.2(2)(c) shall
 be excluded when obtaining such shareholder approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Board may, by resolution,
 but subject to applicable regulatory approvals, decide that any of the provisions hereof
 concerning the effect of termination of the Participant's employment shall not apply
 for any reason acceptable to the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The Board may, subject to regulatory
 approval, discontinue the Plan at any time without the consent of the Participants, provided
 that such discontinuance shall not materially and adversely affect any Awards previously
 granted to a Participant under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Notwithstanding any other provision
 of this Plan, at all times when the Corporation is listed on the TSXV:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Corporation shall be required
 to obtain prior TSXV acceptance of any amendment to this Plan; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Corporation shall be required
 to obtain Disinterested Shareholder Approval in compliance with the applicable policies of
 the TSXV for this Plan if the Plan, together with all of the Corporation's previously
 established and outstanding equity compensation plans or grants, could permit at any time:
 (1) the aggregate number of Shares reserved for issuance under Awards granted to Insiders
 (as a group) at any point in time exceeding 10% of the Outstanding Issue; and (2) the
 grant to Insiders (as a group), within a 12
month period, of an aggregate number of Awards exceeding 10% of the issued Shares, calculated at the date an Award is granted to any
Insider.

**Section 7.3** **Change in Control**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Notwithstanding anything else
 in this Plan or any Grant Agreement, the Board has the right to provide for the conversion
 or exchange of any outstanding Awards into or for options, rights, units or other securities
 of substantially equivalent (or greater) value in any entity participating in or resulting
 from a Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Upon the Corporation entering
 into an agreement relating to a transaction which, if completed, would result in a Change
 in Control, or otherwise becoming aware of a pending Change in Control, the Corporation shall
 give written notice of the proposed Change in Control to the Participants, together with
 a description of the effect of such Change in Control on outstanding Awards, not less than
 seven (7) days prior to the closing of the transaction resulting in the Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Board may, in its sole discretion,
 change the Performance Criteria or accelerate the vesting and/or the expiry date of any or
 all outstanding Awards to provide that, notwithstanding the Performance Criteria and/or vesting
 provisions of such Awards or any Grant Agreement, such designated outstanding Awards shall
 be fully performed and/or vested and conditionally exercisable upon (or prior to) the completion
 of the Change in Control, provided that the Board shall not, in any case, authorize the exercise
 of Awards pursuant to this Section 7.3(3) beyond the expiry date of the Awards.
 If the Board elects to change the Performance Criteria or accelerate the vesting and/or the
 expiry date of the Awards, then if any of such Awards are not exercised within seven (7) days
 after the Participants are given the notice contemplated in Section 7.3(2) (or
 such later expiry date as the Board may prescribe), such unexercised Awards shall, unless
 the Board otherwise determines, terminate and expire following the completion of the proposed
 Change in Control. If, for any reason, the Change in Control does not occur within the contemplated
 time period, the satisfaction of the Performance Criteria, the acceleration of the vesting
 and the expiry date of the Awards shall be retracted and vesting shall instead revert to
 the manner provided in the Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) To the extent that the Change
 in Control would also result in a capital reorganization, arrangement, amalgamation or reclassification
 of the share capital of the Corporation and the Board does not change the Performance Criteria
 or accelerate the vesting and/or the expiry date of Awards pursuant to Section 7.3(3),
 the Corporation shall make adequate provisions to ensure that, upon completion of the proposed
 Change in Control, the number and kind of shares subject to outstanding Awards and/or the
 Option Price per share of Options shall be appropriately adjusted (including by substituting
 the Awards for awards to acquire securities in any successor entity to the Corporation) in
 such manner as the Board considers equitable to prevent substantial dilution or enlargement
 of the rights granted to Participants. The Board may make changes to the terms of the Awards
 or the Plan to the extent necessary or desirable to comply with any rules, regulations or
 policies of any stock exchange on which any securities of the Corporation may be listed,
 provided that the value of previously granted Awards and the rights of Participants
are not materially adversely affected by any such changes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Notwithstanding anything else
 to the contrary herein, in the event of a potential Change in Control, the Board shall have
 the power, in its sole discretion, to modify the terms of this Plan and/or the Awards (including,
 for greater certainty, to cause the vesting of all unvested Awards) to assist the Participants
 to tender into a take-over bid or other transaction leading to a Change in Control. For greater
 certainty, in the event of a takeover bid or other transaction leading to a Change in Control,
 the Board shall have the power, in its sole discretion, to permit Participants to conditionally
 exercise their Awards, such conditional exercise to be conditional upon the take-up by such
 offeror of the Shares or other securities tendered to such take-over bid in accordance with
 the terms of such take-over bid (or the effectiveness of such other transaction leading to
 a Change in Control). If, however, the potential Change in Control referred to in this Section 7.3(5) is
 not completed within the time specified therein (as the same may be extended), then notwithstanding
 this Section 7.3(5) or the definition of "Change in Control": (i) any
 conditional exercise of vested Awards shall be deemed to be null, void and of no effect,
 and such conditionally exercised Awards shall for all purposes be deemed not to have been
 exercised, (ii) Shares which were issued pursuant to the exercise of awards which vested
 pursuant to this Section 7.3 shall be returned by the Participant to the Corporation
 and reinstated as authorized but unissued Shares, and (iii) the original terms applicable
 to Awards which vested pursuant to this Section 7.3 shall be reinstated.

**ARTICLE 8** <br> **MISCELLANEOUS**

**Section 8.1** **Use of an Administrative Agent and Trustee.**

The Board may in its sole discretion appoint from time to time one or more entities to act as administrative agent to administer the Awards granted under the Plan and to act as trustee to hold and administer the assets that may be held in respect of Awards granted under the Plan, the whole in accordance with the terms and conditions determined by the Board in its sole discretion. The Corporation and the administrative agent will maintain records showing the number of Awards granted to each Participant under the Plan.

**Section 8.2** **Tax Withholding.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Notwithstanding any other provision
 of this Plan, all distributions, delivery of Shares or payments to a Participant (or to the
 liquidator, executor or administrator, as the case may be, of the estate of the Participant)
 under the Plan shall be made net of applicable source deductions. If the event giving rise
 to the withholding obligation involves an issuance or delivery of Shares, then, the withholding
 obligation may be satisfied by (a) having the Participant elect to have the appropriate
 number of such Shares sold by the Corporation, the Corporation's transfer agent and
 registrar or any trustee appointed by the Corporation pursuant to Section 8.1 hereof,
 on behalf of and as agent for the Participant as soon as permissible and practicable, with
 the proceeds of such sale being delivered to the Corporation, which will in turn remit such
 amounts to the appropriate governmental authorities, or (b) any other mechanism as may be
required or appropriate to conform with local tax and other rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Notwithstanding the first paragraph
 of this Section 8.2, the applicable tax withholdings may be waived where the Participant
 directs in writing that a payment be made directly to the Participant's registered
 retirement savings plan in circumstances to which regulation 100(3) of the regulations
 of the Tax Act apply.

**Section 8.3** **Reorganization of the Corporation.**

The existence of any Awards shall not affect in any way the right or power of the Corporation or its shareholders to make or authorize any adjustment, recapitalization, reorganization or other change in the Corporation's capital structure or its business, or any amalgamation, combination, merger or consolidation involving the Corporation or to create or issue any bonds, debentures, shares or other securities of the Corporation or the rights and conditions attaching thereto or to affect the dissolution or liquidation of the Corporation or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar nature or otherwise.

**Section 8.4** **Governing Laws.**

The Plan and all matters to which reference is made herein shall be governed by and interpreted in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

**Section 8.5** **Severability.**

The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision and any invalid or unenforceable provision shall be severed from the Plan.

**Section 8.6** **Effective Date of the Plan.**

The Plan was approved by the Board and shall take effect on October 25, 2022.

**APPENDIX "A"**

**FORM OF OPTION GRANT AGREEMENT**

**LIBERTY DEFENSE HOLDINGS, LTD.**

**OPTION GRANT AGREEMENT**

This Stock Option Grant Agreement (the "**Option Grant Agreement**") is entered into between Liberty Defense Holdings, Ltd. (the "Corporation"), and the optionee named below (the "**Optionee**") pursuant to and on the terms and subject to the conditions of the Corporation's omnibus long-term incentive plan (the "**Plan**"). Capitalized terms used and not otherwise defined in this Option Grant Agreement shall have the meanings set forth in the Plan.

The terms of the option (the "**Option**"), in addition to those terms set forth in the Plan, are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  **<u>Optionee</u>** . The Optionee is ● and the address of the Optionee is currently •.

2.  **<u>Number of Shares</u>** . The Optionee may purchase up to •
 Shares of the Corporation (the "**Option Shares**") pursuant to this Option,
 as and to the extent that the Option vests and becomes exercisable as set forth in section
 6 of this Option Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  **<u>Option Price</u>** . The exercise price is Cdn $● per Option Share (the "**Option Price** ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.  **<u>Date Option Granted</u>** . The Option was granted on •.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.  **<u>Term of Option</u>** . The Option terminates on ● (the "**Expiry Date** ").

6.  **<u>Vesting</u>** . The Option to purchase Option Shares shall
 vest and become exercisable as follows: ● .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.  **<u>Exercise of Options</u>** . In order to exercise the Option,
 the Optionee shall notify the Corporation in the form annexed hereto as Schedule A, whereupon
 the Corporation shall use reasonable efforts to cause the Optionee to receive a certificate
 representing the relevant number of fully paid and non-assessable Shares in the Corporation.

8.  **<u>Transfer of Option</u>** . The Option is not transferable or
 assignable except in accordance with the Plan.

9.  **<u>Inconsistency</u>** . This Option Grant Agreement is subject
 to the terms and conditions of the Plan and, in the event of any inconsistency or contradiction
 between the terms of this Option Grant Agreement and the Plan, the terms of the Plan shall
 govern.

10.  **<u>Severability</u>** . Wherever possible, each provision of
 this Option Grant Agreement shall be interpreted in such manner as to be effective and valid
 under applicable law, but if any provision of this Option Grant Agreement is held to be invalid,
 illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction,
 such invalidity, illegality or unenforceability shall not affect any other provision or any
 other jurisdiction, but this Option Grant Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

A- 1

11.  **<u>Entire Agreement</u>** . This Option Grant Agreement and the
 Plan embody the entire agreement and understanding among the parties and supersede and preempt
 any prior understandings, agreements or representations by or among the parties, written
 or oral, which may have related to the subject matter hereof in any way.

12.  **<u>Successors and Assigns</u>** . This Option Grant Agreement
 shall bind and enure to the benefit of the Optionee and the Corporation and their respective
 successors and permitted assigns.

13.  **<u>Time of the Essence</u>** . Time shall be of the essence of
 this Agreement and of every part hereof.

14.  **<u>Governing Law</u>** . This Agreement and the Option shall
 be governed by and interpreted and enforced in accordance with the laws of the Province of
 Ontario and the federal laws of Canada applicable therein.

15.  **<u>Counterparts</u>** . This Option Grant Agreement may be executed
 in separate counterparts, each of which is deemed to be an original and all of which taken
 together constitute one and the same agreement.

*[Remainder of this page left intentionally blank; Signature page follows]*

A- 2

By signing this Agreement, the Optionee acknowledges that the Optionee has been provided a copy of and has read and understands the Plan and agrees to the terms and conditions of the Plan and this Option Grant Agreement.

IN WITNESS WHEREOF the parties hereof have executed this Option Grant Agreement as of the<u> </u> day of<u> </u>, 20<u> </u>.

---

| | |
|:---|:---|
| **LIBERTY DEFENSE HOLDINGS, LTD.** | **LIBERTY DEFENSE HOLDINGS, LTD.** |
| By: |  |
|  | Name: |
|  | Title: |

---

A- 3

**SCHEDULE A**

**ELECTION TO EXERCISE STOCK OPTIONS**

---

| | |
|:---|:---|
| **TO:** | **LIBERTY DEFENSE HOLDINGS, LTD. (the** "**Corporation**"**)** |
| **DATE:** | <u> </u>,<u> </u> |

---

The undersigned Optionee hereby elects to exercise Options granted by the Corporation to the undersigned pursuant to an Option Grant Agreement dated<u> </u>, 20<u> </u> under the Corporation's omnibus long-term incentive plan (the "**Plan**"), for the number Shares set forth below. Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Plan.

---

| | |
|:---|:---|
| Number of Shares to be Acquired: | <u> </u> |
| Option Price (per Share): | $<u> </u> |
| Aggregate Purchase Price: | $<u> </u> |
| Amount enclosed that is payable on account of any source deductions relating to this Option exercise (contact the Corporation for details of such amount): | <br> $<u> </u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◻ Or check here if alternative arrangements have been made with the Corporation; |  |

---

The undersigned hereby tenders a certified cheque, bank draft or other form of payment confirmed as acceptable by the Corporation for such aggregate purchase price, and, if applicable, all source deductions, and directs such Shares to be registered in the name of<u> </u>

*[Remainder of this page left intentionally blank; Signature page follows]*

A- 1

IN WITNESS WHEREOF the parties hereof have executed this Option Grant Agreement as of the<u> </u> day of<u> </u>, 20<u> </u>.

**[Insert Optionee's Name]**

**APPENDIX "B"**

**FORM OF DSU GRANT AGREEMENT**

**LIBERTY DEFENSE HOLDINGS, LTD.**

**DEFERRED SHARE UNIT GRANT AGREEMENT**

---

| | |
|:---|:---|
| **Name:** | **[name of DSU Participant]** |

---

---

| | |
|:---|:---|
| **Award Date:** | **[insert date]** |

---

Liberty Defense Holdings, Ltd. (the "**Corporation**") has adopted the omnibus long term incentive plan (the "**Plan**"). Your award is governed in all respects by the terms of the Plan, and the provisions of the Plan are hereby incorporated by reference. For greater certainty, the provisions set out in Article 4 and Article 6 of the Plan applicable to DSUs shall be deemed to form part of this DSU Grant Agreement *mutatis mutandis*. Capitalized terms used and not otherwise defined in this DSU Grant Agreement shall have the meanings set forth in the Plan. If there is a conflict between the terms of this DSU Grant Agreement and the Plan, the terms of the Plan shall govern.

---

| | |
|:---|:---|
| **Your Award** | The Corporation hereby grants to you ● DSUs. |
| On behalf of the Corporation: |  |
| **LIBERTY DEFENSE HOLDINGS, LTD.** |  |
| Name: |  |
| Title: |  |

---

B- 1

**APPENDIX "C"**

**FORM OF RSU GRANT AGREEMENT**

**LIBERTY DEFENSE HOLDINGS, LTD.**

**RESTRICTED SHARE UNIT GRANT AGREEMENT**

This restricted share unit agreement ("**RSU Grant Agreement**") is entered into between Liberty Defense Holdings, Ltd. (the "**Corporation**") and the Participant named below (the "**Recipient**") of the restricted share units ("**RSUs**") pursuant to the Corporation's omnibus long-term incentive plan (the "**Plan**"). Capitalized terms used and not otherwise defined in this RSU Grant Agreement shall have the meanings set forth in the Plan.

The terms of the RSUs, in addition to those terms set forth in the Plan, are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **Recipient**. The Recipient is ^ and the address of the Recipient is currently ^.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **Grant of RSUs**. The Recipient is hereby granted ^ RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **Settlement**. The RSUs shall be settled as follows:

---

| | | |
|:---|:---|:---|
| *(Select one of the following three options):* | *(Select one of the following three options):* | *(Select one of the following three options):* |
| (a) | ◻ | One Share issued from treasury per RSU. |
| (b) | ◻ | Cash Equivalent of one Share per RSU. |
| (c) | ◻ | Either (a), (b), or a combination thereof, at the election of the Recipient. |

---

**Restriction Period**. In accordance with Section 5.3 of the Plan, the restriction period in respect of the RSUs granted hereunder, as determined by the Board, shall commence on ^ and terminate on ●.

4. **Performance Criteria**. ●.

5. **Performance Period**. ●.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **Vesting**. The RSUs will vest as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **Transfer of RSUs**. The RSUs granted hereunder are not-transferable or assignable except in accordance with the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **Inconsistency**. This RSU Grant Agreement is subject to the terms and conditions of the Plan and, in the event of any inconsistency
or contradiction between the terms of this RSU Grant Agreement and the Plan, the terms of the Plan shall govern.

C- 1

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **Severability**. Wherever possible, each provision of this RSU Grant Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this RSU Grant Agreement is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any
other provision or any other jurisdiction, but this RSU Grant Agreement shall be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **Entire Agreement**. This RSU Grant Agreement and the Plan embody the entire agreement and understanding among the parties and
supersede and pre-empt any prior understandings, agreements or representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **Successors and Assigns**. This RSU Grant Agreement shall bind and enure to the benefit of the Recipient and the Corporation and
their respective successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **Time of the Essence**. Time shall be of the essence of this Agreement and of every part hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **Governing Law**. This RSU Grant Agreement and the RSUs shall be governed by and interpreted and enforced in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **Counterparts**. This RSU Grant Agreement may be executed in separate counterparts, each of which is deemed to be an original
and all of which taken together constitute one and the same agreement.

*[Remainder of page left intentionally blank; Signature page follows]*

C- 2

By signing this RSU Grant Agreement, the Participant acknowledges that he or she has been provided with, has read and understands the Plan and this RSU Grant Agreement.

IN WITNESS WHEREOF the parties hereof have executed this RSU Grant Agreement as of the<u> </u> day of<u> </u>, 20<u> </u>.

---

| | |
|:---|:---|
| **LIBERTY DEFENSE HOLDINGS, LTD.** | **LIBERTY DEFENSE HOLDINGS, LTD.** |
| By: |  |
|  | Name: |
|  | Title: |

---

C- 3

## Exhibit 10.3

**Exhibit 10.3**

**LIBERTY DEFENSE HOLDINGS, LTD.**

**OMNIBUS LONG-TERM INCENTIVE PLAN**

**March 27, 2019, as Amended October 25, 2022 and October 26, 2023**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| Article 1 Definitions | Article 1 Definitions | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 1.1 | Definitions | 1 |
| Article 2 Purpose and Administration of the Plan; Granting Of Awards | Article 2 Purpose and Administration of the Plan; Granting Of Awards | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.1 | Purpose of the Plan | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.2 | Implementation and Administration of the Plan | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.3 | Eligible Participants | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.4 | Shares Subject to the Plan | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.5 | Granting of Awards | 8 |
| Article 3 Options | Article 3 Options | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.1 | Nature of Options | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.2 | Option Awards | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.3 | Option Price | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.4 | Option Term | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.5 | Exercise of Options | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.6 | Method of Exercise and Payment of Purchase Price | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.7 | Cashless Exercise | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.8 | Option Grant Agreements | 12 |
| Article 4 Deferred Share Units | Article 4 Deferred Share Units | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.1 | Nature of DSUs | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.2 | DSU Awards | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.3 | Redemption of DSUs | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.4 | Termination of Unvested DSU Awards | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.5 | DSU Grant Agreements | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.6 | Award of Dividend Equivalents. | 15 |
| Article 5 Restricted Share Units | Article 5 Restricted Share Units | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.1 | Nature of RSUs | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.2 | RSU Awards | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.3 | Restriction Period | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.4 | Performance Criteria and Performance Period | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.5 | RSU Vesting Determination Date | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.6 | Settlement of RSUs | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.7 | Determination of Amounts | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.8 | RSU Grant Agreements | 19 |

---

---

| | | |
|:---|:---|:---|
| Article 6 General Conditions | Article 6 General Conditions | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.1 | General Conditions Applicable to Awards | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.2 | General Conditions Applicable to Awards | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.3 | Unfunded Plan | 21 |
| Article 7 Adjustments and Amendments | Article 7 Adjustments and Amendments | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.1 | Adjustment to Shares Subject to Outstanding Awards | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.2 | Amendment or Discontinuance of the Plan | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.3 | Change in Control | 25 |
| Article 8 Miscellaneous | Article 8 Miscellaneous | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.1 | Use of an Administrative Agent and Trustee | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.2 | Tax Withholding | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.3 | Reorganization of the Corporation. | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.4 | Governing Laws | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.5 | Severability | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.6 | Effective Date of the Plan | 27 |

---

Appendix "A" Form Of Option Grant Agreement

Schedule A Election to Exercise Stock Options

Appendix "B" Form of DSU Grant Agreement

Appendix "C" Form Of RSU Grant Agreement

- ii -

**LIBERTY DEFENSE HOLDINGS, LTD.**

**OMNIBUS LONG-TERM INCENTIVE PLAN**

Liberty Defense Holdings, Ltd. (the "**Corporation**") hereby establishes an omnibus longterm incentive plan for certain qualified directors, officers, Employees, Consultants and service providers providing ongoing services to the Corporation and its Affiliates (as defined herein) that can have an impact on the Corporation's long-term results.

**ARTICLE 1**

**DEFINITIONS**

**Section 1.1** **Definitions.**

Where used herein or in any amendments hereto or in any communication required or permitted to be given hereunder, the following terms shall have the following meanings, respectively, unless the context otherwise requires:

"**Account**" means an account maintained for each Participant on the books of the Corporation which will be credited with Awards in accordance with the terms of this Plan;

"**Affiliates**" has the meaning given to this term in the *Securities Act* (British Columbia), as such legislation may be amended, supplemented or replaced from time to time;

"**Associate**", where used to indicate a relationship with a Participant, means (i) any partner of that Participant, and (ii) the spouse of that Participant and that Participant's children, as well as that Participant's relatives and that Participant's spouse's relatives, if they share that Participant's residence;

"**Awards**" means Options, RSUs and DSUs granted to a Participant pursuant to the terms of the Plan;

"**Black-Out Period**" means a period of time when, pursuant to any policies of the Corporation, any securities of the Corporation may not be traded by certain Persons designated by the Corporation;

"**Board**" has the meaning ascribed thereto in Section 2.2(1) hereof;

"**Business Day**" means a day other than a Saturday, Sunday or statutory holiday, when Canadian chartered banks are generally open for business in Vancouver, British Columbia, Canada, for the transaction of banking business;

"**Cash Equivalent**" means the amount of money equal to the Market Value multiplied by the number of vested RSUs or DSUs in the Participant's Account, net of any applicable taxes in accordance with Section 8.2, on the RSU Settlement Date or the date the Corporation receives, or is deemed to receive, the DSU Redemption Notice, as applicable;

"**Change in Control**" means the occurrence of any of the following events: (i) the acquisition, directly or indirectly, by any Person or group of Persons acting jointly or in concert, within the meaning of National Instrument 62-104 - Takeover Bids and Issuer Bids (or any successor instrument thereto), of a beneficial interest in voting or equity securities of the Corporation, together with all voting or equity securities of the Corporation at the time held beneficially, directly or indirectly by such person or persons acting jointly or in concert, equal to more than 50% of the votes associated with the outstanding voting securities of the Corporation; (ii) a merger, consolidation, plan of arrangement or reorganization of the Corporation that results in the beneficial, direct or indirect transfer of more than 50% of the total voting power of the resulting entity's outstanding securities to a person, or group of persons acting jointly and in concert, who are different from the person(s) that have, beneficially, directly or indirectly, more than 50% of the total voting power prior to such transaction; (iii) any sale, lease, exchange or other transfer (in one transaction or series of related transactions) of all or substantially all of the Corporation's property and assets, or (iv) the Corporation's shareholders approving any plan or proposal for the liquidation or dissolution of the Corporation;

"**Code of Conduct**" means any code of conduct adopted by the Corporation, as modified from time to time;

"**Committee**" has the meaning ascribed thereto in Section 2.2(1) hereof;

"**Consultant**" has the meaning given to the term in Policy 4.4 of the TSXV Policies, as same may be amended, supplemented or replaced from time to time;

"**Corporation**" means **Liberty Defense Holdings, Ltd.**, a corporation existing under the *Business Corporations Act* (British Columbia), as amended from time to time;

"**Disinterested Shareholder Approval**" means the approval of a majority of shareholders of the Corporation voting on a resolution at a duly called and held meeting of such shareholders, excluding votes of Insiders to whom Options or Awards may be granted under the Plan;

"**Dividend Equivalent**" means a cash equivalent in value to a dividend paid on a Share credited to a Participant's Account;

"**DSU**" means a deferred share unit, which is a bookkeeping entry equivalent in value to a Share credited to a Participant's Account in accordance with Article 4 hereof;

"**DSU Awards**" means DSUs granted to a Participant pursuant to the terms of the Plan;

"**DSU Grant Agreement**" means a written letter agreement between the Corporation and a Participant evidencing the grant of DSUs and the terms and conditions thereof, substantially in the form of Appendix "B" hereto;

"**DSU Redemption Notice**" has the meaning ascribed thereto in Section 4.3(1) hereof;

"**Eligible Director**" means a member of the Board who, at the time of execution of a Grant Agreement, and at all times thereafter while they continue to serve as a member of the Board, are not officers, senior executives or other Employees of the Corporation or a Subsidiary, consultants or service providers providing ongoing services to the Corporation and its Affiliates;

"**Eligible Participants**" has the meaning ascribed thereto in Section 2.3(1) hereof;

"**Employee**" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) an individual who is considered
 an employee of the Corporation or its subsidiary under the *Income Tax Act* (Canada)
 (and for whom income tax, employment insurance and CPP deductions must be made at source);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) an individual who works full-time
 for the Corporation or its subsidiary providing services normally provided by an employee
 and who is subject to the same control and direction by the Corporation over the details
 and methods of work as an employee of the Corporation, but for whom income tax deductions
 are not made at source;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) an individual who works for the
 Corporation or its subsidiary on a continuing and regular basis for a minimum amount of time
 per week (the number of hours should be disclosed in the submission) providing services normally
 provided by an employee and who is subject to the same control and direction by the Corporation
 over the details and methods of work as an employee of the Corporation, but for whom income
 tax deductions are not made at source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any employee of the Corporation
 or an Affiliate. Directors who are not otherwise employed by the Corporation or an Affiliate
 shall not be considered Employees under this Plan;

"**Employment Agreement**" means, with respect to any Participant, any written employment agreement between the Corporation or an Affiliate and such Participant;

"**Exchange**" the principal stock exchange on which the Shares are listed, including the TSXV or the TSX;

"**Exchange Hold Period**" has the meaning given to the term in Policy 1.1 of the TSXV Policies, as same may be amended, supplemented or replaced from time to time;

"**Exercise Notice**" means a notice in writing signed by a Participant and stating the Participant's intention to exercise a particular Award, if applicable;

"**Exercise Price**" means the amount payable per Share on the exercise of an Option, as determined in accordance with the terms hereof;

"**Grant Agreement**" means an agreement evidencing the grant to a Participant of an Award, including an Option Grant Agreement, a DSU Grant Agreement, an RSU Grant Agreement or an Employment Agreement;

"**Insider**" has the meaning given to the term in Policy 1.1 of the TSXV Policies, as same may be amended, supplemented or replaced from time to time;

"**Investor Relations Activities**" has the meaning given to the term in Policy 1.1 of the TSXV Policies, as same may be amended, supplemented or replaced from time to time;

"**Investor Relations Individual**" means a Person who provides Investor Relations Activities to the Corporation or a shareholder of the Corporation;

"**Market Value**" means, at any date when the market value of Shares of the Corporation is to be determined, the closing price of the Shares on the Trading Day prior to the date of grant on the principal stock exchange on which the Shares are listed, or if the Shares of the Corporation are not listed on any stock exchange, the value as is determined solely by the Board, acting reasonably and in good faith;

"**Option**" means an option granted by the Corporation to a Participant entitling such Participant to acquire a designated number of Shares from treasury at the Option Price, subject to the provisions hereof;

"**Option Grant Agreement**" means a written letter agreement between the Corporation and a Participant evidencing the grant of Options and the terms and conditions thereof, substantially in the form set out in Appendix "A" hereto;

"**Option Price**" has the meaning ascribed thereto in Section 3.3 hereof;

"**Option Term**" has the meaning ascribed thereto in Section 3.4 hereof;

"**Outstanding Issue**" means the number of Shares that are outstanding as at a specified time, on a non-diluted basis;

"**Participant's Account**" means an account maintained for each Participant's participation in DSUs and/or RSUs under the Plan;

"**Participants**" means Eligible Participants that are granted Awards under the Plan;

"**Performance Criteria**" means criteria established by the Board which, without limitation, may include criteria based on the Participant's personal performance and/or the financial performance of the Corporation and/or of its Affiliates, and that may be used to determine the vesting of the Awards, when applicable;

"**Performance Period**" means the period determined by the Board pursuant to Section 5.3 hereof;

"**Person**" means an individual, corporation, company, cooperative, partnership, trust, unincorporated association, entity with juridical personality or governmental authority or body, and pronouns which refer to a Person shall have a similarly extended meaning;

"**Plan**" means this Omnibus Long-term Incentive Plan, as amended and restated from time to time;

"**Restriction Period**" means the period determined by the Board pursuant to Section 5.3 hereof;

"**RSU**" means a right awarded to a Participant to receive a payment in the form of Shares as provided in Article 4 hereof and subject to the terms and conditions of this Plan;

"**RSU Awards**" means RSUs granted to a Participant pursuant to the terms of the Plan;

"**RSU Grant Agreement**" means a written letter agreement between the Corporation and a Participant evidencing a grant of RSUs and the terms and conditions thereof, such RSU Grant Agreement to be substantially in the form of Appendix "C" hereto;

"**RSU Settlement Date**" has the meaning determined in Section 5.6(1)(a);

"**RSU Settlement Notice**" means a notice by a Participant to the Corporation electing the desired form of settlement of vested RSUs.

"**RSU Vesting Determination Date**" has the meaning described thereto in Section 5.5 hereof;

"**Share Compensation Arrangement**" means a stock option, stock option plan, employee stock purchase plan, long-term incentive plan or any other compensation or incentive mechanism involving the issuance or potential issuance of Shares to one or more full-time employees, directors, officers, Insiders, service providers or Consultants of the Corporation or a Subsidiary including a Share purchase from treasury by a full-time employee, director, officer, Insider, service provider or Consultant which is financially assisted by the Corporation or a Subsidiary by way of a loan, guarantee or otherwise;

"**Shares**" means the common shares in the capital of the Corporation;

"**Subsidiary**" means a corporation, company, partnership or other body corporate that is controlled, directly or indirectly, by the Corporation;

"**Successor Corporation**" has the meaning ascribed thereto in Section 7.1(3) hereof;

"**Tax Act**" means the *Income Tax Act* (Canada) and its regulations thereunder, as amended from time to time;

"**Termination Date**" means the date on which a Participant ceases to be an Eligible Participant;

"**Trading Day**" means any day on which the TSXV or TSX is open for trading;

"**TSX**" means the Toronto Stock Exchange;

"**TSXV**" means the TSX Venture Exchange; and

"**TSXV Policies**" refers to policies contained within the TSX Venture Exchange Corporate Finance Manual.

**"VWAP**" means the volume-weighted average trading price of the Shares on the Exchange calculated by dividing the total value by the total volume of the Shares traded for the five trading days immediately preceding the exercise of the subject Option, provided that the Exchange may exclude internal crosses and certain other special terms trades from the calculation.

**ARTICLE 2**

**PURPOSE AND ADMINISTRATION OF THE PLAN; GRANTING OF AWARDS**

**Section 2.1** **Purpose of the Plan.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The purpose of the Plan is to
 permit the Corporation to grant Awards to Eligible Participants, subject to certain conditions
 as hereinafter set forth, for the following purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to increase the interest in the
 Corporation's welfare of those Eligible Participants, who share responsibility for
 the management, growth and protection of the business of the Corporation or a Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) to provide an incentive to such
 Eligible Participants to continue their services for the Corporation or a Subsidiary and
 to encourage such Eligible Participants whose skills, performance and loyalty to the objectives
 and interests of the Corporation or a Subsidiary are necessary or essential to its success,
 image, reputation or activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) to reward the Participants for
 their performance of services while working for the Corporation or a Subsidiary; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) to provide a means through which
 the Corporation or a Subsidiary may attract and retain able Persons to enter its employment
 or into contractual arrangements.

**Section 2.2** **Implementation and Administration of the Plan.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Plan shall be administered
 and interpreted by the Board or, if the Board by resolution so decides, by a committee appointed
 by the Board (the "**Committee**") and consisting of not less than three (3) members
 of the Board. If a Committee is appointed for this purpose, all references to the term "Board"
 will be deemed to be references to the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Board may, from time to time,
 as it may deem expedient, adopt, amend and rescind rules and regulations for carrying
 out the provisions and purposes of the Plan, subject to any applicable rules of the
 Exchange. Subject to the provisions of the Plan, the Board is authorized, in its sole discretion,
 to make such determinations under, and such interpretations of, and take such steps and actions
 in connection with, the proper administration of the Plan as it may deem necessary or advisable.
 The interpretation, construction and application of the Plan and any provisions hereof made
 by the Board shall be final and binding on all Eligible Participants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) No member of the Board shall be
 liable for any action or determination taken or made in good faith in the administration,
 interpretation, construction or application of the Plan or any Award granted hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Any determination approved by
 a majority of the Board shall be deemed to be a determination of that matter by the Board.

**Section 2.3** **Eligible Participants.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Persons who shall be eligible
 to receive Awards ()"**Eligible Participants**") shall be the directors, officers,
 senior executives and other Employees of the Corporation or a Subsidiary, Consultants and
 service providers providing ongoing services to the Corporation and its Affiliates, who the
 Board may determine from time to time, in its sole discretion, to hold contributory positions
 in the Corporation or a Subsidiary. In determining Awards to be granted under the Plan, the
 Board shall give due consideration to the value of each Eligible Participant's present
 and potential future contribution to the Corporation's success. For greater certainty,
 a Person whose employment with the Corporation or a Subsidiary has ceased for any reason,
 or who has given notice or been given notice of such cessation, whether such cessation was
 initiated by such Employee, service provider, the Corporation or such Subsidiary, as the
 case may be, shall cease to be eligible to receive Awards hereunder as of the date on which
 such Person provides notice to the Corporation or the Subsidiary, as the case may be, in
 writing or verbally, of such cessation, or on the Termination Date for any cessation of a
 Participant's employment initiated by the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For Eligible Participants who
 are Employees, Consultants or Eligible Directors of the Corporation, the Corporation and
 the Participant are responsible for ensuring and confirming that the Participant is a bona
 fide Employee, Consultant or Eligible Director, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Participation in the Plan shall
 be entirely voluntary and any decision not to participate shall not affect an Eligible Participant's
 relationship or employment with the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Notwithstanding any express or
 implied term of this Plan to the contrary, the granting of an Award pursuant to the Plan
 shall in no way be construed as a guarantee of employment or appointment by the Corporation
 to the Participant.

**Section 2.4** **Shares Subject to the Plan.**

Subject to adjustment pursuant to provisions of Article 7 hereof, and as may be approved by the Exchange and the shareholders of the Corporation from time to time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The total number of Shares reserved and available for the grant and issuance of Options shall not exceed ten percent (10%) of the Outstanding
Issue, or such other number as may be approved by the TSXV and the shareholders of the Corporation from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The maximum number of Shares issued, at any time, under this Plan and all other proposed or established Share Compensation Arrangements,
shall not exceed ten percent (10%) of the Outstanding Issue from time to time. For greater certainty, the number of Shares reserved and
available for grant and issuance pursuant to DSUs, RSUs and Options shall not, in aggregate, exceed ten percent (10%) of the Outstanding
Issue from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The maximum number of Shares issued to Eligible Participants who are Insiders, at any point in time, under this Plan and all other proposed
or established Share Compensation Arrangements, shall not exceed ten percent (10%) of the Outstanding Issue from time to time, pursuant to section 4.11(b) of TSXV Policy
4.4. - 7 -

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The maximum number of Shares granted, pursuant to all proposed or established Share Compensation Arrangements, in any twelve (12) month
period, to Eligible Participants who are Insiders, shall not exceed ten percent (10%) of the Outstanding Issue from time to time, pursuant
to section 4.11(c) of TSXV Policy 4.4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) The maximum number of Shares issued to any one Person (and companies wholly owned by that Person) within any one (1) year period shall
not exceed five percent (5%) of the Outstanding Issue, calculated on the date an Option is granted to the Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) The maximum number of Shares issued to any one Consultant, within any one (1) year period, under this Plan and all other proposed or established
Share Compensation Arrangements, shall not exceed two percent (2%) of the Outstanding Issue calculated as at the date any Security Based
Compensation is granted or issued to any Insider.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) The maximum number of Shares issued, in aggregate, to all Investor Relations Individuals, within any twelve (12) month period, under this
Plan and any other proposed or established Share Compensation Arrangements, shall not exceed two percent (2%) of the Outstanding Issue
from time to time, calculated at the date an Option is granted to such Investor Relations Individuals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Investor Relations Individuals are eligible pursuant to this Plan to receive only Awards of Options. Investor Relations Individuals are
not eligible to receive DSUs, RSUs or any Award other than Options, pursuant to this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) Any Award granted pursuant to the Plan and any other Share Compensation Arrangements, prior to a Participant becoming an Insider, shall
be included for the purposes of the limits set out in Section 2.4(2) and Section 2.4(5).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) The maximum number of Awards, excluding Options, issued to any one Eligible Participant shall not exceed: (i) 1% of the Outstanding Issue
at the date such Award is granted; and (ii) 2% of the Outstanding Issue within the most recent twelve (12) month period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) Shares in respect of which an Award is granted under the Plan, but not exercised prior to the termination of such Award or not vested
or settled prior to the termination of such Award due to the expiration, termination, cancellation or lapse of such Award, shall be available
for Awards to be granted thereafter pursuant to the provisions of the Plan.

**Section 2.5** **Granting of Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Any Award granted under the Plan
 shall be subject to the requirement that, if at any time counsel to the Corporation shall
 determine that the listing, registration or qualification of the Shares subject to such Award,
 if applicable, upon any securities exchange or under any law or regulation of any jurisdiction,
or the consent or approval of any securities exchange or any governmental or regulatory body, is necessary as a condition of, or in connection
with, the grant or exercise of such Award or the issuance or purchase of Shares thereunder, if applicable, such Award may not be accepted
or exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained
on conditions acceptable to the Board. Nothing herein shall be deemed to require the Corporation to apply for or to obtain such listing,
registration, qualification, consent or approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Any Award granted under the Plan
 shall be subject to the requirement that the Corporation has the right to place any restriction
 or legend on any securities issued pursuant to this Plan including, but in no way limited
 to, placing a legend to the effect that the securities have not been registered under the
 United States Securities Act of 1933 and may not be offered or sold in the United States
 unless registration or an exemption from registration is available.

**ARTICLE 3** 

**OPTIONS**

**Section 3.1** **Nature of Options.**

An Option is an option granted by the Corporation to a Participant entitling such Participant to acquire a designated number of Shares from treasury at the Option Price, subject to the provisions hereof.

**Section 3.2** **Option Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to the provisions set
 forth in this Plan and any shareholder or regulatory approval which may be required, the
 Board shall, from time to time by resolution, in its sole discretion, (i) designate
 the Eligible Participants who may receive Options under the Plan, (ii) fix the number of Options,
if any, to be granted to each Eligible Participant and the date or dates on which such Options shall be granted, and (iii) determine
the price per Share to be payable upon the exercise of each such Option (the "**Option Price**") and the relevant vesting
provisions (including Performance Criteria, if applicable) and Option Term for such Eligible Participants, subject to the terms and conditions
prescribed in this Plan, in any Option Grant Agreement and any applicable rules of the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Board shall also, from time
 to time by resolution, in its sole discretion,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) designate the Investor Relations Individuals who may receive Options
 under the Plan,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) fix the number of Options, if any, to be granted to each Investor Relations
 Individual and the date or dates on which such Options shall be granted,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) determine the Option Price and the Option Term for such Investor Relations
 Individuals,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) determine relevant vesting provisions (including Performance Criteria,
 if applicable) for such Investor Relations Individuals, provided vesting of the Options will occur in stages over a
period of not less than twelve (12) months with a maximum of 25% of the Options vesting in any three (3) month period, provided
that there can be no acceleration of the vesting requirements applicable to Options granted to Investor Relations Individuals; and

the whole being subject to the terms and conditions prescribed in this Plan, in any Option Grant Agreement and any applicable rules of the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Each Option granted shall be subject to vesting terms as set
forth in the Option Grant Agreement or as otherwise specified by the Board.

**Section 3.3** **Option Price.**

The Option Price for Shares that are the subject of any Option shall be fixed by the Board when such Option is granted, but shall not be less than the Market Value of such Shares at the time of the grant. Where the Exercise Price of an Option is at a discount to the Market Value, all Options and any Shares issued under such Options exercised prior to the expiry of the Exchange Hold Period shall be legended with the Exchange Hold Period commencing on the date the Options were granted.

**Section 3.4** **Option Term.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Board shall determine, at
 the time of granting the particular Option, the period during which the Option is exercisable,
 commencing on the date such Option is granted to the Participant and ending as specified
 in this Plan, or in the Option Grant Agreement, but in no event shall an Option expire on
 a date which is later than ten (10) years from the date the Option is granted ()"**Option Term** "). Unless otherwise determined by the Board, all unexercised Options shall
 be cancelled at the expiry of such Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Should the expiration date for
 an Option fall within a Black-Out Period or within nine (9) Business Days following
 the expiration of a Black-Out Period, such expiration date shall be automatically extended
 without any further act or formality to that date which is the tenth (10th) Business Day
 after the end of the Black-Out Period, such tenth (10th) Business Day to be considered the
 expiration date for such Option for all purposes under the Plan. Notwithstanding Section 7.2
 hereof, the ten (10) Business Day period referred to in this Section 3.4 may not
 be extended by the Board. Notwithstanding the foregoing, in the event that a Participant
 receives Shares in satisfaction of an Award during a Black-Out Period, the Corporation shall
 advise such Participant of the same in writing and such Participant shall not be entitled
 to sell or otherwise dispose of such Shares until such Black-Out Period has expired.

**Section 3.5** **Exercise of Options.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to the provisions of this
 Plan, a Participant shall be entitled to exercise an Option granted to such Participant at
 any time prior to the expiry of the Option Term, subject to vesting limitations which may
 be imposed by the Board at the time such Option is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Prior to its expiration or earlier
 termination in accordance with the Plan, each Option shall be exercisable as to all or such
 part or parts of the optioned Shares and at such time or times and/or pursuant to the achievement
 of such Performance Criteria (if applicable) and/or other vesting conditions as the Board
 at the time of granting the particular Option, may determine in its sole discretion. For
 greater certainty, no Option shall be exercised by a Participant during a Black-Out Period.

**Section 3.6** **Method of Exercise and Payment of Purchase Price.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to the provisions of the
 Plan and the alternative exercise procedures set out herein, an Option granted under the
 Plan may be exercisable (from time to time as provided in Section 3.5 hereof) by the
 Participant (or by the liquidator, executor or administrator, as the case may be, of the
 estate of the Participant) by delivering a fully completed Exercise Notice to the Corporation
 at its registered office to the attention of the Chief Financial Officer & Corporate
 Secretary of the Corporation (or the individual that the Chief Financial Officer &
 Corporate Secretary of the Corporation may from time to time designate), together with a
 bank draft, certified cheque or other form of payment acceptable to the Corporation in an
 amount equal to the aggregate Option Price of the Shares to be purchased pursuant to the
 exercise of the Options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Where Shares are to be issued
 to the Participant pursuant to the terms of this Section 3.6, as soon as practicable
 following the receipt of the Exercise Notice and, if Options are exercised in accordance
 with the terms of Section 3.6(1), the required bank draft, certified cheque or other
 acceptable form of payment, the Corporation shall duly issue such Shares to the Participant
 as fully paid and non-assessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Upon the exercise of an Option
 pursuant to Section 3.6(1), the Corporation shall, as soon as practicable after such
 exercise but no later than ten (10) Business Days following such exercise, forthwith
 cause the transfer agent and registrar of the Shares to either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) deliver to the Participant (or
 to the liquidator, executor or administrator, as the case may be, of the estate of the Participant)
 a certificate in the name of the Participant representing in the aggregate such number of
 Shares as the Participant (or to the liquidator, executor or administrator, as the case may
 be, of the estate of the Participant) shall have then paid for and as are specified in such
 Exercise Notice; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the case of Shares issued in
 uncertificated form, cause the issuance of the aggregate number of Shares the Participant
 (or the liquidator, executor or administrator, as the case may be, of the estate of the Participant)
 shall have then paid for and as are specified in such Exercise Notice to be evidenced by
 a book position on the register of the shareholders of the Corporation to be maintained by
 the transfer agent and registrar of the Shares.

**Section 3.7** **Cashless Exercise**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Subject to the provisions of this
 Plan (including, without limitation Section 8.2) and, upon prior approval of the Board,
 once an Option has vested and become exercisable, an Optionee may elect to exercise such
 Option by either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) excluding Options held by any Investor Relations Service Individual, a "net exercise" procedure in which the Corporation issues to the Optionee, Shares equal to the number determined by dividing (i) the product of the number of Options being exercised multiplied by the difference between the VWAP of the underlying Shares and the Exercise Price of the subject Options by (ii) the VWAP of the underlying Shares; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a broker assisted "cashless exercise" in which the Corporation delivers a copy of irrevocable instructions to a broker engaged for such purposes by the Corporation to sell the Shares otherwise deliverable upon the exercise of the Options and to deliver promptly to the Corporation an amount equal to the Exercise Price and all applicable required withholding obligations a determined by the Corporation against delivery of the Shares to settle the applicable trade.

An Option may be exercised pursuant to this Section 3.7 from time to time by delivery to the Corporation, at its head office or such other place as may be specified by the Corporation of (i) written notice of exercise specifying that the Optionee has elected to effect such a cashless exercise of such Option, the method of cashless exercise, and the number of Options to be exercised and (ii) the payment of an amount for any tax withholding or remittance obligations of the Optionee or the Corporation arising under applicable law and verified by the Corporation to its satisfaction (or by entering into some other arrangement acceptable to the Corporation in its discretion, if any). The Participant shall comply with Section 8.2 of this Plan with regard to any applicable required withholding obligations and with such other procedures and policies as the Corporation may prescribe or determine to be necessary or advisable from time to time including prior written consent of the Board in connection with such exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) In the event of a net exercise
 pursuant to Section 3.7(1)(a) or a cashless exercise pursuant to Section 3.7(1)(b),
 the number of Options exercised, surrendered or converted, and not the number of Shares actually
 issued by the Corporation, must be included in calculating the limits set forth in Section 2.4
 of this Plan.

**Section 3.8** **Option Grant Agreements.**

Options shall be evidenced by an Option Grant Agreement or included in an Employment Agreement or other services agreement, in such form not inconsistent with the Plan as the Board may from time to time determine, provided that the substance of Article 3 and Article 6 hereof be included therein. The Option Grant Agreement shall contain such terms that may be considered necessary in order that the Option will comply with any provisions respecting options in the income tax or other laws in force in any country or jurisdiction of which the Participant may from time to time be a resident or citizen or the rules of any regulatory body having jurisdiction over the Corporation.

**ARTICLE 4<br> DEFERRED SHARE UNIT**

**Section 4.1** **Nature of DSUs.**

A DSU is an Award attributable to a Participant's duties of an office, directorship or employment and that, upon settlement, entitles the recipient Participant to receive such number of Shares as determined by the Board, or to receive the Cash Equivalent or a combination thereof, as the case may be, and is payable after the Termination Date for the Participant.

**Section 4.2** **DSU Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Board shall, from time to
 time by resolution, in its sole discretion, (i) designate the Eligible Participants
 (who, for purposes of the grant of DSUs, shall not include Consultants) who may receive DSU
 Awards under the Plan, (ii) fix the number of DSU Awards to be granted to each Eligible
 Participant and the date or dates on which such DSU Awards shall be granted, and (iii) determine
 the relevant conditions and vesting provisions for such DSU Awards, subject to the terms
 and conditions prescribed in this Plan and in any DSU Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Each DSU shall be subject to vesting
 terms as set forth in the DSU Grant Agreement or as otherwise specified by the Board, and,
 pursuant to TSXV Policy 4.4, s. 4.6, in all instances DSUs will not vest until a minimum
 of one year following award of the DSUs has passed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Subject to vesting and other conditions
 and provisions set forth herein and in the DSU Grant Agreement, each DSU awarded shall entitle
 the Participant to one (1) Share, or the Cash Equivalent, or a combination thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The DSUs are structured so as
 to be considered to be a plan described in section 7 of the Tax Act or any successor to such
 provision.

**Section 4.3** **Redemption of DSUs.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Each Participant shall be entitled
 to redeem his or her DSUs, during the period commencing on the Business Day immediately following
 the Termination Date and ending on December 15 of the second calendar year following
 the Termination Date, or a shorter redemption period set out in the relevant DSU Grant Agreement,
 provided such shorter redemption period is a minimum of one year following the date of grant
 of the DSUs, pursuant to TSXV Policy 4.4, s. 4.6, and such one-year vesting period is stated
 in the DSU Redemption Notice. A Participant may redeem his or her DSUs by providing a written
 notice of settlement to the Corporation setting out the number of DSUs to be settled and
 the particulars regarding the registration of the Shares issuable upon settlement (the "**DSU Redemption Notice** "). Pursuant to TSXV Policy 4.4, s. 4.6, acceleration of vesting
 is permitted if a Participant ceases to be eligible as a Participant in connection with a
 change of control, take-over bid, reverse-take-over or other similar transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) In the event of the death of a
 Participant, the DSU Redemption Notice shall be filed by the administrator or liquidator
 of the estate of the Participant. Pursuant to TSXV Policy 4.4, s. 4.6, acceleration of the vesting
date is permitted in the case of the death of a Participant, and the required minimum of one year vesting period prior to the date of
redemption is waived, and such must be stated in the DSU Redemption Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If a DSU Redemption Notice is
 not received by the Corporation on or before December 15 of the second calendar year
 following the Termination Date, the Participant shall be deemed to have delivered a DSU Redemption
 Notice on that December 15 and the Corporation shall redeem all of the Participant's
 DSUs in exchange for Shares to be delivered to the Participant, administrator or liquidator
 of the estate of the Eligible Director, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) For the purposes of determining
 the number of Shares from treasury to be issued and delivered to an Eligible Director upon
 redemption of DSUs pursuant to Section 4.3, such calculation will be made on the date
 the Corporation receives, or is deemed to receive, the DSU Redemption Notice and be the whole
 number of Shares equal to the whole number of DSUs, having vested within one year from the
 date of grant, then recorded in the Eligible Director's Account which the Eligible
 Director requests or is deemed to request to redeem pursuant to the DSU Redemption Notice.
 Shares issued from treasury will be issued in consideration for the past services of the
 Eligible Director to the Corporation and the entitlement of the Eligible Director under this
 Plan shall be satisfied in full by such issuance of Shares. Provided, however, that if, upon
 receipt by the Corporation of a DSU Redemption Notice pursuant to Section 4.3 hereof,
 the Corporation does not have a sufficient number of Shares reserved and available for issuance
 under this Plan, the Corporation will make payment of a cash amount to a Participant for
 a value equal to the number of DSUs multiplied by the Market Value, subject to any applicable
 deductions and withholdings, in lieu of issuing Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) For purposes of determining the
 Cash Equivalent of DSUs to be made pursuant to Section 4.3, such calculation will be
 made on the date the Corporation receives, or is deemed to receive, the DSU Redemption Notice
 and will be based on the Market Value on that date multiplied by the number of vested DSUs
 in the Participant's Account to settle in cash.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Subject to Section 4.3(6),
 settlement of DSUs shall take place as soon as commercially and reasonably possible following
 receipt or deemed receipt of the DSU Redemption Notice through delivery of a share certificate
 to the Participant or the entry of the Participant's name on the share register for
 the Shares, or in the case of settlement of DSUs for their Cash Equivalent, delivery of a
 cheque to the Participant representing the Cash Equivalent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Notwithstanding any other provision
 of this Plan, in the event that (i) a DSU Redemption Notice is received during a Black-Out
 Period or other trading restriction imposed by the Corporation; or (ii) the Participant
 has not delivered a DSU Redemption Notice and the 90th day following the Termination Date
 falls during a Black-Out Period or other trading restriction imposed by the Corporation,
 then settlement of the applicable DSUs shall be automatically extended to the tenth (10<sup>th</sup>)
 Business Day following the date that such Black-Out Period or other trading restriction
is lifted, terminated or removed. Notwithstanding the foregoing, in the event that a Participant receives Shares in satisfaction of an
Award during a Black-Out Period, the Corporation shall advise such Participant of the same in writing and such Participant shall not
be entitled to sell or otherwise dispose of such Shares until such Black-Out Period has expired.

**Section 4.4** **Termination of Unvested DSU Awards.**

If, as of the date the Corporation receives, or is deemed to receive, the DSU Redemption Notice, a vesting condition applicable to a DSU Award has not been satisfied or, at the discretion of the Board, waived, then such DSU Award, or portion thereof to which the vesting condition applies, shall terminate.

**Section 4.5** **DSU Grant Agreements.**

DSUs shall be evidenced by a DSU Grant Agreement in such form not inconsistent with the Plan as the Board may from time to time determine. The DSU Grant Agreement shall contain such terms that may be considered necessary, including the date of vesting of the DSU a minimum of one year from the date of award, in order that the DSU will comply with any provisions respecting deferred share units in the income tax or other laws in force in any country or jurisdiction of which the Participant may from time to time be a resident or citizen or the rules of any regulatory body having jurisdiction over the Corporation.

**Section 4.6** **Award of Dividend Equivalents.**

Dividend Equivalents may, as determined by the Board in its sole discretion, be awarded in respect of unvested DSUs in a Participant's Account on the same basis as cash dividends declared and paid on Shares as if the Participant was a shareholder of record of Shares on the relevant record date. Dividend Equivalents, if any, will be credited to the Participant's Account in additional DSUs, the number of which shall be equal to a fraction where (a) the numerator is the product of (i) the number of DSUs in such Participant's Account on the date that dividends are paid multiplied by (ii) the dividend paid per Share, and (b) the denominator is the Market Value of one Share calculated on the date that dividends are paid. Any additional DSUs credited to a Participant's Account as a Dividend Equivalent pursuant to this Section 4.6 shall be subject to the same terms and conditions, including vesting conditions, as the underlying DSU Award.

Provided, however, that if, upon receipt by the Corporation of a DSU Redemption Notice pursuant to Section 4.3 hereof, the Corporation does not have a sufficient number of Shares reserved and available for issuance under this Plan, the Corporation will make payment of a cash amount to a Participant for a value equal to the number of DSUs multiplied by the Market Value, subject to any applicable deductions and withholdings, in lieu of issuing Shares.

**ARTICLE 5** **<br> RESTRICTED SHARE UNITS**

**Section 5.1** **Nature of RSUs.**

An RSU is an Award entitling the recipient to acquire Shares, at such purchase price (which may be zero) as determined by the Board, subject to such restrictions, vesting and conditions as the Board may determine at the time of grant. Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives.

**Section 5.2** **RSU Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Board shall, from time to
 time by resolution, in its sole discretion, (i) designate the Eligible Participants
 who may receive RSUs under the Plan, (ii) fix the number of RSUs, if any, to be granted
 to each Eligible Participant and the date or dates on which such RSUs shall be granted, (iii) determine
 the relevant conditions and vesting provisions (including the applicable Performance Period
 and Performance Criteria, if any) and the Restriction Period of such RSUs, (provided, however,
 that no such Restriction Period shall exceed the three (3) years referenced in Section 5.4),
 and (iv) any other terms and conditions applicable to the granted RSUs, which need not
 be identical and which, without limitation, may include non-competition provisions, subject
 to the terms and conditions prescribed in this Plan and in any RSU Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Each RSU shall be subject to
 vesting terms as set forth in the RSU Grant Agreement or as otherwise specified by the Board,
 and, pursuant to TSXV Policy 4.4, s. 4.6, in all instances RSUs will not vest until a minimum
 of one year following award of the RSUs has passed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The RSUs are structured so as
 to be considered to be a plan described in section 7 of the Tax Act or any successor to such
 provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Subject to the vesting and other
 conditions and provisions set forth herein and in the RSU Grant Agreement, the Board shall
 determine whether each RSU awarded to a Participant shall entitle the Participant: (i) to
 receive one Share issued from treasury; (ii) to receive the Cash Equivalent of one (1) Share;
 or (iii) to elect to receive either One Share from treasury, the Cash Equivalent of
 one (1) Share or a combination of cash and Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) RSUs shall be settled by the
 Participant at any time beginning on the first Business Day following their RSU Vesting Determination
 Date but no later than the RSU Settlement Date (as such terms are defined in Section 5.5
 and 5.6, respectively).

**Section 5.3** **Restriction Period.**

The applicable restriction period in respect of a particular RSU Award shall be determined by the Board but in all cases shall end no later than December 31 of the calendar year, which is three (3) years after the calendar year in which the Award is granted ("**Restriction Period**"). For example, the Restriction Period for a grant made in June 2023 shall end no later than December 31, 2026. Subject to the Board's determination, any vested RSUs with respect to a Restriction Period will be paid to Participants in accordance with Article 5 no later than the end of the Restriction Period. Unless otherwise determined by the Board, all unvested RSUs shall be cancelled on the RSU Vesting Determination Date and, in any event, no later than the last day of the Restriction Period, but no earlier than one year from the date of the award of the RSUs to be settled.

**Section 5.4** **Performance Criteria and Performance Period.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) For each award of RSUs, the Board
 shall establish the period in which any Performance Criteria and other vesting conditions
 must be met in order for a Participant to be entitled to receive Shares in exchange for all
 or a portion of the RSUs held by such Participant (the "**Performance Period** "),
 provided that such Performance Period may not expire after the end of the Restriction Period,
 being a minimum of one year from the date of award of the RSUs, and ending no longer than
 three (3) years after the calendar year in which the Award was granted. For example,
 a Performance Period determined by the Board to be for a period of three (3) financial
 years will start on the first day of the financial year in which the award is granted and
 will end on the last day of the second financial year after the year in which the grant was
 made. In such a case, for a grant made on January 4, 2023, the Performance Period will
 start on January 4, 2024 and will end on December 31, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For each award of RSUs, the Board
 shall establish any Performance Criteria and other vesting conditions which must be met during
 the Performance Period in order for a Participant to be entitled to receive Shares in exchange
 for his or her RSUs.

**Section 5.5** **RSU Vesting Determination Date.**

The vesting determination date means the date on which the Board determines if the Performance Criteria and/or other vesting conditions with respect to a RSU have been met (the "**RSU Vesting Determination Date**"), and as a result, establishes the number of RSUs that become vested, if any. For greater certainty, the RSU Vesting Determination Date must fall after the end of the Performance Period, if any, but no later than the last day of the Restriction Period. Unless otherwise specified in the RSU Grant Agreements, one-third (1/3) of RSUs awarded pursuant to an RSU Grant Agreement shall vest on each of the first three anniversaries of the date of grant. Provided that no RSUs may vest prior to one year from the date of award of such RSU. Acceleration of vesting is permitted in connection with the death of a Participant; or in connection with a change of control, take-over bid, reverse-take-over or other similar transaction.

**Section 5.6** **Settlement of RSUs.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Except as otherwise provided
 in the RSU Grant Agreement, in the event that the vesting conditions, the Performance Criteria
 and Performance Period, if applicable, of an RSU are satisfied:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all of the vested RSUs covered
 by a particular grant may, subject to Section 5.6(5), be settled at any time beginning
 on the first Business Day following their RSU Vesting Determination Date but no later than
 the date that is five (5) years from their RSU Vesting Determination Date (the "**RSU Settlement Date** "); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a Participant is entitled to deliver
 to the Corporation, on or before the RSU Settlement Date, an RSU Settlement Notice in respect
 of any or all vested RSUs held by such Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Subject to Section 5.6(5),
 settlement of RSUs shall take place promptly following the RSU Settlement Date and take the
 form set out in the RSU Settlement Notice through:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) in the case of settlement of
 RSUs for their Cash Equivalent, delivery of a cheque to the Participant representing the
 Cash Equivalent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the case of settlement of RSUs
 for Shares, delivery of a share certificate to the Participant or the entry of the Participant's
 name on the share register for the Shares; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in the case of settlement of
 the RSUs for a combination of Shares and the Cash Equivalent, a combination of (a) and
 (b) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If an RSU Settlement Notice is
 not received by the Corporation on or before the RSU Settlement Date, settlement shall take
 the form of Shares issued from treasury as set out in Section 5.7(2).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) If, upon receipt by the Corporation
 of a RSU Settlement Notice pursuant to Section 5.6 hereof, the Corporation does not
 have a sufficient number of Shares reserved and available for issuance under this Plan, the
 Corporation will make payment of a cash amount to a Participant for a value equal to the
 number of RSUs multiplied by the Market Value, subject to any applicable deductions and withholdings,
 in lieu of issuing Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Notwithstanding any other provision
 of this Plan, in the event that a RSU Settlement Date falls during a Black-Out Period or
 other trading restriction imposed by the Corporation and the Participant has not delivered
 a RSU Settlement Notice, then such RSU Settlement Date shall be automatically extended to
 the tenth (10<sup>th</sup>) Business Day following the date that such Black-Out Period or
 other trading restriction is lifted, terminated or removed. Notwithstanding the foregoing,
 in the event that a Participant receives Shares in satisfaction of an Award during a Black-Out
 Period, the Corporation shall advise such Participant of the same in writing and such Participant
 shall not be entitled to sell or otherwise dispose of such Shares until such Black-Out Period
 has expired.

**Section 5.7** **Determination of Amounts.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) **Cash Equivalent of RSUs**.
 For purposes of determining the Cash Equivalent of RSUs to be made pursuant to Section 5.6,
 such calculation will be made on the RSU Settlement Date and shall equal the Market Value
 on the RSU Settlement Date multiplied by the number of vested RSUs in the Participant's
 Account which the Participant desires to settle in cash pursuant to the RSU Settlement Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) **Payment in Shares; Issuance of Shares from Treasury**. For the purposes of determining the number of Shares from treasury
 to be issued and delivered to a Participant upon settlement of RSUs pursuant to Section 5.6,
 such calculation will be made on the RSU Settlement Date and be the whole number
of Shares equal to the whole number of vested RSUs then recorded in the Participant's Account which the Participant desires to
settle pursuant to the RSU Settlement Notice. Shares issued from treasury will be issued in consideration for the past services of the
Participant to the Corporation and the entitlement of the Participant under this Plan shall be satisfied in full by such issuance of
Shares.

**Section 5.8** **RSU Grant Agreements.**

RSUs shall be evidenced by an RSU Grant Agreement or included in an Employment Agreement or other services agreement, in such form not inconsistent with the Plan as the Board may from time to time determine, provided that the substance of Article 4 and Article 6 hereof be included therein. The RSU Grant Agreement shall contain such terms that may be considered necessary in order that the RSU will comply with any provisions respecting restricted share units in the income tax or other laws in force in any country or jurisdiction of which the Participant may from time to time be a resident or citizen or the rules of any regulatory body having jurisdiction over the corporation.

**ARTICLE 6** **<br> GENERAL CONDITIONS**

**Section 6.1** **General Conditions Applicable to Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Each Award, as applicable, shall
 be subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Employment** – The
 granting of an Award to a Participant shall not impose upon the Corporation or a Subsidiary
 any obligation to retain the Participant in its employ in any capacity. For greater certainty,
 the granting of Awards to a Participant shall not impose any obligation on the Corporation
 to grant any awards in the future nor shall it entitle the Participant to receive future
 grants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Rights as a Shareholder** –
 Neither the Participant nor such Participant's personal representatives or legatees
 shall have any rights whatsoever as shareholder in respect of any Shares covered by such
 Participant's Awards until the date of issuance of a share certificate to such Participant
 (or to the liquidator, executor or administrator, as the case may be, of the estate of the
 Participant) or the entry of such person's name on the share register for the Shares.
 Without in any way limiting the generality of the foregoing, no adjustment shall be made
 for dividends or other rights for which the record date is prior to the date such share certificate
 is issued or entry of such person's name on the share register for the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Conformity to Plan** –
 In the event that an Award is granted or a Grant Agreement is executed which does not conform
 in all particulars with the provisions of the Plan, or purports to grant Awards on terms
 different from those set out in the Plan, the Award or the grant of such Award shall not
 be in any way void or invalidated, but the Award so granted will be adjusted to become, in
 all respects, in conformity with the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Non-Assignable and Non-Transferable** – All Awards are exercisable only by the Participant to whom they were awarded
 and will not be assignable or transferable. Awards may be exercised only by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Participant to whom the Awards
 were granted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) upon the Participant's
 death, the legal representative of the Participant's estate; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) upon the Participant's
 incapacity, the legal representative having authority to deal with the property of the Participant,

provided that any such legal representative in (ii) or (iii) shall first deliver evidence satisfactory to the Corporation of legal representation and the right to exercise an Award.

**Section 6.2** **General Conditions Applicable to Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Each Award shall be subject to
 the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Termination for Cause**.
 Upon a Participant ceasing to be an Eligible Participant for "cause", all unexercised
 vested and unvested Awards granted to such Participant shall terminate on the effective date
 of the termination as specified in the notice of termination. For the purposes of the Plan,
 the determination by the Corporation that the Participant was discharged for cause shall
 be binding on the Participant. "Cause" shall include, among other things, gross
 misconduct, theft, fraud, breach of confidentiality or breach of the Corporation's
 Code of Conduct and any reason determined by the Corporation to be cause for termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Retirement**. In the case
 of a Participant's retirement, any unvested Awards held by the Participant as at the
 Termination Date will continue to vest in accordance with their vesting schedules, and all
 vested Awards held by the Participant at the Termination Date may be exercised until the
 earlier of the expiry date of the Awards or six (6) months following the Termination
 Date, provided that if the Participant is determined to have breached any post-employment
 restrictive covenants in favour of the Corporation, then any Awards held by the Participant,
 whether vested or unvested, will immediately expire and the Participant shall pay to the
 Corporation any "in-the-money" amounts realized upon exercise of Awards following
 the Termination Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Resignation**. In the case
 of a Participant ceasing to be an Eligible Participant due to such Participant's resignation,
 subject to any later expiration dates determined by the Board, all Awards shall expire on
 the earlier of ninety (90) days after the effective date of such resignation, or the expiry
 date of the Award, to the extent such Awards were vested and exercisable by the Participant
 on the effective date of such resignation and all unexercised unvested Awards granted to
 such Participant shall terminate on the effective date of such resignation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Termination or Cessation**.
 In the case of a Participant ceasing to be an Eligible Participant for any reason (other
 than for "cause", resignation or death), the number of Awards that may vest is subject
to proration over the applicable vesting or performance period and shall expire on the earlier of ninety (90) days after the effective
date of the Termination Date, or the expiry date of the Awards. For greater certainty, the proration calculation referred to above shall
be net of previously vested Awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **Death**. If a Participant
 dies while in his or her capacity as an Eligible Participant, all unvested Awards will immediately
 vest and all Awards will expire one hundred eighty (180) calendar days after the death of
 such Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **Change in Control**. If a
 participant is terminated without "cause" or resigns for good reason during the
 twelve (12) month period following a Change in Control, or after the Corporation has signed
 a written agreement to effect a change in control but before the change in control is completed,
 then any unvested Awards will immediately vest and may be exercised within thirty (30) calendar
 days of such date. In the case of an Investor Relations Individual, where the Corporation
 has signed a written agreement to effect a change in control and before the change in control
 is completed, any unvested Awards may, subject to prior acceptance by the Exchange, vest
 immediately and be exercised within thirty (30) calendar days of such Exchange approval.

**Section 6.3** **Unfunded Plan.**

Unless otherwise determined by the Board, this Plan shall be unfunded. To the extent any Participant or his or her estate holds any rights by virtue of a grant of Awards under this Plan, such rights (unless otherwise determined by the Board) shall be no greater than the rights of an unsecured creditor of the Corporation. Notwithstanding the foregoing, any determinations made shall be such that the Plan continuously meets the requirements of paragraph 6801(d) of the Income Tax Regulations, adopted under the Tax Act or any successor provision thereto.

**ARTICLE 7** <br> **ADJUSTMENTS AND AMENDMENTS**

**Section 7.1** **Adjustment to Shares Subject to Outstanding Awards.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) In the event of any subdivision
 of the Shares into a greater number of Shares at any time after the grant of an Award to
 a Participant and prior to the expiration of the term of such Award, the Corporation shall
 deliver to such Participant, at the time of any subsequent exercise or vesting of such Award
 in accordance with the terms hereof, in lieu of the number of Shares to which such Participant
 was theretofore entitled upon such exercise or vesting of such Award, but for the same aggregate
 consideration payable therefor, such number of Shares as such Participant would have held
 as a result of such subdivision if, on the record date thereof, the Participant had been
 the registered holder of the number of Shares to which such Participant was theretofore entitled
 upon such exercise or vesting of such Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) In the event of any consolidation
 of Shares into a lesser number of Shares at any time after the grant of an Award to any Participant
 and prior to the expiration of the term of such Award, the Corporation shall deliver
to such Participant at the time of any subsequent exercise or vesting of such Award in accordance with the terms hereof, in lieu of the
number of Shares to which such Participant was theretofore entitled upon such exercise or vesting of such Award, but for the same aggregate
consideration payable therefor, such number of Shares as such Participant would have held as a result of such consideration if, on the
record date thereof, the Participant had been the registered holder of the number of Shares to which such Participant was theretofore
entitled upon such exercise or vesting of such Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If, at any time after the grant
 of an Award to any Participant, and prior to the expiration of the term of such Award, the
 Shares shall be reclassified, reorganized or otherwise changed, otherwise than as specified
 in Section 7.1(1) or Section 7.1(2) hereof or, subject to the provisions
 of Section 7.1(3) hereof, the Corporation shall consolidate, merge, reorganize
 or amalgamate with or into another corporation (the corporation resulting or continuing from
 such consolidation, merger, reorganization, amalgamation, plan of arrangement, spin-off,
 dividend payment or recapitalization, being herein called the "**Successor Corporation** "),
 the Participant shall be entitled to receive, upon the subsequent exercise or vesting of
 Award, in accordance with the terms hereof and shall accept in lieu of the number of Shares
 then subscribed for but for the same aggregate consideration payable therefor, the aggregate
 number of shares of the appropriate class or other securities of the Corporation or the Successor
 Corporation (as the case may be) or other consideration from the Corporation or the Successor
 Corporation (as the case may be) that such Participant would have been entitled to receive
 as a result of such reclassification, reorganization or other change of shares or, subject
 to the provisions of Section 7.2(3) hereof, as a result of such consolidation,
 merger, reorganization, amalgamation, plan of arrangement, spin-off, dividend payment or
 recapitalization, if on the record date of such reclassification, reorganization or other
 change of shares or the effective date of such consolidation, merger reorganization, amalgamation,
 plan of arrangement, spin-off, dividend payment or recapitalization, as the case may be,
 such Participant had been the registered holder of the number of Shares to which such Participant
 was immediately theretofore entitled upon such exercise or vesting of such Award. Provided
 that all adjustments made to the aggregate number of shares of the appropriate class or other
 securities of the Corporation or the Successor Corporation (as the case may be) or other
 consideration from the Corporation or the Successor Corporation (as the case may be) that
 such Participant would have been entitled to receive as a result of such reclassification,
 reorganization or other change of shares or, subject to the provisions of Section 7.2(3) hereof,
 as a result of such consolidation, merger, reorganization, amalgamation, plan of arrangement,
 spin-off, dividend payment or recapitalization, shall be subject to Exchange approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) If, at any time after the grant
 of an Award to any Participant and prior to the expiration of the term of such Award, the
 Corporation shall make a distribution to all holders of Shares or other securities in the
 capital of the Corporation, or cash, evidences of indebtedness or other assets of the Corporation
 (excluding an ordinary course dividend in cash or shares, but including, for greater certainty,
 shares or equity interests in a subsidiary or business unit of the Corporation or one of
 its subsidiaries or cash proceeds of the disposition of such a subsidiary or business unit),
 or should the Corporation effect any transaction or change having a similar effect, then
 the price or the number of Shares to which the Participant is entitled upon exercise or vesting
of Award shall be adjusted to take into account such distribution, transaction or change. The Board shall determine the appropriate adjustments
to be made in such circumstances in order to maintain the Participants' economic rights in respect of their Awards in connection
with such distribution, transaction or change.

**Section 7.2** **Amendment or Discontinuance of the Plan.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Board may amend the Plan or
 any Award at any time subject to Shareholder approval as a condition to Exchange acceptance
 of the amendment. For greater certainty, without limitation, amendments to any of the following
 provisions of this Plan will be subject to Shareholder approval, in particular amendments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to persons eligible to be granted
 or issued security based compensation under this Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) to the maximum number or percentage,
 as the case may be, of Listed Shares that may be issuable upon exercise of Options or conversion
 of DSUs or RSUs under this Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) to the limits under this Plan
 on the amount of Options, DSUs or RSUs that may be granted or issued to any one person or
 any category of persons (such as, for example, Insiders);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) to the method for determining
 the Exercise Price of Stock Options;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) to the maximum term of any Award
 granted under this Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) to the expiry and termination
 provisions applicable to any Award granted under this Plan, including the addition of a blackout
 period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) to include the addition of a
 Net Exercise provision; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) to any method or formula for
 calculating prices, values or amounts under this Plan that may result in a benefit to a Participant,
 including but not limited to the formula for calculating the appreciation of a Stock Appreciation
 Right.

Provided that shareholder approval shall not be required for the following amendments and the Board may make any changes which may include but are not limited to amendments of a general "housekeeping" or clerical nature that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) correct typographical errors;
 and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) clarify existing provisions
 of this Plan, that do not have the effect of altering the scope, nature and intent of such
 provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Notwithstanding Section 7.2(1),
 the Board shall be required to obtain Disinterested Shareholder Approval to make the following
 amendments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any change to the maximum number
 of Shares issuable from treasury under the Plan, except such increase by operation of Section 2.4
 and in the event of an adjustment pursuant to Article 7;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any amendment which reduces the
 Exercise Price of any Award, as applicable, after such Awards have been granted or any cancellation
 of an Award and the substitution of that Award by a new Award with a reduced price, except
 in the case of an adjustment pursuant to Article 7;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any amendment which extends the
 expiry date of any Award or the Restriction Period of any RSU beyond the original expiry
 date, except in case of an extension due to a Black-Out Period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any amendment which would permit
 a change to the pool of Eligible Participants, including a change which would have the potential
 of broadening or increasing participation by Insiders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any amendment which increases
 the maximum number of Shares that may be (i) issuable to Insiders and Associates of
 such Insiders at any time; or (ii) issued to Insiders and Associates of such Insiders
 under the Plan and any other proposed or established Share Compensation Arrangement in a
 one-year period, except in case of an adjustment pursuant to Article 7; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) any amendment to the amendment
 provisions of the Plan, provided that Shares held directly or indirectly by Insiders benefiting
 from the amendments in Section 7.2(2)(b) and Section 7.2(2)(c) shall
 be excluded when obtaining such shareholder approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Board may, by resolution,
 but subject to applicable regulatory approvals, decide that any of the provisions hereof
 concerning the effect of termination of the Participant's employment shall not apply
 for any reason acceptable to the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The Board may, subject to regulatory
 approval, discontinue the Plan at any time without the consent of the Participants, provided
 that such discontinuance shall not materially and adversely affect any Awards previously
 granted to a Participant under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Notwithstanding any other provision
 of this Plan, at all times when the Corporation is listed on the TSXV:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Corporation shall be required
 to obtain prior TSXV acceptance of any amendment to this Plan; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Corporation shall be required
 to obtain Disinterested Shareholder Approval in compliance with the applicable policies of
 the TSXV for this Plan if the Plan, together with all of the Corporation's previously
 established and outstanding equity compensation plans or grants, could permit at any time:
 (1) the aggregate number of Shares reserved for issuance under Awards granted to Insiders
 (as a group) at any point in time exceeding 10% of the Outstanding Issue; and (2) the
 grant to Insiders (as a group), within a 12
month period, of an aggregate number of Awards exceeding 10% of the issued Shares, calculated at the date an Award is granted to any
Insider.

**Section 7.3** **Change in Control**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Notwithstanding anything else
 in this Plan or any Grant Agreement, the Board has the right to provide for the conversion
 or exchange of any outstanding Awards into or for options, rights, units or other securities
 of substantially equivalent (or greater) value in any entity participating in or resulting
 from a Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Upon the Corporation entering
 into an agreement relating to a transaction which, if completed, would result in a Change
 in Control, or otherwise becoming aware of a pending Change in Control, the Corporation shall
 give written notice of the proposed Change in Control to the Participants, together with
 a description of the effect of such Change in Control on outstanding Awards, not less than
 seven (7) days prior to the closing of the transaction resulting in the Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Board may, in its sole discretion,
 change the Performance Criteria or accelerate the vesting and/or the expiry date of any or
 all outstanding Awards to provide that, notwithstanding the Performance Criteria and/or vesting
 provisions of such Awards or any Grant Agreement, such designated outstanding Awards shall
 be fully performed and/or vested and conditionally exercisable upon (or prior to) the completion
 of the Change in Control, provided that the Board shall not, in any case, authorize the exercise
 of Awards pursuant to this Section 7.3(3) beyond the expiry date of the Awards.
 If the Board elects to change the Performance Criteria or accelerate the vesting and/or the
 expiry date of the Awards, then if any of such Awards are not exercised within seven (7) days
 after the Participants are given the notice contemplated in Section 7.3(2) (or
 such later expiry date as the Board may prescribe), such unexercised Awards shall, unless
 the Board otherwise determines, terminate and expire following the completion of the proposed
 Change in Control. If, for any reason, the Change in Control does not occur within the contemplated
 time period, the satisfaction of the Performance Criteria, the acceleration of the vesting
 and the expiry date of the Awards shall be retracted and vesting shall instead revert to
 the manner provided in the Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) To the extent that the Change
 in Control would also result in a capital reorganization, arrangement, amalgamation or reclassification
 of the share capital of the Corporation and the Board does not change the Performance Criteria
 or accelerate the vesting and/or the expiry date of Awards pursuant to Section 7.3(3),
 the Corporation shall make adequate provisions to ensure that, upon completion of the proposed
 Change in Control, the number and kind of shares subject to outstanding Awards and/or the
 Option Price per share of Options shall be appropriately adjusted (including by substituting
 the Awards for awards to acquire securities in any successor entity to the Corporation) in
 such manner as the Board considers equitable to prevent substantial dilution or enlargement
 of the rights granted to Participants. The Board may make changes to the terms of the Awards
 or the Plan to the extent necessary or desirable to comply with any rules, regulations or
 policies of any stock exchange on which any securities of the Corporation may be listed,
 provided that the value of previously granted Awards and the rights of Participants
are not materially adversely affected by any such changes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Notwithstanding anything else
 to the contrary herein, in the event of a potential Change in Control, the Board shall have
 the power, in its sole discretion, to modify the terms of this Plan and/or the Awards (including,
 for greater certainty, to cause the vesting of all unvested Awards) to assist the Participants
 to tender into a take-over bid or other transaction leading to a Change in Control. For greater
 certainty, in the event of a takeover bid or other transaction leading to a Change in Control,
 the Board shall have the power, in its sole discretion, to permit Participants to conditionally
 exercise their Awards, such conditional exercise to be conditional upon the take-up by such
 offeror of the Shares or other securities tendered to such take-over bid in accordance with
 the terms of such take-over bid (or the effectiveness of such other transaction leading to
 a Change in Control). If, however, the potential Change in Control referred to in this Section 7.3(5) is
 not completed within the time specified therein (as the same may be extended), then notwithstanding
 this Section 7.3(5) or the definition of "Change in Control": (i) any
 conditional exercise of vested Awards shall be deemed to be null, void and of no effect,
 and such conditionally exercised Awards shall for all purposes be deemed not to have been
 exercised, (ii) Shares which were issued pursuant to the exercise of awards which vested
 pursuant to this Section 7.3 shall be returned by the Participant to the Corporation
 and reinstated as authorized but unissued Shares, and (iii) the original terms applicable
 to Awards which vested pursuant to this Section 7.3 shall be reinstated.

**ARTICLE 8** <br> **MISCELLANEOUS**

**Section 8.1** **Use of an Administrative Agent and Trustee.**

The Board may in its sole discretion appoint from time to time one or more entities to act as administrative agent to administer the Awards granted under the Plan and to act as trustee to hold and administer the assets that may be held in respect of Awards granted under the Plan, the whole in accordance with the terms and conditions determined by the Board in its sole discretion. The Corporation and the administrative agent will maintain records showing the number of Awards granted to each Participant under the Plan.

**Section 8.2** **Tax Withholding.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Notwithstanding any other provision
 of this Plan, all distributions, delivery of Shares or payments to a Participant (or to the
 liquidator, executor or administrator, as the case may be, of the estate of the Participant)
 under the Plan shall be made net of applicable source deductions. If the event giving rise
 to the withholding obligation involves an issuance or delivery of Shares, then, the withholding
 obligation may be satisfied by (a) having the Participant elect to have the appropriate
 number of such Shares sold by the Corporation, the Corporation's transfer agent and
 registrar or any trustee appointed by the Corporation pursuant to Section 8.1 hereof,
 on behalf of and as agent for the Participant as soon as permissible and practicable, with
 the proceeds of such sale being delivered to the Corporation, which will in turn remit such
 amounts to the appropriate governmental authorities, or (b) any other mechanism as may be
required or appropriate to conform with local tax and other rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Notwithstanding the first paragraph
 of this Section 8.2, the applicable tax withholdings may be waived where the Participant
 directs in writing that a payment be made directly to the Participant's registered
 retirement savings plan in circumstances to which regulation 100(3) of the regulations
 of the Tax Act apply.

**Section 8.3** **Reorganization of the Corporation.**

The existence of any Awards shall not affect in any way the right or power of the Corporation or its shareholders to make or authorize any adjustment, recapitalization, reorganization or other change in the Corporation's capital structure or its business, or any amalgamation, combination, merger or consolidation involving the Corporation or to create or issue any bonds, debentures, shares or other securities of the Corporation or the rights and conditions attaching thereto or to affect the dissolution or liquidation of the Corporation or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar nature or otherwise.

**Section 8.4** **Governing Laws.**

The Plan and all matters to which reference is made herein shall be governed by and interpreted in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

**Section 8.5** **Severability.**

The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision and any invalid or unenforceable provision shall be severed from the Plan.

**Section 8.6** **Effective Date of the Plan.**

The Plan was approved by the Board and shall take effect on October 26, 2023.

**APPENDIX "A"**

**FORM OF OPTION GRANT AGREEMENT**

**LIBERTY DEFENSE HOLDINGS, LTD.**

**OPTION GRANT AGREEMENT**

This Stock Option Grant Agreement (the "**Option Grant Agreement**") is entered into between Liberty Defense Holdings, Ltd. (the "Corporation"), and the optionee named below (the "**Optionee**") pursuant to and on the terms and subject to the conditions of the Corporation's omnibus long-term incentive plan (the "**Plan**"). Capitalized terms used and not otherwise defined in this Option Grant Agreement shall have the meanings set forth in the Plan.

The terms of the option (the "**Option**"), in addition to those terms set forth in the Plan, are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  **<u>Optionee</u>** . The Optionee is ● and the address of the Optionee is currently •.

2.  **<u>Number of Shares</u>** . The Optionee may purchase up to •
 Shares of the Corporation (the "**Option Shares**") pursuant to this Option,
 as and to the extent that the Option vests and becomes exercisable as set forth in section
 6 of this Option Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  **<u>Option Price</u>** . The exercise price is Cdn $● per Option Share (the "**Option Price** ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.  **<u>Date Option Granted</u>** . The Option was granted on •.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.  **<u>Term of Option</u>** . The Option terminates on ● (the "**Expiry Date** ").

6.  **<u>Vesting</u>** . The Option to purchase Option Shares shall
 vest and become exercisable as follows: ● .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.  **<u>Exercise of Options</u>** . In order to exercise the Option,
 the Optionee shall notify the Corporation in the form annexed hereto as Schedule A, whereupon
 the Corporation shall use reasonable efforts to cause the Optionee to receive a certificate
 representing the relevant number of fully paid and non-assessable Shares in the Corporation.

8.  **<u>Transfer of Option</u>** . The Option is not transferable or
 assignable except in accordance with the Plan.

9.  **<u>Inconsistency</u>** . This Option Grant Agreement is subject
 to the terms and conditions of the Plan and, in the event of any inconsistency or contradiction
 between the terms of this Option Grant Agreement and the Plan, the terms of the Plan shall
 govern.

10.  **<u>Severability</u>** . Wherever possible, each provision of
 this Option Grant Agreement shall be interpreted in such manner as to be effective and valid
 under applicable law, but if any provision of this Option Grant Agreement is held to be invalid,
 illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction,
 such invalidity, illegality or unenforceability shall not affect any other provision or any
 other jurisdiction, but this Option Grant Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

A- 1

11.  **<u>Entire Agreement</u>** . This Option Grant Agreement and the
 Plan embody the entire agreement and understanding among the parties and supersede and preempt
 any prior understandings, agreements or representations by or among the parties, written
 or oral, which may have related to the subject matter hereof in any way.

12.  **<u>Successors and Assigns</u>** . This Option Grant Agreement
 shall bind and enure to the benefit of the Optionee and the Corporation and their respective
 successors and permitted assigns.

13.  **<u>Time of the Essence</u>** . Time shall be of the essence of
 this Agreement and of every part hereof.

14.  **<u>Governing Law</u>** . This Agreement and the Option shall
 be governed by and interpreted and enforced in accordance with the laws of the Province of
 Ontario and the federal laws of Canada applicable therein.

15.  **<u>Counterparts</u>** . This Option Grant Agreement may be executed
 in separate counterparts, each of which is deemed to be an original and all of which taken
 together constitute one and the same agreement.

*[Remainder of this page left intentionally blank; Signature page follows]*

A- 2

By signing this Agreement, the Optionee acknowledges that the Optionee has been provided a copy of and has read and understands the Plan and agrees to the terms and conditions of the Plan and this Option Grant Agreement.

IN WITNESS WHEREOF the parties hereof have executed this Option Grant Agreement as of the<u> </u> day of<u> </u>, 20<u> </u>.

---

| | |
|:---|:---|
| **LIBERTY DEFENSE HOLDINGS, LTD.** | **LIBERTY DEFENSE HOLDINGS, LTD.** |
| By: |  |
|  | Name: |
|  | Title: |

---

A- 3

**SCHEDULE A**

**ELECTION TO EXERCISE STOCK OPTIONS**

---

| | |
|:---|:---|
| **TO:** | **LIBERTY DEFENSE HOLDINGS, LTD. (the** "**Corporation**"**)** |
| **DATE:** | <u> </u>,<u> </u> |

---

The undersigned Optionee hereby elects to exercise Options granted by the Corporation to the undersigned pursuant to an Option Grant Agreement dated<u> </u>, 20<u> </u> under the Corporation's omnibus long-term incentive plan (the "**Plan**"), for the number Shares set forth below. Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Plan.

---

| | |
|:---|:---|
| Number of Shares to be Acquired: | <u> </u> |
| Option Price (per Share): | $<u> </u> |
| Aggregate Purchase Price: | $<u> </u> |
| Amount enclosed that is payable on account of any source deductions relating to this Option exercise (contact the Corporation for details of such amount): | <br> $<u> </u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◻ Or check here if alternative arrangements have been made with the Corporation; |  |

---

The undersigned hereby tenders a certified cheque, bank draft or other form of payment confirmed as acceptable by the Corporation for such aggregate purchase price, and, if applicable, all source deductions, and directs such Shares to be registered in the name of<u> </u>

*[Remainder of this page left intentionally blank; Signature page follows]*

A- 1

IN WITNESS WHEREOF the parties hereof have executed this Option Grant Agreement as of the<u> </u> day of<u> </u>, 20<u> </u>.

**[Insert Optionee's Name]**

**APPENDIX "B"**

**FORM OF DSU GRANT AGREEMENT**

**LIBERTY DEFENSE HOLDINGS, LTD.**

**DEFERRED SHARE UNIT GRANT AGREEMENT**

---

| | |
|:---|:---|
| **Name:** | **[name of DSU Participant]** |
| **Award Date:** | **[insert date]** |

---

Liberty Defense Holdings, Ltd. (the "**Corporation**") has adopted the omnibus long term incentive plan (the "**Plan**"). Your award is governed in all respects by the terms of the Plan, and the provisions of the Plan are hereby incorporated by reference. For greater certainty, the provisions set out in Article 4 and Article 6 of the Plan applicable to DSUs shall be deemed to form part of this DSU Grant Agreement *mutatis mutandis*. Capitalized terms used and not otherwise defined in this DSU Grant Agreement shall have the meanings set forth in the Plan. If there is a conflict between the terms of this DSU Grant Agreement and the Plan, the terms of the Plan shall govern.

---

| | |
|:---|:---|
| **Your Award** | The Corporation hereby grants to you ● DSUs. |
| On behalf of the Corporation: |  |
| **LIBERTY DEFENSE HOLDINGS, LTD.** |  |
| Name: |  |
| Title: |  |

---

B- 1

**APPENDIX "C"**

**FORM OF RSU GRANT AGREEMENT**

**LIBERTY DEFENSE HOLDINGS, LTD.**

**RESTRICTED SHARE UNIT GRANT AGREEMENT**

This restricted share unit agreement ("**RSU Grant Agreement**") is entered into between Liberty Defense Holdings, Ltd. (the "**Corporation**") and the Participant named below (the "**Recipient**") of the restricted share units ("**RSUs**") pursuant to the Corporation's omnibus long-term incentive plan (the "**Plan**"). Capitalized terms used and not otherwise defined in this RSU Grant Agreement shall have the meanings set forth in the Plan.

The terms of the RSUs, in addition to those terms set forth in the Plan, are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **Recipient**. The Recipient is ^ and the address of the Recipient
 is currently ^.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **Grant of RSUs**. The Recipient is hereby granted ^ RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **Settlement**. The RSUs shall be settled as follows:

---

| | | |
|:---|:---|:---|
| *(Select one of the following three options):* | *(Select one of the following three options):* | *(Select one of the following three options):* |
| (a) | ◻ | One Share issued from treasury per RSU. |
| (b) | ◻ | Cash Equivalent of one Share per RSU. |
| (c) | ◻ | Either (a), (b), or a combination thereof, at the election of the Recipient. |

---

**Restriction Period**. In accordance with Section 5.3 of the Plan, the restriction period in respect of the RSUs granted hereunder, as determined by the Board, shall commence on ^ and terminate on ●.

4. **Performance Criteria**. ●.

5. **Performance Period**. ●.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **Vesting**. The RSUs will vest as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **Transfer of RSUs**. The RSUs granted hereunder are not-transferable or assignable except in accordance with the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **Inconsistency**. This RSU Grant Agreement is subject to the terms and conditions of the Plan and, in the event of any inconsistency
or contradiction between the terms of this RSU Grant Agreement and the Plan, the terms of the Plan shall govern.

C- 1

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **Severability**. Wherever possible, each provision of this RSU Grant Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this RSU Grant Agreement is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any
other provision or any other jurisdiction, but this RSU Grant Agreement shall be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **Entire Agreement**. This RSU Grant Agreement and the Plan embody the entire agreement and understanding among the parties and
supersede and pre-empt any prior understandings, agreements or representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **Successors and Assigns**. This RSU Grant Agreement shall bind and enure to the benefit of the Recipient and the Corporation and
their respective successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **Time of the Essence**. Time shall be of the essence of this Agreement and of every part hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **Governing Law**. This RSU Grant Agreement and the RSUs shall be governed by and interpreted and enforced in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **Counterparts**. This RSU Grant Agreement may be executed in separate counterparts, each of which is deemed to be an original
and all of which taken together constitute one and the same agreement.

*[Remainder of page left intentionally blank; Signature page follows]*

C- 2

By signing this RSU Grant Agreement, the Participant acknowledges that he or she has been provided with, has read and understands the Plan and this RSU Grant Agreement.

IN WITNESS WHEREOF the parties hereof have executed this RSU Grant Agreement as of the<u> </u> day of<u> </u>, 20<u> </u>.

---

| | |
|:---|:---|
| **LIBERTY DEFENSE HOLDINGS, LTD.** | **LIBERTY DEFENSE HOLDINGS, LTD.** |
| By: |  |
|  | Name: |
|  | Title: |

---

C- 3

## Exhibit 10.14

**Exhibit 10.14**

**LOAN AND SECURITY AGREEMENT**

**between**

**PFF, LLC**

**and**

**Liberty Defense Technologies, Inc.**

Dated:

August 19, 2024

**<u>LOAN AND SECURITY AGREEMENT</u>**

This Loan and Security Agreement is made as of this 19<sup>th</sup> day of August, 2024, between Liberty Defense Technologies, Inc., a Massachusetts corporation (the "Borrower"), and PFF, LLC, a Delaware limited liability company ("Lender").

**<u>W I T N E S S E T H:</u>**

WHEREAS, Borrower has requested that Lender extend a discretionary $2,500,000 revolving credit facility and a $1,800,000 term loan, the proceeds of which will be used to fund Borrower's business operations.

WHEREAS, Lender is willing to extend a discretionary credit facility and term loan on the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing, any Loan (including any Loan by renewal or extension) hereafter made to Borrower by Lender, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Borrower, the parties, intending to be legally bound, agree as follows:

**<u>AGREEMENT</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>DEFINITIONS.</u>** As used herein, the following terms shall have the following meanings (terms defined in the singular shall have the same meaning when used in the plural and vice versa):

"**<u>Affiliate</u>**" shall mean any Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, Borrower. For purposes hereof, "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting stock or other equity interests, by contract or otherwise.

"**<u>Aged Receivables</u>**" shall mean a schedule of all outstanding Receivables of Borrower showing the age of such Receivables in intervals of 30 days.

"**<u>Agreement</u>**" shall mean this Loan and Security Agreement, together with all Schedules and Exhibits attached or otherwise identified thereto, as the same may be amended, modified, restated, or supplemented from time to time.

"**<u>Assignment of Claims Act</u>**" shall mean, collectively, the Assignment of Claims Act of 1940, as amended, 31 U.S.C. § 3727, 41 U.S.C. § 15, any applicable rules, regulations and interpretations issued pursuant thereto, and any amendments to any of the foregoing.

"**<u>Anti-Terrorism Laws</u>**" shall mean any and all laws, regulations, rules, orders, etc. in effect from time to time relating to anti-money laundering and terrorism, including, without limitation, Executive Order No. 13224 (effective September 24, 2001) and the USA Patriot Act.

"**<u>Blocked Person</u>**" shall mean any person: (a) listed in the annex to Executive Order No. 13224, (b) owned or controlled by, or acting for or on behalf of, any person listed in the annex to Executive Order No. 13224, (c) with which Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (d) that commits, threatens or conspires to commit or supports "terrorism" as defined in Executive Order No. 13224, (e) that is named a "specially designated national" or "blocked person" on the most current list published by OFAC or other similar list, (f) a person that is named a "denied person" on the most current list published by the U.S. Commerce Department, or (g) (i) an agency of the government of a Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or (iii) a person resident in a Sanctioned Country to the extent subject to a sanctions program administered by OFAC.

"**<u>Borrower</u>**" shall have the meaning set forth in the Preamble of this Agreement.

**"<u>Borrowing Base</u>"** shall mean, at the time in question, the sum of (a) 90% of Eligible Billed Receivables, (b) 65% of Eligible Unbilled Receivables, and (c) 30% of Eligible Delivery Orders, each as depicted in the Borrowing Base Certificate Lender has most recently received from Borrower; <u>provided</u>, <u>however</u>, that (i) the advance rate for an Eligible Billed Receivable arising from an invoice for goods (or final invoice if an order is shipped in installments) shall be limited to 50% and (ii) at all times the Borrowing Base shall remain subject to verification by Lender.

**"<u>Borrowing Base Certificate</u>"** shall mean a certificate of Borrower containing a computation of the Borrowing Base and certifying that no Default or Event of Default has occurred and is continuing, substantially in the form of Exhibit C attached hereto or such other form as shall be acceptable to Lender.

"**<u>Business Day</u>**" shall mean any day other than a Saturday, Sunday, or other day on which commercial banks under the laws of the Commonwealth of Virginia are authorized or required by law to close.

"**<u>Cash Collateral Account</u>**" shall mean a demand deposit account with a commercial bank acceptable to Lender with respect to which Lender has "control" as such term is defined in the UCC and which is subject to no Liens other than Permitted Liens.

"**<u>Code</u>**" shall mean the Internal Revenue Code of the United States, as amended.

"**<u>Collateral</u>**" shall mean all tangible and intangible personal property of Borrower, wherever located and whether now owned or hereafter acquired, including but not limited to all accounts, contracts rights, chattel paper, cash, general intangibles, investment property, machinery, equipment, goods, inventory, furniture, fixtures, letter-of-credit rights, books and records, deposit accounts, documents, instruments and commercial tort claims, together with all proceeds thereof, including insurance proceeds. All such terms shall have the meanings assigned to such terms in the UCC.

**"<u>Default</u>"** shall mean an event or condition the occurrence of which would, with the lapse of time or the giving of notice, or both, become an Event of Default, whether or not Lender has declared an Event of Default to have occurred.

"**<u>Default Rate</u>**" shall mean a rate of interest five percentage points (5%) in excess of the Loan Interest Rate.

"**<u>Delivery Order</u>**" shall mean a delivery order issued by Borrower to a supplier for goods to be provided by Borrower to a customer pursuant to an executed contract or other agreement with such customer.

"**<u>Eligible Billed Receivables</u>**" shall mean all Receivables of Borrower that have been billed to the appropriate customer, are aged not greater than 90 days from the date of the initial invoice, and are deemed acceptable by Lender, in its sole discretion, for inclusion in the borrowing base Lender evaluates when exercising its discretion to make a Loan. For the purposes of this definition, the term "initial invoice" shall mean the first invoice relating to the applicable goods shipped or services rendered, and not any subsequent invoice relating thereto.

"**<u>Eligible Delivery Order</u>**" shall mean a Delivery Order for goods described therein which, upon Borrower's receipt, will become Eligible Inventory that is to be delivered to the applicable customer no later than One Hundred Eighty (180) days after the date of the Delivery Order; provided, that in all cases if required by Lender, the supplier shall have delivered to Lender written unconditional and irrevocable confirmation in a form acceptable to Lender that supplier will ship the goods in accordance with the instructions of Lender, including, a date before which the goods must be shipped, and an agreement from the supplier that they will ship the goods which are the subject of the Delivery Order regardless of who the end user is, and without any setoffs, counterclaims, or any other claims against Borrower, subject only to receipt of payment in full for such goods. Once goods described in an Eligible Delivery Order either become Eligible Inventory or will no longer become Eligible Inventory upon completion, the corresponding Delivery Order will cease to be an Eligible Delivery Order.

**"<u>Eligible Inventory</u>"** shall mean all inventory acquired by Borrower for the sole purpose of fulfilling the requirements of an awarded U.S. Government contract consisting of finished goods which Lender has deemed acceptable, in its sole discretion, for inclusion in the Borrowing Base and which will be delivered to the applicable customer no later than One Hundred Eighty (180) days after the date of the corresponding Delivery Order. Eligible Inventory is valued at the lower of cost or market on a first-in, first-out basis. Standards of eligibility shall be fixed and may be revised from time to time exclusively by Lender in its sole discretion. Without limitation of the foregoing, unless otherwise approved by Lender, Eligible Inventory shall **<u>not</u>** include any inventory which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is not at all times subject to a duly perfected, first priority (and only) security interest in favor of Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) is not in good and saleable condition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) is on consignment from, or subject to, any repurchase agreement with any supplier;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) constitutes returned, repossessed, damaged, defective, obsolete, or slow-moving goods as determined by the Bank;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) does not conform in all respects to the warranties and representations set forth in the Loan Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) is subject to a negotiable document of title (unless issued or endorsed to Lender);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) is not at a location identified on **Schedule 4.2** attached hereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) constitutes inventory-in-transit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) is at a location not owned and controlled by the Borrower, unless, if required by Lender, Lender has received from the Person owning such location or in control thereof a waiver or subordination of Liens satisfactory to Lender (unless reserves are imposed with regard thereto as determined by Lender in its sole and absolute discretion);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) consists of any packaging materials, supplies or promotional materials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) is classified as raw materials; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) which Lender otherwise in its sole and absolute discretion deems to not be Eligible Inventory.

"**<u>Eligible Purchase Order</u>**" shall mean a Purchase Order which, upon Borrower's receipt of the goods described therein, will become Eligible Inventory that is to be delivered to the applicable customer no later than One Hundred Eighty (180) days after becoming Eligible Inventory, or, in the case of goods directly shipped by the supplier to the customer, will become an Eligible Unbilled Receivable upon shipment by the supplier; provided, that in all cases if required by Lender, the supplier shall have delivered to Lender written unconditional and irrevocable confirmation in a form acceptable to Lender that supplier will ship the goods in accordance with the instructions of Lender, including, a date before which the goods must be shipped, and an agreement from the supplier that they will ship the goods which are the subject of the Purchase Order regardless of who the end user is, and without any setoffs, counterclaims, or any other claims against Borrower.

"**<u>Eligible Unbilled Receivables</u>**" shall mean Receivables of Borrower which (a) represents components of unbilled costs and estimated profits arising out of work actually performed by Borrower under the terms of contracts with customers, (b) may, in accordance with IFRS, be included in current assets on the balance sheet of Borrower even though such amount has not been billed to the customer, excluding, however, any amounts which represent (i) retainages payable upon completion of a contract; or (ii) costs incurred on cost reimbursable contracts that exceed provisional billing rates established by the customer, (c) which will be billed within sixty (60) day, and (d) are deemed acceptable by Lender, in its sole discretion, for inclusion in the borrowing base Lender evaluates when exercising its discretion to make a Loan.

"**<u>ERISA</u>**" shall mean the Employee Retirement Income Security Act of 1974, as amended.

**"<u>Events of Default</u>"** shall have the meaning set forth in **Article 12** of this Agreement.

**"<u>Fiscal Year</u>"** shall mean with respect to any Person, a year of 365 or 366 days, as the case may be, ending on the last day of December in any calendar year.

**"<u>Foreign Financial Account</u>"** means a bank account, securities account, or other financial account in a country other than the Unites States of America, including any of the states, commonwealths, and territories of the United States and the District of Columbia.

"**<u>IFRS</u>**" shall mean international financial reporting standards, consistently applied and maintained throughout the period indicated and consistent with the prior financial practice of Borrower, except for changes mandated by the Financial Accounting Standards Board or any similar accounting authority of comparable standing. Whenever any accounting term is used herein which is not otherwise defined, it shall be interpreted in accordance with IFRS.

**"<u>Indebtedness</u>"** shall mean and include all obligations for borrowed money of any kind or nature, including funded debt and unfunded liabilities, contingent obligations under guaranties or letters of credit, and all obligations for the acquisition or use of any fixed asset, including capitalized leases, or improvements which are payable over a period longer than one year, regardless of the term thereof or the Person or Persons to whom the same is payable, and the Obligations.

"**<u>Inventory Report</u>**" shall mean a report listing all inventory of Borrower, the cost thereof, specifying raw materials, work-in-process, finished goods and such other information as Lender may require relating thereto, all in form acceptable to Lender.

"**<u>Laws</u>**" shall mean all federal, state, and local governmental laws, ordinances, rules, and regulations applicable to Borrower's ownership or use of properties or the conduct of its business, including, without limitation, all laws and regulations regarding the collection and payment of employees' income, payroll, unemployment, and Social Security taxes.

"**<u>Lien</u>**" shall mean any mortgage, deed of trust, pledge, security interest, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or preference, priority or other security agreement, or preferential arrangement, escrow agreement, charge or encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any capital lease, any synthetic lease and the filing of any financing statement under the UCC or comparable law of any jurisdiction to evidence any of the foregoing).

"**<u>Line of Credit Loan</u>**" shall mean each Loan made by Lender to Borrower other than the Term Loan.

**"<u>Loan Documents</u>"** shall mean this Agreement, the Note, and all other agreements, guaranties, pledges, deposit account control agreements, support agreements, assignments, certificates, documents and instruments to be delivered by Borrower or any other Person under this Agreement or in connection with the Loans or any other Indebtedness or Obligations of Borrower to Lender, as the same may be amended, modified, restated or supplemented from time to time.

**"<u>Loan Interest Rate</u>"** shall mean 14.99% per annum. with respect to the Line of Credit Loan and 17.99% per annum with respect to the Term Loan. Effective June 1, 2025, the Loan Interest Rate will be determined by reference to Borrower's financial statements required to be delivered to Lender for the preceding fiscal quarter. If Borrower has positive net income of $0 or greater for the preceding fiscal quarter, the Loan Interest Rate shall remain 14.99% per annum, with respect to the Line of Credit Loan. If Borrower does not have positive net income of $0 or greater for the preceding fiscal quarter, the Loan Interest Rate shall be increased to 16.99% per annum retroactive to the first day of the preceding quarter, and shall remain at such interest rate until the end of the quarter in which the Loan Interest Rate is increase to 16.99%, with respect to the Line of Credit Loan.

**"<u>Loan</u>"** shall mean each discretionary loan made by Lender to Borrower pursuant to **Section 2.1** of this Agreement.

"**<u>Maturity Date</u>**" shall mean August 31<sup>st</sup>, 2025 with respect to the Line of Credit Loan and August 15<sup>th</sup>, 2026 with respect to the Term Loan, and any extension or extensions to either or both of such dates thereof granted by Lender in its sole discretion.

**"<u>Material Adverse Effect</u>"** shall mean any material adverse effect, as determined in Lender's discretion, on (a) the business, assets, operations, prospects or condition, financial or otherwise, of Borrower or any guarantor(s), if any; (b) Borrower's or any guarantor's, if any, ability to pay or perform the Obligations in accordance with their terms; (c) the value, collectability or salability of the Collateral or the perfection or priority of Lender's liens; (d) the validity or enforceability of this Agreement or any of the Loan Documents; or (e) the practical realization of the benefits, rights and remedies inuring to Lender under this Agreement or under the Loan Documents.

"**<u>Maximum Facility</u>**" shall mean at any time, the lesser of (a) $2,500,000 and (b) the then applicable Borrowing Base with respect to the revolving credit facility and $1,800,000 with respect to the Term Loan facility.

"**<u>Note</u>**" shall mean the promissory note, in form and substance satisfactory to Lender, to be given by Borrower to Lender to evidence the Loans.

**"<u>Obligations</u>"** shall mean and include all loans (including the Loans), debts, liabilities, obligations, covenants and duties owing by Borrower to Lender or any Affiliate of Lender of any kind or nature, present or future, whether or not evidenced by any note, guaranty or other instrument, whether arising under this Agreement, the other Loan Documents or under any other agreement or by operation of law, whether or not for the payment of money, whether arising by reason of an extension of credit, opening, guaranteeing or confirming of a letter of credit, loan, guaranty, indemnification or in any other manner, whether direct or indirect (including those acquired by purchase or assignment), absolute or contingent, due or to become due, now due or hereafter arising and howsoever acquired including, without limitation, all interest, charges, expenses, commitment, facility, collateral management or other fees, attorneys' fees and expenses, consulting fees and expenses and any other sum chargeable to Borrower under this Agreement, the other Loan Documents or any other agreement with Lender.

"**<u>OFAC</u>**" shall mean the U.S. Department of Treasury Office of Foreign Assets Control (or any successor agency).

"**<u>Overadvance</u>**" shall mean the existence at any time of determination of an outstanding aggregate principal balance of the Line of Credit Loans in excess of the Maximum Facility.

"**<u>Permitted Liens</u>**" shall mean:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Liens securing the Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the claims of materialmen, mechanics, carriers, warehousemen, processors, or landlords arising out of operation of law so long as the obligations secured thereby (i) are not past due or (ii) are being properly contested and for which Borrower has established adequate reserves;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Liens consisting of deposits or pledges made in the ordinary course of business in connection with workers' compensation, unemployment insurance, social security, and similar laws; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Liens in equipment (including capital leases) to secure purchase money Indebtedness permitted under **Section 10.1** hereof, so long as such security interests do not apply to any property of Borrower other than the equipment so acquired, and the Indebtedness secured thereby does not exceed the cost of such equipment.

**"<u>Person</u>"** shall mean an individual, partnership, limited liability company, limited liability partnership, corporation, joint venture, joint stock company, land trust, business trust or unincorporated organization, or a government or agency or political subdivision thereof.

**"<u>Plan</u>"** shall mean an employee benefit plan or other plan now or hereafter maintained for employees of Borrower or any subsidiary of Borrower and covered by Title IV of ERISA.

"**<u>Purchase Order</u>**" shall mean a purchase order issued to Borrower by a customer of Borrower for goods to be provided by Borrower pursuant to such purchase order.

"**<u>Receivables</u>**" shall mean all rights to payments for property sold or licensed or for services rendered, whether now owned or hereafter acquired by Borrower.

"**<u>Reportable Event</u>"** shall have the meaning assigned to that term in Title IV of ERISA.

"**<u>Request for Loan</u>**" shall mean a borrowing request in substantially the form set forth in **Exhibit A** attached hereto.

"**<u>Sanctioned Country</u>**" shall mean any country subject to the sanctions program identified on the most current list maintained by OFAC.

**"<u>Solvent</u>"** shall mean when used with respect to any Person, such Person (a) owns property the fair value of which is greater than the amount required to pay all of such Person's Indebtedness (including contingent debts), (b) owns property the present fair salable value of which is greater than the amount that will be required to pay the probable liabilities of such Person on its then existing Indebtedness as such become absolute and matured, (c) is able to pay all of its Indebtedness as such Indebtedness matures, and (d) has capital sufficient to carry on its then existing business.

"**<u>Term Loan</u>**" shall mean the Loan made by Lender to Borrower on August 19, 2024 in the original principal amount of $1,800,000.

**"<u>Termination Date</u>"** shall mean the earliest of the date which is (a) the Maturity Date, (b) the date on which either party terminates the Agreement pursuant to the terms hereof.

**"<u>UCC</u>"** shall mean the Uniform Commercial Code as in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>THE LOANS</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1. **<u>Loans</u>.** Subject to the terms and conditions of this Agreement and relying upon the representations and warranties set forth in this Agreement, Lender, in its sole discretion, may choose to make Line of Credit Loans to Borrower on its request, in an amount equal to the amount requested by Borrower pursuant to **Section 2.3** below up to an aggregate outstanding amount not to exceed the Maximum Facility. Subject to the limitations set forth in this Agreement, Borrower may borrow, repay and reborrow Line of Credit Loans. At no time shall the aggregate principal amount of Line of Credit Loans outstanding at any one time exceed the Maximum Facility at such time. The credit facility hereunder is a discretionary line of credit and Lender has no obligation to make Line of Credit Loans even if no Default or Event of Default has occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**<u>(a)</u>** Subject to the terms and conditions of this Agreement and relying upon the representations and warranties set forth in this Agreement, Lender, has made the Term Loan on August 19, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2. **<u>Overadvance</u>.** Borrower acknowledges that Lender has advised Borrower that Lender does not intend to permit Borrower to incur Line of Credit Loans at any time in an outstanding principal amount exceeding the Maximum Facility; however, it is agreed that should the outstanding principal amount of the Line of Credit Loans exceed the Maximum Facility for any reason, then such excess Line of Credit Loans shall (a) constitute Obligations under this Agreement, (b) be entitled to the benefit of all security and protection under this Agreement and the other Loan Documents, (c) be secured by the Collateral and (d) be payable immediately without notice or demand by Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3. **<u>Manner of Borrowing</u>.** Each Loan shall be requested in writing sent via facsimile or electronic transmission by a Request for Loan and a Borrowing Base Certificate executed by an authorized officer of Borrower and the applicable Eligible Purchase Order, not later than 11:00 a.m. Eastern Time on any Business Day. If Lender elects to make the requested Loan, Lender will endeavor to make the requested Loan within one (1) Business Day after Lender's receipt of such Request for Loan to the account specified by Borrower in the Request for Loan. Borrower shall immediately forward to the supplier the amount of the Loan advanced by Lender plus any additional required amounts sufficient to ensure that supplier will deliver the goods that are the subject of the Eligible Purchase Order Lender is financing with the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4. **<u>Evidence of Borrower's Obligations.</u>** Borrower's obligation to pay the principal of, and interest on, the Loans shall be evidenced by the Note executed by Borrower and delivered to Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5. **<u>Payment on Termination Date.</u>** Notwithstanding anything herein to the contrary, on the Termination Date with respect to each Loan Borrower shall pay to Lender in full, in cash, the entire outstanding principal balance such Loans, plus all accrued and unpaid interest thereon, unpaid fees, and all other Obligations. Lender from time to time may agree, in its sole discretion, to extend the Maturity Date or increase the amount of Loans to be provided under this Agreement, or both. During any such periods of extension, the remaining terms and conditions of this Agreement shall remain in full force and effect, and Borrower shall execute and deliver any amendments or modifications to the Loan Documents that Lender may require in connection with any such extension or increase. Nothing in this Section 2.5 shall obligate Lender to grant such extensions or to increase the amount of credit provided under this Agreement or to imply any limitation on the discretionary nature of the Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6. **<u>Scheduled Payments; Term Loan Prepayments</u>**. The principal of the Term Loan shall be payable in installments on the dates and in the amounts set forth in the Loan Payment Schedule attached hereto. Subject to the provisions of Section 2.1, Borrower may use the proceeds of a Line of Credit Loan to pay Obligations incurred with respect to the Term Loan, and Borrower hereby authorizes Lender to make Line of Credit Loans to pay such Obligations as and when such Obligations are due. This authorization shall constitute a standing request for Line of Credit Loans pursuant to Section 2.3 of this Agreement shall remain in effect as a standing request for Line of Credit Loans until revoked in writing by Borrower. Borrower acknowledges and agrees that Lender, in its sole discretion, may choose to make Line of Credit Loans to Borrower and that Lender's agreement to make Line of Credit Loans pursuant to this standing request does not constitute a waiver of Lender's rights under this Agreement, including Lender's right to require Borrower to submit additional information in connection with any Line of Credit Loan as contemplated by this Agreement. Borrower may prepay the Term Loan in full prior to the Maturity Date upon one hundred eighty (180) days' prior written notice to Lender and payment of an early termination fee equal to 0% of the interest that would have been due from the date of prepayment through the Maturity Date assuming the Term Loan had been repaid in accordance with the Loan Payment Schedule. Amounts prepaid may not be reborrowed. Parabilis will reserve the right to require Liberty Defense Technologies, Inc. to submit an additional principal payment based on annual EBITDA, applied to the term loan, up to the difference between 75% of EBITDA less aggregate Parabilis interest and term loan principal payments. This assessment will be made monthly, starting in August 2024, and paid within 30 days of the applicable month end.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>LENDER'S COMPENSATION.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1. **<u>Interest on Loans.</u>** Borrower shall pay interest monthly, in arrears, on the first day of each month on the outstanding principal amount of the Loans at the Loan Interest Rate. At the option of Lender, any accrued and unpaid interest that is not paid when due will be added to the principal amount of the Loans and will thereafter bear interest at the Loan Interest Rate. Notwithstanding the foregoing, on and after the occurrence of a Default or Event of Default (including, without limitation, a payment default under **Sections 2.2** or **2.5** hereof), Borrower shall pay interest on the Loans at the Default Rate. Notwithstanding anything contained herein to the contrary, in no event shall any interest to be paid under this Agreement or under any Loan Document exceed the maximum rate permitted by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2. **<u>Fees. Borrower shall pay to Lender the following fees:</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower shall pay to Lender a commitment fee in the amount of $26,319.40 (the "Commitment Fee"), which Commitment Fee shall be fully-earned and paid as of the date hereof, but as an accommodation to Borrower shall be paid in thirteen (13) installments in the amount of $1,319.44 on the date hereof and $2,083.33 on the first day of the first through 12 month anniversaries of the date hereof. At the option of Lender, any accrued and unpaid installment of the Commitment Fee that is not paid when due will be added to the principal amount of the Loans and will thereafter bear interest at the Loan Interest Rate. Notwithstanding anything contained herein to the contrary, in no event shall any unpaid installment of the Commitment Fee be added to the principal amount of the Loans if as a result thereof any interest to be paid under this Agreement or under any Loan Document would exceed the maximum rate permitted by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If Borrower fails to comply with any provision of this Agreement or any other Loan Document, Lender, at its option, may charge a non-compliance administrative fee in each instance of noncompliance. Lender will notify Borrower in prior to charging a non-compliance administrative fee. *Compliance documents are due 20 days after the close of each quarter, an extension can be provided if the Borrower makes the request prior to the deadline. Failure to provide documents or request an approved extension will result in a non-compliance administrative fee per the following schedule: 46-60 days after quarter end - $1,000; 61-75 days – an additional $3,000; 76-90+ days – an additional $5,000.* Lender's right to charge the non-compliance administrative fee shall be in addition to any other rights or remedies Lender may have under this Agreement and the other Loan Documents, all of which are hereby reserved, and shall not constitute a waiver, release or limitation upon Lender's exercise of any such rights or remedies or Borrower's obligation to comply with all provisions of the Loan Document, including the provision for which the non-compliance administrative fee has been assessed. At the option of Lender, any non-compliance administrative fee that is not paid when due will be added to the principal amount of the Loans and will thereafter bear interest at the Loan Interest Rate. Notwithstanding anything contained herein to the contrary, in no event shall any unpaid non-compliance administrative fee be added to the principal amount of the Loans if as a result thereof any interest to be paid under this Agreement or under any Loan Document would exceed the maximum rate permitted by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3. **<u>Computation of Interest and Fees.</u>** All interest and fees under this Agreement shall be computed on the basis of a year consisting of three hundred sixty (360) days for the number of days actually elapsed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4. **<u>Payments.</u>** All payments with respect to the Obligations shall be paid, without any defense, offset or counterclaim of any kind, at 2010 Corporate Ridge, Suite 450, McLean, Virginia 22102, or to such other address as Lender shall specify. Whenever any payment to be made shall otherwise be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in computing interest in connection with any such payment. If any payment of principal, interest or fees is not made within ten days of its due date, Borrower agree to pay to Lender a late charge equal to 5% of the amount of the payment. Borrower agrees that the late charge and Default Rate are reasonable forecasts of just compensation for anticipated and actual harm incurred by Lender, and that the actual harm incurred by Lender cannot be estimated with certainty and without difficulty. Provided no Default or Event of Default exists, payments received by Lender will be applied in the following manner: (i) to charges, fees and expenses (including attorneys' fees), (ii) next to accrued interest (iii) next to the principal of the Term Loan, (iv) next to the principal of the Line of Credit Loan, and (v) last to other Obligations in any order Lender may choose, in its sole discretion. Payments received by Lender when any Default or Event of Default exists, will be applied to the Obligations in any order Lender may choose, in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5. **<u>Early Termination</u>**. Borrower may terminate this Agreement and prepay all of the Loans, if any, upon ten (10) days' prior written notice to Lender with respect to the revolving credit facility, and one hundred eighty (180) days' prior written notice to Lender with respect to the term loan facility.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. <u>GRANT OF SECURITY INTEREST.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. **<u>Grant of Security Interest</u>**. Borrower hereby assigns and pledges to Lender, and hereby grants to Lender a first priority (subject only to COVID EIDL Permitted Liens) security interest in all of Borrower's right, title and interest in and to the Collateral, whether now owned or hereafter acquired by Borrower, including all proceeds of any and all of the foregoing or hereinafter-described Collateral (including, without limitation, proceeds that constitute property of the types described herein) and, to the extent not otherwise included, all policies of insurance on any property of Borrower and all payments and proceeds under any such insurance (whether or not Lender is the loss payee thereof), or any indemnity warranty or guaranty payable by reason of loss or damage to or otherwise with respect to any of the foregoing Collateral; all cash; and all books of account and records, including all computer software relating thereto. This Agreement secures the payment of all Obligations of Borrower now or hereafter existing or arising. Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts that constitute part of the Obligations and would be owed by Borrower to Lender but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2. **<u>Representations and Warranties Concerning the Collateral.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All items of equipment and inventory of Borrower are located at the places specified in **Schedule 4.2** hereto. During the five years immediately preceding the date of this Agreement, neither Borrower nor any predecessor of Borrower has used any corporate or fictitious name other than its current corporate name. Except as specified in **Schedule 4.2** hereto, Borrower has no trade names. The chief executive office and mailing address of Borrower is presently located at Borrower's address as set forth in **Section 13.4**. The exact legal name of Borrower is that indicated on the signature pages hereof. Borrower is an organization of the type, and is organized in the jurisdiction set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Borrower is the legal and beneficial owner of the Collateral free and clear of any Lien except for the Permitted Liens. No effective financing statement or other document similar in effect covering all or any part of the Collateral is on file in any recording office, except such as may have been filed in favor of Lender relating to this Agreement or with respect to Liens or otherwise permitted by this Agreement. None of the Collateral is subject to any prohibition against encumbering, pledging, hypothecating, or assigning the same or requires notice or consent in connection therewith except for the Assignment of Claims Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Borrower has exclusive possession and control of the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) This Agreement creates a valid security interest in the Collateral, securing the payment of the Obligations and, when properly perfected, shall constitute a valid perfected security interest in such Collateral, free and clear of all Liens except Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The inventory of Borrower has been produced by Borrower in compliance with all requirements of the Fair Labor Standards Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Borrower represents and warrants as to each and every Receivable now existing that: (1) it is a bona fide existing obligation, valid and enforceable against the customer, for software installed or licensed, goods sold or leased or services rendered in the ordinary course of business; (2) it is subject to no dispute, defense or offset except as disclosed in writing to Lender or as reflected or reserved for in the financial statements delivered from time to time by Borrower to Lender hereunder; (3) all instruments, chattel paper and other evidence of indebtedness issued to Borrower with respect to any Receivable have been made available to Lender, and, together with all supporting documents delivered to Lender, are genuine, complete, valid and enforceable in accordance with their terms; (4) it is not subject to any discount, allowance or special terms of payment except in the ordinary course of business or as disclosed in writing to Lender; and (5) except as required by the Assignment of Claims Act, it is not and shall not be subject to any prohibition or limitation upon assignment. Borrower covenants and agrees that each Receivable arising after the date of this Agreement will be in conformance with the foregoing representations in all material respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3.  **<u>Covenants Concerning the Collateral</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower shall immediately notify Lender of (1) any dispute in excess of $25,000 with a customer and (2) the bankruptcy, insolvency, receivership, assignment for the benefit of creditors or suspension of business of any customer of which Borrower has knowledge. Borrower shall not compromise or discount any Receivable without the prior written consent of Lender except for (i) ordinary trade discounts or allowances for prompt payment, and (ii) prior to the occurrence of a Default or an Event of Default, such compromises or discounts that, after giving effect thereto, will not cause the unpaid principal balance of the Loans then outstanding to exceed the most recent Borrowing Base Certificate provided to Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Borrower shall execute all other agreements, instruments and documents and shall perform all further acts that Lender may require to ensure compliance with the Assignment of Claims Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All of the inventory and equipment of Borrower will be kept only at locations identified on **Schedule 4.2**. Borrower shall give Lender prior written notice before any material inventory or equipment is moved or delivered to a location other than such designated places of business, and Lender's lien and security interest will be maintained despite the location of the inventory or equipment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Borrower, at its expense, will defend the Collateral against any claims or demands adverse to Lender's security interest and will promptly pay when due all taxes or assessments levied against Borrower on the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Borrower shall, at the request of Lender, notify account debtors and other Persons obligated on any of the Collateral of the security interest of Lender in any account, chattel paper, general intangible, instrument or other Collateral and that payment thereof is to be made directly to Lender or to any financial institution designated by Lender as Lender's agent therefor, and Lender may itself, without notice to or demand upon Borrower, so notify account debtors and other Persons obligated on Collateral. After the making of such a request or the giving of any such notification, Borrower shall hold any proceeds of collection of accounts, chattel paper, general intangibles, instruments, and other Collateral received by Borrower as trustee for Lender without commingling the same with other funds of Borrower and shall turn the same over to Lender in the identical form received, together with any necessary endorsements or assignments. Borrower shall, at the request of Lender, establish a Cash Collateral Account. When a Cash Collateral Account has been established, Borrower shall deposit into the Cash Collateral Account, immediately upon receipt thereof, all cash, checks, drafts, and other instruments for the payment of money, properly endorsed, which have been received by Borrower in full or partial payment of any and all Collateral. Prior to any such deposit into the Cash Collateral Account, Borrower will not commingle any such items of payment with any of its other funds or property but will hold them separate and apart as trustee for Lender. All electronic payments to Borrower made in respect of any and all Collateral shall be directed to the Cash Collateral Account. When a Cash Collateral Account has been established, Borrower shall designate the Cash Collateral Account in the federal System for Award Management (formerly the Central Contractor Registration) as the account to receive payments due from the United States Government. Borrower authorizes Lender to apply funds in the Cash Collateral Account to reduce the outstanding Obligations. Until Lender has notified Borrower to the contrary, Lender will transfer funds remaining in the Cash Collateral Account after application against the outstanding Obligations then due to the account designated by Borrower from time to time in a written notice to Lender. Effective immediately upon Lender's issuance of notice to Borrower (which may be by electronic communication and given at any time), Lender will cease transferring funds from the Cash Collateral Account to Borrower's designated account. If Borrower fails to cause all payments of all Collateral to be deposited in the Cash Collateral Account, Lender, at its option, may increase the interest rate on outstanding Loans to the Default Rate or charge a monthly administrative fee of $0 for each month or partial month while such failure exists. To exercise this right Lender shall give Borrower at least five (5) days' notice specifying Lender's election. If Lender elects to increase the interest rate, the increase shall be effective as of the date specified in the notice (or if no date is specified, the fifth (5<sup>th</sup>) day after the date of the notice). Lender's right to increase the interest rate pursuant to this **Section 4.3(e)** shall be in addition to any other rights or remedies Lender may have under this Agreement and the other Loan Documents, all of which are hereby reserved, and shall not constitute a waiver, release or limitation upon Lender's exercise of any such rights or remedies or Borrower's obligation to cause all payments of all Collateral to be deposited in the Cash Collateral Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Borrower shall provide Lender such information as Lender from time to time reasonably may request with respect to the Collateral, including, without limitation, statements describing, designating, identifying and evaluating all Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4. **<u>Perfection of Security Interest</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower hereby irrevocably authorizes Lender at any time and from time to time to file in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto that (1) indicate the Collateral (i) as all assets of Borrower or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the applicable Uniform Commercial Code, or (ii) as being of an equal or lesser scope or with greater detail, and (2) contain any other information required by Part 5 of Article 9 of the applicable Uniform Commercial Code for the sufficiency or filing office acceptance of any financing statement or amendment, including (A) whether Borrower is an organization, the type of organization and any organization identification number issued to Borrower or a statement that it has none, and (B) in the case of a financing statement filed as a fixture filing or indicating Collateral as as-extracted collateral or timber to be cut, a sufficient description of real property to which the Collateral relates. Borrower agrees to furnish any such information to Lender promptly upon request. Borrower also ratifies its authorization for Lender to have filed in any Uniform Commercial Code jurisdiction any like initial financing statements or amendments thereto if filed prior to the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Without providing at least 30 days' prior written notice to Lender, Borrower shall not change its name, its type of organization, jurisdiction of organization or other legal structure, its place of business or, if more than one, chief executive office, the office where books or records are kept, or its mailing address or organizational identification number if it has one.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) For each deposit account that Borrower at any time opens or maintains, Borrower shall, at Lender's request and option, pursuant to an agreement in form and substance satisfactory to Lender, either (1) cause the depositary bank to agree to comply at any time with instructions from Lender to such depositary bank directing the disposition of funds from time to time credited to such deposit account, without further consent of Borrower, or (2) arrange for Lender to become the customer of the depositary bank with respect to the deposit account, with Borrower being permitted, only with the consent of Lender, to exercise rights to withdraw funds from such deposit account. Lender agrees with Borrower that Lender shall not give any such instructions or withhold any withdrawal rights from Borrower, unless an Event of Default has occurred and is continuing, or, after giving effect to any withdrawal not otherwise permitted by the Loan Documents, would occur. The provisions of this paragraph shall not apply to deposit accounts specially and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower's salaried employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Borrower acknowledges that it is not authorized to file any financing statement or amendment, termination, or corrective statement with respect to any financing statement without the prior written consent of Lender and agrees that it will not do so without the prior written consent of Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5. **<u>Other Perfection</u>**. Borrower will execute and deliver to Lender such security agreements, assignments and other papers as Lender may at any time or from time to time reasonably request that are required to perfect or protect the security interest granted hereby. Borrower shall also cooperate with Lender, if requested by Lender, in obtaining appropriate waivers or subordinations of interests from such third parties in any Collateral and in obtaining control of Collateral consisting of deposit accounts, investment property, letter-of-credit rights or electronic chattel paper.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6. **<u>Maintenance of Collateral</u>**. Borrower shall, at its sole expense, take good care of all its Collateral and afford it suitable preventive maintenance. Borrower will not permit anything to be done that might in any way impair the value of any of the Collateral or any of the security intended to be afforded by this Agreement. Borrower shall not pledge, assign, or otherwise further encumber, or permit any additional liens or security interests (other than Permitted Liens) to attach to, any of the Collateral, nor permit any of the Collateral to be levied upon under any legal process, nor permit any of the Collateral to become or be a fixture, except with the express written consent of Lender. Upon any breach of the foregoing covenant against encumbrances, Lender may, at its sole election but without obligation to do so, and without limiting Lender's other remedies (including without limitation declaring a default), discharge the encumbrance for the account of and without notice to Borrower, and all expenses incurred by Lender in so doing shall be added to the Obligations and shall be payable by Borrower upon demand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7. **<u>Attorney in Fact</u>**. Borrower hereby appoints Lender and such Person(s) as Lender may designate as its attorney in fact to (a) execute and deliver notices of lien, financing statements, assignments, and any other documents, notices, and agreements necessary for the perfection of Lender's security interests in the Collateral, (b) endorse the name of Borrower on any checks, notes, drafts or other forms of payment or security that may come into the possession of Lender or any Affiliate of Lender, (c) sign Borrower's name on invoices or bills of lading, drafts against customers, notice of assignment, verifications and schedules, (d) continue or obtain any insurance and pay all or any part of the premiums therefor and costs thereof, and make, settle and adjust all claims under such policies of insurance, (e) pay or discharge any taxes, liens, security interests or other encumbrances levied or placed on or threatened against Borrower or its property, (f) instruct any third party having custody or control of any Collateral or books and records belonging or relating to Borrower to give Lender the same rights of access and other rights with respect thereto as Lender has under this Agreement and the Loan Documents, (g) notify the Post Office authorities to change the address of delivery of mail to an address designated by Lender, and open and dispose of mail addressed to Borrower, and (h) generally, to do all things necessary to carry out the terms and provisions of this Agreement. The powers granted herein, being coupled with an interest, are irrevocable, and Borrower approves and ratifies all acts of the attorney-in-fact. Neither Lender nor its designated Person(s) shall be liable for any act or omission, error in judgment or mistake of law so long as the same is not willful or grossly negligent. Any and all sums paid, and any and all costs, expenses, liabilities, obligations, and attorneys' fees incurred by Lender with respect to the foregoing shall be added and become part of the Obligations, shall be payable on demand, and shall bear interest at the then-applicable rate set forth in the Loan Agreement. Borrower agrees that Lender's rights under the foregoing power of attorney or any of Lender's other rights under this Agreement and the other Loan Documents shall not be construed to indicate that Lender is in control of the business, management, or properties of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8. **<u>Limitation on Obligations</u>**. It is expressly agreed by Borrower that, notwithstanding any other provision of this Agreement, Borrower shall remain liable under each Receivable and contract giving rise to each Receivable to observe and perform all the conditions and obligations to be observed and performed by Borrower in accordance with and pursuant to the terms and provisions of each such Receivable and contract. Lender shall not have any obligation or liability under any Receivable or contract by reason of or arising out of this Agreement or the assignment of such Receivable or contract to Lender or the receipt by Lender of any payment relating to the Receivable pursuant to this Agreement, nor shall Lender be required or obligated in any manner to perform or fulfill any of the obligations of Borrower under or pursuant to any Receivable or contract, or to make any payment, or to make any inquiry as to the nature or the sufficiency of any payment received by it or the sufficiency of any performance by any party under any Receivable, or to present or file any claim, or to take any action to collect or enforce any performance or the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9. **<u>Indemnification</u>**. In any suit, proceeding or action brought by or against Lender relating to the Collateral, Borrower will save, indemnify and keep Lender harmless from and against all expense, loss or damage suffered by reason of any defense, setoff, counterclaim, recoupment or reduction of liability whatsoever of any obligor thereunder, arising out of a breach by Borrower of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such obligor or its successors from a Borrower, and all such obligations of Borrower shall be and remain enforceable against and only against Borrower and shall not be enforceable against Lender. The foregoing obligation of Borrower to indemnify Lender shall not extend to any suit, proceeding or action arising out of Lender's gross negligence or willful or malicious misconduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. <u>APPLICATION OF PROCEEDS.</u>** The proceeds of the Loans shall be used solely by Borrower as set forth in the Preamble to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. <u>INDUCING REPRESENTATIONS.</u>** In order to induce Lender to make the Loans, Borrower makes the following representations and warranties to Lender:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. **<u>Organization and Qualifications.</u>** Borrower (a) is a corporation or limited liability company, as applicable, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation or organization; (b) has the power and authority to own its assets and to transact the business in which it is now engaged or in which it is proposed to be engaged; and (c) is duly qualified as a foreign corporation or limited liability company and in good standing under the laws of each other jurisdiction in which such qualification is required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. **<u>Structure.</u>** Borrower has no subsidiaries or Affiliates, except as set forth on **Schedule 6.2** attached hereto. All of the issued and outstanding member interests of Borrower are owned by the Persons and in such amounts/percentages as set forth in **Schedule 6.2** attached hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. **<u>Legally Enforceable Agreement.</u>** The execution, delivery and performance of this Agreement, each and all of the other Loan Documents and each and all other instruments and documents to be delivered by Borrower or its Affiliates under this Agreement and the creation of all liens and security interests provided for herein are within Borrower's corporate or limited liability company power, have been duly authorized by all necessary or proper corporate or limited liability company action (including the consent of members or shareholders where required), are not in contravention of any agreement or indenture to which Borrower is a party or by which it is bound, or of the charter documents (articles/certificate of incorporation, by-laws, articles/certificate of organization/formation or operating agreement, as the case may be) of Borrower, and are not in contravention of any provision of law and the same do not require the consent or approval of any governmental body, agency, authority or any other Person which has not been obtained and a copy thereof furnished to Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. **<u>Solvent Financial Condition.</u>** Both immediately prior to and after giving effect to the transactions contemplated by the terms and provisions of this Agreement, Borrower is Solvent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5. **<u>Financial Statements</u>.** Borrower has furnished to Lender (a) the reviewed consolidated and consolidating balance sheet of Borrower and its subsidiaries as of 6/30/2024, and the related consolidated and consolidating statements of income, stockholders' equity and cash flows for the Fiscal Year then ended prepared by Borrower and reviewed by an independent certified public accounting firm selected by Borrower and acceptable to Lender and (b) the unaudited consolidated and consolidating balance sheet of Borrower and its subsidiaries as of 6/30/2024, and the related unaudited consolidated and consolidating statement of income, stockholder's equity and cash flows for the fiscal quarter and year-to-date period then ending, certified by an officer of Borrower. Such financial statements are complete and correct, have been prepared in accordance with IFRS and fairly present in all material respects the financial condition of Borrower and its subsidiaries on a consolidated and consolidating basis as of the dates of such statements. Since the dates of such statements, there has been no Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6. **<u>Joint Ventures.</u>** Borrower is not engaged in any joint venture or partnership with any other Person, other than those listed in schedule 6.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7. **<u>Real Estate.</u>** Attached hereto as **Schedule 6.7** is a list showing all real property owned or leased by Borrower, and if leased, the correct name and address of the landlord and the date and term of the applicable lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.8. **<u>Intellectual Property.</u>** Borrower owns, possesses, or is licensed to use all the patents, trademarks, service marks, trade names, copyrights, licenses, and other intellectual property necessary for the present and planned future conduct of its business without any conflict with the rights of others. All such patents, trademarks, service marks, trade names, copyrights, licenses, and other similar rights are listed on **Schedule 6.8** attached hereto, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.9. **<u>Existing Business Relationship.</u>** There exists no actual or threatened termination, cancellation, or limitation of, or any adverse modification or change in, the business relationship of Borrower with any supplier, customer or group of customers which could reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.10. **<u>Investment Company Act: Federal Reserve Board Regulations.</u>** Borrower is not an "investment company," or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended (15 U.S.C. §§ 80(a)(1), et seq.). The making of the Loans under this Agreement by Lender, the application of the proceeds and repayment thereof by Borrower and the performance of the transactions contemplated by this Agreement will not violate any provision of such Act, or any rule, regulation or order issued by the Securities and Exchange Commission thereunder. Borrower does not own any margin security as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System and the proceeds of the Loans made pursuant to this Agreement will be used only for the purposes contemplated under this Agreement. None of the proceeds will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security or for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry margin security or for any other purpose which might constitute any of the Loans under this Agreement a "purpose credit" within the meaning of said Regulation U or Regulations T or X of the Federal Reserve Board. Borrower will not take, or permit any agent acting on its behalf to take, any action which might cause this Agreement or any document or instrument delivered pursuant hereto to violate any regulation of the Federal Reserve Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.11. **<u>Tax Returns.</u>** Borrower and the guarantor(s), if any, have filed all tax returns (federal, state, or local) required to be filed and paid all taxes shown thereon to be due including interest and penalties. No assessments have been made against Borrower or any guarantor(s), if any, by any taxing authority nor has any penalty or deficiency been made by any such authority. To the best of Borrower's knowledge, no Federal income tax return of Borrower or any guarantor, if any, is presently being examined by the Internal Revenue Service nor are the results of any prior examination by the Internal Revenue Service or any State or local tax authority being contested by Borrower or any guarantor, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.12. **<u>Litigation</u>**. No action or proceeding is now pending or, to the knowledge of Borrower, is threatened against Borrower or any guarantor, if any, at law, in equity or otherwise, before any court, board, commission, agency or instrumentality of the Federal or state government or of any municipal government or any agency or subdivision thereof, or before any arbitrator or panel of arbitrators, and neither Borrower nor any guarantor, if any, has accepted liability for any such action or proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.13. **<u>Title/ Liens</u>**. Borrower has good and marketable title to the Collateral as sole owner thereof. There are no existing liens on any Collateral of Borrower, except for Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.14. **<u>Existing Indebtedness.</u>** Borrower has no existing Indebtedness except the Indebtedness permitted under **Section 10.1**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.15. **<u>ERISA Matters.</u>** The present value of all accrued vested benefits under any Plan (calculated on the basis of the actuarial valuation for the Plan) did not exceed as of the date of the most recent actuarial valuation for such Plan the fair market value of the assets of such Plan allocable to such benefits. Borrower is not aware of any information since the date of such valuation which would affect the information contained therein. No Plan has incurred a funding shortfall, as that term is defined in Section 302 of ERISA or Section 412 and/or 430 of the Code (whether or not waived), no liability to the Pension Benefit Guaranty Corporation (other than required premiums which have become due and payable, all of which have been paid) has been incurred with respect to the Plan and there has not been any Reportable Event. Borrower has not engaged in any transaction which would subject Borrower to tax, penalty or liability for prohibited transactions imposed by ERISA or the Code. Borrower has not incurred any withdrawal liability, as that term is used in Title IV of ERISA. Neither Borrower nor any of its subsidiaries is now, nor at any time in the past three (3) years has been, obligated to make contributions to a "<u>multiemployer plan</u>," as such term is defined in § 4001(a)(3) of ERISA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.16. **<u>Labor Disputes.</u>** Borrower is not a party to any collective bargaining agreement nor has any labor union been recognized as the representative of its employees. There are no pending or, to Borrower's knowledge, threatened labor disputes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.17. **<u>Compliance with Laws.</u>** Borrower is in compliance with all Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.18. **<u>Anti-Money Laundering and Terrorism Regulations</u>**. Borrower: (a) is familiar with all applicable Anti-Terrorism Laws; (b) acknowledges that its transactions are subject to applicable Anti-Terrorism Laws; (c) will comply in all material respects with all applicable Anti-Terrorism Laws, including, if appropriate, the USA Patriot Act; (d) acknowledges that Lender's performance hereunder is also subject to Lender's compliance with all applicable Anti-Terrorism Laws, including the USA Patriot Act; (e) is not a Blocked Person, and, to Borrower's knowledge, its Affiliates are not Blocked Persons; (f) acknowledges that Lender will not conduct business with any Blocked Person; (g) will not (i) conduct any business or engage in any transaction or dealing with any Blocked Person, including, without limitation, the making or receiving of any contribution of funds, goods or services to or for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224 or other Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law; (h) shall provide to Lender all such information about Borrower's ownership, officers, directors, business structure and, to the extent not prohibited by applicable law or agreement, customers, as Lender may reasonably require; and (i) will take such other action as Lender may reasonably request in connection with its obligations described in clause (d) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.19. **<u>No Other Violations.</u>** Borrower is not in violation of any term of its charter documents (articles/certificate of incorporation, by-laws, articles or certificate of organization/formation or operating agreement, as the case may be) and no event or condition has occurred or is continuing which constitutes or results in (or would constitute or result in, with the giving of notice, lapse of time or other condition) (a) a breach of, or a default under, any agreement, undertaking or instrument to which Borrower is a party or by which it or any of its Collateral may be affected, or (b) the imposition of any lien (other than a Permitted Lien) on any Collateral of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.20. **<u>Debarment and Suspension</u>.** No event has occurred and, to the knowledge of Borrower, no condition exists that may result in the debarment or suspension of Borrower or any subsidiary from any contracting with the Federal government, and neither Borrower nor any Affiliate of Borrower has been subject to any such debarment or suspension prior to the date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.21. **<u>Foreign Assets.</u>** Except as disclosed in writing to Lender, Borrower does not own or have any interest in or control over a Foreign Financial Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.22. **<u>Full Disclosure</u>**. No information contained in any Loan Document, the financial statements or any written statement furnished by or on behalf of Borrower under any Loan Document, or to induce Lender to execute the Loan Documents, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which they were made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.23. **<u>Survival of Representations and Warranties.</u>** Borrower covenants, warrants and represents to Lender that all representations and warranties of Borrower contained in this Agreement or in any other Loan Documents shall be true at the time of Borrower's execution of this Agreement and the other Loan Documents, and Lender's right to bring an action for breach of any such representation or warranty or to exercise any remedy under this Agreement based upon the breach of such representation or warranty shall survive the execution, delivery and acceptance hereof by Lender and the closing of the transactions described herein or related hereto until the Obligations are finally and irrevocably paid in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. <u>FINANCIAL STATEMENTS AND INFORMATION; CERTAIN NOTICES TO LENDER.</u>** So long as Borrower shall have any Obligations to Lender under this Agreement, Borrower shall deliver to Lender, or shall cause to be delivered to Lender:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1. **<u>Monthly Borrowing Base Certificate, Aged Receivables and Delivery Order Report.</u>** On or before the tenth (10) day of each month of each Fiscal Year, a Borrowing Base Certificate appropriately completed and executed by the chief financial officer of Borrower, the Treasurer of Borrower or such other financial officer of Borrower as is acceptable to Lender and including a computation of the Borrowing Base as of the last day of the previous month, accompanied by (i) an Aged Receivables and a Delivery Order Report of the last day of the previous month (ii) such other supporting documents to the schedules as Lender may from time to time reasonably request, and (iii) such invoices, instruments, chattel paper and other evidences of indebtedness representing any Receivable, duly endorsed in blank or to Lender, as Lender may request, and such other information as Lender may require relating thereto, all in form acceptable to Lender

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2. **<u>Annual Financial Statements, Business Plan and Projections.</u>** Within ninety (90) days after the close of each Fiscal Year of Borrower, the reviewed financial statements consisting of the consolidated and consolidating balance sheets of Borrower and its subsidiaries as of the end of such Fiscal Year, and consolidated and consolidating statements of income, stockholders' equity and cash flows of Borrower and its Subsidiaries for such Fiscal Year, all in reasonable detail and all prepared in accordance with IFRS, accompanied by an opinion thereon in form and substance acceptable to Lender of an independent certified public accounting firm selected by Borrower and acceptable to Lender, together with a compliance certificate in the form attached as **Exhibit B** hereto and a contract backlog report in a form acceptable to Lender. Within thirty (30) days after the end of each Fiscal Year, Borrower shall deliver to Lender an annual business plan and projections for the following Fiscal Year (to include a balance sheet, statement of cash flows, and statement of income or operations, in each case prepared on a month-by-month basis and otherwise in scope and level of detail and including such other matters reasonably requested by Lender).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3. **<u>Monthly/Other Financial Statements; Borrowing Base Certificate, Aged Receivables; Inventory Report</u>**. Within twenty (20) days after the end of each of the fiscal months of each Fiscal Year of Borrower, financial statements as of the end of such fiscal month consisting of a balance sheet as of the end of such fiscal month and statements of operations and retained earnings and statements of cash flow for the period commencing at the end of the previous Fiscal Year and ending with the end of such fiscal month, prepared by management of Borrower in accordance with IFRS (subject to normal year-end audit adjustments and the absence of footnotes), together with a compliance certificate in the form attached as **Exhibit B** hereto; and at Lender's request, (i) monthly financial statements conforming to the above, (ii) a Borrowing Base Certificate depicting the information therein as of as of the last day of the previous fiscal month, and (iii) an Aged Receivables and an Inventory Report, both as of the last day of the previous fiscal month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4. **<u>Payroll Tax Reporting</u>**. Promptly upon Lender's request (a) after the payment thereof, provide Lender with evidence, in form satisfactory to Lender, that all of the payroll taxes required to be paid in connection with each payroll cycle have been paid, (b) after the filing thereof, provide Lender with copies of Form 941 (Department of Treasury – Internal Revenue Service) and any state equivalent thereof, and (c) after the filing thereof, provide Lender with copies of Form W-3 (Department of Treasury – Internal Revenue Service) and any state equivalent thereof. Borrower shall also provide any additional information, documents or reports relating to the payment of payroll taxes promptly after request therefore from Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5. **<u>Insurance</u>**. Annually, within thirty (30) days of the renewal date of each insurance policy, evidence of insurance in form and content satisfactory to Lender and otherwise in compliance with **Section 9.6** of this Agreement, together with the original insurance policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6. **<u>Notice of Event of Default and Adverse Business Developments</u>**. Immediately after becoming aware of the existence of a Default or an Event of Default or any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any dispute that may arise between Borrower and any governmental regulatory body or law enforcement authority, including any action relating to any tax liability of Borrower or guarantor if any;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any labor controversy resulting in or threatening to result in a strike or work stoppage against Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any proposal by any public authority to acquire the assets or business of Borrower; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any other matter which has resulted or may result in a Material Adverse Effect.

In each case, Borrower will provide Lender with telephonic notice followed by written notice specifying and describing the nature of such Default, Event of Default or development or information, and such anticipated effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7. **<u>Other Information</u>** Such other information respecting the payment of payroll taxes, the financial condition of Borrower or any guarantor, if any, or any Collateral of Borrower in which Lender may have a lien as Lender may, from time to time, request. Borrower authorizes Lender to communicate directly with Borrower's independent certified public accountants and authorizes those accountants to disclose to Lender any and all financial statements and other information of any kind that they may have with respect to Borrower and its business and financial and other affairs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8. <u>LOAN ACCOUNTING.</u>** Lender will enter on its books and records the date and amount of each Loan, as well as the date and amount of each payment received by Lender. Lender may provide a loan account statement to Borrower on a monthly basis. Each and every loan account statement shall be deemed final, binding and conclusive upon Borrower in all respects (absent manifest error), as to all matters reflected therein, unless Borrower, within fifteen (15) days after the date the loan account statement was rendered, delivers to Lender written notice of any objections which Borrower may have to any such loan account statement and in that event only those items expressly objected to in such notice shall be deemed to be disputed by Borrower. If Borrower disputes the correctness of any loan account statement, Borrower's notice shall specify in detail the particulars of its basis for contending that such statement is incorrect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9. <u>AFFIRMATIVE COVENANTS</u>**<u>.</u> Borrower covenants and agrees that, so long as it shall have any Obligations to Lender under this Agreement, Borrower will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1. **<u>Business and Existence.</u>** Preserve and maintain Borrower's separate existence and rights, privileges, and franchises.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2. **<u>Trade Names</u>**<u>.</u> Transact business in Borrower's own name and invoice all of Borrower's receivables in Borrower's own name.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3. **<u>Transactions with Affiliates</u>**<u>.</u> Whenever Borrower engages in transactions with any of Borrower's Affiliates, conduct the same on an arms-length basis or other basis more favorable to Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4. **<u>Taxes</u>**<u>.</u> Pay and discharge all taxes, assessments, government charges and levies imposed upon Borrower, Borrower's income, profits, or employees or upon any Collateral belonging to Borrower prior to the due date thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5. **<u>Compliance with Laws.</u>** Comply with all Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6. **<u>Maintain Properties: Insurance.</u>** Safeguard and protect all property used in the conduct of Borrower's business and keep all of Borrower's property insured with insurance companies licensed to do business in the states where the property is located against loss or damage by fire or other risk under extended coverage endorsement and against theft, burglary, and pilferage together with such other hazards as Lender may from time to time request, in amounts satisfactory to Lender. Borrower shall deliver the policy or policies of such insurance or certificates of insurance to Lender containing endorsements in form satisfactory to Lender naming Lender as lender loss payee and additional insured and providing that the insurance shall not be canceled, amended, or terminated except upon thirty (30) days' prior written notice to Lender. All insurance proceeds received by Lender shall be retained by Lender for application to the payment of such portion of the Obligations as Lender may determine in Lender's sole discretion. During the existence of a Default or an Event of Default, Lender shall have the right to file claims under any insurance policies, to receive, receipt and give acquittance for any payments that may be made thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise, or settlement of any claims under any of the insurance policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7. **<u>Business Records.</u>** Keep adequate records and books of account with respect to Borrower's business activities in which proper entries are made in accordance with sound bookkeeping practices reflecting all financial transactions of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.8. **<u>Litigation.</u>** Give Lender prompt notice of any suit at law or in equity against Borrower involving money or property valued in excess of $10,000 except where the same is fully covered by insurance and the insurer has accepted liability therefore in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.9. **<u>Damage or Destruction of Collateral</u>**. Maintain or cause to be maintained all property of Borrower in good condition and repair at all times (normal wear and tear excepted), preserve property from loss, damage, or destruction of any nature whatsoever and provide Lender with prompt written notice of any destruction or substantial damage to any Collateral and of the occurrence of any condition or event which has caused, or may cause, loss or depreciation in the value of any Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.10. **<u>Access to Books, Records, and other Collateral</u>**. During normal business hours (unless an Event of Default has occurred in which event at any and all times), (a) provide Lender with such reports and with such access to Borrower's books and records and permit Lender to copy and inspect such reports and books and records all as Lender deems necessary or desirable to enable Lender to monitor the credit facilities extended hereby, and (b) permit Lender to examine and inspect the inventory, equipment or other Collateral and may examine, inspect and copy all books and records with respect thereto. Borrower shall maintain full, accurate and complete records respecting inventory, including a perpetual inventory, and all other Collateral at all times.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.11. **<u>Solvency</u>**<u>.</u> Continue to be Solvent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10. <u>NEGATIVE COVENANTS.</u>** So long as Borrower shall have any Obligation to Lender under this Agreement and unless Lender has first consented thereto in writing, Borrower shall not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1. **<u>Indebtedness</u>**<u>.</u> Create, incur, assume or permit to exist, any Indebtedness, except: (a) the Obligations; (b) Indebtedness of Borrower subordinated to the Obligations on terms satisfactory to Lender (subject to the provisions of the applicable subordination agreement, and for so long as the same is in full force and effect); (c) ordinary trade accounts payable; (d) Indebtedness of Borrower (including Indebtedness arising out of a capital lease) or any subsidiary in an amount not exceeding $25,000 per Fiscal Year secured by purchase-money Liens permitted by this Agreement; (e) guarantees permitted by this Agreement and (f) Indebtedness of Borrower to PFF, LLC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2. **<u>Sale or Disposition</u>**<u>.</u> Sell, lease, assign, transfer, license or otherwise dispose of, any of its now owned or hereafter acquired assets, except for (a) inventory and intellectual property sold, licensed or leased in the ordinary course of business and, (b) the sale or other disposition of assets (other than inventory and intellectual property) no longer used or useful in the conduct of its business and not exceeding $50,000 in the aggregate for during any Fiscal Year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3. **<u>Defaults</u>**<u>.</u> Permit any landlord, mortgagee, trustee under deed of trust or lienholder to declare a default under any lease, mortgage, deed of trust or lien on real estate owned or leased by Borrower, which default remains uncured after any stated cure period or for a period in excess of thirty (30) days from its occurrence, whichever is less, unless such default is being contested by Borrower in good faith by appropriate proceedings being diligently conducted and reserves satisfactory to Lender have been established and maintained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4. **<u>Limitations on Liens.</u>** Suffer any Lien on any of its property, except Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5. **<u>Dividends and Distributions; Subordinate Indebtedness Payments</u>.** Pay any cash dividends, make any capital distribution in cash or other Collateral or return of capital, purchase or redeem any of its equity interests or other securities, retire any of its equity interests, make any payments to the holder of subordinated Indebtedness, or take any action in furtherance of, or which would have an effect equivalent to, any of the foregoing; provided, that, (a) so long as (i) Borrower is a "pass-through" tax entity for federal income tax purposes and (ii) no Default or Event of Default shall have occurred and be continuing, Borrower may make distributions to holders of its equity interests in amounts sufficient to enable such Persons to pay applicable federal and state income taxes which are directly attributable to the net income of Borrower in any Fiscal Year, which distributions shall be made *pro rata* based on a percentage of owned equity interests and shall be calculated based on the assumption that the income of each holder of equity interests will be taxed at the maximum rate permissible under federal or such state law, as applicable and (b) so long as (i) no Default or Event of Default shall have occurred and be continuing, (ii) the Borrower had positive net income for the fiscal quarter ending immediately prior to the fiscal month in which the payment is to be made, and (iii) taking into account the proposed payment, the Borrower will have positive net income for the fiscal quarter in which the payment is to be made, the Borrower may make payments to the holder of subordinated Indebtedness in accordance with the provisions of the applicable subordination agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6. **<u>Fiscal Year</u>**. Change its Fiscal Year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.7. **<u>Change of Control/Management</u>**. Allow a change in the ownership structure of Borrower, or have a Chief Executive Officer other than Bill Frain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.8. **<u>Guaranties; Contingent Liabilities</u>**<u>.</u> Assume, guarantee, endorse, contingently agree to purchase, or otherwise become liable upon the obligation of any Person, except by the endorsement of negotiable instruments for deposit or collection or similar transactions in its ordinary course of business as currently conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.9. **<u>Change of Business.</u>** Cause or permit a change in the nature of its business as conducted on the date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.10. **<u>Change of Accounting Practices.</u>** Change its present accounting principles or practices in any respect, except, upon written notice to Lender, as may be required by changes in IFRS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.11. **<u>Inconsistent Agreement.</u>** Enter into any agreement containing any provision which would be violated by the performance of Borrower's Obligations or other obligations under this Agreement or any other Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.12. **<u>Loan or Advances.</u>** Make any loans or advances to any Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.13. **<u>Investments.</u>** Make any investment in any Person including, without limitation, in any Affiliates or form any Affiliates or subsidiaries not existing on the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.14. **<u>Mergers; Consolidations; Acquisitions</u>**. Enter into any merger, consolidation, reorganization, or recapitalization with any other Person; take any steps in contemplation of dissolution or liquidation; conduct any part of its business through any corporate subsidiary, unincorporated association, or other Person; acquire the stock or assets of any Person, whether by merger, consolidation, purchase of stock or otherwise; or acquire all or any substantial part of the properties of any Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.15. **<u>Foreign Financial Account.</u>** Own or acquire any interest in or control over a Foreign Financial Account that has not been disclosed to Lender in writing no later than seven (7) days after Borrower acquired such ownership or other interest or control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.16. **<u>No Restrictions Without Loan Balance</u>**. The parties hereto acknowledge that, notwithstanding any language in this Agreement to the contrary, none of the covenants and restrictions of Borrower described herein shall be in force at any time when there is no current balance then due to Lender from Borrower under this Agreement, regardless of whether or not this Agreement at that time has been terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11. <u>BORROWER'S REAFFIRMATION</u>.** Borrower's acceptance of each Loan under this Agreement shall constitute a confirmation, as of the date of the Loan, of the matters set forth in **Articles 4** and **6** of this Agreement, of the representations and warranties set forth in the other Loan Documents, and that no Default or Event of Default then exists.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12. <u>EVENTS OF DEFAULT.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1. **<u>Defaults</u>**. The occurrence of any one or more of the following events shall constitute an "Event of Default" hereunder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) if Borrower shall fail to make any payment when due on any Obligation under this Agreement or any other Loan Document, whether at maturity or otherwise ; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if Borrower shall fail to comply with any term, condition, covenant, or agreement contained in **Articles 7 or 10** of this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) if Borrower shall fail to comply with any term, condition, covenant or agreement contained in this Agreement other than in **Articles 7** or **10** of this Agreement, and such failure continues for a period of ten (10) days after the earlier to occur of (i) the date on which such failure to comply is known or reasonably should have become known to any officer of Borrower, or (ii) the date on which Lender shall have notified Borrower of such failure; provided, however, that such ten (10) day period shall not apply in the case of any failure which is not capable of being cured at all or within such ten (10) day period or which has been the subject of a prior failure within a six (6) month period; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) if Borrower shall fail to comply with any term, condition, covenant, warranty, or representation contained in any of the other Loan Documents or any other agreement between Lender and Borrower; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) if Borrower shall cease to be Solvent, make an assignment for the benefit of its creditors, call a meeting of its creditors to obtain any general financial accommodation, suspend business or if any case under any provision of the Bankruptcy Code including provisions for reorganizations, shall be commenced by or against Borrower or if a receiver, trustee or equivalent officer shall be appointed for all or any of the property of Borrower; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) if any representation or warranty contained in this Agreement or any Loan Document, or in any written statement pursuant hereto or thereto, or in any report, financial statement or certificate delivered by Borrower to Lender shall be false, in any respect, when made; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) if any federal or state tax lien is filed of record against Borrower or any guarantor(s), if any, and is not bonded or discharged within ten (10) days of filing; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) if Borrower's independent public accountants shall refuse to deliver any financial statement required by this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if a judgment for more than $10,000 shall be entered against Borrower in any action or proceeding and shall not be stayed, vacated, bonded, paid or discharged within ten (10) days of entry, except a judgment where the claim is fully covered by insurance and the insurance company has accepted liability therefor in writing; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) if any obligation of Borrower in respect of any Indebtedness (other than Indebtedness to Lender) shall be declared to be or shall become due and payable prior to its stated maturity or such obligation shall not be paid as and when the same becomes due and payable; or there shall occur any event or condition which constitutes an event of default under any note, mortgage, indenture, instrument, agreement or evidence of such Indebtedness relating to any obligation of Borrower in respect of any such Indebtedness the effect of which is to permit the holder or the holders of such note, mortgage, indenture, instrument, agreement or evidence of such Indebtedness, or a trustee, agent or other representative on behalf of such holder or holders, to cause the Indebtedness evidenced thereby to become due prior to its stated maturity; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) upon the happening of any Reportable Event, or Borrower terminates or withdraws (full or partial) from any Plan, or if a trustee shall be appointed by an appropriate United States District Court or other court or administrative tribunal to administer any Plan, or if the Pension Benefit Guaranty Corporation shall institute proceedings to terminate any Plan or to appoint a trustee to administer any Plan; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) upon the occurrence and continuance of any Material Adverse Effect, which in the sole discretion of Lender, impairs Lender's security, increases Lender's risks; or impairs Borrower's ability to perform under this Agreement or under the other Loan Documents; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) if Borrower refuses to permit Lender to inspect, examine, verify, or audit the Collateral in accordance with the provisions of this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) upon the happening of any of the events described in **Subsections 12.1 (d), (e), (f), (g), (h), (i) or (j)** with respect to any guarantor, if any, or if any such guarantor purports to terminate its guaranty or upon the death of a guarantor, if any, that is a natural person, if any; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) if Borrower or any subsidiary shall be debarred or suspended from any contracting with the Federal government; or if a notice of debarment or notice of suspension shall have been issued to Borrower or any subsidiary; or if a notice of the possibility of or the actual termination for default of any contract with the Federal government or any material commercial contract shall have been issued to or received by Borrower or any subsidiary; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) if the Loan Documents shall for any reason cease to create a valid and perfected first priority security interest in any of the Collateral purported to be covered thereby, subject to only to Permitted Liens, or if any Loan Document ceases to be in full force and effect, or if any guarantor of the Obligations or any holder of Indebtedness subordinated to the Obligations gives notice to Lender purporting to terminate the effect of any applicable guaranty or subordination agreement, respectively; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) if an event of default under any other Loan Document occurs and is not cured prior to the expiration of all applicable cure periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2. **<u>Remedies</u>**. If an Event of Default has occurred, Lender may, without notice or demand, (a) declare all of the Obligations to be immediately due and payable, (b) elect to apply the Default Rate to all Obligations, and (c) exercise any rights and remedies provided to Lender under this Agreement, the other Loan Documents, or at law or equity, including all remedies provided under the UCC; provided, that upon the occurrence of any Event of Default specified in **Section 12.1(e),** all Obligations shall become immediately due and payable without declaration, notice or demand by Lender. Without limiting the foregoing, Lender may (a) accelerate the payment of all Obligations and demand immediate payment thereof to Lender, (b) with or without judicial process or the aid or assistance of others, enter upon any premises on or in which any of the Collateral may be located and take possession of the Collateral or complete processing, manufacturing and repair of all or any portion of the Collateral, (c) require Borrower, at Borrower's expense, to assemble and make available to Lender any part or all of the Collateral at any place and time designated by Lender, (d) collect, foreclose, receive, appropriate, setoff and realize upon any and all Collateral, and (e) sell, lease, transfer, assign, deliver or otherwise dispose of any and all Collateral (including, without limitation, entering into contracts with respect thereto, by public or private sales at any exchange, broker's board, any office of Lender or elsewhere) at such prices or terms as Lender may deem reasonable, for cash, upon credit or for future delivery, with Lender having the right to purchase the whole or any part of the Collateral at any such public sale, all of the foregoing being free from any right or equity of redemption of Borrower, which right or equity of redemption is hereby expressly waived and released by Borrower. If any of the Collateral is sold or leased by Lender upon credit terms or for future delivery, the Obligations shall not be reduced as a result thereof until payment therefore is finally collected by Lender. If notice of disposition of Collateral is required by law, ten (10) days prior notice by Lender to Borrower designating the time and place of any public sale or the time after which any private sale or other intended disposition of Collateral is to be made, shall be deemed to be reasonable notice thereof and Borrower waives any other notice. In the event Lender institutes an action to recover any Collateral or seeks recovery of any Collateral by way of prejudgment remedy, Borrower waives the posting of any bond which might otherwise be required. Upon the occurrence of an Event of Default, Lender may without, notice, demand or legal process of any kind, take possession of any or all of the Collateral, wherever it may be found, and for that purpose may pursue the same wherever it may be found, and may at any time enter into any of Borrower's premises where any of the Collateral may be or is supposed to be, and search for, take possession of, remove, keep and store any of the Collateral until the same shall be sold or otherwise disposed of, and Lender shall have the right to store and conduct a sale of the same in any of Borrower's premises without cost or charge to Lender. To the extent that the Obligations are now or hereafter secured by property other than the Collateral described herein or by the guarantee, endorsement or property of any other Person, Lender shall have the right to proceed against such other guarantee, endorsement or property upon the occurrence and during the continuance of an Event of Default, and Lender shall have the right, in its sole discretion, to determine which rights, security, liens, security interests or remedies Lender shall at any time pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of them or any of Lender's rights hereunder. The right of Lender to declare any and all Obligations to be immediately due and payable, as well as the recitation of the above events permitting Lender to declare all Obligations due and payable, shall not constitute an election by Lender to waive its right to demand payment of any Obligations under any demand instrument evidencing such Obligations at any time and in any event, as Lender, in its discretion, may deem appropriate.

BORROWER, HAVING KNOWLEDGE THAT IT MAY BE ENTITLED TO NOTICE AND A HEARING PRIOR TO REPOSSESSION OF THE COLLATERAL, WAIVES ANY RIGHT THAT IT MAY HAVE UNDER EXISTING OR FUTURE LAW TO NOTICE OF FORECLOSURE AND ANY OTHER ACT DESCRIBED HEREIN, TO ANY HEARING THAT MAY BE HELD RELATING TO FORECLOSURE OR ANY OTHER SUCH ACTS, AND TO ANY NOTICE THAT MAY BE REQUIRED TO BE GIVEN BY LENDER PRIOR TO SUCH HEARING, OTHER THAN THE NOTICES REQUIRED BY THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE UCC.

Lender itself may perform or comply, or otherwise cause performance or compliance, with the obligations of Borrower contained in this Agreement, including, without limitation, the obligations of Borrower to defend and insure the Collateral. The expenses of Lender incurred in connection with such performance or compliance, together with interest thereon at the Default Rate, shall be payable by Borrower to Lender on demand and shall constitute Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3. **<u>Remedies Cumulative</u>**. All rights and remedies granted Lender under this or any other agreement between Borrower and Lender will be deemed concurrent and cumulative and not alternative, and Lender may proceed with any number of remedies at the same time or at different times until all Obligations are fully satisfied. Borrower hereby waives all rights of notice or dishonor, any other rights of notice or the right to require Lender to marshall assets. Borrower shall pay to Lender on demand any and all expenses, including reasonable attorneys' fees and legal expenses which may have been incurred by Lender, with interest at the maximum rate permitted by law at the time incurred: (a) in the prosecution or defense of any action growing out of or connected with the subject matter of this Agreement, the Obligations, the Collateral or any of Lender's rights therein, and (b) in connection with the custody, preservation, protection, use, operation, preparation for sale or sale of any Collateral, the incurring of all of which are hereby authorized to the extent Lender deems the same advisable. To the extent permitted by applicable law, Borrower expressly acknowledges and agrees that the Default Rate shall apply to any judgment obtained by Lender against Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4. **<u>Obligations Immediately Due.</u>** Upon the Termination Date for any reason, all of the Obligations shall immediately become due and payable without further notice or demand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5. **<u>Continuation of Security Interests.</u>** Notwithstanding any termination, until all Obligations of Borrower shall have been fully paid and satisfied, Lender shall retain all security in and title to all existing and future Collateral held by Lender hereunder or under any other Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13. <u>GENERAL PROVISIONS.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1. **<u>Rights Cumulative.</u>** Lender's rights and remedies under this Agreement shall be cumulative and non-exclusive of any other rights or remedies which Lender may have under any other agreement or instrument, by operation of law or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2. **<u>Governing Law; Consent to Jurisdiction</u>**. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without regard to conflicts of laws principles, including without limitation the Electronic Transactions Act (or equivalent) (or, to the extent controlling, the laws of the United States of America, including without limitation the Electronic Signatures in Global and National Commerce Act). Any judicial proceeding brought by or against Borrower with respect to any of the Obligations, this Agreement or any related agreement may be brought in any court of competent jurisdiction in the Commonwealth of Virginia, and, by execution and delivery of this Agreement, Borrower accepts for itself and in connection with its properties, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. Borrower hereby waives personal service of any and all process upon it and consents that all such service of process may be made by registered mail (return receipt requested) directed to Borrower at its address set forth in **Section 13.4** and service so made shall be deemed completed five (5) days after the same shall have been so deposited in the mails of the United States of America. Nothing herein shall affect the right to serve process in any manner permitted by law or shall limit the right of Lender to bring proceedings against Borrower in the courts of any other jurisdiction. Borrower waives any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. Any judicial proceeding by Borrower against Lender involving, directly or indirectly, any matter or claim in any way arising out of, related to, or connected with this Agreement or any related agreement, shall be brought only in the Circuit Court for Fairfax County, Virginia, or the United States District Court for the Eastern District of Virginia, Alexandria Division.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3. **<u>Successors and Assigns</u>**. This Agreement is entered into for the benefit of the parties hereto and their successors and assigns. It shall be binding upon and shall inure to the benefit of the parties, their successors, and assigns. Lender shall have the right, on such terms as are acceptable to Lender in its sole discretion and without the necessity of any further consent or authorization by Borrower, to sell, assign, securitize or grant participation in all, or a portion of, Lender's interest in the Loans to other financial institutions and to any Person that is engaged in the business of making, purchasing, holding or otherwise investing in loans and extensions of credit in the ordinary course of its business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4. **<u>Notice.</u>** Wherever this Agreement provides for notice to any party (except as expressly provided to the contrary), it shall be given by messenger, certified U.S. mail with return receipt requested, or nationally recognized overnight courier with receipt requested, effective when either received or receipt rejected by the party to whom addressed, and shall be addressed as follows, or to such other address as the party affected may hereafter designate:

If to Lender:

PFF, LLC

2010 Corporate Ridge, Suite 450

McLean, VA 22102

Attn: Ryan Huss, President

If to Borrower:

Liberty Defense Technologies, Inc.

187 Ballardvale Street; Suite 110

Wilmington, MA 01887

Attn: Bill Frain, CEO

In addition, Borrower agrees that notices from Lender may be sent electronically to any electronic address provided by Borrower from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.5. **<u>Strict Performance.</u>** The failure, at any time or times hereafter, to require strict performance by Borrower of any provision of this Agreement shall not waive, affect, or diminish any right of Lender thereafter to demand strict compliance and performance therewith. Any suspension or waiver by Lender of any Default or Event of Default by Borrower under this Agreement or any other Loan Document shall not suspend, waive, or affect any other Default or Event of Default by Borrower under this Agreement or any other Loan Document, whether the same is prior or subsequent thereto and whether of the same or a different type.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.6. **<u>Waiver.</u>** Borrower waives presentment, protest, notice of dishonor and notice of protest upon any instrument on which it may be liable to Lender as maker, endorser, guarantor or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.7. **<u>Construction of Agreement.</u>** The parties hereto agree that the terms and language of this Agreement were the result of negotiations between the parties, and, as a result, there shall be no presumption that any ambiguities in this Agreement shall be resolved against either party. Any controversy over the construction of this Agreement shall be decided mutually without regard to events of authorship or negotiation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.8. **<u>Expenses.</u>** If, at any time or times prior or subsequent to the date hereof, regardless of whether or not a Default or an Event of Default then exists or any of the transactions contemplated under this Agreement are concluded, Lender employs counsel for advice or other representation, or incurs legal expenses, or consulting fees and expenses, or other costs or out-of-pocket expenses in connection with: (a) (i) the negotiation and preparation of this Agreement and the other Loan Documents (in the amount of $0, payable at closing), or (ii) any amendment of or modification of this Agreement or any other Loan Document; (b) the administration of this Agreement or any of the other Loan Documents and the transactions contemplated hereby and thereby; (c) periodic audits and appraisals performed by Lender; (d) any litigation, contest, dispute, suit, proceeding or action (whether instituted by Lender, Borrower or any other Person) in any way relating to the Collateral, this Agreement or any other Loan Document or Borrower's affairs; (e) the perfection of any lien on the Collateral; (f) any attempt to enforce any rights or remedies of Lender against Borrower or any other Person which may be obligated to Lender by virtue of this Agreement or any other Loan Document; or (g) any attempt to inspect, verify, protect, preserve, restore, collect, sell, liquidate or otherwise dispose of or realize upon the Collateral; then, in any such event, the reasonable attorneys' fees and actual expenses arising from such services and all expenses, costs, charges and other fees of such counsel of Lender or relating to any of the events or actions described in this **Section 13.8** shall be payable by Borrower to Lender, and shall be additional Obligations under this Agreement secured by the Collateral. Additionally, if any taxes (excluding taxes imposed upon or measured by the net income of Lender, but including any intangibles tax, stamp tax or recording tax) shall be payable on account of the execution or delivery of this Agreement, or the execution, delivery, issuance or recording of any other Loan Document, or the creation of any of the Obligations under this Agreement, by reason of any existing or hereafter enacted federal or state statute, Borrower will pay (or will promptly reimburse Lender for the payment of) all such taxes including, but not limited to, any interest and penalties thereon, and will indemnify, defend and hold Lender harmless from and against any liability in connection therewith. Borrower shall also reimburse Lender for all other expenses incurred by Lender in connection with the transactions contemplated under this Agreement or the other Loan Documents, including, without limitation, all UCC filing fees and all other filing fees in connection with perfection of Lender's security interests in the Collateral, fees in connection with any bank account, wire charges, automatic clearing house fees and other similar costs and expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.9. **<u>Waiver of Right to Jury Trial</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower and Lender recognize that in matters related to the Loans and this Agreement, and as it may be subsequently modified and/or amended, any such party may be entitled to a trial in which matters of fact are determined by a jury (as opposed to a trial in which such matters are determined by a federal or state judge). By execution of this Agreement, Lender and Borrower will give up their respective right to a trial by jury. Borrower and Lender each hereby expressly acknowledge that this waiver is entered into to avoid delays, minimize trial expenses, and streamline the legal proceedings in order to accomplish a quick resolution of claims arising under or in connection with the Note and this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, BORROWER AND LENDER EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT BORROWER OR LENDER MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION, DIRECTLY OR INDIRECTLY, AT ANY TIME ARISING OUT OF, UNDER, OR IN CONNECTION WITH THE LOANS, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY TRANSACTION CONTEMPLATED THEREBY OR HEREBY, BEFORE OR AFTER MATURITY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) BORROWER HEREBY CERTIFIES THAT NEITHER ANY REPRESENTATIVE NOR AGENT OF LENDER NOR LENDER'S COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. BORROWER ACKNOWLEDGES THAT LENDER HAS BEEN INDUCED TO ENTER INTO THE TRANSACTION BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATION HEREIN.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.10. **<u>Indemnification by Borrower.</u>** Borrower hereby covenants and agrees to indemnify, defend (with counsel selected by Lender) and hold harmless Lender and its officers, partners, employees, consultants, attorneys and agents from and against any and all claims, damages, liabilities, costs and expenses (including, without limitation, the actual fees and expenses of counsel) which may be incurred by or asserted against Lender or any such other Person in connection with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any investigation, action or proceeding arising out of or in any way relating to this Agreement, any of the Loans, any of the other Loan Documents, any other agreement relating to any of the Obligations, any of the Collateral, or any act or omission relating to any of the foregoing; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any taxes, liabilities, claims, or damages relating to Borrower, its employees, the Collateral or Lender's liens thereon; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the correctness, validity or genuineness of any instrument or document that may be released or endorsed to Borrower by Lender (which shall automatically be deemed to be without recourse to Lender in any event), or the existence, character, quantity, quality, condition, value, or delivery of any goods purporting to be represented by any such documents; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any broker's commission, finder's fee or similar charge or fee in connection with the Loans and the transactions contemplated in this Agreement.

Notwithstanding anything contained herein to the contrary, Borrower's indemnification obligations under this **Section 13.10** (i) shall not apply to any claims, damages, liabilities, costs, and expenses solely attributable to Lender's gross negligence or willful misconduct, and (ii) shall survive repayment of the Obligations and the termination of this Agreement and the other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.11. **<u>Savings Clause for Indemnification.</u>** To the extent that the undertaking to indemnify, pay and hold harmless set forth in **Section 13.10** above may be unenforceable because it violates any law or public policy, Borrower shall contribute the maximum portion which it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all matters referred to under **Section 13.10**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.12. **<u>Waiver.</u>** To the extent permitted by applicable law, no claim may be made by Borrower or any other Person against Lender or any of its Affiliates, partners, officers, employees, agents, attorneys or consultants for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract, tort or any other theory of liability arising out of or related to the transactions contemplated by this Agreement or the other Loan Documents or any act, omission or event occurring in connection therewith; and Borrower hereby waives, releases and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor. Neither Lender nor any of its Affiliates, partners, officers, employees, agents, attorneys, or consultants shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or the transactions contemplated hereby, except for its or their own gross negligence or willful misconduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.13. **<u>Entire Agreement; Waiver/Lender's Consent; Amendment.</u>** This Agreement (including the Exhibits and Schedules thereto) and the other Loan Documents supersede, with respect to their subject matter, all prior and contemporaneous agreements, understandings, inducements, or conditions between the respective parties, whether express or implied, oral, or written. No waiver of any provision of this Agreement or any other Loan Document, nor consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in writing by Lender, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No amendment of any provision of this Agreement or any other Loan Document shall in any event be effective unless the same shall be in a writing signed by Lender and Borrower. Notwithstanding the foregoing, Lender may modify this Agreement for the purposes of completing missing content or correcting erroneous content, without the need for a written amendment, provided that Lender shall send a copy of any such modification to Borrower (which notice may be given by electronic mail). No payment by Borrower or acceptance by Lender of a lesser amount than that due at any time hereunder shall be deemed to be other than a payment on account of such amount. No endorsement or statement on any check or other communication accompanying a check for the payment of any amount due hereunder shall be deemed an accord and satisfaction, and Lender may accept any such check or payment without prejudice to its rights hereunder to recover and enforce the Obligations and all other rights and remedies set forth herein and in the other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.14. **<u>Cross Default; Cross Collateral.</u>** Borrower hereby agrees that (a) all other agreements between Borrower and Lender are hereby amended so that a Default or an Event of Default under this Agreement is a default under all such other agreements and a default under any one of the other agreements is a Default or an Event of Default under this Agreement, and (b) the Collateral under this Agreement secures the Obligations now or hereafter outstanding under all other agreements between Borrower and Lender and the Collateral pledged under any other agreement with Lender secures the Obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.15. **<u>Execution in Counterparts.</u>** This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.16. **<u>Severability of Provisions.</u>** Any provision of this Agreement or any of the other Loan Documents that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or the other Loan Documents or affecting the validity or enforceability of such provision in any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.17. **<u>Headings.</u>** The headings preceding the text of this Agreement are inserted solely for convenience of reference and shall not constitute a part of this Agreement or affect its meaning, construction, or effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.18. **<u>Exhibits and Schedules.</u>** All of the Exhibits and Schedules to this Agreement are hereby incorporated by reference herein and made a part hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.19. **<u>No Broker's Fee</u>**. Notwithstanding anything contained herein or in any Loan Documents, Borrower shall be solely responsible for any broker's commission, finder's fee or similar charge or fee in connection with the Loans and the transactions contemplated in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.20. **<u>Marketing and Advertising</u>.** Borrower hereby authorizes and gives permission for Lender and Lender's Affiliates to use the legal or fictional company name, logo, trademark, and/or personal quotes in connection with promotional materials that Lender may disseminate to the public relating to Lender's relationship with Borrower. Promotional materials may include, but are not limited to, brochures, video tapes, emails, internet websites, advertising in newspapers and/or other periodicals, lucites, pictures and photographs. Lender shall provide each Borrower with a copy of promotional materials prepared by Lender or Lender's Affiliates prior to making such promotional materials available to the public.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.21. **<u>Electronic Signatures and Records.</u>** Notwithstanding any other provision herein, Borrower agrees that this Agreement, the other Loan Documents, any amendments thereto, and any other information, notice, agreement, or authorization related thereto (each, a "**<u>Communication</u>**") may, at Lender's option, be in the form of an electronic record. Any Communication may, at Lender's option, be signed or executed using electronic signatures. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by Lender of a manually signed paper Communication which has been converted into electronic form (such as scanned into PDF format) for transmission, delivery, and/or retention.

[REMAINDER OF PAGE LEFT BLANK]

**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be executed by their officers thereunto duly authorized on the day and year first above written.

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| | |
|:---|:---|
| Liberty Defense Technologies, Inc | Liberty Defense Technologies, Inc |
| By: | /s/ Bill Frain |
| Name: | Bill Frain |
| Title: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| PFF, LLC | PFF, LLC |
| By: | /s/ Ryan Huss |
| Name: | Ryan Huss |
| Title: | President |

---

**<u>EXHIBIT A</u>**

**FORM OF REQUEST FOR LOAN**

PFF, LLC

2010 Corporate Ridge, Suite 450

McLean, Virginia 22102

Re: Request for Loan

The undersigned requests a $<u> </u>Loan pursuant to Section 2.1 of the Loan and Security Agreement dated as of August 19, 2024 between PFF, LLC and the undersigned ("Loan Agreement"). Capitalized terms used herein and not otherwise defined herein shall have the meanings given to them in the Loan Agreement.

The Borrowing Base Certificate and Eligible Delivery Order provided to Lender in connection with this Request for Loan is true, correct, and complete in all respects.

Please wire the requested loan advance to the account specified. Please call the undersigned to confirm receipt of this fax or e-mail at<u> </u>.

Thank you.

---

| | |
|:---|:---|
| Liberty Defense Technologies, Inc. | Liberty Defense Technologies, Inc. |
| By: |  |
| Name: | Bill Frain |
| Title: | Chief Executive Officer |

---

**<u>Items to include in the funding request:</u>**

-Request for Loan

-Borrowing Base Certificate accompanied by an Aged Receivables report

-Copies of invoices to be submitted to client

-Eligible Delivery Order and any requested back-up

**<u>EXHIBIT B</u>**

**COMPLIANCE CERTIFICATE**

Liberty Defense Technologies, Inc. ("Borrower") hereby certifies to Lender in accordance with the provisions of a Loan and Security Agreement between Borrower and Lender dated August 19, 2024, as the same from time to time may be amended, supplemented, or otherwise modified ("Agreement") that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Borrower has complied in all respects with all the terms, covenants and conditions of the Agreement which are binding upon them;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) there exists no Event of Default or Default as defined in the Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the representations and warranties contained in the Agreement are true in all respects with the same effect as though such representations and warranties had been made on the date hereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the financial statements to which this Compliance Certificate is attached present fairly in all material respects the financial condition and results of operation of Borrower as of the dates and for the periods indicated in accordance with IFRS applied on a consistent basis.

WITNESS the signature of the undersigned duly authorized officer of Borrower on<u> </u>, 202<u> </u>.

---

| | |
|:---|:---|
| Liberty Defense Technologies, Inc. | Liberty Defense Technologies, Inc. |
| By: |  |
| Name: | Bill Frain |
| Title: | Chief Executive Officer |

---

**<u>EXHIBIT C</u> BORROWING BASE CERTIFICATE**

Date:<u> </u>

TO: PFF, LLC

FROM: Liberty Defense Technologies, Inc.

---

| | |
|:---|:---|
| <u>Eligible Billed Receivables (less than 90 days old)</u>: | <u>Borrowable Amount</u>: |

---

---

| | | | |
|:---|:---|:---|:---|
| Prime US Government Contracts: | $___________________ | @90% | $___________________ |
| US Government Subcontracts: | $___________________ | @90% | $___________________ |

---

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A: Total Availability: Billed Receivables: |  |  | $___________________ |
| <u>Eligible Unbilled Receivables</u>: |  |  |  |
| <u>Billable in next 60 days</u>: |  |  |  |
| &nbsp;&nbsp;&nbsp;Government Prime/Sub: | $___________________ | @65% | $___________________ |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B: Total Availability: Unbilled Receivables: |  |  | $___________________ |
| <u>Eligible Delivery Orders</u>: |  |  |  |
| Government Prime/Sub: | $___________________ | @30% | $___________________ |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C: Total Availability: Delivery Orders |  |  | $___________________ |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Total Availability (A+B+C) |  |  | $___________________ |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E: The Lesser of D: and $2,500,000 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$______________________ |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F: Current Loan Balance (including unpaid interest) |  |  | $___________________ |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G: Current Borrowing Capacity (E-F) |  |  | $___________________ |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H: This Borrowing Request |  |  | $___________________ |

---

To induce Lender to make loans to Borrower under the Loan and Security Agreement dated August 19, 2024 (the "Agreement"), Borrower hereby certifies, represents and warrants to Lender, as of the date hereof, that (a) the person signing below is an authorized officer or representative of Borrower; (b) the statements above are true and complete; (c) the eligible collateral described above represents only Eligible Billed Receivables, Eligible Unbilled Receivables, or Eligible Delivery Orders; (d) Borrower is in compliance with all of the terms and provisions of the Agreement and the other Loan Documents; (e) all of Borrower's representations and warranties in the Agreement and the other Loan Documents are true and correct; and (f) no Default or Event of Default has occurred and is continuing or exists.

---

| | |
|:---|:---|
| Liberty Defense Technologies, Inc. | Liberty Defense Technologies, Inc. |
| By: |  |
| Name: | Bill Frain |
| Title: | Chief Executive Officer |

---

**Schedule 4.2**

**Inventory and Equipment Locations and Trade Names**

"Not Applicable"

**Schedule 6.2**

**Ownership**

---

| | |
|:---|:---|
| **Owner Name** | **Ownership %** |
| LDH GS Amalco Corp. | 100% (pass thru) |
| Liberty Defense Holdings,Ltd. | 100% (parent entity) |

---

**Existing Joint Ventures**

---

| | |
|:---|:---|
| **Owner Name** | **Ownership %** |
| N/A | N/A |

---

**Schedule 6.7**

**Real Estate**

"Not Applicable"

**Schedule 6.8**

**Intellectual Property**

"Not Applicable"

**Schedule 6.9**

**Internal Use – Quality Control (QC)**

✔ Internal Review and Quality Check Complete

**<u>LOAN PAYMENT SCHEDULE</u>**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Period** | **Year** | **Month** | **Payment** | **Interest** | **Principal** | **Balance** |
| 0 | 1 | 8/19/2024 |  |  |  | 1800000.00 |
| 1 | 1 | 9/15/2024 |  | 23888.36 | (23888.36) | 1823888.36 |
| 2 | 1 | 10/15/2024 |  | 26894.88 | (26894.88) | 1850783.24 |
| 3 | 1 | 11/15/2024 |  | 28201.18 | (28201.18) | 1878984.42 |
| 4 | 1 | 12/15/2024 |  | 27707.32 | (27707.32) | 1906691.74 |
| 5 | 1 | 1/15/2025 |  | 29132.68 | (29132.68) | 1935824.42 |
| 6 | 1 | 2/15/2025 |  | 29577.81 | (29577.81) | 1965402.23 |
| 7 | 1 | 3/15/2025 | 125298.53 | 27123.63 | 98174.90 | 1867227.33 |
| 8 | 1 | 4/15/2025 | 125298.53 | 28529.70 | 96768.83 | 1770458.50 |
| 9 | 1 | 5/15/2025 | 125298.53 | 26178.53 | 99120.00 | 1671338.50 |
| 10 | 1 | 6/15/2025 | 125298.53 | 25536.68 | 99761.85 | 1571576.65 |
| 11 | 1 | 7/15/2025 | 125298.53 | 23237.81 | 102060.72 | 1469515.93 |
| 12 | 1 | 8/15/2025 | 125298.53 | 22453.00 | 102845.53 | 1366670.40 |
| 13 | 2 | 9/15/2025 | 125298.53 | 20881.60 | 104416.93 | 1262253.47 |
| 14 | 2 | 10/15/2025 | 125298.53 | 18664.06 | 106634.47 | 1155619.00 |
| 15 | 2 | 11/15/2025 | 125298.53 | 17656.91 | 107641.62 | 1047977.38 |
| 16 | 2 | 12/15/2025 | 125298.53 | 15495.71 | 109802.82 | 938174.56 |
| 17 | 2 | 1/15/2026 | 125298.53 | 14334.54 | 110963.99 | 827210.57 |
| 18 | 2 | 2/15/2026 | 125298.53 | 12639.10 | 112659.43 | 714551.14 |
| 19 | 2 | 3/15/2026 | 125298.53 | 9861.20 | 115437.33 | 599113.81 |
| 20 | 2 | 4/15/2026 | 125298.53 | 9153.97 | 116144.56 | 482969.25 |
| 21 | 2 | 5/15/2026 | 125298.53 | 7141.33 | 118157.20 | 364812.05 |
| 22 | 2 | 6/15/2026 | 125298.53 | 5574.03 | 119724.50 | 245087.55 |
| 23 | 2 | 7/15/2026 | 125298.53 | 3623.94 | 121674.59 | 123412.96 |
| 24 | 2 | 8/15/2026 | 125298.61 | 1885.65 | 123412.96 | 0.00 |

---

ii

## Exhibit 10.15

**Exhibit 10.15**

AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT

THIS AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT (this "Amendment"), dated as of the 15<sup>th</sup> day of March 2025, is made by and between **Liberty Defense Technologies, Inc.**, a Massachusetts corporation (the "Borrower"), and PFF, LLC, a Delaware limited liability company (the "Lender").

RECITALS

A. Lender and Borrower entered into a Loan and Security Agreement dated as of August 19, 2024 (as amended through the date hereof, the "Agreement") pursuant to which Lender has agreed to extend credit to Borrower, and Borrower has agreed to obtain credit from Lender, on the terms and conditions set forth in such Agreement.

B. Pursuant to the Agreement, Lender has previously made a term loan in the original principal amount of $1,800,000 with a current principal balance of $1,992,525.86 (the "Existing Term Loan").

C. Borrower has requested that Lender make certain modifications to the Agreement, including revising the Existing Term Loan payment schedule, and Lender has consented to such request subject to the execution of this Amendment and the satisfaction of the conditions specified herein.

D. Borrower and Lender now desire to execute this Amendment to set forth their agreements with respect to the modifications to the Agreement.

E. The indebtedness and other obligations of Borrower under the Agreement are guaranteed by Liberty Defense Holdings, Ltd. (the "Guarantor") pursuant to an Unconditional Guaranty dated August 19, 2024 (the "Guaranty") made by the Guarantor for the benefit of Lender.

F. The Guarantor has consented to the modifications set forth herein and expressly agrees that such modifications shall not affect the Guarantor's obligations under the Guaranty.

Accordingly, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender and Borrower agree as follows:

SECTION 1. <u>Definitions</u>. Capitalized terms used in this Amendment and not defined herein are defined in the Agreement.

SECTION 2. <u>Amendments to Agreement</u>. The Agreement is hereby amended as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1. <u>Loan Payment Schedule</u>. The Loan Payment Schedule attached to the Agreement is deleted in its entirety and replaced with the Loan Payment Schedule attached to this Amendment.

SECTION 3. <u>Representations and Warranties of Borrower</u>. Borrower represents and warrants to Lender that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) It has the power and authority to enter into and to perform this Amendment, to execute and deliver all documents relating to this Amendment, and to incur the obligations provided for in this Amendment, all of which have been duly authorized and approved in accordance with Borrower's organizational and governing documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Amendment, together with all documents executed pursuant hereto, shall constitute when executed the valid and legally binding obligations of Borrower in accordance with their respective terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except with respect to events or circumstances occurring subsequent to the date thereof and known to Lender, all representations and warranties made in the Agreement are true and correct as of the date hereof, with the same force and effect as if all representations and warranties were fully set forth herein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Borrower's obligations under the Loan Documents remain valid and enforceable obligations, and the execution and delivery of this Amendment and the other documents executed in connection herewith shall not be construed as a novation of the Agreement or any of the other Loan Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) As of the date hereof, Borrower has no offsets or defenses against the payment of any of the Obligations.

SECTION 4. <u>Waiver of Claims</u>. As a specific inducement to Lender without which Borrower acknowledges Lender would not enter into this Amendment and the other documents executed in connection herewith, Borrower hereby waives any and all claims that it may have against Lender, as of the date hereof, arising out of or relating to the Agreement or any other Loan Document whether sounding in contract, tort or any other basis.

SECTION 5. <u>Conditions of Effectiveness</u>. This Amendment shall become effective when, and only when, Borrower has executed and completed this Amendment, has executed and completed a replacement Note form and substance acceptable to Lender, such original, executed documents have been delivered to Lender, and Borrower has paid to Lender the modification fee described in Section 6 and has reimbursed Lender for Lender's costs and expenses incurred in connection with this Amendment, at which time this Amendment shall be deemed effective as of the date set forth in the first paragraph of this Amendment.

SECTION 6. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. <u>Reference To Agreement.</u> Upon the effectiveness of this Amendment, each reference in the Agreement to "this Agreement" and each reference in the other Loan Documents to the Agreement, shall mean and be a reference to the Agreement as amended hereby and each reference in the Agreement and the other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. <u>Effect on Loan Documents**,** and Accrued and Unpaid Interest, Fees and Other Charges</u>. Except as specifically amended above, the Agreement and all other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed. Without limiting the generality of the foregoing, all Collateral given to secure the Obligations of Borrower under the Agreement and the other Loan Documents prior to the date hereof does and shall continue to secure all Obligations of Borrower under the Agreement, as amended hereby and the other Loan Documents, and, except as provided in the Agreement and the other Loan Documents, no such Collateral shall be released until all conditions to such release contained in the Loan Documents are satisfied. Any interest, fees and other charges due under the Agreement which have accrued and remain unpaid as of the effective date of this Amendment shall be paid on the next succeeding date that any such charge which has accrued on or after the effective date of this Amendment is due under the Agreement, as amended hereby, unless any such charge is discontinued by this Amendment, in which event Borrower shall pay the accrued and unpaid portion thereof upon execution of this Amendment. Lender may modify this Amendment for the purposes of completing missing content or correcting erroneous content, without the need for a written amendment, provided that Lender shall send a copy of any such modification to Borrower (which notice may be given by electronic mail).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. <u>No Waiver</u>. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. <u>Costs, Expenses and Taxes</u>. Borrower agrees to pay on demand all costs and expenses of Lender in connection with the preparation, reproduction, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder, including the reasonable fees and out-of-pocket expenses of counsel for Lender with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5. <u>Governing Law</u>. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without giving effect to conflict of law provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6. <u>Counterparts</u>. This Amendment may be executed by the parties hereto individually or in any combination, in one or more counterparts, each of which shall be an original and all of which together constitute one and the same agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7. <u>Electronic Signatures and Records.</u> Notwithstanding any other provision herein, Borrower agrees that this Amendment, at Lender's option, may be in the form of an electronic record and, at Lender's option, may be signed or executed using electronic signatures. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by Lender of a manually signed Amendment which has been converted into electronic form (such as scanned into PDF format) for transmission, delivery and/or retention.

IN WITNESS WHEREOF, Borrower and Lender have caused this Amendment to be signed by their duly authorized representatives under seal all as of the day and year first above written.

---

| | |
|:---|:---|
| Liberty Defense Technologies, Inc.,<br> a Massachusetts corporation | Liberty Defense Technologies, Inc.,<br> a Massachusetts corporation |
| By: | /s/ William Frain |
| Name: | William Frain |
| Title: | CEO |
| PFF, LLC, a Delaware limited liability company | PFF, LLC, a Delaware limited liability company |
| By: | /s/ Suzanne Martinez Hoilman |
| Name: | Suzanne Martinez Hoilman |
| Title: | CFO |

---

**LOAN PAYMENT SCHEDULE**

![](tm261972d2_ex10-15img01.gif)

**Internal Use – Quality Control (QC)**

✔ Internal Review and Quality Check Complete

## Exhibit 10.16

**Exhibit 10.16**

AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT

THIS AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT (this "Amendment"), dated as of the 15<sup>th</sup> day of July 2025, is made by and between **Liberty Defense Technologies, Inc.**, a Massachusetts corporation (the "Borrower"), and PFF, LLC, a Delaware limited liability company (the "Lender").

RECITALS

A. Lender and Borrower entered into a Loan and Security Agreement dated as of August 19, 2024 (as amended through the date hereof, the "Agreement") pursuant to which Lender has agreed to extend credit to Borrower, and Borrower has agreed to obtain credit from Lender, on the terms and conditions set forth in such Agreement.

B. Pursuant to the Agreement, Lender has previously made a term loan in the original principal amount of $1,800,000 with a current principal balance of $1,992,525.86 (the "Existing Term Loan").

C. Borrower has requested that Lender make certain modifications to the Agreement, including revising the Existing Term Loan payment schedule, and Lender has consented to such request subject to the execution of this Amendment and the satisfaction of the conditions specified herein.

D. Borrower and Lender now desire to execute this Amendment to set forth their agreements with respect to the modifications to the Agreement.

E. The indebtedness and other obligations of Borrower under the Agreement are guaranteed by Liberty Defense Holdings, Ltd. (the "Guarantor") pursuant to an Unconditional Guaranty dated August 19, 2024 (the "Guaranty") made by the Guarantor for the benefit of Lender.

F. The Guarantor has consented to the modifications set forth herein and expressly agrees that such modifications shall not affect the Guarantor's obligations under the Guaranty.

Accordingly, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender and Borrower agree as follows:

SECTION 1. <u>Definitions</u>. Capitalized terms used in this Amendment and not defined herein are defined in the Agreement.

SECTION 2. <u>Amendments to Agreement</u>. The Agreement is hereby amended as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1. <u>Loan Payment Schedule</u>. The Loan Payment Schedule attached to the Agreement is deleted in its entirety and replaced with the Loan Payment Schedule attached to this Amendment.

SECTION 3. <u>Representations and Warranties of Borrower</u>. Borrower represents and warrants to Lender that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) It has the power and authority to enter into and to perform this Amendment, to execute and deliver all documents relating to this Amendment, and to incur the obligations provided for in this Amendment, all of which have been duly authorized and approved in accordance with Borrower's organizational and governing documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Amendment, together with all documents executed pursuant hereto, shall constitute when executed the valid and legally binding obligations of Borrower in accordance with their respective terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except with respect to events or circumstances occurring subsequent to the date thereof and known to Lender, all representations and warranties made in the Agreement are true and correct as of the date hereof, with the same force and effect as if all representations and warranties were fully set forth herein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Borrower's obligations under the Loan Documents remain valid and enforceable obligations, and the execution and delivery of this Amendment and the other documents executed in connection herewith shall not be construed as a novation of the Agreement or any of the other Loan Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) As of the date hereof, Borrower has no offsets or defenses against the payment of any of the Obligations.

SECTION 4. <u>Waiver of Claims</u>. As a specific inducement to Lender without which Borrower acknowledges Lender would not enter into this Amendment and the other documents executed in connection herewith, Borrower hereby waives any and all claims that it may have against Lender, as of the date hereof, arising out of or relating to the Agreement or any other Loan Document whether sounding in contract, tort or any other basis.

SECTION 5. <u>Conditions of Effectiveness</u>. This Amendment shall become effective when, and only when, Borrower has executed and completed this Amendment, has executed and completed a replacement Note form and substance acceptable to Lender, such original, executed documents have been delivered to Lender, and Borrower has paid to Lender the modification fee described in Section 6 and has reimbursed Lender for Lender's costs and expenses incurred in connection with this Amendment, at which time this Amendment shall be deemed effective as of the date set forth in the first paragraph of this Amendment.

SECTION 6. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. <u>Reference To Agreement.</u> Upon the effectiveness of this Amendment, each reference in the Agreement to "this Agreement" and each reference in the other Loan Documents to the Agreement, shall mean and be a reference to the Agreement as amended hereby and each reference in the Agreement and the other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. <u>Effect on Loan Documents**,** and Accrued and Unpaid Interest, Fees and Other Charges</u>. Except as specifically amended above, the Agreement and all other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed. Without limiting the generality of the foregoing, all Collateral given to secure the Obligations of Borrower under the Agreement and the other Loan Documents prior to the date hereof does and shall continue to secure all Obligations of Borrower under the Agreement, as amended hereby and the other Loan Documents, and, except as provided in the Agreement and the other Loan Documents, no such Collateral shall be released until all conditions to such release contained in the Loan Documents are satisfied. Any interest, fees and other charges due under the Agreement which have accrued and remain unpaid as of the effective date of this Amendment shall be paid on the next succeeding date that any such charge which has accrued on or after the effective date of this Amendment is due under the Agreement, as amended hereby, unless any such charge is discontinued by this Amendment, in which event Borrower shall pay the accrued and unpaid portion thereof upon execution of this Amendment. Lender may modify this Amendment for the purposes of completing missing content or correcting erroneous content, without the need for a written amendment, provided that Lender shall send a copy of any such modification to Borrower (which notice may be given by electronic mail).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. <u>No Waiver</u>. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. <u>Costs, Expenses and Taxes</u>. Borrower agrees to pay on demand all costs and expenses of Lender in connection with the preparation, reproduction, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder, including the reasonable fees and out-of-pocket expenses of counsel for Lender with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5. <u>Governing Law</u>. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without giving effect to conflict of law provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6. <u>Counterparts</u>. This Amendment may be executed by the parties hereto individually or in any combination, in one or more counterparts, each of which shall be an original and all of which together constitute one and the same agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7. <u>Electronic Signatures and Records.</u> Notwithstanding any other provision herein, Borrower agrees that this Amendment, at Lender's option, may be in the form of an electronic record and, at Lender's option, may be signed or executed using electronic signatures. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by Lender of a manually signed Amendment which has been converted into electronic form (such as scanned into PDF format) for transmission, delivery and/or retention.

IN WITNESS WHEREOF, Borrower and Lender have caused this Amendment to be signed by their duly authorized representatives under seal all as of the day and year first above written.

---

| | |
|:---|:---|
| Liberty Defense Technologies, Inc.,<br> a Massachusetts corporation | Liberty Defense Technologies, Inc.,<br> a Massachusetts corporation |
| By: | /s/ William Frain |
| Name: | William Frain |
| Title: | CEO |
| PFF, LLC, a Delaware limited liability company | PFF, LLC, a Delaware limited liability company |
| By: | /s/ Suzanne Martinez Hoilman |
| Name: | Suzanne Martinez Hoilman |
| Title: | CFO |

---

**LOAN PAYMENT SCHEDULE**

![](tm261972d3_ex10-16img001.jpg)

**Internal Use – Quality Control (QC)**

✔ Internal Review and Quality Check Complete

## Exhibit 10.17

**Exhibit 10.17**

AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT

THIS AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT (this "Amendment"), dated as of the 14<sup>th</sup> day of August 2025, is made by and between Liberty Defense Technologies, Inc., a Massachusetts corporation (the "Borrower"), and PFF, LLC, a Delaware limited liability company (the "Lender").

RECITALS

A. Lender and Borrower entered into a Loan and Security Agreement dated as of August 19, 2024 (as amended through the date hereof, the "Agreement") pursuant to which Lender has agreed to extend credit to Borrower, and Borrower has agreed to obtain credit from Lender, on the terms and conditions set forth in such Agreement.

B. Pursuant to the Agreement, Lender has previously made a term loan in the original principal amount of $1,800,000 with a current principal balance of $1,992,525.86 (the "Existing Term Loan").

C. Borrower has requested that Lender make certain modifications to the Agreement, including revising the Existing Term Loan payment schedule and increasing the Term Loan Balance, and Lender has consented to such request subject to the execution of this Amendment and the satisfaction of the conditions specified herein.

D. Borrower and Lender now desire to execute this Amendment to set forth their agreements with respect to the modifications to the Agreement.

E. The indebtedness and other obligations of Borrower under the Agreement are guaranteed by Liberty Defense Holdings, Ltd. (the "Guarantor") pursuant to an Unconditional Guaranty dated August 19, 2024 (the "Guaranty") made by the Guarantor for the benefit of Lender.

F. The Guarantor has consented to the modifications set forth herein and expressly agrees that such modifications shall not affect the Guarantor's obligations under the Guaranty.

Accordingly, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender and Borrower agree as follows:

SECTION 1. <u>Definitions</u>. Capitalized terms used in this Amendment and not defined herein are defined in the Agreement.

SECTION 2. <u>Amendments to Agreement</u>. The Agreement is hereby amended as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1. <u>Amendments to Section 2</u>. Section 2 of the Agreement is amended as follows:

2.1(a). <u>Term Loan</u>. The definition of the term Term Loan is hereby amended and restated in its entirety as follows:

"<u>Term Loan</u>" shall mean the Loan made by Lender to Borrower on August 19, 2024, in the original principal amount of $1,800,000, as increased by the $100,000 additional advance made by Lender on August 14, 2025, the $150,000 additional advance made by Lender on September 5, 2025, the $200,000 additional advance made by Lender on September 19, 2025, the $200,000 additional advance made by Lender on September 26, 2025 and the $510,000 additional advance made by Lender on October 31, 2025 resulting in an outstanding principal balance of $2,952,525.86 taking into account any principal repayments prior to the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2. <u>Amendments to Section 2</u>. Section 2 of the Agreement is amended as follows:

2.2(a). <u>Section 2.1</u>. Section 2.1(b) of the Agreement is hereby amended and restated in its entirety as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to the terms and conditions of this Agreement and relying upon the representations and warranties set forth in this Agreement, Lender has made the Term Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3. <u>Loan Payment Schedule</u>. The Loan Payment Schedule attached to the Agreement is deleted in its entirety and replaced with the Loan Payment Schedule attached to this Amendment.

SECTION 3. <u>Representations and Warranties of Borrower</u>. Borrower represents and warrants to Lender that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) It has the power and authority to enter into and to perform this Amendment, to execute and deliver all documents relating to this Amendment, and to incur the obligations provided for in this Amendment, all of which have been duly authorized and approved in accordance with Borrower's organizational and governing documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Amendment, together with all documents executed pursuant hereto, shall constitute when executed the valid and legally binding obligations of Borrower in accordance with their respective terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except with respect to events or circumstances occurring subsequent to the date thereof and known to Lender, all representations and warranties made in the Agreement are true and correct as of the date hereof, with the same force and effect as if all representations and warranties were fully set forth herein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Borrower's obligations under the Loan Documents remain valid and enforceable obligations, and the execution and delivery of this Amendment and the other documents executed in connection herewith shall not be construed as a novation of the Agreement or any of the other Loan Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) As of the date hereof, Borrower has no offsets or defenses against the payment of any of the Obligations.

SECTION 4. <u>Waiver of Claims</u>. As a specific inducement to Lender without which Borrower acknowledges Lender would not enter into this Amendment and the other documents executed in connection herewith, Borrower hereby waives any and all claims that it may have against Lender, as of the date hereof, arising out of or relating to the Agreement or any other Loan Document whether sounding in contract, tort or any other basis.

SECTION 5. <u>Conditions of Effectiveness</u>. This Amendment shall become effective when, and only when, Borrower has executed and completed this Amendment, has executed and completed a replacement Note form and substance acceptable to Lender, such original, executed documents have been delivered to Lender, and Borrower has paid to Lender the modification fee described in Section 6 and has reimbursed Lender for Lender's costs and expenses incurred in connection with this Amendment, at which time this Amendment shall be deemed effective as of the date set forth in the first paragraph of this Amendment.

SECTION 6. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. <u>Reference To Agreement and Note.</u> Upon the effectiveness of this Amendment, each reference in the Agreement to "this Agreement" and each reference in the other Loan Documents to the Agreement, shall mean and be a reference to the Agreement as amended hereby and each reference in the Agreement and the other Loan Documents to the "Note" shall mean and be a reference to the Note, executed by Borrower and delivered to Lender pursuant to Section 5 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. <u>Effect on Loan Documents**,** and Accrued and Unpaid Interest, Fees and Other Charges</u>. Except as specifically amended above, the Agreement and all other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed. Without limiting the generality of the foregoing, all Collateral given to secure the Obligations of Borrower under the Agreement and the other Loan Documents prior to the date hereof does and shall continue to secure all Obligations of Borrower under the Agreement, as amended hereby and the other Loan Documents, and, except as provided in the Agreement and the other Loan Documents, no such Collateral shall be released until all conditions to such release contained in the Loan Documents are satisfied. Any interest, fees and other charges due under the Agreement which have accrued and remain unpaid as of the effective date of this Amendment shall be paid on the next succeeding date that any such charge which has accrued on or after the effective date of this Amendment is due under the Agreement, as amended hereby, unless any such charge is discontinued by this Amendment, in which event Borrower shall pay the accrued and unpaid portion thereof upon execution of this Amendment. Lender may modify this Amendment for the purposes of completing missing content or correcting erroneous content, without the need for a written amendment, provided that Lender shall send a copy of any such modification to Borrower (which notice may be given by electronic mail).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. <u>No Waiver</u>. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. <u>Costs, Expenses and Taxes</u>. Borrower agrees to pay on demand all costs and expenses of Lender in connection with the preparation, reproduction, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder, including the reasonable fees and out-of-pocket expenses of counsel for Lender with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5. <u>Governing Law</u>. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without giving effect to conflict of law provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6. <u>Counterparts</u>. This Amendment may be executed by the parties hereto individually or in any combination, in one or more counterparts, each of which shall be an original and all of which together constitute one and the same agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7. <u>Electronic Signatures and Records.</u> Notwithstanding any other provision herein. Borrower agrees that this Amendment, at Lender's option, may be in the form of an electronic record and, at Lender's option, may be signed or executed using electronic signatures. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by Lender of a manually signed Amendment which has been converted into electronic form (such as scanned into PDF format) for transmission, delivery and/or retention.

IN WITNESS WHEREOF, Borrower and Lender have caused this Amendment to be signed by their duly authorized representatives under seal all as of the day and year first above written.

---

| | |
|:---|:---|
| Liberty Defense Technologies, Inc., | Liberty Defense Technologies, Inc., |
| a Massachusetts corporation | a Massachusetts corporation |
| By: | /s/ William Frain |
| Name: | William Frain |
| Title: | CEO |
| PFF, LLC, a Delaware limited liability company | PFF, LLC, a Delaware limited liability company |
| By: | /s/ Suzanne Martinez Hoilman |
| Name: | Suzanne Martinez Hoilman |
| Title: | CFO |

---

**LOAN PAYMENT SCHEDULE**

**LOAN SCHEDULE**

![](tm261972d2_ex10-17img001.jpg)

**Internal Use – Quality Control (QC)**

⌧ Internal Review and Quality Check Complete

## Exhibit 10.18

**Exhibit 10.18**

AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT

THIS AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT (this "Amendment"), dated as of the 1<sup>st</sup> day of September 2025, is made by and between Liberty Defense Technologies, Inc., a Massachusetts corporation (the "Borrower"), and PFF, LLC, a Delaware limited liability company (the "Lender").

RECITALS

A. Lender and Borrower entered into a Loan and Security Agreement dated as of August 19, 2024 (as amended through the date hereof, the "Agreement") pursuant to which Lender has agreed to extend credit to Borrower, and Borrower has agreed to obtain credit from Lender, on the terms and conditions set forth in such Agreement.

B. Borrower has requested that Lender make certain modifications to the Agreement, including extending the Maturity Date, and Lender has consented to such request subject to the execution of this Amendment and the satisfaction of the conditions specified herein.

C. Borrower and Lender now desire to execute this Amendment to set forth their agreements with respect to the modifications to the Agreement.

D. The indebtedness and other obligations of Borrower under the Agreement are guaranteed by Liberty Defense Holdings, Ltd. (the "Guarantor") pursuant to an Unconditional Guaranty dated August 19, 2024 (the "Guaranty") made by the Guarantor for the benefit of Lender.

E. The Guarantor has consented to the modifications set forth herein and expressly agrees that such modifications shall not affect the Guarantor's obligations under the Guaranty.

Accordingly, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender and Borrower agree as follows:

SECTION 1. <u>Definitions</u>. Capitalized terms used in this Amendment and not defined herein are defined in the Agreement.

SECTION 2. <u>Amendments to Agreement</u>. The Agreement is hereby amended as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1. <u>Amendments to Section 1</u>. Section 1 of the Agreement is amended as follows:

2.1(a). <u>Maturity Date</u>. The definition of the term Maturity Date is hereby amended and restated in its entirety as follows:

"<u>Maturity Date</u>" shall mean May 31, 2026. The Maturity Date shall automatically renew for one-year periods unless Lender has notified Borrower at least 90 days in advance of the current Maturity Date that Lender, in its sole discretion, is electing not to extend the Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Amendments to Section 3</u>. Section 3 of the Agreement is amended as follows:

2.2(a). <u>Section 3.2(a)</u>. Section 3.2(a) of the Agreement is hereby amended and restated in its entirety as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a) Borrower shall pay to Lender a monthly commitment fee on the first day of each calendar month equal to the product of 0.083% multiplied by the dollar amount in the definition of Maximum Facility applicable for such month with respect to the line of credit loan.

SECTION 3. <u>Representations and Warranties of Borrower</u>. Borrower represents and warrants to Lender that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) It has the power and authority to enter into and to perform this Amendment, to execute and deliver all documents relating to this Amendment, and to incur the obligations provided for in this Amendment, all of which have been duly authorized and approved in accordance with Borrower's organizational and governing documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Amendment, together with all documents executed pursuant hereto, shall constitute when executed the valid and legally binding obligations of Borrower in accordance with their respective terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except with respect to events or circumstances occurring subsequent to the date thereof and known to Lender, all representations and warranties made in the Agreement are true and correct as of the date hereof, with the same force and effect as if all representations and warranties were fully set forth herein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Borrower's obligations under the Loan Documents remain valid and enforceable obligations, and the execution and delivery of this Amendment and the other documents executed in connection herewith shall not be construed as a novation of the Agreement or any of the other Loan Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) As of the date hereof, Borrower has no offsets or defenses against the payment of any of the Obligations.

SECTION 4. <u>Waiver of Claims</u>. As a specific inducement to Lender without which Borrower acknowledges Lender would not enter into this Amendment and the other documents executed in connection herewith, Borrower hereby waives any and all claims that it may have against Lender, as of the date hereof, arising out of or relating to the Agreement or any other Loan Document whether sounding in contract, tort or any other basis.

SECTION 5. <u>Conditions of Effectiveness</u>. This Amendment shall become effective when, and only when, Borrower has executed and completed this Amendment, has executed and completed a replacement Note form and substance acceptable to Lender, such original, executed documents have been delivered to Lender, and Borrower has paid to Lender the modification fee described in Section 6 and has reimbursed Lender for Lender's costs and expenses incurred in connection with this Amendment, at which time this Amendment shall be deemed effective as of the date set forth in the first paragraph of this Amendment.

SECTION 6. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. <u>Reference To Agreement.</u> Upon the effectiveness of this Amendment, each reference in the Agreement to "this Agreement" and each reference in the other Loan Documents to the Agreement, shall mean and be a reference to the Agreement as amended hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. <u>Effect on Loan Documents, and Accrued and Unpaid Interest, Fees and Other Charges.</u> Except as specifically amended above, the Agreement and all other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed. Without limiting the generality of the foregoing, all Collateral given to secure the Obligations of Borrower under the Agreement and the other Loan Documents prior to the date hereof does and shall continue to secure all Obligations of Borrower under the Agreement, as amended hereby and the other Loan Documents, and, except as provided in the Agreement and the other Loan Documents, no such Collateral shall be released until all conditions to such release contained in the Loan Documents are satisfied. Any interest, fees and other charges due under the Agreement which have accrued and remain unpaid as of the effective date of this Amendment shall be paid on the next succeeding date that any such charge which has accrued on or after the effective date of this Amendment is due under the Agreement, as amended hereby, unless any such charge is discontinued by this Amendment, in which event Borrower shall pay the accrued and unpaid portion thereof upon execution of this Amendment. Lender may modify this Amendment for the purposes of completing missing content or correcting erroneous content, without the need for a written amendment, provided that Lender shall send a copy of any such modification to Borrower (which notice may be given by electronic mail).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. <u>No Waiver.</u> The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. <u>Costs, Expenses and Taxes.</u> Borrower agrees to pay on demand all costs and expenses of Lender in connection with the preparation, reproduction, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder, including the reasonable fees and out-of-pocket expenses of counsel for Lender with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5. <u>Governing Law.</u> This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without giving effect to conflict of law provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6. <u>Counterparts.</u> This Amendment may be executed by the parties hereto individually or in any combination, in one or more counterparts, each of which shall be an original and all of which together constitute one and the same agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7. <u>Electronic Signatures and Records.</u> Notwithstanding any other provision herein, Borrower agrees that this Amendment, at Lender's option, may be in the form of an electronic record and, at Lender's option, may be signed or executed using electronic signatures. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by Lender of a manually signed Amendment which has been converted into electronic form (such as scanned into PDF format) for transmission, delivery and/or retention.

IN WITNESS WHEREOF, Borrower and Lender have caused this Amendment to be signed by their duly authorized representatives under seal all as of the day and year first above written.

---

| | |
|:---|:---|
| Liberty Defense Technologies, Inc., | Liberty Defense Technologies, Inc., |
| a Massachusetts corporation | a Massachusetts corporation |
| By: | /s/ William Frain |
| Name: | William Frain |
| Title: | CEO |
| PFF, LLC, a Delaware limited liability company | PFF, LLC, a Delaware limited liability company |
| By: | /s/ Suzanne Martinez Hoilman |
| Name: | Suzanne Martinez Hoilman |
| Title: | CFO |

---

**Internal Use – Quality Control (QC)**

⌧ Internal Review and Quality Check Complete

## Exhibit 23.1

**Exhibit 23.1**

![](tm261972d2_ex23-1img01.jpg)

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We hereby consent to the inclusion in this Registration Statement on Form F-1 of Liberty Defense Holdings Ltd. of our report dated June 17, 2025, relating to the consolidated statement of financial position and financial statement schedules of Liberty Defense Holdings Ltd. for the years ended December 31, 2024 and 2023, which are part of this Registration Statement

We also consent to the reference to us under the caption "Experts" in this Registration Statement.

---

| | |
|:---|:---|
|  | **/s/ DAVIDSON & COMPANY LLP** |
| Vancouver, Canada | Chartered Professional Accountants |

---

February 4, 2026

![](tm261972d2_ex23-1img02.jpg)

## Ex-Filing

?xml version='1.0' encoding='ASCII'? EX-FILING FEES

---

| |
|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Calculation of Filing Fee Tables**  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **F-1**  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **LIBERTY DEFENSE HOLDINGS, LTD.**  |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Security Type**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Security Class Title**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Fee Calculation or Carry Forward Rule**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Maximum Aggregate Offering Price**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Fee Rate**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Amount of Registration Fee**  |
| **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** |
| Fees to be Paid | 1 | Equity | Common Shares, no par value | 457(o) | $17250000.00 | 0.0001381 | $2382.22 |
| Fees Previously Paid |  |  |  |  |  |  |  |
| **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** |
| Carry Forward Securities |  |  |  |  |  |  |  |
|  |  |  | Total Offering Amounts: | Total Offering Amounts: | $17250000.00  |  | $2382.22  |
|  |  |  | Total Fees Previously Paid:  | Total Fees Previously Paid:  |  |  | $0.00  |
|  |  |  | Total Fee Offsets:  | Total Fee Offsets:  |  |  | $0.00  |
|  |  |  | Net Fee Due:  | Net Fee Due:  |  |  | $2382.22  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Offering Note** <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <sup>1</sup> Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended (the "Securities Act"). Includes the aggregate offering price of additional shares that the underwriters have the option to purchase to cover over-allotments, if any. Pursuant to Rule 416 under the Securities Act, the securities registered hereby include an indeterminate number of additional securities as may become issuable by reason of share splits, share dividends, recapitalizations or similar transactions from time to time.

---

| | |
|:---|:---|
| | |
| **Rules 457(b) and 0-11(a)(2)** | **Rules 457(b) and 0-11(a)(2)** |
| Fee Offset Claims | N/A |
| Fee Offset Sources | N/A |
| **Rule 457(p)** | **Rule 457(p)** |
| Fee Offset Claims | N/A |
| Fee Offset Sources | N/A |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Security Type**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Security Class Title**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Amount of Securities Previously Registered**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Maximum Aggregate Offering Price of Securities Previously Registered**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Form Type**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **File Number**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Initial Effective Date**  |
| N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |

---