# EDGAR Filing Document

**Accession Number:** 0001737927
**File Stem:** 0001104659-25-120861
**Filing Date:** 2025-12
**Character Count:** 756408
**Document Hash:** 7151c54cf8a30aabf30f864df7a0bab2
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-25-120861.hdr.sgml**: 20251215

**ACCESSION NUMBER**: 0001104659-25-120861

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 37

**CONFORMED PERIOD OF REPORT**: 20251214

**ITEM INFORMATION**: Entry into a Material Definitive Agreement

**ITEM INFORMATION**: Unregistered Sales of Equity Securities

**ITEM INFORMATION**: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20251215

**DATE AS OF CHANGE**: 20251215

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Canopy Growth Corp
- **CENTRAL INDEX KEY:** 0001737927
- **STANDARD INDUSTRIAL CLASSIFICATION:** MEDICINAL CHEMICALS & BOTANICAL PRODUCTS [2833]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 000000000
- **STATE OF INCORPORATION:** Z4
- **FISCAL YEAR END:** 0331

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38496
- **FILM NUMBER:** 251569999

**BUSINESS ADDRESS:**
- **STREET 1:** 1 HERSHEY DRIVE
- **CITY:** SMITH FALLS
- **STATE:** A6
- **ZIP:** K7A0A8
- **BUSINESS PHONE:** 855-558-9333

**MAIL ADDRESS:**
- **STREET 1:** 1 HERSHEY DRIVE
- **CITY:** SMITH FALLS
- **STATE:** A6
- **ZIP:** K7A0A8

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**PURSUANT TO SECTION 13 OR 15(d)**

**OF THE SECURITIES EXCHANGE ACT OF 1934**

Date of Report (Date of earliest event reported): December 14, 2025

**Canopy Growth Corporation**

(Exact name of registrant as specified in its charter)

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| | | |
|:---|:---|:---|
| **Canada** | **001-38496** | **N/A** |
| (State or other jurisdiction <br> of incorporation) | (Commission <br> File Number) | (IRS Employer<br> Identification No.) |

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| | |
|:---|:---|
| **1 Hershey Drive<br> Smiths Falls, Ontario** | **K7A 0A8** |
| (Address of principal executive offices) | (Zip Code) |

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**(855) 558-9333**

(Registrant's telephone number, including area code)

**Not Applicable**

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

◻ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading <br> Symbol(s)** | **Name of each exchange<br> on which registered** |
| **Common Shares, no par value** | **CGC** | **The Nasdaq Stock Market LLC** |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company&nbsp;&nbsp;&nbsp;&nbsp;◻

If an emerging growth company, 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 13(a) of the Exchange Act. ◻

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| | |
|:---|:---|
| **Item 1.01** | **Entry into a Material Definitive Agreement.** |

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***Arrangement Agreement***

On December 14, 2025, Canopy Growth Corporation ("Canopy Growth") entered into an arrangement agreement (the "Arrangement Agreement") with MTL Cannabis Corp. ("MTL") pursuant to which, among other things, Canopy Growth agreed to acquire all of the issued and outstanding common shares in the capital of MTL (the "MTL Shares") on the basis of 0.32 of a common share of Canopy Growth (each whole share, a "Canopy Growth Share") and C$0.144 in cash for each MTL Share (the "Cash Consideration"), or approximately 38 million Canopy Growth Shares and C$17 million in cash in the aggregate (based on the currently issued and outstanding MTL Shares on a non-diluted basis), by way of a plan of arrangement under the *Canada Business Corporations Act* (the "Arrangement"). In addition, pursuant to the Arrangement, Canopy Growth will issue up to an additional 2,956,391 Canopy Growth Shares in exchange for the Release (as defined below).

<u>Certain Conditions and Procedures Relating to Approval of the Arrangement</u>

The Arrangement is subject to the conditions set forth in the Arrangement Agreement, including, among others: (i) approval by the Supreme Court of British Columbia (the "Court") at a hearing upon the procedural and substantive fairness of the terms and conditions of the Arrangement; (ii) any approvals required under the *Competition Act* (Canada); and (iii) approval by the shareholders of MTL as required by applicable corporate and securities laws. The shareholders of MTL will be asked to vote on a resolution (the "Arrangement Resolution") to, among other things, approve the Arrangement at a shareholder meeting to be called for such purpose (the "Meeting"). MTL will convene and hold the Meeting as soon as reasonably practicable following receipt of the interim order of the Court and, in any event, not later than February 17, 2026 or such other date as agreed to by Canopy Growth and MTL. The implementation of the Arrangement is conditional upon the adoption of the Arrangement Resolution by (i) the affirmative vote of holders of at least two-thirds of the MTL Shares present in person or represented by proxy at the Meeting and (ii) a simple majority of the votes cast on the Arrangement Resolution excluding the votes for MTL Shares held and/or controlled by persons described in items (a) through (d) of Section 8.1(2) of Multilateral Instrument 61-101 *– Protection of Minority Security Holders in Special Transactions* (collectively, "MTL Shareholder Approval").

<u>Canopy Growth Shares to be Issued in Exchange for Release of Claims</u>

Certain former shareholders (the "MC Shareholders") of Montreal Cannabis Medical, Inc. ("MC"), which was a company previously acquired by MTL, are, in the event of certain enumerated dilutive transactions with respect to certain outstanding convertible securities of MTL, entitled to a number of MTL Shares pursuant to a Second Restated Share Exchange Agreement, dated June 28, 2023, among MTL, MC, the MC Shareholders, Michel Clement, Richard Clement (the "Share Exchange Agreement"). Pursuant to the Arrangement, each MC Shareholder will irrevocably, finally and fully release MTL, Canopy Growth and their respective affiliates from any and all obligations owing to such MC Shareholder pursuant to the Share Exchange Agreement, including for greater certainty, each MC Shareholder's entitlement to anti-dilution rights pursuant to the Share Exchange Agreement (the "Release") in exchange for such MC Shareholder's pro rata entitlement to up to 2,956,391 (subject to reduction in certain circumstances) Canopy Growth Shares to be issued to the MC Shareholders pursuant to the Arrangement (the "MC Shareholder Consideration").

<u>Deposit of Consideration in Escrow; Advance of Transaction Expenses</u>

Pursuant to the Arrangement Agreement, Canopy Growth has agreed that it will, following receipt of the final order of the Court and certain regulatory approvals and no later than the business day prior to the filing by MTL of the articles of arrangement in compliance with the *Canada Business Corporations Act* to (i) deposit in escrow the Canopy Growth Shares to be issued as consideration pursuant to the Arrangement, including the MC Shareholder Consideration and the requisite amount of cash to pay the aggregate Cash Consideration payable pursuant to the Arrangement (other than payments to MTL shareholders exercising rights of dissent ("Dissent Rights") in accordance with applicable Canadian law and who have not withdrawn their notice of objection) and (ii) advance sufficient funds to pay certain amounts that are due in connection with the Arrangement to Canopy Growth's counsel, to be held in trust, for payment to the appropriate parties immediately prior to the effective time of the Arrangement (the "Effective Time").

<u>Additional Conditions Precedent</u>

The Arrangement is also subject to the satisfaction or waiver of the following conditions precedent: (i) no law will have been enacted, issued, promulgated, enforced, made, entered, issued or applied and no proceeding will otherwise have been commenced, issued or taken under any laws or by any governmental authority that makes or which would be reasonably expected to make the Arrangement illegal or otherwise directly or indirectly cease trade, enjoin, restrain or otherwise prohibit completion of the Arrangement; (ii) the conditional approval of the Toronto Stock Exchange will have been obtained, including in respect of the listing and posting for trading of the Canopy Growth Shares issued as consideration for MTL Shares pursuant to the Arrangement and the MC Shareholder Consideration; (iii) the securities to be issued pursuant to the Arrangement shall be exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act") pursuant to Section 3(a)(10) thereof and pursuant to exemptions from applicable state securities laws, provided, however, this condition shall be deemed to be waived if MTL fails to take certain actions; (iv) receipt of confirmation that (a) a sufficient number of Canopy Growth Shares and the requisite amount of Cash Consideration to satisfy the aggregate consideration payable to shareholders of MTL pursuant to the Arrangement and the MC Shareholder Consideration has been deposited into escrow and (b) certain amounts that are due in connection with the Arrangement have been paid by Canopy Growth; (v) MTL shareholders shall not have exercised Dissent Rights, or have instituted proceedings to exercise Dissent Rights, in connection with the Arrangement (other than MTL shareholders representing not more than 10% of the MTL Shares then outstanding); (vi) no legal or regulatory action or proceeding shall have been commenced by any person that would reasonably likely result in certain restrictions on the ability of Canopy Growth to acquire the MTL Shares, and (vii) other closing conditions, including compliance, in all material respects, with the covenants contained in the Arrangement Agreement.

<u>Representations and Warranties and Certain Covenants</u>

Each of Canopy Growth and MTL has made certain customary representations and warranties and agreed to certain covenants in the Arrangement Agreement, including, with respect to MTL, covenants regarding the conduct of its businesses prior to the Effective Time.

<u>Termination</u>

The Arrangement Agreement also contains certain termination rights, including: (i) in favor of either MTL or Canopy Growth in the event that (A) the Effective Time does not occur on or before the April 15, 2026 (the "Outside Date"), subject to certain limited exceptions; (B) MTL Shareholder Approval is not obtained at the Meeting; or (C) any law is enacted or made that remains in effect and that makes the completion of the Arrangement or the transactions contemplated by the Arrangement Agreement illegal or otherwise prohibited, and such law has become final and non-appealable; (ii) in favor of Canopy Growth in the event that (A) the MTL board of directors determines, in accordance with the Arrangement Agreement, to make a Change of Recommendation (as defined in the Arrangement Agreement); (B) MTL breaches the provisions of the Arrangement Agreement relating to non-solicitation in any material respect; (C) subject to certain notice and cure provisions, MTL breaches any of its representations, warranties, covenants or agreements in the Arrangement Agreement that would cause certain closing conditions in the Arrangement Agreement not to be satisfied, subject to limited exceptions or (D) a Material Adverse Effect (as defined in the Arrangement Agreement) has occurred and is continuing; and (iii) in favor of MTL in the event that (A) subject to certain notice and cure provisions, Canopy Growth breaches any of its representations, warranties, covenants or agreements in the Arrangement Agreement that would cause certain closing conditions in the Arrangement Agreement not to be satisfied, subject to limited exceptions; or (B) a Purchaser Material Adverse Effect (as defined in the Arrangement Agreement) has occurred after the date of the Arrangement Agreement and is continuing.

<u>Termination Fee</u>

The Arrangement Agreement provides that a termination fee of C$4,000,000 (the "Termination Fee") will be payable by MTL upon termination of the Arrangement Agreement under specified circumstances, including:

&nbsp;&nbsp;&nbsp;&nbsp;1. the Arrangement Agreement is terminated:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. by MTL or Canopy Growth in connection with a failure to obtain MTL Shareholder Approval *;* or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. by Canopy Growth upon the occurrence of the Outside Date or in connection with certain breaches of representations, warranties or
covenants by MTL; and

both (i) prior to such termination a third party publicly proposes to acquire 50% or more of the MTL Shares pursuant to an Acquisition Proposal (as such term is defined in the Arrangement Agreement) and (ii) MTL shall have either (a) completed any Acquisition Proposal within 12 months after the termination of the Arrangement Agreement or (b) entered into an Acquisition Agreement (as such term is defined in the Arrangement Agreement) in respect of any Acquisition Proposal or the MTL board of directors shall have recommended any Acquisition Proposal, in each case within 12 months after the Arrangement Agreement is terminated;

&nbsp;&nbsp;&nbsp;&nbsp;2. the Arrangement Agreement is terminated by Canopy Growth in connection with a Change of Recommendation;

&nbsp;&nbsp;&nbsp;&nbsp;3. the Arrangement Agreement is terminated by either MTL or Canopy Growth in connection with a failure to obtain MTL Shareholder Approval,
if at the time of such termination, Canopy Growth was entitled to terminate the Arrangement Agreement as a result of a Change of Recommendation;
or

&nbsp;&nbsp;&nbsp;&nbsp;4. the Arrangement Agreement is terminated by Canopy Growth in connection with a material breach by MTL of the non-solicitation covenants
contained in the Arrangement Agreement.

<u>Steps of the Arrangement</u>

Pursuant to the Arrangement, at the Effective Time, among other things, each of the events below will occur:

i. Each MC Shareholder shall and shall be deemed to irrevocably grant the Release in exchange for the MC Shareholder Consideration.

ii. Any MTL Shares in respect of which Dissent Rights have been properly exercised and not withdrawn (the "Dissent Shares"), will be entitled to be paid the fair value by Canopy Growth of such shares in accordance with the *Canada Business Corporations Act*, as modified by the Arrangement and the interim order and final order of the Court.

iii. Each outstanding MTL restricted share unit (a "MTL RSU"), whether vested or unvested, will be deemed to be vested to the fullest extent, and such MTL RSU will be deemed to be surrendered and disposed of to MTL for one MTL Share, less any amounts withheld pursuant to the terms of the Arrangement.

iv. Each outstanding MTL deferred share unit (a "MTL DSU"), whether vested or unvested, will be deemed to be vested to the fullest extent, and such MTL DSU will be deemed to be surrendered and disposed of to MTL for one MTL Share, less any amounts withheld pursuant to the terms of the Arrangement.

v. Each outstanding MTL warrant that is in-the-money (a "MTL In-The-Money-Warrant") will be deemed to be exercised on a cashless basis and surrendered and forfeited by the holder thereof to MTL (free and clear of any liens of any nature whatsoever), and will be exchanged for MTL Shares, having a fair market value equal to the amount by which the relevant MTL In-The-Money-Warrant is in the money, less any amounts withheld pursuant to the terms of the Arrangement.

vi. Each outstanding MTL option that is in-the-money (a "MTL In-The-Money-Option"), whether vested or unvested, will be deemed to be vested to the fullest extent, and shall be deemed to be, exercised on a cashless basis and surrendered and forfeited by the holder thereof to MTL (free and clear of any liens of any nature whatsoever), and will be exchanged for MTL Shares, having a fair market value equal to the amount by which the relevant MTL In-The-Money-Option is in the money, less any amounts withheld pursuant to the terms of the Arrangement.

vii. Each issued and outstanding MTL Share (excluding any Dissent Shares and any MTL Shares held by Canopy Growth and any of its affiliates, but including MTL Shares issued to former holders of MTL RSUs, MTL DSUs, MTL In-The-Money Warrants and MTL In-The-Money Options) will be deemed to be transferred to Canopy Growth in exchange for 0.32 of a Canopy Growth Share and C$0.144 in cash, less any amounts withheld pursuant to the terms of the Arrangement.

viii. Each outstanding MTL option that is out-of-the-money (a "MTL Out-of-the-Money-Option") will be exchanged for an option (a "Replacement Option") to purchase from Canopy Growth the number of Canopy Growth Shares equal to 0.32 of a Canopy Growth Share at an exercise price per Canopy Growth Share that would otherwise be payable to acquire an MTL Share pursuant to the MTL Out-of-the-Money-Option it replaces less an amount equal to the Cash Consideration (rounded up to the nearest whole cent), except that the aggregate number of whole Canopy Growth Shares issuable pursuant to the relevant former MTL Out-of-the-Money-Option holder's replacement options having a common exercise date and price shall be rounded down to the nearest whole number. Except as set out above, all other terms and conditions of such Replacement Option, including the conditions to and manner of exercise (provided any Replacement Option shall be exercisable at the offices of Canopy Growth), shall be as nearly equivalent as practicable to the terms and conditions of the certificates governing the MTL Out-of-The-Money Option so exchanged, and shall be governed by the terms of the amended and restated equity incentive plan of Canopy Growth, and any document evidencing a MTL Out-of-The-Money Option shall thereafter evidence and be deemed to evidence such Replacement Option.

ix. Each outstanding MTL warrant that is out-of-the-money (a "MTL Out-of-the-Money-Warrant") will be exchanged for a warrant (a "Replacement Warrant") to purchase from Canopy Growth 0.32 of a Canopy Growth Share, at an exercise price per Canopy Growth Share that would otherwise be payable to acquire a MTL Share pursuant to the MTL Out-of-the-Money-Warrant it replaces less an amount equal to the Cash Consideration (rounded up to the nearest whole cent), except that the aggregate number of whole Canopy Growth Shares issuable pursuant to Replacement Warrants having a common exercise date and price shall be rounded down to the nearest whole number. Except as set out above, the term to expiry, conditions to and manner of exercise (provided any Replacement Warrant shall be exercisable at the offices of Canopy Growth) and other terms and conditions of each of the Replacement Warrants shall be as nearly equivalent as practicable to the terms and conditions of the certificates governing the MTL Out-of-the-Money-Warrant for which it is exchanged, and any document evidencing a MTL Out-of-the-Money-Warrant shall thereafter evidence and be deemed to evidence such Replacement Warrant.

x. Each of the outstanding MTL compensation options (the "MTL Compensation Options") (each exercisable for one unit (an "MTL Unit") comprised of one MTL Share and one half of one MTL warrant exercisable to acquire one MTL Share until September 19, 2028 at an exercise price of C$0.98 per MTL Share (each whole warrant, an "MTL Unit Warrant")) will be exchanged for an option (a "Replacement Compensation Option") to purchase from Canopy Growth 0.32 of a Canopy Growth unit (a "Canopy Growth Unit") comprised of one Canopy Growth Share and one half of one warrant exercisable to acquire one Canopy Growth Share until September 19, 2028, at an exercise price of C$2.61 per Canopy Growth Share, with each Replacement Compensation Option having an exercise per Canopy Growth Unit that would otherwise be payable to acquire an MTL Unit pursuant to the MTL Compensation Option it replaces less an amount equal to the Cash Consideration (rounded up to the nearest whole cent), except that the aggregate number of whole Canopy Growth Units issuable pursuant to the relevant MTL Compensation Option holder's Replacement Compensation Options having a common exercise date and price shall be rounded down to the nearest whole number. Except as set out above, the term to expiry, conditions to and manner of exercise (provided any Replacement Compensation Option shall be exercisable at the offices of Canopy Growth) and other terms and conditions of each of the Replacement Compensation Options shall be as nearly equivalent as practicable to the terms and conditions of the certificates governing the MTL Compensation Option for which it is exchanged and any document evidencing a MTL Compensation Option shall thereafter evidence and be deemed to evidence such Replacement Compensation Option.

xi. In exchange for the Release from each MC Shareholder, Canopy Growth shall issue Canopy Growth Shares with a legend imposing an 18-month transfer restriction to each MC Shareholder based on such MC Shareholder's pro rata entitlement to the MC Shareholder Consideration, which shall and shall be deemed to be received in full and final satisfaction of the Release.

The foregoing summary of the Arrangement Agreement does not purport to be a complete description of all the parties' rights and obligations under the Arrangement Agreement and is qualified in its entirety by reference to the Arrangement Agreement, which is filed as Exhibit 2.1 hereto and incorporated by reference herein. The representations, warranties and covenants set forth in the Arrangement Agreement have been made only for the purposes of the Arrangement Agreement and solely for the benefit of the parties to the Arrangement Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Arrangement Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. In addition, such representations and warranties (1) will not survive completion of the Arrangement and cannot be the basis for any claims under the Arrangement Agreement by the other party after termination of the Arrangement Agreement and (2) were made only as of the dates specified in the Arrangement Agreement. Accordingly, the Arrangement Agreement is included with this filing only to provide investors with information regarding the terms of the Arrangement Agreement and not to provide investors with any other factual information regarding the parties or their respective businesses.

Assuming timely receipt of all necessary court, MTL shareholder, regulatory and other third-party approvals and the satisfaction of all other conditions, closing of the Arrangement is expected to occur by the end of February 2026.

***Voting Support Agreements and Lock-up***

Pursuant to the terms of the Arrangement Agreement, simultaneously with the execution of the Arrangement Agreement, Canopy Growth, on the one hand, and certain key shareholders of MTL (the "Key Shareholders") and the directors and executive officers of MTL (collectively, with the Key Shareholders, the "Supporting Parties"), on the other hand, entered into irrevocable voting support agreements (collectively, the "Support Agreements") pursuant to which, among other things, each of the Supporting Parties have agreed to, among other things, vote (i) in favor of the Arrangement and any other matter necessary for consummation of the Arrangement and (ii) against any Acquisition Proposal and/or any other matter that could reasonably expected to delay, prevent, impede or frustrate the successful completion of the Arrangement and each of the transactions contemplated by the Arrangement Agreement. MTL shareholders beneficially owning approximately 75% of the outstanding MTL Shares have entered into Support Agreements with Canopy Growth.

The Support Agreements entered into by the Key Shareholders also contain a lock-up provision (the "Lock-Up"), pursuant to which each Key Shareholder has agreed, subject to limited exceptions, not to, among other things, sell, transfer or otherwise dispose of Canopy Growth Shares (or other Canopy Growth securities convertible or exercisable into Canopy Growth Shares) such Key Shareholder receives pursuant to the Arrangement (the "Locked-Up Securities") until (a) with respect to 10% of such Locked-Up Securities, three months after the effective date of the Arrangement (the "Effective Date"), with respect to 20% of the Locked-Up Securities, six months after the Effective Date, with respect to 20% of the Locked-Up Securities, nine months after the Effective Date, and with respect to 50% of the Locked-Up Securities, 12 months after the Effective Date. Approximately 72% of the Canopy Growth Shares to be issued for the issued and outstanding MTL Shares pursuant to the Arrangement are subject to the Lock-Up.

***Consulting Agreements with MTL's Founders and Employment Agreement with MTL's Chief Executive Officer***

In connection with the Arrangement, Canopy Growth entered into consulting agreements (the "Consulting Agreements") with MTL's founders, Richard and Michel Clement, conditional upon completion of the Arrangement. The Consulting Agreements have a term of 18 months and provide for, among other things, the grant of certain performance stock units ("PSUs") under Canopy Growth's Omnibus Equity Incentive Plan (the "Canopy Growth Equity Incentive Plan") to each of Richard and Michel Clement in the amount of C$2,000,000. The PSUs will only vest upon the achievement of certain performance objectives over specified time periods. In addition, under the terms of the Consulting Agreements, each of Richard and Michel Clement is entitled to receive C$25,000 per month for each month he provides services to Canopy Growth under his Consulting Agreement.

Canopy Growth also entered into an employment agreement, dated December 14, 2025, with Michael Perron, MTL's Chief Executive Officer, pursuant to which Canopy Growth has appointed Mr. Perron, 40 years of age, as Chief Operating Officer of Canopy Growth as of the Effective Date conditional upon the closing of the Arrangement (the "Perron Employment Agreement"). Under the terms of the Perron Employment Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;· Mr. Perron is entitled to a base salary of C$450,000 and a discretionary annual performance
bonus of no more than 40% of his base salary;

&nbsp;&nbsp;&nbsp;&nbsp;· Mr. Perron is eligible, at the discretion of the board of directors of Canopy Growth, to
receive an annual long-term incentive award of 45% of his salary under the Canopy Growth Equity Incentive Plan, subject to applicable
vesting requirements;

&nbsp;&nbsp;&nbsp;&nbsp;· on the first trading date after the Effective Date on which Canopy Growth may grant equity awards,
Mr. Perron is entitled to receive, at the discretion of the board of directors of Canopy Growth, a one-time equity award consisting
of restricted stock units with a grant date Fair Market Value (as such term is defined in the Canopy Growth Equity Incentive Plan) equal
to C$30,000 and stock options with an exercise price equal to the Fair Market Value of a Canopy Growth Share on the date of grant and
an aggregate exercise price of C$20,000; and

&nbsp;&nbsp;&nbsp;&nbsp;· Mr. Perron is entitled to a retention bonus equal to 12 months of his base salary if he
does not resign and is not terminated for Cause (as defined in the Perron Employment Agreement) during the first year of his employment
with Canopy Growth after the Effective Date.

Mr. Perron has served as Chief Executive Officer of MTL since July 2023 and the Chief Executive Officer of Montréal Cannabis Médical Inc., a wholly-owned subsidiary of MTL, since October 2022. Prior to October 2022, he acted as an independent business consultant from July 2021, and prior to that a business consultant with MNP Business Consulting from January 2021. Other than the Arrangement Agreement, there are no arrangements or understandings between Mr. Perron and any other person pursuant to which he has been appointed Chief Operating Officer of Canopy Growth. There are no family relationships between Mr. Perron and any director or executive officer of Canopy Growth, and he has no direct or indirect material interest in any transaction in which Canopy Growth Corporation was or is to be a participant that is required to be disclosed pursuant to Item 404(a) of Regulation S-K.

The forgoing summary of the Perron Employment Agreement is qualified in its entirety by reference to the Perron Employment Agreement, which is filed as Exhibit 10.1.

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|:---|:---|
| **Item 3.02** | **Unregistered Sales of Equity Securities.** |

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The information contained in (or incorporated by reference into) Item 1.01 of this Current Report on Form 8-K (this "Current Report") is hereby incorporated by reference into this Item 3.02. Canopy Growth anticipates that the securities to be issued to the security holders of MTL pursuant to the Arrangement will be issued in a transaction exempt from the registration requirements of the Securities Act pursuant to Section 3(a)(10) thereof.

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|:---|:---|
| **Item 5.02.** | **Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.** |

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The second, third and fourth paragraphs under the heading "Consulting Agreements with MTL's Founders and Employment Agreement with MTL's Chief Executive Officer" in Item 1.01 of this Current Report are incorporated by reference into this Item 5.02.

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|:---|:---|
| **Item 7.01** | **Regulation FD Disclosure.** |

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On December 15, 2025, Canopy Growth issued a press release announcing that it entered into the Arrangement Agreement with MTL, a copy of which is attached hereto as Exhibit 99.1 and is incorporated by reference herein solely for purposes of this Item 7.01 disclosure. A copy of a presentation providing certain information regarding Canopy Growth and MTL is attached hereto as Exhibit 99.2 and is incorporated by reference herein solely for purposes of this Item 7.01 disclosure.

The information set forth and incorporated by reference in Item 7.01 of this Current Report, including Exhibits 99.1 and 99.2 attached hereto, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the United States Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of such section. The information set forth and incorporated by reference in Item 7.01 of this Current Report, including Exhibits 99.1 and 99.2 attached hereto, shall not be incorporated by reference into any filing under the Securities Act or the Exchange Act, regardless of any incorporation by reference language in any such filing.

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|:---|:---|
| **Item 8.01.** | **Other Events.** |

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The audited consolidated financial statements of MTL for the years ended March 31, 2025 and 2024, including the notes thereto and the auditor's report thereon, are filed as Exhibit 99.3 and are incorporated by reference herein.

The unaudited condensed interim consolidated financial statements of MTL for the three and six months ended September 30, 2025, including the notes thereto, are filed as Exhibit 99.4 and are incorporated by reference herein.

The consent of MNP LLP is filed as Exhibit 23.1 to the Current Report and is incorporated herein by reference.

These financial statements of MTL are not required to be included in this Current Report and are being voluntarily filed by Canopy Growth.

***Cautionary Statement Regarding Forward-Looking Statements***

This Current Report contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking statements and information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Canopy Growth or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements or information contained in this Current Report. Examples of such statements include statements with respect to the timing and outcome of the Arrangement, the anticipated benefits of the Arrangement, the retention of members of MTL's management team, the anticipated timing of the Meeting and the closing of the Arrangement, and the satisfaction or waiver of the closing conditions set out in the Arrangement Agreement, including receipt of all regulatory approvals.

Risks, uncertainties and other factors involved with forward-looking statements or information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements and information, including risks relating to the dilutive impact of the transaction and future resales of Canopy Growth Shares in the public market by the MTL shareholders, which may negatively affect the price of the Canopy Growth Shares; assumptions as to the time required to prepare and mail Meeting materials to MTL shareholders; the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory approval, Court approval and MTL Shareholder Approval; the ability of the parties to satisfy, in a timely manner, the other conditions to the completion of the Arrangement; risks relating to the overall macroeconomic environment, which may impact customer spending, costs and margins, including tariffs (and related retaliatory measures), the levels of inflation, and interest rates; expectations regarding future investment, growth and expansion of operations; regulatory and licensing risks; changes in general economic, business and political conditions, including changes in the financial and stock markets; legal and regulatory risks inherent in the cannabis industry, including the global regulatory landscape and enforcement related to cannabis; risks related to the integration of acquired businesses; the timing and manner of the legalization of cannabis in the United States; additional dilution; political risks and risks relating to regulatory change, including with respect to reimbursement rates in the medical cannabis market; risks relating to anti-money laundering laws; compliance with extensive government regulation and the interpretation of various laws regulations and policies; public opinion and perception of the cannabis industry; and such other risks contained in the public filings of Canopy Growth filed with the Securities and Exchange Commission and available on EDGAR at <u>www.sec.gov/edgar</u> and with Canadian securities regulators and available on the issuer profile of Canopy Growth on SEDAR+ at <u>www.sedarplus.ca</u>, including Canopy Growth's Annual Report on Form 10-K for the fiscal year ended March 31, 2025 and its subsequently filed quarterly reports on Form 10-Q. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Current Report and in the filings.

In respect of the forward-looking statements and information concerning the anticipated benefits and completion of the Arrangement and the anticipated timing for completion of the Arrangement, Canopy Growth has provided such statements and information in reliance on certain assumptions that Canopy Growth believes are reasonable at this time. Although Canopy Growth believes that the assumptions and factors used in preparing the forward-looking statements or forward-looking information in this Current Report are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. Should one or more of the foregoing risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Canopy Growth has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The forward-looking statements and forward-looking information included in this Current Report are made as of the date of this Current Report and Canopy Growth does not undertake any obligation to publicly update such forward-looking statements or forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws. Readers are cautioned not to put undue reliance on any forward-looking statement. Forward-looking statements contained in this Current Report are expressly qualified by this cautionary statement.

There can be no assurance that the Arrangement will occur, or that it will occur on the terms and conditions contemplated in this Current Report. The Arrangement Agreement could be modified, restructured or terminated and actual results could differ materially from those currently anticipated due to a number of factors and risks. The Arrangement cannot be implemented until the required MTL Shareholder Approval, Court approval and regulatory approval is obtained.

---

| | |
|:---|:---|
| **Item 9.01** | **Financial Statements and Exhibits.** |

---

(d) Exhibits

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| [2.1](tm2533279d1_ex2-1.htm) | [Arrangement Agreement, dated December 14, 2025, by and between Canopy Growth Corporation and MTL Cannabis Corp.](tm2533279d1_ex2-1.htm) |
| [10.1](tm2533279d1_ex10-1.htm) | [Employment Agreement, dated December 14, 2025 between Canopy Growth Corporation and Michael Perron](tm2533279d1_ex10-1.htm) |
| [23.1](tm2533279d1_ex23-1.htm) | [Consent of MNP LLP](tm2533279d1_ex23-1.htm) |
| [99.1](tm2533279d1_ex99-1.htm) | [Press Release, dated December 15, 2025](tm2533279d1_ex99-1.htm) |
| [99.2](tm2533279d1_ex99-2.htm) | [Investor Presentation, dated December 15, 2025](tm2533279d1_ex99-2.htm) |
| [99.3](tm2533279d1_ex99-3.htm) | [The audited consolidated financial statements of MTL Cannabis Corp. for the years ended March 31, 2025 and 2024, including the notes thereto and the auditor's report thereon](tm2533279d1_ex99-3.htm) |
| [99.4](tm2533279d1_ex99-4.htm) | [The unaudited condensed interim consolidated financial statements of MTL Cannabis Corp. for the three and six months ended September 30, 2025, including the notes thereto](tm2533279d1_ex99-4.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | |
|:---|:---|
| **CANOPY GROWTH CORPORATION** | **CANOPY GROWTH CORPORATION** |
| By: | /s/ Thomas Stewart |
|  | Thomas Stewart |
|  | Chief Financial Officer |

---

Date: December 15, 2025

## Exhibit 2.1

**Exhibit 2.1**

**Arrangement Agreement**

**Canopy growth corporation**

- and -

**MTL CANNABIS CORP.**

&nbsp;&nbsp; <br> December 14, 2025 <br>

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  | **Article 1** |  |
|  | **<u>INTERPRETATION</u>** |  |
| 1.1 | Definitions | 1 |
| 1.2 | Currency | 21 |
| 1.3 | Interpretation Not Affected by Headings | 22 |
| 1.4 | Knowledge | 22 |
| 1.5 | Extended Meanings, Etc. | 22 |
| 1.6 | Date of any Action | 22 |
| 1.7 | Schedules | 22 |
|  | **Article 2** |  |
|  | **<u>THE ARRANGEMENT</u>** |  |
| 2.1 | The Arrangement and Effective Date | 23 |
| 2.2 | Implementation Steps by the Company | 23 |
| 2.3 | Implementation Steps by the Purchaser | 25 |
| 2.4 | Interim Order | 25 |
| 2.5 | Circular | 26 |
| 2.6 | Final Order | 28 |
| 2.7 | Court Proceedings | 28 |
| 2.8 | Dissenting Shareholders | 29 |
| 2.9 | List of Securityholders | 29 |
| 2.1 | Securityholder Communications | 29 |
| 2.11 | Transaction Settlement | 30 |
| 2.12 | Payment of Consideration and MC Shareholder Consideration | 30 |
| 2.13 | Adjustment of Consideration | 31 |
| 2.14 | U.S. Securities Law Matters | 31 |
| 2.15 | Withholding Taxes | 33 |
|  | **Article 3** |  |
|  | **<u>REPRESENTATIONS AND WARRANTIES</u>** |  |
| 3.1 | Representations and Warranties of the Company | 34 |
| 3.2 | Representations and Warranties of the Purchaser | 65 |
| 3.3 | Survival of Representations and Warranties | 71 |
|  | **Article 4** |  |
|  | **<u>COVENANTS</u>** |  |
| 4.1 | Covenants of the Company Regarding the Conduct of Business | 71 |
| 4.2 | Access to Information | 78 |
| 4.3 | Covenants of the Company Regarding the Arrangement | 78 |
| 4.4 | Covenants of the Company Regarding Financial Statements | 79 |
| 4.5 | Covenants of the Purchaser Regarding the Performance of Obligations | 80 |
| 4.6 | Mutual Covenants | 81 |
| 4.7 | Covenants Related to Regulatory Approvals | 82 |

---

- i -

---

| | | |
|:---|:---|:---|
| 4.8 | Employment Matters | 84.0 |
| 4.9 | Indemnification and Insurance | 85.0 |
| 4.1 | Pre-Acquisition Reorganization | 85.0 |
|  | **Article 5** |  |
|  | **<u>ADDITIONAL AGREEMENTS</u>** |  |
| 5.1 | Acquisition Proposals | 87.0 |
| 5.2 | Expenses and Termination Fee | 91.0 |
|  | **Article 6** |  |
|  | **<u>TERMINATION</u>** |  |
| 6.1 | Termination | 93.0 |
| 6.2 | Void upon Termination | 95.0 |
| 6.3 | Notice and Cure Provisions | 95.0 |
|  | **Article 7** |  |
|  | **<u>CONDITIONS PRECEDENT</u>** |  |
| 7.1 | Mutual Conditions Precedent | 96.0 |
| 7.2 | Additional Conditions Precedent to the Obligations of the Company | 97.0 |
| 7.3 | Additional Conditions Precedent to the Obligations of the Purchaser | 97.0 |
|  | **Article 8** |  |
|  | **<u>GENERAL</u>** |  |
| 8.1 | Notices | 99.0 |
| 8.2 | Assignment | 100.0 |
| 8.3 | Benefit of Agreement | 100.0 |
| 8.4 | Third Party Beneficiaries | 100.0 |
| 8.5 | Time of Essence | 100.0 |
| 8.6 | Public Announcements | 101.0 |
| 8.7 | Governing Law; Attornment; Service of Process | 101.0 |
| 8.8 | Entire Agreement | 101.0 |
| 8.9 | Amendment | 101.0 |
| 8.1 | Waiver and Modifications | 102.0 |
| 8.11 | Severability | 102.0 |
| 8.12 | Mutual Interest | 102.0 |
| 8.13 | Further Assurances | 103.0 |
| 8.14 | Injunctive Relief | 103.0 |
| 8.15 | No Personal Liability | 103.0 |
| 8.16 | Counterparts | 103.0 |

---

Schedule A - Form of Plan of Arrangement <br> Schedule B - Arrangement Resolution

- ii -

**<u>ARRANGEMENT AGREEMENT</u>**

**THIS AGREEMENT** is made as of December 14, 2025

BETWEEN

**CANOPY GROWTH CORPORATION**

a corporation incorporated under the federal laws of Canada (the "**Purchaser**")

- and -

**MTL Cannabis Corp.**

a corporation incorporated under the federal laws of Canada (the "**Company**").

**WHEREAS** the Purchaser proposes to acquire all of the outstanding securities of the Company pursuant to the Arrangement (as defined herein), as provided in this Agreement;

**AND WHEREAS** the Company Board (as defined herein) has unanimously determined that the Arrangement is fair to the Company Shareholders (as defined herein) and that the Arrangement is in the best interests of the Company and its stakeholders and has unanimously resolved, subject to the terms of this Agreement, to recommend that the Company Shareholders vote in favour of the Arrangement Resolution;

**NOW THEREFORE** in consideration of the premises and the covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each of the Parties, the Parties agree as follows:

**Article 1 <u><br> INTERPRETATION</u>**

**1.1**  **<u>Definitions</u>** 

In this Agreement, unless otherwise defined or expressly stated herein or something in the subject matter or the context is inconsistent therewith:

"**Acceptable Confidentiality Agreement**" means a confidentiality agreement between the Company and a third party other than the Purchaser: (a) that is entered into in accordance with Section 5.1(c) hereof; (b) that does not preclude or limit the ability of the Company to disclose information relating to such agreement or the negotiations contemplated thereby, to the Purchaser; and (c) that contains a standstill provision that has a duration of at least 18 months and only permits the third party to make an Acquisition Proposal to the Company Board that is not publicly announced;

"**Acquisition Agreement**" has the meaning ascribed thereto in Section 5.1(e);

"**Acquisition Proposal**" means, at any time, whether or not in writing, (a) any offer, proposal or inquiry from any person or group of persons other than the Purchaser (or any affiliate of the Purchaser) after the date of this Agreement relating with respect to: (i) any direct or indirect acquisition by any person or group of persons of Company Shares (or securities convertible into or exchangeable or exercisable for Company Shares) representing 20% or more of the Company Shares then outstanding; (ii) any plan of arrangement, amalgamation, merger, share exchange, consolidation, recapitalization, liquidation, dissolution, winding up, exclusive license or other business combination, involving or in respect of the Company or any of its subsidiaries; (iii) any direct or indirect acquisition (or any alliance, joint venture, lease, long-term supply agreement or other arrangement having the same economic effect as the foregoing) by any person or group of persons other than the Purchaser (or any affiliate of the Purchaser), in a single transaction or a series of related transactions, of any assets of the Company and/or any interest in one or more of its subsidiaries (including shares or other equity interest of subsidiaries) that individually or in the aggregate represent 20% or more of the consolidated assets of the Company, contribute 20% or more of the consolidated revenue of the Company and its subsidiaries or constitute or hold 20% or more of the fair market value of the assets of the Company and its subsidiaries (taken as a whole), in each case based on the financial statements of the Company most recently filed prior to such time as part of the Company Public Disclosure Record (or any sale, disposition, lease, license, royalty, alliance, joint venture, long-term supply agreement or other arrangement having a similar economic effect), whether in a single transaction or a series of related transactions; or (iv) any other similar transaction or series of transactions involving the Company or any of its subsidiaries, (b) inquiry, expression or other indication of interest or offer to, or public announcement of or of an intention to do any of the foregoing, or (c) modification or proposed modification of any such proposal, inquiry, expression or indication of interest, in each case excluding the Arrangement and the other transactions contemplated by this Agreement;

"**Advance Ruling Certificate**" means an advance ruling certificate issued by the Commissioner pursuant to section 102 of the Competition Act with respect to the transactions contemplated by this Agreement, such Advance Ruling Certificate having not been modified or withdrawn prior to the Effective Time;

"**affiliate**" and "**associate**" have the meanings respectively ascribed thereto under the Securities Act;

"**Agreement**" means this arrangement agreement (including the Schedules hereto), as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms hereof;

"**Anti-Dilution Shares**" means the Anti-Dilution Event Consideration Shares as defined in Section 2.2(a)(ii) in the Share Exchange Agreement;

"**Arrangement**" means the arrangement of the Company under Section 192 of the CBCA on the terms and subject to the conditions set forth in the Plan of Arrangement, subject to any amendments or variations thereto made in accordance with the terms of this Agreement and the Plan of Arrangement or made at the direction of the Court in the Interim Order or Final Order with the prior written consent of the Purchaser and the Company, each acting reasonably;

"**Arrangement Resolution**" means the special resolution to be considered and, if thought advisable, passed by the Company Shareholders at the Company Meeting to approve the Arrangement, to be substantially in the form of Schedule B hereto;

"**Articles of Arrangement**" means the articles of arrangement of the Company in respect of the Arrangement to be filed with the Director in compliance with the CBCA after the Final Order is made, which shall include the Plan of Arrangement and otherwise be in form and content satisfactory to the Company and the Purchaser, each acting reasonably;

"**Business Contact Data**" means any information that is used for the purpose of communicating or facilitating communication with an individual in relation to their employment, business or professional such as the individual's name, position name or title, work address, work telephone number, work fax number or work electronic address;

"**Business Day**" means a day other than a Saturday, a Sunday or any other day on which commercial banking institutions in Toronto, Ontario or Vancouver, British Columbia are authorized or required by applicable Law to be closed;

"**Canadian Competition Approval**" means either: (a) the issuance of an Advance Ruling Certificate; or (b) (i) the applicable waiting period under section 123 of the Competition Act has expired, been terminated by the Commissioner, or (ii) the obligation to submit a notification shall have been waived by the Commissioner under paragraph 113(c) of the Competition Act, and in either case of (i) or (ii), a No Action Letter has been issued by the Commissioner;

"**Cannabis Laws**" has the meaning ascribed thereto in Section 3.1(p)(i);

"**Cannabis Licences**" has the meaning ascribed thereto in Section 3.1(p)(ii);

"**Cash Consideration**" means $0.144 for each Company Share;

"**CBCA**" means the *Canada Business Corporations Act*, and includes any successor thereto;

"**Change of Recommendation**" has the meaning ascribed thereto in Section 6.1(c)(i);

"**Circular**" means the notice of meeting and accompanying management information circular (including all schedules, appendices and exhibits thereto) to be sent to the Company Shareholders in connection with the Company Meeting, including any amendments or supplements thereto;

"**Code**" means the *United States Internal Revenue Code of 1986*, as amended;

"**Commercially Reasonable Efforts**" with respect to any Party means the cooperation of such Party and the use by such Party of its reasonable efforts consistent with reasonable commercial practice without payment or incurrence of any material liability or obligation;

"**Commissioner**" means the Commissioner of Competition appointed under the Competition Act and includes any person duly authorized to exercise the powers and perform the duties on behalf of the Commissioner of Competition;

"**Company**" means MTL Cannabis Corp., a corporation incorporated under the federal laws of Canada;

"**Company 2017 Debenture**" means the 18% unsecured convertible debenture of the Company in an aggregate principal amount of $5,000 due on demand;

"**Company Annual Financial Statements**" means the audited consolidated financial statements of the Company for the years ended March 31, 2025 and 2024, including the notes thereto and the auditor's report thereon;

"**Company Archerwill Debenture Warrants**" means the 1,733,333 warrants of the Company, each exercisable to acquire one Company Share until August 5, 2027 at an exercise price of $0.74737 per Company Share, subject to adjustment in accordance with their terms;

"**Company Archerwill Prepayment Warrants**" means the 16,640,858 warrants of the Company, each exercisable to acquire one Company Share until August 5, 2027 at an exercise price of $0.5749 per Company Share, subject to adjustment in accordance with their terms;

"**Company Board**" means the board of directors of the Company;

"**Company Board Recommendation**" means the unanimous determination of the Company Board, after consultation with legal and financial advisors, that the Arrangement is in the best interests of the Company and the unanimous recommendation of the Company Board to Company Shareholders that they vote in favour of the Arrangement Resolution;

"**Company Compensation Option Holder**" means a holder of one or more Company Compensation Options;

"**Company Compensation Options**" means the 220,360 compensation options of the Company, each exercisable to acquire one Company Unit until September 19, 2028 at an exercise price of $0.65 per Company Unit, subject to adjustment in accordance with their terms;

"**Company Credit Agreement**" means the credit agreement dated July 30, 2025 (as may be amended, supplemented, amended and restated, replaced, or otherwise modified from time to time) between, among others, the Company, as borrower and The Toronto-Dominion Bank, as Administrative Agent;

"**Company Data**" means all data contained in the Company Systems and all other information and data compilations used by the Company or any of its subsidiaries, whether or not in electronic form;

"**Company Diligence Information**" means the documents provided or made available to the Purchaser by the Company following execution of the Confidentiality Agreement and prior to the execution of this Agreement for the purposes of its due diligence in connection with the Arrangement, including all documents included in the Company Public Disclosure Record and in any electronic data room to which the Purchaser has been provided access;

"**Company Disclosure Letter**" means the disclosure letter dated the date hereof regarding this Agreement that has been executed by the Company and delivered to the Purchaser concurrently with the execution of this Agreement;

"**Company DSU Holder**" means a holder of one or more Company DSUs;

"**Company DSUs**" means all deferred share units of the Company outstanding immediately prior to the Effective Time granted pursuant to or otherwise subject to the Company Incentive Plan;

"**Company Employee Costs**" has the meaning ascribed thereto in Section 4.8(a);

"**Company Fairness Opinion**" means the opinion of the Company Financial Advisor to the effect that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the Consideration to be received by the Company Shareholders under the Arrangement is fair, from a financial point of view, to the Company Shareholders;

"**Company Financial Advisor**" means Haywood Securities Inc.;

"**Company Financial Statements**" means, collectively, the Company Annual Financial Statements and the Company Interim Financial Statements;

"**Company Intellectual Property Rights**" has the meaning ascribed thereto in Section 3.1(ii)(i);

"**Company Interim Financial Statements**" means the unaudited condensed interim consolidated financial statements of the Company for the three and six months ended September 30, 2025, including the notes thereto;

"**Company Leased Clinics**" has the meaning ascribed thereto in Section 3.1(u)(iv);

"**Company Leased Properties**" has the meaning ascribed thereto in Section 3.1(u)(iv);

"**Company Lease Clinic Documents**" has the meaning ascribed thereto in Section 3.1(u)(iv);

"**Company Lease Document**" and "**Company Lease Documents**" have the meanings ascribed thereto in Section 3.1(u)(iv);

"**Company March 2020 Warrants**" means the 3,244,757 warrants of the Company, each exercisable to acquire one Company Share until December 31, 2026 at an exercise price of $1.50 per Company Share, subject to adjustment in accordance with their terms;

"**Company Meeting**" means the special meeting of the Company Shareholders, including any adjournment or postponement thereof, to be called and held in accordance with the Interim Order for the purpose of considering and, if thought advisable, approving the Arrangement Resolution;

"**Company Incentive Plan"** means the Long-Term Incentive Plan of the Company approved by the Company Board on June 6, 2025;

"**Company In-The-Money Option**" has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

"**Company In-The-Money Warrant**" has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

"**Company Optionholder**" means a holder of one or more Company Options;

"**Company Option Plan**" means the Amended and Restated Stock Option Plan of the Company approved by the Company Shareholders on July 28, 2023;

"**Company Options**" means all options to acquire Company Shares outstanding immediately prior to the Effective Time granted pursuant to or otherwise subject to the Company Option Plan;

"**Company Out-Of-The-Money Option**" has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

"**Company Out-Of-The-Money Warrant**" has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

"**Company Owned Real Property**" and "**Company Owned Real Properties**" have the meanings ascribed thereto in Section 3.1(u)(i);

"**Company Public Disclosure Record**" means all documents filed by or on behalf of the Company on SEDAR+ since January 1, 2023 and prior to the date hereof that are publicly available on the date hereof;

"**Company Related Party Loans**" means all related party indebtedness owing by the Company, including the Earnout Consideration and any outstanding and unpaid shareholder loans and debt, in each case, in such principal amounts owing as of the date hereof and interest accruing thereon in accordance with their terms and to such parties as is disclosed in Section 1.1 of the Company Disclosure Letter,

"**Company RSU Holder**" means a holder of one or more Company RSUs;

"**Company RSUs**" means all restricted share units of the Company outstanding immediately prior to the Effective Time granted pursuant to or otherwise subject to the Company Incentive Plan;

"**Company Securityholders**" means, collectively, Company Shareholders, Company RSU Holders, Company DSU Holders, Company Warrant Holders, Company Optionholders and Company Compensation Option Holders;

"**Company Senior Management**" means the Company's President and Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Chief Cultivation Officer;

"**Company September 2025 Warrants**" means the 1,652,669 warrants of the Company, each exercisable to acquire one Company Share until September 19, 2028 at an exercise price of $0.98 per Company Share, subject to adjustment in accordance with their terms;

"**Company Shareholder**" means a holder of one or more Company Shares;

"**Company Shares**" means the common shares without par value in the capital of the Company;

"**Company Systems**" means all information technology and computer systems (including computer software, information technology and telecommunication hardware and other equipment) relating to the generation, transmission, storage, maintenance or processing of data and information, whether or not in electronic form, used in the conduct of the business of the Company or any of its subsidiaries;

"**Company Transaction Costs**" means all costs and reasonable and documented expenses incurred by the Company in connection with this Agreement and the Arrangement, including fees and reasonable and documented expenses of financial and accounting advisors, legal fees and disbursements, and premiums in relation to the "tail" directors' and officers' liability insurance contemplated by Section 4.9(b), but excludes for greater certainty, the Termination Fee, if any;

"**Company Unit**" means a unit of the Company comprised of one Company Share and one half of one Company Unit Warrant;

"**Company Unit Warrant**" means a warrant of the Company exercisable to acquire one Company Share until September 19, 2028 at an exercise price of $0.98 per Company Share, subject to adjustment in accordance with its terms;

"**Company Warrants**" means, collectively, the Company Archerwill Debenture Warrants, the Company Archerwill Prepayment Warrants, the Company March 2020 Warrants and the Company September 2025 Warrants;

"**Company Warrant Holder**" means a holder of one or more Company Warrants;

"**Competition Act**" means the *Competition Act* (Canada) and the regulations promulgated thereunder;

"**Confidentiality Agreement**" means the confidentiality agreement between the Company and the Purchaser dated as of August 27, 2024;

"**Consideration**" means the consideration to be received in respect of each Company Share that is issued and outstanding immediately prior to the Effective Time pursuant to the Plan of Arrangement, consisting of (i) the Share Consideration and (ii) the Cash Consideration;

"**Consideration Shares**" means the Purchaser Shares to be issued as Share Consideration pursuant to the Arrangement;

"**Consent**" has the meaning ascribed thereto in Section 4.4;

"**Contract**" means any contract, agreement, license, franchise, lease, arrangement, commitment, understanding, joint venture, partnership, note, instrument, or other right or obligation (whether written or oral) to which a Party, or any of its subsidiaries, is a party or by which a Party, or any of its subsidiaries, is bound or affected or to which any of their respective properties or assets is subject;

"**Court**" means the Supreme Court of British Columbia, or other court as applicable;

"**CSA**" means the Canadian Securities Administrators;

"**CSE**" means the Canadian Securities Exchange;

"**Depositary**" means Odyssey Trust Company or any other trust company, bank or other financial institution agreed to in writing by the Company and the Purchaser for the purpose of, among other things, receiving certificates representing Company Shares and the receipt from the Purchaser and subsequent distribution of the Consideration in connection with the Arrangement;

"**Director**" means the Director appointed pursuant to Section 260 of the CBCA;

"**Disclosing Party**" has the meaning ascribed thereto in Section 4.7(i);

"**Dissent Rights**" has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

"**Dissenting Shareholder**" has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

"**Earnout Consideration**" means the Earnout Consideration as defined in the Share Exchange Agreement;

"**Effective Date**" has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

"**Effective Time**" has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

"**Eligible Company Optionholder**" has the meaning ascribed thereto in Section 4.8(c);

"**Employee Plans"** means all benefit, bonus, incentive, pension, retirement, savings, stock purchase, profit sharing, stock option, stock appreciation, phantom stock, termination, change of control, life insurance, medical, health, welfare, hospital, dental, vision care, drug, sick leave, disability, and similar plans, programmes, arrangements or practices relating to any current or former director, officer or employee of the Company other than benefit plans established pursuant to statute;

"**Employment Agreements**" means the employment agreements, consulting agreements and other agreements listed in 3.1(aa)(i) of the Company Disclosure Letter;

"**Environment**" means the natural environment (including soil, land surface or subsurface strata, surface water, groundwater, sediment, ambient air (including all layers of the atmosphere), organic and inorganic matter and living organisms, including human health, and any other environmental medium or natural resource);

"**Environmental Laws**" means all Laws and agreements with Governmental Authorities and all other statutory requirements relating to public health, the discharge, emission or release of Hazardous Substances, or the protection of the Environment and all Permits issued pursuant to such Laws, agreements or other statutory requirements;

"**Final Order**" means the final order of the Court approving the Arrangement under Section 192 of the CBCA, in form and substance acceptable to the Company and the Purchaser, each acting reasonably, after a hearing upon the procedural and substantive fairness of the terms and conditions of the Arrangement, as such order may be affirmed, amended, modified, supplemented or varied by the Court (with the consent of both the Company and the Purchaser, each acting reasonably) at any time prior to the Effective Date or, if appealed, as affirmed or amended (provided that any such amendment, modification, supplement or variation is acceptable to both the Company and the Purchaser, each acting reasonably) on appeal unless such appeal is withdrawn, abandoned or denied;

"**Governmental Authority**" means any multinational, federal, provincial, territorial, state, regional, municipal, local or other government or governmental body and any division, agent, official, agency, commission, board or authority of any government, governmental body, quasi-governmental or private body (including the TSX, Nasdaq, the CSE or any other stock exchange) exercising any statutory, regulatory, expropriation or taxing authority under the authority of any of the foregoing and any domestic, foreign or international judicial, quasi-judicial or administrative court, tribunal, commission, board, panel or arbitrator acting under the authority of any of the foregoing;

"**Hazardous Substances**" means any waste or other substance that is prohibited, listed, defined, designated or classified under any applicable Environmental Law as dangerous, hazardous, radioactive, corrosive, explosive, infectious, carcinogenic, mutagenic or toxic or a pollutant, chemical or contaminant under or pursuant to, or that could result in liability under, any applicable Environmental Laws including, but not limited to, petroleum and all derivatives thereof or synthetic substitutes therefor, hydrogen sulphide, arsenic, cyanide, cadmium, lead, mercury, polychlorinated biphenyls ("**PCBs**"), PCB-containing equipment and material, asbestos, asbestos-containing material, urea-formaldehyde, and any other material or substance that may impair the natural environment, the health of any individual, property or plant or animal life;

"**Health Care Laws**" means the *Food and Drugs Act* (Canada), the *Controlled Drugs and Substances Act* (Canada) and the *Cosmetic Regulations, the Personal Health Information Protection Act, 2004* (Ontario), and the regulations, policies and administrative guidance issued thereunder or similar federal, provincial, territorial, municipal or local law, regulation policy or administrative guidance;

"**IFRS**" means International Financial Reporting Standards, at the relevant time applied on a consistent basis;

"**Indemnified Parties**" has the meaning ascribed thereto in Section 4.9(a);

"**Intellectual Property**" means any and all domestic, foreign and worldwide: (i) patents, and applications for patents, including but not limited to any and all patent reissues, divisionals, continuations, renewals, extensions and continuations-in-part of patents or patent applications; (ii) plant breeder's rights or applications for plant breeder's rights and analogous protections; (iii) proprietary and non-public business information, including inventions (whether patentable or not), invention disclosures, improvements, discoveries, trade secrets, confidential information, know-how, methods, processes, designs, technology, technical data, schematics, formulae and customer lists, and documentation relating to any of the foregoing; (iv) copyrights, copyright registrations and applications for copyright registration, together with the moral rights associated with any of the foregoing; (v) mask works, mask work registrations and applications for mask work registrations; (vi) industrial designs, design rights, design registrations, design registration applications and integrated circuit topographies; (vi) trade names, business names, corporate names, domain names, website names and world wide web addresses, common law trademarks, trademark registrations, trademark applications, trade dress and logos, and the goodwill associated with any of the foregoing; (vii) Software; and (viii) any other intellectual property and industrial property;

"**Interim Order**" means the interim order of the Court to be issued following the application therefor submitted to the Court pursuant to Section 192 of the CBCA as contemplated by Section 2.2(b) hereof, in form and substance acceptable to the Company and the Purchaser, each acting reasonably, providing for, among other things, the calling and holding of the Company Meeting, as such order may be affirmed, amended, modified, supplemented or varied by the Court with the consent of both the Company and the Purchaser, each acting reasonably;

"**Investment Canada Act**" means the *Investment Canada Act* (Canada) and the regulations promulgated thereunder;

"**IRCC**" means the Government of Canada's department of Immigration, Refugees and Citizenship Canada;

"**Key Employees**" means Richard Clément, Michel Clément and Michael Perron;

"**Key Shareholders**" means Richard Clément and Michel Clément;

"**Laws**" means all laws, statutes, codes, ordinances (including zoning), decrees, rules, regulations, by-laws, notices, judicial, arbitral, administrative, ministerial, departmental or regulatory judgments, injunctions, orders, decisions, settlements, writs, assessments, arbitration awards, rulings, determinations or awards, decrees or other requirements of any Governmental Authority having the force of law and any legal requirements arising under the common law or principles of law or equity and the term "applicable" with respect to such Laws and, in the context that refers to any person, means such Laws as are applicable at the relevant time or times to such person or its business, undertaking, property or securities and emanate from a Governmental Authority having jurisdiction over such person or its business, undertaking, property or securities;

"**Liens**" means any pledge, claim, lien, charge, option, hypothec, mortgage, security interest, royalty or any other encumbrance, easement, whether contingent or absolute, direct or indirect, or any agreement, option, right or privilege (whether by Law, contract or otherwise) capable of becoming any of the foregoing;

"**Litigation**" has the meaning ascribed thereto in Section 4.1(n);

"**Lock-Up Agreements**" means the voting support and lock-up agreements dated as of the date hereof between the Purchaser and the Locked-Up Company Shareholders;

"**Locked-Up Company Shareholders**" means the Key Shareholders;

"**Material Adverse Effect**" means any result, fact, change, effect, event, circumstance, occurrence or development that, taken together with all other results, facts, changes, effects, events, circumstances, occurrences or developments, has or would reasonably be expected to have a material and adverse effect on the business, results of operations, capitalization, assets, liabilities (including any contingent liabilities), obligations (whether absolute, accrued, conditional or otherwise), or financial condition of the Company and its subsidiaries, taken as a whole, provided, however, that any result, fact, change, effect, event, circumstance, occurrence or development that arises out of, relates directly or indirectly to, results directly or indirectly from or is attributable to any of the following shall not be deemed to constitute, and shall not be taken into account in determining whether there has been, a Material Adverse Effect:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) changes, developments or conditions in or relating to general political, economic or financial or capital
market conditions in Canada or globally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any change or proposed change in any Laws (including veteran benefits or medical cannabis coverage or
reimbursement programs) or the interpretation, application or non-application of any Laws by any Governmental Authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) changes or developments affecting the Canadian, medical or adult-use, cannabis industries in general;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any earthquake, hurricane, tornado, tsunami, flood, pandemic or other natural disaster or outbreak or
escalation of hostilities or war or acts of terrorism or any natural disaster or general outbreaks of illness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any generally applicable changes in IFRS or regulatory accounting requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the failure of any of the Company or any of its subsidiaries to meet any internal or published projections,
forecast or estimates of, or guidance related to, revenues, earnings, cash flows or other financial metrics before, on or after the date
hereof (it being understood that the causes underlying such failure, if not otherwise excluded from the definition of Material Adverse
Effect, may be taken into determining whether a Material Adverse Effect has occurred);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) a change in the market price of the Company Shares as a result of the announcement of the execution of
this Agreement or of the transactions contemplated hereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) any action taken (or omitted to be taken) by the Company or any of its subsidiaries, which is required
to be taken (or omitted to be taken) pursuant to this Agreement or that is consented to by the Purchaser in writing; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the announcement of this Agreement or consummation of the Arrangement or the transactions contemplated
hereby;

provided, however, that each of clauses (a) through (e) above shall not apply to the extent that any of the changes, developments, conditions or occurrences referred to therein relate primarily to (or have the effect of relating primarily to) the Company and its subsidiaries taken as a whole or disproportionately adversely affect the Company and its subsidiaries taken as a whole in comparison to other persons who operate in the Canadian or global, medical or adult-use cannabis industries and provided further, however, that references in certain sections of this Agreement to dollar amounts are not intended to be, and shall not be deemed to be, illustrative or interpretive for purposes of determining whether a Material Adverse Effect has occurred;

"**Material Contract**" means any Contract to which the Company or any of its subsidiaries is party or by which it or any of its assets, rights or properties are bound, that, if terminated or modified, would have a Material Adverse Effect and shall, without limitation, include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any Contract under which indebtedness of the Company or its subsidiaries for borrowed money in excess
of $500,000 is outstanding or may be incurred or pursuant to which any property or asset of the Company or its subsidiaries is mortgaged,
pledged or otherwise subject to a Lien securing indebtedness, any Contract under which the Company or its subsidiaries has directly or
indirectly guaranteed any liabilities or obligations of any person in excess of $500,000 or any Contract restricting the incurrence of
indebtedness by the Company or its subsidiaries or the incurrence of Liens on any properties or securities of the Company or its subsidiaries
or restricting the payment of dividends or other distributions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any Contract under which the Company or any of its subsidiaries is obliged to make payments, or receives
payments in excess of, $500,000 over the life of such Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any Company Lease Documents relating to 815, C Ave. Tecumseh, Pointe-Claire, QC H9R 4B1;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any Contract providing for the direct or indirect purchase, sale or exchange of, or option to purchase,
sell or exchange, any material property, asset or shares (or other equity interests) of another person, where the purchase or sale price
or agreed value or fair market value of such property, asset or shares (or other equity interests) exceeds $600,000, in each case entered
into in the past 12 months and for which any obligations remain outstanding or in respect of which the applicable transaction has not
been consummated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any Contract providing for the establishment, investment in, organization or formation of any joint venture,
limited liability company, partnership or similar entity that creates an exclusive dealing arrangement or right of first offer or refusal
that materially limits the business of the Company or any of its subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) any shareholders or stockholders agreements, registration rights agreements, voting trusts, proxies or
similar agreements, arrangements or commitments with respect to any shares or other equity interests of the Company or its subsidiaries
or any other Contract relating to disposition, voting or dividends with respect to any shares or other equity securities of the Company
or any of its subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any Contract that contains any material exclusivity or non-solicitation obligations of the Company or
any of its subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) any Contract that limits or restricts in any material respect (i) the ability of the Company or any
of its subsidiaries to engage in any line of business or carry on business in any geographic area, or (ii) the scope of persons to
whom the Company or any of its subsidiaries may sell products or deliver services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any Contract that gives another person the right to purchase or license an unlimited quantity or volume
of, or enterprise-wide scope of use of, the Company's products or services (or licenses to the Company products or services) for
a fixed aggregate price at no additional charge, or under which the Company grants most-favored customer pricing, rights of first refusal
or similar rights or terms to any person; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) any standstill or similar Contract (excluding that which is solely contained within a confidentiality
agreement or non-disclosure agreement between the Company and a third party) currently restricting the ability of the Company to offer
to purchase or purchase the assets or equity securities of another person;

"**material fact**" has the meaning attributed to such term under the Securities Act;

"**MC Release**" has the meaning ascribed thereto in Section 2.14(b);

"**MC Shareholder Consideration**" means 2,956,391 Purchaser Shares to be issued to the MC Shareholders with such Purchaser Shares subject to transfer restrictions for a period of 18 months following the Effective Date; provided that, any exercise of the Company Archerwill Prepayment Warrants prior to the Effective Date shall result in an automatic and proportionate reduction to the MC Shareholder Consideration in so far as an MC Shareholder receives Anti-Dilution Shares;

"**MC Shareholders**" means, collectively, the David Bow Family Trust, the Michael Rancourt Family Trust, the Michel Clément Family Trust, the Richard Clément Family Trust and the Massimo Caporusso Family Trust (2021);

"**MI 61-101**" means Multilateral Instrument 61-101 - *Protection of Minority Security Holders in Special Transactions*;

"**misrepresentation**" has the meaning attributed to such term under the Securities Act;

"**Modern Slavery Laws**" means all Laws regarding the provision of slavery, servitude and forced or child labour and about human trafficking including the *Fighting Against Forced Labour and Child Labour in Supply Chains Act* (Canada), the *Customs Tariff Act* (Canada) and the *Customs Act* (Canada);

"**Money Laundering Laws**" has the meaning ascribed thereto in Section 3.1(o)(iv);

"**Mortgage**" has the meaning ascribed thereto in Section 3.1(u)(ix);

"**Nasdaq**" means the Nasdaq Global Select Market;

"**NI 52-109**" means National Instrument 52-109 – *Certification of Disclosure in Issuers' Annual and Interim Filings*;

"**No Action Letter**" means written confirmation from the Commissioner that he does not, at that time, intend to make an application under Section 92 of the Competition Act in respect of the transactions contemplated by this Agreement, such written confirmation having not been modified or withdrawn prior to the Effective Time;

"**OQLF**" means the Office québécois de la langue française;

"**ordinary course of business**", or any similar reference, means, with respect to an action taken or to be taken by any person, that such action is consistent with the past practices of such person and is taken in the ordinary course of the normal day-to-day business and operations of such person and, in any case, is not unreasonable or unusual in the circumstances when considered in the context of the provisions of this Agreement;

"**Outside Date**" means April 15, 2026 or such later date as may be agreed to in writing by the Parties, provided that if the Effective Date has not occurred by April 15, 2026 as a result of the failure to satisfy the conditions set forth in Section 7.1(d); then either Party may elect by notice in writing delivered to the other Party by no later than 5:00 p.m. (Toronto time) on a date that is on or prior to such date or, in the case of subsequent extensions, the date that is on or prior to the Outside Date, as previously extended, to extend the Outside Date from time to time by a specified period of not less than five days and not more than 15 days, provided that in aggregate such extensions shall not exceed 90 days from April 15, 2026; provided further that, notwithstanding the foregoing, a Party shall not be permitted to extend the Outside Date if the failure to satisfy such condition is primarily the result of such Party's failure to comply with its covenants in this Agreement;

"**Parties**" means the parties to this Agreement and "**Party**" means any one of them;

"**Payoff Indebtedness**" means all indebtedness under the Company Credit Agreement and related loan documents and (ii) the Company Related Party Loans.

"**Payoff Letters**" has the meaning ascribed thereto in Section 2.11(b);

"**Permit**" means any lease, license, permit, certificate, consent, order, grant, approval, classification, registration or similar authorization of or from any Governmental Authority;

"**Permitted Liens**" means, in respect of the Company or any of its subsidiaries, any one or more of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Liens for Taxes which are not yet due or delinquent or that are being properly contested in good faith
by appropriate proceedings and in respect of which reserves have been provided in accordance with IFRS in the Company Interim Financial
Statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) easements, servitudes, restrictions, restrictive covenants, rights of way, licenses, permits and other
similar rights in the Company Owned Real Property or the Company Leased Property that, in each case, do not materially detract from or
adversely affect the value or materially or adversely interfere with the use of the Company Owned Real Property or the Company Leased
Property subject thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) zoning and building by-laws and ordinances, regulations made by public authorities that in each case do
not materially detract from or adversely affect the value or materially or adversely interfere with the use of the Company Owned Real
Property or the Company Leased Property subject thereto; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Liens disclosed in Section 1.1 of the Company Disclosure Letter;

"**person**" includes an individual, sole proprietorship, corporation, body corporate, incorporated or unincorporated association, syndicate or organization, partnership, limited partnership, limited liability company, unlimited liability company, joint venture, joint stock company, trust, natural person in his or her capacity as trustee, executor, administrator or other legal representative, a government or Governmental Authority or other entity, whether or not having legal status;

"**Personal Data**" means any information about an identifiable individual or any other information that is otherwise considered or deemed personal information, personal data, protected health information, or other personally identifiable information under applicable Law;

"**Plan of Arrangement**" means the plan of arrangement substantially in the form and content set out in Schedule A hereto, as amended, modified or supplemented from time to time in accordance with Article 6 of the Plan of Arrangement or at the direction of the Court in the Final Order, with the consent of the Company and the Purchaser, each acting reasonably;

"**Privacy and Information Security Requirements**" means (i) all Laws that govern the Processing of Personal Data, data privacy, information security in the United States and Canada; (ii) all Laws applicable to the information security of Company Systems; (iii) all other Laws and rules relating to biometrics, internet of things, direct marketing, electronic marketing, robocalls, or telemarketing in the United States and Canada; (iv) all Contracts that relate to the Processing of Personal Data and/or protecting the security or privacy of personally identifiable information or personal data as such terms are defined under applicable Laws; (v) all Privacy Notices; (vi) all requirements of the *Personal Information Protection and Electronic Documents Act* (Canada) and all substantially similar provincial legislation; and (vii) the Payment Card Information Data Security Standards;

"**Privacy Notices**" means any notices, policies, disclosures, or public representations by the Company or any of its subsidiaries in respect of the Company or the respective subsidiary's Processing of Personal Data or privacy practices;

"**Process**" or "**Processing**" means the collection, use, storage, processing, distribution, transfer, import, export, protection (including security measures), disposal, destruction, or disclosure or other activity regarding data (whether electronically or in any other form or medium) including, but not limited to, Personal Data;

"**Prohibited Activities**" means the cultivation, production, distribution, sale or possession of cannabis in the United States or any other jurisdiction where it is not nationally legal;

"**Prohibited Entities**" means a person engaged in Prohibited Activities;

"**Pre-Acquisition Reorganization**" has the meaning ascribed to it in Section 4.10;

"**Proceedings**" has the meaning ascribed thereto in Section 3.1(q);

"**Purchaser**" means Canopy Growth Corporation, a corporation incorporated under the federal laws of Canada;

"**Purchaser Annual Financial Statements**" means the audited financial statements of the Purchaser as at March 31, 2025 and 2024 and for each of the years in the three-year period ended March 31, 2025, including the notes thereto and the auditor's report thereon;

"**Purchaser Exchangeable Shares**" means the exchangeable shares in the capital of the Purchaser;

"**Purchaser Financial Statements**" means, collectively, the Purchaser Annual Financial Statements and the Purchaser Interim Financial Statements;

"**Purchaser Interim Financial Statements**" means the unaudited condensed interim consolidated financial statements as at and for the three and six months ended September 30, 2025, including the notes thereto;

"**Purchaser Material Adverse Effect**" means any result, fact, change, effect, event, circumstance, occurrence or development that, taken together with all other results, facts, changes, effects, events, circumstances, occurrences or developments, has or would reasonably be expected to have a material and adverse effect on the business, results of operations, capitalization, assets, liabilities (including any contingent liabilities), obligations (whether absolute, accrued, conditional or otherwise), or financial condition of the Purchaser and its subsidiaries, taken as a whole, provided, however, that any result, fact, change, effect, event, circumstance, occurrence or development that arises out of, relates directly or indirectly to, results directly or indirectly from or is attributable to any of the following shall not be deemed to constitute, and shall not be taken into account in determining whether there has been, a Purchaser Material Adverse Effect:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) changes, developments or conditions in or relating to general political, economic or financial or capital
market conditions in Canada, the United States or globally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any change or proposed change in any Laws (including veteran benefits or medical cannabis coverage or
reimbursement programs) or the interpretation, application or non-application of any Laws by any Governmental Authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) changes or developments affecting the Canadian or global, medical or adult-use cannabis industries in
general;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any earthquake, hurricane, tornado, tsunami, flood, pandemic or other natural disaster or outbreak or
escalation of hostilities or war or acts of terrorism or any natural disaster or general outbreaks of illness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any generally applicable changes in U.S. GAAP or regulatory accounting requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the failure of any of the Purchaser or any of its subsidiaries to meet any internal or published projections,
forecast or estimates of, or guidance related to, revenues, earnings, cash flows or other financial metrics before, on or after the date
hereof (it being understood that the causes underlying such failure, if not otherwise excluded from the definition of Purchaser Material
Adverse Effect, may be taken into determining whether a Purchaser Material Adverse Effect has occurred);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) a change in the market price of the Purchaser Shares as a result of the announcement of the execution
of this Agreement or of the transactions contemplated hereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) any action taken (or omitted to be taken) by the Purchaser or any of its subsidiaries, which is required
to be taken (or omitted to be taken) pursuant to this Agreement or that is consented to by the Company in writing; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the announcement of this Agreement or consummation of the Arrangement or the transactions contemplated
hereby;

provided, however, that each of clauses (a) through (e) above shall not apply to the extent that any of the changes, developments, conditions or occurrences referred to therein relate primarily to (or have the effect of relating primarily to) the Purchaser and its subsidiaries taken as a whole or disproportionately adversely affect the Purchaser and its subsidiaries taken as a whole in comparison to other persons who operate in the Canadian or global, medical or adult-use cannabis industries and provided further, however, that references in certain sections of this Agreement to dollar amounts are not intended to be, and shall not be deemed to be, illustrative or interpretive for purposes of determining whether a Purchaser Material Adverse Effect has occurred;

"**Purchaser Public Disclosure Record**" means all documents filed by or on behalf of the Purchaser on SEDAR+ since January 1, 2023 and prior to the date hereof that are publicly available on the date hereof;

"**Purchaser Senior Management**" means the Purchaser's Chief Executive Officer and Chief Financial Officer;

"**Purchaser Shares**" means the common shares in the capital of the Purchaser;

"**Real Property**" means all land, together with all buildings, structures, improvements, and fixtures located therein or thereon, together with all easements, privileges, rights-of-way, benefits, hereditaments and all other rights and interests pertaining, benefiting or appurtenant to them (including air, oil, gas, mineral, and water rights);

"**Receiving Party**" has the meaning ascribed thereto in Section 4.7(i);

"**Registration Statement**" has the meaning ascribed thereto in Section 4.4;

"**Regulatory Approvals**" means sanctions, rulings, consents, orders, exemptions, permits, waivers, early termination authorizations, clearances, written confirmations of no intention to initiate legal proceedings and other approvals (including the lapse, without objection, of a prescribed time under a statute or regulation that states that a transaction may be implemented if a prescribed time lapses following the giving of notice without an objection being made) of Governmental Authorities, including for greater certainty, Canadian Competition Approval;

"**Release**" means any sudden, intermittent or gradual release, spill, leak, pumping, addition, pouring, emission, emptying, discharge, migration, injection, escape, leaching, disposal, dumping, deposit, spraying, burial, abandonment, incineration, seepage, placement or introduction of a Hazardous Substance, whether accidental or intentional, into the Environment;

"**Remedial Action**" shall mean any investigation, feasibility study, monitoring, testing, sampling, removal (including removal of underground storage tanks), restoration, clean-up, remediation, closure, site restoration, remedial response or remedial work, in each case in relation to environmental matters;

"**Replacement Compensation Option**" has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

"**Replacement Option**" has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

"**Replacement Warrant**" has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

"**Representatives**" means, collectively, with respect to a Party, that Party's officers, directors, employees, investment bankers, lawyers, accountants, consultants or other agent or advisor employed by such Party;

"**Returns**" means all returns, reports, declarations, elections, notices, filings, forms, statements and other documents (whether in tangible, electronic or other form) and including any amendments, schedules, attachments, supplements, appendices and exhibits thereto, made, prepared, filed or required to be made, prepared or filed by Law in respect of Taxes;

"**Sanctions**" has the meaning ascribed thereto in Section 3.1(o)(v);

"**SEC**" means the United States Securities and Exchange Commission;

"**Securities Act**" means the *Securities Act* (Ontario) and the rules, regulations and published policies made thereunder;

"**Securities Laws**" means the Securities Act and all other applicable Canadian provincial and territorial securities Laws;

"**SEDAR+**" means the System for Electronic Data Analysis and Retrieval +;

"**Share Consideration**" means 0.32 of a Purchaser Share for each Company Share;

"**Share Exchange Agreement**" means the Second Restated Share Exchange Agreement dated June 28, 2023, among the Company, Montreal Cannabis Medical Inc., Michel Clément, Richard Clément and the MC Shareholders;

"**Software**" means computer software and programs (both source code and object code form), all proprietary rights in the computer software and programs and all documentation and other materials related to the computer software and programs;

**"Special Committee"** means the Special Committee established by the Company Board in connection with the transactions contemplated by this Agreement;

"**subsidiary**" means, with respect to a specified entity, any:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) corporation of which issued and outstanding voting securities of such corporation to which are attached
more than 50% of the votes that may be cast to elect directors of the corporation (whether or not shares of any other class or classes
will or might be entitled to vote upon the happening of any event or contingency) are owned by such specified entity and the votes attached
to those voting securities are sufficient, if exercised, to elect a majority of the directors of such corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) partnership, unlimited liability company, joint venture or other similar entity in which such specified
entity has more than 50% of the equity interests and the power to direct the policies, management and affairs thereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) a subsidiary (as defined in clauses (a) and (b) above) of any subsidiary (as so defined)
of such specified entity;

"**Superior Proposal**" means a *bona fide* Acquisition Proposal made in writing on or after the date of this Agreement by a person or persons acting jointly (other than the Purchaser and its affiliates) that did not result from a breach of Article 5 and which or in respect of which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is to acquire (i) no less than all of the outstanding Company Shares not owned by the person or persons;
provided that such acquisition is on the same terms and conditions for all Company Shareholders or (ii) all or substantially all
of the assets of the Company on a consolidated basis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Company Board has determined in good faith, after consultation with its financial advisors and outside
legal counsel, that such Acquisition Proposal would, taking into account all of the terms and conditions of such Acquisition Proposal,
if consummated in accordance with its terms (but not assuming away any risk of non-completion), result in a transaction which (i) is
in the best interests of the Company and its stakeholders; and (ii) is superior to the Company Shareholders from a financial point
of view than the Arrangement (taking into account any amendments to this Agreement and the Arrangement proposed by the Purchaser pursuant
to Section 5.1(f));

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) is not subject to any financing condition and in respect of which adequate arrangements (as such term
is understood for purposes of section 2.27 of National Instrument 62-104 - *Take-over Bids and Issuer Bids*) have been made to ensure
that the required funds will be available to effect payment in full, including in satisfaction of any outstanding indebtedness of the
Company, including pursuant to the Company Credit Agreement, that would be required to be repaid upon closing of such Acquisition Proposal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) is not subject to any due diligence and/or access condition or due diligence termination right in favour
of the acquirer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the Company Board has determined in good faith, after consultation with financial advisors and outside
legal counsel, is reasonably capable of being completed in accordance with its terms, without undue delay, taking into account all legal,
financial, regulatory and other aspects of such Acquisition Proposal and the person making such Acquisition Proposal; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the Company has sufficient financial resources available to pay or has made arrangements to pay, any Termination
Fee payable pursuant to the terms hereof in accordance with the terms hereof;

"**Superior Proposal Notice Period**" has the meaning ascribed thereto in Section 5.1(f)(iii);

"**Support Agreements**" means the voting support agreements dated as of the date hereof between the Purchaser and the Supporting Company Shareholders and other voting and support agreements that may be entered into after the date hereof by the Purchaser and Company Shareholders, which agreements provide that such Company Shareholders shall, among other things vote all Company Shares of which they are the registered or beneficial holder or over which they have control or direction, in favour of the Arrangement and not dispose of their Company Shares;

"**Supporting Company Shareholders**" means, collectively, each of the directors and executive officers of the Company, each of which has entered into a Support Agreement;

"**Surviving Corporation**" means any corporation or other entity continuing following the amalgamation, merger, consolidation or winding up of the Company with or into one or more other entities (pursuant to a statutory procedure or otherwise);

"**Tax**" or "**Taxes**" means without duplication, with respect to any Person, all supranational, national, federal, provincial, state, municipal, territorial, county, local, foreign or other taxes, dues, duties, rates, imposts, fees, levies, other assessments, tariffs, charges or obligations of the same or similar nature, however denominated, imposed, assessed or collected by any Governmental Authority, including income taxes, branch taxes, profits taxes, capital gains taxes, gross receipts taxes, royalty taxes, windfall profits taxes, value added taxes, severance taxes, ad valorem taxes, property taxes, capital taxes, net worth taxes, production taxes, sales taxes, retail, use taxes, licence taxes, excise taxes, franchise taxes, real and personal property taxes, anti-dumping taxes, countervailing taxes, environmental taxes, transfer taxes, withholding or similar taxes, payroll taxes, employment taxes, health taxes, employer health taxes, government pension plan premiums and contributions, social security premiums, workers' compensation premiums and pension (including Canada Pension Plan and other governmental plans) payments, escheat or unclaimed property (whether or not considered a tax under applicable Law), employment/unemployment insurance or compensation premiums and contributions, stamp taxes, occupation taxes, premium taxes, alternative or add-on minimum taxes, goods and services tax/harmonized sales tax, Quebec sales tax, provincial sales tax, customs or excise duties or other taxes, fees, imposts, assessments or charges of any kind whatsoever imposed or charged by any Governmental Authority, any requirement to pay or repay any amount to a Governmental Authority in respect of a tax credit, refund, rebate, governmental grant or subsidy, overpayment, or similar adjustment of taxes, and any instalments in respect thereof, together with any tax indemnity obligation, interest, penalties, or additions with respect thereto and any interest in respect of such additions or penalties, and whether disputed or not, and "Tax" means any one of such Taxes;

"**Tax Act**" means the *Income Tax Act* (Canada), as amended, and the regulations promulgated thereunder, as amended;

"**Termination Fee**" has the meaning ascribed thereto in Section 5.2(b);

"**Termination Fee Event**" has the meaning ascribed thereto in Section 5.2(a);

"**Third-Party Beneficiaries**" has the meaning ascribed thereto in Section 8.4;

"**Transaction Settlement Amount**" has the meaning ascribed thereto in Section 2.11(a);

"**Transaction Settlement Notice**" has the meaning ascribed thereto in Section 2.11(a);

"**TSX**" means the Toronto Stock Exchange;

"**U.S. Exchange Act**" means the United States *Securities Exchange Act of 1934*, as amended, and the rules and regulations promulgated thereunder;

"**U.S. Federal Laws**" means (i) the U.S. Controlled Substances Act (including any implementing regulations and schedules in effect at the relevant time) or any other U.S. federal law the violation of which is predicated upon a violation of the U.S. Controlled Substances Act; and (ii) any Canadian, U.S. or international anti-money laundering legislation.

"**U.S. GAAP**" means United States generally accepted accounting principals, adopted by the SEC;

"**U.S. Investment Company Act**" means the U.S. Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder;

"**U.S. Securities Act**" means the United States *Securities Act of 1933*, as amended, and the rules and regulations promulgated thereunder;

"**U.S. Securities Laws**" means federal and state securities legislation of the United States and all rules, regulations and orders promulgated thereunder; and

"**U.S. Treasury Regulations**" means the treasury regulations under the Code.

**1.2**  **<u>Currency</u>** 

Except where otherwise specified, all references to currency herein are to lawful money of Canada and "$" refers to Canadian dollars. References to "US$" refer to United States dollars.

**1.3**  **<u>Interpretation Not Affected by Headings</u>** 

The division of this Agreement into Articles and Sections and the insertion of a table of contents and headings are for convenience of reference only and do not affect the construction or interpretation of this Agreement. The terms "this Agreement", "hereof", "herein", "hereunder" and similar expressions refer to this Agreement, including the Schedules hereto, and not to any particular Article, Section or other portion hereof. Unless something in the subject matter or context is inconsistent therewith, references herein to an Article, Section or Schedule by number or letter or both are to that Article, Section or Schedule in or to this Agreement.

**1.4**  **<u>Knowledge</u>** 

Any reference in this Agreement to the "knowledge" of the Company, means to the knowledge and information of the Company Senior Management after reasonable inquiry regarding the relevant matter. Any reference in this Agreement to the "knowledge" of the Purchaser, means to the knowledge and information of the Purchaser Senior Management after reasonable inquiry regarding the relevant matter.

**1.5**  **<u>Extended Meanings, Etc.</u>** 

Unless the context otherwise requires, words importing the singular number only include the plural and vice versa; words importing any gender include all genders. The terms "including" or "includes" and similar terms of inclusion, unless expressly modified by the words "only" or "solely", mean "including without limiting the generality of the foregoing" and "includes without limiting the generality of the foregoing". Any Contract, instrument or Law defined or referred to herein means such Contract, instrument or Law as from time to time amended, modified, supplemented or consolidated, including, in the case of Contracts or instruments, by waiver or consent and, in the case of Laws, by succession of comparable successor Laws, and all attachments thereto and instruments incorporated therein and, in the case of statutory Laws, all rules and regulations made thereunder.

**1.6**  **<u>Date of any Action</u>** 

In the event that any date on which any action is required to be taken hereunder by any of the Parties is not a Business Day, such action will be required to be taken on the next succeeding day which is a Business Day.

**1.7**  **<u>Schedules</u>** 

The following are the Schedules to this Agreement:

Schedule A - Form of Plan of Arrangement

Schedule B - Form of Arrangement Resolution

**Article 2 <u><br> THE ARRANGEMENT</u>**

**2.1**  **<u>The Arrangement and Effective Date</u>** 

The Company and the Purchaser agree that the Arrangement will be implemented in accordance with and subject to the terms and conditions contained in this Agreement and the Plan of Arrangement. On or prior to the Effective Date, the Articles of Arrangement shall be filed with the Director. From and after the Effective Time, the steps to be carried out pursuant to the Arrangement shall become effective in accordance with the Plan of Arrangement. The closing of the transactions contemplated hereby and by the Plan of Arrangement will take place at 10:00 a.m. (Toronto time) on the Effective Date at the offices in Toronto, Ontario of Cassels Brock & Blackwell LLP, or at such other time on the Effective Date or such other place as may be agreed to by the Parties. Subject to the satisfaction or waiver (subject to applicable Laws) of the last of the conditions set forth in Article 7 hereof (excluding conditions that by their terms cannot be satisfied until the Effective Date, but subject to the satisfaction or, when permitted, waiver of those conditions as of the Effective Date), upon the Arrangement Resolution having been approved and adopted by the Company Shareholders and the Company obtaining the Final Order, the Arrangement shall be effective at the Effective Time on the Effective Date.

**2.2**  **<u>Implementation Steps by the Company</u>** 

The Company covenants in favour of the Purchaser that, subject to the terms of this Agreement, the Company will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) subject to compliance with applicable Securities Laws, prior to the next opening of markets in Toronto
following the execution of this Agreement, issue a news release announcing the entering into of this Agreement and other related matters
referred to in Section 4.3(a)(ii), which news release shall be satisfactory in form and substance to each of the Company and the
Purchaser, each acting reasonably, and, thereafter, file such news release and a corresponding material change report in prescribed form
in accordance with applicable Securities Laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) as soon as reasonably practicable after the execution of this Agreement and, in any event the Company
will use Commercially Reasonable Efforts to do so not later than January 14, 2026 or such other date as agreed to by the Parties,
apply to, and have the hearing for the Interim Order before, the Court pursuant to Section 192 of the CBCA in a manner and form acceptable
to the Purchaser, acting reasonably, and thereafter proceed with such application and diligently pursue obtaining the Interim Order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) lawfully convene and hold the Company Meeting in accordance with the Interim Order, the Company's
articles and by-laws and applicable Laws, as soon as reasonably practicable after the Interim Order is issued, and, in any event, not
later than February 17, 2026 or such other date as agreed to by the Parties (acting reasonably), for the purpose of having the Company
Shareholders consider the Arrangement Resolution, and will not, unless the Purchaser otherwise consents in writing, adjourn, postpone
or cancel the Company Meeting or propose to do any of the foregoing except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) for an adjournment as required for quorum purposes or by applicable Law; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) as required under Section 5.1(h) or Section 6.3;

<u>provided</u>, <u>however</u>, that, if the Company Meeting is scheduled to occur during a Superior Proposal Notice Period, the Company may, and upon the request of the Purchaser, the Company shall, adjourn or postpone the Company Meeting to (i) a date specified by the Purchaser that is not later than six Business Days after the date on which the Company Meeting was originally scheduled to be held, or (ii) if the Purchaser does not specify such date, to the sixth Business Day after the date on which the Company Meeting was originally scheduled to be held;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) subject to the terms of this Agreement, solicit from the Company Shareholders proxies in favour of the
approval of the Arrangement Resolution and against any resolution submitted by any person that is inconsistent with, or which seeks (without
the Purchaser's consent) to hinder or delay the Arrangement Resolution and the completion of the transactions contemplated by this
Agreement including, if so requested by the Purchaser, using the services of a proxy solicitation agent, consulting with the Purchaser
in the selection and retainer of any such proxy solicitation agent and reasonably considering the Purchaser's recommendation with
respect to any such agent, and cooperating with any persons engaged by the Purchaser, to solicit proxies in favour of the approval of
the Arrangement Resolution, recommend to all Company Shareholders that they vote in favour of the Arrangement Resolution, and take all
other actions that are reasonably necessary or desirable to obtain the approval of the Arrangement by the Company Shareholders, and (i) permit
the Purchaser to assist and participate in all calls and meetings with such proxy solicitation agent, (ii) provide the Purchaser
with all material information distributions or updates from the proxy solicitation agent, (iii) consult with, and consider any suggestions
from, the Purchaser with regards to the proxy solicitation agent, and (iv) consult with the Purchaser and keep the Purchaser apprised,
with respect to such solicitation and other actions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) advise the Purchaser as reasonably requested, and on a daily basis commencing 10 Business Days prior to
the Company Meeting, as to the aggregate tally of the proxies and votes received in respect of the Company Meeting and all matters to
be considered at the Company Meeting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) fix the date of the Company Meeting, as directed by the Purchaser, promptly provide the Purchaser with
any notice relating to the Company Meeting and allow Representatives of the Purchaser to attend the Company Meeting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) not change the record date for the Company Shareholders entitled to vote at the Company Meeting in connection
with any adjournment or postponement of the Company Meeting unless required by Law or the Company's by-laws (it being understood
that a change will not be required where such date has been provided for in the Interim Order); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) subject to obtaining the Final Order and to the satisfaction or waiver (subject to applicable Laws) of
each of the conditions set forth in Article 7 hereof (excluding conditions that by their terms cannot be satisfied until the Effective
Date, but subject to the satisfaction or, when permitted, waiver of those conditions as of the Effective Date), as soon as reasonably
practicable thereafter, and, in any event, not later than two Business Days thereafter, send to the Director under the CBCA, for endorsement
and filing by the Director, the Articles of Arrangement and such other documents as may be necessary to give effect to the Arrangement,
provided, however, that the Articles of Arrangement shall not be sent to the Director, for endorsement and filing by the Director, except
as contemplated hereby or with the Purchaser's prior written consent.

**2.3**  **<u>Implementation Steps by the Purchaser</u>** 

Subject to the terms of this Agreement, the Purchaser will cooperate with, assist and consent to the Company seeking the Interim Order and the Final Order and, subject to the Company obtaining the Final Order and to the satisfaction or waiver (subject to applicable Laws) of each of the conditions set forth in Article 7 hereof (excluding conditions that by their terms cannot be satisfied until the Effective Date, but subject to the satisfaction or, when permitted, waiver of those conditions as of the Effective Date), as soon as reasonably practicable thereafter, take all steps and actions including, if applicable, making all filings with Governmental Authorities necessary to give effect to the Arrangement and carry out the terms of the Plan of Arrangement applicable to each of them prior to the Outside Date.

**2.4**  **<u>Interim Order</u>** 

The application referred to in Section 2.2(b) shall, unless the Company and the Purchaser otherwise agree, include a request that the Interim Order provide, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) for the class of persons to whom notice is to be provided in respect of the Arrangement and the Company
Meeting and for the manner in which such notice is to be provided;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) confirmation of the record date for the purposes of determining the Company Shareholders entitled to receive
notice of and vote at the Company Meeting (which date shall be fixed and published by the Company in consultation with the Purchaser);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) that the Company Meeting may be adjourned or postponed from time to time by the Company in accordance
with the terms of this Agreement without the need for additional approval by the Court and without the necessity of first convening the
Company Meeting or first obtaining any vote of the Company Shareholders respecting the adjournment or postponement, and notice of any
such adjournment or postponement shall be given by such method as the Company Board may determine is appropriate in the circumstances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) that the record date for the Company Shareholders entitled to receive notice of and to vote at the Company
Meeting will not change in respect of or as a consequence of any adjournment or postponement of the Company Meeting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) that the requisite and sole approval of the Arrangement Resolution will be: (i) 66⅔% of the
votes cast on the Arrangement Resolution by the Company Shareholders present in person or represented by proxy at the Company Meeting,
and (ii) a simple majority of the votes cast on the Arrangement Resolution excluding the votes for Company Shares held or controlled
by persons described in items (a) through (d) of Section 8.1(2) of MI 61-101;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) that in all other respects, the terms, conditions and restrictions of the Company's constating documents,
including quorum requirements and other matters shall apply with respect to the Company Meeting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) that the Parties intend to rely upon the exemption from registration provided by Section 3(a)(10) of
the U.S. Securities Act with respect to the issuance of the Consideration Shares, Replacement Warrants, Replacement Options, Replacement
Compensation Options and MC Shareholder Consideration, subject to and conditioned on the Court's approval of the Arrangement and
determination that the Arrangement is substantively and procedurally fair to Company Shareholders, Company Warrant Holders, Company Optionholders,
Company Compensation Option Holders and MC Shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) for the grant of Dissent Rights to the Company Shareholders who are registered holders of Company Shares
as contemplated in the Plan of Arrangement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) for the notice requirements with respect to the presentation of the application to the Court for the Final
Order;

and, subject to the consent of the Company (such consent not to be unreasonably withheld or delayed) the Company shall also request that the Interim Order provide for such other matters as the Purchaser may reasonably require.

**2.5**  **<u>Circular</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the Purchaser complying with Section 2.5(e), the Company will, in consultation with the Purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) as soon as reasonably practicable after the execution of this Agreement, promptly prepare the Circular
together with any other documents required by the CBCA and other applicable Laws in connection with the approval of the Arrangement Resolution
by the Company Shareholders at the Company Meeting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) as soon as reasonably practicable after the issuance of the Interim Order, cause the Circular and such
other documents to be filed and sent to the Company Shareholders in compliance with the abridged timing contemplated by National Instrument
54-101 – *Communication with Beneficial Owners of Securities of a Reporting Issuer* and filed as required by the Interim Order
and applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company shall ensure that the Circular complies in all material respects with applicable Laws, and, without limiting the generality of the foregoing, that the Circular (including with respect to any information incorporated therein by reference) will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading in light of the circumstances in which they are made (other than in each case with respect to any information furnished by the Purchaser) and will provide the Company Shareholders with information in sufficient detail to permit them to form a reasoned judgement concerning the matters to be placed before them at the Company Meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Company shall use Commercially Reasonable Efforts to obtain any necessary consents from its auditor and any other advisors to the use of any financial, technical or other expert information required to be included in the Circular and to the identification in the Circular of each such advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company and the Purchaser will cooperate in the preparation, filing and mailing of the Circular. The Company will provide legal counsel to the Purchaser with an opportunity to review and comment on all drafts of the Circular and other documents related thereto prior to filing the Circular with applicable Governmental Authorities and printing and mailing the Circular to the Company Shareholders and will give consideration to such comments. All information relating solely to the Purchaser included in the Circular shall be provided by the Purchaser in accordance with Section 2.5(e) and shall be in form and content satisfactory to the Purchaser, acting reasonably, and the Circular will include: (i) a statement that the Company Board has unanimously determined that the Arrangement is fair to the Company Shareholders, and it is in the best interests of the Company; (ii) the unanimous recommendation of the Company Board that the Company Shareholders vote in favour of the Arrangement Resolution and the rationale for that recommendation; (iii) a copy of the Company Fairness Opinion; (iv) a statement that each of the Supporting Company Shareholders has signed a Support Agreement, pursuant to which, and subject to the terms thereof, they have agreed to, among other things, vote their Company Shares in favour of the Arrangement Resolution and (v) a statement that each of the Locked-Up Company Shareholders has signed a Lock-Up Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Purchaser will, in a timely manner, furnish the Company with all such information regarding the Purchaser as may reasonably be required to be included in the Circular pursuant to applicable Laws and any other documents related thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Company shall keep the Purchaser fully informed in a timely manner of any requests or comments made by the Canadian securities regulatory authorities and/or the CSE in connection with the Circular.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company and the Purchaser will each promptly notify the other if at any time before the Effective Date it becomes aware (in the case of the Company only with respect to the Company and in the case of the Purchaser only with respect to the Purchaser) that the Circular or any other document referred to in Section 2.5(e) contains any misrepresentation or otherwise requires any amendment or supplement and promptly deliver written notice to the other Party setting out full particulars thereof. In any such event, the Company and the Purchaser will cooperate with each other in the preparation, filing and dissemination of any required supplement or amendment to the Circular or such other document, as the case may be, and any related news release or other document necessary or desirable in connection therewith.

**2.6**  **<u>Final Order.</u>** 

If (i) the Interim Order is granted; and (ii) the Arrangement Resolution is approved by Company Shareholders at the Company Meeting as provided for in the Interim Order and as required by applicable Law, subject to the terms of this Agreement, the Company shall take all steps necessary or desirable to submit the Arrangement to the Court and diligently pursue an application for the Final Order pursuant to Section 192 of the CBCA, as soon as reasonably practicable after the Company Meeting, but in any event not later than four clear Business Days thereafter, and, if at any time after the issuance of the Final Order and on or before the Effective Date, the Company is required by the terms of the Final Order or by Law to return to the Court with respect to the Final Order, it will only do so after prior notice to the Purchaser, and affording the Purchaser a reasonable opportunity to consult with the Company regarding the same.

**2.7**  **<u>Court Proceedings</u>** 

The Company will provide the Purchaser and its counsel with an opportunity to review and comment upon drafts of all materials to be filed with the Court in connection with the Arrangement prior to the service and filing of such materials and will give consideration to such comments. The Company will ensure that all materials filed with the Court in connection with the Arrangement are consistent in all material respects with the terms of this Agreement and the Plan of Arrangement. Subject to applicable Law, the Company will not file any material with the Court in connection with the Arrangement or serve any such material, and will not and will not agree to modify or amend materials so filed or served, except as contemplated by this Section 2.7 or with the Purchaser's prior written consent, such consent not to be unreasonably withheld, conditioned or delayed, provided, however, that nothing herein shall require the Purchaser to agree or consent to any increase or change in the consideration payable under the terms of the Plan of Arrangement or any modification or amendment to such filed or served materials that expands or increases the Purchaser's obligations set forth in any such filed or served materials or under this Agreement or the Arrangement. In addition, the Company will not object to legal counsel to the Purchaser making such submissions on the hearing of the motion for the Interim Order and the application for the Final Order as such counsel considers appropriate. The Company will also provide the Purchaser on a timely basis with copies of any notice of appearance and evidence or other documents served on the Company or its legal counsel in respect of the application for the Interim Order or the Final Order or any appeal therefrom and of any notice, whether or not in writing, received by the Company or its legal counsel indicating any intention to oppose the granting of the Interim Order or the Final Order or to appeal the Interim Order or the Final Order.

**2.8**  **<u>Dissenting Shareholders</u>** 

The Company will give the Purchaser prompt notice of any written communication from any Company Shareholder in opposition to the Arrangement (except for non-substantive communications from any Company Shareholder that purports to hold less than 0.1% of the Company Shares (provided that communications from such Company Shareholder are not substantive in the aggregate)), written notice of dissent or purported exercise by any Company Shareholder of Dissent Rights received by the Company in relation to the Arrangement and any withdrawal of Dissent Rights received by the Company and any written communications sent by or on behalf of the Company to any Company Shareholder exercising or purporting to exercise Dissent Rights in relation to the Arrangement. The Company shall not make any payment or settlement offer, or agree to any such settlement, or conduct any negotiations prior to the Effective Time with respect to any such dissent, notice or instrument without the prior written consent of the Purchaser.

**2.9**  **<u>List of Securityholders</u>** 

Upon the reasonable request from time to time of the Purchaser, the Company will provide the Purchaser with lists (in both written and electronic form) of: (i) the registered Company Shareholders, together with their addresses and respective holdings of Company Shares; (ii) the names and addresses and holdings of all persons having rights (including Company Optionholders, Company DSU Holders, Company RSU Holders, Company Warrant Holders, Company Compensation Option Holders and MC Shareholders) issued or granted by the Company to acquire or otherwise related to Company Shares; and (iii) non-objecting beneficial owners of Company Shares and participants in book-based nominee registers (such as CDS & Co.), together with their addresses and respective holdings of Company Shares. The Company will from time to time require that its registrar and transfer agent furnish the Purchaser with such additional information, including updated or additional lists of Company Shareholders, information regarding beneficial ownership of Company Shares and lists of holdings and other assistance as the Purchaser may reasonably request.

**2.10**  **<u>Securityholder Communications</u>** 

The Company and the Purchaser agree to cooperate in the preparation of presentations, if any, to any Company Securityholders, MC Shareholders or the analyst community regarding the Arrangement. The Company agrees to consult with the Purchaser in connection with any communications or meeting with Company Securityholders, MC Shareholders or analysts that it may have; provided, however, that the foregoing shall be subject to the Company's overriding obligation to make any disclosure or filing required by applicable Laws or stock exchange rules and if the Company is required to make any such disclosure or filing, it shall use its Commercially Reasonable Efforts to give prior oral or written notice to the Purchaser and an opportunity to review and comment thereon prior to its dissemination or filing and will give consideration to such comments.

**2.11**  **<u>Transaction Settlement</u>** 

The Parties agree that at least two Business Days prior to the anticipated Effective Date, the Company shall deliver to the Purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a written notice (the "**Transaction Settlement Notice**") setting out the following information:
(i) the Company Employee Costs and the most recent estimate of the unpaid Company Transaction Costs and the total aggregate amounts
owing pursuant to the Company Related Party Loans and Company Credit Agreement, (ii) the amount of immediately available cash in
the Company's accounts to satisfy the unpaid portion of any Company Employee Costs, Company Transaction Costs and amounts owing
under the Company Related Party Loans and Company Credit Agreement on the Effective Date, and (iii) having regard to the foregoing,
the amount to be advanced by the Purchaser, to its counsel, on behalf of the Company pursuant to Section 2.12 to satisfy the unpaid
portion of any Company Employee Costs, the amount of the Company Transaction Costs that the Company will not be able to satisfy using
the cash amount set out in subsection (i) and amounts owing under the Company Related Party Loans and Company Credit Agreement on
or prior to the Effective Date (such aggregate amount, the "**Transaction Settlement Amount** "). For greater certainty,
in order to minimize the amount of the Transaction Settlement Amount, the Parties agree that the Company shall use all available cash
to satisfy all Company Transaction Costs owing on or prior to the Effective Date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) executed payoff letters with respect to all of the Payoff Indebtedness, providing for the payment and
cancellation of such Payoff Indebtedness and, as applicable, an authorization to file all Personal Property Security Act (or the equivalent
thereof) discharge statements and releases reasonably necessary to evidence satisfaction and termination of such Payoff Indebtedness and
any Liens securing such Payoff Indebtedness, along with wire transfer instructions (the "**Payoff Letters** ").

**2.12**  **<u>Payment of Consideration and MC Shareholder Consideration</u>** 

The Purchaser will, following receipt of the Final Order and the Regulatory Approvals listed in Section 7.1(c) and no later than the Business Day prior to the filing by the Company of the Articles of Arrangement with the Director:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) deposit in escrow with the Depositary (the terms and conditions of such escrow to be satisfactory to the
Parties, acting reasonably) sufficient Purchaser Shares and the requisite amount of cash to satisfy the aggregate Consideration and MC
Shareholder Consideration payable pursuant to the Plan of Arrangement (other than, in the case of the Consideration, payments to Company
Shareholders exercising Dissent Rights and who have not withdrawn their notice of objection);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) advance the Transaction Settlement Amount to the Purchaser's counsel, to be held in trust, for payment
to the applicable persons disclosed in the Transaction Settlement Notice, and in such amounts as set out in the Transaction Settlement
Notice as supplemented by the applicable Payoff Letters, in each case, in accordance with the Arrangement and this Agreement immediately
prior to the Effective Time.

**2.13**  **<u>Adjustment of Consideration</u>** 

The Purchaser Shares comprising a portion of the Consideration and the MC Shareholder Consideration payable pursuant to the Plan of Arrangement will be adjusted to reflect fully the effect of any stock split, reverse split, stock dividend (including any stock dividend of securities convertible into Purchaser Shares), consolidation or reorganization with respect to the Purchaser Shares, if the Purchaser Shares shall have been changed into a different number of shares or a different class upon such action, effected in accordance with the terms of this Agreement occurring after the date of this Agreement and prior to the Effective Time, such that the recipients of such Purchaser Shares shall receive the same economic benefit as contemplated by this Agreement and the Plan of Arrangement prior to such action and as so adjusted shall, from and after the date of such event, be the Purchaser Shares comprising a portion of the Consideration to be paid per Company Share, subject to further adjustment in accordance with this Section 2.13.

**2.14**  **<u>U.S. Securities Law Matters</u>** 

The Parties agree that the Arrangement will be carried out with the intention that, all Consideration Shares (including those issued in exchange for Company Shares issued to Company RSU Holders, Company DSU Holders and the holders of Company In-The-Money Warrants and Company In-The-Money Options pursuant to the Plan of Arrangement), Replacement Options, Replacement Warrants, Replacement Compensation Options and MC Shareholder Consideration issued pursuant to the Arrangement will be issued by the Purchaser in reliance on the exemption from the registration requirements of the U.S. Securities Act provided by Section 3(a)(10) thereof and pursuant to applicable exemptions from applicable state securities laws. In order to ensure the availability of the exemption under Section 3(a)(10) of the U.S. Securities Act, the Parties agree that the Arrangement will be carried out on the following basis:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Arrangement will be subject to the approval of the Court;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Court will be advised as to the intention of the Parties to rely on the exemption under Section 3(a)(10) of
the U.S. Securities Act with respect to the issuance of the Consideration Shares in exchange for the Company Shares, the issuance of the
Replacement Options in exchange for the Company Out-Of-The-Money Options, the issuance of Replacement Warrants in exchange for the Company
Out-Of-The-Money Warrants, the Replacement Compensation Options in exchange for the Company Compensation Options and the MC Shareholder
Consideration in exchange for the MC Shareholders irrevocably, fully and finally releasing the Company, the Purchaser and their respective
affiliates, from any and all obligations owing to such MC Shareholders pursuant to the Share Exchange Agreement, including, for greater
certainty, each MC Shareholder's entitlement to the Anti-Dilution Shares (the "**MC Release**") prior to the hearing
for the Final Order required to approve the procedural and substantive fairness of the terms and conditions of the Arrangement to the
Company Shareholders to whom Consideration Shares will be issued, to holders of Company Out-Of-The-Money Options to whom Replacement Options
will be issued, to holders of Company Out-Of-The-Money Warrants to whom Replacement Warrants will be issued, to Company Compensation Option
Holders to whom Replacement Compensation Options will be issued and to the MC Shareholders to whom the MC Shareholder Consideration will
be issued;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) pursuant to Section 2.4(g), the Court will be advised prior to the hearing to approve the Interim
Order that the Parties intend to rely on the exemption under Section 3(a)(10) of the U.S. Securities Act with respect to the
issuance of the Consideration Shares in exchange for the Company Shares, the issuance of the Replacement Options in exchange for the Company
Out-Of-The-Money Options, the issuance of Replacement Warrants in exchange for the Company Out-Of-The-Money Warrants, the Replacement
Compensation Options in exchange for the Company Compensation Options, and the issuance of the MC Shareholder Consideration in exchange
for the MC Release and that its approval of the Arrangement will be relied upon as a determination that the Court has satisfied itself
as to the procedural and substantive fairness of the terms and conditions of the Arrangement to all Company Shareholders who are entitled
to receive Consideration Shares in exchange for the Company Shares, all holders of Company Out-Of-The-Money Options who are entitled to
receive Replacement Options in exchange for the Company Out-Of-The-Money Options, all holders of Company Out-Of-The-Money Warrants who
are entitled to receive Replacement Warrants in exchange for the Company Out-Of-The-Money Warrants, all Compensation Option Holders who
are entitled to receive Replacement Compensation Options in exchange for the Company Compensation Options and all MC Shareholders who
are entitled to receive the MC Shareholder Consideration in exchange for the MC Release, in each case pursuant to the Arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Company will ensure that each person entitled to receive the Consideration Shares, Replacement Options,
Replacement Warrants, Replacement Compensation Options or the MC Shareholder Consideration pursuant to the Arrangement will be given adequate
notice advising them of their right to attend the hearing of the Court for the Final Order to give approval of the Arrangement and providing
them with sufficient information necessary for them to exercise that right;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) each person entitled to receive the Consideration Shares, Replacement Options, Replacement Warrants, Replacement
Compensation Options or the MC Shareholder Consideration pursuant to the Arrangement will be advised that the Consideration Shares, Replacement
Options, Replacement Warrants, Replacement Compensation Options and MC Shareholder Consideration issued in exchange for the Company Shares,
Company Out-Of-The-Money Options, Company Out-Of-The-Money Warrants, Company Compensation Options and the MC Release, respectively, pursuant
to the Arrangement have not been registered under the U.S. Securities Act and will be issued by the Purchaser in reliance on the exemption
under Section 3(a)(10) of the U.S. Securities Act and that certain restrictions on resale under the U.S. Securities Laws, including,
as applicable, Rule 144 under the U.S. Securities Act, may be applicable with respect to the Consideration Shares and the MC Shareholder
Consideration issued to persons who are "affiliates" (as defined in Rule 144 under the U.S. Securities Act) of the Purchaser
on or after the Effective Date, or persons who were "affiliates" of the Purchaser within 90 days prior to the Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the Parties will use Commercially Reasonable Efforts to ensure that the:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Final Order will expressly state that the Arrangement serves as a basis of a claim to the exemption under
Section 3(a)(10) of the U.S. Securities Act from the registration requirements otherwise imposed by the U.S. Securities Act
regarding the issuance of Consideration Shares, Replacement Options, Replacement Warrants, Replacement Compensation Options and MC Shareholder
Consideration pursuant to the Plan of Arrangement and is approved by the Court as being substantively and procedurally fair to the Company
Shareholders, holders of Company Out-Of-The-Money Options, holders of Company Out-Of-The-Money Warrants, Company Compensation Option Holders
and to the MC Shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Interim Order will specify that each Company Shareholder, each holder of Company Out-Of-The-Money
Options, each holder of Company Out-Of-The-Money Warrants, Company Compensation Option Holders and each MC Shareholder will have the right
to appear before the Court at the hearing of the Court for the Final Order to give approval of the Arrangement so long as they enter an
appearance within a reasonable time and in accordance with the requirements of Section 3(a)(10) under the U.S. Securities Act;
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Final Order shall include a statement to substantially the following effect: "This Order will
serve as a basis of a claim to an exemption, pursuant to Section 3(a)(10) of the United States Securities Act of 1933, as amended,
from the registration requirements otherwise imposed by that act, regarding the issue and exchange of securities of the Purchaser pursuant
to the Plan of Arrangement".

**2.15**  **<u>Withholding Taxes</u>** 

The Company, the Purchaser and the Depositary, as applicable, will be entitled to deduct and withhold from any consideration otherwise payable or deliverable to any person under the Plan of Arrangement and this Agreement (including, without limitation, any payments to Dissenting Shareholders, Company RSU Holders, Company DSU Holders, Company Warrant Holders, Company Optionholders, Company Compensation Option Holders and MC Shareholders), such amounts as the Company, the Purchaser or the Depositary, as applicable, is required to deduct and withhold, or reasonably believe to be required to deduct and withhold, with respect to such payment or delivery under any provision of any Laws in respect of Taxes. For the purposes hereof, all such withheld amounts shall be treated for all purposes under the Plan of Arrangement and this Agreement as having been paid to the person in respect of which such deduction and withholding was made on account of the obligation to make payment to such person hereunder, provided that such deducted or withheld amounts are actually remitted to the appropriate Governmental Authority by or on behalf of the Company, the Purchaser or the Depositary, as applicable. Each of the Company, the Purchaser and the Depositary is hereby authorized to sell or otherwise dispose of such portion of Purchaser Shares payable as Share Consideration or the MC Shareholder Consideration as is necessary to provide sufficient funds to the Company, the Purchaser or the Depositary, as applicable, to enable it to implement such deduction or withholding, and the Company, the Purchaser or the Depositary will notify the holder thereof and remit to the holder any unapplied balance of the net proceeds (after deduction for (a) the amounts required to satisfy the required withholding under the Plan of Arrangement and this Agreement in respect of such Person, (b) reasonable commissions payable to the broker, and (c) other reasonable costs and expenses) of such sale. Any sale will be made in accordance with applicable Laws and at prevailing market prices and none of the Company, the Purchaser, the Depositary or their respective agents, as the case may be, shall have any liability to, or be under any obligation to obtain a particular price or to indemnify, any Company Securityholder in respect of a particular price, for the portion of the Share Consideration or the MC Shareholder Consideration so sold.

**Article 3 <u><br> REPRESENTATIONS AND WARRANTIES</u>**

**3.1**  **<u>Representations and Warranties of the Company</u>** 

Except as specifically disclosed in the Company Disclosure Letter (which shall make reference to the applicable section in respect of which such qualification is being made, provided that any matter disclosed in any section of the Company Disclosure Letter shall be considered disclosed also for other section of the Company Disclosure Letter for which it is reasonably apparent on its face that such matter is pertinent to the other section of the Company Disclosure Letter), the Company represents and warrants to and in favour of the Purchaser as follows and acknowledges that the Purchaser is relying upon such representations and warranties in entering into this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Organization and Qualification</u>. The Company has been duly incorporated and validly exists and is
in good standing under the CBCA, and has the requisite corporate and legal power and capacity to own its property and assets as now owned
and to carry on its business as it is now being carried on. The Company is duly qualified to carry on business and is in good standing
in each jurisdiction in which the nature or character of its properties and assets, owned, leased or operated by it, or the nature of
its business or activities, makes such qualification necessary. The Company Diligence Information includes complete and correct copies
of the constating documents of the Company, as amended to the date of this Agreement. The Company Diligence Information includes complete
and correct copies of the resolutions or minutes (or, in the case of draft minutes, the most recent drafts thereof) of all meetings of
the Company Shareholders, the Company Board and each committee of the Company Board from the last three (3) years, excluding any
minutes (or portion thereof) of the Company Board in relation to this Agreement, and the Company has not taken any action to amend or
supersede such documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Subsidiaries</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company does not have any subsidiaries other than as set out in Section 3.1(b)(i) of the
Company Disclosure Letter. Section 3.1(b)(i) of the Company Disclosure Letter accurately sets out the name and jurisdiction
of each subsidiary and the percentage owned directly or indirectly by the Company and the remaining equity interest, if any, owned other
than by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Other that as set out in Section 3.1(b)(ii) of the Company Disclosure Letter, each of the subsidiaries
of the Company that is a corporation is validly subsisting under its respective laws of incorporation or continuance and has all requisite
corporate power and authority to carry on its business as now conducted and to own or lease and to operate its properties and assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Each of the subsidiaries of the Company is duly qualified to carry on business in each jurisdiction in
which the nature or character of its properties and assets, owned, leased or operated by it, or the nature of its business or activities,
makes such qualification necessary, except where the failure to be so qualified would not be reasonably expected to have, individually
or in the aggregate, a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Company is, directly or indirectly, the legal, beneficial and registered owner of all of the issued
shares or other equity interests of each of the subsidiaries of the Company and none of the subsidiaries has any outstanding agreement,
subscription, warrant, option, right or commitment (nor has it granted any right or privilege capable of becoming an agreement, subscription,
warrant, option, right or commitment) obligating it to issue or sell any of its shares or other equity interests, including any security
or obligation of any kind convertible into or exchangeable or exercisable for any shares or other securities of the subsidiaries. Except
with respect to Permitted Liens, all of the issued and outstanding shares or other equity interests in the capital of each of the subsidiaries
have been duly authorized and validly issued and are fully-paid and non-assessable, as the case may be, and all such shares or other equity
interests are owned free and clear of all Liens of any kind or nature whatsoever and are free of any other restrictions including any
restriction on the right to vote, sell or otherwise dispose of such shares or other equity interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Company Diligence Information includes complete and correct copies of the constating documents of
each of the subsidiaries **,** as amended to the date of this Agreement. The Company Diligence Information includes complete and correct
copies of the resolutions or minutes (or, in the case of draft minutes, the most recent drafts thereof) of all meetings of the shareholders
of the subsidiaries, the board of directors of the subsidiaries and each committee thereof from the last three (3) years, excluding
any minutes (or portion thereof) in relation to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>No Other Interests</u>. Except for the shares or other equity interests owned by the Company in the
subsidiaries and as set out in Section 3.1(c) of the Company Disclosure Letter, (i) neither the Company nor any of its
subsidiaries owns, beneficially, any shares in the capital of any corporation; and (ii) neither the Company nor any of its subsidiaries
holds any securities or obligations of any kind convertible into or exercisable or exchangeable for shares in the capital of any corporation.
None of the Company nor any of its subsidiaries is a party to any agreement to acquire any shares of any entity or corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Authority Relative to this Agreement</u>. The Company has the requisite corporate power, authority
and capacity to enter into this Agreement and (subject to obtaining the approval of the Company Shareholders of the Arrangement Resolution,
the Interim Order and the Final Order as contemplated in Section 2.2) to perform its obligations hereunder and to complete the transactions
contemplated by this Agreement. The execution and delivery of this Agreement, the performance by the Company of its obligations hereunder
and the completion by the Company of the transactions contemplated by this Agreement have been duly authorized by the Company Board, subject
to obtaining the approval of the Arrangement Resolution by the Company Shareholders, the Interim Order and the Final Order as contemplated
in Section 2.2, and no other corporate proceedings on the part of the Company are necessary to authorize the execution and delivery
by it of this Agreement, the performance by the Company of its obligations hereunder, or the completion of the Arrangement or, the completion
by the Company of the transactions contemplated hereby, other than, with respect to the Circular and other matters relating thereto, the
approval of the Company Board. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and other Laws relating to or affecting the availability of equitable remedies and the enforcement of
creditors' rights generally and general principles of equity and public policy and to the qualification that equitable remedies
such as specific performance and injunction may be granted only in the discretion of a court of competent jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Approvals</u>. No authorization, licence, permit, certificate, registration, consent or approval of,
or filing with, or notification to, any Governmental Authority is required to be obtained or made by the Company or its subsidiaries for
the execution and delivery by the Company of this Agreement, the performance by the Company of its obligations hereunder, the completion
by the Company of the Arrangement, other than:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Interim Order and any filings required in order to obtain, and approvals required under, the Interim
Order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Final Order, and any filings required in order to obtain the Final Order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) such filings and other actions required under applicable Securities Laws, the CBCA and the rules and
policies of the CSE;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Canadian Competition Approval;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) any other authorizations, licences, permits, certificates, registrations, consents, approvals and filings
and notifications with respect to which the failure to obtain or make same would not reasonably be expected to prevent or significantly
impede or materially delay the completion of the Arrangement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) third party consents, approvals and notices set out in Section 3.1(e) of the Company Disclosure
Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>No Violation</u>. Subject to obtaining the authorizations, consents and approvals and making the filings
referred to in Section 3.1(e) and Section 3.1(f) of the Company Disclosure Letter, the execution and delivery by the
Company of this Agreement, the performance by the Company of its obligations hereunder and the completion of the Arrangement do not and
will not (nor will they with the giving of notice or the lapse of time or both):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) conflict with, result in a violation or breach of, constitute a default or require any consent (other
than such as has already been obtained), to be obtained under, or give rise to any termination rights or payment obligation under, any
provision of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Law applicable to it, its subsidiaries or any of their respective properties or assets; 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;(b) any provisions of the articles, by-laws or other constating documents or partnership agreements of the Company or any of its subsidiaries or any other agreement or understanding with any party holding an ownership interest in the Company;

except in the case of (a) above for such breaches, defaults, consents, terminations, cancellations, suspensions, accelerations, penalties, payment obligations or rights which would not individually or in the aggregate have a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) result in a conflict, contravention, breach or default under or termination of, or acceleration or permit
the acceleration of the performance required by, or loss of any benefit under, or require any consent or approval under, any Contract
to which it is a party or by which it or any of its subsidiaries is bound or to any of its material assets is subject or give to any person
any interest, benefit or right, including any right of first refusal, first offer, purchase, termination, cancellation, suspension, alteration,
payment, modification, reimbursement, cancellation or acceleration, under any such Contracts, except for any of such matters which would
not individually or in the aggregate have a Material Adverse Effect; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) result in the creation or imposition of any Lien upon any of the Company's assets or the assets
of any of its subsidiaries, or restrict, hinder, impair or limit its or any of its subsidiaries' ability to carry on their respective
business as and where it is now being carried on or as and where it may be carried on in the future; except for any of such matters which
would not individually or in the aggregate have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Capitalization</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The authorized capital of the Company consists of an unlimited number of Company Shares. As at December 12,
2025, there were (A) 120,302,960 Company Shares issued and outstanding, (B) Company Options outstanding providing for the issuance
of 6,093,331 Company Shares upon the exercise thereof in accordance with their terms; (C) Company DSUs outstanding providing for
the issuance of 3,750,000 Company Shares upon the vesting thereof in accordance with their terms; (D) Company RSUs outstanding providing
for the issuance of 2,000,000 Company Shares upon the vesting thereof in accordance with their terms; (E) 220,360 Company Compensation
Options providing for the issuance of 220,360 Company Units (comprised of 220,360 Company Shares and 110,180 Company Unit Warrants) upon
the exercise thereof in accordance with their terms; (F) Company September 2025 Warrants providing for the issuance of 1,652,669
Company Shares upon the exercise thereof in accordance with their terms; (G) Company March 2020 Warrants providing for the issuance
of 3,244,757 Company Shares upon the exercise thereof in accordance with their terms; (H) Company Archerwill Debenture Warrants providing
for the issuance of 1,733,333 Company Shares upon the exercise thereof in accordance with their terms; (I) Company Archerwill Prepayment
Warrants providing for the issuance of 16,640,858 Company Shares upon the exercise thereof in accordance with their terms; and (J) Company
2017 Debenture. All outstanding Company Shares have been, and all Company Shares issuable upon the exercise, vesting or conversion, as
applicable, of rights under the Company Options, Company DSUs, Company RSUs, Company Warrants, Company Compensation Options and Company
Unit Warrants in accordance with their respective terms have been duly authorized and, upon issuance, will be, validly issued as fully
paid and non-assessable shares of the Company and are not and will not be, as applicable, subject to or issued in violation of, any pre-emptive
or anti-dilution right, subject to compliance with the right to the Anti-Dilution Shares in accordance with the terms of the Share Exchange
Agreement. There is no outstanding contractual obligation of the Company to repurchase, redeem or otherwise acquire any such Company Shares.
Except as set out in Section 3.1(g)(i) of the Company Disclosure Letter, the Company has no other outstanding agreement, subscription,
warrant, option, right or commitment or other right or privilege (whether by law, pre-emptive, anti-dilution right or contractual), nor
has it granted any right or privilege capable of becoming an agreement, subscription, warrant, option, right or commitment, obligating
it to issue or sell any Company Shares or other securities, including any security or obligation of any kind convertible into or exchangeable
or exercisable for any Company Shares or other security. Other than the Company Option Plan and the Company Incentive Plan, the Company
does not have any share or stock appreciation right, phantom equity, restricted share unit, deferred share unit or similar right, agreement,
arrangement or commitment based on the book value, Company Share price, income or any other attribute of or related to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Company Shares are listed and posted for trading on the CSE and on the OTCQX and, except for such
listing and trading, no securities of the Company are listed or quoted for trading on any other stock or securities exchange or market
or registered under any securities Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Section 3.1(g)(iii) of the Company Disclosure Letter sets forth a schedule, as of the date hereof
and to the extent applicable, of all outstanding grants to holders of Company Options, Company DSUs, Company RSUs, Company Warrants and
Company Compensation Options and the number, exercise price, date of grant, expiration dates, performance criteria and the names of the
holders of such Company securities and whether each such holder is a current director of the Company or current officer, employee or consultant
of the Company. There are no outstanding securities, bonds, debentures or other evidences of indebtedness of the Company or its subsidiaries
that have the right to vote (or that are convertible into or exercisable for securities having the right to vote) with the holders of
the Company Shares on any matter. There are no outstanding obligations of the Company or any of its subsidiaries with respect to the voting
or disposition of any outstanding securities of the Company or any of its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) No holder of securities issued by the Company or its subsidiaries has any right to compel the Company
or its subsidiaries to register or otherwise qualify securities for public sale in Canada, the United States, or elsewhere.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Shareholder and Similar Agreements</u>. None of the Company nor any of its subsidiaries is party to
any shareholder, pooling, voting trust or other similar agreement relating to the issued and outstanding shares in the capital of the
Company or any of its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Reporting Issuer Status and Securities Laws Matters</u>. The Company is a "reporting issuer"
within the meaning of applicable Securities Laws in each of Alberta, British Columbia, Ontario and Québec, and is not on the list
of reporting issuers in default under applicable Securities Laws, and no securities commission or similar regulatory authority has issued
any order preventing or suspending trading of any securities of the Company, and the Company is not in default of any material provision
of applicable Securities Laws or the rules, regulations or policies of the CSE. Trading in the Company Shares on the CSE is not currently
halted or suspended. No delisting, suspension of trading or cease trading order with respect to any securities of the Company is pending
(other than in relation to the transactions contemplated by this Agreement) or, to the knowledge of the Company, threatened. No inquiry,
review or investigation (formal or informal) of the Company by any securities commission or similar regulatory authority under applicable
Securities Laws or the CSE is in effect or ongoing or expected to be implemented or undertaken. The Company has not taken any action to
cease to be a reporting issuer in any provinces or territory of Canada nor has the Company received notification from any securities commission
or similar regulatory authority seeking to revoke the reporting issuer status of the Company. Except as set forth above in this Section 3.1(i),
the Company is not subject to continuous disclosure or other public reporting requirements under any Securities Laws or any securities
Laws, including without limitation, U.S. Securities Laws. None of the Company's subsidiaries are subject to continuous disclosure
or other disclosure requirements under any Securities Laws, U.S. Securities Laws or the securities Laws of any other jurisdiction. The
documents and information comprising the Company Public Disclosure Record, as at the respective dates they were filed, were in compliance
in all material respects with applicable Securities Laws and, where applicable, the rules and policies of the CSE and did not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading. The Company has publicly disclosed in the Company Public
Disclosure Record all information regarding any event, circumstance or action taken or failed to be taken by the Company or its subsidiaries
which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company is up-to-date in
all forms, reports, statements and documents, including financial statements and management's discussion and analysis, required
to be filed by the Company under applicable Securities Laws and the rules and policies of the CSE. The Company has not filed any
confidential material change report that at the date hereof remains confidential. There are no outstanding or unresolved comments in comment
letters from any securities commission or similar regulatory authority with respect to any of the Company Public Disclosure Record and,
to the knowledge of the Company, neither the Company nor any of the Company Public Disclosure Record is subject of an ongoing audit, review,
comment or investigation by any securities commission or similar regulatory authority or the CSE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>U.S. Securities Matters.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company is not registered, and is not required to be registered, as an "investment company"
pursuant to the U.S. Investment Company Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Company Shares are not and are not required to be registered pursuant to Section 12 of the U.S.
Exchange Act and the Company is not currently subject to the reporting requirements of the U.S. Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Company Financial Statements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company Financial Statements have been, and all financial statements of the Company which are publicly
disseminated by the Company in respect of any subsequent periods prior to the Effective Date will be, prepared in accordance with IFRS
applied on a basis consistent with those of previous periods and in accordance with applicable Laws (except as set forth in such statements
or in the notes thereto or, in the case of unaudited statements, subject to normal and recurring year-end audit adjustments). The Company
Financial Statements, together with the related management's discussion and analysis, present fairly, in all material respects,
the assets, liabilities (whether accrued, absolute, contingent or otherwise) and financial condition of the Company and its subsidiaries,
on a consolidated basis, as at the respective dates thereof and the losses, comprehensive losses, results of operations, changes in shareholders'
equity and cash flows of the Company for the periods covered thereby. The Company does not intend to correct or restate, nor, to the knowledge
of the Company is there any reasonable basis for any correction or restatement of, any aspect of any of the Company Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) None of the Company nor any of its subsidiaries is a party to, or has any commitment to become a party
to, any joint venture, off-balance sheet partnership or any similar Contract (including any Contract relating to any transaction or relationship
between or among the Company or any of its subsidiaries, on the one hand, and any unconsolidated affiliate, including any structure finance,
special purpose or limited purpose entity or person, on the other hand) where the result, purpose or effect of such contract is to avoid
disclosure of any material transaction involving, or material liabilities of, the Company or any of its subsidiaries, in the published
financial statements of the Company or the Company Public Disclosure Record.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Management of the Company has designed a process of internal control over financial reporting (as such
term is defined in NI 52-109) for the Company providing reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with IFRS and has otherwise complied with NI 52-109.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Since March 31, 2025, neither the Company nor any of its subsidiaries nor any Representative of the
Company or any of its subsidiaries has received or otherwise had or obtained knowledge of any complaint, allegation, assertion, or claim,
whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any of
its subsidiaries or their respective internal accounting controls, including any complaint, allegation, assertion, or claim that the Company
or any of its subsidiaries has engaged in questionable accounting or auditing practices, which has not been resolved to the satisfaction
of the audit committee of the Company Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Except as set out in Section 3.1(k)(v) of the Company Disclosure Letter, there are no outstanding
loans made by the Company to any director or officer of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Undisclosed Liabilities</u>. Except as set out in Section 3.1(l) of the Company Disclosure
Letter, as disclosed in the Company Interim Financial Statements, or incurred in the ordinary course of business including in relation
to subsequent drawdowns on the Company Credit Agreement, none of the Company nor any of its subsidiaries has incurred any material liabilities
or obligations of any nature, whether or not accrued, contingent or otherwise and are not party to or bound by any suretyship, guarantee,
indemnification or assumption agreement, or endorsement of, or any other similar contract or commitment with respect to the obligations,
liabilities or indebtedness of any person in excess of $250,000 in the aggregate or incurred in connection with this Agreement or the
transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Auditors</u>. The Company's current auditors are independent with respect to the Company within
the meaning of the rules of professional conduct applicable to auditors in Canada. There has not been a "reportable event"
(within the meaning of Section 4.11 of National Instrument 51-102 – *Continuous Disclosure Obligations*) with the Company's
auditors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Absence of Certain Changes</u>. Since September 30, 2025, except as disclosed in the Company Public
Disclosure Record or as set out in Section 3.1(n) of the Company Disclosure Letter:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Company and its subsidiaries have conducted their respective businesses only in the ordinary course
of business and consistent with past practice, except for the Arrangement contemplated hereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) there has not been any event, occurrence, development or state of circumstances or facts that has had
or would be reasonably expected to have a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) there has not been any material write-down by the Company of any of the assets of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) there has not been any material expenditure or commitment to expend by the Company with respect to capital
expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) neither the Company nor any of its subsidiaries has approved or entered into any agreement in respect
of any acquisition or sale, lease, license or other disposition by the Company or its subsidiaries of any interest in any material assets
whether by asset sale, transfer of property, shares or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) there has not been any incurrence, assumption or guarantee by the Company of any debt for borrowed money,
any creation or assumption by the Company of any Lien, or any making by the Company of any loan, advance or capital contribution to or
material investment in any other person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) there has not been any satisfaction or settlement of any material claim, liability or obligation of the
Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) none of the Company, its subsidiaries nor any of the directors, officers, employees, consultants or auditors
thereof, has received or otherwise had or obtained knowledge of any fraud or complaint, allegation, assertion or claim, whether written
or oral, regarding fraud or the accounting or auditing practices, procedures, methodologies or methods of the Company or any of the subsidiaries
or their respective internal accounting controls;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) neither the Company nor any of its subsidiaries has effected any material change in its accounting policies,
principles, methods, practices or procedures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) neither the Company nor any of its subsidiaries has suffered any material casualty, damage, destruction
or loss to any of its properties or assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) neither the Company nor any of its subsidiaries has entered into, or amended, any Material Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) neither the Company nor any of its subsidiaries has declared, set aside or paid any dividends or made
any distribution or payment or return of capital in respect of the Company Shares or any other securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) neither the Company nor any of its subsidiaries has effected or passed any resolution to approve a split,
division, consolidation, combination or reclassification of the Company Shares or any other securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) there has not been any increase in or modification of the compensation payable to or to become payable
by the Company to any of its directors, officers, employees or consultants of more than 2.0% of the previous compensation payable or any
grant to any such director, officer, employee or consultant of any increase in severance or termination pay or any increase or modification
of any bonus, pension, insurance or benefit arrangement to, for or with any of such directors, officers, employees or consultants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) neither the Company nor any of its subsidiaries has adopted, or materially amended, any collective bargaining
agreement, bonus, pension, profit sharing, stock purchase, stock option or other benefit plan; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) the Company has not agreed, announced, resolved or committed to do any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Compliance with Laws</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The business of the Company and its subsidiaries has been since January 1, 2023 and is
 currently being conducted in compliance with all applicable Laws, other than violations which have not had or would not reasonably
 be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company and its subsidiaries have not received
 any notice of any alleged violation of any such Laws. The Company does not have any knowledge of any potential or pending changes in
 any Law that may materially impact the business, operations, financial condition, or otherwise of the Company or its subsidiaries
 except as set forth in Section 3.1(o)(i) of the Company Disclosure Letter. Without limiting the generality of the foregoing,
 all issued and outstanding Company Shares have been issued in material compliance with all applicable Securities Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Since January 1, 2023, neither the Company nor any of its subsidiaries has received any written notices
or other written correspondence from any Governmental Authorities (A) regarding any violation (or any investigation, inspection,
audit, or other proceeding by any Governmental Authority involving allegations of any violation) of any Law or (B) of any circumstances
that may have existed or currently exist which could lead to a loss, suspension, or modification of, or a refusal to issue, any material
Permit. To the knowledge of the Company, no investigation, inspection, audit or other proceeding by any Governmental Authority involving
allegations of any material violation of any Law is threatened or contemplated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) None of the Company, any of its subsidiaries nor, to the knowledge of the Company, any of their respective
directors, officers, supervisors, managers, employees, or agents has: (A) violated any applicable anti-corruption, anti-bribery,
export control, and economic sanctions Laws, including without limitation the *Corruption of Foreign Public Officials Act* (Canada)
and the *United States Foreign Corrupt Practices Act*, (B) made or authorized any direct or indirect contribution, payment or
gift of funds, property or anything else of value to any official, employee or agent of any Governmental Authority, authority or instrumentality
in Canada, other jurisdictions in which the Company or any of its subsidiaries has assets or any other jurisdiction other than in accordance
with applicable Laws, (C) used any corporate funds, or made any direct or indirect unlawful payment from corporate funds, to any
foreign or domestic government official or employee or for any unlawful contribution, gift, entertainment or other unlawful expense relating
to political activity; or (D) violated or is in violation of any provision of the *Criminal Code* (Canada) relating to foreign
corrupt practices, including making any contribution to any candidate for public office, in either case, where either the payment or gift
or the purpose of such contribution payment or gift was or is prohibited under the foregoing or any other applicable Law of any locality.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements of the money laundering statutes of all applicable jurisdictions,
the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced
by any Governmental Authority (collectively, the "**Money Laundering Laws**") and no action, suit or proceeding by or before
any court of Governmental Authority or any arbitrator non-Governmental Authority involving the Company or any of its subsidiaries with
respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) None of the Company, any of its subsidiaries nor, to the knowledge of the Company, any of their respective
directors, officers, supervisors, managers, employees, or agents has had any sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department, the Government of Canada or any other relevant sanctions authority (collectively, "**Sanctions** ")
imposed upon any such person, and the Company and its subsidiaries are not in violation of any of the Sanctions or law or executive order
relating thereto, or are conducting business with any person subject to any Sanctions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Cannabis Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company and its subsidiaries are, and at all times have been, in compliance, in all material respects,
with all Laws applicable to the cultivation, ownership, testing, research, development, manufacture, packaging, processing, use, distribution,
storage, import, export, sale or disposal of any product manufactured, distributed or sold by the Company and its subsidiaries, including
the *Cannabis Act* (Canada) and the *Cannabis Regulations* (Canada) (collectively, "**Cannabis Laws** ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Neither the Company, nor any subsidiary, nor, to the knowledge of the Company, any entity in which it
has an interest, has received any inspection report, notice of adverse finding, warning letter, untitled letter or other correspondence
or notice from any Governmental Authority alleging or asserting any material non-compliance with (i) any Cannabis Laws or Health
Care Laws or (ii) any licences issued pursuant to the *Cannabis Act* (Canada), the *Excise Act, 2001* (Canada) or any predecessor
legislation to the Company or any subsidiary (the "**Cannabis Licences**") or any licence required by a Health Care Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Company and its subsidiaries are, and at all times have been, in compliance in all material respects
with the terms and conditions of all such Cannabis Licences and all other licenses required in connection with their respective businesses.
The Company does not anticipate any variations or difficulties in obtaining, maintaining or renewing such Cannabis Licences or any other
required license.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Company and its subsidiaries have filed, declared, obtained, maintained or submitted all material
reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any applicable
Cannabis Laws, Health Care Laws or Cannabis Licences, and all such reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments were materially complete and correct on the date filed (or were corrected or supplemented by
a subsequent submission).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Neither the Company nor any subsidiary has ever received any notice or communication from any customer
or Governmental Authority (including Health Canada) alleging a material defect, an issue requiring a recall or quarantine of product (whether
voluntary, required or otherwise) or material claim in respect of any products supplied or sold by the Company or any subsidiary to a
customer and, to the Company's knowledge, there are no circumstances that would give rise to any reports, recalls, public disclosure,
announcements or material customer communications that are required to be made by the Company or any subsidiary in respect of any products
supplied or sold by any of them.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) Each of the Company's and its subsidiaries' sites used for the cultivation and processing
of cannabis and cannabis products complies in all material respects with the requirements of the Cannabis Licences and other applicable
Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) All product research and development activities, quality assurance, quality control, testing and research
and analysis activities conducted by the Company and each subsidiary in connection with their business are conducted in accordance with
prudent industry practices applicable to a company of the size and nature as the Company and in compliance, in all material respects,
with all industry, laboratory safety, management and training standards applicable to the Company's and its subsidiaries'
current business, including its own standard operating procedures, and all such processes, procedures and practices required in connection
with such activities are in place as reasonably necessary and are being complied with in all material respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Each individual employed by or associated with the Company and the subsidiaries that is required to hold
a security clearance under the *Cannabis Act* (Canada) and related regulations in order to maintain the Cannabis Licences holds,
or has applied for, such clearance and the Company and each subsidiary is not aware of any circumstance that would affect such security
clearances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) To the knowledge of the Company, each entity in respect of which the Company or any subsidiary has an
investment, is, and at all times has been, in compliance, in all material respects, with applicable Cannabis Laws and Health Care Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>United States Operations</u>. Neither the Company nor any of its subsidiaries (i) operates or
carries on business in the United States; (ii) directly or indirectly, owns, or invests or engages in, any Prohibited Entities; (iii) has
any commercial interests or arrangements with Prohibited Entities that are similar in substance to ownership of, or investment in, Prohibited
Entities; (iv) provides or obtains services, supplies or products to or from Prohibited Entities; (v) has any commercial interests
or arrangements with entities engaging in the activities described in items (i), (ii), (iii) and (iv); and (vi) specifically
target or derive revenues or funds from any of the activities described in the foregoing items.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Litigation</u>. Except as set out in Section 3.1(r) of the Company Disclosure Letter, there
is no court, administrative, regulatory or similar proceeding (whether civil, quasi-criminal or criminal, administrative or investigative),
arbitration or other dispute settlement procedure, investigation or inquiry before or by any Governmental Authority, or any notice, claim,
action, suit, demand, arbitration, charge, indictment, hearing, demand letter or other similar civil, quasi-criminal or criminal, administrative
or investigative matter or proceeding, including by any third party whatsoever (collectively, "**Proceedings**") against
or involving the Company or its subsidiaries, or affecting any of their property or assets (whether in progress or, to the knowledge of
the Company, threatened) that (i) would have, or be reasonably expected to have, individually or in the aggregate, a Material Adverse
Effect; or (ii) would restrain, enjoin or otherwise prohibit or delay or otherwise adversely affect the consummation of the Arrangement.
There is no judgment, writ, decree, injunction, rule, award or order of any Governmental Authority outstanding against the Company or
its subsidiaries in respect of any of their businesses, properties or assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Insolvency</u>. No act or proceeding has been taken by or against the Company or any of its subsidiaries
in connection with the dissolution, liquidation, winding up, bankruptcy, reorganization, compromise or arrangement of the Company or any
of its subsidiaries or for the appointment of a trustee, receiver, manager or other administrator of the Company or any of its subsidiaries
or any of their properties or assets nor, to the knowledge of the Company, is any such act or proceeding threatened. Neither the Company
nor any of its subsidiaries has sought protection under the *Bankruptcy and Insolvency Act* (Canada), the *Companies' Creditors Arrangement Act* (Canada) or similar legislation. Neither the Company nor any of its subsidiaries nor any of their respective properties
or assets is subject to any outstanding judgment, order, writ, injunction or decree that involves or may involve, or restricts or may
restrict, the right or ability of the Company or its subsidiaries to conduct its business in all material respects as it has been carried
on prior to the date hereof, or that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect or would reasonably be expected to prevent or significantly impede or materially delay the completion of the Arrangement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) <u>Data Privacy and Security</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company and each of its subsidiaries complies, and during the past three years has complied, in all
material respects, with all Privacy and Information Security Requirements. Neither the Company nor any of its subsidiaries has been notified
in writing of, or is the subject of, any complaint or proceeding or to the Company's knowledge, any, regulatory investigation related
to Processing of Personal Data by any Governmental Authority or payment card association, regarding any actual or possible violations
of any Privacy and Information Security Requirement by or with respect to the Company or any of its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Company and each of its subsidiaries employs commercially reasonable organizational, administrative,
physical and technical safeguards that comply in all material respects with all Privacy and Information Security Requirements to protect
Company Data within its custody or control and requires the same of all vendors under contract with the Company that Process Company Data
on its behalf. The Company and each of its subsidiaries has provided all requisite notices and obtained all required consents, and satisfied
all other requirements (including but not limited to notification to Governmental Authorities), necessary for the Processing (including
international and onward transfer) of all Personal Data in connection with the conduct of the business as currently conducted and in connection
with the consummation of the transactions contemplated hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) To the knowledge of the Company, neither the Company nor any of its subsidiaries has suffered a material
security breach with respect to any of the Company Data and to the Company's knowledge, there has been no unauthorized or illegal
use of or access to any Company Data which would result in a Material Adverse Effect. Except as set forth in Section 3.1(t)(iii) of
the Company Disclosure Letter, neither the Company nor any of its subsidiaries has notified, or been required to notify, any person of
any information security breach involving Personal Data. To the Company's knowledge, the Company Systems have had no material errors
or defects that have not been fully remedied and contain no code designed to disrupt, disable, harm, distort or otherwise impede in any
material manner the legitimate operation of such Company Systems (including what are sometimes referred to as "viruses", "worms",
 "time bombs" or "back doors") that have not been removed or fully remedied. Neither the Company nor any of its
subsidiaries has experienced any material disruption to, or material interruption in, the conduct of its business that affected the business
for more than one calendar week, and attributable to a defect, bug, breakdown, unauthorized access, introduction of a virus or other malicious
programming, or other failure or deficiency on the part of any computer software or the Company Systems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) <u>Property</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company or its subsidiaries, as applicable, is the registered and/or beneficial owner of the Real
Property described in Section 3.1(u)(i) of the Company Disclosure Letter (each, a "**Company Owned Real Property** "
and collectively, the "**Company Owned Real Properties**") and has good and marketable fee simple title to such Company
Owned Real Properties, 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;(ii) Other than the Company Owned Real Properties, the Company and its subsidiaries do not own any other Real
Property. Other than the Company Leased Properties, the Company and its subsidiaries do not lease any other Real Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Neither the Company nor any of its subsidiaries have received any notice, and have no knowledge, of any
intention of any Governmental Authority to expropriate all or any part of the Company Owned Real Properties or the Company Leased Properties;
there are no leases in respect of the Company Owned Real Properties, Company Leased Properties (except those leases evidenced by the Company
Lease Documents), or any part thereof; no person has any right of first refusal, option, or other right to acquire the Company Owned Real
Properties, to the knowledge of the Company the Company Leased Properties or any part thereof; neither the Company nor any of its subsidiaries
is in default under any of its respective material obligations arising out of, or in connection with, any Permitted Liens or any other
matter of record beyond any applicable cure periods; all necessary permits, licenses and approvals have been obtained from the appropriate
Governmental Authority in respect of the Company and its subsidiaries' present use of and operations on the Company Owned Real Properties
and the Company Leased Properties and the Company owns all such licenses and is not operating on behalf of another license holder; the
Company and its subsidiaries have no present or future obligation to pay moneys to any Governmental Authority in connection with any on-site
or off-site servicing, including off-site roads, services or utilities, save and except obligations which are contemplated in the Permitted
Liens or are paid through realty taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Each property currently leased or subleased by the Company or its subsidiaries as at the date hereof from
any party (collectively, the "**Company Leased Properties**") is listed in Section 3.1(u)(iv) of the Company
Disclosure Letter, identifying all of the documents under which such leasehold interests are held (together with any amendments, supplements,
modifications, extensions, correspondence, guaranties, and other documents, each, a "**Company Lease Document**" and collectively,
the "**Company Lease Documents**") and setting forth the amounts of any security deposits or letters of credit held pursuant
to any Company Lease Document. The Company Diligence Information includes complete and correct copies of the Company Lease Documents as
at the date hereof. The Company or its subsidiaries, as applicable, hold good and valid leasehold interests in the Company Leased Properties,
free and clear of all Liens other than Permitted Liens, except for any Company Leased Properties in which the Company or its subsidiaries
currently operate a clinic (collectively, the "**Company Leased Clinics** "). The Company or its subsidiaries, as applicable,
hold good and valid leasehold interests in the Company Leased Clinics, free and clear of all Liens other than Permitted Liens, except
for such failures or Liens that, individually or in the aggregate, are not material to the Company. Each of the Company Lease Documents,
except the Company Lease Documents entered into in connection with the Company Leased Clinics (the "**Company Lease Clinic Documents** "),
is valid, binding, enforceable, and in full force and effect as against the Company and its subsidiaries, as applicable, and to the knowledge
of the Company, as against the other parties thereto. Each of the Company Lease Clinic Documents, is valid, binding, enforceable, and
in full force and effect as against the Company and its subsidiaries, as applicable, and to the knowledge of the Company, as against the
other parties thereto, except for any failures of any of the Company Lease Documents to be valid, binding enforceable and in full force
and effect that, individually or in the aggregate, are not material to the Company. Neither the Company, its subsidiaries nor, to the
knowledge of the Company, any of the other parties to the Company Lease Documents, is in material breach or violation or default (in each
case, with or without notice or lapse of time or both) under any of the Company Lease Documents which breach, violation or default has
not been cured, and the Company and its subsidiaries has not received or given any notice of default under any such agreement which remains
uncured. Neither the Company nor any of its subsidiaries has a defence, set-off, basis for withholding rent, claim or counterclaim against
any other party to any Company Lease Document that remains outstanding for any failure of performance of any of the terms of a Company
Lease Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Company Owned Real Properties and the Company Leased Properties, as applicable, are adequately serviced
by utilities (or well water with adequate septic systems, if any) having adequate capacities for the current operations of the Company's
and its subsidiaries' facilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) The Company's or its applicable subsidiary's possession and quiet enjoyment of the Company
Owned Real Properties and the Company Leased Properties is not subject to any disturbance in any material respect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) Except as disclosed in Section 3.1(u)(vii) of the Company Disclosure Letter or pursuant to a
Permitted Lien, neither the Company nor any of its subsidiaries is currently leasing, subleasing, licensing or has otherwise granted any
Person an ongoing right to use or occupy the Company Owned Real Property or Company Leased Property or any portion of it, or collaterally
assigned or granted any other Lien in such Company Owned Real Property or Company Leased Property or any interest in it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Except as disclosed in Section 3.1(u)(viii) of the Company Disclosure Letter, neither the landlord
nor any other party to any Company Lease Document is an affiliate of, or to the knowledge of the Company, otherwise has any economic interest
in, the Company or its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) The Company has not signed any agreement pursuant to which a Company Lease Document becomes subordinate
to any existing Lien of any registered mortgage or deed of trust (each a "**Mortgage**") encumbering fee or leasehold title
to the Company Leased Properties or, in the event such Company Lease Document is so subordinated to a Mortgage, such Company Lease Document
has received an agreement from the applicable lender under the applicable Mortgage that such lender will not evict, disturb the possession
or terminate the leasehold estate of the Company or its applicable subsidiary under such Company Lease Document if there is a foreclosure
of the Mortgage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) Each Company Owned Real Property and Company Leased Property is in material compliance with all applicable
Laws and the Company and its subsidiaries have obtained and currently maintain all applicable Permits reasonably necessary for the use
and operation of all Company Owned Real Property or Company Leased Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) Neither the Company nor any of its subsidiaries has received any written notice of any existing plan or
study by any Governmental Authority or by any other person that challenges or otherwise adversely affects the continuation of the use
or operation of any Company Owned Real Property or Company Leased Property, and to the knowledge of the Company, there is no such plan
or study with respect to which it has not received written notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) With respect to the Company Owned Real Properties and the Company Leased Properties, there is no: (i) pending
or, to the Company's knowledge, threatened condemnation, eminent domain or taking proceeding; or (ii) to the Company's
knowledge, private restrictive covenant or governmental use restriction (including zoning) on all or any portion of the Company Owned
Real Properties or Company Leased Properties, as applicable, that prohibits or materially interferes with the current use of the Company
Owned Real Properties or Company Leased Properties, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) All water, oil, gas, electrical, steam, compressed air, telecommunications, sewer, storm and waste water
systems and other utility services or systems, as applicable, for the Company Owned Real Property or Company Leased Property have been
installed and are operational and sufficient for the operation of the Company's or its subsidiaries' business as currently
conducted thereon, in all material respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Sufficiency of Assets</u>. The Company and its subsidiaries have valid, good and marketable title to
all personal property owned by them, free and clear of all Liens other than Permitted Liens. The assets and property owned, leased or
licensed by the Company and its subsidiaries are sufficient, in all material respects, for conducting the business, as currently conducted,
of the Company and its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) <u>Material Contracts</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Set out in Section 3.1(w)(i) of the Company Disclosure Letter is a list of each Material Contract.
The Company Diligence Information includes complete and correct copies of all Material Contracts to which the Company or its subsidiaries
is a party and no such Material Contract has been modified, rescinded or terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Each Material Contract to which the Company or its subsidiaries is a party is in full force and effect,
unamended, and the Company or its subsidiaries is entitled to all rights and benefits thereunder in accordance with the terms thereof.
Each of the Material Contracts is a valid and binding obligation of the Company or its subsidiaries and the other parties thereto enforceable
in accordance with their respective terms, except as may be limited by bankruptcy, insolvency and other Laws affecting the enforcement
of creditors' rights generally and subject to the qualification that equitable remedies may only be granted in the discretion of
a court of competent jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Company or the applicable subsidiary of the Company has performed in all material respects all respective
obligations required to be performed by it to date under the Material Contracts and none of the Company or its subsidiaries, or, to the
knowledge of the Company, any of the other parties thereto, is in material breach or violation of or in default under (in each case, with
or without notice or lapse of time or both) any Material Contract and neither the Company nor its subsidiaries has received or given any
notice of default under any Material Contract which remains uncured, and, to the knowledge of the Company, there exists no state of facts
which after notice or lapse of time or both would constitute a default under or material breach of any Material Contract or the inability
of a party to any Material Contract to perform its obligations thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Neither the Company nor any of its subsidiaries has received any notice (whether written or oral), that
any party to a Material Contract intends to cancel, terminate or otherwise modify or not renew its relationship with the Company or with
any of its subsidiaries, and, to the knowledge of the Company, no such action has been threatened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>Permits</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Each of the Company and its subsidiaries has identified, obtained, acquired or entered into, and are in
material compliance with all Permits required by applicable Laws necessary to conduct its current businesses as it is currently being
conducted. Section 3.1(x)(i) of the Company Disclosure Letter sets out a complete and accurate list of all such Permits as at
December 12, 2025 (whether governmental, regulatory or similar type) relating to the Company and its subsidiaries' business,
and there are no other Permits necessary to carry on its business as presently carried on or to own or lease any of the property or the
assets utilized by the Company or its subsidiaries. The Company Diligence Information includes true and correct copies of all such Permits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any and all of the Permits pursuant to which the Company or its subsidiaries operates its business are
valid and subsisting permits, certificates, agreements, leases, licenses, documents or instruments in full force and effect, enforceable
in accordance with terms thereof. All such Permits are in good standing and there has been no default under any such Permit, and all fees
and other amounts required to be paid with respect to such Permits to the date hereof have been paid. There are no actions, proceedings
or investigations, pending or, to the knowledge of the Company, threatened, against the Company or any of its subsidiaries that could
reasonably be expected to result in the suspension, loss or revocation of any such Permits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Except as disclosed in Section 3.1(x)(iii) of the Company Disclosure Letter, no Permits of the
Company or any of its subsidiaries will in any way be affected by, or terminate or lapse by reason of, the transactions contemplated by
this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) To the Company's knowledge, there are no facts, events or circumstances that would reasonably be
expected to result in a failure to obtain or failure to be in compliance with such Permits as are necessary to conduct the business of
the Company and its subsidiaries as it is currently being conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) <u>Environmental Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Since January 1, 2023, the Company and each of its subsidiaries have, in all material respects, carried
on its businesses and operations in compliance with all applicable Environmental Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Neither the Company nor any of its subsidiaries has received from any person or Governmental Authority
any notice, formal or informal, of any proceeding, action or other claim, liability or potential liability arising under any Environmental
Law that is pending as of the date of this Agreement. The Company is not aware of any facts or circumstances that reasonably could be
expected to give rise to any such notice, action or other claim, liability or potential liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Neither the Company nor any its subsidiaries has received any order, request or written notice from any
person or Governmental Authority either alleging a violation of any Environmental Law or requiring that the Company or any of its subsidiaries
carry out any work, incur any costs or assume any liabilities, related to Environmental Laws or to any agreements with, or Permits from,
any Governmental Authority with respect to or pursuant to Environmental Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) There are no Hazardous Substances or other conditions that would reasonably be expected to result in material
liability of or materially adversely affect the Company or any of its subsidiaries under or related to any Environmental Law on, at, in,
under or from any of the Company Owned Real Properties or Company Leased Properties (including the workplace environment) currently or,
to the knowledge of the Company, previously owned, leased or operated by the Company or any of its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) There are no pending claims or, to the knowledge of the Company, threatened claims, against the Company
or any of its subsidiaries arising out of any Environmental Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) The Company Diligence Information includes true and complete copies of all material environmental assessment
reports, health and safety audits, and reports of environmental investigations with respect to the Company and its subsidiaries'
operations and the Company Owned Real Properties and Company Leased Properties in the Company's possession or control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) Neither the Company nor any of its subsidiaries has caused or permitted the Release of any Hazardous Substances
on or to any Company Owned Real Property or Company Leased Property in such a manner as: (A) would reasonably be expected to impose
material liability on the Company or its subsidiaries for cleanup, natural resource damages, loss of life, personal injury, nuisance or
damage to other property; or (B) would be reasonably expected to result in imposition of a Lien or the expropriation of any Company
Owned Real Property or Company Leased Property or any of the assets of the Company or its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) <u>Taxes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Each of the Company and its subsidiaries has duly and timely filed all Returns required to be filed by
it with any Governmental Authority on or before the applicable due date and each such Return was complete and correct in all material
respects at the time of filing. Each of the Company and its subsidiaries has paid or caused to be paid to the appropriate Governmental
Authority on a timely basis all Taxes which are due and payable, all assessments and reassessments and all other Taxes as are due and
payable by it, other than those which are being or have been contested in good faith pursuant to applicable Laws, and in respect of which,
in the reasonable opinion of the Company, adequate reserves or accruals in accordance with IFRS have been provided in the Company Interim
Financial Statements. No audit, action, investigation, deficiencies, litigation, proposed adjustments have been asserted or, to the knowledge
of the Company, threatened with respect to Taxes of the Company or any of its subsidiaries, and neither the Company nor any of its subsidiaries
is a party to any action or proceeding for assessment or collection of Taxes and no such event has been asserted or, to the knowledge
of the Company, threatened. No Return of the Company or any of its subsidiaries is under investigation, review, audit or examination by
any taxing authority with respect to any Taxes, and no written notice of any investigation, review, audit or examination by any taxing
authority has been received by the Company or any of its subsidiaries with respect to any Taxes. No Lien for Taxes has been filed or exists
with respect to any assets or properties of the Company or any of its subsidiaries other than for Taxes not yet due and payable or Liens
for Taxes that are being contested in good faith by appropriate proceedings and in respect of which adequate reserves or accruals in accordance
with IFRS have been provided in the Company Interim Financial Statements. There are no currently effective elections, agreements or waivers
extending the statutory period or providing for an extension of time with respect to the assessment or reassessment of any Taxes, the
filing of any Return or any payment of Taxes by the Company or any of its subsidiaries. Neither the Company nor any of its subsidiaries
has made, prepared and/or filed any elections, designations or similar filings relating to Taxes or entered into any agreement or other
arrangement in respect of Taxes or Returns that could, in and of itself, require a material amount to be included in the income of the
Company or any of its subsidiaries for any period ending after the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) All Taxes that the Company or its subsidiaries has been required to withhold have been duly withheld and
have been duly and timely paid to the proper Governmental Authority. Each of the Company and its subsidiaries has remitted all Canada
Pension Plan contributions, provincial pension plan contributions, employment insurance premiums, employer health taxes, payroll taxes
and other Taxes payable by it in respect of its employees, agents and consultants, as applicable, and has remitted such amounts to the
appropriate Governmental Authority within the time required under applicable Laws. Each of the Company and its subsidiaries has, to the
extent required under applicable Laws, duly paid or charged, collected and remitted on a timely basis all Taxes on any packaging, sale,
supply, delivery whatsoever, or on account of any use or transfer Taxes, made by them, including, without limitation, goods and services,
harmonized sales, provincial and territorial sales taxes, state and local taxes, and cannabis duties, required by Law to be paid or collected
and remitted by it. Each of the Company and its subsidiaries has properly requested, received and retained all necessary resale certificates,
exemption certificates and other documentation supporting any claimed exemption or waiver of Taxes on sales or similar transactions as
to which it would otherwise have been obligated to collect or withhold Taxes. Each of the Company and its subsidiaries has complied with
all related packaging, stamping, information reporting, withholding and record retention requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) There are no rulings or closing agreements relating to the Company or any of its subsidiaries which may
affect the Company's or any of its subsidiaries' liability for Taxes for any taxable period commencing on or after the Effective
Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) For all transactions between the Company or its subsidiaries and any person with whom the Company or its
subsidiaries was not dealing at arm's length for purposes of the Tax Act, the Company or its subsidiaries has made or obtained records
or documents that meet the requirements of paragraphs 247(4)(a) to (c) of the Tax Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) No circumstances exist or may reasonably be expected to arise as a result of matters existing before the
Effective Date that may result in the Company or any of its subsidiaries being subject to the application of Section 159 or Section 160
of the Tax Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) None of Sections 78 or 80 to 80.04 of the Tax Act have applied to the Company or any of its subsidiaries,
and there are no circumstances existing which could reasonably be expected to result in the application of Sections 78 or 80 to 80.04
of the Tax Act to the Company or any of its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) There are no circumstances which exist and would result in, or which have existed and resulted in, Section 17
of the Tax Act applying to the Company or to any of its subsidiaries. None of the Company or any of its subsidiaries is obligated to make
any payments or is a party to any agreement under which it could be obligated to make any payment that will not be deductible in computing
its income under the Tax Act by virtue of Section 67 of the Tax Act. None of the Company or any of its subsidiaries has ever had
an obligation to file an information return pursuant to (i) sections 237.3, 237.4 or 237.5 of the Tax Act, or (ii) sections
1079.8.5 or 1079.8.6 of the *Taxation Act* (Quebec).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) The Company and each of its subsidiaries has been resident in its jurisdiction of incorporation for Tax
purposes and has not, at any time, been treated as a resident of or as having a permanent establishment or other fixed place of business
in any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) Neither the Company nor any of its subsidiaries is a beneficiary of any Tax incentive, Tax rebate, Tax
holiday or similar arrangement or agreement with any Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) The Company and each of its subsidiaries have not been subject to any Taxes in the U.S. and have not been
required to file any Returns in the U.S.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) <u>Employment Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Section 3.1(aa)(i) of the Company Disclosure Letter sets out a true and complete list, in all
material respects, of all employees of the Company and any subsidiary as at December 12, 2025, whether actively at work or not, including
their respective location, hire date and cumulative length of service, term of contract (if fixed), position, compensation (including
but not limited to salary, bonus and commissions), grants received under any short term and long term incentive plans, benefits, vacation
entitlement in days, current status (full time or part-time, active or non-active (and if non-active, the reason for leave)) and whether
they are unionized or subject to a written employment Contract as well as a list of all former employees of the Company to whom the Company
or any of its subsidiaries has or may have any outstanding obligations, indicating the nature and the value of such obligations. Except
as disclosed in Section 3.1(aa)(i) of the Company Disclosure Letter, no employee of the Company or its subsidiaries has any
agreement as to length of notice or severance payment required to terminate his or her employment, other than payments required by Law
in connection with the termination of employment of an employee without an agreement as to notice or severance. The Company Diligence
Information contains true and complete copies of all written Contracts in relation to the employees listed in Section 3.1(aa)(i) of
the Company Disclosure Letter who have a base salary in excess of $150,000 per annum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Section 3.1(aa)(ii) of the Company Disclosure Letter contains a correct and complete list, in
all material respects, of each independent contractor engaged by the Company or any subsidiary as at December 12, 2025 including
their consulting fees, any other forms of compensation or benefits to which they are entitled and whether they are subject to a written
Contract. Current and complete copies of all such independent contractor Contracts that provides for base fees in excess of $150,000 per
annum have been provided to the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Except as set out in Section 3.1(aa)(iii) of the Company Disclosure Letter, neither the Company
nor any of its subsidiaries is a party to or bound or governed by, or subject 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;(A) any employment, consulting, retention or change of control agreement with, or any written or oral agreement,
arrangement or understanding providing for retention, severance or termination payments to, any officer, employee or consultant of the
Company or any of its subsidiaries in connection with the termination of their position or their employment as a direct result of a change
in control of the Company (including as a result of the Arrangement).

&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 collective bargaining or union agreement, or any actual or, to the knowledge of the Company, threatened
application for certification or bargaining rights in respect of the Company or any of its subsidiaries;

&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 labour dispute, strike, lock-out, work slowdown or stoppage relating to or involving any employees
of the Company or any of its subsidiaries and no such event has occurred within the last year; 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;(D) any actual or, to the knowledge of the Company, threatened material claim against the Company or any of
its subsidiaries arising out of or in connection with employment or consulting relationship or the termination thereof.

Complete and correct copies of the agreements, arrangements and understandings referred to in paragraphs (A) and (B) of this Section 3.1(aa)(iii) are included in the Company Diligence Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Company and its subsidiaries do not engage in any unfair labour practice and no unfair labour practice
complaint, grievance or arbitration proceeding is pending or, to the knowledge of the Company, threatened against the Company or any of
its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Company and each of its subsidiaries is and has been since January 1, 2023 in compliance in all
material respects with all applicable Laws respecting employment and employment practices, terms and conditions of employment, human rights,
accessibility, pay equity, French language, and wages and hours, including any such laws regarding employment documentation, minimum wages
and hours, vacation time and pay, public holiday pay, overtime pay and statutory leaves of absence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) No claim, complaint, charge or investigation for unpaid wages, bonuses, commissions, employment withholding
taxes, penalties, overtime, vacation pay, public holiday pay or other compensation, benefits or record keeping violations involving any
employee has been issued and is outstanding or is pending or is threatened by any employee of the Company or any of its subsidiaries under
applicable employment standards legislation, the Tax Act or any other federal, state, provincial, local or foreign Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) No discrimination claim, complaint, charge or investigation has been filed and is outstanding or is pending
or is threatened against the Company or any of its subsidiaries under applicable Human Rights legislation, Accessibility legislation,
Pay Equity legislation or any other federal, state, provincial, local or foreign Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Other than as set forth in Section 3.1(aa)(viii), no wrongful dismissal, constructive dismissal,
mass termination or other claim, complaint, charge or investigation that arises out of the employment relationship between the Company
or any of its subsidiaries and their respective employees has been issued by any employee and remains outstanding or is pending or, to
the knowledge of the Company or its subsidiaries, is threatened under any applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) All amounts due or accrued due for all salary, wages, bonuses, commissions, vacation with pay, paid sick
days under applicable Laws, and benefits under the Employee Plans, except where such Employee Plans are third party plans for which the
Company has no responsibility, have either been paid or have been properly accrued and disclosed as of December 12, 2025, in Section 3.1(aa)(ix) of
the Company Disclosure Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) There are no outstanding assessments, penalties, fines, liens, charges, surcharges, or other amounts due
or owing pursuant to any workplace safety and insurance legislation, and the Company and its subsidiaries have not been reassessed in
any material respect under such legislation during the past three years and no audit of the Company or its subsidiaries is currently being
performed pursuant to any applicable workplace safety and insurance legislation. To the knowledge of the Company, there are no pending
claims or potential claims which may materially adversely affect the Company's accident cost experience in respect of the business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) The Company has promptly, thoroughly and impartially investigated all workplace harassment (including
sexual harassment) and workplace violence allegations and claims of which the Company and its subsidiaries is aware relating to employees
and former employees of the Company and its subsidiaries. With respect to each such allegation or claim with potential merit, the Company
has taken prompt corrective action that is reasonably calculated to prevent further workplace harassment (including sexual harassment)
and workplace violence. The Company and its subsidiaries do not reasonably expect any material liability with respect to any such allegations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) With respect to its Quebec operations, the Company and its subsidiaries are in compliance in all material
respects with the Charter of the French Language, including obligations relating to employment documentation, internal communications,
policies, training, commercial documentation, and, where applicable, francization program requirements, and has received no notice of
non-compliance from the OQLF.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) Except as disclosed in Section 3.1(aa)(xiii) of the Company Disclosure Letter, as at December 12,
2025, no employee is employed pursuant to a work permit issued by IRCC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) <u>Employment, Severance and Change of Control Agreements</u>. The Company Diligence Information contains
correct and complete copies of all employment, consulting, change of control and severance agreements to which the Company is a party
providing for severance payments in excess of the amount that would result by Law in connection with termination of employment of an employee
without an agreement as to notice or severance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) <u>Modern Slavery</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company and its subsidiaries are in compliance, in all material respects, with the requirements of
applicable Modern Slavery Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Neither the Company, nor any of its subsidiaries, nor any of their respective directors, officers or employees
nor, to the knowledge of the Company, any agents or persons acting on any of their behalf has received written notice of or is aware of
any claim, action, suit, proceeding or investigation against it by any Government Authority with respect to applicable Modern Slavery
Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Company and its subsidiaries have the policies and procedures disclosed in the Company Diligence Information
with respect to applicable Modern Slavery Laws, and is in compliance with such policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) <u>Health and Safety</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Since January 1, 2023, each of the Company and its subsidiaries have operated in all material respects
in accordance with all applicable Laws with respect to employment and labour, including employment and labour standards, occupational
health and safety, employment equity, pay equity, workers' compensation, human rights, labour relations and privacy, and there are
no current, pending, or to the knowledge of the Company, threatened proceedings before any Governmental Authority with respect to any
such matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Neither the Company nor any of its subsidiaries has received any demand or notice with respect to a material
breach of any applicable health and safety Laws, the effect of which would be reasonably expected to materially affect the operations
of the Company or any of its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) There are no outstanding material assessments, penalties, fines, liens, charges, surcharges, or other
amounts due or owing pursuant to any workplace safety and insurance legislation and neither the Company nor any of its subsidiaries has
been reassessed in any respect under such legislation since January 1, 2023 and, to the knowledge of the Company, no audit of the
Company nor any of its subsidiaries is currently being performed pursuant to any applicable workplace safety and insurance legislation.
There are no material claims, investigations or inquiries pending against the Company or any of its subsidiaries (or naming the Company
or any of its subsidiaries as a potentially responsible party) based on material non-compliance with any applicable health and safety
Laws at any of the operations relating to the Company Owned Real Property or the Company Leased Properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) All assessments, contributions and other amounts owing and payable to any applicable workplace safety,
workers' compensation or similar regulatory authority have been paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) <u>Acceleration of Benefits</u>. Except as set out in Section 3.1(ee) of the Company Disclosure Letter,
no person will, as a result of any of the transactions contemplated herein or in the Plan of Arrangement, become entitled to (i) any
retirement, retention, severance, unemployment compensation, bonus, golden parachute or other similar payment from the Company or any
of its subsidiaries, (ii) the acceleration of the vesting or the time to exercise of any Company Option, Company DSU or Company RSU
or employee or director awards of the Company or any of its subsidiaries, (iii) the forgiveness or postponement of payment of any
indebtedness owing by such person to the Company or any of its subsidiaries, or (iv) receive any additional payments or compensation
under or in respect of any employee or director benefits or incentive or other compensation plans or arrangements from the Company or
any of its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) <u>Pension and Employee Benefits</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Since January 1, 2023, each of the Company and its subsidiaries has complied in all material respects
with all the terms of, and all applicable Law in respect of, employee compensation and benefit obligations of the Company and its subsidiaries.
Other than the Company Option Plan and the Company Incentive Plan and all Employee Plans set out in Section 3.1(ff)(i) of the
Company Disclosure Letter, neither the Company nor any of its subsidiaries has any pension or retirement income plans or other employee
compensation or benefit plans, agreements, policies, programs, arrangements or practices, whether written or oral, which are maintained
by or binding upon the Company. The Company is in compliance with the terms of the Company Option Plan and the Company Incentive Plan
and all applicable Laws related thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Company has provided as part of Company Diligence Information true, correct and complete copies of
all the Employee Plans as amended as of the date hereof, together with all related funding and investment management agreements, summary
plan descriptions, the most recent actuarial reports (including, for greater certainty, actuarial valuations in respect of any multi-employer
pension plan), financial statements, asset statements, and all material opinions and memoranda (whether externally or internally prepared)
and material correspondence with all regulatory authorities or other relevant persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Since January 1, 2023, each of the Company and its subsidiaries has complied in all material respects
with all the terms of, and all applicable Laws in respect of, the Employee Plans. All contributions, and premiums owing under the
Employee Plans have been paid when due in accordance with the terms of the Employees Plans and applicable Laws. The Company and/or
its subsidiaries, as the case may be, have paid in full all contributions for the period up to the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Except as set forth in Section 3.1(ff)(iv) of the Company Disclosure Letter, no Employee Plan
is a "registered pension plan" as such term is defined in the Tax Act or provides benefits following the retirement or (except
where required by statute) termination of employment of any employee of the Company or its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gg) <u>Employee Matters</u>. Any individual who performs services for the Company's or any of its subsidiaries'
business and who is not treated as an employee is not an employee under applicable Law or for any purpose including, without limitation,
for Tax withholding purposes or benefit plan purposes. Neither the Company nor any of its subsidiaries has any material liability
by reason of an individual who performs or performed services for the Company's or any of its subsidiaries' business in any
capacity being improperly excluded from participating in a benefit plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hh) <u>Employment Withholdings</u>. The Company has withheld from each payment made to any of its present
or former employees, officers or directors, or to other persons, all amounts required by Law or administrative practice to be withheld
by it on account of income taxes, pension plan contributions, employment insurance premiums, employer health taxes and similar taxes and
levies, and has remitted such withheld amounts within the required time to the appropriate Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Intellectual Property</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Except as set forth in Section 3.1(ii)(i) of the Company Disclosure Letter, the Company and
its subsidiaries own all right, title and interest in and to, or have validly licensed (and are not in material breach of such licenses),
and have the right to use all Intellectual Property that is material to the conduct of the business, as currently conducted, of the Company
and its subsidiaries (collectively, the "**Company Intellectual Property Rights** "). All such Company Intellectual Property
Rights are sufficient, in all material respects, for conducting the business, as currently conducted, of the Company and its subsidiaries,
and all such Company Intellectual Property Rights are valid and enforceable, subject to bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other Laws relating to or affecting the availability of equitable remedies and the enforcement of creditors'
rights generally. To the knowledge of the Company, the operation of the businesses of the Company and its subsidiaries, including the
manufacture, marketing, use, and sale of the products and services of the Company and its subsidiaries, and the use and exploitation of
the Company Intellectual Property Rights do not infringe upon, misappropriate, or otherwise violate the Intellectual Property rights of
any third party. To the knowledge of the Company, no third party is infringing upon, misappropriating, or otherwise violating the Company
Intellectual Property Rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Section 3.1(ii)(ii) of the Company Disclosure Letter sets forth an accurate and complete list
of all registered or applied for trademarks, trade names, service marks, domain names, patents, industrial designs and design rights,
plant breeder's rights, integrated circuit topographies, and copyrights owned or purported to be owned by the Company and its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Company and its subsidiaries have taken reasonable steps to maintain their rights to the Company Intellectual
Property and to protect and preserve the confidentiality of, and their exclusive right to use, all of their trade secrets and confidential
information and know-how, and, to the knowledge of the Company, no such trade secrets, information, or know-how have been improperly used
or accessed by, or disclosed (other than under obligations of confidentiality) to any other person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Section 3.1(ii)(iv) of the Company Disclosure Letter sets forth an accurate and complete list
of all material Intellectual Property licensed by the Company and its subsidiaries (excluding "click-through" or "shrink-wrap"
licenses of generally commercially available software entered into in the ordinary course of business).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jj) <u>Insurance</u>. The Company has in place reasonable and prudent insurance policies for the Company and
its subsidiaries, appropriate for their size, nature and stage of development. All insurance policies of the Company and its subsidiaries
are disclosed in Section 3.1(jj) of the Company Disclosure Letter and are in full force and effect and the Company Diligence Information
includes complete and correct copies of such insurance policies. All premiums due and payable under all such policies have been paid and
the Company and its subsidiaries is otherwise in compliance in all material respects with the terms of such policies. Neither the Company
nor any of its subsidiaries has received any notice of cancellation or termination with respect to any such policy. There has been no
denial of material claims nor material claims disputed by the insurers of such policies. All material proceedings covered by any insurance
policy of the Company or any of its subsidiaries have been properly reported to and accepted by the applicable insurer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(kk) <u>Books and Records</u>. The corporate records and minute books of the Company and each of its subsidiaries
are maintained in accordance with all applicable Laws in all material respects, and such corporate records and minute books are complete
and accurate in all material respects. The financial books and records and accounts of the Company and each of its subsidiaries in all
material respects have been maintained in accordance with good business practices and in accordance with IFRS or the accounting principles
generally accepted in the country of domicile of each such entity on a basis consistent with prior years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ll) <u>Non-Arm's Length Transactions</u>. Except for agreements as set out in Section 3.1(ll) of
the Company Disclosure Letter or disclosed in the Company Public Disclosure Record, there are no current contracts, commitments, agreements,
arrangements or other transactions between the Company or any of its subsidiaries, on the one hand, and any (i) officer or director
of the Company or its subsidiaries, (ii) holder of record or, to the knowledge of the Company, beneficial owner of 5% or more of
the outstanding Company Shares, or (iii) affiliate or associate or any such officer, director or Company Shareholder, on the other
hand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(mm) <u>Financial Advisors or Brokers</u>. Other than as included in the Company Diligence Information, the
Company has not incurred any obligation or liability, contingent or otherwise, or agreed to pay or reimburse any broker, finder, financial
adviser or investment banker, for any brokerage, finder's, advisory or other fee or commission, or for the reimbursement of expenses,
in connection with this Agreement, the transactions contemplated hereby or any alternative transaction in relation to the Company, other
than with respect to the Company Financial Advisor and the Company Fairness Opinion. The Company has provided to the Purchaser correct
and complete copies of the agreement, as amended, under which the Company Financial Advisor has agreed to provide services to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(nn) <u>Company Fairness Opinion</u>. The Special Committee and the Company Board has received the Company
Fairness Opinion in oral form, which opinion has not been modified, amended, qualified or withdrawn. A true and complete copy of the written
Company Fairness Opinion will be provided by the Company to the Purchaser promptly following delivery of the same to the Special Committee
and the Company Board. The Company has been authorized by the Company Financial Advisor to permit inclusion of the Company Fairness Opinion
and references thereto and summaries thereof in the Circular.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(oo) <u>Special Committee and Company Board Approval</u>. The Special Committee, at a meeting duly called and
held, upon consultation with legal and financial advisors, has unanimously determined that this Agreement and the Arrangement are fair
to the Company Shareholders and are in the best interests of the Company and unanimously determined to recommend approval of this Agreement
and the Arrangement to the Company Board and that the Company Board recommend that the Company Shareholders vote in favour of the Arrangement
Resolution. The Company Board, at a meeting duly called and held, upon consultation with legal and financial advisors, has unanimously
determined that this Agreement and the Arrangement are fair to the Company Shareholders and are in the best interests of the Company,
have unanimously approved the execution and delivery of this Agreement and the transactions contemplated by this Agreement and have unanimously
resolved to recommend that the Company Shareholders vote in favour of the Arrangement Resolution. No action has been taken to amend, or
supersede such determinations, resolutions or authorizations of the Special Committee or Company Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(pp) <u>Company Diligence Information.</u> All Company Diligence Information provided is true and
correct in all material respects and does not contain any material omissions as at its respective date as stated therein, or, if any Company
Diligence Information is undated, as of the date of its delivery to the data room for purposes of the transactions contemplated by this
Agreement. The Company acknowledges that the Purchaser is relying on the Company Diligence Information provided by the Company
to them in entering into this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(qq) <u>Arrangements with Securityholders</u>. To the knowledge of the Company, other than the Lock-Up Agreements,
Support Agreements and this Agreement, the Company does not have any agreement, arrangement or understanding (whether written or oral)
with respect to the Purchaser or any of its securities, businesses or operations, with any shareholder of the Purchaser, any interested
party of the Purchaser or any related party of any interested party of the Purchaser, or any joint actor with any such persons (and for
this purpose, the terms "interested party", "related party" and "joint actor" shall have the meaning
ascribed to such terms in MI 61-101).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(rr) <u>Restrictions on Business Activities</u>. There is no agreement, judgment, injunction, order or decree
binding upon the Company or any of its subsidiaries that has or could reasonably be expected to have the effect of materially prohibiting,
restricting or impairing any business practice of the Company or any of its subsidiaries or affiliates, any acquisition of property by
the Company or any of its subsidiaries or affiliates, or the conduct of business by the Company or any of its subsidiaries or affiliates,
as currently conducted (including following the transactions contemplated by this Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ss) <u>Indemnification Agreements</u>. The Company Diligence Information contains correct and complete copies
of all indemnity agreements and any similar agreements to which the Company is a party that contain rights to indemnification in favour
of the current officers and directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(tt) <u>Ownership of Purchaser Shares or other Securities</u>. Neither the Company nor any of its affiliates
own any Purchaser Shares or any other securities of the Purchaser.

**3.2**  **<u>Representations and Warranties of the Purchaser</u>** 

The Purchaser represents and warrants to and in favour of the Company as follows and acknowledges that the Company is relying upon such representations and warranties in entering into this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Organization and Corporate Capacity</u>. The Purchaser has been duly incorporated and validly exists
and is in good standing under the CBCA and has the requisite corporate and legal power and capacity to own its properties and assets as
now owned and to carry on its business as it is now being carried on. The Purchaser is duly qualified to carry on business and is in good
standing in each jurisdiction in which the nature or character of its properties and assets, owned, leased or operated by it, or the nature
of its business or activities, makes such qualification necessary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Authority Relative to this Agreement</u>. The Purchaser has the requisite corporate power, authority
and capacity to enter into and perform its obligations under this Agreement and to complete the transactions contemplated hereby. The
execution and delivery of this Agreement, the performance by the Purchaser of its obligations hereunder and the completion by the Purchaser
of the transactions contemplated by this Agreement have been duly authorized by the directors of the Purchaser and no other corporate
proceedings on the part of the Purchaser are necessary to authorize the execution and delivery by it of this Agreement, the performance
by the Purchaser of its obligations hereunder or the completion by the Purchaser of the transactions contemplated hereby. This Agreement
has been duly executed and delivered by the Purchaser and constitutes legal, valid and binding obligations of the Purchaser enforceable
against the Purchaser in accordance with its terms, subject to bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium
and other Laws relating to or affecting the availability of equitable remedies and the enforcement of creditors' rights generally
and general principles of equity and public policy and to the qualification that equitable remedies such as specific performance and injunction
may be granted only in the discretion of a court of competent jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Required Approvals</u>. No authorization, licence, permit, certificate, registration, consent or approval
of, or filing with, or notification to, any Governmental Authority is required to be obtained or made by or with respect to the Purchaser
for the execution and delivery by the Purchaser of this Agreement, the performance by the Purchaser of its obligations hereunder and the
completion by the Purchaser of the Arrangement, other than:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Interim Order and any filings required in order to obtain, and approvals required under, the Interim
Order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Final Order, and any filings required in order to obtain the Final Order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) such filings (including a Current Report on Form 8-K to be filed with the SEC in connection with
this Agreement and the transaction contemplated thereby) and approvals required for the issuance of the Consideration Shares and the MC
Shareholder Consideration as a result of the Arrangement required under applicable Securities Laws, U.S. Securities Laws and the rules and
policies of the TSX and Nasdaq;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Canadian Competition Approval; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) any other authorizations, licences, permits, certificates, registrations, consents, approvals and filings
and notifications with respect to which the failure to obtain or make same would not reasonably be expected to prevent or significantly
impede or materially delay the completion of the Arrangement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>No Violation</u>. Subject to obtaining the authorizations, consents and approvals and making the filings
referred to in Section 3.2(c), the execution and delivery by the Purchaser of this Agreement, the performance by the Purchaser of
its obligations hereunder and the completion of the transactions contemplated hereby do not and will not result in a contravention,
conflict, violation, breach or default under its constating documents or any Law applicable to it, except as would not reasonably be expected
to prevent or significantly impede or materially delay the completion of the Arrangement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Capitalization</u>. The authorized capital of the Purchaser consists of an unlimited number of Purchaser
Shares and an unlimited number of Purchaser Exchangeable Shares. As at December 12, 2025, there were (A) 342,201,418 Purchaser
Shares issued and outstanding, (B) 26,261,474 Purchaser Exchangeable Shares issued and outstanding , (C) options providing for
the issuance of 3,130,850 Purchaser Shares upon the exercise thereof; (D) restricted share units providing for the issuance of 3,503,153
Purchaser Shares upon the vesting thereof; (E) nil performance share units; (F) warrants providing for the issuance of 15,483,580
Purchaser Shares upon the exercise thereof; and (G) convertible debentures that may result in the issuance of up to 6,700,860 Purchaser
Shares upon the conversion thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Consideration Shares</u>. The Consideration Shares and the MC Shareholder Consideration will, when
issued in accordance with the terms of the Arrangement, be duly authorized, validly issued, fully-paid and non-assessable Purchaser Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Shareholder and Similar Agreements</u>. The Purchaser is not party to any shareholder, pooling, voting
trust or other similar agreement relating to the issued and outstanding shares in the capital of the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Reporting Issuer Status and Securities Laws Matters</u>. The Purchaser is a "reporting issuer"
within the meaning of applicable Securities Laws in in each of provinces and territories of Canada, and is not on the list of reporting
issuers in default under applicable Securities Laws, and no securities commission or similar regulatory authority has issued any order
preventing or suspending trading of any securities of the Purchaser, and the Purchaser is not in default of any material provision of
applicable Securities Laws, U.S. Securities Laws or the rules and regulations of the TSX or Nasdaq. Trading in the Purchaser Shares
on the TSX and Nasdaq is not currently halted or suspended. No delisting, suspension of trading or cease trading order with respect to
any securities of the Purchaser is pending or, to the knowledge of the Purchaser, threatened. To the knowledge of the Purchaser, no inquiry,
review or investigation (formal or informal) of the Purchaser by any securities commission or similar regulatory authority under applicable
Securities Laws, U.S. Securities Laws or the TSX or Nasdaq is in effect or ongoing or expected to be implemented or undertaken. The documents
and information comprising the Purchaser Public Disclosure Record, as at the respective dates they were filed, were in compliance in all
material respects with applicable Securities Laws, U.S. Securities Laws and, where applicable, the rules and policies of the TSX
and Nasdaq and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Purchaser has
publicly disclosed in the Purchaser Public Disclosure Record all information regarding any event, circumstance or action taken or failed
to be taken which could, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect. The Purchaser
is up-to-date in all forms, reports, statements and documents, including financial statements and management's discussion and analysis,
required to be filed by the Purchaser under applicable Securities Laws, U.S. Securities Laws and the rules and policies of the TSX
and Nasdaq. The Purchaser has not filed any confidential material change report that at the date hereof remains confidential. There are
no outstanding or unresolved comments in comment letters from any securities commission or similar regulatory authority with respect to
any of the Purchaser Public Disclosure Record and to the knowledge of the Purchaser, neither the Purchaser nor any of the Purchaser Public
Disclosure Record is subject of an ongoing audit, review, comment or investigation by any securities commission or similar regulatory
authority or the TSX or Nasdaq.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Purchaser Financial Statements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Purchaser Financial Statements have been, and all financial statements of the Purchaser which are
publicly disseminated by the Purchaser in respect of any subsequent periods prior to the Effective Date will be, prepared in accordance
with U.S. GAAP applied on a basis consistent with those of previous periods and in accordance with applicable Laws. The Purchaser Financial
Statements, together with the related management's discussion and analysis, present fairly, in all material respects, the assets,
liabilities (whether accrued, absolute, contingent or otherwise) and financial condition of the Purchaser and its subsidiaries, on a consolidated
basis, as at the respective dates thereof and the losses, comprehensive losses, results of operations, changes in shareholders'
equity and cash flows of the Purchaser for the periods covered thereby. The Purchaser does not intend to correct or restate, nor, to the
knowledge of the Purchaser is there any basis for any correction or restatement of, any aspect of any of the Purchaser Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Neither the Purchaser nor any of its subsidiaries is a party to, or has any commitment to become a party
to, any joint venture, any off-balance sheet transaction, arrangement, obligation or other relationship or any similar Contract (including
any Contract relating to any transaction or relationship between or among the Purchaser or any of its subsidiaries, on the one hand, and
any unconsolidated affiliate, including any structure finance, special purpose or limited purpose entity or person, on the other hand)
where the result, purpose or effect of such transaction, arrangement, obligation, relationship or contract is to avoid disclosure of any
material transaction involving, or material liabilities of, the Purchaser or any of its subsidiaries, in the published financial statements
of the Purchaser or the Purchaser Public Disclosure Record.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Undisclosed Liabilities</u>. Except: (i) as disclosed in the Purchaser Financial Statements; and
(ii) liabilities and obligations incurred in the ordinary course of business consistent with past practice since March 31, 2025,
neither the Purchaser nor any of its subsidiaries has incurred any liabilities or obligations of any nature, whether or not accrued, contingent
or otherwise and are not party to or bound by any suretyship, guarantee, indemnification or assumption agreement, or endorsement of, or
any other similar contract with respect to the obligations, liabilities or indebtedness of any person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Absence of Certain Changes</u>. Since March 31, 2025, except as disclosed in the Purchaser Public
Disclosure Record:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Purchaser and its subsidiaries have conducted their respective businesses only in the ordinary course
of business and consistent with past practice, except for the Arrangement contemplated hereby; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) there has not been any event, occurrence, development or state of circumstances or facts that has had
or would be reasonably expected to require the filing of a material change report under applicable Securities Laws or have a Purchaser
Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Compliance with Laws</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The business of the Purchaser and its subsidiaries has been and is currently being conducted in compliance
in all material respects with applicable Laws and the Purchaser and its subsidiaries have not received any notice of any alleged material
violation of any such Laws other than violations which have not had and would not reasonably be expected to, individually or in the aggregate,
have a Purchaser Material Adverse Effect. Without limiting the generality of the foregoing, all issued and outstanding Purchaser Shares
have been issued in material compliance with all applicable Securities Laws and U.S. Securities Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) None of the Purchaser, any of its subsidiaries nor, to the knowledge of the Purchaser, any of their respective
directors, officers, supervisors, managers, employees, or agents has: (A) violated any applicable anti-corruption, anti-bribery,
export control, and economic sanctions Laws, including without limitation the *Corruption of Foreign Public Officials Act* (Canada)
and the *United States Foreign Corrupt Practices Act*, (B) made or authorized any direct or indirect contribution, payment or
gift of funds, property or anything else of value to any official, employee or agent of any Governmental Authority, authority or instrumentality
in Canada, other jurisdictions in which the Purchaser or any of its subsidiaries has assets or any other jurisdiction other than in accordance
with applicable Laws, (C) used any corporate funds, or made any direct or indirect unlawful payment from corporate funds, to any
foreign or domestic government official or employee or for any unlawful contribution, gift, entertainment or other unlawful expense relating
to political activity; or (D) violated or is in violation of any provision of the *Criminal Code* (Canada) relating to foreign
corrupt practices, including making any contribution to any candidate for public office, in either case, where either the payment or gift
or the purpose of such contribution payment or gift was or is prohibited under the foregoing or any other applicable Law of any locality.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The operations of the Purchaser and its subsidiaries are and have been conducted at all times in compliance
with Money Laundering Laws and no action, suit or proceeding by or before any court of Governmental Authority or any arbitrator non-Governmental
Authority involving the Purchaser or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge
of the Purchaser, threatened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) None of the Purchaser, any of its subsidiaries nor, to the knowledge of the Purchaser, any of their respective
directors, officers, supervisors, managers, employees, or agents has had any Sanctions imposed upon any such person, and the Purchaser
and its subsidiaries are not in violation of any of the Sanctions or law or executive order relating thereto, or are conducting business
with any person subject to any Sanctions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Certain Securities Law Matters</u>. The Consideration Shares and the MC Shareholder Consideration to
be issued in connection with the transactions contemplated herein will not be subject to any statutory hold or restricted period under
the securities legislation of any province or territory of Canada and, subject to restrictions contained in Section 2.6(3) of
National Instrument 45-102 – *Resale of Securities*, will be freely tradable within Canada by the holders thereof (subject
to the 18-month transfer restrictions in the case of the MC Shareholder Consideration). In addition, assuming the compliance by the parties
with the terms of this Agreement and the granting of the Final Order by the Court, (i) the Consideration Shares to be issued in exchange
for the Company Shares in connection with the transactions contemplated herein and (ii) the MC Shareholder Consideration to be issued
in exchange for the MC Release, will be exempt from the registration requirements of the U.S. Securities Act pursuant to Section 3(a)(10) thereof,
and the Consideration Shares and the MC Shareholder Consideration to be distributed pursuant to the Plan of Arrangement will not be subject
to resale restrictions under the U.S. Securities Act, except by persons who are "affiliates" (as defined in Rule 144
of the U.S. Securities Act) of the Purchaser, on or after the Effective Date, or were "affiliates" of the Purchaser within
90 days prior to the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Purchaser Board Approval</u>. The Purchaser Board, at a meeting duly called and held, upon consultation
with legal advisors, has unanimously authorized and approved the execution and delivery of this Agreement and the transactions contemplated
by this Agreement. No action has been taken to amend or supersede such authorizations of the Purchaser Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>U.S. Securities Matters.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Purchaser is not registered, and is not required to be registered, as an "investment company"
pursuant to the U.S. Investment Company Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Consideration Shares and the MC Shareholder Consideration are a class of securities registered pursuant
to Section 12 of the U.S. Exchange Act and the Purchaser is in compliance in all material respects with its reporting and other obligations
under the U.S. Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Not Non-Canadian.</u> The Purchaser is not a non-Canadian within the meaning of the Investment Canada
Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Sufficient Funds.</u> The Purchaser has sufficient funds available to pay, prior to the Effective Time,
all payments required pursuant to this Agreement, including the Plan of Arrangement, the Company Employee Costs and the outstanding amounts
owing under the Company Credit Agreement and the Company Related Party Loans.

**3.3**  **<u>Survival of Representations and Warranties</u>** 

No investigation by or on behalf of any Party prior to the execution of this Agreement will mitigate, diminish or affect the representations and warranties made by the other Parties. The representations and warranties of the Parties contained in this Agreement will not survive the completion of the Arrangement and will expire and be terminated on the earlier of the Effective Time and the date on which this Agreement is terminated in accordance with its terms. This Section 3.3 will not limit any covenant or agreement of any of the Parties, which, by its terms, contemplates performance after the Effective Time or the date on which this Agreement is terminated, as the case may be.

**Article 4 <u><br> COVENANTS</u>**

**4.1**  **<u>Covenants of the Company Regarding the Conduct of Business</u>** 

The Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, except (i) with the Purchaser's consent in writing (to the extent that such consent is permitted by applicable Law), which consent will not be unreasonably withheld, conditioned or delayed, (ii) as expressly permitted or specifically contemplated by this Agreement, (iii) as set out in the Company Disclosure Letter, or (iv) as is otherwise required by applicable Law:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) except as set out in Schedule 4.1(a) in the Company Disclosure Letter, the businesses of the Company
and its subsidiaries will be conducted only in a proper and prudent manner and in accordance with good industry practice and applicable
Laws, the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will
use Commercially Reasonable Efforts to maintain and preserve intact its business organizations, assets, properties, rights, Permits, goodwill
and business relationships and keep available the services of its officers, employees and consultants as a group;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Company will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to
allow the Purchaser to review and provide input with respect to the direction of activities of the Company and its subsidiaries; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) within 15 days following the end of each calendar month prior to the Effective Date, provide the Purchaser
with a current cash balance and a report setting forth a schedule of monthly disbursements made by the Company in excess of $150,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) without limiting the generality of Section 4.1(a) above, the Company will not, directly or indirectly:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) alter or amend the articles, by-laws or other constating documents of the Company or any of its subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) declare, set aside or pay any dividend on or make any distribution or payment or return of capital in
respect of any equity securities of the Company or any subsidiaries (other than dividends, distributions, payments or return of capital
made to the Company by any subsidiary);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) split, divide, consolidate, combine or reclassify the Company Shares or any other securities of the Company
or its subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) issue, sell, grant, award, pledge, dispose of or otherwise encumber or agree to issue, sell, grant, award,
pledge, dispose of or otherwise encumber any Company Shares or other equity or voting interests or any options, stock appreciation rights,
warrants, calls, conversion or exchange privileges or rights of any kind to acquire (whether on exchange, exercise, conversion or otherwise)
any Company Shares or other equity or voting interests or other securities or any shares of its subsidiaries (including, for greater certainty,
Company Options, Company DSUs, Company RSUs, Company Warrants, Company Compensation Options, Company Unit Warrants or any other equity
based awards), other than pursuant to the exercise or vesting, as applicable, of Company Options, Company DSUs, Company RSUs, Company
Warrants, Company Compensation Options and Company Unit Warrants that are outstanding or issuable as of the date of this Agreement in
accordance with their terms (as such terms are disclosed in the Company Public Disclosure Record) any Anti-Dilution Shares issuable in
accordance with the terms of the Share Exchange Agreement, and Company Shares issuable upon conversion of the Company 2017 Debenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) redeem, purchase or otherwise acquire or subject to any Lien, any of its outstanding Company Shares or
other securities or securities convertible into or exchangeable or exercisable for Company Shares or any such other securities or any
shares or other securities of its subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) amend the terms of any securities of the Company or its subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) adopt a plan of liquidation or pass any resolution providing for the liquidation or dissolution of the
Company or its subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) reorganize, amalgamate or merge the Company with any other person and will not cause or permit its subsidiaries
to reorganize, amalgamate or merge with any other person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) reduce the stated capital of the shares of the Company or any of its subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management
of the operations, or the appointment of governing bodies or enter into any joint venture or similar agreement, arrangement or relationship;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) make any material changes to any of its accounting policies, principles, methods, practices or procedures
(including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the
Company Public Disclosure Record, as required by applicable Laws or under IFRS; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) enter into, modify or terminate any Contract with respect to any of the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Company will promptly notify the Purchaser orally and then promptly notify the Purchaser in writing
of (i) any "material change" (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any
event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement
that would render a representation or warranty, if made on that date or the Effective Date, inaccurate such that any of the conditions
in Section 7.3(b) would not be satisfied;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except
in connection with this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) sell, pledge, lease, licence, dispose of, mortgage or encumber or otherwise transfer any assets or properties
of the Company or its subsidiaries including without limitation with respect to the Company Owned Real Property or the Company Leased
Properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity
securities or interests or assets or otherwise) or agree to acquire, directly or indirectly, in one transaction of a series of related
transactions, any corporation, partnership, association or other business organization or division thereof or any property or asset, or
make any investment, directly or indirectly, in one transaction or in a series of related transactions, by the purchase of securities,
contribution of capital, property transfer, or purchase of any property or assets of any other person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) incur any capital expenditures, enter into any agreement obligating the Company or its subsidiaries to
provide for future capital expenditures, in the aggregate, in excess of $250,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) incur any indebtedness, including any additional drawdowns under the Company Credit Agreement except for
drawdowns under the uncommitted demand revolving facility (or RT Facility) under the Company Credit Agreement that do not exceed, at any
time, more than $700,000 in addition to the amount of borrowings outstanding under the Company Credit Agreement as at the date hereof,
or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of
any other person, or make any loans or advances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) pay, discharge or satisfy any claim, liability or obligation prior to the same being due, other than the
payment, discharge or satisfaction, in the ordinary course of business, of liabilities reflected or reserved against in the Company Interim
Financial Statements, or voluntarily waive, release, assign, settle or compromise any Proceeding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) engage in any new business, enterprise or other activity that is inconsistent with the existing businesses
of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Company Public Disclosure
Record) planned or proposed to be carried on prior to the date of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) enter into or terminate any interest rate, currency, equity or commodity swaps, hedges, derivatives, forward
sales contracts or other financial instruments or like transaction, other than in the ordinary course of business consistent with the
Company's financial risk management policy; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except
in the ordinary course of business:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract
that, if entered into prior to the date hereof, would be a Material Contract, or terminate, cancel, extend, renew or amend, modify or
change any Material Contract, or waive, release, or assign any material rights or claims thereto or thereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee),
or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to
any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in
effect on the date hereof, and except as is necessary to comply with applicable Laws:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase
in compensation in any form;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) grant any general salary or fee increase, pay any bonus, award (equity or otherwise) or other material
compensation to the directors, officers, employees or consultants of the Company or its subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) take any action with respect to the grant, acceleration or increase of any severance, change of control,
retirement, retention or termination pay (or amend any existing arrangement relating to the foregoing);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) enter into or modify any employment or consulting agreement with any employee or consultant that provide
for base salary or fees in excess of $100,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) terminate the employment or consulting arrangement of any senior management employees (including the Company
Senior Management), except for cause;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) increase any benefits payable under its current severance or termination pay policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) increase the coverage, contributions, funding requirements or benefits available under any Employee Plan
or create any new plan which would be considered to be an Employee Plan once created

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) make any material determination under any Employee Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) amend the Company Incentive Plan or the Company Option, adopt or make any contribution to or any award
under any new performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance,
incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior
officers or former directors or senior officers of the Company or its subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any
performance criteria under the Company Incentive Plan or the Company Option Plan, except in accordance with their respective terms as
contemplated in the Plan of Arrangement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) establish, adopt, enter into, amend or terminate any collective bargaining agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant
of the Company or its subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Company will use its Commercially Reasonable Efforts to cause the current insurance (or re-insurance)
policies maintained by the Company, including directors' and officers' insurance, not to be cancelled terminated, amended
or modified and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse,
replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductibles
and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially
similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.9(b), the Company will
not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) the Company will use Commercially Reasonable Efforts to retain the services of its and its subsidiaries'
existing employees and consultants (including the Company Senior Management) until the Effective Time, and will promptly provide written
notice to the Purchaser of the resignation or termination of any of its key employees or consultants, including the Key Employees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) except in the ordinary course of business, neither the Company nor its subsidiaries will make an application
to amend, terminate, allow to expire or lapse or otherwise modify any of its material Permits or take any action or fail to take any action
which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any benefit under, or reasonably
be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of rights under,
any material Permit necessary to conduct its businesses as now being conducted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) the Company and each of its subsidiaries will (i) duly and timely file all Returns required to be
filed by it on or after the date hereof and all such Returns will be true, complete and correct in all material respects and (ii) timely
withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except
for any Taxes contested in good faith pursuant to applicable Laws and in respect of which adequate reserves or accruals in accordance
with IFRS have been provided in the Company Interim Financial Statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) the Company will not (i) change its tax accounting methods, principles or practices, except insofar
as may have been required by a change in IFRS or applicable Law, (ii) settle, compromise or agree to the entry of judgment with respect
to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected
or reserved against in the Company Interim Financial Statements) (iii) enter into any tax sharing, tax allocation or tax indemnification
agreement, (iv) make a request for a tax ruling to any Governmental Authority, or (v) agree to any extension or waiver of the
limitation period relating to any Tax claim or assessment or reassessment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action,
claim or other material Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary
remedy ()"**Litigation**") (except where the action, claim or other Proceeding is insured and the Company's contribution
does not exceed its deductible) or (ii) brought by any present, former or purported holder of its securities in connection with the
transactions contemplated by this Agreement or the Arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other
than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality
Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract
(i) containing (A) any limitation or restriction on the ability of the Company or its subsidiaries or, following completion
of the transactions contemplated hereby, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business,
(B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company
or its subsidiaries or, following consummation of the transactions contemplated hereby, all or any portion of the business of the Purchaser
or any of its affiliates, is or would be conducted, (C) any limit or restriction on the ability of the Company or its subsidiaries
or, following completion of the transactions contemplated hereby, the ability of the Purchaser or any of its affiliates, to solicit customers
or employees, or (D) containing any provision restricting or triggered by the transactions contemplated herein; or (ii) that
would reasonably be expected to prevent or significantly impede or materially delay the completion of the Arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would
render, or which reasonably may be expected to render, any representation or warranty made by the Company in this Agreement untrue or
inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained
therein) at any time prior to the Effective Date if then made; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) as is applicable, the Company will not, and will not cause or permit its subsidiaries to, agree, announce,
resolve, authorize or commit to do any of the foregoing.

**4.2**  **<u>Access to Information</u>** 

Subject to compliance with applicable Laws and the terms of any existing Contracts, each party will afford to the other and its Representatives until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, continuing access to the Company Diligence Information or Purchaser Diligence Information, as applicable, and reasonable access during normal business hours and upon reasonable notice, to their subsidiaries' businesses, properties, books and records and such other data and information as such party may reasonably request, as well as to its management personnel, subject however to such access not interfering with the ordinary conduct of the businesses of the disclosing party and its subsidiaries. Subject to compliance with applicable Laws and such requests not materially interfering with the ordinary conduct of the business of the Company and its subsidiaries, the Company will also make available to the Purchaser and its Representatives information reasonably requested by the Purchaser for the purposes of preparing, considering and implementing integration and strategic plans for the combined businesses of the Company and the Purchaser and its affiliates following completion of the Arrangement. Without limiting the generality of the provisions of the Confidentiality Agreement, the Purchaser and the Company acknowledge that all information provided under this Section 4.2, or otherwise pursuant to this Agreement or in connection with the transactions contemplated hereby, is subject to the Confidentiality Agreement, which will remain in full force and effect in accordance with its terms notwithstanding any other provision of this Agreement or any termination of this Agreement. If any provision of this Agreement otherwise conflicts or is inconsistent with any provision of the Confidentiality Agreement, the provisions of this Agreement will supersede those of the Confidentiality Agreement but only to the extent of the conflict or inconsistency and all other provisions of the Confidentiality Agreement will remain in full force and effect. Investigations made by or on behalf of the Purchaser or the Company, whether under this Section 4.2 or otherwise, will not waive, diminish the scope of, or otherwise affect any representation or warranty made by the Company or the Purchaser, respectively, in this Agreement.

**4.3**  **<u>Covenants of the Company Regarding the Arrangement</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the terms and conditions of this Agreement, the Company shall and shall cause its subsidiaries to perform all obligations required to be performed by the Company under this Agreement, cooperate with the Purchaser in connection therewith, and use Commercially Reasonable Efforts to do such other acts and things as may be necessary or desirable in order to complete the Arrangement and the other transactions contemplated hereby, including (without limiting the obligations of the Company in Article 2):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) promptly, and in any event within five Business Days following the date of this Agreement, provide to
the Purchaser (if such agreement remains in effect and if providing a copy of such agreement is not expressly prohibited by the terms
of such agreement) a copy of each confidentiality and/or standstill agreement which has been entered into by the Company and any third
party prior to the date hereof pursuant to which confidential information of the Company has been provided;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) subject to the Purchaser's prior review and approval as contemplated by Section 2.2(a), publicly
announcing the execution of this Agreement, the support of the Company Board of the Arrangement (including the voting intentions of each
director and officer of the Company referred to in Section 3.1(nn)) and the Company Board Recommendation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) using its Commercially Reasonable Efforts to obtain all necessary waivers, consents and approvals required
to be obtained by the Company and its subsidiaries from other parties to any Material Contracts in order to complete the Arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) take all actions necessary to ensure the availability of the exemption from registration under Section 3(a)(10) of
the U.S. Securities Act with respect to the issuance of the Consideration Shares in exchange for the Company Shares, the issuance of the
MC Shareholder Consideration in exchange for the MC Release and the issuance of the Replacement Options in exchange for Company Out-Of-The-Money
Options, the Replacement Warrants in exchange for Company Out-Of-The-Money Warrants and the Replacement Compensation Options in exchange
for Company Compensation Options; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) upon reasonable consultation with the Purchaser, opposing, or seeking to lift or rescind any injunction,
restraining or other order, decree or ruling seeking to restrain, enjoin or otherwise prohibit or adversely affect the consummation of
the Arrangement and defending all lawsuits or other legal, regulatory or other Proceedings against the Company challenging or affecting
this Agreement or the completion of the Arrangement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the event that the Purchaser concludes that it is necessary or desirable to proceed with another form of transaction (such as a formal take-over bid or amalgamation) whereby the Purchaser and/or its affiliates would effectively acquire all of the Company Shares within approximately the same time periods and on economic terms and other terms and conditions (including tax treatment) and having economic consequences to the Company and the Company Shareholders which are equivalent to or better than those contemplated by this Agreement (an "**Alternative Transaction**"), the Company agrees to support the completion of such Alternative Transaction in the same manner as the Arrangement and shall otherwise fulfill its covenants contained in this Agreement in respect of such Alternative Transaction. In the event of any proposed Alternative Transaction, any reference in this Agreement to the Arrangement shall refer to the Alternative Transaction to the extent applicable, all terms, covenants, representations and warranties of this Agreement shall be and shall be deemed to have been made in the context of the Alternative Transaction and all references to time periods regarding the Arrangement, including the Effective Time, herein shall refer to the date of closing of the transactions contemplated by the Alternative Transaction (as such date may be extended from time to time).

**4.4**  **<u>Covenants of the Company Regarding Financial Statements</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On the day the Parties execute this Agreement, the Company shall cause its auditor to provide the Purchaser
with a consent (the "**Consent**") in customary form with respect to (a) referencing the auditor as an "expert"
and (b) the inclusion of the auditor's report with respect to the Company Annual Financial Statements prepared in accordance
with IFRS in the Purchaser's Post-Effective Amendment No. 2 to the Purchaser's registration statement on Form S-3
(File No. 333-279949) filed under the U.S. Securities Act with the SEC on May 30, 2025 (the "**Registration Statement** ").
The Company acknowledges and agrees that the Company Financial Statements and the Consent shall be included in a Current Report on Form 8-K
filed by Purchaser under the U.S. Exchange Act and incorporated by reference into the Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company shall use Commercially Reasonable Efforts to as soon as reasonably practicable prepare its
unaudited condensed interim consolidated financial statements of the Company prepared in accordance with IFRS and reviewed in accordance
with the relevant standards set out in the Chartered Professional Accountants of Canada Handbook as at and for the three and nine months
ended December 31, 2025, such that Purchaser may also file such financial statements pursuant to applicable Securities Laws and U.S.
Securities Laws prior to and/or following the Effective Date and include such financial statements in the Registration Statement through
incorporation by reference.

**4.5**  **<u>Covenants of the Purchaser Regarding the Performance of Obligations</u>** 

Subject to the terms and conditions of this Agreement, the Purchaser will perform all obligations required to be performed by it under this Agreement, cooperate with the Company in connection therewith, and use Commercially Reasonable Efforts to do such other acts and things as may be necessary or desirable in order to complete the Arrangement and other transactions contemplated hereby, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) cooperating with the Company in connection with, and using its Commercially Reasonable Efforts to assist
the Company in obtaining the waivers, consents and approvals referred to in Section 4.3(a)(iii), provided, however, that, except
as stated otherwise in this Agreement, in connection with obtaining any waiver, consent or approval from any person (other than a Governmental
Authority) with respect to any transaction contemplated by this Agreement, the Purchaser will not be required to pay or commit to pay
to such person whose waiver, consent or approval is being solicited any cash or other consideration, make any commitment or incur any
liability or other obligation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) using its Commercially Reasonable Efforts to effect all necessary registrations, filings and submissions
of information required by Governmental Authorities from the Purchaser relating to the Arrangement required to be completed prior to the
Effective Time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) upon reasonable consultation with the Company, opposing, or seeking to lift or rescind any injunction,
restraining or other order, decree or ruling seeking to restrain, enjoin or otherwise prohibit or adversely affect the consummation of
the Arrangement and defending all lawsuits or other legal, regulatory or other Proceedings against or relating to the Purchaser challenging
or affecting this Agreement or the completion of the Arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) forthwith carrying out the terms of the Interim Order and Final Order to the extent applicable to it and
taking all necessary actions to give effect to the transactions contemplated herein and the Plan of Arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) apply for and use Commercially Reasonable Efforts to obtain conditional approval of the listing and posting
for trading on the TSX of the Consideration Shares and the MC Shareholder Consideration, subject only to the satisfaction by the Purchaser
of customary listing conditions of the TSX; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) filing or causing to be filed with the Nasdaq all necessary documents and taking or causing to be taken
all necessary steps to ensure that the Purchaser has obtained all necessary approvals for the Consideration Shares and the MC Shareholder
Consideration to be listed on the Nasdaq.

**4.6**  **<u>Mutual Covenants</u>** 

Other than in connection with obtaining the Regulatory Approvals (which, for greater certainty, shall be governed by the provisions of Section 4.7), each of the Parties covenants and agrees that, subject to the terms and conditions of this Agreement, until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) it will use Commercially Reasonable Efforts to satisfy (or cause the satisfaction of) the conditions precedent
to its obligations hereunder as set forth in Article 7 hereof to the extent the same is within its control and to take, or cause
to be taken, all other action and to do, or cause to be done, all other things necessary and commercially reasonable to permit the completion
of the Arrangement in accordance with its obligations under this Agreement, the Plan of Arrangement and applicable Laws and cooperate
with the other Parties in connection therewith, including using its Commercially Reasonable Efforts to (i) effect or cause to be
effected all necessary registrations, filings and submissions of information triggered by or required to be effected by it in connection
with the Arrangement, (ii) oppose, lift or rescind any injunction or restraining order against it or other order, decree, ruling
or action against it seeking to stop, or otherwise adversely affecting its ability to make and complete, the Arrangement and (iii) otherwise
cooperate with the other Parties in connection with the performance by it of its obligations hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) it will use Commercially Reasonable Efforts not to take or cause to be taken any action, or refrain from
taking any commercially reasonable action, which is inconsistent with this Agreement or which would reasonably be expected to materially
delay or otherwise impede the completion of the Arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) promptly notify the other Party of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any communication from any party to a Material Contract that intends to cancel, terminate or otherwise
modify or not renew its relationship with the Company or with any of its subsidiaries with respect to such Material Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any communication from any person alleging that the consent of such person (or another person) is or may
be required in connection with the Arrangement (and the response thereto from such Party, its subsidiaries or its Representatives);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any material communication from any Governmental Authority in connection with the Arrangement (and the
response thereto from such Party, its subsidiaries or its representatives); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any litigation threatened or commenced against or otherwise affecting such Party or any of its subsidiaries
that is related to the Arrangement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) it will use Commercially Reasonable Efforts to execute and do all acts, further deeds, things and assurances
as may be required in the reasonable opinion of the other Party's legal counsel to permit the completion of the Arrangement.

**4.7**  **<u>Covenants Related to Regulatory Approvals</u>** 

Subject to the other terms and conditions of this Section 4.7, each Party, as applicable to that Party, covenants and agrees with respect to obtaining all Regulatory Approvals required for the completion of the Arrangement that, subject to the terms and conditions of this Agreement, until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) except with respect to the Canadian Competition Approval, as soon as reasonably practicable after the
date hereof, each Party, or where appropriate, both Parties jointly, shall make all initial notifications, filings, applications and submissions
with Governmental Authorities required or advisable, and shall use Commercially Reasonable Efforts to obtain all required Regulatory Approvals
and shall cooperate with the other Party in connection with all Regulatory Approvals sought by the other Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) With respect to the Canadian Competition Approval,:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) within 18 Business Days after the date hereof or such other date as the Parties may reasonably agree,
the Parties shall file with the Commissioner a request for an Advance Ruling Certificate or, in the alternative, a No Action Letter; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if an Advance Ruling Certificate or No Action Letter shall not have been obtained within 16 days following
the filing of that submission, either the Purchaser or the Company may at any time thereafter, acting reasonably, notify the other Party
that it intends to file a notification pursuant to subsection 114(1) of the Competition Act, in which case the Company and the Purchaser
shall each file their respective notifications pursuant to subsection 114(1) of the Competition Act, as promptly as practicable but
in any event within 10 Business Days following the date the Company or the Purchaser notified the other Party of its intention to file
a notification;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Parties shall request that the Regulatory Approvals be processed by the applicable Governmental Authority
on an expedited basis and, to the extent that a public hearing is held, the Parties shall request the earliest possible hearing date for
the consideration of the Regulatory Approvals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) no Party shall extend or consent to any extension or refuse to consent to any extension of any applicable
waiting or review period or enter into any agreement with a Governmental Authority not to consummate the transactions contemplated by
this Agreement, except upon the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned or
delayed);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) all filing fees (including any Taxes thereon) in respect of any filing made to any Governmental Authority
in respect of any Regulatory Approvals shall be paid by the Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) each Party shall use Commercially Reasonable Efforts to respond promptly to any request or notice from
any Governmental Authority requiring that Party to supply additional information that is relevant to the review of the transactions contemplated
by this Agreement in respect of obtaining or concluding the Regulatory Approvals sought by either Party, and each Party shall cooperate
with the other Party and shall furnish to the other Party such information and assistance as a Party may reasonably request in connection
with preparing any submission or responding to such request or notice from a Governmental Authority;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) each Party shall permit the other Party an opportunity to review in advance any proposed applications,
notices, filings, submissions, undertakings, correspondence and communications (including responses to requests for information and inquiries
from any Governmental Authority) in respect of obtaining or concluding all required Regulatory Approvals, and shall provide the other
Party with a reasonable opportunity to comment thereon and shall consider those comments in good faith, and each Party shall provide the
other Party with any applications, notices, filings, submissions, undertakings or other substantive correspondence provided to a Governmental
Authority, or any communications received from a Governmental Authority, in respect of obtaining or concluding the required Regulatory
Approvals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) each Party shall keep the other Party informed on a timely basis of the status of discussions relating
to obtaining or concluding the required Regulatory Approvals sought by such Party and, for greater certainty, no Party shall participate
in any meeting (whether in person, by telephone or otherwise) with a Governmental Authority in respect of obtaining or concluding the
required Regulatory Approvals unless it advises the other Party in advance and gives such other Party an opportunity to attend;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) notwithstanding any other requirements in this Section 4.7, where a Party (a "**Disclosing Party**") is required under this Section 4.7 to provide information to another Party (a "**Receiving Party** ")
that the Disclosing Party deems to be competitively sensitive information, the Disclosing Party may restrict the provision of such competitively
sensitive information only to outside legal advisors of the Receiving Party; provided, that the Disclosing Party also provides the Receiving
Party a redacted version of such information which does not contain any such competitively sensitive information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) the Parties shall not enter into any transaction, investment, agreement, arrangement or joint venture
or take any other action, the effect of which would reasonably be expected to make obtaining the required Regulatory Approvals materially
more difficult or challenging, or reasonably be expected to materially delay the obtaining of the required Regulatory Approvals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) the Parties shall use (and shall cause their respective subsidiaries to use) their respective commercially
reasonable efforts to oppose, lift or rescind or cooperate in opposing, lifting or rescinding any injunction or restraining order or other
order or action seeking to stop, or otherwise adversely affecting the ability of the Parties to consummate, the transactions contemplated
under this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) the Parties shall use (and shall cause their respective subsidiaries to use) their respective Commercially
Reasonable Efforts take or cause to be taken all actions advisable on their respective parts to consummate the transactions contemplated
by this Agreement as promptly as practicable after the date of the Agreement; provided, however, that this Section 4.7 shall not
require either Party to take any actions that would, in its sole discretion, as applicable, affect its or its subsidiaries' right
to own, use or exploit its or their business, operations or assets, including, for greater certainty, divesting, restricting or agreeing
to divest or restrict any assets of a Party or any of its subsidiaries, terminating any existing relationships, contractual rights or
obligations of a Party or any of its subsidiaries or effecting any change or restructuring of a Party or any of its subsidiaries in order
to obtain the required Regulatory Approvals prior to the Outside Date.

**4.8**  **<u>Employment Matters</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Prior to the Effective Time, the Company shall use Commercially Reasonable Efforts to cause, and it shall use Commercially Reasonable Efforts to cause any of its subsidiaries to cause, all directors and officers of the Company and its subsidiaries identified in Section 4.8 of the Company Disclosure Letter to provide resignations from such positions and to enter into mutual releases of all claims between such directors and officers and the Company (and its subsidiaries) or shall terminate such officers effective as at the Effective Time; provided that, such resignations and terminations so identified in Section 4.8 of the Company Disclosure Letter will be limited to such person's service as a director and/or officer of the Company and not with respect to such person's employment with the Company and where such employees are entitled to any severance or change of control payments or benefit pursuant to the terms of each such employee's employment contract or pursuant to applicable Laws (which are identified as payable in Section 4.8 of the Company Disclosure Letter), the full amount of such entitlements (the "**Company Employee Costs**") shall be paid in accordance with Section 2.12.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company shall be exclusively responsible and shall pay for any withholding obligations of Taxes pursuant to the Tax Act from any amounts paid for the payments contemplated in this Section 4.8.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Parties acknowledge that, in respect of any payment made pursuant to the Plan of Arrangement to a Company Optionholder who is entitled to claim a deduction pursuant to paragraph 110(1)(d) of the Tax Act in respect of the surrender or other settlement of any Company Options that are not "non-qualified securities" for the purposes of section 110 of the Tax Act (an "**Eligible Company Optionholder**"): (i) the Company shall (A) make an election pursuant to subsection 110(1.1) of the Tax Act, and (B) provide evidence in writing of such election to such holders of Company Options, in the form(s) prescribed in respect of the Tax Act, and (ii) no deduction will be claimed in respect of any such payments in computing the income of the Company or of any person not dealing at arm's length with the Company under the Tax Act. This Section 4.8(c) shall survive the Effective Date and is intended to be for the benefit of, and will be enforceable by, the Eligible Company Optionholders resident or employed in Canada and their respective heirs, executors, administrators and personal representatives and will be binding on the Company and its successors and assigns and such rights will be held by the Company, and any successor to the Company, in trust for such Eligible Company Optionholders; provided, however, that no approval of any beneficiary of such trust will be required in connection with any amendment or variation of this Section 4.8(c) prior to the Effective Date.

**4.9**  **<u>Indemnification and Insurance</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Parties agree that all rights to indemnification existing in favour of the present and former directors and officers of the Company (each such present or former director or officer of the Company being herein referred to as an "**Indemnified Party**" and such persons collectively being referred to as the "**Indemnified Parties**") as provided by the articles or by-laws of the Company or by contracts or agreements to which the Company is a party and in effect as of the date hereof, that are fully and completely disclosed in the Company Disclosure Letter and copies of which are provided to the Purchaser prior to the date hereof, and, as of the Effective Time, will survive and will continue in full force and effect and without modification, and the Company and any successor to the Company (including any Surviving Corporation) shall continue to honour such rights of indemnification and indemnify the Indemnified Parties pursuant thereto, with respect to actions or omissions of the Indemnified Parties occurring prior to the Effective Time, for six years following the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Prior to the Effective Time, notwithstanding any other provision hereof, the Company may purchase prepaid non-cancellable "tail" directors' and officers' liability insurance providing coverage for a period of six years from the Effective Date with respect to claims arising from or related to facts or events which occur on or prior to the Effective Date, provided that the total cost of such "tail" directors' and officers' liability insurance shall not exceed 300% of the current annual aggregate premium for directors' and officers' liability insurance currently maintained by the Company and its subsidiaries.

**4.10**  **<u>Pre-Acquisition Reorganization</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company shall effect such reorganization of its business, operations, subsidiaries and assets or such other transactions (each, a "**Pre-Acquisition Reorganization**"), as the Purchaser may reasonably request prior to receipt of the Final Order, and the Plan of Arrangement, if required, shall be modified accordingly; provided that, any such Pre-Acquisition Reorganization shall not become effective until the satisfaction or waiver of all conditions precedent to any transactions contemplated by this Agreement, other than any conditions that by their nature can only be satisfied or waived on the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company shall use its Commercially Reasonable Efforts to obtain all necessary consents, approvals or waivers from any persons to effect each Pre-Acquisition Reorganization, and the Company shall cooperate with the Purchaser in structuring, planning and implementing any such Pre-Acquisition Reorganization. The Purchaser shall provide written notice to the Company of any proposed Pre-Acquisition Reorganization at least five Business Days prior to the date of the Company Meeting; provided that, notwithstanding anything else herein, the Company need not effect any Pre-Acquisition Reorganization which, in the opinion of the Company's counsel, acting reasonably, would:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) require the Company or its subsidiaries to contravene any applicable Laws, its organizational documents
or any Contract or Permit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) would require the approval of any Company Securityholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) would reduce the Consideration, MC Shareholder Consideration or other amounts to be received by Company
Securityholders under the Plan of Arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) materially delay, impede or impair the ability of the Company to consummate, and will prevent the consummation
of, the Arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) would require the Company or any of its subsidiaries to take any action that could adversely affect their
classification under the Tax Act or that could subject them to any material Taxes under the Tax Act; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the Company shall not be obligated to take any action that could result in any Taxes being imposed on,
or any adverse Tax consequence being borne by, any Company Securityholder materially greater than the Taxes to such party in connection
with the consummation of the Arrangement in the absence of any Pre-Acquisition Reorganization (unless consented to by such persons or
such persons are reimbursed and indemnified by the Purchaser).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Purchaser acknowledges and agrees that the planning for and implementation of any Pre-Acquisition Reorganization shall not be considered a breach of any covenant under this Agreement and shall not be considered in determining whether a representation or warranty of the Company hereunder has been breached. The Purchaser and the Company shall work cooperatively and use Commercially Reasonable Efforts to prepare prior to the Effective Time all documentation necessary and do such other acts and things as are necessary to give effect to such Pre-Acquisition Reorganization. The Company and its subsidiaries shall not be liable for the failure of the Purchaser to benefit from any anticipated Tax efficiency as a result of a Pre-Acquisition Reorganization.

**Article 5 <u><br> ADDITIONAL AGREEMENTS</u>**

**5.1**  **<u>Acquisition Proposals</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as expressly contemplated by this Agreement or to the extent that the Purchaser, in its sole and absolute discretion, has otherwise consented to in writing, until the earlier of the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 6.1, the Company shall not and shall cause its subsidiaries and their respective Representatives to not, directly or indirectly through any other person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) make, initiate, solicit, promote, entertain or encourage (including by way of furnishing or affording
access to information or any site visit or entering into any form of agreement, arrangement or understanding), or take any other action
that knowingly facilitates, directly or indirectly, any inquiry or the making of any inquiry, proposal or offer with respect to an Acquisition
Proposal or that reasonably could be expected to constitute or lead to an Acquisition Proposal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) participate in any discussions or negotiations with, furnish information to, or otherwise cooperate in
any way with, any person (other than the Purchaser and its subsidiaries) regarding an Acquisition Proposal or any inquiry, proposal or
offer that reasonably could be expected to constitute or lead to an Acquisition Proposal; provided however, that the Company may ascertain
facts from the person making such Acquisition Proposal for the sole purpose of the Company Board informing itself about such Acquisition
Proposal and the person that made it;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) make or propose publicly to make a Change of Recommendation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) accept, recommend, enter into, or propose publicly to accept, recommend or enter into, any agreement,
understanding or arrangement in respect of an Acquisition Proposal (other than an Acceptable Confidentiality Agreement); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) make any public announcement or take any other action inconsistent with, or that could reasonably be likely
to be regarded as detracting from, the approval, recommendation or declaration of advisability of the Company Board of the transactions
contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company shall and shall cause its subsidiaries and their respective Representatives to immediately cease and terminate any solicitation, encouragement, discussion, negotiation or other activities with any person (other than the Purchaser, its subsidiaries and their respective Representatives) conducted prior to the date hereof by the Company or any of its Representatives or its subsidiaries and their Representatives with respect to any Acquisition Proposal or any inquiry, proposal or offer that reasonably could be expected to constitute or lead to an Acquisition Proposal and, in connection therewith, the Company will immediately discontinue access to and disclosure of any of its confidential information, including access to any data room, virtual or otherwise, to any person (other than access by the Purchaser and its Representatives) and will as soon as possible, and in any event within two Business Days after the date hereof, request, and use its Commercially Reasonable Efforts to exercise all rights it has (or cause its subsidiaries to exercise any rights that they have) to require the return or destruction of all confidential information regarding the Company or its subsidiaries previously provided in connection therewith to any person other than the Purchaser and its Representatives to the extent such information has not already been returned or destroyed and use Commercially Reasonable Efforts to ensure that such obligations are fulfilled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding anything to the contrary contained in Section 5.1(a), in the event that the Company receives a *bona fide* written Acquisition Proposal from any person after the date hereof and prior to the Company Meeting that was not solicited by the Company and that did not otherwise result from a material breach of this Section 5.1, and subject to the Company's compliance with Section 5.1(d), the Company and its Representatives may (i) furnish information with respect to it to such person pursuant to an Acceptable Confidentiality Agreement, provided that (x) the Company provides a copy of such Acceptable Confidentiality Agreement to the Purchaser promptly upon its execution, and (y) the person making the Acquisition Proposal is provided with access to such information for a maximum period of 15 Business Days, and (z) the Company contemporaneously provides to the Purchaser any non-public information concerning the Company that is provided to such person which was not previously provided to the Purchaser or its Representatives, and (ii) participate in any discussions or negotiations regarding such Acquisition Proposal; provided, however, that, prior to taking any action described in clauses (i) or (ii) above, the Company Board determines in good faith, after consultation with its financial advisors and outside legal counsel, that such Acquisition Proposal would, if consummated in accordance with its terms, constitute a Superior Proposal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company shall promptly (and, in any event, within 24 hours) notify the Purchaser orally and in writing, of any Acquisition Proposal (whether or not in writing) received by the Company, any inquiry received by the Company that could reasonably be expected to constitute or lead to an Acquisition Proposal, or any request received by the Company for non-public information relating to the Company in connection with an Acquisition Proposal or for access to the properties, books or records of the Company by any person that informs the Company that it is considering making an Acquisition Proposal, including a copy of any written Acquisition Proposal, a description of the material terms and conditions of such inquiry or request and the identity of the person making such Acquisition Proposal, inquiry or request, and promptly provide to the Purchaser such other information concerning such Acquisition Proposal, inquiry or request as the Purchaser may reasonably request, including all material or substantive correspondence relating to such Acquisition Proposal. The Company will keep the Purchaser promptly and fully informed of any material changes to the status, developments and details of any such Acquisition Proposal, inquiry or request, including any modifications or other amendments thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Except as expressly permitted by this Section 5.1, neither the Company Board, nor any committee thereof shall: (i) make a Change of Recommendation; (ii) accept, approve, endorse or recommend or publicly propose to accept, approve, endorse or recommend any Acquisition Proposal; (iii) permit the Company to accept or enter into, or publicly propose to enter into (or permit any such actions in the case of the Company Board or any committee thereof), any letter of intent, memorandum of understanding or other Contract, agreement in principle, acquisition agreement, merger agreement or similar agreement or understanding (an "**Acquisition Agreement**") with respect to any Acquisition Proposal; or (iv) permit the Company to accept or enter into any Contract requiring the Company to abandon, terminate or fail to consummate the Arrangement or providing for the payment of any break, termination or other fees or expenses to any person proposing an Acquisition Proposal in the event that the Company completes the transactions contemplated hereby or any other transaction with the Purchaser or any of its affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Notwithstanding anything to the contrary contained in Section 5.1(e), in the event the Company receives a *bona fide* Acquisition Proposal that that Company Board has determined is a Superior Proposal from any person after the date hereof and prior to the Company Meeting, then the Company Board may, prior to the Company Meeting, make a Change of Recommendation**,** but only if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Company did not breach any provision of this Section 5.1 in connection with the preparation or
making of such Acquisition Proposal and the Company has complied with the other terms of this Section 5.1(f);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Company has given written notice to the Purchaser that it has received a Superior Proposal and that
the Company Board has determined that (x) such Acquisition Proposal constitutes a Superior Proposal and (y) the Company Board
intends to make a Change of Recommendation, promptly following the making of such determination, together with a summary of the material
terms of any proposed Acquisition Agreement or other agreement relating to such Superior Proposal (together with a copy of such agreement
and any ancillary agreements and supporting materials) to be executed with the person making such Superior Proposal, and, if applicable,
a written notice from the Company Board regarding the value or range of values in financial terms that the Company Board has, in consultation
with its financial advisors, determined should be ascribed to any non-cash consideration offered in the Superior Proposal;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a period of seven (7) full Business Days (such period being the "**Superior Proposal Notice Period**") shall have elapsed from the later of the date the Purchaser received the notice from the Company referred to in Section 5.1(f)(ii) and,
if applicable, the notice from the Company Board with respect to any non-cash consideration as contemplated in Section 5.1(f)(ii),
and the date on which the Purchaser received copies of the agreements and supporting material set out in Section 5.1(f)(ii); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) if the Purchaser has proposed to amend the terms of the Arrangement in accordance with Section 5.1(g),
the Company Board shall have determined in good faith, after consultation with its financial advisors and outside legal counsel, that
(x) the Acquisition Proposal remains a Superior Proposal compared to the Arrangement as proposed to be amended by the Purchaser and
has provided the Purchaser with full details of the basis on which such determination was made and (y) failure to take such action
would be inconsistent with the fiduciary duties of such directors under applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Company acknowledges and agrees that during the Superior Proposal Notice Period or such longer period as the Company may approve for such purpose, the Purchaser shall have the right, but not the obligation, to propose to amend the terms of this Agreement and the Arrangement. The Company Board will review in good faith any offer made by the Purchaser to amend the terms of this Agreement and the Arrangement in order to determine, in consultation with its financial advisors and outside legal counsel, whether the proposed amendments would, upon acceptance, result in the Acquisition Proposal that previously constituted a Superior Proposal ceasing to be a Superior Proposal. The Company agrees that, subject to the Company's disclosure obligations under applicable Securities Laws, the fact of the making of, and each of the terms of, any such proposed amendments shall be kept strictly confidential and shall not be disclosed to any person (including without limitation, the person having made the Superior Proposal), other than the Company's Representatives, without the Purchaser's prior written consent. If the Company Board determines that such Acquisition Proposal would cease to be a Superior Proposal as a result of the amendments proposed by the Purchaser, the Company will forthwith so advise the Purchaser and will promptly thereafter accept the offer by the Purchaser to amend the terms of this Agreement and the Arrangement and the Parties agree to take such actions and execute such documents as are necessary to give effect to the foregoing. If the Company Board continues to believe in good faith, after consultation with its financial advisors and outside legal counsel, that such Acquisition Proposal remains a Superior Proposal and therefore rejects the Purchaser's offer to amend this Agreement and the Arrangement, if any, the Company may, subject to compliance with the other provisions hereof, make a Change of Recommendation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Each successive modification of any Acquisition Proposal shall constitute a new Superior Proposal for the purposes of Section 5.1(f) and shall require a new seven (7) full Business Day Superior Proposal Notice Period from the date described in Section 5.1(f)(iii) with respect to such new Acquisition Proposal. In circumstances where the Company provides the Purchaser with notice of a Superior Proposal and all documentation contemplated by Section 5.1(f)(ii) on a date that is less than 12 Business Days prior to the Company Meeting, the Company may, and upon the request of the Purchaser, the Company shall, adjourn or postpone the Company Meeting to, either proceed with or postpone the Company Meeting in accordance with the terms of this Agreement to a date that is not more than seven Business Days after the scheduled date of such Company Meeting, as directed by the Purchaser, provided, however, that the Company Meeting shall not be adjourned or postponed to a date later than the seventh Business Day prior to the Outside Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company Board shall reaffirm its recommendation in favour of the Arrangement by news release promptly after (i) the Company Board has determined that any Acquisition Proposal is not a Superior Proposal if the Acquisition Proposal has been publicly announced or made; or (ii) the Company Board makes the determination referred to in Section 5.1(g) that an Acquisition Proposal that has been publicly announced or made and which previously constituted a Superior Proposal has ceased to be a Superior Proposal and the Parties have so amended the terms of this Agreement and the Arrangement. The Purchaser and its outside counsel shall be given an opportunity to review and comment on the form and content of any such news release and the Company shall give consideration to all amendments to such press release requested by the Purchaser and its outside counsel. Such news release shall state that the Company Board has determined that such Acquisition Proposal is not a Superior Proposal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The Company will not become a party to any Contract with any person subsequent to the date hereof that limits or prohibits the Company from (i) providing or making available to the Purchaser and its affiliates and Representatives any information provided or made available to such person or its officers, directors, employees, consultants, advisors, agents or other representatives (including solicitors, accountants, investment bankers and financial advisors) pursuant to any confidentiality agreement described in this Section 5.1 or (ii) providing the Purchaser and its affiliates and Representatives with any other information required to be given to it by the Company under this Section 5.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The Company represents and warrants that it has not waived or amended any confidentiality, standstill, non-disclosure or similar agreements, restrictions or covenant to which it or any of its subsidiaries is party. The Company agrees (i) not to release any persons from, or terminate, modify, amend or waive the terms of, any confidentiality agreement or standstill agreement or standstill provisions in any such confidentiality agreement that the Company entered into prior to the date hereof, (ii) to promptly and diligently take all commercially reasonable actions necessary to enforce all standstill, non-disclosure, non-disturbance, non-solicitation and similar covenants that it has entered into prior to the date hereof or enter into after the date hereof. The Company shall forthwith, if provided for in a confidentiality agreement with such person, request the return or destruction of all information provided to any third party that, has entered into a confidentiality agreement with the Company to the extent that such information has not previously been returned or destroyed, and shall use all Commercially Reasonable Efforts to ensure that such requests are honoured.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Without limiting the generality of the foregoing, the Company shall ensure that its subsidiaries and Representatives are aware of the provisions of this Section 5.1, and the Company shall be responsible for any breach of this Section 5.1 by any of its subsidiaries or Representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Nothing contained in this Agreement will prevent the Company Board from: (i) complying with Section 2.17 of National Instrument 62-104 – *Take-over Bids and Issuer Bids* and similar provisions under Securities Laws relating to the provision of a directors' circular in respect of an Acquisition Proposal; or (ii) making any disclosure to Company Securityholders, if the Company Board determines in good faith, after receiving the advice of its legal counsel, that the failure to make such disclosure would be a breach of its fiduciary duties, or would violate Securities Laws or any requirements of the CSE, provided such disclosures are in accordance with the provisions in Section 2.10.

**5.2**  **<u>Expenses and Termination Fee</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "**Termination Fee Event**" means any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) this Agreement shall have been terminated

&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) by either the Company or the Purchaser pursuant Section 6.1(b)(ii) *[Failure to Obtain Company Shareholder Approval]*;

&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) by the Purchaser pursuant to Section 6.1(b)(i) *[Occurrence of Outside Date]* or Section 6.1(c)(iii) *[Breach of Representations, Warranties or Covenants]*,

and both (x) prior to such termination, an Acquisition Proposal shall have been made public or proposed publicly to the Company or the Company Shareholders after the date hereof and prior to the Company Meeting, and (y) the Company shall have either (1) completed any Acquisition Proposal within 12 months after this Agreement is terminated or (2) entered into an Acquisition Agreement in respect of any Acquisition Proposal or the Company Board shall have recommended any Acquisition Proposal, in each case, within 12 months after this Agreement is terminated, and such Acquisition Proposal in either case, as it may be modified or amended, is subsequently completed (whether before or after the expiry of such 18-month period), provided, however, that for the purposes of this paragraph 5.2(a)(i) all references to "20%" in the definition of Acquisition Proposal shall be changed to "50%"; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) this Agreement shall have been terminated by the Purchaser pursuant to Section 6.1(c)(i) *[Change of Recommendation]*;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) this Agreement shall have been terminated by either the Company or the Purchaser pursuant to Section 6.1(b)(ii) *[Failure to Obtain Company Shareholder Approval]*, if at the time of such termination, the Purchaser was entitled to terminate this Agreement
pursuant to Section 6.1(c)(i) *[Change of Recommendation]*; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) this Agreement shall have been terminated by the Purchaser pursuant to Section 6.1(c)(ii) *[Material Breach of Non-Solicitation Covenants]*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If a Termination Fee Event occurs, the Company shall pay to the Purchaser a termination fee of $4,000,000 (the "**Termination Fee**") by wire transfer in immediately available funds to an account specified by the Purchaser as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) in the case of a Termination Fee Event referred to in Section 5.2(a)(i), the Company shall pay the
Termination Fee to the Purchaser on or prior to completion of the applicable Acquisition Proposal; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) in the case of a Termination Fee Event referred to in Section 5.2(a)(ii) or 5.2(a)(iii), the
Company shall pay the Termination Fee to the Purchaser within one Business Day following such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as otherwise specified herein, each Party will pay its respective legal and accounting costs, fees and expenses incurred in connection with the preparation, execution and delivery of this Agreement and all documents and instruments executed pursuant to this Agreement and any other costs, fees and expenses whatsoever and howsoever incurred, and will indemnify and save harmless the others from and against any claim for any broker's, finder's or placement fee or commission alleged to have been incurred as a result of any action by it in connection with the transactions hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Parties acknowledges that the agreements contained in this Section 5.2 are an integral part of the transactions contemplated in this Agreement and that without these agreements the other Party would not enter into this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each Party acknowledges that all of the payment amounts set out in this Section 5.2 are payments in consideration for the disposition of the Purchaser's rights under this Agreement and represent liquidated damages which are a genuine pre-estimate of the damages which the Purchaser will suffer or incur as a result of the event giving rise to such payment and the resultant termination of this Agreement and are not penalties. The Company irrevocably waives any right that it may have to raise as a defence that any such liquidated damages are excessive or punitive. For greater certainty, the Parties agree that the payment of an amount pursuant to this Section 5.2 in the manner provided herein is the sole and exclusive remedy of the Purchaser in respect of the event giving rise to such payment, provided, however, that nothing contained in this Section 5.2, and no payment of any such amount, shall relieve or have the effect of relieving the Company in any way from liability for damages incurred or suffered by the Purchaser as a result of an intentional or wilful breach of this Agreement, including the intentional or wilful making of a misrepresentation in this Agreement and nothing contained in this Section 5.2 shall preclude the Company from seeking injunctive relief in accordance with Section 8.14 to restrain the breach or threatened breach of the covenants or agreements set forth in this Agreement or the Confidentiality Agreement or otherwise to obtain specific performance of any of such acts, covenants or agreements, without the necessity of posting a bond or security in connection therewith.

**Article 6 <u><br> TERMINATION</u>**

**6.1**  **<u>Termination</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Termination by Mutual Consent</u>. This Agreement may be terminated at any time prior to the Effective Time by mutual written consent of the Company and the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Termination by either the Company or the Purchaser</u>. This Agreement may be terminated by either the Company or the Purchaser at any time prior to the Effective Time if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Effective Time does not occur on or before the Outside Date, except that the right to terminate this
Agreement under this Section 6.1(b)(i) shall not be available to any Party who has not fulfilled any of its obligations or breached
any of its representations and warranties under this Agreement which has been a principal cause of, or resulted in, the failure of the
Effective Time to occur by the Outside Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Company Meeting is held and the Arrangement Resolution is not approved by the Company Shareholders
in accordance with applicable Laws and the Interim Order, except that the right to terminate this Agreement under this Section 6.1(b)(ii) shall
not be available to any Party whose failure to fulfil any of its obligations or breach of any of its representations and warranties under
this Agreement has been a principal cause of, or resulted in, the failure to receive approval of the Arrangement Resolution by the Company
Shareholders; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) after the date hereof, any Law is enacted or made that remains in effect and that makes the completion
of the Arrangement or the transactions contemplated by this Agreement illegal or otherwise prohibited, and such Law has become final and
non-appealable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Termination by the Purchaser</u>. This Agreement may be terminated by the Purchaser at any time prior to the Effective Time if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) either (A) the Company Board fails to publicly make a recommendation that the Company Shareholders
vote in favour of the Arrangement Resolution as contemplated in Section 2.2(d), Section 2.5(d) and Section 5.1(i) or
the Company or the Company Board, or any committee thereof, withdraws, modifies, qualifies or changes in a manner adverse to the Purchaser
the Company Board Recommendation (it being understood that publicly taking no position or a neutral position by the Company and/or the
Company Board with respect to an Acquisition Proposal for a period exceeding three Business Days after an Acquisition Proposal has been
publicly announced shall be deemed to constitute such a withdrawal, modification, qualification or change), (B) the Purchaser requests
that the Company Board reaffirm its recommendation that the Company Shareholders vote in favour of the Arrangement Resolution and the
Company Board shall not have done so by the earlier of (x) the fifth Business Day following receipt of such request and (y) the
Company Meeting, or (C) the Company and/or the Company Board, or any committee thereof, accepts, approves, endorses or recommends
any Acquisition Proposal or proposes publicly to accept, approve, endorse or recommend any Acquisition Proposal (each of the foregoing,
a "**Change of Recommendation** ");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Company breaches Section 5.1 in any material respect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) subject to compliance with Section 6.3, the Company breaches any of its representations, warranties,
covenants or agreements contained in this Agreement, which breach would cause any of the conditions set forth in Section 7.1 or Section 7.3
not to be satisfied and such breach is incapable of being cured or is not cured in accordance with the terms of Section 6.3, provided,
however, that the Purchaser is not then in breach of this Agreement so as to cause any of the conditions set forth in Section 7.1
or Section 7.2 not to be satisfied; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a Material Adverse Effect has occurred after the date of this Agreement and is continuing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Termination by the Company</u>. This Agreement may be terminated by the Company at any time prior to the Effective Time subject to compliance with Section 6.3, if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) subject to compliance with Section 6.3, the Purchaser breaches any of its representations, warranties,
covenants or agreements contained in this Agreement, which breach would cause any of the conditions set forth in Section 7.1 or Section 7.2
not to be satisfied and such breach is incapable of being cured or is not cured in accordance with the terms of Section 6.3, provided,
however, that the Company is not then in breach of this Agreement so as to cause any of the conditions set forth in Section 7.1 or
Section 7.3 not to be satisfied; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a Purchaser Material Adverse Effect has occurred after the date of this Agreement and is continuing.

**6.2**  **<u>Void upon Termination</u>** 

If this Agreement is terminated pursuant to Section 6.1, this Agreement shall become void and of no force and effect and no Party will have any liability or further obligation to the other Party hereunder, except that (i) any liability of the Company to pay a Termination Fee that is unpaid at the time of termination of the Agreement and (ii) the provisions of Section 4.2, Section 5.2, this Section 6.2 and Article 8 (other than Section 8.6 and Section 8.9), shall survive any termination hereof pursuant to Section 6.1, provided, however, that neither the termination of this Agreement nor anything contained in Section 5.2 or this Section 6.2 will relieve any Party from any liability for any intentional or wilful breach by it of this Agreement, including any intentional or wilful making of a misrepresentation in this Agreement. Notwithstanding anything to the contrary contained in this Agreement, the Confidentiality Agreement shall survive any termination hereof pursuant to Section 6.1.

**6.3**  **<u>Notice and Cure Provisions</u>** 

If any Party determines at any time prior to the Effective Time that it intends to refuse to complete the transactions contemplated hereby because of any unfilled or unperformed condition contained in this Agreement, such Party will so notify the other Party forthwith upon making such determination in order that the other Party will have the right and opportunity to take such steps, at its own expense, as may be necessary for the purpose of fulfilling or performing such condition within a reasonable period of time, but in no event later than the Outside Date. Neither the Company nor the Purchaser may elect not to complete the transactions contemplated hereby pursuant to the conditions precedent contained in Article 7 hereof or exercise any termination right arising therefrom and no payments will be payable as a result of such election pursuant to Article 7 unless forthwith and in any event prior to the Effective Time the Party intending to rely thereon has given a written notice to the other Party specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Party giving such notice is asserting as the basis for the non-fulfillment of the applicable condition precedent or the exercise of the termination right, as the case may be. If any such notice is given, provided that the other Party is proceeding diligently to cure such matter, if such matter is susceptible to being cured, the Party giving such notice may not terminate this Agreement as a result thereof until the earlier of the Outside Date and the expiration of a period of 10 Business Days from such notice. If such notice has been given prior to the date of the Company Meeting, such meeting, unless the Parties otherwise agree, will be postponed or adjourned until the expiry of such period (without causing any breach of any other provision contained herein).

**Article 7 <u><br> CONDITIONS PRECEDENT</u>**

**7.1**  **<u>Mutual Conditions Precedent</u>** 

The respective obligations of the Parties to complete the Arrangement are subject to the satisfaction, or mutual waiver by the Parties, on or before the Effective Date, of each of the following conditions, each of which are for the mutual benefit of the Parties and which may be waived, in whole or in part, by the mutual consent of the Purchaser and the Company at any time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Arrangement Resolution will have been approved by the Company Shareholders at the Company Meeting
in accordance with the Interim Order and applicable Laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) each of the Interim Order and Final Order will have been obtained in form and substance satisfactory to
each of the Company and the Purchaser, each acting reasonably, and will not have been set aside or modified in any manner unacceptable
to either the Company or the Purchaser, each acting reasonably, on appeal or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the conditional approval of the TSX will have been obtained, including in respect of the listing and posting
for trading of the Consideration Shares and the MC Shareholder Consideration thereon;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Canadian Competition Approval will have been obtained;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) no Law will have been enacted, issued, promulgated, enforced, made, entered, issued or applied and no
Proceeding will otherwise have been commenced, issued or taken under any Laws or by any Governmental Authority (whether temporary, preliminary
or permanent) that makes or which would be reasonably expected to make the Arrangement illegal or otherwise directly or indirectly cease
trade, enjoin, restrain or otherwise prohibit completion of the Arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the Consideration Shares to be issued in exchange for the Company Shares, the Replacement Options to be
issued in exchange for the Company Out-Of-The-Money Options, the Replacement Warrants to be issued in exchange for the Company Out-Of-The-Money
Warrants, the Replacement Compensation Options to be issued in exchange for the Company Compensation Options and the MC Shareholder Consideration
to be issued in exchange for the MC Release pursuant to the Arrangement shall be exempt from the registration requirements of the U.S.
Securities Act pursuant to Section 3(a)(10) thereof and pursuant to exemptions from applicable state securities laws; provided,
however, that the Company shall not be entitled to the benefit of the conditions in this subsection 7.1(f), and shall be deemed to have
waived such condition in the event that the Company fails to (A) advise the Court prior to the hearing in respect of the Interim
Order that the Purchaser intends to rely on the exemption from registration afforded by Section 3(a)(10) of the U.S. Securities
Act based on the Court's approval of the Arrangement or (B) comply with the requirements set forth in Section 2.14; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) this Agreement shall not have been terminated in accordance with its terms.

**7.2**  **<u>Additional Conditions Precedent to the Obligations of the Company</u>** 

The obligation of the Company to complete the Arrangement will be subject to the satisfaction or waiver by the Company, on or before the Effective Date, of each of the following conditions, each of which is for the exclusive benefit of the Company and which may be waived by the Company at any time, in whole or in part, in its sole discretion and without prejudice to any other rights that the Company may have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Purchaser shall have complied in all material respects with its obligations, covenants and agreements
in this Agreement to be performed and complied with on or before the Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the representations and warranties of the Purchaser in Section 3.2 shall be true and correct (disregarding
for this purpose all materiality or Purchaser Material Adverse Effect qualifications contained therein) as of the Effective Date as if
made on and as of such date (except for such representations and warranties which refer to or are made as of another specified date, in
which case such representations and warranties will have been true and correct as of that date) and except (i) as affected by transactions,
changes, conditions, events or circumstances expressly permitted by this Agreement or (ii) for breaches of representations and warranties
(other than those contained in Sections 3.2(a) *[Organization and Corporate Capacity]*, 3.2(b) *[Authority Relative to this Agreement]*, 3.2(e) *[Capitalization]*, Section 3.2(k)(ii) *[No MAE])* which have not had and would not
reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect, it being understood that it is
a separate condition precedent to the obligations of the Company hereunder that the representations and warranties made by the Purchaser
in 3.2(a) *[Organization and Corporate Capacity]*, 3.2(b) *[Authority Relative to this Agreement]*, 3.2(e) *[Capitalization]*,
Section 3.2(k)(ii) *[No MAE]* must be accurate in all respects other than de minimis inaccuracies when made and as of the
Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Purchaser shall have complied with its obligations under Section 2.12, the Depositary shall have
confirmed receipt of the Consideration and MC Shareholder Consideration received pursuant to Section 2.12(a) and Purchaser's
counsel shall have made such payments as required under Section 2.12(b);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Company shall have received a certificate of the Purchaser signed by a senior officer of the Purchaser
and dated the Effective Date certifying that the conditions set out in Section 7.2(a) and Section 7.2(b) have been
satisfied, which certificate will cease to have any force and effect after the Effective Time.

**7.3**  **<u>Additional Conditions Precedent to the Obligations of the Purchaser</u>** 

The obligation of the Purchaser to complete the Arrangement will be subject to the satisfaction, or waiver by the Purchaser, on or before the Effective Date, of each of the following conditions, each of which is for the exclusive benefit of the Purchaser and which may be waived by the Purchaser at any time, in whole or in part, in its sole discretion and without prejudice to any other rights that the Purchaser may have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Company shall have complied in all material respects with its obligations, covenants and agreements
in this Agreement to be performed and complied with on or before the Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the representations and warranties of the Company in Section 3.1 shall be true and correct (disregarding
for this purpose all materiality or Material Adverse Effect qualifications contained therein) as of the Effective Date as if made on and
as of such date (except for such representations and warranties which refer to or are made as of another specified date, in which case
such representations and warranties will have been true and correct as of that date) except (i) as affected by transactions, changes,
conditions, events or circumstances expressly permitted by this Agreement or (ii) for breaches of representations and warranties
(other than those contained in Sections 3.1(a) *[Organization and Qualification]*, 3.1(d) *[Authority Relative to this Agreement]*, 3.1(g) *[Capitalization]*, Section 3.1(n)(ii) *[No MAE])* which have not had and would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect, it being understood that it is a separate condition
precedent to the obligations of the Purchaser hereunder that the representations and warranties made by the Company in 3.1(a) *[Organization and Qualification]*, 3.1(d) *[Authority Relative to this Agreement]*, 3.1(g) *[Capitalization]*, Section 3.1(n)(ii) *[No MAE])* must be accurate in all respects other than de minimis inaccuracies when made and as of the Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Company Shareholders shall not have exercised Dissent Rights, or have instituted proceedings to exercise
Dissent Rights, in connection with the Arrangement (other than Company Shareholders representing not more than 10% of the Company Shares
then outstanding);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) since the date of this Agreement, there shall not have occurred, or have been disclosed to the public
(if previously undisclosed to the public) a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the Purchaser shall have received a certificate of the Company signed by a senior officer of the Company
and dated the Effective Date certifying that the conditions set out in Section 7.3(a), Section 7.3(b), Section 7.3(c) and
Section 7.3(d) have been satisfied, which certificate will cease to have any force and effect after the Effective Time; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) there shall not be pending any Proceeding by any Governmental Authority or any other person that is reasonably
likely to result in any:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) prohibition or restriction on the acquisition by the Purchaser of any Company Shares or the completion
of the Arrangement or any person obtaining from any of the Parties any material damages directly in connection with the Arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) prohibition or material limit on the ownership by the Purchaser of the Company or any material portion
of their respective businesses; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) imposition of limitations on the ability of the Purchaser to acquire or hold, or exercise full rights
of ownership of, any Company Shares, including the right to vote such Company Shares.

**Article 8 <u><br> GENERAL</u>**

**8.1**  **<u>Notices</u>** 

Any demand, notice or other communication to be given in connection with this Agreement must be given in writing and will be given by personal delivery or by electronic mail addressed to the recipient as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) if to the Purchaser as follows:

Canopy Growth Corporation

1 Hershey Drive

Smiths Falls, ON K7A 0A8

Attention: Legal

E-mail: [\*\*\*]

with a copy (which will not constitute notice) to:

Cassels Brock & Blackwell LLP<br> 40 Temperance Street, Suite 3200

Toronto, Ontario M5H 0B4

Attention: Jonathan Sherman<br> Email: jsherman@cassels.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if to the Company:

1773 Bayly Street

Pickering, ON L1W 2Y7

Attention: Michael Perron

E-mail: [\*\*\*]

with a copy (which will not constitute notice) to:

Farris LLP

25th Floor, 700 W Georgia St.

Vancouver, British Columbia V7Y 1B3

Attention: Daniel Everall

E-mail: deverall@farris.com

or to such other street address, individual or electronic communication number or address as may be designated by notice given by either Party to the other. Any demand, notice or other communication given by personal delivery will be conclusively deemed to have been given on the day of actual delivery thereof and, if given by electronic mail, on the day of transmittal thereof if given during the normal business hours of the recipient and on the next Business Day if not given during such hours on any day.

**8.2**  **<u>Assignment</u>** 

The Company agrees that the Purchaser may assign all or any part of its rights under this Agreement to, and its obligations under this Agreement may be assumed by, a wholly-owned direct or indirect subsidiary of the Purchaser, provided that the Purchaser shall continue to be liable jointly and severally with such subsidiary for all obligations hereunder. Subject to the foregoing, neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any Party without the prior written consent of the other Party.

**8.3**  **<u>Benefit of Agreement</u>** 

This Agreement will enure to the benefit of and be binding upon the respective successors (including any successor by reason of amalgamation or statutory arrangement) and permitted assigns of the Parties.

**8.4**  **<u>Third Party Beneficiaries</u>** 

The Parties agree that nothing in this Agreement will not benefit or create any right or cause of action in favour of any person, other than the Parties and that no person, other than the Parties, shall be entitled to rely on the provisions of this Agreement in any action, suit, proceeding, hearing or other forum other than (i) as expressly provided in Section 4.8(c) and Section 4.9 which, without limiting its terms, are intended for the benefit of the Eligible Company Optionholders in the case of Section 4.8(c) and the present and former directors and officers of the Company and its subsidiaries in the case of Section 4.9; and (ii) after the Effective Date, the rights of Company Securityholders to receive amounts payable pursuant to this Agreement or the Plan of Arrangement (collectively, with the Eligible Company Optionholders and present and former directors and officers of the Company and its subsidiaries referred to in Section 8.4(i), the "**Third-Party Beneficiaries**"). The Parties acknowledge to each of the Third-Party Beneficiaries their direct rights against the applicable Party under Section 4.8(c) and Section 4.9, which are intended for the benefit of, and shall be enforceable by, each Third-Party Beneficiary, his or her heirs, executors, administrators and legal representatives, and for such purpose, the Company shall hold the rights and benefits of Section 4.8(c) and Section 4.9 in trust for and on behalf of the Third-Party Beneficiaries and the Company hereby accepts such trust and agrees to hold the benefit of and enforce performance of such covenants on behalf of the Third-Party Beneficiaries.

**8.5**  **<u>Time of Essence</u>** 

Time is of the essence of this Agreement.

**8.6**  **<u>Public Announcements</u>** 

No Party shall issue any press release or otherwise make written public statements with respect to the Arrangement or this Agreement without the consent of the other Party (which consent shall not be unreasonably withheld, conditioned or delayed). The Company shall not make any filing with any Governmental Authority with respect to the Arrangement or the transactions contemplated hereby without the prior written consent of the Purchaser.

**8.7**  **<u>Governing Law; Attornment; Service of Process</u>** 

This Agreement shall be governed, including as to validity, interpretation and effect, by the laws of the Province of British Columbia and the federal laws of Canada applicable therein. Each of the Parties hereby irrevocably attorns to the non-exclusive jurisdiction of the courts of the Province of British Columbia in respect of all matters arising under and in relation to this Agreement or the Arrangement and waives, to the fullest extent possible, the defence of an inconvenient forum or any similar defence to the maintenance of proceedings in such courts.

**8.8**  **<u>Entire Agreement</u>** 

This Agreement constitutes, together with the Confidentiality Agreement, the entire agreement between the Parties with respect to the subject matter hereof and thereof. There are no representations, warranties, terms, conditions, undertakings or collateral agreements, express, implied or statutory, between the Parties with respect thereto except as expressly set forth in this Agreement and the Confidentiality Agreement.

**8.9**  **<u>Amendment</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the terms of the Interim Order, the Plan of Arrangement and applicable Laws, this Agreement and the Plan of Arrangement may, at any time and from time to time before or after the holding of the Company Meeting but not later than the Effective Time, be amended by written agreement of the Parties without, subject to applicable Laws, further notice to or authorization on the part of the Company Shareholders, and any such amendment may, without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) change the time for performance of any of the obligations or acts of the Parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) waive any inaccuracies or modify any representation, term or provision contained herein or in any document
delivered pursuant hereto; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) waive compliance with or modify any of the conditions precedent referred to in Article 7 or any of
the covenants herein contained or waive or modify performance of any of the obligations of the Parties,

provided, however, that no such amendment may reduce or materially affect the consideration to be received by the Company Shareholders under the Arrangement without their approval at the Company Meeting or, following the Company Meeting, without their approval given in the same manner as required by applicable Laws for the approval of the Arrangement as may be required by the Court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, the Plan of Arrangement may only be supplemented or amended in accordance with the provisions thereof.

**8.10**  **<u>Waiver and Modifications</u>** 

Any Party may (a) waive, in whole or in part, any inaccuracy of, or consent to the modification of, any representation or warranty made to it hereunder or in any document to be delivered pursuant hereto, (b) extend the time for the performance of any of the obligations or acts of the other Parties (c) waive or consent to the modification of any of the covenants herein contained for its benefit or waive or consent to the modification of any of the obligations of the other Parties hereto or (d) waive the fulfillment of any condition to its own obligations contained herein. No waiver or consent to the modifications of any of the provisions of this Agreement will be effective or binding unless made in writing and signed by the Party or Parties purporting to give the same and, unless otherwise provided, will be limited to the specific breach or condition waived. The rights and remedies of the Parties hereunder are cumulative and are in addition to, and not in substitution for, any other rights and remedies available at law or in equity or otherwise. No single or partial exercise by a Party of any right or remedy precludes or otherwise affects any further exercise of such right or remedy or the exercise of any other right or remedy to which that Party may be entitled. No waiver or partial waiver of any nature, in any one or more instances, will be deemed or construed a continued waiver of any condition or breach of any other term, representation or warranty in this Agreement.

**8.11**  **<u>Severability</u>** 

If any provision of this Agreement is determined by any court of competent jurisdiction to be illegal, invalid or unenforceable, that provision will be severed from this Agreement and the remaining provisions will continue in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

**8.12**  **<u>Mutual Interest</u>** 

Notwithstanding the fact that any part of this Agreement has been drafted or prepared by or on behalf of one of the Parties, all Parties confirm that they and their respective counsel have reviewed and negotiated this Agreement and that the Parties have adopted this Agreement as the joint agreement and understanding of the Parties, and the language used in this Agreement will be deemed to be the language chosen by the Parties to express their mutual intent, and the Parties waive the application of any Laws or rule of construction providing that ambiguities in any agreement or other document will be construed against the Party drafting such agreement or other document and agree that no rule of construction providing that a provision is to be interpreted in favour of the person who contracted the obligation and against the person who stipulated it will be applied against any Party.

**8.13**  **<u>Further Assurances</u>** 

Subject to the provisions of this Agreement, the Parties will, from time to time, do all acts and things and execute and deliver all such further documents and instruments, as the other Parties may, either before or after the Effective Date, reasonably require to effectively carry out or better evidence or perfect the full intent and meaning of this Agreement and, in the event the Arrangement becomes effective, to document or evidence any of the transactions or events set out in the Plan of Arrangement.

**8.14**  **<u>Injunctive Relief</u>** 

Subject to Section 5.2(e), the Parties agree that irreparable harm would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached for which money damages would not be an adequate remedy at law. It is accordingly agreed that the Parties will be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent breaches of this Agreement, any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief hereby being waived.

**8.15**  **<u>No Personal Liability</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No director, officer or employee of the Purchaser will have any personal liability to the Company under this Agreement or any other document delivered in connection with this Agreement or the Arrangement on behalf of the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No director, officer or employee of the Company will have any personal liability to the Purchaser under this Agreement or any other document delivered in connection with this Agreement or the Arrangement on behalf of the Company.

**8.16**  **<u>Counterparts</u>** 

This Agreement may be executed and delivered in any number of counterparts (including by electronic transmission), each of which will be deemed to be an original and all of which taken together will be deemed to constitute one and the same instrument.

*[Remainder of page has been left intentionally blank]*

**IN WITNESS WHEREOF** the Parties have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

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| | | |
|:---|:---|:---|
| **CANOPY GROWTH CORPORATION** | **CANOPY GROWTH CORPORATION** | **CANOPY GROWTH CORPORATION** |
| By: | /s/ Tom Stewart | /s/ Tom Stewart |
|  | Name: | Tom Stewart |
|  | Title: | Chief Financial Officer |
| **MTL CANNABIS CORP.** | **MTL CANNABIS CORP.** | **MTL CANNABIS CORP.** |
| By: | /s/ Michael Perron | /s/ Michael Perron |
|  | Name: Michael Perron | Name: Michael Perron |
|  | Title: Chief Executive Officer | Title: Chief Executive Officer |

---

**Schedule A<br> Form of Plan of Arrangement**

**PLAN OF ARRANGEMENT**

**PLAN OF ARRANGEMENT UNDER SECTION 192<br> OF THE *CANADA BUSINESS CORPORATIONS ACT***

**Article 1** **<br> DEFINITIONS AND INTERPRETATION**

**1.1** **Definitions** 

In this Plan of Arrangement, unless the context otherwise requires, the following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:

"**affiliate**" has the meaning ascribed thereto under the *Securities Act* (Ontario);

"**Anti-Dilution Shares**" means the Anti-Dilution Event Consideration Shares as defined in Section 2.2(a)(ii) in the Share Exchange Agreement;

"**Arrangement**" means the arrangement of the Company under Section 192 of the CBCA on the terms and subject to the conditions set forth in this Plan of Arrangement, subject to any amendments or variations thereto made in accordance with Section 8.9 of the Arrangement Agreement and this Plan of Arrangement or made at the direction of the Court in the Final Order with the prior written consent of the Purchaser and the Company, each acting reasonably;

"**Arrangement Agreement**" means the arrangement agreement dated December 14, 2025 between the Company and the Purchaser to which this Plan of Arrangement is attached as Schedule A, together with the Schedules attached thereto, as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms of thereof;

"**Arrangement Resolution**" means the special resolution to be considered, and, if thought advisable, passed by the Company Shareholders at the Company Meeting to approve the Arrangement, substantially in the form of Schedule B to the Arrangement Agreement;

"**Articles of Arrangement**" means the articles of arrangement of the Company in respect of the Arrangement to be filed with the Director in compliance with the CBCA after the Final Order is made, which shall include this Plan of Arrangement and otherwise be in form and content satisfactory to the Company and the Purchaser, each acting reasonably;

"**Business Day**" means any day, other than a Saturday, a Sunday or any other day on which commercial banking institutions in Toronto, Ontario or Vancouver, British Columbia are authorized or required by applicable Law to be closed;

"**Canadian Resident**" means a person that, immediately prior to the Effective Time, is a resident of Canada for the purposes of the Tax Act and any applicable income tax treaty or convention;

"**Cash Consideration**" means $0.144 in cash for each Company Share;

"**CBCA**" means the *Canada Business Corporations Act*, and includes any successor thereto;

"**Certificate of Arrangement**" means the certificate of arrangement to be issued by the Director pursuant to Section 192(7) of the CBCA in respect of the Articles of Arrangement;

"**Circular**" means the notice of meeting and accompanying management information circular (including all schedules, appendices and exhibits thereto) to be sent to the Company Shareholders in connection with the Company Meeting, including any amendments or supplements thereto;

"**Company**" means MTL Cannabis Corp., a corporation existing under the federal laws of Canada;

"**Company Archerwill Debenture Warrants**" means the 1,733,333 warrants of the Company, each exercisable to acquire one Company Share until August 5, 2027 at an exercise price of $0.74737 per Company Share, subject to adjustment in accordance with their terms;

"**Company Archerwill Prepayment Warrants**" means the 16,640,858 warrants of the Company, each exercisable to acquire one Company Share until August 5, 2027 at an exercise price of $0.5749 per Company Share, subject to adjustment in accordance with their terms;

"**Company Compensation Option Holder**" means a holder of one or more Company Compensation Options;

"**Company Compensation Options**" means the 220,360 compensation options of the Company, each exercisable to acquire one Company Unit until September 19, 2028 at an exercise price of $0.65 per Company Unit, subject to adjustment in accordance with their terms;

"**Company DSU Holder**" means a holder of one or more Company DSUs;

"**Company DSUs**" means all deferred share units of the Company outstanding immediately prior to the Effective Time granted pursuant to or otherwise subject to the Company Incentive Plan;

"**Company Incentive Plan**" means the Long-Term Incentive Plan of the Company approved by the Company Board on June 6, 2025;

"**Company In-The-Money Option**" means a Company Option having a Company Option In-The-Money Amount;

"**Company In-The-Money Warrant**" means a Company Warrant having a Company Warrant In-The-Money Amount;

"**Company March 2020 Warrants**" means the 3,244,757 warrants of the Company, each exercisable to acquire one Company Share until December 31, 2026 at an exercise price of $1.50 per Company Share, subject to adjustment in accordance with their terms;

"**Company Meeting**" means the special meeting of the Company Shareholders, including any adjournment or postponement thereof, to be called and held in accordance with the Interim Order for the purpose of considering and, if thought advisable, approving the Arrangement Resolution;

"**Company Option In-The-Money Amount**" in respect of a Company Option means the amount, if any, by which the total fair market value of the Company Share, which will be equal to the closing price of Company Shares on the CSE on the last trading day immediately prior to the Effective Date, that a holder is entitled to acquire on exercise of the Company Option immediately prior to the Effective Time exceeds the exercise price to acquire the Company Share issuable pursuant to the Company Option;

"**Company Optionholder**" means a holder of one or more Company Options;

"**Company Option Plan**" means the Amended and Restated Stock Option Plan of the Company approved by the Company Shareholders on July 28, 2023;

"**Company Options**" means all options to acquire Company Shares outstanding immediately prior to the Effective Time granted pursuant to or otherwise subject to the Company Option Plan

"**Company Option Shares**" means the Company Shares to be issued to holders of Company In-The-Money Options pursuant to Section 3.1(f) of the Plan of Arrangement;

"**Company Out-Of-The-Money Option**" means a Company Option that is not a Company In-The-Money Option;

"**Company Out-Of-The-Money Warrant**" means a Company Warrant that is not a Company In-The-Money Warrant;

"**Company RSU Holder**" means a holder of one or more Company RSUs;

"**Company RSUs**" means all restricted share units of the Company outstanding immediately prior to the Effective Time granted pursuant to or otherwise subject to the Company Incentive Plan;

"**Company Securityholders**" means, collectively, Company Shareholders, Company RSU Holders, Company DSU Holders, Company Warrant Holders, Company Optionholders and Company Compensation Option Holders;

"**Company September 2025 Warrants**" means the 1,652,669 warrants of the Company, each exercisable to acquire one Company Share until September 19, 2028 at an exercise price of $0.98 per Company Share, subject to adjustment in accordance with their terms;

"**Company Shareholder**" means a holder of one or more Company Shares;

"**Company Shares**" means the common shares without par value in the capital of the Company;

"**Company Unit**" means a unit of the Company comprised of one Company Share and one half of one Company Unit Warrant;

"**Company Unit Warrant**" means a warrant of the Company exercisable to acquire one Company Share until September 19, 2028 at an exercise price of $0.98 per Company Share, subject to adjustment in accordance with its terms;

"**Company Warrant Holder**" means a holder of one or more Company Warrants;

"**Company Warrant In-The-Money Amount**" in respect of a Company Warrant means the amount, if any, by which the total fair market value of the Company Share, which will be equal to the closing price of Company Shares on the CSE on the last trading day immediately prior to the Effective Date, that a holder is entitled to acquire on exercise of the Company Warrant immediately prior to the Effective Time exceeds the exercise price to acquire the Company Share issuable pursuant to the Company Warrant;

"**Company Warrant Shares**" means the Company Shares to be issued to holders of Company In-The-Money Warrants pursuant to Section 3.1(e) of the Plan of Arrangement;

"**Company Warrants**" means, collectively, the Company Archerwill Debenture Warrants, the Company Archerwill Prepayment Warrants, the Company March 2020 Warrants and the Company September 2025 Warrants;

"**Consideration**" means the consideration to be received pursuant to the Plan of Arrangement in respect of each Company Share, consisting of (i) the Share Consideration and (ii) the Cash Consideration;

"**Consideration Shares**" means the Purchaser Shares to be issued as Share Consideration pursuant to the Arrangement;

"**Court**" means the Supreme Court of British Columbia, sitting in Vancouver, British Columbia, or other court as applicable;

"**CRA**" means the Canada Revenue Agency;

"**CSE**" means the Canadian Securities Exchange;

"**Depositary**" means Odyssey Trust Company or any other trust company, bank or other financial institution agreed to in writing by the Company and the Purchaser for the purpose of, among other things, exchanging certificates representing Company Shares for the Consideration in connection with the Arrangement;

"**Director**" means the Director appointed pursuant to Section 260 of the CBCA:

"**Dissent Rights**" has the meaning specified in Section 5.1;

"**Dissent Shares**" means Company Shares held by a Dissenting Shareholder and in respect of which the Dissenting Shareholder has validly exercised Dissent Rights;

"**Dissenting Shareholder**" means a registered Company Shareholder that has duly and validly exercised Dissent Rights and has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights, but only in respect of Company Shares in respect of which Dissent Rights are validly exercised by such registered Company Shareholder;

"**Effective Date**" means the date shown on the Certificate of Arrangement giving effect to the Arrangement;

"**Effective Time**" means 12:01 a.m. on the Effective Date, or such other time as the Purchaser and the Company may agree to in writing before the Effective Date;

"**Eligible Holder**" means a Canadian Resident (other than a Tax Exempt Person), or an Eligible Non-Resident;

"**Eligible Non-Resident**" means a Non-Resident Shareholder whose Company Shares are "taxable Canadian property" and not "treaty-protected property", in each case as defined in the Tax Act;

"**Exchange Ratio**" means the number of Purchaser Shares to be issued for each Company Share pursuant to Section 3.1(g);

"**Final Order**" means the final order of the Court approving the Arrangement under Section 192 of the CBCA, in form and substance acceptable to the Company and the Purchaser, each acting reasonably, after a hearing upon the procedural and substantive fairness of the terms and conditions of the Arrangement, as such order may be affirmed, amended, modified, supplemented or varied by the Court (with the consent of both the Company and the Purchaser, each acting reasonably) at any time prior to the Effective Date or, if appealed, as affirmed or amended (provided that any such amendment, modification, supplement or variation is acceptable to both the Company and the Purchaser, each acting reasonably) on appeal unless such appeal is withdrawn, abandoned or denied;

"**Former Company DSU Holders**" means, at and following the Effective Time, the holders of Company DSUs immediately prior to the Effective Time;

"**Former Company In-The-Money Optionholders**" means, at and following the Effective Time, the holders of Company In-The-Money Options immediately prior to the Effective Time;

"**Former Company In-The-Money Warrant Holder**" means, at and following the Effective Time, the holders of Company In-The-Money Warrants immediately prior to the Effective Time;

"**Former Company RSU Holders**" means, at and following the Effective Time, the holders of Company RSUs immediately prior to the Effective Time;

"**Former Company Shareholders**" means, at and following the Effective Time, the holders of Company Shares immediately prior to the Effective Time;

"**Former Company Warrant Holders**" means, at and following the Effective Time, the holders of Company Warrants immediately prior to the Effective Time;

"**Interim Order**" means the interim order of the Court to be issued following the application therefor submitted to the Court pursuant to Section 192 of the CBCA, in form and substance acceptable to the Company and the Purchaser, each acting reasonably, providing for, among other things, the calling and holding of the Company Meeting, as such order may be affirmed, amended, modified, supplemented or varied by the Court with the consent of both the Company and the Purchaser, each acting reasonably;

"**Laws**" means all laws, statutes, codes, ordinances (including zoning), decrees, rules, regulations, by-laws, notices, judicial, arbitral, administrative, ministerial, departmental or regulatory judgments, injunctions, orders, decisions, settlements, writs, assessments, arbitration awards, rulings, determinations or awards, decrees or other requirements of any Governmental Authority having the force of law and any legal requirements arising under the common law or principles of law or equity and the term "applicable" with respect to such Laws and, in the context that refers to any person, means such Laws as are applicable at the relevant time or times to such person or its business, undertaking, property or securities and emanate from a Governmental Authority having jurisdiction over such person or its business, undertaking, property or securities;

"**Letter of Transmittal**" means the letter of transmittal to be delivered by the Company to Company Shareholders for use in connection with the Arrangement;

"**MC Shareholder Consideration**" means 2,956,391 Purchaser Shares to be issued to the MC Shareholders with such Purchaser Shares subject to transfer restrictions for a period of 18 months following the Effective Date; provided that, any exercise of the Company Archerwill Prepayment Warrants prior to the Effective Date shall result in an automatic and proportionate reduction to the MC Shareholder Consideration in so far as an MC Shareholder receives Anti-Dilution Shares;

"**MC Shareholders**" means, collectively, the David Bow Family Trust, the Michael Rancourt Family Trust, the Michel Clément Family Trust, the Richard Clément Family Trust and the Massimo Caporusso Family Trust (2021);

"**Non-Resident**" means a person that, immediately prior to the Effective Time, is not, and is not deemed to be, a resident of Canada for the purposes of the Tax Act and any applicable income tax treaty or convention;

"**Non-Resident Shareholder**" means a Company Shareholder that is a Non-Resident or a partnership of which a Non-Resident is a member;

"**Plan**" or "**Plan of Arrangement"** means this plan of arrangement proposed under Section 192 of the CBCA, as amended, modified or supplemented from time to time in accordance with the terms hereof and Section 8.9 of the Arrangement Agreement, or made at the direction of the Court in the Final Order with the prior written consent of the Company and the Purchaser, each acting reasonably;

"**Purchaser**" means Canopy Growth Corporation, a corporation incorporated under the federal laws of Canada;

"**Purchaser Equity Incentive Plan**" means the Omnibus Equity Incentive Plan of the Purchaser as approved by shareholders of the Purchaser on September 25, 2023, as the same may be amended, supplemented or restated in accordance therewith, prior to the Effective Time.

"**Purchaser Shares**" means common shares in the capital of the Purchaser;

"**Purchaser Unit**" means a unit of the Purchaser comprised of one Purchaser Share and one half of one Purchaser Unit Warrant;

"**Purchaser Unit Warrant**" means a warrant of the Purchaser exercisable to acquire one Purchaser Share until September 19, 2028 at an exercise price of $2.61 per Purchaser Share, subject to adjustment in accordance with its terms;

"**Release**" has the meaning specified in Section 3.1(a);

"**Replacement Compensation Option**" has the meaning specified in Section 3.1(i);

"**Replacement Option**" has the meaning specified in Section 3.1(h);

"**Replacement Warrant**" has the meaning specified in Section 3.1(i);

"**Section 85 Election**" has the meaning specified in Section 4.1(f);

"**Share Consideration**" means 0.32 of a Purchaser Share for each Company Share;

"**Share Exchange Agreement**" means the Second Restated Share Exchange Agreement dated June 28, 2023, among the Company, Montreal Cannabis Medical Inc., Michel Clément, Richard Clément and the MC Shareholders;

"**Tax Act**" means the *Income Tax Act* (Canada), as amended, and the regulations promulgated thereunder;

"**Tax Exempt Person**" means a person who is exempt from tax under Part I of the Tax Act; and

"**U.S. Securities Act**" means the United States Securities Act of 1933, as amended and the rules and regulations promulgated thereunder.

Any capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Arrangement Agreement. In addition, words and phrases used herein and defined in the CBCA and not otherwise defined herein or in the Arrangement Agreement shall have the same meaning herein as in the CBCA unless the context otherwise requires.

**1.2** **Interpretation Not Affected by Headings, etc.** 

The division of this Plan of Arrangement into articles, sections, subsections and subparagraphs and the insertion of headings are for convenience of reference only and shall not affect the construction, meaning or interpretation of this Plan of Arrangement. Unless reference is specifically made to some other document or instrument, all references herein to articles, sections, subsections and subparagraphs are to articles, sections, subsections and subparagraphs of this Plan of Arrangement, and use of the terms "herein", "hereof" and "hereunder" and similar expressions refer to this Plan of Arrangement and not to any particular article, section or other portion of this Plan of Arrangement.

**1.3** **Number, Gender and Persons** 

Unless the context otherwise requires, words importing the singular number shall include the plural and vice versa; words importing any gender shall include all genders; and words importing persons shall include individuals, partnerships, associations, corporations, funds, unincorporated organizations, trusts, estates, trustees, executors, administrators, legal representatives, governments (including any Governmental Authority), regulatory authorities, syndicate or other entities, whether or not having legal status.

**1.4** **Date for any Action** 

In the event that the date on which any action is required to be taken hereunder by any of the parties hereto is not a business day in the place where the action is required to be taken, such action shall be required to be taken on the next succeeding day which is a business day in such place.

**1.5** **Statutory References** 

References in this Plan of Arrangement to any statute or sections thereof shall include such statute and all rules and regulations made or promulgated thereunder, as it or they may have been or may from time to time be amended, substituted or re-enacted, unless stated otherwise.

**1.6** **Currency** 

In this Plan of Arrangement, unless otherwise stated, all references to sums of money are expressed in lawful money of Canada.

**1.7** **Governing Law** 

This Plan of Arrangement shall be governed, including as to validity, interpretation and effect, by the laws of the Province of British Columbia and the federal laws of Canada applicable therein.

**1.8** **Time** 

Time shall be of the essence in every matter or action contemplated hereunder. All references to time are to local time, Vancouver, British Columbia.

**Article 2** **<br> ARRANGEMENT AGREEMENT**

**2.1** **Arrangement Agreement** 

This Plan of Arrangement constitutes an Arrangement under Section 192 of the CBCA and is made pursuant to, and is subject to the provisions of, the Arrangement Agreement.

**2.2** **Binding Effect** 

At the Effective Time, this Plan of Arrangement and the Arrangement shall, without any further authorization, act or formality on the part of any person, become effective and be binding upon the Purchaser, the Company, the Depositary, all registered and beneficial holders of Company Shares, including Dissenting Shareholders, all registered and beneficial holders of Company RSUs, Company DSUs, Company Warrants, Company Options and Company Compensation Options, the MC Shareholders, the registrar and transfer agent in respect of the Company Shares, and all other persons.

**2.3** **Effect of the Arrangement** 

The Articles of Arrangement and the Certificate of Arrangement shall be filed and issued, respectively, with respect to this Arrangement in its entirety. The Certificate of Arrangement shall be conclusive evidence that the Arrangement has become effective and that each of the provisions in Section 3.1 has become effective in the sequence and at the times set out therein.

**Article 3** **<br> ARRANGEMENT**

**3.1** **The Arrangement** 

Commencing and effective as at the Effective Time, each of the events set out below shall occur and shall be deemed to occur sequentially in the following order without any further act or formality required on the part of any person, except as otherwise expressly provided herein, effective as at five-minute intervals starting at the Effective Time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) each MC Shareholder shall and shall be deemed to irrevocably, fully and finally release the Company, the
Purchaser and their respective affiliates, from any and all obligations owing to such MC Shareholders pursuant to the Share Exchange Agreement,
including, for greater certainty, each MC Shareholder's entitlement to the Anti-Dilution Shares (the "**Release** ")
in exchange for the MC Shareholder Consideration;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) each Dissent Share shall be, and shall be deemed to be, transferred by the holder thereof, without any
further act or formality on its part, to the Purchaser (free and clear of any Liens of any nature whatsoever) and the Purchaser shall
thereupon be obligated to pay the amount therefor determined and payable in accordance with Article 5, and:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) such Dissenting Shareholder shall cease to be, and shall be deemed to cease to be, the holder of such
Dissent Share and to have any rights as a Company Shareholder other than the right to be paid the fair value by the Purchaser for such
Dissent Share as set out in Section 5.1;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) such Dissenting Shareholder's name shall be, and shall be deemed to be, removed from the register
of Company Shareholders maintained by or on behalf of the Company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Purchaser shall be deemed to be the transferee of such Dissent Shares (free and clear of any Liens
of any nature whatsoever) and the register of Company Shareholders maintained by or on behalf of the Company shall be, and shall be deemed
to be, revised accordingly;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) subject to Section 4.6, each Company RSU, whether vested or unvested, shall be deemed to be vested
to the fullest extent, and such Company RSU shall be, and shall be deemed to be, surrendered and disposed of to the Company by the Company
RSU Holder for one Company Share and the Company Shares issuable in connection therewith shall be deemed to be issued to such Former Company
RSU Holder as fully paid and non-assessable shares in the capital of the Company, provided that no share certificates shall be issued
with respect to such shares; and:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) such Former Company RSU Holder shall cease to be, and shall be deemed to cease to be, the holder of such
Company RSU and shall cease to have any rights as a Company RSU Holder in respect of such Company RSU;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) such Former Company RSU Holder's name shall be, and shall be deemed to be, removed from the register
of the Company RSUs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all agreements, grants and similar instruments relating to such Company RSU shall be, and shall be deemed
to be, cancelled, and neither the Company nor the Purchaser shall have any further liabilities or obligations to the Former Company RSU
Holder with respect thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) subject to Section 4.6, each Company DSU, whether vested or unvested, shall be deemed to be vested
to the fullest extent, and such Company DSU shall be, and shall be deemed to be, surrendered and disposed of to the Company by the Company
DSU Holder for one Company Share and the Company Shares issuable in connection therewith shall be deemed to be issued to such Former Company
DSU Holder as fully paid and non-assessable shares in the capital of the Company, provided that no share certificates shall be issued
with respect to such shares; and:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) such Former Company DSU Holder shall cease to be, and shall be deemed to cease to be, the holder of such
Company DSU and shall cease to have any rights as a Company DSU Holder in respect of such Company DSU;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) such Former Company DSU Holder's name shall be, and shall be deemed to be, removed from the register
of the Company DSUs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all agreements, grants and similar instruments relating to such Company DSU shall be, and shall be deemed
to be, cancelled, and neither the Company nor the Purchaser shall have any further liabilities or obligations to the Former Company DSU
Holder with respect thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) subject to Section 4.6, each Company In-The-Money Warrant, shall be, and shall be deemed to be, exercised
by the holder thereof on a cashless basis and surrendered and forfeited to the Company (free and clear of any Liens of any nature whatsoever)
and the relevant Former Company In-The-Money Warrant Holder shall receive, from the Company, Company Warrant Shares having a fair market
value equal to the relevant Company Warrant In-The-Money Amount and the Company Warrant Shares issuable in connection therewith shall
be deemed to be issued to such Former Company In-The-Money Warrant Holder as fully paid and non-assessable shares in the capital of the
Company, provided that no share certificates shall be issued with respect to such Company Warrant Shares, and:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) such Former Company In-The-Money Warrant Holder shall cease to be, and shall be deemed to cease to be,
the holder of such Company In-The-Money Warrant and shall cease to have any rights as a Company Warrant Holder in respect of such Company
In-The-Money Warrant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) such Former Company In-The-Money Warrant Holder's name shall be, and shall be deemed to be, removed
from the register of the Company Warrants; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all warrant agreements, grants and similar instruments relating to such Company In-The-Money Warrant shall
be, and shall be deemed to be, cancelled, and neither the Company nor the Purchaser shall have any further liabilities or obligations
to the Former Company In-The-Money Warrant Holder with respect thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) subject to Section 4.6, each Company In-The-Money Option, whether vested or unvested, shall be deemed
to be vested to the fullest extent, and such Company In-The-Money Option shall be, and shall be deemed to be, exercised by the holder
thereof on a cashless basis and surrendered and forfeited to the Company (free and clear of any Liens of any nature whatsoever) and the
relevant Former Company In-The-Money Optionholder shall receive, from the Company, Company Option Shares having a fair market value equal
to the relevant Company Option In-The-Money Amount and the Company Option Shares issuable in connection therewith shall be deemed to be
issued to such Former Company In-The-Money Optionholder as fully paid and non-assessable shares in the capital of the Company, provided
that no share certificates shall be issued with respect to such Company Option Shares, and:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) such Former Company In-The-Money Optionholder shall cease to be, and shall be deemed to cease to be, the
holder of such Company In-The-Money Option and shall cease to have any rights as a Company Optionholder in respect of such Company In-The-Money
Option;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) such Former Company In-The-Money Optionholder's name shall be, and shall be deemed to be, removed
from the register of the Company Options; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all option agreements, grants and similar instruments relating to such Company In-The-Money Option shall
be, and shall be deemed to be, cancelled, and neither the Company nor the Purchaser shall have any further liabilities or obligations
to the Former Company In-The-Money Optionholder with respect thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) each Company Share (excluding (i) any Dissent Share or (ii) any Company Share held by the Purchaser
or any of its affiliates but including (i) the Company Shares issuable pursuant to Section 3.1(c) and Section 3.1(d);
(ii) the Company Option Shares issuable pursuant to Section 3.1(f); and (iii) the Company Warrant Shares issuable pursuant
to Section 3.1(e)) shall be, and shall be deemed to be, assigned and transferred by the holder thereof, without any further act or
formality on its part, to the Purchaser (free and clear of any Liens of any nature whatsoever), in exchange for the Consideration, less
any amounts withheld pursuant to Section 4.6, and:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) each holder of such Company Shares shall cease to be, and shall be deemed to cease to be, the holder thereof
and to have any rights as a Company Shareholder other than the right to be paid the Consideration per Company Share in accordance with
this Plan of Arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the name of each such holder shall be, and shall be deemed to be, removed from the register of Company
Shareholders maintained by or on behalf of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Purchaser shall be deemed to be the transferee of such Company Shares (free and clear of any Liens
of any nature whatsoever) and the register of Company Shareholders maintained by or on behalf of the Company shall be, and shall be deemed
to be, revised accordingly; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) for greater certainty, applicable amounts may be withheld from the Consideration pursuant to Section 4.6(a),
and the Purchaser Shares (payable as Share Consideration) so withheld may be sold pursuant to and in accordance with Section 4.6(b) to
satisfy the withholding and deduction in respect of the surrender, assignment and transfer, of the Company RSUs pursuant to Section 3.1(c),
the Company DSUs pursuant to Section 3.1(d) and the Company-In-The-Money Options pursuant to Section 3.1(f);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) each outstanding Company Out-Of-The-Money Option shall be exchanged at the Effective Time for an option
(a "**Replacement Option**") to purchase from the Purchaser 0.32 of a Purchaser Share, at an exercise price per Purchaser
Share that would otherwise be payable to acquire a Company Share pursuant to the Company Out-Of-The-Money Option it replaces less an amount
equal to the Cash Consideration (rounded up to the nearest whole cent), except that the aggregate number of whole Purchaser Shares issuable
pursuant to the relevant former Company Out-Of-The-Money Option holder's Replacement Options having a common exercise date and price
shall be rounded down to the nearest whole number. Except as set out above, all other terms and conditions of such Replacement Option,
including the conditions to and manner of exercise (provided any Replacement Option shall be exercisable at the offices of the Purchaser),
shall be as nearly equivalent as practicable as the terms and conditions of the certificates governing the Company Out-Of-The-Money Option
so exchanged, and shall be governed by the terms of the Purchaser Equity Incentive Plan, and any document evidencing a Company Out-Of-The-Money
Option shall thereafter evidence and be deemed to evidence such Replacement Option. Each Company Out-Of-The-Money Option shall cease to
be, and shall be deemed to cease to be, an option or right to acquire Company Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) each outstanding Company Out-Of-The-Money Warrant shall be exchanged at the Effective Time for a warrant
(a "**Replacement Warrant**") to purchase from the Purchaser 0.32 of a Purchaser Share, at an exercise price per Purchaser
Share that would otherwise be payable to acquire a Company Share pursuant to the Company Out-Of-The-Money Warrant it replaces less an
amount equal to the Cash Consideration (rounded up to the nearest whole cent), except that the aggregate number of whole Purchaser Shares
issuable pursuant to the relevant former Company Out-Of-The-Money Warrant holder's Replacement Warrants having a common exercise
date and price shall be rounded down to the nearest whole number. Except as set out above, the term to expiry, conditions to and manner
of exercise (provided any Replacement Warrant shall be exercisable at the offices of the Purchaser) and other terms and conditions of
each of the Replacement Warrants shall be as nearly equivalent as practicable to the terms and conditions of the certificates governing
the Company Out-Of-The-Money Warrant for which it is exchanged, and any document evidencing a Company Out-Of-The-Money Warrant shall thereafter
evidence and be deemed to evidence such Replacement Warrant. Each Company Out-Of-The-Money Warrant shall cease to be, and shall be deemed
to cease to be, a warrant or right to acquire Company Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) each outstanding Company Compensation Option shall be exchanged at the Effective Time for an option (a
 "**Replacement Compensation Option**") to purchase from the Purchaser 0.32 of a Purchaser Unit, at an exercise price per
Purchaser Unit that would otherwise be payable to acquire a Company Unit pursuant to the Company Compensation Option it replaces less
an amount equal to the Cash Consideration (rounded up to the nearest whole cent), except that the aggregate number of whole Purchaser
Units issuable pursuant to the relevant former Company Compensation Option holder's Replacement Compensation Options having a common
exercise date and price shall be rounded down to the nearest whole number. Except as set out above, the term to expiry, conditions to
and manner of exercise (provided any Replacement Compensation Option shall be exercisable at the offices of the Purchaser) and other terms
and conditions of each of the Replacement Compensation Options shall be as nearly equivalent as practicable to the terms and conditions
of the certificates governing the Company Compensation Option for which it is exchanged and any document evidencing a Company Compensation
Option shall thereafter evidence and be deemed to evidence such Replacement Compensation Option. Each Company Compensation Option shall
cease to be, and shall be deemed to cease to be, an option or right to acquire Company Units, Company Shares and Company Unit Warrants;
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) in exchange for the Release from each MC Shareholder, the Purchaser shall issue Purchaser Shares with
a legend imposing an 18-month transfer restriction to each MC Shareholder based on such MC Shareholder's pro rata entitlement to
the MC Shareholder Consideration, which shall and shall be deemed to be received in full and final satisfaction of the Release.

The exchanges and cancellations provided for in this Section 3.1 shall be deemed to occur on the Effective Date, notwithstanding that certain of the procedures related thereto are not completed until after the Effective Date.

**Article 4** **<br> CERTIFICATES AND PAYMENTS**

**4.1** **Payment and Delivery of Consideration** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Following receipt of the Final Order and on the Business Day prior to the Effective Date, the Purchaser
shall deliver or cause to be delivered to the Depositary, for the benefit of applicable holders of Company Shares and the MC Shareholders,
sufficient Purchaser Shares to satisfy the aggregate Share Consideration and MC Shareholder Consideration payable to the Company Shareholders
and MC Shareholders, as applicable, in accordance with Section 3.1 and the aggregate amount of cash to satisfy the Cash Consideration
payable to the Company Shareholders in accordance with Section 3.1, which Purchaser Shares and cash shall be held by the Depositary
as agent and nominee for such Former Company Shareholders and MC Shareholders for distribution to such Former Company Shareholders and
MC Shareholders, as applicable, in accordance with the provisions of this Article 4;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) upon surrender to the Depositary for cancellation of a certificate which immediately prior to
the Effective Time represented outstanding Company Shares, together with a duly completed and executed Letter of Transmittal and any such
additional documents and instruments as the Depositary may reasonably require, the Company Shareholder shall be entitled to receive in
exchange therefor, and the Depositary shall deliver to such Former Company Shareholder, the Consideration that such Former Company Shareholder
has the right to receive under this Plan of Arrangement for such Company Shares, less any amounts withheld pursuant to Section 4.6,
and any certificate so surrendered shall forthwith be cancelled; and (ii) immediately following the Effective Time, each MC Shareholder
shall be entitled to receive in accordance with their written delivery and registration instructions, and the Depositary shall deliver
to such MC Shareholder, the Purchaser Shares representing the MC Shareholder Consideration that such MC Shareholder has the right to receive
under this Plan of Arrangement with a legend imposing a transfer restriction expiring 18-months after the Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Until surrendered for cancellation as contemplated by Section 4.1(b)(i), each certificate that immediately
prior to the Effective Time represented one or more Company Shares (other than Dissent Shares or Company Shares held by the Purchaser
or any of its affiliates) shall be deemed after the Effective Time to represent only the right to receive in exchange therefor the Consideration
that the holder of such certificate is entitled to receive in accordance with Section 3.1, less any amounts withheld pursuant to
Section 4.6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) each Former Company Out-Of-The-Money Warrant Holder shall be entitled to receive in exchange therefor,
and the Purchaser shall promptly following the Effective Time deliver to such Former Company Out-Of-The-Money Warrant Holder, the Replacement
Warrant that such Former Company Out-Of-The-Money Warrant Holder has the right to receive under this Plan of Arrangement for such Company
Out-Of-The-Money Warrant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) each Former Company Out-Of-The-Money Options Holder shall be entitled to receive in exchange therefor,
and the Purchaser shall promptly following the Effective Time deliver to such Former Company Out-Of-The-Money Optionholder, the Replacement
Option that such Former Company Out-Of-The-Money Optionholder has the right to receive under this Plan of Arrangement for such Company
Out-Of-The-Money Option;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) An Eligible Holder who is entitled to receive Consideration Shares under Section 3.1(g) shall
be entitled to make a joint income tax election, pursuant to Section 85 of the Tax Act (and any analogous provision of provincial
income tax law) (a "**Section 85 Election**") with respect to the disposition of Company Shares under this Plan of
Arrangement by providing two signed copies of the necessary joint election forms to an appointed representative, as directed by the Purchaser,
within 60 days after the Effective Date, duly completed with the details of the Company Shares transferred and the applicable agreed amount
for the purposes of such joint elections. The Purchaser shall, within 30 days after receiving the completed joint election forms from
an Eligible Holder, and subject to such joint election forms being correct and complete and in compliance with requirements imposed under
the Tax Act (or any analogous provision of provincial income tax law), sign and return such forms to such Eligible Holder. Neither the
Company, the Purchaser nor any successor corporation shall be responsible for the proper completion and filing of any joint election form,
and except for the obligation to sign and return the duly completed joint election forms which are received within 60 days of the Effective
Date, for any taxes, interest or penalties arising as a result of the failure of an Eligible Holder to properly or timely complete and
file such joint election forms in the form and manner prescribed by the Tax Act (or any applicable provincial legislation). In its sole
discretion, the Purchaser or any successor corporation may choose to sign and return a joint election form received by it from an Eligible
Holder more than 60 days following the Effective Date, but will have no obligation to do so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Subject to Section 4.1(f) and Section 4.1(h), upon receipt of a duly completed and executed
Letter of Transmittal, or other written confirmation from an Eligible Holder which has been delivered to the Purchaser, in which such
Eligible Holder has indicated that the Eligible Holder intends to make a Section 85 Election, the Purchaser will promptly deliver
a tax instruction letter, together with the relevant tax election forms (including the provincial tax election forms, if applicable) to
the Eligible Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Purchaser, in its sole discretion, may post to its website instructions for Eligible Holders wishing
to make a Section 85 Election, and in such case, the Purchaser will provide, in the Letter of Transmittal, its website address where
such instructions will be posted. Final instructions with respect to the mechanics for Eligible Holders to make a Section 85 Election
will be included in the Circular.

**4.2** **Lost Certificates** 

In the event any certificate which immediately prior to the Effective Time represented one or more outstanding Company Shares that were transferred pursuant to Section 3.1(g) shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to be lost, stolen or destroyed, the Depositary will issue in exchange for such lost, stolen or destroyed certificate, the Consideration deliverable in accordance with such holder's duly completed and executed Letter of Transmittal. When authorizing such payment or delivery in exchange for any lost, stolen or destroyed certificate, the person to whom such Consideration is to be delivered shall as a condition precedent to the delivery of such Consideration, give a bond satisfactory to the Purchaser and the Depositary (each acting reasonably) in such sum as the Purchaser may direct, or otherwise indemnify the Purchaser and the Company in a manner satisfactory the Purchaser and the Company, each acting reasonably, against any claim that may be made against the Purchaser and the Company with respect to the certificate alleged to have been lost, stolen or destroyed.

**4.3** **No Fractional Purchaser Shares** 

In no event shall any holder of Company Shares or any of the MC Shareholders be entitled to a fractional Purchaser Share. Where the aggregate number of Purchaser Shares to be issued to a Company Shareholder as Share Consideration or an MC Shareholder as MC Shareholder Consideration under this Plan of Arrangement would result in a fraction of a Purchaser Share being issuable, then the number of Purchaser Shares to be issued to such Company Shareholder or MC Shareholder, as applicable, shall be rounded down to the nearest whole number and no compensation shall be issued in lieu of the issuance of a fractional Purchaser Share.

**4.4** **No Fractional Cash Consideration.** 

In no event shall any holder of Company Shares be entitled to a fractional Cash Consideration. Where the aggregate amount of Cash Consideration to be paid to a Company Shareholder as Cash Consideration under this Plan of Arrangement would result in a fraction of a cent being paid, then the aggregate amount of Cash Consideration owing to such Company Shareholder shall be rounded down to the nearest whole cent.

**4.5** **Post-Effective Time Dividends and Distributions** 

All dividends and distributions made after the Effective Time with respect to any Purchaser Shares allotted and issued pursuant to this Arrangement but for which a certificate has not been issued shall be paid or delivered to the Depositary to be held by the Depositary in trust for the holder of such Purchaser Shares. All monies received by the Depositary shall be invested by it in interest bearing trust accounts upon such terms as the Depositary may reasonably deem appropriate. Subject to this Section 4.5, the Depositary shall pay and deliver to any such holder, as soon as reasonably practicable after application therefor is made by such holder to the Depositary in such form as the Depositary may reasonably require, such dividends and distributions and any interest thereon to which such holder is entitled pursuant to the Arrangement, net of any applicable withholding and other taxes.

**4.6** **Withholding Rights** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company, the Purchaser and the Depositary, as applicable, will be entitled to deduct and withhold
from any consideration otherwise payable or deliverable to any person under this Plan of Arrangement and the Arrangement Agreement (including,
without limitation, any payments to Dissenting Shareholders, Company RSU Holders, Company DSU Holders, Company Warrant Holders, Company
Optionholders, Company Compensation Option Holders and MC Shareholders), such amounts as the Company, the Purchaser or the Depositary,
as applicable, is required to deduct and withhold, or reasonably believe to be required to deduct and withhold, with respect to such payment
or delivery under any provision of any Laws in respect of Taxes. For the purposes hereof, all such withheld amounts shall be treated for
all purposes under this Plan of Arrangement and the Arrangement Agreement as having been paid to the person in respect of which such deduction
and withholding was made on account of the obligation to make payment to such person hereunder, provided that such deducted or withheld
amounts are actually remitted to the appropriate Governmental Authority by or on behalf of the Company, the Purchaser or the Depositary,
as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each of the Company, the Purchaser and the Depositary is hereby authorized to sell or otherwise dispose
of such portion of Purchaser Shares payable as Share Consideration or the MC Shareholder Consideration as is necessary to provide sufficient
funds to the Company, the Purchaser or the Depositary, as applicable, to enable it to implement such deduction or withholding, and the
Company, the Purchaser or the Depositary will notify the holder thereof and remit to the holder any unapplied balance of the net proceeds
(after deduction for (a) the amounts required to satisfy the required withholding under this Plan of Arrangement and the Arrangement
Agreement in respect of such Person, (b) reasonable commissions payable to the broker, and (c) other reasonable costs and expenses)
of such sale. Any sale will be made in accordance with applicable Laws and at prevailing market prices and none of the Company, the Purchaser,
the Depositary or their respective agents, as the case may be, shall have any liability to, or be under any obligation to obtain a particular
price or to indemnify, any Company Securityholder in respect of a particular price, for the portion of the Share Consideration or MC Shareholder
Consideration so sold.

**4.7** **Extinction of Rights** 

If any Former Company Shareholder fails to deliver to the Depositary the certificates, documents or instruments required to be delivered to the Depositary under Section 4.1 in order for such Former Company Shareholder to receive the Consideration which such former holder is entitled to receive pursuant to Section 3.1, on or before the third anniversary of the Effective Date, on the third anniversary of the Effective Date: (a) such former holder will be deemed to have donated and forfeited to the Purchaser or its successor any Consideration held by the Depositary in trust for such former holder to which such former holder is entitled and (b) any certificate representing Company Shares formerly held by such former holder will cease to represent a claim of any nature whatsoever and will be deemed to have been surrendered to the Purchaser and will be cancelled. Neither the Company nor the Purchaser, or any of their respective successors, will be liable to any person in respect of any Consideration (including any consideration previously held by the Depositary in trust for any such former holder) which is forfeited to the Company or the Purchaser or delivered to any public official pursuant to any applicable abandoned property, escheat or similar Law.

**4.8** **No Liens** 

Any exchange or transfer of securities pursuant to this Plan of Arrangement shall be free and clear of any Liens or other claims of third parties of any kind.

**4.9** **Paramountcy** 

From and after the Effective Time: (a) this Plan of Arrangement shall take precedence and priority over any and all Company Shares, Company RSUs, Company DSUs, Company Warrants, Company Options and Company Compensation Options issued prior to the Effective Time; (b) the rights and obligations of the Company Securityholders (other than the Purchaser or any of its affiliates), the MC Shareholders, the Company, the Purchaser, the Depositary and any transfer agent or other depositary therefor in relation thereto, shall be solely as provided for in this Plan of Arrangement and the Arrangement Agreement; and (c) all actions, causes of action, claims or proceedings (actual or contingent and whether or not previously asserted) based on or in any way relating to any Company Shares, Company RSUs, Company DSUs, Company Warrants, Company Options, Company Compensation Options, the Share Exchange Agreement or the Anti-Dilution Shares shall be deemed to have been settled, compromised, released and determined without liability except as set forth in this Plan of Arrangement.

**Article 5** **<br> DISSENTING SHAREHOLDERS**

**5.1** **Dissent Rights** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each registered Company Shareholder may exercise rights of dissent ()"**Dissent Rights** ")
with respect to the Company Shares held by such Company Shareholder in connection with the Arrangement pursuant to and in the manner set
forth in Section 190 of the CBCA, as modified by the Interim Order and this Section 5.1, provided that, notwithstanding Section 190(5) of
the CBCA, the written objection to the Arrangement Resolution contemplated by Section 190(5) of the CBCA must be received by
the Company not later than 5:00 p.m. two Business Days immediately preceding the date of the Company Meeting (as it may be adjourned
or postponed from time to time). Dissenting Shareholders who duly exercise such Dissent Rights and who:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) are ultimately determined to be entitled to be paid fair value (as determined as of the close of business
on the day before the Arrangement Resolution was adopted) from the Purchaser for the Dissenting Shares in respect of which they have exercised
Dissent Rights, notwithstanding anything to the contrary contained in Part XV of the CBCA, shall be deemed to have irrevocably transferred
such Dissent Shares to the Purchaser pursuant to Section 3.1(a) in consideration of such fair value and shall (other than Section 3.1(a) be
deemed not to have participated in the transactions in Article 3); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) are ultimately not entitled, for any reason, to be paid by the Purchaser the fair value for their Dissent
Shares, shall be deemed to have participated in the Arrangement in respect of those Company Shares on the same basis as a non-dissenting
Company Shareholder and shall be entitled to receive only the Consideration from the Purchaser in the same manner as such non-dissenting
Company Shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In no event shall the Purchaser or the Company or any other person be required to recognize a Dissenting
Shareholder as a registered or beneficial owner of Company Shares or any interest therein (other than the rights set out in this Section 5.1)
at or after the Effective Time, and as at the Effective Time the names of such Dissenting Shareholders shall be deleted from the central
securities register of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) For greater certainty, in addition to any other restrictions in the Interim Order and under Section 190
of the CBCA, none of the following shall be entitled to exercise Dissent Rights: (i) Company Shareholders who vote or have instructed
a proxyholder to vote such Company Shares in favour of the Arrangement Resolution (but only in respect of such Company Shares); and (ii) holders
of Company RSUs, Company DSUs, Company Warrants, Company Options or Company Compensation Options.

**Article 6** **<br> AMENDMENTS**

**6.1** **Amendments** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Purchaser and the Company reserve the right to amend, modify and/or supplement this Plan of Arrangement
at any time and from time to time prior to the Effective Time, provided that any such amendment, modification or supplement must be agreed
to in writing by each of the Purchaser and the Company, each acting reasonably, and filed with the Court, and, if made following the Company
Meeting, then: (i) approved by the Court; and (ii) communicated to the Company Securityholders, if and as required by the Court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any amendment, modification or supplement to this Plan of Arrangement, if agreed to by the Purchaser and
the Company, each acting reasonably, may be proposed by the Purchaser or the Company at any time prior to or at the Company Meeting, with
or without any other prior notice or communication, and if so proposed and accepted by the persons voting at the Company Meeting (other
than as may be required under the Interim Order) shall become part of this Plan of Arrangement for all purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any amendment, modification or supplement to this Plan of Arrangement that is approved or directed by
the Court following the Company Meeting will be effective only if: (i) it is agreed to in writing by each of the Purchaser and the
Company, each acting reasonably, and (ii) if required by the Court, by some or all of the Company Shareholders voting in the manner
directed by the Court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any amendment, modification or supplement to this Plan of Arrangement may be made by mutual agreement
by the Purchaser and the Company without the approval of or communication to the Court or the Company Securityholders, provided that it
concerns a matter which, in the reasonable opinion of the Purchaser and the Company is of an administrative or ministerial nature required
to better give effect to the implementation of this Plan of Arrangement and is not adverse to the financial or economic interests of any
of the Company Securityholders.

**Article 7** **<br> FURTHER ASSURANCES**

**7.1** **Further Assurances** 

Notwithstanding that the transactions and events set out in this Plan of Arrangement shall occur and shall be deemed to occur in the order set out in this Plan of Arrangement without any further act or formality, each of the Company and the Purchaser shall make, do and execute, or cause to be made, done and executed, all such further acts, deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required by any of them in order to implement this Plan of Arrangement and to further document or evidence any of the transactions or events set out in this Plan of Arrangement.

**Article 8** **<br> U.S. SECURITIES LAW EXEMPTION**

**8.1** **U.S. Securities Law Exemptions** 

Notwithstanding any provision herein to the contrary, the Company and the Purchaser each agree that the Plan of Arrangement will be carried out with the intention that, and they will use their commercially reasonable best efforts to ensure that, all: (a) Company Shares to be issued to holders of (i) Company RSUs pursuant to Section 3.1(c); (ii) Company DSUs pursuant to Section 3.1(d); (iii) Company In-The-Money Warrants pursuant to Section 3.1(e); and (iii) Company-In-The-Money Options pursuant to Section 3.1(f) (b) Consideration Shares to be issued in exchange for Company Shares (including those Company Shares issued pursuant to Sections 3.1(c), Section 3.1(d), Section 3.1(e) and Section 3.1(f)); (c) Replacement Options to be issued to holders of Company Out-Of-The-Money Options in exchange for Company Out-Of-The-Money Options pursuant to Section 3.1(h); (d) Replacement Warrants to be issued to Company Warrant Holders in exchange for Company Out-Of-The-Money Warrants pursuant to Section 3.1(i); (e) Replacement Compensation Options to be issued to Company Compensation Option Holders in exchange for Company Compensation Options pursuant to Section 3.1(j) and (f) MC Shareholder Consideration to be issued in exchange for the Release pursuant to Section 3.1(k), whether in the United States, Canada or any other country, will be issued in reliance on the exemption from the registration requirements of the U.S. Securities Act provided by Section 3(a)(10) thereof and similar exemptions under applicable state securities laws, and pursuant to the terms, conditions and procedures set forth in the Arrangement Agreement and this Plan of Arrangement. Holders of Company Out-Of-The-Money Options entitled to receive Replacement Options, Company Warrant Holders entitled to receive Replacement Warrants and Company Compensation Option Holders entitled to receive Replacement Compensation Options will be advised that the exemption provided by the U.S. Securities Act pursuant to Section 3(a)(10) thereof, will not be available for the issuance of any Purchaser Shares, Purchaser Units and Purchaser Unit Warrants, as applicable, issuable upon the exercise of the Replacement Options, Replacement Warrants, Replacement Compensation Options and Purchaser Unit Warrants, as applicable, if any. The Purchaser Shares, Purchaser Units and Purchaser Unit Warrants, as applicable, issuable upon the exercise of the Replacement Options, Replacement Warrants, Replacement Compensation Options or Purchaser Unit Warrants, if any, may be issued only pursuant to an available exemption or exclusion from the registration requirements of the U.S. Securities Act and applicable state securities laws.

**Schedule B<br> Arrangement Resolution**

**BE IT RESOLVED AS A SPECIAL RESOLUTION THAT:**

A. The arrangement (as it may be modified or amended, the "**Arrangement**") under Section 192 of the *Canada Business Corporations Act* involving MTL Cannabis Corp. (the "**Company** "), its shareholders and Canopy Growth Corporation (the "**Purchaser** "), all as more particularly described and set forth in the plan of arrangement (as it may be modified or amended, the "**Plan of Arrangement**") attached as Appendix [A] to the Management Information Circular of the Company dated [●], 2025 (the "**Information Circular** "), and all transactions contemplated thereby, are hereby authorized, approved and adopted.

B. The Arrangement Agreement dated as of December 14, 2025 between the Company and the Purchaser, as
it may be amended from time to time (the "**Arrangement Agreement** "), and the transactions contemplated therein, the actions
of the directors of the Company in approving the Arrangement and the Arrangement Agreement and the actions of the directors and officers
of the Company in executing and delivering the Arrangement Agreement and causing the performance by the Company of its obligations thereunder
are hereby confirmed, ratified, authorized and approved.

C. The Company be and is hereby authorized to apply for a final order from the Supreme Court of British Columbia
to approve the Arrangement on the terms set forth in the Arrangement Agreement and the Plan of Arrangement (as they may be amended, modified
or supplemented and as described in the Circular).

D. Notwithstanding that this resolution has been passed (and the Arrangement approved and agreed to) by shareholders
of the Company or that the Arrangement has been approved by the Supreme Court of British Columbia, the directors of the Company are hereby
authorized and empowered without further approval of any shareholders of the Company (i) to amend the Arrangement Agreement or the
Plan of Arrangement to the extent permitted by the Arrangement Agreement or Plan of Arrangement and (ii) not to proceed with the
Arrangement at any time prior to the Effective Time (as defined in the Arrangement Agreement).

E. Any director or officer of the Company is hereby authorized, empowered and instructed, acting for, in
the name and on behalf of the Company, to execute or cause to be executed, under the seal of the Company or otherwise, and to deliver
or to cause to be delivered, for filing with the Director under the *Canada Business Corporations Act,* articles of arrangement and
such other documents as are necessary or desirable to give effect to the Arrangement in accordance with the Arrangement Agreement, such
determination to be conclusively evidenced by the execution and delivery of articles of arrangement or other such documents.

F. Any director or officer of the Company is hereby authorized, empowered and instructed, acting for, in
the name and on behalf of the Company, to execute or cause to be executed, under the seal of the Company or otherwise, and to deliver
or to cause to be delivered, all such other documents and to do or to cause to be done all such other acts and things as in such person's
opinion may be necessary or desirable in order to carry out the intent of the foregoing paragraphs of these resolutions and the matters
authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such document or the doing of such
act or thing.

## Exhibit 10.1

**Exhibit 10.1**

![](tm2533279d1_ex10-2img001.jpg)

**<u>EMPLOYMENT AGREEMENT</u>**

(Province of Ontario)

This Agreement is made this 14 day of December 2025

BETWEEN:

**Canopy Growth Corporation**

1 Hershey Drive

Smiths Falls, ON K7A 0A8

("Company")

- and -

Michael Perron

("Employee" or "you")

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. Duties and Responsibilities**

Conditional upon the closing of an Arrangement Agreement between Canopy Growth Corporation and MTL Cannabis Corp. and other parties (the "Closing"), and in consideration of a signing bonus in the amount of $1,000.00 together with Employee's acceptance and continuing acceptance of the terms of this agreement (the "Agreement"), Company appoints Employee to the position of **Chief Operating Officer**, reporting to the **Chief Executive Officer**. Employee agrees to perform the duties of such position diligently and to the best of Employee's ability.

Company requires Employee's full attention. Accordingly, while Employee is employed by Company, Employee must devote Employee's self exclusively to the business of Company. Employee agrees Employee will not engage in any other business activity or employment, including sitting on any board of directors, governors, or trustees (whether the organization is operated for profit or not) during Employee's employment, without Company's prior written approval. Company agrees not to withhold such approval unreasonably.

Notwithstanding the foregoing, nothing herein shall preclude you from (i) engaging in charitable activities and community affairs or (ii) managing your passive personal investments and affairs, provided that such personal investments are not competitive to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. Term**

The term and terms of this Agreement shall commence effective as of the Closing date (the "Effective Date"). Notwithstanding same, it is understood that Employee's initial start date of employment with MTL Cannabis Corp. (the "Initial Start Date") will be used for the calculation of all vacation and statutory termination entitlements, as well as any other required statutory entitlements as per the employment standards or labour standards legislation in the province in which Employee works, as amended from time to time ("Employment Standards").

![](tm2533279d1_ex10-2img001.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. Conditional Offer**

Company's offer of employment as set out in this Agreement is also conditional upon:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Employee's agreement to permit a Multi-factor authenticator
 (MFA) to be placed on their personal cell phone in order to permit access to the Company's
 systems and emails. Note that MFA authenticators simply help to protect the privacy of Company's
 systems, and do not collect Employee personal information. The Authenticator application
 confirms the MFA codes; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) completion, to the Company's satisfaction,
 of a criminal background check

If Company is not satisfied with the results of the criminal background check (determined honestly, reasonably and in good faith), then this Agreement will be frustrated.

Employee agrees to sign and return any forms or consents and take any steps necessary for Company to conduct the above-noted background check(s) as required by the Company. Employee also agrees that Company may use the services of a third-party background checking firm to conduct some or all of these background checks, and that Company may provide Employee's personal information to the background checking firm for this purpose, including any forms and consents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **Location of Work**

Employee will be working primarily in the province of Ontario. Employee may be required, on one or more occasions, to travel to other Company facilities located throughout Canada. The Company has implemented a "remote-first approach" to office work, to support its employees' proven agility to work remotely and to provide continued flexibility around where work gets done. While Employee will be permitted to work remotely pursuant to any Company Remote Work Policy as implemented or amended from time to time, in order to support continued employee connections and collaboration, the Company will also have flexible, on-demand office space model in Toronto and Kanata – which teams can leverage as needed. It is understood that Employee may be required to attend the Company's office space from time to time for employee engagement activities. Please note that the Company will continue to evaluate this approach over time and may adjust it as needed in its sole discretion, and any changes to this approach will not constitute constructive dismissal. In the event that travel outside of Canada is required as part of Employee's duties, Employee agrees to maintain a valid passport and to take all other steps which may be required from time to time in order to travel without impediment.

No amount paid by the Company shall be construed as, nor shall be reported by you as, rent for the use of space within your home or alternate work location. No space within your home or alternate work location should be used to conduct in-person customer, vendor or co-worker meetings, nor should such space be held out by either Company or you to be an office of Company, or any of Company's affiliates. Furthermore, neither the address of your home, or alternative work location, nor any telephone or facsimile number associated with such address(es) shall be: displayed on any Company or Company's affiliates business card; displayed on any Company or Company's affiliates letterhead, advertising or signage; listed in any directory or website; displayed on or listed in any similar medium; and/or otherwise associated with Company or Company's affiliates. Personal residences are not to be used as team-retreat destinations.

![](tm2533279d1_ex10-2img001.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. Working Conditions**

Employee may be required, on one or more occasions, to work variable shifts. Employee agrees to work those variable shifts as may be assigned. Employee shall be entitled to one unpaid half hour per day for a lunch break, which must be taken. The time at which lunch may be taken will fluctuate daily pending the needs of the business and workflow. Employee may be exposed to noise, machinery, and chemicals and by execution of this Agreement, Employee accepts those working conditions. Employee acknowledges and agrees that the primary responsibility for creating and maintaining a safe and healthy workplace environment is shared by both Employee and Company. Among other things:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Employee assumes responsibility for maintaining a safe and healthy
 work environment through Employee's actions. Employee will take every reasonable precaution
 in the circumstances to protect Employee's own health and safety and that of other
 persons at or near the workplace;

&nbsp;&nbsp;&nbsp;&nbsp;(b) Employee will co-operate with Company
 and with Employee's fellow employees to protect Employee's own health and safety
 and that of other persons at or near the workplace;

&nbsp;&nbsp;&nbsp;&nbsp;(c) Employee will take every reasonable precaution in the circumstances
 to ensure that protective devices, equipment or clothing required by the Company, the *Occupational Health and Safety Act* or that statute's regulations are used or worn;

&nbsp;&nbsp;&nbsp;&nbsp;(d) Employee agrees to co-operate with any person performing a duty
 or exercising a power conferred by the *Occupational Health and Safety Act* or its regulations
 and will comply with that law and the regulations. Employee agrees to fully engage and comply
 where safety training and procedural updating may be required and acknowledges that the training
 may be held outside of normal working hours and remain mandatory;

&nbsp;&nbsp;&nbsp;&nbsp;(e) Where Employee believes that any condition,
 device, equipment, machine, material or thing or any aspect of the workplace is or may be
 dangerous to Employee's health or safety or that of any other person at the workplace,
 Employee must immediately report it to a supervisor;

&nbsp;&nbsp;&nbsp;&nbsp;(f) Employee agrees to accept a framework for participation, transfer
 of information and refusal of unsafe work, all of which are necessary for the parties to
 carry out their responsibilities pursuant to the *Occupational Health and Safety Act* and its regulations;

&nbsp;&nbsp;&nbsp;&nbsp;(g) Employee agrees to not remove or make ineffective any protective
 device required by law or by the Company, without providing an adequate temporary protective
 device and when the need for removing or making ineffective the protective device has ceased,
 the protective device shall be replaced immediately;

&nbsp;&nbsp;&nbsp;&nbsp;(h) Employee agrees to not use or operate
 any equipment, machine, device or thing or work in a manner that may endanger Employee's
 self or any other worker;

&nbsp;&nbsp;&nbsp;&nbsp;(i) Employee agrees to not engage in any
 prank, contest, feat of strength, unnecessary running or rough and boisterous conduct; and

&nbsp;&nbsp;&nbsp;&nbsp;(j) Employee agree to not use profanity in directly communicating with
 the Company, co-workers, suppliers and customers. Aggressive behaviour and conduct will not
 be tolerated.

![](tm2533279d1_ex10-2img001.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. Policies**

Employee agrees to adhere to all Company rules and policies which are located and can be found at <u>Home - Canopy Growth Intranet (lumapps.com).</u> Company reserves the right to revise or revoke Company rules and policies, or to introduce new rules and policies, as Company may deem necessary from time to time, and Employee will also be required to abide by any changes in the rules and policies, once they come into effect.

In particular, and without limiting the generality of the foregoing, although set out in a separate Company policy, please note that all equipment and other physical property furnished to you by the Company which is used by you during the course of your employment with the Company is the sole property of the Company (including but not limited to any Company laptops and servers and mobile devices). You understand and agree that as the owner of this Company property: (i) the Company has the right to review and monitor anything contained thereon, without notice; and (ii) you shall have no expectation of privacy with respect to documents and information transmitted through or stored on such Company property. **<u>In addition, please note that any personal cell phone or device used by you for work purposes, in full or in part, during the course of your employment may be subject to: (i) the Company's review of anything contained thereon that may relate to the business of the Company or the conduct of your employment, without notice; and (ii) you shall have no expectation of privacy with respect to any Company related documents and information transmitted through or stored on your cell phone or personal device to the extent such document or information transmitted relates to the business of the Company</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. Compensation and Benefits**

**(a)** **Base Salary** 

Employee will be paid a base salary of four hundred and fifty thousand dollars ($450,000.00) per year, subject to statutory and benefits deductions ("Base Salary").

**(b) Short-Term Incentive**

Employee will be entitled to be considered for a discretionary annual performance bonus of no more than 40% of Employee's earned and received Base Salary based on agreed upon performance objectives, which will be tied to the fiscal year. The incentive bonus will at all times be subject to the terms of the applicable Company Short-Term Incentive Plan ("STIP") and corporate scorecard, as may be amended from time to time. Notwithstanding the foregoing, to the extent that the STIP is in conflict with Section 8(b)(iv) of this Agreement, this Agreement will prevail.

**(c) Long-Term Incentive**

Employee will be eligible to participate in Canopy Growth's Amended and Restated Omnibus Incentive Plan, as approved by the Board and as amended from time to time (the "Incentive Plan").

At the discretion of the Board, you will be eligible to receive an annual long-term incentive ("LTI") award of 45% your Base Salary, which utilizes the Fair Market Value share price (as defined in the Incentive Plan) ("FMV price") on the grant date.

![](tm2533279d1_ex10-2img001.jpg)

The award may be composed of one or more of the following: stock options ("Options"), restricted stock units ("RSUs"), and/or other form of equity authorized by the Incentive Plan. The ratio of the various forms of equity (meaning the percentage of the award provided as, for example, Options versus RSUs) shall be in the complete discretion of the Board and may vary from award to award.

All such awards shall vest in accordance with the terms of the Incentive Plan unless modified by either: (a) the terms of this Agreement; or (b) the terms of the individual award.

A copy of the Incentive Plan is attached to this Agreement, and you confirm that you have had the opportunity to review it prior to the signing of this Agreement. Note that notwithstanding any terms and conditions of the Incentive Plan, all vesting rights continue through to the end of your statutory notice period under the ESA, but all other terms and conditions of the Incentive Plan remain in full force and effect. Further, it is understood and agreed that: (i) there is no vesting of options during any common law or other notice period in excess of the ESA notice period; and (ii) there is no entitlement to damages in lieu of the opportunity to vest options during any non-statutory notice period.

**(d) One-time equity grant**

Subject to Board approval and the signing of a grant agreement by Employee, on the first available trading date post-Closing on which the Company may grant equity, Employee shall be entitled to receive a one-time equity award grant equal to CAD $50,000 (the "Equity Award"), which utilizes the Fair Market Value share price (as defined in the Incentive Plan) ("FMV price") on the grant date. The Equity Award shall be granted in the form of 60% Restricted Stock Unit's ("RSU's") and 40% Stock Options ("Options"). The Equity Grant shall vest in accordance with the terms of the Incentive Plan unless modified by either: (i) the terms of this Agreement; or (ii) the terms of the individual Equity Award. The Equity Award shall vest in equal tranches of RSU's and Options, reflective of 1/3 (33%) annually, where specified dates will be specified within the grant agreement. At all times, the Grant will be subject to the terms and conditions of the Incentive Plan, except where expressly amended in this section 7(d).

**(e) Retention Bonus**

In the event that, during the first one (1) year of employment from the Effective Date, Employee does not resign their employment and is not terminated for Cause as defined in Section 8(c), Employee will earn and be provided with a retention bonus equal to twelve (12) months of Base Salary (the "Retention Bonus"). The Retention Bonus will be paid to the Employee within thirty (30) days of Employee's first anniversary of employment from the Effective Date. For greater clarity, although the Retention Bonus will not be earned and no portion of same will be owed or paid to Employee if Employee resigns his employment for any reason or is terminated for Cause at any point during the 1 year period from the Effective Date, the Retention Bonus will be paid to Employee if Employee is terminated without Cause at any point during the 1 year period from the Effective Date.

![](tm2533279d1_ex10-2img001.jpg)

**(f) Vacation Entitlement**

Except as provided under under Employment Standards, Employee will be entitled to take no more than four (4) weeks of paid vacation time per year. Such vacation time is to be scheduled with the approval of Employee's supervisor or manager and is subject to business requirements. Employee will also receive vacation pay in accordance with Employment Standards. Vacation pay will be paid to Employee by salary continuance through Employee's vacation time. Although vacation time continues to accrue during any unpaid leave of absence, vacation pay will not accrue during that period.

Any vacation time that Employee takes in any given year shall count first towards Employee's statutory allowance and then towards any additional vacation time Employee is entitled to under this Agreement. Employee is subject at all times to the Company's Canadian Vacation and Holiday Policy, as amended from time to time, including the rules preventing carryover of non-statutory vacation from one year to another.

Employee agrees that if Employee has received vacation pay before it is earned, then Company may deduct the applicable amount from any wages or other payments owing to Employee when Employee's employment ends. At all times, Employee's vacation will be subject to the terms of Company's Employee Leave Policy, as amended from time to time, except as modified by the terms of this Agreement.

**(g) Extended Health Benefits**

Employee will be entitled to apply for the health and insurance benefits, if any, offered to all eligible employees as of the Effective Date. The terms and carrier of Company's health and insurance benefits are subject to change from time to time, at Company's sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8. End of Employment**

Employee agrees that Employee's employment may be terminated in one of the following three (3) ways. These termination provisions will apply throughout the term of employment with Company regardless of any changes in salary, benefits, position, title, or job responsibilities.

**(a) Employee's Resignation**

Employee may resign from employment by giving Company four (4) weeks of written notice or such other notice as is required under Employment Standards. At Company's sole option, Company may waive the obligation for Employee to work in active employment during the period following the tendering of such notice of resignation. In the event of a waiver of the notice of resignation period, whether in full or in part, Company will provide Employee with continued regular compensation for the balance of the four (4) week notice period or other notice period required under Employment Standards, and any such waiver will not constitute constructive dismissal.

![](tm2533279d1_ex10-2img001.jpg)

**(b) Termination by Company Without Cause**

The Company shall be permitted to terminate Employee's employment for reasons other than Cause (as defined below), and for any reason not prohibited by statute, by providing Employee with only the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) statutory notice or pay in lieu of notice, and any applicable statutory severance, both of which are in accordance with and limited to the minimum requirements of Employment Standards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) an additional payment of four (4) months of Base Salary as calculated at the time of the Employee's termination (on a lump sum or salary continuance basis, at the discretion of the Company), which amount is in addition to the statutory entitlements set out in Section 8(b)(i), provided however that: (A) under no circumstances shall the entitlement under sections 8(b)(i) and (ii) taken together equal less than twelve (12) months of Base Salary (the "Notice"); and (B) the Notice shall then be subject to the mitigation requirement below;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the continuation of any statutorily prescribed benefits in accordance with and limited to the minimum requirements of Employment Standards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) whether or not it has been earned pursuant to the terms of the STIP, you will receive an partial incentive under the STIP for the fiscal year within which your employment is terminated, which will calculated on a pro-rata basis from the start of that fiscal year to the end of your statutory notice period under Employment Standards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) vacation pay accrual in accordance with and limited to the minimum requirements of Employment Standards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) any earned incentive compensation or equity in accordance with and limited to the minimum requirements of Employment Standards, notwithstanding any term to the contrary in the applicable Company incentive compensation or equity plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (vii) all wages earned to the date of notice of termination; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) any other entitlements in accordance with and limited to the minimum requirements of Employment Standards.

Employee understands and agrees that as a condition of receiving any payments pursuant to this section which exceed the statutory entitlements provided by Employment Standards, Employee shall be required to execute a release in favour of Company. Employee also understands and agrees that Employee shall be obligated to use all reasonable efforts to mitigate any and all damages suffered as a result of termination, with all remuneration received as a result of such mitigation forming a credit to those payments that are due by Company to Employee pursuant to such paragraph, which are in excess of the statutory entitlements provided under Employment Standards.

![](tm2533279d1_ex10-2img001.jpg)

Employee specifically acknowledges that by entering into this Agreement, Employee is forfeiting Employee's right to claim common law notice of termination, which may be greater than the amount of notice required to be provided to Employee pursuant to the provisions of this Agreement. Employee is advised to seek legal advice on this issue before agreeing to such limitation and understands that any such legal costs shall be borne by Employee.

**(c) Termination by Company For Cause**

Company may terminate Employee's employment for statutory cause as defined under applicable Employment Standards (which term includes any statutory definition which refers to wilful misconduct, disobedience or wilful neglect of duty) (altogether, "Cause"), in which case Company will only be required to provide Employee with such entitlements as are required under Employment Standards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9. Protection of Business Interests**

Employee is required to execute, as a part of this Agreement, a detailed Intellectual Property and Confidentiality Agreement, attached as **Schedule "B"**.

**(a) Non-Solicitation**

In recognition of the access Employee will have to Company's processes, employees, contractors, and clients, Employee agrees that during Employee's employment and for a period of six (6) months after the date of notice of resignation or notice of termination, as applicable (the "Termination Date"), Employee will not, either directly or indirectly, communicate with Company's employees, contractors, clients or prospective clients for the purpose of inducing them to end their relationship with Company.

**(b) Non-Competition**

In light of the nature of Employee's position and the close relationship Employee will have with Company's clients, it is important for Company to limit interference with Company's business. Therefore, in consideration of the termination package being offered to the Employee in section 8(b), it is agreed that during Employee's employment and for a period of twelve (12) months after the Termination Date, Employee will not, whether on Employee's own behalf or on behalf of any other person, corporation, or organization, whether or not such organization is operated for profit, work at, work for, be employed by, provide services to, engage with, or assist in any way, whether or not for remuneration, recognition, or reward any person, corporation, or organization, whether or not such organization is operated for profit, that sells or intends to sell cannabis, including hemp, and/or provides cannabis-related services or products, in any jurisdiction in which Company or its subsidiaries has operations.

**(c) Non-Disparagement**

Employee agrees that Employee will not make at any time, either during employment or at any time thereafter, any statement or permit or authorize any statement to be made which is calculated or reasonably likely to damage the reputation or cause other damage to the Company, any subsidiary or associated company or its or their employees, officers or directors. The Company agrees that the Company will not make at any time, either during employment or at any time thereafter, any statement or permit or authorize any statement to be made which is calculated or reasonably likely to damage the reputation or cause other damage to Employee. Notwithstanding the foregoing, nothing in this provision prohibits the Company from making truthful statements in connection with corporate or securities filings or in the course of litigation or regulatory hearings.

![](tm2533279d1_ex10-2img001.jpg)

**(d) Return of Company Property**

Immediately upon notice of termination or notice of resignation, Employee shall return to Company all property used by Employee in the performance of duties and all other property belonging to Company in Employee's possession or control including, without limitation, Company documents and copies thereof, laptops, monitors, phones, credit cards, keys and access cards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10. General**

This Agreement constitutes the entire employment agreement between the parties and supersedes any previous written or verbal agreements. Employee represents and warrants that Employee's employment with Company will not violate any agreement or understanding to which Employee is currently bound including any existing non-competition, non-solicitation or confidentiality agreements and including any prior agreements with MTL Cannabis Corp and any affiliates. Employee expressly understands and agrees that Change of Control provisions in his prior agreements with MTL Cannabis Corp. and any affiliates will not be engaged as a result of the Closing and will not apply to his employment with the Company. Employee further agree to indemnify and save harmless Company against all losses, costs, damages, expenses, penalties, fines and other amounts for which it may be found liable at law with respect to Employee's breach of any such agreement.

This Agreement will continue to govern Employee's employment relationship regardless of any changes to Employee's employment including, but not limited to, changes to Employee's position, duties and responsibilities, location of employment, hours of work, compensation, or benefits. Any modifications to this Agreement must be in writing and signed by both parties. No waiver of a breach of any term of this Agreement is binding unless it is in writing and signed by the party waiving it. Unless otherwise specified, the waiver will be limited to the specific breach waived. If any term of this Agreement is found to be invalid or unenforceable, in whole or in part, the validity or enforceability of any other provision will not be affected. It is understood and agreed that all provisions of this Agreement are subject to the minimum requirements of Employment Standards, such that if an employment standard as defined under Employment Standards provides for a greater right or benefit than any provision of this Agreement, then Employee will instead be provided with Employee's entitlements under Employment Standards in lieu of Employee's entitlements under this Agreement. The parties agree that they will exercise their rights and perform their obligations as provided in this Agreement, including all discretionary rights and obligations, honestly, reasonably and in good faith.

The Company is committed to the success of its employees. If Employee requires accommodation because of disability, Human Resources should be contacted immediately. The rights which accrue to the Company under this Agreement shall pass on to its successors, assigns, heirs and legal representatives, including any corporation or other business organization with which the Company may merge or consolidate or to which it may transfer substantially all of its assets.

![](tm2533279d1_ex10-2img001.jpg)

This Agreement is governed by the laws of the province in which Employee works.

This Agreement may be signed in counterparts and exchanged by digital or electronic transmission and shall be binding if so delivered.

This Agreement may be signed in counterparts and exchanged by digital or electronic transmission and shall be binding if so delivered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **11. Photograph Consent**

I hereby ***<u>consent</u>*** to having my photo published on Canopy Growth's social media outlets and acknowledge that ***<u>I have provided</u>*** my written consent by checking the box below.

◻

I hereby ***<u>do not</u>*** consent to having my photo published on Canopy Growth's social media outlets and acknowledge that ***<u>I have not provided</u>*** my written consent by checking the box below.

◻

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **12. Execution**

---

| |
|:---|
| So agreed: |
| /s/ Luc Mongeau |
| Canopy Growth Corp. |

---

I have had sufficient time to review this Agreement and have been advised to review it with a lawyer. If I did not do so, it is because I understood the terms of Canopy Growth's offer and did not feel that I needed legal advice. I understand and accept the terms of this Agreement and am signing it voluntarily.

---

| | |
|:---|:---|
| /s/ Michael Perron | December 14, 2025 |
| Michael Perron | Dated |

---

![](tm2533279d1_ex10-2img001.jpg)

**<u>SCHEDULE "A"</u>**

**<u>JOB DESCRIPTION</u>**

---

| | |
|:---|:---|
| **Position:** | Chief Operating Officer |

---

The Chief Operating Officer (COO) will be responsible for overseeing the day-to-day operational functions of the organization and driving operational excellence. This role requires a strategic leader with deep knowledge of the cannabis industry, strong business acumen, and the ability to scale operations in a rapidly evolving market.

**Responsibilities:**

**Operational Leadership:**

&nbsp;&nbsp;&nbsp;&nbsp;· Develop and implement operational
 strategies aligned with the company's vision and growth objectives.

&nbsp;&nbsp;&nbsp;&nbsp;· Provide strategic leadership and
 oversight of end-to-end operations including cultivation, manufacturing, logistics, procurement,
 planning, S&OP, and inventory management.

**Strategic Planning:**

&nbsp;&nbsp;&nbsp;&nbsp;· Collaborate with the CEO and executive
 team to define long-term goals and operational plans.

&nbsp;&nbsp;&nbsp;&nbsp;· Identify opportunities for process
 improvement and innovation.

**Compliance & Regulatory Management:**

&nbsp;&nbsp;&nbsp;&nbsp;· Ensure adherence to all cannabis regulations.

&nbsp;&nbsp;&nbsp;&nbsp;· Maintain compliance programs and
 audit processes to mitigate risk.

**Financial & Performance Management:**

&nbsp;&nbsp;&nbsp;&nbsp;· Collaborate with the CFO to manage
 budgets, forecasts, and operational KPIs.

&nbsp;&nbsp;&nbsp;&nbsp;· Drive cost optimization and efficiency
 across all business units.

**Process Improvement & Scalability:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Implement best practices across all
 operations functions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Lead initiatives to scale operations
 while maintaining product quality and consistency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Establish KPIs and metrics to track
 operational performance

**Team Leadership & Development**

&nbsp;&nbsp;&nbsp;&nbsp;· Build and mentor high-performing
 teams across multiple operational functions.

&nbsp;&nbsp;&nbsp;&nbsp;· Foster a culture of accountability,
 innovation, and continuous improvement.

![](tm2533279d1_ex10-2img001.jpg)

**<u>SCHEDULE "B"</u>**

**<u>INTELLECTUAL PROPERTY AND CONFIDENTIAL INFORMATION AGREEMENT</u>**

This Intellectual Property and Confidential Information Agreement (the "**Agreement**") is entered into between Canopy Growth Corp. (the "**Company**") and **Michael Perron** (the "**Employee**").

**WHEREAS** the Company is offering the Employee employment or continued employment and has an interest in protecting its confidential information and other proprietary information and related rights;

**AND WHEREAS** the Employee recognizes the importance of protecting the Company's confidential information and other proprietary information and related rights is a fundamental term of the Employee's employment;

**NOW THEREFORE**, in consideration of the Company hiring, promoting or continuing to employ the Employee and/or for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by the parties), the Employee and the Company hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>Definitions</u>**

"**Confidential Information**" means all of the materials and information (whether or not reduced to writing and whether or not patentable or protected by copyright) provided by the Company to the Employee, or which is available to the Employee during the course of the Employee's employment, including, without limitation the following:

&nbsp;&nbsp;&nbsp;&nbsp;· information regarding the Company's business operations,
 Developments (as defined below), methods and practices, recruiting and training policies, including
 marketing strategies, product plans (including unannounced products), product pricing, margins,
 hourly rates, per diems and information regarding the financial affairs of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;· customer lists, quotations or proposals given to customers, requirements
 of specific customers, and the names of the suppliers to the Company and the nature of the
 Company's relationships with these clients and suppliers;

&nbsp;&nbsp;&nbsp;&nbsp;· information regarding the business operations, methods and practices,
 including marketing strategies, product plans (including unannounced products), product pricing,
 margins, hourly rates and financial affairs of the Company's stakeholders;

&nbsp;&nbsp;&nbsp;&nbsp;· technical and business information of or regarding the clients,
 customers or stakeholders of the Company, obtained in order to enable or assist the Company
 in providing such clients, customers or stakeholders with products and services, including
 information regarding the business operations, methods and practices and product plans of
 such clients, customers or stakeholders;

&nbsp;&nbsp;&nbsp;&nbsp;· any other trade secret or confidential
 or proprietary information received by the Company from third parties and in the possession
 or control of the Company; and

&nbsp;&nbsp;&nbsp;&nbsp;· any other materials or information related to the Company's
 business which are not generally known to others, regardless of whether such information
 is in paper or electronic format or any other format;

![](tm2533279d1_ex10-2img001.jpg)

provided that, Confidential Information shall not include information which:

&nbsp;&nbsp;&nbsp;&nbsp;(a) is generally known or in the public
 domain at the time of disclosure;

&nbsp;&nbsp;&nbsp;&nbsp;(b) though originally Confidential Information becomes generally available
 to the public through no fault of the Employee, as of the date of its becoming part of the
 public knowledge; or

&nbsp;&nbsp;&nbsp;&nbsp;(c) is required to be disclosed by any law, regulation, governmental
 body, or authority or by court Order provided that before disclosure is made, notice of the
 requirement is provided to the Company, and to the extent possible in the circumstances,
 the Company is afforded an opportunity to dispute the requirement.

The absence of any notice indicating confidentiality on any material will not imply that same is not Confidential Information.

"**Developments**" include, without limitation any methods, processes, procedures, systems, inventions (whether patentable or not), devices, discoveries, concepts, know-how, data, databases, technology, products, software (in executable and source code formats), templates, documentation, specifications, compilations, designs, reports, trade-marks, and any enhancements, modifications, or additions to the foregoing or to any products owned, marketed or used by the Company which relate, directly or indirectly, to the Company's present or reasonably foreseeable business and which are developed, created, generated or reduced to practice by the Employee, alone or jointly with others, during the Employee's employment, whether during or after working hours and whether or not resulting from the use of the premises or property of the Company.

"**Employment**" or "employment" means any period of employment or engagement as a contractor with the Company or its acquired companies, and includes all such periods of time prior to the signing of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>Non-Disclosure of Confidential Information</u>**

At all times during and subsequent to the termination of the Employee's employment, the Employee shall keep in strictest confidence and trust the Confidential Information, the Employee shall take all necessary precautions against unauthorized disclosure of the Confidential Information, and the Employee shall not directly or indirectly disclose, allow access to, transmit or transfer the Confidential Information to a third party, nor shall the Employee copy or reproduce the Confidential Information except as may be reasonably required for the Employee to perform the Employee's duties for the Company.

Nothing contained in this Agreement limits your ability to provide information to the Ontario Securities Commission, a recognized self-regulatory organization or a law enforcement agency about an act of the Company, or person acting on behalf of the person or company, that has occurred, is ongoing or is about to occur, and that you reasonably believe is contrary to securities law or a by-law or other regulatory instrument of a recognized self-regulatory organization.

![](tm2533279d1_ex10-2img001.jpg)

Nothing contained in this Agreement limits your ability to cooperate with, testify at or otherwise assist or expressing an intention to cooperate, testify or otherwise assist in, (i) an investigation by the Ontario Securities Commission, a recognized self-regulatory organization or a law enforcement agency, or (ii) a proceeding of the Ontario Securities Commission or a recognized self-regulatory organization, or a judicial proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. <u>Restricted Use of Confidential Information</u>**

At all times during and subsequent to the termination or cessation of the Employee's employment, the Employee shall not use the Confidential Information in any manner except as reasonably required for the Employee to perform the Employee's duties for the Company.

Upon the request of the Company and in any event upon the termination or cessation of the Employee's employment, the Employee shall immediately return to the Company all materials, including all copies in whatever form, containing the Confidential Information which are in the Employee's possession or under the Employee's control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. <u>Ownership of Confidential Information and Developments</u>**

The Employee acknowledges and agrees that the Employee shall not acquire any right, title or interest in or to the Confidential Information.

The Employee agrees to make full disclosure to the Company of each Development promptly after its creation.

With the sole exception of any intellectual property owned by (and not merely licensed to) the Employee prior to the making of this Agreement, which is also enumerated by the Employee in a written from, prior to the execution of this Agreement, the Employee hereby assigns and transfers to the Company, and agrees that the Company shall be the exclusive owner of, all of the Employee's right, title and interest to each Development and any enhancement, modification, or addition to any of the intellectual property enumerated by the Employee or any of the intellectual property that is marketed or used by the Company which relate, directly or indirectly, to the Company's present or reasonably foreseeable business and which are developed, created, generated or reduced to practice by the Employee, alone or jointly with others, during the Employee's employment, whether during or after working hours and whether or not resulting from the use of the premises or property of the Company, throughout the world, including all trade secrets, patent rights, copyrights and all other intellectual property rights therein.

The Employee further agrees to cooperate fully at all times during and subsequent to the Employee's employment with respect to signing further documents and doing such acts and other things reasonably requested by the Company to confirm such transfer of ownership of rights, including intellectual property rights, effective at or after the time the Development is created and to obtain patents or copyrights or the like covering the Developments. The Employee agrees that the Company, its assignees and their licensees are not required to designate the Employee as the author of any Developments. The Employee agrees that the obligations in this section shall continue beyond the termination of the Employee's employment with respect to Developments created during the Employee's employment.

![](tm2533279d1_ex10-2img001.jpg)

The Employee acknowledges that the Company shall alone have the right to apply for, prosecute, defend and obtain Letters Patent of invention, copyright registration, industrial design registration in any and all counties of the world with respect to any such invention, discovery, development or improvement, copyright material or industrial design created.

The expense of applying for and obtaining the Letters Patent, copyright registration and industrial design registration referred to in this Agreement shall be borne entirely by the Company.

It is agreed that the Company shall not be entitled to those inventions, discoveries, developments and improvements made by the Employee prior to the time the Employee was engaged in employment by the Company; it being understood and agreed that the inventions, discoveries, developments and improvements disclosed by the Employee to the Company constitutes the whole of the inventions, discoveries, developments and improvements made by the Employee, and the Employee hereby acknowledges that there are no inventions, discoveries, developments and improvements made prior to the employment of the Employee by the Company and which are the property of the Employee other than those that are so disclosed.

The Employee hereby grants a power of attorney to the Company to have the Company execute on the Employee's behalf all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company and its successors, assigns and nominees sole and exclusive rights, title and interest in and to such Developments, and any copyrights, patents, trade-marks, industrial designs (design patents), topographies (mask work rights) or other intellectual property rights relating thereto.

The Employee hereby waives in whole all moral rights which the Employee may have in the Developments, including the right to the integrity of the Developments, the right to be associated with the Developments, the right to restrain or claim damages for any distortion, mutilation or other modification of the Developments, and the right to restrain use or reproduction of the Developments in any context and in connection with any product, service, cause or institution. The Employee will confirm any such waiver from time to time as requested by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. <u>No Conflicting Obligations</u>**

The Employee acknowledges and represents to the Company that the Employee's performance during the period of the Employee's employment shall not breach any agreement or other obligation to keep confidential the proprietary information of any prior employer or client of the Employee or any other third party. The Employee further acknowledges and represents that the Employee is not bound by any agreement or obligation with any third party that conflicts with any of the Employee's obligations under this Agreement.

![](tm2533279d1_ex10-2img001.jpg)

The Employee represents and agrees that the Employee will not bring to the Company and shall not use in the performance of the Employee's work with the Company, any trade secrets, confidential information and other proprietary information of any prior employer or client of the Employee or any other third party. The Employee represents and agrees that in the Employee's work creating Developments the Employee will not knowingly infringe the intellectual property rights, including copyright, of any third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. <u>Non-Disparagement</u>**

The Employee agrees that they will not criticize, denigrate or otherwise disparage or cause disparagement of the Company or its predecessors, successors, affiliates, directors, officers or employees, including on any form of social media. The Company agrees that it will not criticize, denigrate or otherwise disparage or cause disparagement of the Employee, including on any form of social media. Notwithstanding the foregoing, nothing in this provision prohibits the Company from making truthful statements in connection with corporate or securities filings or in the course of litigation or regulatory hearings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. <u>Enforcement</u>**

The Employee acknowledges and agrees that damages may not be an adequate remedy to compensate the Company for any breach of the Employee's obligations contained in this Agreement, and accordingly the Employee agrees that in addition to any and all other remedies available to it, the Company shall be entitled to seek relief by way of a temporary or permanent injunction to enforce the obligations contained in this Agreement. Such relief shall be in addition to and not in lieu of any other remedies available the Company at law or in equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8. <u>Returning the Company Documents</u>**

The Employee agrees that upon the termination of the Employee's employment the Employee will deliver to the Company (and will not keep in the Employee's possession or deliver to anyone else) any and all Confidential Information and proprietary information including, without limitation, devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items belonging to the Company, together with any third party information received by the Employee. Notwithstanding the foregoing, the Employee shall be entitled to keep personal copies of (i) the Employee's compensation records, (ii) this Agreement, and (iii) the Employee's letter of offer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9. <u>General</u>**

This Agreement shall be governed by and construed in accordance with the laws in force in the Province of Ontario and any laws of Canada applicable thereto.

If any provision of this Agreement is wholly or partially unenforceable for any reason, such unenforceable provision or part thereof shall be deemed to be omitted from this Agreement without in any way invalidating or impairing the other provisions of this Agreement.

![](tm2533279d1_ex10-2img001.jpg)

The obligations herein may not be changed or modified, released or terminated, in whole or in part, except in writing signed by the President, Chief Legal Officer, or Chief Human Resources Officer of the Company and the Employee.

This Agreement supersedes all previous agreements, if any, between the Company and the Employee with respect to the subject matter of this Agreement. The Employee agrees, however, that this Agreement does not purport to set forth all of the terms and conditions of the Employee's employment and the Employee has other obligations to the Company that are not set forth in this Agreement.

The rights and obligations under this Agreement shall survive the termination of the Employee's employment and shall enure to the benefit of and shall be binding upon (i) the Employee's heirs and personal representatives; (ii) the successors and assigns of the Employee; and (iii) the successors and assigns of the Company.

**THE EMPLOYEE HAS READ THIS AGREEMENT, UNDERSTANDS IT, HAS HAD THE OPPORTUNITY TO OBTAIN INDEPENDENT LEGAL ADVICE IN RESPECT OF IT, AND AGREES TO ITS TERMS**.

The Employee acknowledges having received a fully executed copy of this Agreement.

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the 14 day of December, 2025.

---

| | |
|:---|:---|
| /s/ Michael Perron | /s/ Michael Perron |
| Michael Perron | Michael Perron |
| Canopy Growth Corp. | Canopy Growth Corp. |
| By: | /s/ Luc Mongeau |
|  | Luc Mongeau |
|  | Chief Executive Officer |

---

## Exhibit 23.1

**Exhibit 23.1**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the use in this Current Report on Form 8-K dated December 15, 2025 and to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-279949) and Registration Statements on Form S-8 (Nos. 333-229352, 333-251379 and 333-275167) of Canopy Growth Corporation, of our auditor's report dated July 21, 2025 with respect to the consolidated financial statements of MTL Cannabis Corp. as at March 31, 2025 and March 31, 2024, and the related consolidated statements of income and comprehensive income, changes in shareholders' equity and cash flows and the notes to the consolidated financial statements for each of the years in the two-year period ended March 31, 2025, as filed with the United States Securities Exchange Commission.

**/s/ MNP LLP**

Chartered Professional Accountants

December 15, 2025

Montreal, Canada

## Exhibit 99.1

**Exhibit 99.1**

*This news release constitutes a "designated news release" for the purposes of Canopy Growth's prospectus supplement dated August 29, 2025 to its short form base shelf prospectus dated June 5, 2024*

*All financial amounts in this press release are expressed in Canadian dollars.*

**Canopy Growth to Acquire MTL Cannabis;<br> Transaction Expected to Create Canada's Leading Medical Cannabis Business and Enhance Capacity to Serve Growing International Demand**

Highly accretive business combination expected to generate significant run-rate synergies of approximately $10 million within 18 months

Strengthens Canopy Growth's presence in Québec with an opportunity to expand national distribution of MTL's high-quality, budtender-recommended product portfolio<sup>2</sup>

MTL's core management team is expected to join Canopy Growth to drive cultivation excellence and enhance the Company's product quality and operational performance

Implied consideration of $0.91 per MTL Share based on the closing price of Canopy Growth Shares on the TSX as of December 12, 2025. Represents a 45% premium to the average 20-day VWAP of MTL Shares on the CSE as of December 12, 2025

**SMITHS FALLS, ON and POINTE-CLAIRE, QC** **— December 15, 2025** — Canopy Growth Corporation ("Canopy Growth" or the "Company") (TSX: WEED) (Nasdaq: CGC) and MTL Cannabis Corp. ("MTL Cannabis" or "MTL") (CSE: MTLC) (OTCQX: MTLNF) are pleased to announce that they have entered into a definitive arrangement agreement (the "Arrangement Agreement") pursuant to which Canopy Growth will acquire all of the issued and outstanding common shares of MTL (the "MTL Shares") and will settle all debt and debt-like instruments owed by MTL, in a transaction valued at approximately $125 million on a fully-diluted equity basis (the "Transaction") and approximately $179 million on an enterprise value ("TEV") basis. Under the terms of the Arrangement Agreement, each shareholder of MTL (an "MTL Shareholder") will receive fixed consideration for each MTL Share equal to: (i) 0.32 of a common share of Canopy Growth (each whole share, a "Canopy Growth Share"), and (ii) $0.144 in cash.

MTL was founded by Québec-based entrepreneurs and brothers, Richard and Michel Clément, who built the company around a deep commitment to cultivating high-quality cannabis flower. The quality of the cannabis products produced by MTL's disciplined, craft-driven cultivation approach has earned national recognition, including being named Canada's #1 budtender-recommended brand in a 2024 Brightfield Study<sup>1</sup>. MTL brings proven operations excellence, loyal consumer demand, and a track record of producing cannabis that performs in market. Canopy Growth intends to leverage the expertise of the MTL team as it continues to elevate its cannabis product portfolio.

"MTL brings skilled operators, strong brands, and a profitable business that will strengthen our leadership in Canada's medical market and deepens our presence in key Canadian adult-use markets, including Québec. Their cultivation expertise, combined with our national scale, positions us to improve product quality, expand supply, and accelerate our path to profitable growth. Together, we're building a stronger, more competitive Canadian business for the long term," said Luc Mongeau, Chief Executive Officer, Canopy Growth

1. Recognized as Canada's #1 budtender-recommended brand in the 2024 Brightfield Study, Brightfield Group, Canadian Budtender Study 2024 (in partnership with O2O). Findings based on a survey of ~670 Canadian budtenders across multiple provinces in Canada.

"MTL was built on the idea that high-quality flower, grown with care and consistency, will always earn the trust of consumers and patients. Joining Canopy Growth gives us the platform to bring that philosophy to more Canadians. Our respective portfolios are highly complementary, and we see a strong opportunity to expand MTL's reach through Canopy Growth's national distribution and retail relationships. We're incredibly proud of what our team has built and look forward to working with Canopy Growth to continue elevating Canadian cannabis," said Richard Clément, Co-Founder and Chief Cultivation Officer, MTL Cannabis

**<u>Key Transaction Highlights</u>**

**Expected to elevate Canopy Growth to the leading position in Canada's medical cannabis market**

MTL's complementary patient network, strategically located clinics under the Canada House brand, and established online medical channel, Abba Medix, expands Canopy Growth's ability to reach and support patients nationwide. With the addition of MTL, Canopy Growth's Canadian medical cannabis business is expected to establish the combined company as the leading medical cannabis provider in Canada.

**Leveraging MTL's production assets to bolster flower supply for Canadian and international markets**

Canopy Growth intends to fully integrate MTL's cultivation and post-harvest assets into its supply chain. The resulting increase in high-quality flower supply is expected to enhance the Company's ability to meet growing demand in the European medical cannabis market and support continued category growth in Canada.

**Strengthens Canopy Growth's presence in Québec, Canada's second-largest cannabis market**

The Transaction provides Canopy Growth with a more significant operational, brand and product footprint in Québec, including two cultivation facilities, as well as the high-quality cannabis flower and hash products sold under the MTL and Québec-exclusive R'Belle brands. The Transaction is expected to meaningfully enhance the Company's ability to serve Québec's adult-use consumers.

**Improves Canopy Growth's market ranking in core Canada adult-use product categories**

MTL's award-winning<sup>2</sup>, budtender-recommended brand portfolio<sup>3</sup> holds #1 national market share in upper mainstream flower<sup>4</sup> and #4 national market share in upper mainstream pre-roll joints ("PRJ")<sup>5</sup>. The Transaction establishes a combined company with the #7 position in total adult-use cannabis market share<sup>6</sup>. Canopy Growth intends to leverage its broad distribution network and key relationships to expand the distribution of MTL's flower, PRJ and hash product portfolio in British Columbia, Alberta, and Ontario.

2. Brand of the Year at the 2024 Grow Up Conference, Toronto, Canada

3. Recognized as Canada's #1 budtender-recommended brand in the 2024 Brightfield Study, Brightfield Group, Canadian Budtender Study 2024 (in partnership with O2O). Findings based on a survey of ~670 Canadian budtenders across multiple provinces in Canada.

4. Calculated using the Company's internal proprietary market analysis tool that applies sales data supplied by third-party providers and government agencies (last 13 weeks ended November 2, 2025).

5. Calculated using the Company's internal proprietary market analysis tool that applies sales data supplied by third-party providers and government agencies (last 13 weeks ended November 2, 2025).

6. Calculated using the Company's internal proprietary market analysis tool that applies sales data supplied by third-party providers and government agencies (last 13 weeks ended November 2, 2025).

**Accretive Transaction expected to support Canopy Growth's goal of achieving positive adjusted EBITDA**

Upon closing of the Transaction, MTL's profitable, on an adjusted EBITDA basis, cash-generating business will be integrated into Canopy Growth's ecosystem. MTL has previously reported net revenue of $84 million<sup>7</sup>, 51% gross margin before fair value adjustments<sup>8</sup>, and $11 million in operating cash flow<sup>9</sup> in the trailing twelve-month period ended September 30, 2025 ("TTM period<sup>"</sup>). The Transaction is expected to achieve potential cost synergies estimated at approximately $10 million, on an annualized basis, over a period of 18 months, which are expected to be realized from anticipated operating efficiencies and corporate integration. With MTL's reported strong gross margin performance and positive cash flow from operations<sup>10</sup> and the anticipated post-Transaction cost synergies, the acquisition of MTL is expected to be materially accretive to Canopy Growth's overall financial performance. Combined with the progress that Canopy Growth has made to reduce operating expenses during the fiscal year ended March 31, 2026, reported at over $20 million in expense reductions on an annualized basis as of the end of the six-month period ended September 30, 2025, the Company expects that the Transaction will support its goal of achieving positive adjusted EBITDA.

**Strengthen Canopy Growth's leadership capabilities through retention of key MTL management**

The Company expects to retain core members of MTL's leadership team, including its experience in cultivation and operations. MTL has proven expertise in high-quality flower production, genetics selection, supply chain management, and facility operations. This will complement Canopy Growth's existing capabilities and reinforce operational discipline through integration and ongoing cultivation improvement.

**Further Benefits to MTL Shareholders**

**MTL Shareholders receive attractive premium**

The Transaction provides MTL Shareholders with a premium per MTL Share of approximately 45% based on the average 20-day volume weighted average trading price of the MTL Shares on the Canadian Stock Exchange and the Canopy Growth Shares on the Toronto Stock Exchange (the "TSX") as of December 12, 2025.

**Provides MTL Shareholders enhanced and effectively immediate liquidity**

The equity component of the consideration payable pursuant to the Transaction allows MTL Shareholders to benefit from the significantly greater liquidity of Canopy Growth Shares relative to MTL Shares. Canopy's average daily trading volume is in excess of $35 million per day, providing significant liquidity and monetizable value for MTL Shareholders.

7 TTM Net revenue is calculated using information provided in MTL's financial results reported for the three-month periods ended September 30, 2025, June 30, 2025, March 31, 2025 and December 31, 2024 as disclosed in MTL's financial statements filed under MTL's profile on SEDAR+ at www.sedarplus.ca.

8 TTM Gross margin is calculated using information provided in MTL's financial results reported for the three-month periods ended September 30, 2025, June 30, 2025, March 31, 2025 and December 31, 2024 as disclosed in MTL's financial statements filed under MTL's profile on SEDAR+ at www.sedarplus.ca.

9 TTM operating cash flow is calculated using information provided in MTL's financial results reported for the three-month periods ended September 30, 2025, June 30, 2025, March 31, 2025 and December 31, 2024 as disclosed in MTL's financial statements filed under MTL's profile on SEDAR+ at www.sedarplus.ca.

10 https://www.sedarplus.ca/csa-party/records/document.html?id=06ea4f728220b9b0bb9fa6ae051ba79c8e8162dd75d776b3f2d029eb870811f2, https://www.sedarplus.ca/csa-party/records/document.html?id=a471f82311c57574dd55869ee0f64c93f806880710f5ee0b42046815379c90b4

**MTL Shareholders gain greater exposure to global cannabis market**

Through the equity component of the consideration payable pursuant to the Transaction, MTL Shareholders receive exposure to Canopy Growth's diversified global cannabis platform outside of Canada through principal operations in Europe and Australia and the highly differentiated, and indirect exposure, into the United States, the largest cannabis market in the world, through its unconsolidated, non-controlling interest in Canopy USA, LLC ("Canopy USA").

**<u>Transaction Details</u>**

Pursuant to the terms of the Arrangement Agreement, MTL Shareholders will receive 0.32 of a Canopy Growth Share and $0.144 in cash in exchange for each MTL Share held. With 137 million MTL Shares outstanding on a fully-diluted basis as of December 12, 2025, the total consideration paid for all outstanding MTL Shares is approximately $125 million, not including the deemed value of up to 2,956,391 Canopy Growth Shares being issued under the Arrangement (as defined below) to certain former shareholders (the "MC Shareholders") of Montreal Cannabis Medical, Inc. ("MC"), which will be subject to an 18-month restriction on transfer, in exchange for a release of all prior obligations owing to the former MC Shareholders in connection with MTL's prior acquisition of MC.

The Transaction will be effected by way of a court-approved plan of arrangement under the *Canada Business Corporations Act* (the "Arrangement"), requiring the approval of (i) at least two-thirds of the votes cast by the MTL Shareholders; and (ii) a simple majority of the votes cast by MTL Shareholders excluding for this purpose the votes attached to MTL Shares owned and/or controlled by any MTL Shareholders required to be excluded under Multilateral Instrument 61-101 *Protection of Minority Security Holders in Special Transactions,* voting at a special meeting of shareholders to consider the Transaction expected to be held in the first calendar quarter of 2026.

In connection with the Transaction, Canopy Growth has entered into irrevocable voting support agreements with certain directors and officers and certain key shareholders of MTL Cannabis (the "Support and Lock-Up Agreements"), with such MTL Shareholders representing approximately 75% of the issued and outstanding MTL Shares. The Support and Lock-Up Agreements also contain a lock-up provision (the "Lock-Up"), pursuant to which each such key shareholder of MTL Cannabis has agreed, subject to limited exceptions, not to, among other things, sell, transfer or otherwise dispose of Canopy Growth Shares (or other Canopy Growth securities convertible or exercisable into Canopy Growth Shares) such key shareholder of MTL Cannabis receives pursuant to the Arrangement (the "Locked-Up Securities") until (a) with respect to 10% of such Locked-Up Securities, three months after the effective date of the Arrangement (the "Effective Date"), with respect to 20% of the Locked-Up Securities, six months after the Effective Date, with respect to 20% of the Locked-Up Securities, nine months after the Effective Date, and with respect to 50% of the Locked-Up Securities, 12 months after the Effective Date. Approximately 72% of the Canopy Growth Shares to be issued for the issued and outstanding MTL Shares pursuant to the Arrangement are subject to the Lock-Up.

In addition, Canopy Growth entered into consulting agreements (the "Consulting Agreements") with Richard and Michel Clément conditional upon closing of the Transaction. The Consulting Agreements provide for, among other things, the grant of certain performance stock units to each of Richard and Michel Clément in the amount of $2,000,000. Canopy Growth also entered into an employment agreement with Michael Perron, MTL's Chief Executive Officer, pursuant to which Michael Perron will be appointed Chief Operating Officer of Canopy Growth upon closing of the Transaction and, subject to approval of the board of directors of Canopy Growth, provides for, among other things, the grant of (i) certain restricted stock units in the amount of $30,000; and (ii) certain options with an aggregate exercise price as of the date of grant of $20,000.

In addition to MTL Shareholder and court approvals, the Transaction is subject to applicable regulatory approvals including, but not limited to, TSX approval and approval under the *Competition Act* (Canada) and the satisfaction of certain other closing conditions customary in transactions of this nature. The Arrangement Agreement includes customary provisions, including non-solicitation, "fiduciary out" and "right to match" provisions as well as a termination fee of $4 million payable by MTL Cannabis to Canopy Growth in certain specified circumstances.

Assuming timely receipt of all necessary court, MTL Shareholder, regulatory and other third-party approvals and the satisfaction of all other conditions, closing of the Transaction is expected to occur before the end of February 2026.

A full description of the Transaction will be set forth in the management information circular of MTL Cannabis (the "Circular"), which will be mailed or made available to MTL Shareholders and filed with the Canadian securities regulators on SEDAR at www.sedarplus.ca.

**<u>Approvals and Recommendation</u>**

The Transaction was unanimously approved by the Board of Directors of Canopy Growth, as well as the Board of Directors of MTL Cannabis (with conflicted directors abstaining), following the unanimous recommendation of a special committee of the MTL Board of Directors (the "MTL Special Committee"). The MTL Special Committee and the Board of Directors unanimously recommended that MTL Shareholders vote in favour of the Transaction after determining the Transaction is fair to the MTL Shareholders and is in the best interests of MTL Cannabis.

Haywood Securities Inc. provided the MTL Cannabis Special Committee with an opinion that, as of December 14, 2025 and based upon and subject to the various assumptions, limitations, qualifications and other matters set forth in such opinion, the consideration to be received by the MTL Shareholders pursuant to the Transaction is fair, from a financial point of view, to MTL Shareholders.

None of the securities to be issued pursuant to the Transaction have been or will be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and any securities issuable in the Transaction are anticipated to be issued in reliance upon the exemption from such registration requirements provided by Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

**<u>Advisors and Counsel</u>**

Canaccord Genuity Corp. is acting as exclusive financial advisor to Canopy Growth. Cassels Brock & Blackwell LLP and Paul Hastings LLP are acting as legal counsel to the Company.

Haywood Securities Inc. is acting as exclusive financial advisor to the MTL Special Committee and provided a fairness opinion to the MTL Special Committee. Farris, LLP is acting as legal counsel to MTL Cannabis.

###

**Canopy Growth Contacts**

**Media Contact:** <br> Alex Thomas<br> Sr. Director, Communications

<u>alex.thomas@canopygrowth.com</u>

**Investor Contact:**<br> Tyler Burns<br> Director, Investor Relations<br> <u>tyler.burns@canopygrowth.com</u>

**MTL Cannabis Contacts**

Michael Perron

Chief Executive Officer

investors@mtlcannabis.ca

**About Canopy Growth**

Canopy Growth is a world-leading cannabis company dedicated to unleashing the power of cannabis to improve lives.

Through an unwavering commitment to consumers, Canopy Growth delivers innovative products from owned and licensed brands including Tweed, 7ACRES, DOJA, Deep Space, and Claybourne, as well as category defining vaporization devices by Storz & Bickel. In addition, Canopy Growth serves medical cannabis patients globally with principal operations in Canada, Europe and Australia.

Canopy Growth has also established a comprehensive ecosystem to realize the opportunities presented by the U.S. THC market through an unconsolidated, non-controlling interest in Canopy USA. Canopy USA's portfolio includes ownership of Acreage Holdings, Inc., a vertically integrated multi-state cannabis operator with operations throughout the U.S. Northeast and Midwest, as well as ownership of Wana Wellness, LLC, The Cima Group, LLC, and Mountain High Products, LLC, a leading North American edibles brand, and majority ownership of Lemurian, Inc., a California-based producer of high-quality cannabis extracts and clean vape technology.

At Canopy Growth, we're shaping a future where cannabis is embraced for its potential to enhance well-being and improve lives. With high-quality products, a commitment to responsible use, and a focus on enhancing the communities where we live and work, we're paving the way for a better understanding of all that cannabis can offer.

For more information visit <u>www.canopygrowth.com</u>.

References to information included on, or accessible through, our website do not constitute incorporation by reference of the information contained at or available through our website, and you should not consider such information to be part of this press release.

**About MTL Cannabis**

MTL Cannabis Corp. is the parent company of MC, a licensed producer operating from a 76,000 sq ft licensed indoor grow facility in Pointe Claire, Québec; Abba Medix Corp., a licensed producer in Pickering, Ontario that operates a leading medical cannabis marketplace; IsoCanMed Inc., a licensed producer in Louiseville, Québec growing best-in-class indoor cannabis, in its 64,000 sq. ft. production facility; and Canada House Clinics Inc., operating clinics across Canada that work directly with primary care teams to provide specialized cannabinoid therapy services to patients suffering from simple and complex medical conditions.

As a flower-first company built for the modern street, MTL Cannabis uses proprietary hydroponic growing methodologies supported by handcrafted techniques to produce products that are truly craft for the masses. MTL Cannabis focuses on craft quality cannabis products, including lines of dried flower, pre-rolls and hash marketed under the "MTL Cannabis", "Low Key by MTL" and "R'belle" brands for the Canadian market through nine distribution arrangements with various provincial cannabis distributors. MTL Cannabis has also developed several export channels for bulk and unbranded Good Agricultural and Collection Practice quality cannabis.

It is MTL's goal for Abba Medix Corp. to become the leading distributor of medical cannabis in Canada and for Canada House Clinics to be the leading Canadian provider of medical cannabis clinic services.

For further information, please visit www.mtlcorp.ca/ or the Company's public filings at <u>www.sedarplus.ca</u>.

**Notice Regarding Forward Looking Statements**

*This press release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking statements and information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Canopy Growth, MTL or their respective subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements or information contained in this press release. Examples of such statements include statements with respect to the timing and outcome of the Arrangement, the anticipated benefits of the Transaction, the retention of MTL's core management team, the estimated potential synergies as a result of the Transaction, the anticipated timing of the MTL special meeting of shareholders and the closing of the Transaction, the satisfaction or waiver of the closing conditions set out in the Arrangement Agreement, including receipt of all regulatory approvals. Certain of the forward-looking statements contained herein concerning the industries in which Canopy Growth and MTL conduct business are based on estimates prepared using data from publicly available governmental sources, market research, industry analysis and on assumptions based on data and knowledge of these industries, which management of Canopy Growth and MTL believe to be reasonable. However, although generally indicative of relative market positions, market shares and performance characteristics, such data is inherently imprecise. The industries in which Canopy Growth and MTL conduct business involve risks and uncertainties that are subject to change based on various factors, which are described further below.*

*Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including risks relating to the dilutive impact of the Transaction and future resales of Canopy Growth Shares in the public market by the MTL Shareholders, which may negatively affect Canopy Growth Shares' stock price; assumptions as to the time required to prepare and mail meeting materials to MTL Shareholders; the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court and MTL Shareholder approvals; the ability of the parties to satisfy, in a timely manner, the other conditions to the completion of the Transaction; the prompt and effective integration of Canopy Growth's and MTL's businesses and the ability to achieve the anticipated synergies contemplated by the Transaction; inherent uncertainty associated with financial or other projections; risks related to the value of Canopy Growth Shares to be issued pursuant to the Transaction; the diversion of management time on Transaction-related issues; risks relating to the overall macroeconomic environment, which may impact customer spending, costs and margins, including tariffs (and related retaliatory measures); the levels of inflation, and interest rates; expectations regarding future investment, growth and expansion of Canopy Growth's and MTL's operations; regulatory and licensing risks; changes in general economic, business and political conditions, including changes in the financial and stock markets; legal and regulatory risks inherent in the cannabis industry, including the global regulatory landscape and enforcement related to cannabis, risks related to the integration of acquired businesses; the timing and manner of the legalization of cannabis in the United States; additional dilution; political risks and risks relating to regulatory change, including with respect to reimbursement rates in the medical cannabis market; risks relating to anti-money laundering laws; compliance with extensive government regulation and the interpretation of various laws, regulations and policies; public opinion and perception of the cannabis industry; and such other risks contained in the public filings of Canopy Growth filed with Canadian securities regulators and available under Canopy's profile on SEDAR+ at www.sedarplus.ca and with the United States Securities and Exchange Commission through EDGAR at www.sec.gov/edgar, including the factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025 and the risk factor discussed under the heading "Item 1A. Risk Factors" in the Company's Form 10-Q for the quarterly period ended September 30, 2025, and in the public filings of MTL filed with Canadian securities regulators and available under MTL's profile on SEDAR+ at www.sedarplus.ca.*

*In respect of the forward-looking statements and information concerning the anticipated benefits and completion of the Transaction and the anticipated timing for completion of the Transaction, Canopy Growth and MTL have provided such statements and information in reliance on certain assumptions that they believe are reasonable at this time. Although Canopy Growth and MTL believe that the assumptions and factors used in preparing the forward-looking information or forward-looking statements in this press release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. Should one or more of the foregoing risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Canopy Growth and MTL have attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The forward-looking information and forward-looking statements included in this press release are made as of the date of this press release and Canopy Growth and MTL do not undertake any obligation to publicly update such forward-looking information or forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities laws. Readers are cautioned not to put undue reliance on any forward-looking statement. Forward-looking statements contained in this press release are expressly qualified by this notice regarding forward-looking statements.*

*MTL Cannabis prepares its financial statements in accordance with international financial reporting standards ("IFRS") whereas Canopy Growth prepares its financial statements in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). There are differences in the reporting frameworks between IFRS and U.S. GAAP and accordingly, the financial statements of MTL Cannabis may not be comparable with those of Canopy Growth.*

## Exhibit 99.2

**Exhibit 99.2**

![](tm2533279d1_ex99-2img001.jpg)

Canopy Growth to Acquire MTL Cannabis Expected to Create Canada's Leading Medical Cannabis Business and Enhance Capacity to Serve Growing International Demand December 15, 2025

![](tm2533279d1_ex99-2img002.jpg)

2 DISCLAIMERS AND CAUTIONARY STATEMENTS Forward - Looking Information (1/2) Unless otherwise noted or the context indicates otherwise, references in this presentation (this "Presentation") to the "Company" or "Canopy Growth," refer to Canopy Growth Corporation and its direct and indirect wholly - owned subsidiaries and investments accounted for by the equity method . This Presentation relates to Canopy Growth's planned acquisition of MTL Cannabis Corp . ("MTL Cannabis" or "MTL") (CSE : MTLC) (OTCQX : MTLNF) pursuant to an Arrangement Agreement, dated December 14 , 2025 (the Arrangement Agreement") by way of a court - approved plan of arrangement under the Canada Business Corporations Act (the "Arrangement") . Canopy Growth's acquisition of MTL pursuant to the Arrangement Agreement is referred to herein as the "Transaction") This presentation contains "forward - looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward - looking information" within the meaning of applicable Canadian securities legislation . Often, but not always, forward - looking statements and information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved . Forward - looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Canopy Growth, MTL or their respective subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward - looking statements or information contained in this Presentation . Examples of such statements include statements with respect to the timing and outcome of the Arrangement, the anticipated benefits of the Transaction, the retention of MTL's core management team, the estimated potential synergies as a result of the Transaction, the anticipated timing of the MTL special meeting of shareholders and the closing of the Transaction, the satisfaction or waiver of the closing conditions set out in the Arrangement Agreement, including receipt of all regulatory approvals . Certain of the forward - looking statements contained herein concerning the industries in which we conduct our business are based on estimates prepared by us using data from publicly available governmental sources, market research, industry analysis and on assumptions based on data and knowledge of these industries, which we believe to be reasonable . However, although generally indicative of relative market positions, market shares and performance characteristics, such data is inherently imprecise . The industries in which we conduct our business involve risks and uncertainties that are subject to change based on various factors, which are described further below . Risks, uncertainties and other factors involved with forward - looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward - looking information, including risks relating to the dilutive impact of the Transaction and future resales of Canopy Growth Shares in the public market by the MTL Shareholders, which may negatively affect Canopy Growth Shares' stock price assumptions as to the time required to prepare and mail meeting materials to MTL Shareholders ; the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court and MTL Shareholder approvals ; the ability of the parties to satisfy, in a timely manner, the other conditions to the completion of the Transaction ; the prompt and effective integration of Canopy Growth's and MTL's businesses and the ability to achieve the anticipated synergies contemplated by the Transaction ; inherent uncertainty associated with financial or other projections ; risks related to the value of Canopy Growth Shares to be issued pursuant to the Transaction ; the diversion of management time on Transaction - related issues ; risks relating to the overall macroeconomic environment, which may impact customer spending, costs and margins, including tariffs (and related retaliatory measures) ; the levels of inflation, and interest rates ; expectations regarding future investment, growth and expansion of Canopy Growth's and MTL's operations ; regulatory and licensing risks ; changes in general economic, business and political conditions, including changes in the financial and stock markets ; legal and regulatory risks inherent in the cannabis industry, including the global regulatory landscape and enforcement related to cannabis, risks related to the integration of acquired businesses ; the timing and manner of the legalization of cannabis in the United States ;

![](tm2533279d1_ex99-2img003.jpg)

3 DISCLAIMERS AND CAUTIONARY STATEMENTS Forward - Looking Information (2/2) additional dilution ; political risks and risks relating to regulatory change, including with respect to reimbursement rates in the medical cannabis market ; risks relating to anti - money laundering laws ; compliance with extensive government regulation and the interpretation of various laws, regulations and policies ; public opinion and perception of the cannabis industry ; and such other risks contained in the public filings of Canopy Growth filed with Canadian securities regulators and available under Canopy's profile on SEDAR+ at www . sedarplus . ca and with the United States Securities and Exchange Commission through EDGAR at www . sec . gov/edgar, including the factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10 - K for the fiscal year ended March 31 , 2025 and the risk factor discussed under the heading "Item 1 A . Risk Factors" in the Company's Form 10 - Q for the quarterly period ended September 30 , 2025 , and in the public filings of MTL filed with Canadian securities regulators and available under MTL's profile on SEDAR+ at www . sedarplus . ca . In respect of the forward - looking statements and information concerning the anticipated benefits and completion of the Transaction and the anticipated timing for completion of the Transaction, Canopy Growth and MTL have provided such statements and information in reliance on certain assumptions that they believe are reasonable at this time . Although Canopy Growth and MTL believe that the assumptions and factors used in preparing the forward - looking information or forward - looking statements in this Presentation are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all . Should one or more of the foregoing risks or uncertainties materialize, or should assumptions underlying the forward - looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected . Although Canopy Growth and MTL have attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended . The forward - looking information and forward - looking statements included in this Presentation are made as of the date of this Presentation and Canopy Growth and MTL do not undertake any obligation to publicly update such forward - looking information or forward - looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities laws . Readers are cautioned not to put undue reliance on any forward - looking statement . Forward - looking statements contained in this Presentation are expressly qualified by this notice regarding forward - looking statements . MTL Cannabis prepares its financial statements in accordance with international financial reporting standards ("IFRS") whereas Canopy Growth prepares its financial statements in accordance with U . S . generally accepted accounting principles ("U . S . GAAP") . There are differences in the reporting frameworks between IFRS and U . S . GAAP and accordingly, the financial statements of MTL Cannabis may not be comparable with those of Canopy Growth . All financial information in this Presentation is reported in Canadian dollars unless otherwise indicated .

![](tm2533279d1_ex99-2img004.jpg)

4 Strategic Rationale Expected to create Canada's leading medical cannabis business H arness es MTL's cultivation capabilities to expand flower supply for global markets Enhances Canopy Growth's position in key Canadian adult - use categories Bolsters leadership strength through retention of critical MTL management Strengthens Canopy Growth's presence in Quebec, Canada's second - largest cannabis market Expected to accelerate Canopy Growth's path to positive adjusted EBITDA MTL Shareholders receive attractive premium Provides MTL Shareholders enhanced and effectively immediate liquidity MTL Shareholders gain greater exposure to global cannabis market

![](tm2533279d1_ex99-2img005.jpg)

5 • Cannabis Expertise - Proven cultivator of craft quality cannabis flower at commercial scale • Québec Presence – Robust operational and brand/product footprint in Quebec • Award - Winning Brand - Brand of the Year at the 2024 Grow Up Conference 1 , Recognized as Canada's #1 budtender - recommended brand 2 • Cash Flow Positive - Delivered $84 million in net revenue 3 , 51% gross margin before fair value adjustments 4 , and $11 million in operating cash flow 5 in the trailing twelve - month period ended September 30, 2025 ("TTM") MTL Cannabis: A High - Quality Acquisition 1. Brand of the Year at the 2024 Grow Up Conference, Toronto, Canada 2.Recognized as Canada's #1 budtender - recommended brand in the 2024 Brightfield Study, Brightfield Group, Canadian Budtender Stu dy 2024 (in partnership with O2O). Findings based on a survey of ~670 Canadian budtenders across multiple provinces in Canada. 3. TTM Net revenue is calculated using information provided in MTL's financial results reported for the three - month periods end ed September 30, 2025, June 30, 2025, March 31, 2025 and December 31, 2024 as disclosed in MTL's financial statements filed under MTL's profile on SEDAR+ at www.sedarplus.ca. 4 TTM Gross margin is calculated using information provided in MTL's financial results reported for the three - month periods ende d September 30, 2025, June 30, 2025, March 31, 2025 and December 31, 2024 as disclosed in MTL's financial statements filed under MTL's profile on SEDAR+ at www.sedarplus.ca. 5. TTM operating cash flow is calculated using information provided in MTL's financial results reported for the three - month peri ods ended September 30, 2025, June 30, 2025, March 31, 2025 and December 31, 2024 as disclosed in MTL's financial statements filed under MTL's profile on SEDAR+ at www.sedarplus.ca.

![](tm2533279d1_ex99-2img006.jpg)

6 Transaction SUMMARY Proposed Transaction ❖ Canopy Growth to acquire all of the issued and outstanding shares of MTL Cannabis by way of a court approved Plan of Arrangement ❖ MTL Shareholders will receive consideration for each MTL Share equal to: (i) 0.32 of a common share of Canopy Growth; and (ii) $0.144 in cash. Transaction implies a value of $0.91 per MTL Share based on the closing price of Canopy Growth Shares on the Toronto Stock Exchange ("TSX") as of December 12, 2025 ❖ The Transaction provides MTL Shareholders with a premium per MTL Share of approximately 45% based on the average 20 - day VWAP of MTL Shares on the Canadian Stock Exchange ("CSE") and Canopy Growth Shares on the TSX as of December 12, 2025 Key Approvals & Conditions ❖ Approved by the Boards of Directors of both companies ❖ MTL shareholder approval required ❖ Fairness opinion provided to MTL ❖ Regulatory and court approvals required, as well as other customary closing conditions Timing ❖ Special meeting of MTL shareholders is expected to occur in February 2026 ❖ Expected closing by the end of February 2026

![](tm2533279d1_ex99-2img007.jpg)

7 Transaction STRUCTURE AND SUPPORT Valuation Detail ❖ Total consideration is approximately $125 million for MTL Shares on a fully - diluted equity basis and approximately $179 million Enterprise Value Approvals ❖ Requires approval of at least two - thirds of the votes cast by MTL Cannabis shareholders + ❖ Simple majority of the votes cast by MTL Shareholders excluding for this purpose the votes attached to MTL Shares owned and/or controlled by any MTL Shareholders required to be excluded under Multilateral Instrument 61 - 101 Protection of Minority Security Holders in Special Transactions Support ❖ Directors, officers, and shareholders representing approximately 75% of MTL Shares have agreed to irrevocably vote in favor of the Transaction ❖ Approximately 72% of the Canopy Growth Shares to be issued for the issued and outstanding MTL Shares pursuant to the Arrangement are subject to a lock - up for a period of one year following closing, with staged releases of such Canopy Growth Shares Board Recommendation ❖ MTL Cannabis' Board of Directors recommends that MTL shareholders vote in favour

![](tm2533279d1_ex99-2img008.jpg)

8 • Canopy Growth and MTL have complementary patient networks • MTL's strategically located clinics under the Can ada House brand, and established online medical channel, Abba Medix, expands Canopy Growth's ability to reach and support patients nationwide • With the addition of MTL, Canopy Growth's Canadian medical cannabis business is expected to establish the combined company as the leading medical cannabis provider in Canada Canadian medical cannabis Market Leadership

![](tm2533279d1_ex99-2img009.jpg)

9 • Canopy Growth will leverage MTL's cultivation expertise within its supply chain to further enhance excellence in flower quality • Increase in high - quality flower supply is expected to enhance the Company's ability to meet growing demand in the European medical cannabis market and support continued category growth in Canada Leveraging MTL's production assets to bolster flower supply

![](tm2533279d1_ex99-2img010.jpg)

10 Cultivation / Production Facilities Strengthens Canopy Growth's presence in Quebec, opportunity to expand national distribution of MTL's product portfolio MTL's Quebec Presence Brands Canopy's commercial strength expected to fuel growth in MTL's brands across Canada Canopy Growth DOJA Facility Kelowna, BC Canopy Growth 7ACRES Facility Kincardine, ON MTL Cannabis Cultivation Facility Louiseville, QC MTL Cannabis Cultivation Facility Pointe - Claire, QC

![](tm2533279d1_ex99-2img011.jpg)

11 Complementary Brand Portfolio FLOWER PRE - ROLLS VAPES EDIBLES EDIBLE EXTRACTS/ CONCENTRATES LOWER MAINSTREAM VALUE 11 UPPER MAINSTREAM 1. Québec — only brand PREMIUM Denotes MTL Brand 1 1 1

![](tm2533279d1_ex99-2img012.jpg)

12 expected to support Canopy Growth's goal of achieving positive adjusted EBITDA Synergies MTL Profitable Business (TTM) Canopy Growth FY2026 Expense Reductions $10 million Expected run - rate synergies on an annualized basis, 18 - month period 9 $84 million Net Revenue 6 51% Gross Margin before fair value adjustments 7 $11 million Operating Cash Flow 8 $20+ million annualized savings 6.TTM Net revenue is calculated using information provided in MTL's financial results reported for the three - month periods ended September 30, 2025, June 30, 2025, March 31, 2025 and December 31, 2024 as disclosed in MTL's financial statements filed under MTL's profile on SEDAR+ at www.sedarplus.ca. 7. TTM Gross margin is calculated using information provided in MTL's financial results reported for the three - month periods end ed September 30, 2025, June 30, 2025, March 31, 2025 and December 31, 2024 as disclosed in MTL's financial statements filed under MTL's profile on SEDAR+ at www.sedarplus.ca. 8. TTM operating cash flow is calculated using information provided in MTL's financial results reported for the three - month peri ods ended September 30, 2025, June 30, 2025, March 31, 2025 and December 31, 2024 as disclosed in MTL's financial statements filed under MTL's profile on SEDAR+ at www.sedarplus.ca . 9. Estimated synergies are expected to be realized from, among other things, anticipated operating efficiencies and corporate in tegration. Expected

![](tm2533279d1_ex99-2img013.jpg)

13 • Retention of core members of MTL's leadership team will provide robust experience in cultivation and operations • New perspectives will enhance Canopy Growth's existing capabilities and reinforce operational discipline through integration and ongoing cultivation improvements Strengthen Canopy Growth's leadership capabilities through retention of key MTL management Rich Clément Chief Cultivation Officer Mitch Clément Chief Operating Officer Mike Perron Chief Executive Officer Luc Mongeau Chief Executive Officer Tom Stewart Chief Financial Officer Christelle Gedeon Chief Legal Officer

![](tm2533279d1_ex99-2img014.jpg)

14 THANK YOU

## Exhibit 99.3

**Exhibit 99.3**

**MTL Cannabis Corp.**

Consolidated Financial Statements

For the years ended March 31, 2025 and 2024

[Expressed in Canadian dollars]

**Independent Auditor's Report**

To the Shareholders of MTL Cannabis Corp. :

**Opinion**

We have audited the consolidated financial statements of MTL Cannabis Corp. and its subsidiaries (the "Company"), which comprise the consolidated statements of financial position as at March 31, 2025 and March 31, 2024, and the consolidated statements of income and comprehensive income, changes in shareholders' equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at March 31, 2025 and March 31, 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board.

**Basis for Opinion**

We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the consolidated financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audits of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

**Key Audit Matters**

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

***Impairment Assessment for Goodwill***<br> *Key Audit Matter Description*

The Company performs impairment testing on an annual basis, or whenever events or change in circumstances indicate that the carrying value of a cash generating unit ("CGU") might exceed its recoverable amount. The recoverable amount of a CGU is determined using the higher of its value in use and its fair value less costs of disposal. Goodwill was determined to not be impaired as a result of the Company's impairment tests as at March 31, 2025. Refer to Notes 2, 3 and 10 of the consolidated financial statements for further details.

We identified the impairment assessment for goodwill to be a key audit matter. There was a high degree of auditor judgment required, including the involvement of internal valuation specialists, to evaluate the significant assumptions used by management in determining the recoverable amount including, but not limited to, forecasted revenue, gross margin, operating expenses, long-term growth rates, and discount rates. The sensitivity of reasonable changes to the significant assumptions could have a significant impact on the determination of the recoverable amount of the CGUs and the Company's determination of impairment.

---

| | |
|:---|:---|
| **MNP S.E.N.C.R.L., s.r.l./LLP** | **MNP S.E.N.C.R.L., s.r.l./LLP** |
| 1155, boulevard René-Lévesque Ouest, 23e étage, Montréal (Québec) H3B 2K2 | 1.888.861.9724 Tél. : 514.861.9724 Téléc. : 514.861.9446 |
| **MNP.ca** | **MNP.ca** |

---

*Audit Response*

We responded to this matter by performing procedures in relation to the impairment assessment for goodwill. Our audit work in relation to this included, but was not restricted to, the following:

· Evaluated the reasonableness of key assumptions
established by management, such as forecasted revenue, gross margin, operating expenses, long-term growth rates and discount rates, through
assessing historical and actual performance and external market and industry data;

· Performed a sensitivity analysis on the key assumptions
to assess the impact of reasonable changes on the determination of the recoverable amounts;

· Involved internal valuation specialists with
specialized skills and knowledge to evaluate the reasonableness of the Company's impairment model;

· With the assistance of internal valuation specialists,
evaluated the reasonableness of the discount rate and other inputs used in the impairment analysis based on industry data and other benchmarks;
and

· Assessed the appropriateness of the disclosures
in the notes to the consolidated financial statements.

***Valuation of Biological Assets and Inventory***

 ****

*Key Audit Matter Description*

Biological assets are measured at fair value less costs to sell. Inventory is measured at the lower of cost and net realizable value. In estimating the fair value of biological assets, management is required to make a number of estimates, including estimating the stage of growth of the cannabis up to the point of harvest, expected yield, harvesting costs, selling costs, selling price, and the allocation of indirect costs. In estimating the fair value of final inventory values, management is required to determine an estimate of spoiled or expired inventory. Refer to Notes 2, 3, 6 and 7 of the consolidated financial statements for further details.

We identified valuation of biological assets and inventory as a key audit matter, as a high degree of auditor judgment was required to evaluate the significant assumptions and estimates made by management.

*Audit Response*

We responded to this matter by performing procedures in relation to the valuation of biological assets and inventory. Our audit work in relation to this included, but was not restricted to, the following:

· Performed a physical observation of the year-end
biological assets and inventory, validating the stage of growth of biological assets;

· Performed physical observations of the cannabis
production cycle at the Company's facilities throughout the year;

· Tested on a sample basis the value and classification
of costs as either harvesting costs, production costs, selling costs, or indirect costs;

· Tested the allocation of indirect costs on a
sample basis by assessing the appropriateness of the allocation method, cost drivers and other estimates;

· Evaluated the appropriateness of the selling
price per gram by comparing it to market data;

· Evaluated the appropriateness of the expected
yield by reperforming weigh-ins of dried grams of cannabis harvested and assessing historical data on yield per plant for each strain;

· Performed sensitivity analyses over unobservable
inputs used to determine the fair value of biological assets to assess the impact of changes in those significant unobservable inputs
on the Company's determination of fair value;

· Assessed the measurement of inventory by verifying
that the inventory was valued at the lower of cost and net realizable value and by assessing the provision for slow-moving inventory based
on its age and likelihood of sale;

![](tm2533279d1_ex99-3sp01img03.jpg)

· Evaluated the reasonableness of the expected
net selling prices based on actual sales made and the required costs to sell the inventory; and

· Assessed the appropriateness of the disclosures
in the notes to the consolidated financial statements.

**Other Information**

Management is responsible for the other information. The other information comprises Management's Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audits of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audits or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information obtained prior to the date of this auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

**Responsibilities of Management and for the Financial Statements**

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

**Auditor's Responsibilities for the Audit of the consolidated Financial Statements**

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

&nbsp;&nbsp;&nbsp;&nbsp;· Identify and assess the risks of material misstatement
of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

![](tm2533279d1_ex99-3sp01img03.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;· Obtain
 an understanding of internal control relevant to the audit in order to design audit procedures
 that are appropriate in the circumstances, but not for the purpose of expressing an opinion
 on the effectiveness of the Company's internal control.

&nbsp;&nbsp;&nbsp;&nbsp;· Evaluate
 the appropriateness of accounting policies used and the reasonableness of accounting estimates
 and related disclosures made by management.

&nbsp;&nbsp;&nbsp;&nbsp;· Conclude
 on the appropriateness of management's use of the going concern basis of accounting and,
 based on the audit evidence obtained, whether a material uncertainty exists related to events
 or conditions that may cast significant doubt on the Company's ability to continue
 as a going concern. If we conclude that a material uncertainty exists, we are required to
 draw attention in our auditor's report to the related disclosures in the consolidated financial
 statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
 are based on the audit evidence obtained up to the date of our auditor's report. However,
 future events or conditions may cause the Company to cease to continue as a going concern.

&nbsp;&nbsp;&nbsp;&nbsp;· Evaluate
 the overall presentation, structure and content of the consolidated financial statements,
 including the disclosures, and whether the consolidated financial statements represent the
 underlying transactions and events in a manner that achieves fair presentation.

&nbsp;&nbsp;&nbsp;&nbsp;· Obtain
 sufficient appropriate audit evidence regarding the financial information of the entities
 or business activities within the Company to express an opinion on the consolidated financial
 statements. We are responsible for the direction, supervision and performance of the group
 audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits and significant audit findings, including any significant deficiencies in internal control that we identify during our audits.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Walter-Armando Gomez Figueroa.

---

| | |
|:---|:---|
| Montréal, Québec<br>July 21, 2025 | ![](tm2533279d1_ex99-3sp01img02.jpg)<sup>1</sup> |

---

<sup>1</sup> By CPA auditor, public accountancy permit No. A142237

![](tm2533279d1_ex99-3sp01img03.jpg)

**MTL Cannabis Corp.**

**Consolidated Statements of Financial Position**<br> [expressed in Canadian dollars]

---

| | | | |
|:---|:---|:---|:---|
| As at March 31, |  | **2025** | 2024 |
|  | Notes | **$** | $ |
| **ASSETS** |  |  |  |
| **Current assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash |  | **5680958** |  |
| &nbsp;&nbsp;&nbsp;Trade and other receivables | 5 | **11821096** |  |
| &nbsp;&nbsp;&nbsp;Inventory | 6 | **16946417** |  |
| &nbsp;&nbsp;&nbsp;Biological assets | 7 | **2141941** |  |
| Prepaid expenses and deposits |  | **460925** |  |
|  |  | **37051337** |  |
| **Non-current assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and deposits |  | **63290** |  |
| &nbsp;&nbsp;&nbsp;Right-of-use assets, net | 8 | **11755639** |  |
| &nbsp;&nbsp;&nbsp;Property, plant and equipment, net | 9 | **18670035** |  |
| &nbsp;&nbsp;&nbsp;Intangible assets and goodwill, net | 10 | **18615383** |  |
| **TOTAL ASSETS** |  | **86155684** |  |
| **LIABILITIES** |  |  |  |
| **Current liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Trade and other payables |  | **19364554** |  |
| &nbsp;&nbsp;&nbsp;Income taxes payable |  | **695939** |  |
| &nbsp;&nbsp;&nbsp;Provision | 4 | **5000000** |  |
| &nbsp;&nbsp;&nbsp;Lease obligations | 8 | **1020568** |  |
| &nbsp;&nbsp;&nbsp;Notes payable | 11 | **14552353** |  |
| &nbsp;&nbsp;&nbsp;Borrowings | 12 | **350438** |  |
| &nbsp;&nbsp;&nbsp;Convertible debentures | 13 | **7583236** |  |
|  |  | **48567088** |  |
| **Non-current liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Lease obligations | 8 | **13874879** |  |
| &nbsp;&nbsp;&nbsp;Convertible debentures | 13 | **—** |  |
| &nbsp;&nbsp;&nbsp;Provision | 4 | **—** |  |
| &nbsp;&nbsp;&nbsp;Deferred tax liability | 19 | **1951455** |  |
|  |  | **64393422** |  |
| **SHAREHOLDERS' EQUITY** |  |  |  |
| &nbsp;&nbsp;&nbsp;Share capital | 14 | **11075877** |  |
| &nbsp;&nbsp;&nbsp;Contributed surplus | 14 | **4981294** |  |
| &nbsp;&nbsp;&nbsp;Retained earnings (deficit) |  | **5705091** |  |
|  |  | **21762262** |  |
| **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** |  | **86155684** |  |
| Contingencies | 20 |  |  |
| Subsequent events | 24 |  |  |

---

*Approved by the Board of Directors on July 18, 2025:*

<u>(Signed) Richard Clément</u> <u>(Signed) Yves Metten</u> <br> Director Director

*The accompanying notes are an integral part of these consolidated financial statements.*

**MTL Cannabis Corp.**

**Consolidated Statements of Income and Comprehensive Income**

[expressed in Canadian dollars, except number of shares]

---

| | |
|:---|:---|
| For the years ended March 31, |  |
|  | Notes |
| **Revenue** |  |
| Product revenue | 18 |
| Referral revenue and other | 18 |
| Less: excise tax |  |
| Cost of sales |  |
| Gross profit before fair value adjustments |  |
| Fair value adjustments on biological assets | 7 |
| Fair value adjustments on sale of inventory |  |
| **Gross profit** |  |
| **Operating expenses** |  |
| General and administrative | 17 |
| Sales and marketing |  |
| Amortization and depreciation | 8910 |
| Share-based compensation | 14 |
| **Total operating expenses** |  |
| **Operating income** |  |
| Finance expense, net | 16 |
| Other income |  |
| **Income before income taxes** |  |
| Income tax expense (recovery) | 19 |
| **Net income and comprehensive income for the year** |  |
| Income per share - basic and diluted | 15 |
| Weighted average number of common shares outstanding - basic and diluted |  |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

**MTL Cannabis Corp.**

**Consolidated Statements of Changes in Shareholders' Equity**

For the years ended March 31, 2025 and 2024

[expressed in Canadian dollars, except number of shares and warrants]

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common shares** | **Warrants** | **Warrants** | **Contributed <br> surplus** | **Total** |
|  | **#** | $— | **#** | | |
| Balance as at March 31, 2024 | 116997561 |  | 7717521) |  |  |
| Issuance of warrants (Note 14) |  |  | 434858 |  |  |
| Share-based compensation (Note 14) |  |  |  |  |  |
| Remeasurement of amount payable to pre-RTO existing MTL Cannabis shareholders (Note 4) |  |  | —) |  |  |
| Net income and comprehensive income |  |  |  |  |  |
| **Balance as at March 31, 2025** | **116997561** |  | **8152379** |  |  |
| Balance as at March 31, 2023 | 46152564 |  |  |  |  |
| Common shares, warrants and options issued in connection with the RTO Transaction (Note 4) | 70844997 |  | 5978089 |  |  |
| Amount payable to the pre-RTO existing MTL Cannabis shareholders (Note 4) |  |  | —) |  |  |
| Remeasurement of amount payable to pre-RTO existing MTL Cannabis shareholders (Note 4) |  |  | —) |  |  |
| Transfer of conversion feature liability to contributed surplus (Note 13) |  |  |  |  |  |
| Transfer of warranty liability to contributed surplus (Note 13) |  |  |  |  |  |
| Deferred tax impact of conversion feature and warrant liability (Note 19) |  |  | —) |  |  |
| Loss on modifications of warrants (Note 11) |  |  |  |  |  |
| Issuance of warrants (Note 14) |  |  | 1739432 |  |  |
| Net income and comprehensive income |  |  |  |  |  |
| **Balance as at March 31, 2024** | **116997561** |  | **7717521** |  |  |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

**MTL Cannabis Corp.**

**Consolidated Statements of Cash Flows**<br> [expressed in Canadian dollars]

---

| | | | |
|:---|:---|:---|:---|
| For the year ended March 31, |  | **2025** | 2024 |
|  | Notes | **$** | $ |
| **Operating activities:** |  |  |  |
| Net income for the year |  |  |  |
| Add (deduct) items not affecting cash: |  |  |  |
| &nbsp;&nbsp;&nbsp;Deferred tax expense (recovery) |  |  |  |
| &nbsp;&nbsp;&nbsp;Amortization and depreciation | 6910 |  |  |
| &nbsp;&nbsp;&nbsp;Inventory impairment provision | 6 |  |  |
| &nbsp;&nbsp;&nbsp;Change in fair value adjustments on inventory sold |  |  |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of biological assets |  |  |  |
| &nbsp;&nbsp;&nbsp;Expected credit losses | 5 |  |  |
| &nbsp;&nbsp;&nbsp;Share-based compensation | 14 |  |  |
| &nbsp;&nbsp;&nbsp;Impairment of property, plant, and equipment | 9 |  |  |
| &nbsp;&nbsp;&nbsp;Loss on disposal of property, plant, and equipment | 9 |  |  |
| &nbsp;&nbsp;&nbsp;Gain on loan forgiveness |  |  |  |
| &nbsp;&nbsp;&nbsp;Other loss |  |  |  |
| &nbsp;&nbsp;&nbsp;Finance expense | 16 |  |  |
| Changes in non-cash working capital items: |  |  |  |
| &nbsp;&nbsp;&nbsp;Trade and other receivables |  |  |  |
| &nbsp;&nbsp;&nbsp;Inventory |  |  |  |
| &nbsp;&nbsp;&nbsp;Biological assets |  |  |  |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and deposits |  |  |  |
| &nbsp;&nbsp;&nbsp;Trade and other payables |  |  |  |
| &nbsp;&nbsp;&nbsp;Income taxes payable |  |  |  |
| Income taxes paid |  |  |  |
| **Cash flows provided by operating activities** |  |  |  |
| **Investing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of property, plant and equipment | 59 |  |  |
| &nbsp;&nbsp;&nbsp;Net cash acquired in the RTO Transaction | 4 |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds on sale of property, plant and equipment | 89 |  |  |
| **Cash flows used in investing activities** |  |  |  |
| **Financing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from notes payable | 11 |  |  |
| &nbsp;&nbsp;&nbsp;Repayment of notes payable | 11 |  |  |
| &nbsp;&nbsp;&nbsp;Repayment of borrowings | 12 |  |  |
| &nbsp;&nbsp;&nbsp;Repayment of convertible debentures | 13 |  |  |
| &nbsp;&nbsp;&nbsp;Payment of lease obligations | 8 |  |  |
| **Cash flows used in financing activities** |  |  |  |
| **Net change in cash during the year** |  |  |  |
| Cash, beginning of the year |  |  |  |
| **Cash, end of the year** |  |  |  |

---

*The accompanying notes are an integral part of these consolidated financial statements.*

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

(expressed in Canadian dollars, except share amounts)

**1 Nature of business**

MTL Cannabis Corp. (the "Company" or "MTLC"), formerly Canada House Cannabis Group Inc. ("Canada House") up to completion of the Tranche Two Closing, as defined below, was incorporated on September 29, 1982 under the Company Act of the Province of British Columbia. The Company's head office and principal place of business is located at 4225 Autoroute Transcanadienne, Pointe-Claire, Québec, Canada, H9R 1B4. The Company's common shares are listed on the Canadian Securities Exchange under the symbol "MTLC", and on the OTCQB Venture Market under the symbol "MTLNF". The Company through its subsidiaries, engages in cultivation and production of cannabis products for recreational and medical purposes in Canada. It also operates clinics that work directly with primary care teams to provide specialized cannabinoid therapy services to patients suffering from medical conditions. The Company produces various cannabis products, including lines of dried flower, hash, and pre-rolls.

These consolidated financial statements ("financial statements") of the Company for the years ended March 31, 2025 and 2024, comprise the results of the Company and its wholly owned subsidiaries Montréal Cannabis Médical Inc. ("MTL Cannabis"), Abba Medix Corp. ("Abba"), Canada House Clinics Inc. ("CHC"), The Longevity Project Corp. ("TLP"), IsoCanMed Inc. ("IsoCanMed"), and Margaree Health Group Inc. ("Margaree").

***Reverse Take Over ("RTO") Transaction***

On August 9, 2021, Canada House, MTL Cannabis, and the MTL Cannabis shareholders entered into a share exchange agreement. Subsequently, on July 22, 2022, Canada House and MTL Cannabis entered into a restated share exchange agreement (the "Agreement"). Pursuant to the Agreement, Canada House would acquire all of the issued and outstanding shares of MTL Cannabis over two tranches (the "RTO Transaction").

The first stage of the RTO Transaction was completed on August 30, 2022 (the "Tranche One Closing"). The Tranche One Closing resulted in Canada House acquiring 24.99% of the issued and outstanding common shares of MTL Cannabis from the MTL shareholders in exchange for 49.99% of the issued and outstanding common shares of Canada House. Canada House issued 22,779,340 common shares to the shareholders of MTL Cannabis on the Tranche One Closing. Subsequent to the Tranche One Closing, 46,152,564 common shares of Canada House were issued and outstanding.

The second stage of the RTO Transaction was completed on July 28, 2023 (the "Tranche Two Closing"). The Tranche Two Closing resulted in Canada House acquiring the remaining 75.01% of the issued and outstanding shares of MTL Cannabis from the MTL Cannabis shareholders in exchange for 70,713,556 common shares of Canada House, resulting in MTL Cannabis becoming a wholly owned subsidiary of Canada House. Upon completion of the Tranche Two Closing, the existing MTL Cannabis shareholders held a majority of the Canada House outstanding common shares, constituting a reverse take over of Canada House by the shareholders of MTL Cannabis. Upon completion of the RTO Transaction, Canada House changed its name to MTL Cannabis Corp.

**2 Basis of preparation**

 ****

***Statement of compliance***

These financial statements have been prepared by management in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board ("IASB") and IFRIC® Interpretations of the IFRS Interpretations Committee. The policies set out below have been consistently applied to all periods presented, unless otherwise noted.

These financial statements were approved and authorized for issuance by the Board of Directors of the Company on July 18, 2025.

***Basis of measurement***

These financial statements have been prepared on a historical cost basis, with the exception of certain financial instruments measured at fair value on initial recognition and biological assets which are measured at fair value less costs to sell. Historical costs are generally based upon the fair value of the consideration given in exchange for goods and services received.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of IFRS 2 Share-based Payment, leasing transactions that are within the scope of IFRS 16 Leases ("IFRS 16"), and measurements that have some similarities to fair value but are not fair value, such as net realizable value in IAS 2 Inventories ("IAS 2"), or value in use in IAS 36 Impairment of Assets.

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

***Basis of consolidation***

These financial statements comprise the accounts of the Company and its wholly-owned subsidiaries.

Subsidiaries are fully consolidated from the date of acquisition, which is the date on which the Company obtains control and continues to be consolidated until the date when such control ceases. Control is achieved when the Company has power over the investee, is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to use its power to affect its returns. The Company reassesses whether or not it controls an investee if facts and circumstances indicate there are changes to one or more of the three elements of control listed above. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intercompany balances, transactions and unrealized gains and losses resulting from intercompany transactions and dividends are eliminated on consolidation.

***Functional currency and presentation currency***

These financial statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiaries.

***Use of estimates, judgments and assumptions***

The preparation of these financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Estimates are based on management's best knowledge of current events and actions the Company may undertake in the future. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The following are the critical judgments and estimates that management has made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognized in the financial statements:

· *Business combinations* 

At the time of an acquisition, management uses judgment to determine whether an acquisition is a business combination or an asset acquisition. IFRS 3, *Business Combinations* ("IFRS 3") is only applicable when a business has been acquired.

In a business combination, substantially all identifiable assets, liabilities and contingent liabilities acquired are recorded at the date of acquisition at their respective fair values. One of the most significant areas of judgment and estimation relates to the determination of the fair value of these assets and liabilities, including the fair value of consideration given. If any intangible assets are identified, depending on the type of intangible asset and the complexity of determining its fair value, the Company determines the fair value, using appropriate valuation techniques, which are generally based on a forecast of the total expected future net cash flows. These valuations are linked closely to the assumptions made by management regarding the future performance of the assets concerned and the discount rate applied.

In cases where there is a reverse takeover, management also uses judgment in the identification of the acquiror in business combinations. A reverse takeover is a business combination in which the legal acquirer becomes the acquiree for accounting purposes and the legal acquiree becomes the acquirer for accounting purposes. The Company considers the guidance in IFRS 10 *Consolidated Financial Statements*, when determining which entity has obtained control for accounting purposes.

· *Determination of cash-generating units* 

For the purposes of impairment testing, goodwill acquired through business combinations is allocated to a cash-generating unit ("CGU") or group of CGUs. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Significant judgment is involved in determining the smallest group of assets that generates independent cash flows.

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

· *Goodwill impairment testing* 

Goodwill is reviewed annually for impairment. Goodwill impairment testing is performed by comparing the carrying value to its recoverable amount. The recoverable amounts of the cash-generating units were estimated based on the greater of value in use, using a discounted cash flow approach, and fair value less costs to sell. The approach uses cash flow projections based upon a financial forecast approved by management, covering a five-year period. Cash flows for the years thereafter are extrapolated using the estimated terminal growth rate. The risk premiums expected by market participants related to uncertainties about the industry and assumptions relating to future cash flows may differ or change quickly, depending on economic conditions, identification of cash-generating units, and other events.

· *Estimated useful lives of long-lived assets* 

Depreciation of property, plant and equipment and intangible assets is dependent on estimates of useful lives and residual values, which are determined through the exercise of judgment. The assessment of any impairment of these assets is dependent on estimates of recoverable amounts that take into account factors such as economic and market conditions and the useful lives of assets.

· *Leases* 

Measurement of right-of-use assets and lease liabilities require judgment in determining lease terms, such as assessing the likelihood of exercising extension options and determination of the appropriate discount rate. In the case where an incremental borrowing rate is used, the Company estimates the incremental borrowing rate based on the lease term, collateral assumptions, and the economic environment in which the lease is denominated. Renewal options are only included if management is reasonably certain that the option will be renewed.

· *Determination of the sale requirements being met under a sale and leaseback transaction* 

The Company assesses whether the transfer of its assets under a sale and leaseback transaction should be accounted for as a sale of those assets, applying relevant guidance of IFRS 16 and IFRS 15. This involves the determination of when a performance obligation is satisfied in IFRS 15 to determine whether the transfer of an asset has occurred. The Company distinguishes the right to control an asset (as conveyed in a lease agreement subsequent to a sale and leaseback transaction) from the transfer of control of an asset, and considers any rights to repurchase the assets, the lease term in relation to the economic life of the assets, the transfer of physical possession (legal title), and the ability to obtain substantially all the remaining benefits from the asset amongst other applicable factors specific to the transaction.

The Company has made the judgment that the requirements for a sale under IFRS 15 were met in relation to the sale and leaseback transaction involving its land and building (Note 8).

· *Inventories* 

Inventories are valued at the lower of cost and net realizable value. The costs of inventory involve estimates in determining the allocation of fixed and variable production overhead. These estimates include determination of normal production capacity and nature of expenses to be allocated. In assessing the recoverability of final inventory values, management compares the inventory cost to estimated net realizable value. Management records a provision to inventory to the extent the cost of inventory exceeds the estimated net realizable value.

· *Valuation of the fair value less costs to sell of biological assets* 

In calculating the value of the biological assets, management is required to make a number of estimates, including estimating the stage of growth of the cannabis up to the point of harvest, harvesting costs, selling costs, average or expected selling prices and list prices and expected yields for the cannabis plants.

· *Trade and other receivables* 

The recognition of trade and other receivables requires the Company to assess credit risk and collectability when assessing allowances for expected credit loss. The Company considers historical trends and any available information indicating a customer could be experiencing liquidity or going concern problems and the status of any contractual or legal disputes with customers in performing this assessment. The Company's provision is based on its historical credit loss experiences, adjusted for forward-looking factors specific to the debtors and the economic environment.

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

· *Convertible debentures* 

The identification of convertible note components is based on interpretations of the substance of the contractual arrangement and therefore requires judgment from management. The separation of the components affects the initial recognition of the convertible debenture at issuance and the subsequent recognition of interest on the liability component. The determination of the fair value of the liability is also based on a number of assumptions, including contractual future cash flows, discount rates and the presence of any derivative financial instruments.

**3 Material accounting policies**

[a] Revenue recognition

The Company's accounting policy for revenue recognition under *IFRS 15, Revenue from Contracts with Customers* ("IFRS 15"), is to follow a five-step model to determine the amount and timing of revenue to be recognized by applying the following steps:

i) identify the contract with a customer;

ii) identify the performance obligations in the contract;

iii) determine the transaction price;

iv) allocate the transaction price to the performance obligations in the contract; and

v) recognize revenue when or as the Company satisfies a performance obligation.

Revenue from the sale of cannabis is recognized when the Company transfers control of the good to the customer. This is generally considered to have occurred when products have been delivered to the location specified in the sales contract and accepted by the customer. The Company recognizes deferred revenue when proceeds are received but not earned. Revenue is recognized when the products are transferred to the customer and the Company's performance obligations have been fulfilled. Revenue from the referral of clinic patients to licensed producers is recognized once the Company's performance obligation is met, which is when the Company consults the patient, the patient completes a purchase, and the licensed producer is billed.

The Company recognizes revenue in an amount that reflects the consideration the Company expects to receive taking into account any variation that may result from rights of return, price concessions, price protection and discounts.

Gross revenue includes excise taxes, which the Company pays as principal. Excise taxes are a production tax which becomes payable when a cannabis product is delivered to the customer and are not directly related to the value of the revenue. Excise taxes are netted against gross revenue on the consolidated statements of income and comprehensive income.

The determination of whether revenue should be reported on a gross or net basis is based on an assessment of whether the Company is acting as the principal or an agent in these transactions with resellers and involves judgment based on an evaluation of the terms of each arrangement. While none of the factors individually are considered presumptive or determinative, in reaching conclusions on gross versus net revenue recognition, management places the most weight on the analysis of whether the Company controls and are responsible for the condition of the goods until they are ultimately sold to the end customer.

Areas of judgment include identifying the customer per the definition within IFRS 15, determining whether control has passed to the customer, and estimating expected returns and variable consideration for discounts.

[b] Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

· *Financial assets* 

On initial recognition, a financial asset is classified as measured at amortized cost, fair value through other comprehensive income ("FVOCI"), or fair value through profit and loss ("FVTPL"). The classification of financial assets is based on the business model in which a financial asset is managed and its contractual cash flow characteristics.

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

&nbsp;&nbsp;&nbsp;&nbsp;o It is held within a business model whose objective is to hold assets to collect contractual cash flows;
and

&nbsp;&nbsp;&nbsp;&nbsp;o Its contractual terms give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.

A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition.

The following accounting policies apply to the subsequent measurement of financial assets.

---

| | |
|:---|:---|
| &nbsp;&nbsp;Financial assets at FVTPL | &nbsp;&nbsp;Subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss. |
| &nbsp;&nbsp;Financial assets at amortized cost | &nbsp;&nbsp;Subsequently measured at amortized cost using the effective interest method, less any impairment losses. Interest income, foreign exchange gains and losses and impairment losses are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss. |

---

· *Financial liabilities* 

The Company initially recognizes financial liabilities at fair value on the date at which the Company becomes a party to the contractual provisions of the instrument.

The Company classifies its financial liabilities as either financial liabilities at FVTPL or amortized cost.

Subsequent to initial recognition, other liabilities are measured at amortized cost using the effective interest method. Financial liabilities at FVTPL are stated at fair value with changes being recognized in profit or loss.

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire.

· *Financial liabilities and equity instruments* 

&nbsp;&nbsp;&nbsp;&nbsp;· Classification
as debt or equity

Debt and equity instruments issued by the Company 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.

&nbsp;&nbsp;&nbsp;&nbsp;· Equity
instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a group entity are recognized at the proceeds received, net of direct issue costs.

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.

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

· Classification
of financial instruments

The Company classifies its financial assets and liabilities depending on the purpose for which the financial instruments were acquired, their characteristics and management intent as outlined below:

---

| | |
|:---|:---|
| **Classification** |  |
| Cash | Amortized cost |
| Trade and other receivables | Amortized cost |
| Trade and other payables | Amortized cost |
| Notes payable | Amortized cost |
| Borrowings | Amortized cost |
| Convertible debentures | Amortized cost |

---

· Impairment
of financial assets

An expected credit loss ("ECL") model applies to financial assets measured at amortized cost. The Company's financial assets measured at amortized cost and subject to the ECL model consist primarily of trade and other receivables. The Company applies the simplified approach to impairment for trade and other receivables by recognizing a loss allowance based on lifetime expected losses at each reporting date taking into consideration historical credit loss experience and financial factors specific to the debtors and general economic conditions. The Company has assessed the impairment of its trade and other receivables using the expected credit loss model, and no material difference was noted.

[c] Biological assets

While the Company's biological assets are within the scope of IAS 41 Agriculture, the direct and indirect costs of biological assets are determined using an approach similar to the capitalization criteria outlined in IAS 2. They include the direct cost of seeds and growing materials as well as other indirect costs such as utilities and supplies consumed throughout the growing process. Indirect labour for individuals involved in the growing and quality control process is also included, as well as depreciation on production equipment and overhead costs such as rent to the extent it is associated with the growing space. All direct and indirect costs of biological assets are capitalized as they are incurred, and they are all subsequently recorded within "cost of sales" in the consolidated statements of income and comprehensive income in the period that the related product is sold. Unrealized fair value gains on growth of biological assets are recorded in a separate line on the face of the consolidated statements of income and comprehensive income. Biological assets are measured at their fair value less costs to sell on the consolidated statements of financial position.

[d] Inventories

The direct and indirect costs of inventory initially include the fair value of the biological asset at the time of harvest. They also include subsequent costs such as materials, labour and depreciation expense on equipment involved in transformation, packaging, labeling and inspection. Cost is determined using the weighted average or 'First-in First-Out' method. All direct and indirect costs related to inventory are capitalized as they are incurred and they are subsequently recorded within "cost of sales" in the consolidated statements of income and comprehensive income at the time cannabis is sold, except for realized fair value amounts included in inventory sold, which are recorded as a separate line on the face of the consolidated statements of income and comprehensive income. Inventory is measured at the lower of cost or net realizable value on the consolidated statements of financial position.

[e] Property, plant and equipment

Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. The cost of an item of equipment includes expenditures that are directly attributable to the acquisition or construction of the asset. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The cost of replacing part of an item of equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in consolidated statements of income and comprehensive income.

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs incurred are charged to the consolidated statements of income and comprehensive income.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount and are recognized net within other income in the consolidated statements of income and comprehensive income.

Depreciation is based on the estimated useful lives of the assets provided as follows:

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equipment and supplies | 20% declining balance |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Computer equipment | 30% declining balance |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leasehold improvements | 20% declining balance |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Buildings | 25 years straight-line |

---

An item of property, plant and equipment and any significant part initially recognized are derecognized upon disposal or when no future economic benefits are expected from their use or disposal. The assets' residual values, useful lives and methods of depreciation and the depreciation charge are adjusted prospectively, if appropriate.

[f] Business combinations

Business combinations are accounted for using the acquisition method. In applying the acquisition method, the Company separately measures at their acquisition-date fair values, the identifiable assets acquired, the liabilities assumed, goodwill acquired and any non-controlling interest in the acquired entity. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Company. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement that does not require continued employment services. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

Acquisition costs in connection with a business combination are expensed as incurred.

Goodwill is measured as the excess of the fair value of the consideration transferred, less any non-controlling interest in the entity being acquired at the proportionate share of the recognized net identifiable assets acquired. Goodwill acquired through a business combination is allocated to each CGU or group of CGUs that are expected to benefit from the related business combination. A group of CGUs represents the lowest level within the entity at which the goodwill is monitored for internal management purposes, which is not higher than an operating segment.

[g] Intangible assets

The Company's intangible assets largely consist of intangible assets acquired from business combinations. The cost of intangible assets acquired in a business combination is measured based on their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. The useful lives of intangible assets are assessed as either finite or indefinite. The Company's has no indefinite life intangible assets.

The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed annually. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for prospectively by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

Amortization of an intangible asset with a finite useful life is recorded using the straight-line method over the estimated useful lives as outlined below:

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customer relationships | 4 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade name and trademarks | 2 to 5 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technology | 5 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;License | 2 years |

---

**MTL Cannabis Corp.** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

[h] Impairment of long-lived assets

Long-lived assets, including property, plant and equipment, and intangible assets, are tested for impairment when there are indicators of impairment which are reviewed at each reporting date or earlier whenever events or changes in circumstances indicate that the carrying amount of an asset exceeds its recoverable amount. Goodwill is not subject to amortization but is assessed for impairment on at least an annual basis and, additionally, whenever events and changes in circumstances suggest that the carrying amount may not be recoverable.

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 CGU). The recoverable amount of an asset or a CGU is the higher of its fair value, less costs of disposal, and its value in use. If the carrying amount of an asset exceeds its recoverable amount, an impairment charge is recognized immediately in net income equal to the amount by which the carrying amount exceeds the recoverable amount. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the lesser of the revised estimate of recoverable amount, and the carrying amount that would have been recorded had no impairment loss been recognized previously.

[i] Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company recognizes a right-of-use ("ROU") asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured based on 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 the 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 ROU assets are depreciated to the earlier of the end of useful life of the ROU asset or the lease term using the straight-line method as this most closely reflects the expected pattern of the consumption of the future economic benefits. The lease term includes periods covered by an option to extend if the Company is reasonably certain to exercise that option. In addition, the ROU asset can be 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.

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 the 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, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the ROU asset, unless it has been reduced to zero.

A lease modification will be accounted for as a separate lease if the modification increases the scope of the lease and if the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope. For a modification that is not a separate lease or where the increase in consideration is not commensurate, at the effective date of the lease modification, the Company will remeasure the lease liability using the Company's incremental borrowing rate, when the rate implicit to the lease is not readily available, with a corresponding adjustment to the ROU asset.

[j] Sale and leaseback

The Company accounts for sale and leaseback transactions in accordance with IFRS 16. If the transfer of the asset or group of assets qualify as a sale under IFRS 15, the Company derecognizes the asset or group of assets and recognizes a ROU asset and a lease liability. The ROU asset is measured at the proportion of the previous carrying amount of the asset that relates to the right-of-use retained. Any gain or loss is limited to the rights transferred to the buyer-lessor and is recognized in profit or loss during the period in which the sale occurred.

[k] Income Taxes

Income tax expense comprises of current and deferred tax. Current tax and deferred tax are recognized in net profit or loss except to the extent that it relates to a business combination or items recognized directly in equity or in other comprehensive income.

**MTL Cannabis Corp.** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

Current income taxes are recognized for the estimated income taxes payable or receivable on taxable income or loss for the current year and any adjustment to income taxes payable in respect of previous years. Current income taxes are determined using tax rates and tax laws that have been enacted or substantively enacted by the year-end date.

Deferred tax assets and liabilities are recognized where the carrying amount of an asset or liability differs from its tax base, except for taxable temporary differences arising on the initial recognition of goodwill and temporary differences arising on the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting nor taxable profit or loss.

Recognition of deferred tax assets for unused tax losses, tax credits and deductible temporary differences is restricted to those instances where it is probable that future taxable profit will be available against which the deferred tax asset can be utilized. At the end of each reporting period, the Company reassesses unrecognized deferred tax assets. The Company recognizes a previously unrecognized deferred tax asset to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

[l] Share-based payments

The Company grants equity-settled share options to purchase common shares to certain employees and officers. Share options generally vest over 4 years and expire after 5 years.

The fair value of the share options is determined using the Black-Scholes option-pricing model. Estimates are required for inputs to this model including the fair value of the underlying shares, the expected life of the option, volatility, expected dividend yield and the risk-free interest rate. Variation in actual results for any of these inputs will result in a different value of the share option realized from the original estimate. The assumptions and estimates used are further outlined in the share options note.

[m] Government assistance

Government assistance is recognized when there is reasonable assurance it will be received, and all related conditions will be complied with. When government assistance relates to an expense item, it is recognized as a reduction of the expense over the period necessary to match the government assistance on a systematic basis to the costs it is intended to subsidize. When government assistance relates to depreciable assets the value of the grant is deducted from the carrying amount of the asset. The grant is recognized over the life of the depreciable asset as a reduction to depreciation expense.

[n] Net income per share

Net income per share is calculated based on the income for the financial year and the weighted average number of common shares outstanding during the year. Diluted net income per share is calculated using the income or loss for the financial year adjusted for the effect of any dilutive instruments and the weighted average diluted number of shares (ignoring any potential issue of common shares that would be anti-dilutive) during the year.

***New standards, amendments and interpretations recently adopted by the Company***

 ****

*IAS 1 – Presentation of financial statements ("IAS 1")*

In January 2020, the IASB issued Classification of Liabilities as Current or Non-current (Amendments to IAS 1). The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the consolidated statements of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity.

The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with earlier application permitted. The Company early adopted these amendments effective April 1, 2023. The impact of adopting these amendments on the Company's financial statements was not significant.

*IFRS 16 – Leases ("IFRS 16")*

In September 2022, the IASB issued amendments to IFRS 16, Leases, which add to requirements explaining how a company accounts for a sale and leaseback after the date of the transaction.

**MTL Cannabis Corp.** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

The amendments are effective for annual reporting periods beginning on or after January 1, 2024. Earlier application is permitted. The Company adopted these amendments effective April 1, 2024. The impact of adopting these amendments on the Company's financial statements was not significant.

***New standards, amendments and interpretations not yet adopted by the Company***

 ****

*IFRS 18 – Presentation and Disclosure in Financial Statements ("IFRS 18")*

In April 2024, the IASB issued a new standard IFRS 18, introducing a defined structure for the statement of profit and loss and new specific disclosure requirements to the statement of profit and loss.

The standard is effective for annual reporting periods beginning on or after January 1, 2027 and also applies to comparative information. The Company is still assessing the impact of adopting these amendments on its financial statements.

All other IFRSs and amendments issued but not yet effective have been assessed by the Company and are not expected to have a material impact on the Company's financial statements.

---

| | |
|:---|:---|
| **4** | **Business combination** |

---

*Acquisition of Canada House*

On July 28, 2023, MTL Cannabis and Canada House completed the RTO Transaction following the Tranche Two Closing. Pursuant to the restated share exchange agreement, the MTL Cannabis shareholders acquired 80% of the rights, title and interest in and to all of the issued and outstanding shares in the capital of Canada House. The transaction was determined to meet the definition of a reverse acquisition per *IFRS 3 – Business Combinations*, and the acquisition method was applied. In exchange for the shares in the capital of Canada House, the Company agreed to pay total consideration of $14,280,361, comprised of share consideration of $11,014,000, replacement warrants and options issued with a fair value of $1,377,000, and settlement of the pre-existing relationship for the amount of $1,889,361. The Company issued 5,978,089 replacement warrants and 1,765,000 replacement options. The share consideration was measured at the fair value of the shares that MTL Cannabis would have to issue to the shareholders of Canada House, to give the shareholders of Canada House the same percentage of equity interest in the combined entity that results from the reverse takeover had it taken the legal form of MTL Cannabis acquiring Canada House. Canada House issued 22,779,340 common shares to the shareholders of MTL Cannabis on the Tranche One Closing, and 70,713,556 common shares to the shareholders of MTL Cannabis on the Tranche Two Closing.

The fair value of the replacement warrants and options were assessed using a combination of a Monte Carlo analysis and Black-Scholes option pricing model. Key assumptions used in both models were a share price of $0.47, estimated volatility of 95% and a risk-free rate of 4.0%.

The settlement amount of pre-existing relationships was determined by reviewing the net balance of the outstanding receivables and payables between MTL Cannabis and Canada House.

MTL Cannabis Corp.

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

The allocation of the fair value of the purchase price to the identifiable assets acquired and liabilities assumed as at the date of the acquisition is as follows:

---

| | |
|:---|:---|
|  | **$** |
| Share consideration | 11014000 |
| Replacement warrants and options | 1377000 |
| Settlement of pre-existing relationships | 1889361 |
| **Total consideration** | **14280361** |
| Cash | 1014345 |
| Trade and other receivables | 6291512 |
| Prepaid expenses and deposits | 711588 |
| Inventory | 1661663 |
| Biological assets | 442450 |
| Property, plant and equipment | 12021410 |
| Right-of-use assets, net | 2035501 |
| Intangible assets, net | 12590000 |
| Trade and other payables | (6304727) |
| Lease liability | (2035501) |
| Notes payable | (10875572) |
| Borrowings | (3409286) |
| Convertible debentures | (5861366) |
| Financial instrument liabilities | (5400000) |
| Deferred tax liability | (1203706) |
| **Fair value of net assets acquired** | **1678311** |
| **Goodwill** | **12602050** |

---

Goodwill arising on the acquisition reflects the benefits attributable to synergies, revenue growth and future market development opportunities expected to be realized from the acquisition. These benefits were not recognized separately from goodwill because they did not meet the recognition criteria for identifiable intangible assets. The goodwill is not deductible for income tax purposes.

*Amount payable to the pre-RTO existing shareholders of MTL Cannabis*

As a part of the acquisition of Canada House on July 28, 2023, an amount was payable to the pre-RTO existing shareholders of MTL Cannabis if certain revenue targets are achieved during the first and second twelve-month periods following the Tranche Two Closing. The maximum amount payable to the pre-RTO existing shareholders of MTL Cannabis is $5,000,000. The Company uses a scenario-based model to independently assess individual earn-outs and calculate the best estimate of the earn-out based on probabilities of success attributable to each individual scenario in accordance with IAS 37 *– Provisions, Contingent Liabilities and Contingent Assets*. The provision of the amount payable was determined to be $4,358,000. The Company determined that the obligation was not part of the RTO Transaction under *IFRS 3 – Business Combinations*. The provision is recorded as a liability on the consolidated statements of financial position and a charge to retained earnings for distribution of equity to pre-RTO existing shareholders within the consolidated statement of changes in shareholders' equity. During the year ended March 31, 2025, the Company recognized $507,000 (2024 – $135,000) in the consolidated statement of changes in shareholder's equity, for accretion of the amount payable to the shareholders of MTL Cannabis. As at March 31, 2025, the total provision was $5,000,000 (2024 – $4,493,000) as the revenue targets are expected to be met.

Acquisition costs in connection with the RTO Transaction are expensed as incurred and recorded within the line item 'General and administrative' expense. During the year ended March 31, 2024, the Company incurred total transaction costs of $232,905. The Company also recognized an expense of $61,777 as share-based compensation expense relating to 131,441 common shares issued for services in connection with the RTO Transaction. The common shares were valued at a price of $0.47 per common share.

**MTL Cannabis Corp.** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

**5 Trade and other receivables**

The Company's trade and other receivables include the following:

---

| |
|:---|
| Trade receivables (Note 23) |
| SR&ED receivables |
| Sales tax receivables |
| Government assistance receivable |
| Other receivables |
| Less: expected credit losses (Note 23) |

---

During the year ended March 31, 2025, the Company purchased light fixtures in the amount of $2,677,500. As a part of the Hydro-Québec Efficient Solutions Program, the Company obtained a subsidy for these lights in the amount of $1,990,014. The net cost of the lights are included as additions of property, plant and equipment (see Note 9).

For trade receivables, the change in allowance for credit losses for the year ended March 31, 2025 was as follows:

---

| |
|:---|
| Opening balance |
| Reduction in allowance for credit losses**)** |
| Settlement of loans receivable |
| Closing balance |

---

**6 Inventory**

The Company's inventory consists of the following:

---

| |
|:---|
| Inventory – Work in process |
| Inventory – Finished goods |
| Carrying value |
| Less: provision |

---

During the year ended March 31, 2025, the Company expensed $36,476,741 of inventory in cost of sales (2024 – $32,986,487). Included in the amount of inventory expensed to cost of sales is $2,133,090 (2024 – $1,281,304) of depreciation allocated from property and equipment and ROU assets. During the year ended March 31, 2025, the Company recorded $577,048 (2024 – $705,768) of inventory write-downs that were included in cost of sales.

As of March 31, 2025, the carrying value of inventory includes $598,601 of inventoried depreciation costs (March 31, 2024 – $620,933).

**MTL Cannabis Corp.** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

**7 Biological assets**

Biological assets consist of cannabis plants. The changes in the carrying value of biological assets are as follows:

---

| |
|:---|
| Balance – March 31, 2023 |
| RTO Transaction (Note 4) |
| Production costs capitalized |
| Changes in fair values less costs to sell due to biological transformation |
| Transferred to inventory upon harvest |
| Balance – March 31, 2024 |
| Production costs capitalized |
| Changes in fair values less costs to sell due to biological transformation |
| Plants sold during the period) |
| Transferred to inventory upon harvest |
| **Balance – March 31, 2025** |

---

The Company measures its biological assets at their fair value less costs to sell. This is determined using a model which estimates the expected harvest yield in grams for plants currently being cultivated, the expected selling price per gram and the expected costs to sell per gram.

The fair value measurements for biological assets have been categorized as Level 3 fair values based on the inputs to the valuation technique used. The Company's method of accounting for biological assets attributes value accretion on a straight-line basis throughout the life of the biological asset from initial cloning to the point of harvest.

The following table quantifies each significant unobservable input, and also provides the impact a 10% increase or decrease in each input would have on the fair value of biological assets at period end:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | **As at March 31, 2025** | **As at March 31, 2025** | **As at March 31, 2024** | **As at March 31, 2024** |
|  | <br>**Assumption:** | **Input** | **10% change** | **Input** | **10% change** |
| i | Weighted average of expected loss of plants until harvest [a] | 8% | $20018 | 6% | $9940 |
| ii | Expected yields (dry grams of cannabis per plant) [b] | 582 grams of <br> dry flower | $219771 | 548 grams of dry <br> flower | $155042 |
| iii | Weighted average number of growing weeks completed as a percentage of total growing weeks as at year-end | 51% | $219771 | 42% | $155042 |
| iv | Estimated selling price (per gram) [c] | $1.74 per gram <br> dried flower | $419754 | $1.76 per gram <br> dried flower | $299732 |
| v | After harvest cost to <br>complete and sell (per gram) | $0.82 per gram <br> dried flower | $199984 | $0.87 per gram <br> dried flower | $144690 |

---

[a] Weighted average of expected loss of plants until harvest represents loss of plants that do not survive to the point of harvest. It does not include any financial loss on a surviving plant.

[b] Expected average yields for cannabis plants vary based on the mix of strains and number of plants existing at each reporting date.

[c] The estimated selling price per gram represents the actual average sales price for the Company's strains sold as bulk products.

The Company estimates the harvest yields for cannabis at various stages of growth. As of March 31, 2025, it is expected that the Company's biological assets will yield approximately 4,035,798 (March 31, 2024 – 4,153,916) grams of dry cannabis flower when harvested. The fair value adjustments on biological assets are presented separately on the consolidated statements of income and comprehensive income.

The Company's estimates, by their nature, are subject to changes that could result from volatility of market prices, unanticipated regulatory changes, harvest yields, loss of crops, changes in estimates and other uncontrollable factors that could significantly affect the future fair value of biological assets.

**MTL Cannabis Corp.** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

**8 Leases**

*Right-of-use asset*

 

---

| | |
|:---|:---|
| **Cost** | **$** |
| Balance – March 31, 2023 |  |
| RTO Transaction (Note 4) |  |
| Balance – March 31, 2024 |  |
| Additions |  |
| Termination |  |
| Modification |  |
| **Balance – March 31, 2025** |  |
| **Accumulated depreciation** |  |
| Balance – March 31, 2023 |  |
| Depreciation |  |
| Balance – March 31, 2024 |  |
| Depreciation |  |
| Termination |  |
| **Balance – March 31, 2025** |  |
| Net Balance – March 31, 2024 |  |
| **Net Balance – March 31, 2025** |  |
| Lease obligations |  |
| Balance – March 31, 2023 |  |
| Additions (Note 4) |  |
| Interest accretion |  |
| Lease payments |  |
| Balance – March 31, 2024 |  |
| Additions |  |
| Interest accretion |  |
| Lease payments |  |
| Termination |  |
| Modification |  |
| **Balance – March 31, 2025** |  |
| Current |  |
| Non-current |  |

---

The Company's right-of-use assets and lease obligations relate to the Company's warehouse and office premises. On closing of the RTO Transaction, the Company also acquired leases related to a licensed cultivation facility and clinics.

The following table sets out a maturity analysis of the lease payments payable, showing the undiscounted lease payments to be paid on an annual basis, reconciled to the lease obligation.

---

| | |
|:---|:---|
|  | **$** |
| Less than one year | 3437056 |
| One to two years | 3409872 |
| Two to three years | 3411841 |
| Three to four years | 3393488 |
| Thereafter | 13377343 |
| Total undiscounted lease payments payable | 27029600 |
| Less: impact of present value | 12134153 |
| **Balance – March 31, 2025** | **14895447** |

---

The Company received rental income of $29,980 during the year ended March 31, 2025 (2024 – $401,637) relating to the short-term rental of unused warehouse facilities, which has been included in general and administrative expenses on the consolidated statements of income and comprehensive income.

**MTL Cannabis Corp.** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

On April 1, 2024, the Company commenced a lease for additional space at its production facility with a termination date of March 31, 2033. As a result of the additional space, the Company recognized an additional right-of-use asset and lease liability in the amount of $2,064,762. The leased premises is owned by a company controlled by the Chief Cultivation Officer and the Chief Operating Officer.

On April 1, 2024, the Company commenced a lease for a new clinic in Greenwood, Nova Scotia with a termination date of March 31, 2029. As a result of the new clinic, the Company recognized an additional right-of-use asset and lease liability in the amount of $99,242.

On April 12, 2024, the Company modified its lease agreement at a clinic in Pembroke, Ontario. The modification extended the lease and increased the monthly payments. As a result of the modification, the Company remeasured the lease liability by discounting the revised lease payments using a revised discount rate and made a corresponding increase to the ROU asset in the amount of $33,219.

On January 27, 2025, the Company closed a transaction to sell and lease back the CHC land and building at the clinic in Oromocto, New Brunswick. The Company sold the land and building for gross cash consideration of $700,000. Net cash proceeds totaled $693,444 after deducting applicable transaction expenses.

Additionally, the Company entered into a lease agreement for the clinic for an initial term of three years commencing on February 1, 2025, with an optional one-year renewal period. Management determined that the sale and leaseback transaction met the requirements for a sale under IFRS 16 and IFRS 15 as it was determined that the criteria for the transfer of control of the assets to the Purchaser were met. This resulted in the recognition of a lease liability of $135,831, derecognition of the underlying assets representing the rights transferred to the purchaser of $796,745, recognition of a right of use asset of $135,831, and a loss on disposal of $80,252. The disposal of the underlying assets is included in Note 9.

For its leased premises, the Company hypothecates all of its equipment and other moveable effects to its landlord up to the market value equivalent of one years' rent as security against the lease obligation.

**9 Property, plant and equipment**

---

| |
|:---|
| **Cost** |
| Balance, March 31, 2023 |
| &nbsp;&nbsp;&nbsp;RTO Transaction (Note 4) |
| &nbsp;&nbsp;&nbsp;Additions |
| &nbsp;&nbsp;&nbsp;Disposals |
| &nbsp;&nbsp;&nbsp;Balance, March 31, 2024 |
| &nbsp;&nbsp;&nbsp;Additions |
| &nbsp;&nbsp;&nbsp;Disposals |
| &nbsp;&nbsp;&nbsp;Impairment |
| **Balance, March 31, 2025** |
| **Accumulated depreciation** |
| Balance, March 31, 2023 |
| &nbsp;&nbsp;&nbsp;Depreciation |
| &nbsp;&nbsp;&nbsp;Disposals |
| &nbsp;&nbsp;&nbsp;Balance, March 31, 2024 |
| &nbsp;&nbsp;&nbsp;Depreciation |
| &nbsp;&nbsp;&nbsp;Disposals |
| **Balance, March 31, 2025** |
| **Carrying value** |
| Balance, March 31, 2024 |
| **Balance, March 31, 2025** |

---

**MTL Cannabis Corp.** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

During the year ended March 31, 2025, the Company allocated $1,511,354 (2024 – $1,503,944) of depreciation expense to the production of biological assets and inventory. During the year ended March 31, 2025, the Company recognized a loss on disposal of $55,882 (2024 – loss of $62,808) and impairment of $168,530 (2024 – $nil) in other (income) loss.

**10 Intangible assets and goodwill**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | <br> **Customer relationships** | **License** | **Technology** | **Trademarks <br> and brand** | **Goodwill** | **Total** |
| **Cost** | **$** | **$** | **$** | **$** | **$** | **$** |
| Balance, March 31, 2024 |  |  |  |  |  |  |
| RTO Transaction (Note 4) | 8040000 | 3340000 | 390000 | 820000 | 12602050 | 25192050 |
| Balance, March 31, 2024 | 8040000 | 3340000 | 390000 | 820000 | 12602050 | 25192050 |
| **Balance, March 31, 2025** | **8040000** | **3340000** | **390000** | **820000** | **12602050** | **25192050** |
| **Accumulated amortization** |  |  |  |  |  |  |
| Balance, March 31, 2023 |  |  |  |  |  |  |
| Depreciation | 1340000 | 1113333 | 52000 | 125334 |  | 2630667 |
| Balance, March 31, 2024 | 1340000 | 1113333 | 52000 | 125334 |  | 2630667 |
| Amortization | 2010000 | 1670000 | 78000 | 188000 |  | 3946000 |
| **Balance, March 31, 2025** | **3350000** | **2783333** | **130000** | **313334** | **—** | **6576667** |
| **Carrying Value** |  |  |  |  |  |  |
| Balance, March 31, 2024 | 6700000 | 2226667 | 338000 | 694666 | 12602050 | 22561383 |
| **Balance, March 31, 2025** | **4690000** | **556667** | **260000** | **506666** | **12602050** | **18615383** |

---

The Company performs an assessment for goodwill impairment as of March 31 of each year and whenever there is an indication of impairment.

The recoverable amount of the two CGUs to which goodwill has been allocated was determined using the value-in-use approach. Under the value-in-use approach, the recoverable amount is calculated based on the present value of expected cash flows expected to be derived from the CGU. For the years ended March 31, 2025 and 2024, the Company concluded that the recoverable amount of the group of CGUs was higher than the carrying amount, and therefore no impairment was recognized. The value-in-use was determined using a discount rate of 24% (2024 – 27%) and a terminal rate of 3% (2024 – 3%).

**11 Notes payable**

The following table presents the notes payable for the Company:

---

| | | | |
|:---|:---|:---|:---|
|  | | March 31, | March 31, |
|  | **March 31,**<br>**2025** | 2024 | 2024 |
|  | | $— | $|
| Due to related parties [i] |  |  | 4765975 |
| Promissory notes [ii] |  |  | 10238543 |
| Total notes payable |  |  | 15004518 |

---

**[i] Due to related parties**

Notes payable are due to certain related parties of the Company. The notes payable bear interest at 17% per annum and are unsecured. As of March 31, 2024, the notes payable due to related parties were due on demand.

On July 25, 2024, the Company and the related parties entered into amending agreements for the notes payable. The amended agreements deferred repayment of the principal and accrued and outstanding interest until June 1, 2025. All other terms of the notes remained the same.

**MTL Cannabis Corp.** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

---

| |
|:---|
| Balance – Beginning of the year |
| Advances |
| Interest expense |
| Repayments |
| Balance – End of the year |

---

**[ii] Promissory notes**

On July 28, 2023, as part of the RTO Transaction (Note 4), the Company assumed three promissory notes (the "ISO Promissory Notes") each with a principal value of $4,167,667, for an aggregate amount of $12,500,000, bearing interest at 5% payable annually. The maturity dates of the three promissory notes are December 12, 2023, June 12, 2024, and December 12, 2024. Until maturity, the principal amount of $666,667 of each note may be converted into common shares of the Company, at the option of the noteholder, at a conversion price of $1.50. The promissory notes are secured by a general security agreement registered against the assets of IsoCanMed. On closing of the RTO Transaction, the Company determined that the fair value of the ISO Promissory Notes was $10,875,572.

As a part of the RTO Transaction, the Company also issued 333,333 replacement warrants to each noteholder for an aggregate issuance of 999,999 replacement warrants. The warrants had an exercise price of $1.20 and were exercisable up to August 30, 2025. The fair value of these replacement warrants were included as a part of the purchase consideration (see Note 4 and Note 14(c)).

On December 11, 2023, the Company and one of the note holders agreed to amend one of the promissory notes (the "Amended ISO Promissory Note"). The Amended ISO Promissory note extended the maturity date from December 12, 2023 to April 30, 2024. In exchange for the extension, the Company repaid $1,000,000 of the outstanding principal of the promissory note and amended the terms of outstanding warrants (see Note 14). The exercise price of 333,333 warrants issued in conjunction with the ISO Promissory Notes were reduced from $1.20 per common share to $0.66 per share. The warrants were also amended to include a clause where, if the closing price of the common shares for ten consecutive trading days exceeds $0.825 per Share (the "Accelerated Period"), the expiry date of the Warrants will be automatically accelerated without any further action on the part of the Company or the holder of the Warrants to a date that is 30 days following the end of the Accelerated Period.

The Company determined that the Amended ISO Promissory note was a substantial modification. Therefore, the Company extinguished the existing debt of $3,244,863 and recognized new debt with a fair value of $3,035,956. For the year ended March 31, 2024, the Company recognized a gain on extinguishment of $208,907, recorded in the line-item 'Finance Expense, net' in the consolidated statements of income and comprehensive income.

The Company also determined that the exercise price of the modified warrants will remain fixed after modification. Therefore, the warrants will remain classified as equity. For the year ended March 31, 2024, the Company recorded a loss on modification of $23,013 on remeasurement of the warrants, recorded in the line-item 'Finance expense, net' in the consolidated statements of income and comprehensive income.

On July 28, 2024, the Company and all of the note holders agreed to amend the promissory notes (the "Second Amended ISO Promissory Notes"). The Second Amended ISO Promissory Notes extended the maturity date for all notes to June 2, 2025. All other terms of the notes remained the same.

---

| |
|:---|
| Balance – Beginning of the year |
| RTO Transaction (Note 4) |
| Interest expense |
| Repayments**)** |
| Gain on extinguishment |
| Balance – End of the year |

---

**MTL Cannabis Corp.** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

**12 Borrowings**

The following table presents the borrowings for the Company:

---

| | | | |
|:---|:---|:---|:---|
|  | | March 31, | March 31, |
|  | **March 31,**<br>**2025** | 2024 | 2024 |
|  | | $— | $|
| Mortgage payable [i] |  |  | 2094364 |
| Unsecured loan [ii] |  |  | 344188 |
| **Total borrowings** |  |  | 2438552 |

---

**[i] Mortgage payable**

On July 28, 2023, as part of the RTO Transaction (Note 4), the Company assumed a mortgage payable balance (the "Mortgage") for an aggregate principal of $2,000,000, bearing interest at 12% per annum. The Mortgage is secured by the property and assets of the Company's wholly owned subsidiary, IsoCanMed, in Louiseville, Quebec, and is subject to monthly interest-only installments of $11,667, with the principal amount due on January 1, 2024. On closing of the RTO Transaction, the Company determined that the fair value was $2,058,334.

On December 20, 2023, the Company and lender entered into an amended mortgage agreement (the "Amended Mortgage"). The Amended Mortgage delayed repayment of the principal and accrued and outstanding interest from January 1, 2024 to January 1, 2025. Under the terms of the Amended Mortgage, the interest rate was increased from 12% to 13.25% per annum, payable monthly beginning February 1, 2024.

The Company incurred cash transaction costs of $30,000 which are being amortized as accretion expense over the term of the Amended Mortgage. The amortization of transaction costs is included in the line-item 'Finance expense (income), net' in the consolidated statements of income and comprehensive income. As a result of the Amended Mortgage, the Company recognized a loss on modification of $39,770 during the year ended March 31, 2024. The loss on modification was recorded in the line-item 'Finance expense, net' in the consolidated statements of income and comprehensive income.

During the year ended March 31, 2025, the Company incurred $244,331 of interest expense (2024 – $192,305) and made payments totaling $2,338,695 (2024 – $116,505) comprised of principal and interest. In December 2024, the Company repaid the mortgage in full.

**[ii] Unsecured loan**

On July 28, 2023, as part of the RTO Transaction (Note 4), the Company assumed a three-year unsecured loan provided by a vendor, bearing interest at 2% per annum, payable annually. The loan matured on October 31, 2021 and is due on demand.

On closing of the RTO Transaction, the Company determined that the fair value was $340,010, comprised of the principal amount of $313,000 and accrued but unpaid interest of $27,010. During the year ended March 31, 2025, the Company incurred and accrued $6,250 of interest expense (2024 – $4,178).

**13 Convertible debentures**

---

| |
|:---|
| Balance as at March 31, 2023 |
| RTO transaction (Note 4) |
| Interest accretion expense |
| Repayments |
| Balance as at March 31, 2024 |
| Interest accretion expense |
| Payments |
| **Balance as at March 31, 2025** |

---

**MTL Cannabis Corp.** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

(i) 2017 Debentures

On July 28, 2023, as part of the RTO Transaction (Note 4), the Company assumed unsecured convertible debentures with an outstanding balance of $607,000 (the "2017 Debentures"). Each 2017 Debentures unit comprises a principal amount of $1,000 and bears interest at 18% per annum, payable monthly. As of July 28, 2023, the 2017 Debentures are due on demand and are no longer convertible.

The Company determined that the fair value of the 2017 Debentures was $607,000. During the year ended March 31, 2025, the Company incurred $72,085 of interest expense (2024 – $55,958).

(ii) Archerwill Debentures

On July 28, 2023, as part of the RTO Transaction (Note 4), the Company assumed a secured convertible debenture with a principal value of $6,500,000 (the "Archerwill Debenture"). The Archerwill Debenture bears interest at 8% per annum. The Archerwill Debenture are convertible into common shares at a conversion price of $0.57, or payable in cash at maturity, at the option of the lender. Unless converted earlier, the Archerwill Debenture matures on August 8, 2025. The Archerwill Debenture is secured by a first ranking security over all present and after-acquired property.

The Archerwill Debenture also contains a repayment clause where for each $1.00 paid towards principal or accrued interest of notes payable, $0.50 shall be paid towards the ISO Promissory Notes (Note 11), $0.25 shall be paid towards the notes payable to certain related parties (Note 11), and $0.25 shall be paid towards the Archerwill Debenture. Any repayment shall first be credited to any accrued and unpaid interest. In addition, for each repayment made, the Company must issue the number of warrants equal to the repayment amount divided by the conversion price of $0.57.

In conjunction with the Archerwill Debenture, the Company issued 4,333,333 common share purchase warrants (the "Archerwill Debenture Warrants"), exercisable until August 5, 2027 at an exercise price of $0.75. On September 18, 2023, 60% or 2,600,000 of the Archerwill Debenture Warrants were cancelled as the 20 day VWAP of Common Shares following the resumption of trading on the CSE was less than $0.65 per common share.

On closing of the RTO Transaction (Note 4), the Company determined that the fair value of the host debt instrument, the conversion option derivative, and warrant liability was $5,254,366, $4,843,000, and $557,000 respectively. The fair value of the conversion feature and warrants were assessed using a combination of a Monte Carlo analysis and Black-Scholes model. Key assumptions used in both models were a share price of $0.47, estimated volatility of 95% and a risk-free rate of 4.0%. The fair value of the host debt instrument was fair valued based on a discount rate of 22%.

After the first 20 trading days following the resumption of trading, the conversion option derivative and warrant liability met the criteria for equity classification on September 18, 2023. In accordance with IAS 32, the conversion option derivative and the remaining 1,733,333 Archerwill Debenture Warrants were reclassed into equity at the remeasured fair value on September 18, 2023.

As at September 18, 2023, the Company determined the fair value of the conversion option derivative, and warrant liability as $2,740,000, and $310,000 respectively. The fair value of the conversion feature and warrants were assessed using a combination of a Monte Carlo analysis and Black-Scholes model. Key assumptions used in both models were a share price of $0.31, an exercise price of $0.57 for options, an exercise price of $0.74737 for warrants, estimated volatility of 105% and a risk-free rate of 4.1%. The gain of $2,350,000 was recorded in the line item 'Finance expense, net'.

On December 22, 2023, January 31, 2024, and March 13, 2024, the Company repaid an aggregate of $1,000,000 towards the Archerwill Debenture, resulting in the issuance of 1,739,432 warrants (the "Archerwill Prepayment Warrants"). The Archerwill Prepayment Warrants expire on August 5, 2027. The fair value of the Archerwill Prepayment Warrants was assessed using the Black-Scholes model. Key assumptions used in the model were a share price of $0.27 - $0.435, an exercise price of $0.57, estimated volatility of 95%, an expected life of 3.40 – 3.62 years, and a risk-free rate of 3.85%. The fair value of $344,155 was recorded in the line item 'Finance expense, net' on the consolidated statements of income and comprehensive income.

On June 26, 2024, the Company repaid $250,000 towards the Archerwill Debenture, resulting in the issuance of 434,858 warrants (the "Second Archerwill Prepayment Warrants"). The Second Archerwill Prepayment Warrants expire on August 5, 2027. The fair value of the Second Archerwill Prepayment Warrants was determined using the Black-Scholes model. Key assumptions used in the model were a share price of $0.27, an exercise price of $0.57, estimated volatility of 95%, an expected life of 3.11 years, and a risk-free rate of 3.88%. The fair value of $53,146 was recorded in the line item 'Finance expense, net' on the consolidated statements of income and comprehensive income.

**MTL Cannabis Corp.** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

**14 Share capital**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a) Authorized**

The Company has authorized capital consisting of an unlimited number of common shares without par value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b) Issued and outstanding**

---

| | | |
|:---|:---|:---|
|  | **Common shares** | **Common shares** |
|  | **#** | **$** |
| Balance – March 31, 2023 | 46152564 | 100 |
| Shares issued pursuant to Tranche Two Closing (Note 4) | 70713556 | 11014000 |
| Shares issued for services (Note 4) | 131441 | 61777 |
| Balance – March 31, 2024 | 116997561 | 11075877 |
| **Balance – March 31, 2025** | **116997561** | **11075877** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c) Warrants**

On July 28, 2023, as a result of the RTO Transaction (Note 4), the Company issued replacement warrants for all warrants issued and outstanding of Canada House at the time of the Tranche Two Closing. The replacement warrants were issued on the same terms, except they were exercisable into common shares of MTL Cannabis Corp., rather than Canada House. Each warrant converts into one common share of the Company on exercise. The fair value of the replacements warrants in MTL Cannabis Corp. was included as a part of the total purchase consideration (Note 4).

The changes in the numbers of warrants outstanding during the year ended March 31, 2025 were as follows:

---

| | | |
|:---|:---|:---|
|  | **Number of<br> warrants** | **Weighted average<br> exercise price** |
|  | **#** | **$** |
| Outstanding as at March 31, 2023 |  |  |
| RTO Transaction (Notes 4 and 13) | 5978089 | 1.20 |
| Warrants issued (Note 13) | 1739432 | 0.57 |
| Outstanding as at March 31, 2024 | 7717521 | 1.06 |
| Granted (Note 13) | 434858 | 0.57 |
| **Outstanding as at March 31, 2025** | **8152379** | **1.03** |

---

The following table is a summary of the Company's warrants outstanding as at March 31, 2025:

---

| | | |
|:---|:---|:---|
| **Expiration date** | **Warrants <br> outstanding** | **Weighted average<br> exercise price** |
|  | **#** | **$** |
| August 30, 2025 | 666666 | 1.20 |
| August 30, 2025 | 333333 | 0.66 |
| December 31, 2026 | 3244757 | 1.50 |
| August 5, 2027 | 1733333 | 0.75 |
| August 5, 2027 | 2174290 | 0.57 |
|  | **8152379** | **1.03** |

---

**MTL Cannabis Corp.** 

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS** 

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

The following table is a summary of the Company's warrants outstanding as at March 31, 2024:

---

| | | |
|:---|:---|:---|
| **Expiration date** | **Warrants <br> outstanding** | **Weighted average<br> exercise price** |
|  | **#** | **$** |
| August 30, 2025 | 666666 | 1.20 |
| August 30, 2025 | 333333 | 0.66 |
| December 31, 2026 | 3244757 | 1.50 |
| August 5, 2027 | 1733333 | 0.75 |
| August 5, 2027 | 1739432 | 0.57 |
|  | **7717521** | **1.06** |

---

The weighted average remaining contractual life of warrants outstanding as at March 31, 2025 was 1.87 years (2024 – 2.85 years).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d) Share options**

The Company has a share option plan (the "Option Plan") for directors, officers, employees and consultants of the Company. The Company's Board of Directors determines, among other things, the eligibility of individuals to participate in the Option Plan and the term, vesting periods, and the exercise price of options granted to individuals under the Option Plan.

Each share option converts into one common share of the Company on exercise. No amounts are paid or payable by the individual on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.

The Company's Option Plan provides that the number of common shares reserved for issuance may not exceed 10% of the Common Shares that are outstanding unless the Board of Directors shall have increased such limit by a resolution of the Board. In addition, the aggregate number of Common Shares so reserved for issuance to one person may not exceed 5% of the total issued and outstanding common shares. If any options terminate, expire, or are cancelled, the number of options so terminated, expired or cancelled shall again be available under the plan.

On July 28, 2023, as a result of the RTO Transaction (Note 4), the Company issued replacement share options for all options issued and outstanding of Canada House at the time of the Tranche Two Closing. The replacement share options were issued on the same terms, except they were exercisable into common shares of MTL Cannabis Corp., rather than Canada House. Each share option converts into one common share of the Company on exercise. No amounts are paid or payable by the individual on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of expiry. The fair value of the replacement options was included as a part of the total purchase consideration (Note 4).

The change in the number of share options outstanding during the year are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **March 31, 2025** | **March 31, 2025** | March 31, 2024 | March 31, 2024 | March 31, 2024 |
|  | **Number of<br> options** | **Weighted<br> average <br> exercise price** | Number of<br> options | Number of<br> options | Weighted<br> average<br> exercise price |
|  | **#** | | $— | # | $|
| Options outstanding, beginning of year | **854166** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Options replaced (Note 4) | **—** |  |  | 1765000 | 1.26 |
| &nbsp;&nbsp;&nbsp;Options granted | **5725000** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Options forfeited | **(77500)** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Options expired | **(106668)** |  |  | (910834) | 1.50 |
| **Options outstanding, end of year** | **6394998** |  |  | 854166 | 1.00 |
| **Options exercisable, end of year** | **2101248** |  |  | 854166 | 1.00 |

---

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

On April 10, 2024 and June 10, 2024, the Company granted 2,550,000 and 3,175,000 share options, respectively, with 25% of the options granted vesting immediately. The remaining options granted vest evenly over the next three years on the anniversary date of the grant.

The fair value of share options granted on April 10, 2024 and June 10, 2024, were estimated at the date of grant using the Black-Scholes option pricing model using the following inputs:

---

| | |
|:---|:---|
|  | **2025** |
| Grant date share price | $0.26 - $0.29 |
| Exercise price | $0.26 - $0.29 |
| Expected dividend yield | $nil |
| Risk-free interest rate | 3.52% - 3.74% |
| Expected option life | 5 years |
| Expected volatility | 95% |

---

The expected volatility was estimated using the volatility of publicly traded companies that the Company considered to be comparable. The expected option life represents the period of time that options granted are expected to be outstanding. The risk-free interest rate is based on the government bonds with a term equal to the expected life of the options.

During the year ended March 31, 2025, the Company recognized $764,188 in share-based compensation expense (2024 – $61,777).

The following table is a summary of the Company's share options outstanding as at March 31, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Options outstanding** | **Options outstanding** | **Options outstanding** | **Options exercisable** | **Options exercisable** | **Options exercisable** |
| **Number** | **Number** | | | **Number** | **Number** |
| **outstanding** | **outstanding** | | | **exercisable** | **exercisable** |
| $**#** | **#** | **Weighted average**<br>**remaining**<br>**contractual life**<br>**[years]**<br>**#** |<br>**Weighted average**<br>**exercise price**<br>**$** | $**#** | **#** |
|  | 2550000 | 4.03 |  |  | 637500 |
|  | 3175000 | 4.20 |  |  | 793750 |
|  | 500000 | 3.41 |  |  | 500000 |
|  | 169998 | 0.94 |  |  | 169998 |
|  | **6394998** | **3.98** |  |  | **2101248** |

---

The following table is a summary of the Company's share options outstanding as at March 31, 2024:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Options outstanding** | **Options outstanding** | **Options outstanding** | **Options exercisable** | **Options exercisable** | **Options exercisable** |
| **Number** | **Number** | | | **Number** | **Number** |
| **outstanding** | **outstanding** | | | **exercisable** | **exercisable** |
| $**#** | **#** | **Weighted average**<br>**remaining**<br>**contractual life**<br>**[years]**<br>**#** |<br>**Weighted average**<br>**exercise price**<br>**$** | $**#** | **#** |
|  | 500000 | 4.41 |  |  | 500000 |
|  | 350833 | 1.63 |  |  | 350833 |
|  | 3333 | 0.06 |  |  | 3333 |
|  | **854166** | **3.25** |  |  | **854166** |

---

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

---

| | |
|:---|:---|
| **15** | **Earnings per share** |

---

The Company presents basic and diluted EPS data for its shares. Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the year. Diluted EPS is determined by adjusting net income and the weighted average number of common shares outstanding, for the effects of all dilutive potential shares.

---

| | | |
|:---|:---|:---|
|  | **For the years ended<br> March 31,** | **For the years ended<br> March 31,** |
|  | **2025** | **2024** |
|  | **$** | **$** |
| Net income for the year | **6826256** | 2449523 |
| Weighted average number of shares for basic EPS | **116997561** | 93963259 |
|  | $**0.058** | $0.026 |

---

The Company has three categories of potentially dilutive securities: convertible debentures, warrants and share options. Basic and diluted income per share were the same for the years ended March 31, 2025 and 2024, as the exercise of any potentially dilutive instruments would be anti-dilutive.

---

| | |
|:---|:---|
| **16** | **Finance expense, net** |

---

Finance expense, net for the years ended March 31, 2025 and 2024 consists of the following:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **$** | **$** |
| Interest on lease obligations (Note 8) | **2562566** |  |
| Interest on notes payable (Note 11) | **1975887** |  |
| Interest on borrowings (Note 12) | **250581** |  |
| Interest on convertible debentures (Note 13) | **2492438** |  |
| Fair value gain on financial liabilities (Note 13) | **—**) |  |
| Gain on modification of mortgage payable (Note 12) | **—**) |  |
| Gain on extinguishment of notes payable (Note 11) | **—**) |  |
| Incremental fair value of warrants modified (Note 11) | **—** |  |
| Warrants issued (Note 14) | **53146** |  |
| Other finance expense | **67163** |  |
|  | **7401781** |  |

---

---

| | |
|:---|:---|
| **17** | **Nature of expenses** |

---

General and administrative expenses for the years ended March 31, 2025 and 2024 consists of the following:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **$** | **$** |
| Salaries, wages and benefits | **13935357** |  |
| General operating | **6528883** |  |
| Occupancy expense (recovery) | **312330**) |  |
| Professional fees | **3133879** |  |
|  | **23910449** |  |

---

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

---

| | |
|:---|:---|
| **18** | **Segmented information** |

---

The Company reports segment information based on internal reports used by the Chief Operating Decision makers ("CODM") to make operating and resource decisions and to assess performance. The CODM is represented by the Chief Executive Officer, Chief Operating Officer, Chief Cultivation Officer, and Chief Financial Officer. The CODM makes decisions and assesses performance of the Company through two reportable and operating segments. The Company cultivates and distributes cannabis related products via federally approved cannabis programs by way of its Licensed Producer business. In addition, Company operates its clinic business through its CHC subsidiary. The Company derives substantially all of its revenue from these two segments.

The Company primarily operates in one principal geographical area, Canada, accordingly all of the Company's long-lived assets are located in Canada. For the year ended March 31, 2025, the Company generated revenue of $3,247,000 in Portugal (2024 – $291,500).

The following table presents details on the Company's segments for the year ended March 31, 2025:

---

| | |
|:---|:---|
|  | **CHC** |
|  | **$** |
| **Revenue** |  |
| Product revenue | 283965 |
| Referral revenue and other) | 7490147 |
| Less: excise tax |  |
| Net revenue | 7774112 |
| Cost of sales |  |
| Gross profit before fair value adjustments | 7774112 |
| Fair value adjustments on biological assets |  |
| Fair value adjustments on sale of inventory |  |
| **Gross profit** | **7774112** |
| Expenses | 5460753 |
| **Operating income (loss)** | **2313359** |
| Finance expense, net | 137241 |
| Other expense (income) | 109198 |
| **Income (loss) before income taxes** | **2066920)** |
| Income tax expense | 492439 |
| **Net income (loss) and comprehensive income (loss) for the year** | **1574481** |

---

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

The following table presents details on the Company's segments for the year ended March 31, 2024:

---

| |
|:---|
| **Revenue** |
| Product revenue |
| Referral revenue and other |
| Less: excise tax |
| Net revenue |
| Cost of sales |
| Gross profit before fair value adjustments |
| Fair value adjustments on biological assets |
| Fair value adjustments on sale of inventory |
| **Gross profit** |
| Expenses |
| **Operating income (loss)** |
| Finance expense, net |
| Other income |
| **Income (loss) before income taxes)** |
| Income tax expense |
| **Net income (loss) and comprehensive income (loss) for the year** |

---

Non-current assets as at March 31, 2025 and 2024 were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Licensed <br> producer** | **CHC** | **Total** |
|  | **$** | **$** | **$** |
| **March 31, 2025** |  |  |  |
| Right-of-use assets, net | 11035875 | 719764 | 11755639 |
| Property, plant and equipment, net | 18578433 | 91602 | 18670035 |
| Intangible assets, net | 12241717 | 6373666 | 18615383 |
|  | **41856025** | **7185032** | **49041057** |
| **March 31, 2024** |  |  |  |
| Right-of-use assets, net | 10487659 | 785245 | 11272904 |
| Property, plant and equipment, net | 16324879 | 1128230 | 17453109 |
| Intangible assets, net | 15231717 | 7329666 | 22561383 |
|  | **42044255** | **9243141** | **51287396** |

---

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

---

| | |
|:---|:---|
| **19** | **Income taxes** |

---

The reconciliation of income tax expense for the years ended March 31, 2025 and 2024 consists of the following:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **$** | **$** |
| Income before income taxes | **8654428** | 1786784 |
| Statutory tax rate | **26.50%** | 26.50% |
| Expected income tax provision (recovery) | **2293423** | 473498 |
| Impact of difference in tax rate | **88479** | 19191 |
| Recognition of previously unrecognized tax losses | **(887054)** |  |
| Tax rate changes and other adjustments | **(157361)** | (9864) |
| Non-deductible expenses | **306802** | 123018 |
| Fair value adjustment on warrants | **—** | (525450) |
| Change in deferred tax assets not recognized | **183883** | (743132) |
| Net income tax provision | **1828172** | (662739) |

---

The Company's income tax (recovery) is allocated as follows:

---

| | |
|:---|:---|
|  | **March 31,**<br>**2025** |
|  | **$** |
| Current tax expense | **944017** |
| Deferred tax (recovery) | **884155** |
| Net income tax provision | **1828172** |

---

The following table summarizes the components of deferred tax:

---

| |
|:---|
| Non-capital loss carry forwards |
| Property, plant and equipment**)** |
| Intangible assets**)** |
| Biological assets and inventory**)** |
| Lease Liability, net of right-of-use assets |
| CEBA Loan |
| Share issuance cost |
| Land) |
| ITC Receivable**)** |
| Notes payable**)** |
| Convertible debt**)** |
| Other |
| Total deferred tax assets (liabilities) |

---

Deferred taxes are provided as a result of temporary differences that arise due to differences between income tax values and the carrying amount of assets and liabilities. Deferred tax assets are recognized to offset deferred tax liabilities where they relate to income taxes levied by the same taxation authority and the Company has the legal right and intent to offset.

Movement in the net deferred tax assets (liabilities) is as follows:

---

| |
|:---|
| Balance at the beginning of the year**)** |
| Recognized in profit or loss**)** |
| Recognized in equity) |
| Recognized in goodwill on RTO Transaction (Note 4) |
| Balance at the end of the year |

---

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

Deferred tax assets have not been recognized in respect of the following tax attributes as, on a standalone basis, the subsidiaries to which they relate are not expected to generate sufficient taxable profits to utilize the benefits:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2025** | **March 31,<br> 2024** |
|  | **$** | **$** |
| Non-capital losses carried forward | **10204479** | 9485111 |
| Property, plant and equipment | **7279371** | 7369889 |
| Lease liability | **98520** | 48327 |
| Reserve | **248469** | 406957 |
| Contingent consideration | **88526** | 88526 |
| Land | **253044** | 253045 |
| Capital losses carried forward | **2907252** | 2907252 |
| Share issuance costs | **173338** |  |
|  | **21252999** | 20559107 |

---

Share issue and financing costs will be fully amortized in 2028. The remaining deductible temporary differences may be carried forward indefinitely.

The Company's unrecognized Canadian non-capital income tax losses expire as follows:

---

| | |
|:---|:---|
| **Year** | **$** |
| 2041 | 3893604 |
| 2042 | 3272148 |
| 2043 | 207 |
| 2044 | 2518303 |
| 2045 | 520217 |
|  | **10204479** |

---

---

| | |
|:---|:---|
| **20** | **Contingencies** |

---

In the ordinary course of business, from time to time, the Company is involved in various claims related to operations, rights, commercial, employment or other claims. While the outcome of these matters may not be estimable at the reporting date, the Company makes provision, where possible, for the estimate outcome of such claims or proceedings.

---

| | |
|:---|:---|
| **21** | **Related party transactions** |

---

Key management personnel are those persons having the authority and responsibility for planning, directing and controlling activities of the entity, directly or indirectly and consists of the Chief Executive Officer, Chief Financial Officer, Chief Cultivation Officer, Chief Operating Officer, President, and Directors.

Compensation expense which consists of salaries, benefits and bonuses for the Company's key management personnel for the year ended March 31, 2025, was $3,271,513 ((2024 – $1,258,449). Compensation expense for the year ended March 31, 2025 includes 2,550,000 options granted to key management personnel on April 10, 2024 (2024 – nil). The aggregate fair value of the options granted was $489,141 (2024 – $nil), and the Company recognized $344,410 during the year.

During the year ended March 31, 2025, the Company purchased $6,164,150 (2024 – $1,785,010) of equipment and services at market rates from companies owned by key management personnel. As of March 31, 2025, the Company had an outstanding balance of $3,150,207 (March 31, 2024 – $283,497) recorded in trade and other payables.

During the year ended March 31, 2025, the Company made rental and lease payments to related parties totaling $2,587,728 (2024 – $2,108,200).

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

During the year ended March 31, 2025, the Company accrued interest of $758,035 (2024 – $937,655) on a notes payable balance from a company controlled by the Chief Cultivation Officer and Chief Operating Officer. The Company repaid $990,742 during the year ended March 31, 2025 (2024 – $2,334,654). As of March 31, 2025, the Company had an outstanding balance payable of $4,533,268 (March 31, 2024 – $4,765,975) recorded in notes payable in relation to these notes (Note 11). The balance payable is due on July 1, 2025. As of July 1, 2022, the note is interest bearing at a rate of 17% per annum. Prior to this period the interest was non-interest bearing.

During the year ended March 31, 2025, the Company accrued interest of $660,127 (2024 – $503,802) on a promissory note from a director. The Company repaid $353,707 during the year ended March 31, 2025 (2024 – $nil). As of March 31, 2025, the Company had an outstanding balance payable of $4,138,607 (March 31, 2024 – $4,307,648) recorded in notes payable (Note 11). On July 28, 2024, the Company extended the maturity date of the note from December 12, 2024 to June 2, 2025. The balance payable bears interest at a rate of 5% per annum.

---

| | |
|:---|:---|
| **22** | **Capital management** |

---

The Company's capital management objectives are to maintain financial flexibility in order to pursue its strategy of organic growth and to provide returns to its shareholders. The Company defines capital as the aggregate of its capital shares, notes payable, borrowings, and convertible debentures.

Total managed capital is as follows:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2025** | March 31,<br> 2024 |
|  | **$** | $ |
| Notes payable | **14552353** | 15004518 |
| Borrowings | **350438** | 2438552 |
| Convertible debentures | **7583236** | 5412883 |
| Share capital | **11075877** | 11075877 |
|  | **33561904** | 33931830 |

---

The Company manages its capital structure in accordance with changes in economic conditions. In order to maintain or adjust its capital structure, the Company may elect to issue or repay financial liabilities, issue shares, repurchase shares, pay dividends or undertake any other activities as deemed appropriate under the specific circumstances. The Company is not subject to any externally imposed capital requirements.

---

| | |
|:---|:---|
| **23** | **Financial instruments and risk management** |

---

***Credit risk***

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from deposits with banks and outstanding receivables. The Company trades only with recognized, creditworthy third parties. The Company performs credit checks for all customers who wish to trade on credit terms. As at March 31, 2025, two customers represented 45% of the outstanding receivable balance (2024 – one customer represented 39%). For the year ended March 31, 2025, two customers accounted for 50% of the Company's revenue (2024 – no customers accounted for more than 10% of the Company's revenue).

The Company does not hold any collateral as security and mitigates this risk by dealing only with what management believes to be financially sound counterparties and, accordingly, does not anticipate significant loss for non-performance.

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

The aging of trade receivables is as follows:

---

| |
|:---|
| Current |
| 1 – 30 days past due |
| 31 – 60 days past due |
| Greater than 60 days past due |
| Less: expected credit losses |

---

The expected credit losses were recognized in the consolidated statements of income and comprehensive income in the financial statement line item 'General and administrative'. The losses are included within 'General operating costs' (Note 17).

***Liquidity risk***

Liquidity risk is the risk the Company will not be able to meet its financial obligations as they come due. The Company's exposure to liquidity risk is dependent on the Company's ability to raise additional financing to meet its commitments and sustain operations. The Company mitigates liquidity risk by management of working capital, cash flows, the issuance of share capital and, if desired, the issuance of debt. The Company's trade and other payables are all due within 12 months from the date of these financial statements. The Company is not subject to any covenants.

The Company is obligated to the following contractual maturities of undiscounted cash flows as at March 31, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Carrying <br> amount** | **Year 1** | **Year 2** | **Year 3 and <br> thereafter** | **Total** |
|  | **$** | **$** | **$** | **$** | **$** |
| Trade and other payables | 19364554 | 19364554 |  |  | 19364554 |
| Lease obligations | 14895447 | 3437056 | 3409872 | 20182672 | 27029600 |
| Notes payable | 14552353 | 14685293 |  |  | 14685293 |
| Borrowings | 350438 | 350438 |  |  | 350438 |
| Convertible debentures | 7583236 | 8903593 |  |  | 8903593 |
|  | **56746028** | **46740934** | **3409872** | **20182672** | **70333478** |

---

***Market risk***

Market risk is the risk the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: foreign currency risk, interest rate risk and other price risk.

&nbsp;&nbsp;&nbsp;&nbsp;*·* Foreign
 currency risk

Foreign currency risk arises on financial instruments that are denominated in a currency other than the functional currency in which they are measured. The Company is not exposed to foreign currency risk as at March 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;*·* Interest
 rate risk

Interest rate risk is the risk the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk as at March 31, 2025, as there are no material long-term borrowings outstanding subject to variable interest rates.

&nbsp;&nbsp;&nbsp;&nbsp;*·* Other
 price risk

Other price risk is the risk the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The Company is not exposed to other price risk as at March 31, 2025.

**MTL Cannabis Corp.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

March 31, 2025 and 2024

[expressed in Canadian dollars, except share amounts]

***Fair values***

The carrying values of cash, trade and other receivables, trade and other payables, notes payable, borrowings, and the current portion of convertible debentures approximate their fair value due to the short-term nature of these items. The carrying value of the convertible debentures approximates its fair value due to initial recognition at fair value upon the RTO transaction, and subsequent measurement at amortized cost.

The risk of material change in fair value is not considered to be significant. The Company does not use derivative financial instruments to manage this risk.

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 Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company's valuation techniques. A level is assigned to each fair value measurement based on the lowest-level input significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:

&nbsp;&nbsp;&nbsp;&nbsp;· Level
 1 – Unadjusted quoted prices as at the measurement date for identical assets or liabilities
 in active markets.

&nbsp;&nbsp;&nbsp;&nbsp;· Level
 2 – Observable inputs other than quoted prices included in Level 1, such as quoted
 prices for similar assets and liabilities in active markets; quoted prices for identical
 or similar assets and liabilities in markets that are not active; or other inputs that are
 observable or can be corroborated by observable market data.

&nbsp;&nbsp;&nbsp;&nbsp;· Level
 3 – Significant unobservable inputs that are supported by little or no market activity.
 The fair value hierarchy also requires an entity to maximize the use of observable inputs
 and minimize the use of unobservable inputs when measuring fair value.

The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value. The financial liabilities are a level 2 financial instrument as its fair value was calculated using observable market inputs. No instruments were classified as level 3 as of March 31, 2025. During the year, there were no transfers of amounts between levels.

---

| | |
|:---|:---|
| **24** | **Subsequent Events** |

---

*Notes payable*

On May 30, 2025, the Company and the three note holders of the ISO Promissory Notes agreed to amend the terms of the notes (Note 11). The amendments extended the maturity date of each note to August 31, 2025 from the previous maturity date of June 2, 2025.

On June 1, 2025, the Company and certain related parties agreed to amend its note payable balance due on June 1, 2025. The amendments extended the maturity date of each note to March 31, 2026 from the previous maturity date of June 1, 2025.

*Share-based compensation*

On June 6, 2025, the Company granted 3,000,000 deferred share units ("DSUs") and 2,000,000 restricted share units ("RSUs") to key management personnel. The DSUs granted vest on June 6, 2028, and the RSUs vest evenly over the next three years on the anniversary of the grant date.

*Expansion into Manitoba*

On June 6, 2025, the Company, through its subsidiary CHC, entered into a lease agreement to expand its operations and open a new clinic in Winnipeg, Manitoba. The lease commenced on July 1, 2025, is month-to-month, and can be terminated at any time with 60 days' notice.

## Exhibit 99.4

#### Exhibit 99.4
**MTL Cannabis Corp.**

Condensed Consolidated Interim Financial Statements

For the three and six months ended September 30, 2025 and 2024

[unaudited] [Expressed in Canadian dollars]

**MTL Cannabis Corp.**

**Condensed Consolidated Interim Statements of Financial Position**<br> [unaudited] [expressed in Canadian dollars]

---

| | | | |
|:---|:---|:---|:---|
| As at |  | **September 30,** | March 31, |
|  |  | **2025** | 2025 |
|  | Notes | **$** | $ |
| **ASSETS** |  |  |  |
| **Current assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash |  |  | 5680958 |
| &nbsp;&nbsp;&nbsp;Trade and other receivables | 3 |  | 11821096 |
| &nbsp;&nbsp;&nbsp;Inventory | 4 |  | 16946417 |
| &nbsp;&nbsp;&nbsp;Biological assets | 5 |  | 2141941 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and deposits |  |  | 460925 |
|  |  |  | 37051337 |
| **Non-current assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and deposits |  |  | 63290 |
| &nbsp;&nbsp;&nbsp;Right-of-use assets, net | 6 |  | 11755639 |
| &nbsp;&nbsp;&nbsp;Property, plant and equipment, net | 7 |  | 18670035 |
| &nbsp;&nbsp;&nbsp;Intangible assets and goodwill, net | 8 |  | 18615383 |
| **TOTAL ASSETS** |  |  | 86155684 |
| **LIABILITIES** |  |  |  |
| **Current liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Trade and other payables |  |  | 19364554 |
| &nbsp;&nbsp;&nbsp;Income taxes payable |  |  | 695939 |
| &nbsp;&nbsp;&nbsp;Provision | 9 |  | 5000000 |
| &nbsp;&nbsp;&nbsp;Lease obligations | 6 |  | 1020568 |
| &nbsp;&nbsp;&nbsp;Notes payable | 9 |  | 14552353 |
| &nbsp;&nbsp;&nbsp;Borrowings | 10 |  | 350438 |
| &nbsp;&nbsp;&nbsp;Convertible debentures | 11 |  | 7583236 |
|  |  |  | 48567088 |
| **Non-current liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Lease obligations | 6 |  | 13874879 |
| &nbsp;&nbsp;&nbsp;Notes payable | 9 |  |  |
| &nbsp;&nbsp;&nbsp;Borrowings | 10 |  |  |
| &nbsp;&nbsp;&nbsp;Deferred tax liability |  |  | 1951455 |
|  |  |  | 64393422 |
| **SHAREHOLDERS' EQUITY** |  |  |  |
| &nbsp;&nbsp;&nbsp;Share capital | 12 |  | 11075877 |
| &nbsp;&nbsp;&nbsp;Contributed surplus | 12 |  | 4981294 |
| &nbsp;&nbsp;&nbsp;Retained (deficit) earnings |  |  | 5705091 |
|  |  |  | 21762262 |
| **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  | 86155684 |
| Contingencies | 17 |  |  |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.*

**MTL Cannabis Corp.**

**Condensed Consolidated Interim Statements of Income (loss) and Comprehensive Income (loss)**<br> [unaudited] [expressed in Canadian dollars, except number of shares]

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | **Three months ended<br> September 30,** | **Three months ended<br> September 30,** | **Six months ended<br> September 30,** | **Six months ended<br> September 30,** |
|  | <br>Notes | **2025<br> $** | 2024<br> $ | **2025<br> $** | 2024<br> $ |
| **Revenue** |  |  |  |  |  |
| Product revenue |  | **23250382** | 25099126 | **47508984** | 49605134 |
| Referral revenue and other |  | **2115188** | 1335376 | **3746873** | 2671632 |
| Excise tax |  | **(4751906)** | (5564604) | **(9958342)** | (10685636) |
| **Net Revenue** |  | **20613664** | 20869898 | **41297515** | 41591130 |
| Cost of revenue |  | **10332840** | 9552333 | **22096469** | 19080977 |
| Gross profit before fair value adjustments |  | **10280824** | 11317565 | **19201046** | 22510153 |
| Unrealized fair value adjustments on biological assets | 5 | **(82543)** | 2393627 | **2081553** | 4774327 |
| Realized fair value adjustments on sale of inventory |  | **(992116)** | (1925800) | **(2558793)** | (2395159) |
| **Gross profit** |  | **9206165** | 11785392 | **18723806** | 24889321 |
| **Operating expenses** |  |  |  |  |  |
| General and administrative | 15 | **6933575** | 5761295 | **12096238** | 11512581 |
| Sales and marketing |  | **732233** | 493541 | **1510127** | 993877 |
| Amortization and depreciation | 678 | **1208064** | 1363673 | **2587560** | 2833593 |
| Share-based compensation | 12 | **276547** | 76952 | **421870** | 495370 |
|  |  | **9150419** | 7695461 | **16615795** | 15835421 |
| **Operating income** |  | **55746** | 4089931 | **2108011** | 9053900 |
| Finance expense, net | 14 | **8080121** | 1827305 | **10007929** | 3616606 |
| Other loss (income) |  | **391097** | (29173) | **374963** | (123096) |
| **Income before income taxes** |  | **(8415472)** | 2291799 | **(8274881)** | 5560390 |
| Current tax expense (recovery) |  | **(428798)** | 698621 | **530316** | 1005166 |
| Deferred tax expense (recovery) |  | **335389** | 347400 | **(438701)** | 1103133 |
|  |  | **(93409)** | 1046021 | **91615** | 2108299 |
| **Net income (loss) and comprehensive income (loss) for the period** |  | **(8322063)** | 1245778 | **(8366496)** | 3452091 |
| Income (loss) per share - basic and diluted | 13 | $**(0.071)** | $0.011 | $**(0.071)** | $0.030 |
| &nbsp;&nbsp;Weighted average number of common shares outstanding - basic and diluted |  | **117392772** | 116997561 | **117196246** | 116997561 |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements*

**MTL Cannabis Corp.**

**Condensed Consolidated Interim Statements of Changes in Shareholders' Equity**

For the six months ended September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except number of shares and warrants]

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common shares** | **Common shares** |  | **Warrants** | **Contributed <br> surplus** |  | **Retained <br> earnings <br> (deficit)** | **Total** |
|  | **#** | **$** | $— | **#** | **$** | $— | **$** | **$** |
| Balance as at March 31, 2025 | 116997561 |  |  | 8152379 |  |  |  |  |
| Share-based compensation (Note 12) |  |  |  |  |  |  |  |  |
| Private Placement (Note 12) | 3305399 |  |  | 1652699 |  |  |  |  |
| Issuance of warrants (Note 11) |  |  |  | 14466568 |  |  |  |  |
| Expiration of warrants (Note 9) |  |  |  | (999999) |  |  |  |  |
| Net loss and comprehensive loss |  |  |  |  |  |  |  |  |
| **Balance as at September 30, 2025** | **120302960** |  |  | **23271647** |  |  |  |  |
| | | | | | | | | |
| Balance as at March 31, 2024 | 116997561 |  |  | 7717521 |  |  |  |  |
| Issuance of warrants (Note 12) |  |  |  | 434858 |  |  |  |  |
| Issuance of share options |  |  |  |  |  |  |  |  |
| (Note 12) |  |  |  |  |  |  |  |  |
| Remeasurement of amount payable to pre-RTO existing MTL Cannabis Corp. shareholders |  |  |  |  |  |  |  |  |
| Net income and comprehensive income |  |  |  |  |  |  |  |  |
| **Balance as at September 30, 2024** | **116997561** |  |  | **8152379** |  |  |  |  |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.*

**MTL Cannabis Corp.**

**Condensed Consolidated Interim Statements of Cash Flows**<br> [unaudited] [expressed in Canadian dollars]

---

| | | | |
|:---|:---|:---|:---|
| For the six months ended September 30, | Notes | **2025**<br> **$** | **2024**<br> **$** |
| **Operating activities:** |  |  |  |
| Net income (loss) for the period |  | **(8366496)** | 3452091 |
| Add (deduct) items not affecting cash: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax expense (recovery) |  | **(438701)** | 1103133 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization and depreciation | 678 | **3684272** | 3878815 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory impairment provision | 4 | **792347** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value adjustments on inventory sold |  | **2558793** | 2395159 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of biological assets |  | **(2081553)** | (4774327) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected credit losses | 3 | **(148388)** | 12158 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation | 12 | **421870** | 495370 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other income |  | **—** | (2915) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Finance expense | 14 | **10033126** | 3612878 |
|  |  | **6455270** | 10172362 |
| Changes in non-cash working capital items: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade and other receivables |  | **799303** | (2209274) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory |  | **(3453923)** | (5919284) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Biological assets |  | **2485045** | 4017985 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and deposits |  | **(1808611)** | (18278) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade and other payables |  | **(2857105)** | 1361498 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable |  | **955238** | 1118596 |
| Provision paid | 9 | **(375284)** |  |
| Income taxes paid |  | **(1651177)** | (352022) |
| **Cash flows provided by operating activities** |  | **548756** | 8171583 |
| **Investing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of property, plant and equipment | 7 | **(1807372)** | (2256036) |
| **Cash flows used in investing activities** |  | **(1807372)** | (2256036) |
| **Financing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from borrowings, net | 10 | **19210007** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from Brokered Private Placement, net | 12 | **1759483** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of notes payable | 9 | **(11460141)** | (1905630) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of borrowings | 10 | **(328335)** | (139514) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of convertible debentures | 11 | **(8907979)** | (286141) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of lease obligations | 6 | **(1741153)** | (1663907) |
| **Cash flows used in financing activities** |  | **(1468118)** | (3995192) |
| **Net change in cash during the period** |  | **(2726734)** | 1920355 |
| Cash, beginning of the period |  | **5680958** | 1352135 |
| **Cash, end of the period** |  | **2954224** | 3272490 |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.*

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] (expressed in Canadian dollars, except share amounts)

---

| | |
|:---|:---|
| **1** | **Nature of business** |

---

MTL Cannabis Corp. (the "Company" or "MTLC"), formerly Canada House Cannabis Group Inc. ("Canada House"), was incorporated on September 29, 1982 under the Company Act of the Province of British Columbia. The Company's head office and principal place of business is located at 4225 Autoroute Transcanadienne, Pointe-Claire, Québec, Canada, H9R 1B4. The Company's common shares are listed on the Canadian Securities Exchange under the symbol "MTLC", and on the OTCQB Venture Market under the symbol "MTLNF". The Company through its subsidiaries, engages in cultivation and production of cannabis products for recreational and medical purposes in Canada. It also operates clinics that work directly with primary care teams to provide specialized cannabinoid therapy services to patients suffering from medical conditions. The Company produces various cannabis products, including lines of dried flower, hash, and pre-rolls.

These unaudited condensed consolidated interim financial statements ("financial statements") of the Company for the three and six months ended September 30, 2025 and 2024, comprise the results of the Company and its wholly owned subsidiaries Montréal Cannabis Médical Inc. ("MTL Cannabis"), Abba Medix Corp. ("Abba"), Canada House Clinics Inc. ("CHC"), The Longevity Project Corp. ("TLP"), IsoCanMed Inc. ("IsoCanMed"), and Margaree Health Group Inc. ("Margaree").

---

| | |
|:---|:---|
| **2** | **Basis of preparation** |

---

*Statement of compliance*

These financial statements were prepared using the same accounting policies and methods as those used in the Company's audited consolidated financial statements for the year ended March 31, 2025. These financial statements have been prepared in compliance with IAS 34 – Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB"). Accordingly, certain disclosures normally included in annual financial statements, prepared in in accordance with IFRS® Accounting Standards as issued by the IASB and IFRIC® Interpretations of the IFRS Interpretations Committee, have been omitted or condensed. These financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended March 31, 2025.

These financial statements were approved and authorized for issuance by the Board of Directors of the Company on November 27, 2025.

***Functional currency and presentation currency***

These financial statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiaries.

***Use of estimates, judgments and assumptions***

The preparation of these financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Estimates are based on management's best knowledge of current events and actions the Company may undertake in the future. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

***Summary of material accounting policies adopted in the period***

 ****

*Share-based payments*

The Company grants restricted share units ("RSUs") and deferred share units ("DSUs") to employees and directors of the Company. The RSUs and DSUs are treated as equity-settled instruments for accounting purposes. The Company expects that vested RSUs and DSUs will be settled through the issuance of one common share per RSU or DSU. The fair value is determined based on the market value of the Company's shares at the time of grant. Compensation cost is recognized over the expected vesting period of the share-based compensation.

***New standards, amendments and interpretations not yet adopted by the Company***

 ****

*IFRS 18 – Presentation and Disclosure in Financial Statements ("IFRS 18")*

In April 2024, the IASB issued a new standard IFRS 18, introducing a defined structure for the statement of profit and loss and new specific disclosure requirements to the statement of profit and loss.

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

The standard is effective for annual reporting periods beginning on or after January 1, 2027, and also applies to comparative information. The Company is still assessing the impact of adopting these amendments on its financial statements.

All other IFRSs and amendments issued but not yet effective have been assessed by the Company and are not expected to have a material impact on the Company's financial statements.

---

| | |
|:---|:---|
| **3** | **Trade and other receivables** |

---

The Company's trade and other receivables include the following:

---

| |
|:---|
| Trade receivable |
| SR&ED receivables |
| Income taxes receivable |
| Sales tax receivable |
| Government assistance receivable |
| Other receivables |
| Less: expected credit losses |

---

During the year ended March 31, 2025, the Company purchased light fixtures in the amount of $2,677,500. As a part of the Hydro-Québec Efficient Solutions Program, the Company obtained a subsidy for these lights in the amount of $1,990,014. The net cost of the lights are included as additions of property, plant and equipment (see Note 7). The subsidy was received during the three months ended June 30, 2025.

On September 11, 2025, the Company obtained approval for a subsidy in the amount of $947,140. The subsidy relates to energy savings from HVAC purchases as a part of the Hydro-Québec Efficient Solutions Program. The subsidy was deducted from the cost of property, plant and equipment (see Note 7).

For trade receivables, the change in allowance for credit losses for the six months ended September 30, 2025 was as follows:

---

| |
|:---|
| Opening balance |
| Reduction in allowance for credit losses |
| Closing balance |

---

---

| | |
|:---|:---|
| **4** | **Inventory** |

---

The Company's inventory consists of the following:

---

| |
|:---|
| Work in process |
| Finished goods |
| Carrying value |
| Less: provision |

---

During the three and six months ended September 30, 2025, the Company expensed $9,655,529 and $20,989,909 of inventory in cost of sales (2024 – $8,970,110 and $17,949,015). Included in the amount of inventory expensed to cost of sales is $557,051 and $1,083,080 (2024 – $465,189 and $1,045,222) of depreciation allocated from property and equipment and ROU assets. As of September 30, 2025, the carrying value of inventory includes $775,102 of inventoried depreciation costs (March 31, 2025 – $598,601). During the six months ended September 30, 2025, the Company recorded $792,347 of impairment (2024 – $nil), and $778,494 of inventory write-downs (2024 – $631,712).

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

---

| | |
|:---|:---|
| **5** | **Biological assets** |

---

Biological assets consist of cannabis plants. The changes in the carrying value of biological assets are as follows:

---

| |
|:---|
| Balance – March 31, 2024 |
| Production costs capitalized |
| Changes in fair values less costs to sell due to biological transformation |
| Plants sold during the period) |
| Transferred to inventory upon harvest |
| Balance – March 31, 2025 |
| Production costs capitalized |
| Changes in fair values less costs to sell due to biological transformation |
| Transferred to inventory upon harvest |
| **Balance – September 30, 2025** |

---

The Company measures its biological assets at their fair value less costs to sell. This is determined using a model which estimates the expected harvest yield in grams for plants currently being cultivated, the expected selling price per gram and the expected costs to sell per gram.

The fair value measurements for biological assets have been categorized as Level 3 fair values based on the inputs to the valuation technique used. The Company's method of accounting for biological assets attributes value accretion on a straight-line basis throughout the life of the biological asset from initial cloning to the point of harvest.

The following table quantifies each significant unobservable input, and also provides the impact a 10% increase or decrease in each input would have on the fair value of biological assets at period end:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | **As at September 30, 2025** | **As at September 30, 2025** | **As at March 31, 2025** | **As at March 31, 2025** |
|  | <br>**Assumption:** | **Input** | **10% change** | **Input** | **10% change** |
| i | Weighted average of expected loss of plants until harvest [a] | 13% | $23477 | 8% | $20018 |
| ii | Expected yields (dry grams of cannabis per plant) [b] | 651 grams of <br> dry flower | $173845 | 582 grams of dry <br> flower | $219771 |
| iii | Weighted average number of growing weeks completed as a percentage of total growing weeks as at period-end | 46% | $173845 | 51% | $219771 |
| iv | Estimated selling price (per gram) [c] | $1.68 per gram <br> dried flower | $348334 | $1.74 per gram <br> dried flower | $419754 |
| v | After harvest cost to complete and sell (per gram) | $0.86 per gram <br> dried flower | $174489 | $0.82 per gram <br> dried flower | $199984 |

---

[a] Weighted average of expected loss of plants until harvest represents loss of plants that do not survive to the point of harvest. It does not include any financial loss on a surviving plant.

[b] Expected average yields for cannabis plants vary based on the mix of strains and number of plants existing at each reporting date.

[c] The estimated selling price per gram represents the actual average sales price for the Company's strains sold as bulk products.

The Company estimates the harvest yields for cannabis at various stages of growth. As of September 30, 2025, it is expected that the Company's biological assets will yield approximately 4,466,882 (March 31, 2025 – 4,035,798) grams of dry cannabis flower when harvested. The fair value adjustments on biological assets are presented separately on the condensed consolidated interim statements of income (loss) and comprehensive income (loss).

The Company's estimates, by their nature, are subject to changes that could result from volatility of market prices, unanticipated regulatory changes, harvest yields, loss of crops, changes in estimates and other uncontrollable factors that could significantly affect the future fair value of biological assets.

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS** 

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

---

| | |
|:---|:---|
| **6** | **Leases** |

---

---

| | |
|:---|:---|
| *Right-of-use asset* | |
| **Cost** | **$** |
| Balance – March 31, 2025 |  |
| Additions |  |
| Modification |  |
| **Balance – September 30, 2025** |  |
| **Accumulated depreciation** |  |
| Balance – March 31, 2025 |  |
| Depreciation |  |
| **Balance – September 30, 2025** |  |
| Net Balance – March 31, 2025 |  |
| **Net Balance – September 30, 2025** |  |
| Lease obligations |  |
| Balance – March 31, 2025 |  |
| Additions |  |
| Interest accretion |  |
| Lease payments |  |
| Modification |  |
| **Balance – September 30, 2025** |  |
| Current |  |
| Non-current |  |

---

The Company's right-of-use assets and lease obligations relate to the Company's warehouse, office premises, licensed cultivation facility, and clinics. For its leased premises, the Company hypothecates all of its equipment and other moveable effects to its landlord up to the market value equivalent of one years' rent as security against the lease obligation.

The following table sets out a maturity analysis of the lease payments payable, showing the undiscounted lease payments to be paid on an annual basis, reconciled to the lease obligation.

---

| | |
|:---|:---|
|  | **$** |
| Less than one year | 3467609 |
| One to two years | 3452984 |
| Two to three years | 3587438 |
| Three to four years | 3268441 |
| Thereafter | 15480258 |
| Total undiscounted lease payments payable | 29256730 |
| Less: impact of present value | 8588901 |
| **Balance – September 30, 2025** | **20667829** |

---

Additions during the period

On July 1, 2025, the Company commenced a new lease for its clinic in Mount Pearl, Newfoundland. The lease expires on June 30, 2028, and includes a three-year renewal option. Prior to this agreement, the lease was month-to-month and a short-term lease under IFRS 16. As a result of the agreement, the Company recognized an additional right-of-use asset and lease liability in the amount of $168,493.

*Modifications during the period*

On July 29, 2025, the Company modified its lease agreement on its head office at 4225 Transcanadienne Highway. The modification extended the non-cancellable period from March 31, 2028 to March 31, 2029. The Company determined that the 5-year renewal option at the end of the non-cancellable period was still reasonably certain to be exercised. The Company determined that this modification did not result in a new lease. As a result of the modification, the Company remeasured the lease liability by discounting the lease payments over the revised lease term using a revised discount rate and made a corresponding increase to its right-of-use asset in the amount of $2,414,425. The leased premises is owned by a company controlled by the Chief Cultivation Officer and the Chief Operating Officer.

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

On July 29, 2025, the Company modified its lease agreement on its production facility at 815 Tecumseh Ave. The modification extended the non-cancellable period from March 31, 2028 to March 31, 2029. The Company determined that the 5-year renewal option at the end of the non-cancellable period was still reasonably certain to be exercised. The Company determined that this modification did not result in a new lease. As a result of the modification, the Company remeasured the lease liability by discounting the lease payments over the revised lease term using a revised discount rate and made a corresponding increase to its right-of-use asset in the amount of $3,743,005. The leased premises is owned by a company controlled by the Chief Cultivation Officer and the Chief Operating Officer.

On September 30, 2025, the Company modified its lease agreement at a clinic in Kingston, Ontario. The modification extended the maturity date from March 31, 2026 to March 31, 2029. As a result of the modification, the Company remeasured the lease liability by discounting the revised lease payments using a revised discount rate and made a corresponding increase to the ROU asset in the amount of $42,918.

*Rental income*

The Company received rental income of $8,824 and $20,294 during the three and six months ended September 30, 2025 (2024 – $7,495 and $14,990) relating to the short-term rental of unused warehouse facilities, which has been included in general and administrative expenses on the condensed consolidated interim statements of income (loss) and comprehensive income (loss).

---

| | |
|:---|:---|
| **7** | **Property, plant and equipment** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Equipment <br> and <br> supplies** | **Computer<br> equipment** | **Leasehold <br> improvements** | **Land** |
|  | **$** | **$** | **$** | **$** |
| **Cost** |  |  |  |  |
| Balance, March 31, 2025 | 8315504 | 209283 | 4009186 | 121957 |
| &nbsp;&nbsp;&nbsp;Additions | 1424653 |  | 414005 |  |
| &nbsp;&nbsp;&nbsp;Government subsidy (Note 4) |  |  |  |  |
| **Balance, September 30, 2025** | **9740157** | **209283** | **4423191** | **121957** |
| **Accumulated depreciation** |  |  |  |  |
| Balance, March 31, 2025 | 4028098 | 80443 | 143712 |  |
| &nbsp;&nbsp;&nbsp;Depreciation | 422889 | 24897 | 104631 |  |
| **Balance, September 30, 2025** | **4450987** | **105340** | **248343** | **—** |
| **Carrying value** |  |  |  |  |
| Balance, March 31, 2025 | 4287406 | 128840 | 3865474 | 121957 |
| **Balance, September 30, 2025** | **5289170** | **103943** | **4174848** | **121957** |

---

During the three and six months ended September 30, 2025, the Company allocated $382,287 and $755,155 (2024 – $495,535 and $833,140) of depreciation expense to the production of biological assets and inventory. As of September 30, 2025, $126,000 of additions were payable to suppliers (2024 – $nil).

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

---

| | |
|:---|:---|
| **8** | **Intangible assets and goodwill** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Customer relationships**<br> **$** | **License**<br> **$** | **Technology**<br> **$** | **Trademarks and brand**<br> **$** | **Goodwill**<br> **$** | **Total**<br> **$** |
| **Cost** |  |  |  |  |  |  |
| Balance, March 31, 2025 | 8040000 | 3340000 | 390000 | 820000 | 12602050 | 25192050 |
| **Balance, September 30, 2025** | **8040000** | **3340000** | **390000** | **820000** | **12602050** | **25192050** |
| **Accumulated amortization** |  |  |  |  |  |  |
| Balance, March 31, 2025 | 3350000 | 2783333 | 130000 | 313334 |  | 6576667 |
| Amortization | 1005000 | 556667 | 39000 | 87333 |  | 1688000 |
| **Balance, September 30, 2025** | **4355000** | **3340000** | **169000** | **400667** | **—** | **8264667** |
| **Carrying Value** |  |  |  |  |  |  |
| Balance, March 31, 2025 | 4690000 | 556667 | 260000 | 506666 | 12602050 | 18615383 |
| **Balance, September 30, 2025** | **3685000** | **—** | **221000** | **419333** | **12602050** | **16927383** |

---

---

| | |
|:---|:---|
| **9** | **Notes payable** |

---

The following table presents the notes payable for the Company:

---

| | | | |
|:---|:---|:---|:---|
|  | **September 30,**<br> **2025** | March 31, <br>2025 | March 31, <br>2025 |
|  |  | $— | $|
| Due to related parties [i] |  |  | 4533268 |
| Promissory notes [ii] |  |  | 10019085 |
| Total notes payable |  |  | 14552353 |
| Current |  |  | 14552353 |
| Non-current |  |  |  |

---

**[i] Due to related parties** 

Notes payable are due to certain related parties of the Company. The notes payable bear interest at 17% per annum and are unsecured. As of March 31, 2025, the notes payable balances were due on June 1, 2025.

On June 1, 2025, the Company and the related parties entered into amending agreements for the notes payable. The amending agreements deferred repayment of the principal and accrued interest until March 31, 2026. All other terms of the notes remained the same. The Company considered the amendment an extinguishment at maturity and replacement with a new note. No gain or loss was recognized on extinguishment.

On July 30, 2025, the Company and the related parties entered into amending agreements for the notes payable. The amending agreements deferred repayment of the principal and accrued until August 30, 2028, subject to demand by the lender. All other terms of the notes remained the same. The Company recognized a gain of $181,934 on modification of the notes, included in the line-item finance expense, net in the condensed consolidated interim statements of income (loss) and comprehensive (income) loss.

On July 30, 2025, the Company also issued two new promissory notes to related parties in the amount of $2,312,358 per note. The new notes mature on August 30, 2028, and incur interest at 17% per annum. The notes were issued to defer repayment of the provision of $5,000,000 owed to the shareholders of MTL Cannabis prior to the Canada House acquisition. The remaining balance of $375,284 was repaid in cash. Previously, the notes were due upon repayment of the Third Amended ISO Promissory Notes (see Note 9(ii)).

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS** 

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

The following table summarizes the changes to the Company's due to related party notes payable:

---

| |
|:---|
| Balance – Beginning of the period |
| Notes payable issued in settlement of provision |
| Interest expense |
| Repayments) |
| Modification |
| Balance – End of the period |

---

**[ii] Promissory notes** 

On July 28, 2023, as part of the Canada House acquisition, the Company assumed three promissory notes (the "ISO Promissory Notes") each with a principal value of $4,167,667, for an aggregate amount of $12,500,000, bearing interest at 5% payable annually. The initial maturity dates of the three promissory notes are December 12, 2023, June 12, 2024, and December 12, 2024. Until maturity, the principal amount of $666,667 of each note may be converted into common shares of the Company, at the option of the noteholder, at a conversion price of $1.50. The promissory notes are secured by a general security agreement registered against the assets of IsoCanMed. On closing of the Canada House acquisition, the Company determined that the fair value of the ISO Promissory Notes was $10,875,572.

On December 11, 2023, the Company and one of the note holders agreed to amend one of the promissory notes (the "Amended ISO Promissory Note"). The Amended ISO Promissory note extended the maturity date from December 12, 2023 to April 30, 2024.

On July 28, 2024, the Company and all of the note holders agreed to amend the promissory notes (the "Second Amended ISO Promissory Notes"). The Second Amended ISO Promissory Notes extended the maturity date for all notes to June 2, 2025. All other terms of the notes remained the same.

On June 1, 2025, the Company and all of the note holders agreed to amend the promissory notes (the "Third Amended ISO Promissory Notes"). The Third Amended ISO Promissory Notes extended the maturity date for all notes to August 31, 2025. All other terms of the notes remained the same. The Company considered the amendment an extinguishment at maturity and replacement with a new note. No gain or loss was recognized on extinguishment.

On July 31, 2025, the Company fully repaid the Third Amended ISO Promissory Notes.

---

| |
|:---|
| Balance – Beginning of the period |
| Interest expense |
| Repayments |
| Balance – End of the period |

---

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

---

| | |
|:---|:---|
| **10** | **Borrowings** |

---

The following table presents the borrowings for the Company:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | March 31,<br>2025 |
|  | **$** | $ |
| Unsecured loan [i] | **353572** | 350438 |
| RT Facility [ii] | **633927** |  |
| NRT 1 Facility [ii] | **6645306** |  |
| NRT 2 Facility [ii] | **11815177** |  |
| Total borrowings | **19447982** | 350438 |
| Current | **3617073** | 350438 |
| Non-current | **15830909** |  |

---

---

| | |
|:---|:---|
| **[i]** | **Unsecured loan** |

---

On July 28, 2023, as part of the Canada House acquisition, the Company assumed a three-year unsecured loan provided by a vendor, bearing interest at 2% per annum, payable annually. The loan matured on October 31, 2021, and is due on demand. During the three and six months ended September 30, 2025, the Company incurred and accrued $1,575 and $3,134 of interest expense (2024 – $1,576 and $3,134).

---

| | |
|:---|:---|
|  | **September 30,**<br>**2025** |
|  | **$** |
| Balance – Beginning of the period | **350438** |
| Interest expense | **3134** |
| Balance – End of the period | **353572** |

---

---

| | |
|:---|:---|
| **[ii]** | **Credit facilities** |

---

On July 30, 2025, the Company entered into a credit agreement ("Credit Agreement") with a Canadian Schedule 1 Bank to assist with capital expenditures, finance working capital, and refinance existing debt assumed from the Canada House acquisition. The Credit Agreement was comprised of the following facilities:

&nbsp;&nbsp;&nbsp;&nbsp;· an
 uncommitted demand revolving credit facility of up to $4,000,000 (the "RT Facility").

&nbsp;&nbsp;&nbsp;&nbsp;· A
 committed non-revolving term credit facility, by way of a single drawdown, in the amount
 of $6,750,000 (the "NRT 1 Facility").

&nbsp;&nbsp;&nbsp;&nbsp;· A
 committed non-revolving term credit facility, by way of a single drawdown, in the amount
 of $12,150,000 (the "NRT 2 Facility").

&nbsp;&nbsp;&nbsp;&nbsp;· An
 uncommitted delayed draw non-revolving term credit facility, available by way of one or more
 drawdowns, in the amount of $4,120,000 (the "DDTL Facility").

All facilities (the "Credit Facilities") mature on July 28, 2028, and bear interest based on the Canadian Overnight Repo Rate Average ("CORRA") plus an applicable margin, or the Canadian prime rate plus an applicable margin. The applicable margin is based on predetermined thresholds for total funded debt to Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"). Upon issuance, the effective interest rate of the NRT 1 Facility and the NRT 2 Facility were 6.85% and 7.05%, respectively. The Credit Facilities are classified as financial liabilities at amortized cost and accounted for using the effective interest rate method. In the case of CORRA loans, interest is repayable on the last day of the applicable interest period selected, on prepayment, and on termination. In the case of Canadian prime rate loans, interest is repayable on the last banking day of each calendar month, on prepayment, and on termination.

The credit outstanding under the RT Facility shall be repaid on the maturity date with all accrued and unpaid interest. Prior to the maturity date, amounts which are repaid may be reborrowed. The credit outstanding under the NRT 1 Facility, NRT 2 Facility, and DDTL Facility shall be repaid in monthly instalments, and the annual sum of the monthly instalments shall equal 5%, 20%, and 2.78% of the drawn amount, respectively. The instalments are paid on the last banking day of each calendar month following the closing date to and including the last full calendar month prior to the maturity date of July 28, 2028. Any balances outstanding after the last instalment payment are repaid at maturity together with all accrued and unpaid interest. The Credit Facilities can be prepaid at any time without penalty.

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

As of September 30, 2025, the Company made drawdowns of $6,750,000 under the NRT 1 Facility, $12,150,000 under the NRT 2 Facility, and utilized $633,927 of the RT Facility through overdraft. The DDTL Facility remains undrawn.

The Company incurred cash transaction costs of $463,085 which are being amortized as accretion expense over the term of the Credit Facilities, included in the line-item finance expense, net in the condensed consolidated interim statements of income (loss) and comprehensive (income) loss. Transaction expenses were allocated to each facility based on the maximum draw amount, and the portion relating to the undrawn amount has been capitalized as a prepaid finance fee in the statement of financial position. The portion allocated to the drawn amount is included in the effective interest rate of each respective facility.

The Credit Facilities are secured by a first ranking security over all present and after-acquired property, assets and undertaking in the form of security documents. The Credit Facilities contain a financial covenant requiring the Company to maintain a total funded to EBITDA ratio of 2.00:1.00 for each fiscal quarter from the closing date to June 29, 2026, and a total funded to EBITDA ratio of 1.50:1.00 for each fiscal quarter from and including June 30, 2026 to maturity. The Company is also subject to a fixed charges coverage ratio, requiring a ratio greater than 1.25:1.00 to be maintained at all times.

As at September 30, 2025, the Company was in compliance with its financial covenants.

The following table summarizes changes to the Company's NRT 1 Facility.

---

| |
|:---|
| Balance – Beginning of the period |
| Advances |
| Allocated transaction costs**)** |
| Interest expense |
| Repayments |
| Balance – End of the period |

---

The following table summarizes changes to the Company's NRT 2 Facility.

---

| |
|:---|
| Balance – Beginning of the period |
| Advances |
| Allocated transaction costs**)** |
| Interest expense |
| Repayments |
| Balance – End of the period |

---

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

---

| | |
|:---|:---|
| **11** | **Convertible debentures** |

---

---

| |
|:---|
| Balance as at March 31, 2024 |
| Interest accretion expense |
| Payments) |
| Balance as at March 31, 2025 |
| Interest accretion expense |
| Cash payments) |
| Gain on extinguishment) |
| **Balance as at September 30, 2025** |

---

(i) 2017 Debentures

On July 28, 2023, as part of the Canada House acquisition, the Company assumed unsecured convertible debentures with an outstanding balance of $607,000 (the "2017 Debentures"). Each 2017 Debentures unit comprises a principal amount of $1,000 and bears interest at 18% per annum, payable monthly. As of July 28, 2023, the 2017 Debentures are due on demand and are no longer convertible.

The Company determined that the fair value of the 2017 Debentures was $607,000. During the three and six months ended September 30, 2025, the Company incurred $1,283 and $19,149 of interest expense (2024 – $18,169 and $36,141). On July 31, 2025, the Company repaid the 2017 Debentures.

(ii) Archerwill Debentures

On July 28, 2023, as part of the Canada House acquisition, the Company assumed a secured convertible debenture with a principal value of $6,500,000 (the "Archerwill Debenture"). The Archerwill Debenture bears interest at 8% per annum. The Archerwill Debenture is convertible into common shares at a conversion price of $0.57, or repayable in cash upon maturity, which is August 8, 2025, unless converted earlier. The Archerwill Debenture is secured by a first ranking security over all present and after-acquired property.

The Archerwill Debenture also contains a repayment clause where for each $1.00 paid towards principal or accrued interest of notes payable, $0.50 shall be paid towards the ISO Promissory Notes (Note 9), $0.25 shall be paid towards the notes payable to certain related parties (Note 9), and $0.25 shall be paid towards the Archerwill Debenture. Any repayment shall first be credited to any accrued and unpaid interest. In addition, for each repayment made, the Company must issue the number of warrants equal to the repayment amount divided by the conversion price of $0.57.

In conjunction with the Archerwill Debenture, the Company issued 4,333,333 common share purchase warrants (the "Archerwill Debenture Warrants"), exercisable until August 5, 2027 at an exercise price of $0.75. On September 18, 2023, 60% or 2,600,000 of the Archerwill Debenture Warrants were cancelled as the 20 day VWAP of Common Shares following the resumption of trading on the CSE was less than $0.65 per common share.

On closing of the Canada House acquisition, the Company determined that the fair value of the host debt instrument, the conversion option derivative, and warrant liability was $5,254,366, $4,843,000, and $557,000 respectively. The fair value of the conversion feature and warrants were assessed using a combination of a Monte Carlo analysis and Black-Scholes model. Key assumptions used in both models were a share price of $0.47, estimated volatility of 95% and a risk-free rate of 4.0%. The fair value of the host debt instrument was fair valued based on a discount rate of 22%.

After the first 20 trading days following the resumption of trading, the conversion option derivative and warrant liability met the criteria for equity classification on September 18, 2023. In accordance with IAS 32, the conversion option derivative and the remaining 1,733,333 Archerwill Debenture Warrants were reclassed into equity at the remeasured fair value on September 18, 2023.

As at September 18, 2023, the Company determined the fair value of the conversion option derivative, and warrant liability as $2,740,000, and $310,000 respectively. The fair value of the conversion feature and warrants were assessed using a combination of a Monte Carlo analysis and Black-Scholes model. Key assumptions used in both models were a share price of $0.31, an exercise price of $0.57 for options, an exercise price of $0.74737 for warrants, estimated volatility of 105% and a risk-free rate of 4.1%. The gain of $2,350,000 was recorded in the line item 'Finance expense, net'.

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

On December 22, 2023, January 31, 2024, and March 13, 2024, the Company repaid an aggregate of $1,000,000 towards the Archerwill Debenture, resulting in the issuance of 1,739,432 warrants (the "Archerwill Prepayment Warrants"). The Archerwill Prepayment Warrants expire on August 5, 2027. The fair value of the Archerwill Prepayment Warrants was assessed using the Black-Scholes model. Key assumptions used in the model were a share price of $0.27 - $0.435, an exercise price of $0.57, estimated volatility of 95%, an expected life of 3.40 – 3.62 years, and a risk-free rate of 3.85%. The fair value of $344,155 was recorded in the line item 'Finance expense, net' on the condensed consolidated interim statements of income (loss) and comprehensive income (loss).

On June 26, 2024, the Company repaid $250,000 towards the Archerwill Debenture, resulting in the issuance of 434,858 warrants (the "Second Archerwill Prepayment Warrants"). The Second Archerwill Prepayment Warrants expire on August 5, 2027. The fair value of the Second Archerwill Prepayment Warrants was determined using the Black-Scholes model. Key assumptions used in the model were a share price of $0.27, an exercise price of $0.57, estimated volatility of 95%, an expected life of 3.11 years, and a risk-free rate of 3.88%. The fair value of $53,146 was recorded in the line item 'Finance expense, net' on the condensed consolidated interim statements of income (loss) and comprehensive income (loss).

On July 31, 2025, the Company repaid the Archerwill Debentures in full. The final repayment resulted in the issuance of 14,466,568 warrants (the "Third Archerwill Prepayment Warrants"). The Third Archerwill Prepayment Warrants expire on August 5, 2027. The fair value of the Third Archerwill Prepayment Warrants was determined using the Black-Scholes model. Key assumptions used in the model were a share price of $0.80, an exercise price of $0.57, estimated volatility of 95%, an expected life of 2.01 years, and a risk-free rate of 2.76%. The fair value of $6,875,343, and the Company's gain on extinguishment of $15,168, were recorded in the line item 'Finance expense, net' on the condensed consolidated interim statements of income (loss) and comprehensive income (loss).

---

| | |
|:---|:---|
| **12** | **Share capital** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Authorized** 

The Company has authorized capital consisting of an unlimited number of common shares without par value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Issued and outstanding** 

---

| | | |
|:---|:---|:---|
|  | **Common shares** | **Common shares** |
|  | **#** | **$** |
| Balance – March 31, 2025 | 116997561 | 11075877 |
| Private Placement | 3305399 | 1230673 |
| **Balance – September 30, 2025** | **120302960** | **12306550** |

---

On September 19, 2025, the Company closed a brokered private placement offering of 3,147,999 units at a price of $0.65 per unit, for aggregate gross proceeds of $2,046,199 (the "Private Placement"). Each unit consists of one common share of the Company and one-half common share purchase warrant ("Unit Warrant"). Each Unit Warrant entitles the holder to purchase one common share of the Company at an exercise price of $0.98 per full Unit Warrant for a period of 36 months from the issuance date.

The fair value of the Unit Warrants was determined using the Black-Scholes option pricing model with the following assumptions: an underlying share price of $0.67, an exercise price of $0.98, a risk-free rate of 2.47%, an expected volatility of 92.45%, an expected life of 3 years and an expected dividend yield of 0%. Total proceeds were allocated based on the relative fair value of the shares and the warrants. The Company allocated $1,630,108 to share capital, and $416,091 to contributed surplus, respectively.

Total cash transaction costs were $375,364, resulting in net cash proceeds to the Company of $1,670,835. As at September 30, 2025, $88,648 of the cash transaction costs were unpaid and recorded within trade and other payables. The Company issued 78,700 broker warrants ("Broker Warrants"), 220,360 broker options ("Broker Options"), and 157,400 common shares to agents as compensation for the Private Placement the ("Compensation Shares"). The Broker Warrants have the same terms as the Unit Warrants, and the Broker Options are exercisable to acquire one unit, at an exercise price of $0.65 per unit, for a period of 36 months from the issuance date.

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

The fair value of the Broker Warrants was determined to be $26,919, estimated using the Black-Scholes Model. The inputs to compute the fair value of the Broker Warrants match the input of the Unit Warrants above. The fair value of the Broker Options was determined to be $126,033, estimated using the Black-Scholes Model. The inputs to compute the fair value of the Broker Options is based on the inputs used to compute the fair value of the Unit Warrants, and the following assumptions for the Broker Options: an underlying share price of $0.67, an exercise price of $0.65, a risk-free rate of 2.47%, an expected volatility of 92.45%, an expected life of 3 years and an expected dividend yield of 0%. The Compensation Shares were treated as transaction costs and fair value was determined to be $105,458, based on an underlying share price of $0.67.

The total transaction costs of $633,774 were allocated based on the relative fair value of the shares and the warrants. Transaction costs of $504,893 were recorded as a reduction to the common shares issued within equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Warrants** 

On July 28, 2023, as a result of the Canada House acquisition, the Company issued replacement warrants for all warrants issued and outstanding of Canada House at the time of the Tranche Two Closing. The replacement warrants were issued on the same terms, except they were exercisable into common shares of MTL Cannabis Corp., rather than Canada House. Each warrant converts into one common share of the Company on exercise. The fair value of the replacements warrants in MTL Cannabis Corp. was included as a part of the total purchase consideration.

The numbers of warrants outstanding at March 31, 2025 and September 30, 2025 were as follows:

---

| | | |
|:---|:---|:---|
|  | **Number of<br> warrants** | **Weighted average <br> exercise price** |
|  | **#** | **$** |
| Outstanding as at March 31, 2025 | 8152379 | 1.03 |
| Third Archerwill Prepayment Warrants (Note 11) | 14466568 | 0.57 |
| Unit Warrants (Note 12(b)) | 1573999 | 0.98 |
| Broker Warrants (Note 12(b)) | 78700 | 0.98 |
| Expired warrants | (666666) | 1.20 |
| Expired warrants | (333333) | 0.66 |
| **Outstanding as at September 30, 2025** | **23271647** | **0.75** |

---

The following table is a summary of the Company's warrants outstanding as at September 30, 2025:

---

| | | |
|:---|:---|:---|
| **Expiration date** | **Warrants<br> outstanding** | **Weighted average <br> exercise price** |
|  | **#** | **$** |
| December 31, 2026 | 3244757 | 1.50 |
| August 5, 2027 | 1733333 | 0.75 |
| August 5, 2027 | 16640858 | 0.57 |
| September 19, 2028 | 1652699 | 0.98 |
|  | **23271647** | **0.75** |

---

The following table is a summary of the Company's warrants outstanding as at March 31, 2025:

---

| | | |
|:---|:---|:---|
| **Expiration date** | **Warrants <br> outstanding** | **Weighted average <br> exercise price** |
|  | **#** | **$** |
| August 30, 2025 | 666666 | 1.20 |
| August 30, 2025 | 333333 | 0.66 |
| December 31, 2026 | 3244757 | 1.50 |
| August 5, 2027 | 1733333 | 0.75 |
| August 5, 2027 | 2174290 | 0.57 |
|  | **8152379** | **1.03** |

---

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

&nbsp;&nbsp;&nbsp;&nbsp;**(d)** **Share options** 

The Company has a share option plan (the "Option Plan") for directors, officers, employees and consultants of the Company. The Company's Board of Directors determines, among other things, the eligibility of individuals to participate in the Option Plan and the term, vesting periods, and the exercise price of options granted to individuals under the Option Plan.

Each share option converts into one common share of the Company on exercise. No amounts are paid or payable by the individual on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.

The Company's Option Plan provides that the number of common shares reserved for issuance may not exceed 10% of the Common Shares that are outstanding unless the Board of Directors shall have increased such limit by a resolution of the Board. In addition, the aggregate number of Common Shares so reserved for issuance to one person may not exceed 5% of the total issued and outstanding common shares. If any options terminate, expire, or are cancelled, the number of options so terminated, expired or cancelled shall again be available under the plan.

On July 28, 2023, as a result of the Canada House acquisition, the Company issued replacement share options for all options issued and outstanding of Canada House at the time of the Tranche Two Closing. The replacement share options were issued on the same terms, except they were exercisable into common shares of MTL Cannabis Corp., rather than Canada House. Each share option converts into one common share of the Company on exercise. No amounts are paid or payable by the individual on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of expiry. The fair value of the replacement options was included as a part of the total purchase consideration.

The change in the number of share options outstanding during the period are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **September 30, 2025** | September 30, 2024 | September 30, 2024 |
|  | **Number of<br> options** | Number of<br> options | Weighted<br> average<br> exercise price |
|  | **#** | $**#** | **$** |
| Options outstanding, beginning of period | **6394998** | 854166 | 1.00 |
| &nbsp;&nbsp;&nbsp;Options granted (Note 12(b)) | **—** | 5725000 | 0.28 |
| &nbsp;&nbsp;&nbsp;Options forfeited | **(151667)** | (10833) | 1.50 |
| &nbsp;&nbsp;&nbsp;Options expired | **—** | (3335) | 4.80 |
| **Options outstanding, end of period** | **6243331** | 6564997 | 0.37 |
| **Options exercisable, end of period** | **3455831** | 2282081 | 0.54 |

---

During the three and six months ended September 30, 2025, the Company recognized $52,844 and $147,051 in share-based compensation expense for options (2024 – $76,952 and $495,370).

The following table is a summary of the Company's share options outstanding as at September 30, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Options outstanding** | **Options outstanding** | **Options outstanding** | **Options exercisable** | **Options exercisable** | **Options exercisable** |
| **Number<br> outstanding** | **Number<br> outstanding** | | | **Number<br> exercisable** | **Number<br> exercisable** |
| $**#** | **#** | **Weighted average<br> remaining <br> contractual life<br> [years]**<br>**#** | **Weighted average <br> exercise price**<br>**$** | $**#** | **#** |
|  | 2550000 | 3.53 |  |  | 1275000 |
|  | 3025000 | 3.70 |  |  | 1512500 |
|  | 500000 | 2.91 |  |  | 500000 |
|  | 168331 | 0.44 |  |  | 168331 |
|  | **6243331** | **3.48** |  |  | **3455831** |

---

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

The following table is a summary of the Company's share options outstanding as at September 30, 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Options outstanding** | **Options outstanding** | **Options outstanding** | **Options outstanding** | **Options exercisable** | **Options exercisable** | **Options exercisable** |
| | **Number<br> outstanding** | **Number<br> outstanding** | | | **Number<br> exercisable** | **Number<br> exercisable** |
| **Exercise price**<br>**$** | $**#** | **#** | **Weighted average<br> remaining <br> contractual life<br> [years]**<br>**#** | **Weighted average<br> exercise price**<br>**$** | $**#** | **#** |
|  |  | 2550000 | 4.53 |  |  | 637500 |
|  |  | 3175000 | 4.70 |  |  | 793750 |
|  |  | 500000 | 3.91 |  |  | 500000 |
|  |  | 339997 | 1.13 |  |  | 350831 |
|  |  | **6564997** | **4.39** |  |  | **2282081** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(e)** **RSUs** 

On June 6, 2025, the Company adopted a Long-Term Incentive Plan (the "LITP"), which allows the Board of Directors to grant long-term equity-based awards, including RSUs, DSUs, and performance share units ("PSUs"), to eligible participants. The Company's Board of Directors determines, among other things, the eligibility of individuals to participate in the LITP and the term and vesting period of the awards granted to individuals under the LITP. Each award converts into one common share of the Company.

On June 6, 2025, the Company granted 2,000,000 RSUs to various members of management. The RSUs vest in three equal tranches on the first, second and third anniversaries of the grant date. The RSUs had a grant date fair value of $0.35 per RSU based on the price of the Company's common shares on the date of grant. The fair value of the awards is recognized over the vesting period of each tranche, with the expense recognized in share-based compensation expense and a corresponding increase to contributed surplus. During the three and six months ended September 30, 2025, the Company recognized $107,806 and $135,929 in share-based compensation expense for RSUs (2024 – $nil and $nil).

The changes in the number of RSUs during the six months ended September 30, 2025 are as follows:

---

| | | |
|:---|:---|:---|
|  | **Number of RSUs** | **Number of RSUs** |
|  | **#** | **#** |
| Outstanding, beginning of period |  |  |
| &nbsp;&nbsp;&nbsp;Granted during the period | | 2,000,000 |
| **Outstanding, end of period** | | **2,000,000** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(f)** **DSUs** 

On June 6, 2025 and August 28, 2025, the Company granted 3,000,000 and 750,000 DSUs to various members of management, respectively. All DSUs vest on the third anniversary of the date of the grant. The DSUs had a grant date fair value of $0.35 and $0.67 per DSU, respectively, based on the price of the Company's common shares on the date of grant. The fair value of the DSUs on the date of grant is expensed over the vesting period, with the expense recognized in share-based compensation expense and a corresponding increase to contributed surplus. During the three and six months ended September 30, 2025, the Company recognized $115,898 and $138,891 in share-based compensation expense for DSUs (2024 – $nil and $nil).

The changes in the number of DSUs during the six months ended September 30, 2025 are as follows:

---

| | | |
|:---|:---|:---|
|  | **Number of DSUs** | **Number of DSUs** |
|  | **#** | **#** |
| Outstanding, beginning of period |  |  |
| &nbsp;&nbsp;&nbsp;Granted during the period | | 3,750,000 |
| **Outstanding, end of period** | | **3,750,000** |

---

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(g)** **Broker options** 

Each broker option (Note 12(b)) is exercisable to acquire one unit, at an exercise price of $0.65 per unit, for a period of 36 months from the issuance date. Each unit is comprised of one common share and one-half common share purchase warrant. The changes in the number of broker options during the six months ended September 30, 2025, are as follows:

---

| | | |
|:---|:---|:---|
|  | **Number of Options** | **Number of Options** |
|  | **#** | **#** |
| Outstanding, beginning of period |  |  |
| &nbsp;&nbsp;&nbsp;Granted during the period | | 220,360 |
| **Outstanding, end of period** | | **220,360** |

---

---

| | |
|:---|:---|
| **13** | **Income (loss) per share** |

---

The Company presents basic and diluted EPS data for its shares. Basic EPS is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the year. Diluted EPS is determined by adjusting net income (loss) and the weighted average number of common shares outstanding, for the effects of all dilutive potential shares.

---

| | |
|:---|:---|
|  | **For the six months ended<br> September 30,** |
|  | **2024** |
|  | **$** |
| Net income (loss) for the period**))** | 3452091 |
| Weighted average number of shares for basic EPS | 116997561 |
| Basic and diluted EPS**))** | $0.030 |

---

The Company has five categories of potentially dilutive securities: convertible debentures, warrants, share options, RSUs, and DSUs. Basic and diluted income (loss) per share were the same for the three and six months ended September 30, 2025 and 2024, as the exercise of any potentially dilutive instruments would be anti-dilutive.

---

| | |
|:---|:---|
| **14** | **Finance expense, net** |

---

Finance expense, net for the three and six months ended September 30, 2025 and 2024 consists of the following:

---

| | |
|:---|:---|
|  | **For the six months ended<br> September 30,** |
|  | **2024** |
|  | **$** |
| Interest on lease obligations (Note 6) | 1300592 |
| Interest on notes payable (Note 9) | 1180659 |
| Interest on borrowings (Note 10) | 157475 |
| Interest on convertible debentures (Note 11) | 921006 |
| Gain on modification of notes payable (Note 9)**))** |  |
| Gain on extinguishment of convertible debentures (Note 11)**))** |  |
| Warrants issued (Note 11,12) | 53146 |
| Other finance (income) expense | 3728 |
|  | 3616606 |

---

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

---

| | |
|:---|:---|
| **15** | **Nature of expenses** |

---

General and administrative expenses for the three and six months ended September 30, 2025 and 2024 consists of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the three months <br> ended September 30,** | **For the three months <br> ended September 30,** | **For the six months ended<br> September 30,** | **For the six months ended<br> September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **$** | **$** | **$** | **$** |
| Salaries, wages and benefits | **4670126** | 3078763 | **7954862** | 6648738 |
| General operating | **1586886** | 1254541 | **2816885** | 2601331 |
| Professional fees | **601879** | 1332900 | **1167736** | 2129216 |
| Occupancy expense | **74684** | 95091 | **156755** | 133296 |
|  | **6933575** | 5761295 | **12096238** | 11512581 |

---

---

| | |
|:---|:---|
| **16** | **Segmented information** |

---

The Company reports segment information based on internal reports used by the Chief Operating Decision makers ("CODM") to make operating and resource decisions and to assess performance. The CODM is represented by the Chief Executive Officer, Chief Operating Officer, Chief Cultivation Officer, and Chief Financial Officer. The CODM makes decisions and assesses performance of the Company through two reportable and operating segments. The Company cultivates and distributes cannabis related products via federally approved cannabis programs by way of its Licensed Producer business. In addition, Company operates its clinic business through its CHC subsidiary. The Company derives substantially all of its revenue from these two segments.

The Company primarily operates in one principal geographical area, Canada, accordingly all of the Company's long-lived assets are located in Canada. For the three months ended September 30, 2025, the Company generated revenue of $3,159,343 and $3,338,093 in Portugal (2024 – $455,000 and $669,500).

The following table presents details on the Company's segments for the three months ended September 30, 2025:

---

| |
|:---|
| **Revenue** |
| Product revenue |
| Referral revenue and other |
| Less: excise tax) |
| Net revenue |
| Cost of sales |
| Gross profit before fair value adjustments |
| Fair value adjustments on biological assets) |
| Fair value adjustments on sale of inventory) |
| **Gross profit** |
| Expenses |
| **Operating income (loss))** |
| Finance expense, net |
| Other income) |
| **Income (loss) before income taxes))** |
| Income tax expense (recovery) |
| **Net income (loss) and comprehensive income (loss) for the period))** |

---

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

The following table presents details on the Company's segments for the six months ended September 30, 2025:

---

| |
|:---|
| **Revenue** |
| Product revenue |
| Referral revenue and other |
| Less: excise tax) |
| Net revenue |
| Cost of sales |
| Gross profit before fair value adjustments |
| Fair value adjustments on biological assets |
| Fair value adjustments on sale of inventory) |
| **Gross profit** |
| Expenses |
| **Operating income (loss))** |
| Finance expense, net |
| Other income) |
| **Income (loss) before income taxes))** |
| Income tax expense (recovery) |
| **Net income (loss) and comprehensive income (loss) for the period))** |

---

The following table presents details on the Company's segments for the three months ended September 30, 2024:

---

| |
|:---|
| **Revenue** |
| Product revenue |
| Referral revenue and other |
| Less: excise tax) |
| Net revenue |
| Cost of sales |
| Gross profit before fair value adjustments |
| Fair value adjustments on biological assets |
| Fair value adjustments on sale of inventory) |
| **Gross profit** |
| Expenses |
| **Operating income (loss))** |
| Finance expense, net |
| Other income) |
| **Income (loss) before income taxes)** |
| Income tax (recovery) expense |
| **Net income (loss) and comprehensive income (loss) for the period)** |

---

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

The following table presents details on the Company's segments for the six months ended September 30, 2024:

---

| |
|:---|
| **Revenue** |
| Product revenue |
| Referral revenue and other |
| Less: excise tax) |
| Net revenue |
| Cost of sales |
| Gross profit before fair value adjustments |
| Fair value adjustments on biological assets |
| Fair value adjustments on sale of inventory) |
| **Gross profit** |
| Expenses |
| **Operating income (loss))** |
| Finance expense (income), net |
| Other income) |
| **Income (loss) before income taxes)** |
| Income tax expense) |
| **Net income (loss) and comprehensive income (loss) for the period)** |

---

Non-current assets as at September 30, 2025 and March 31, 2025 were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Licensed <br> producer** | **CHC** | **Total** |
|  | **$** | **$** | **$** |
| **September 30, 2025** |  |  |  |
| Right-of-use assets, net | 16342448 | 764363 | 17106811 |
| Property, plant and equipment, net | 18606215 | 71448 | 18677663 |
| Intangible assets, net | 11031717 | 5895666 | 16927383 |
|  | **45980380** | **6731477** | **52711857** |
| **March 31, 2025** |  |  |  |
| Right-of-use assets, net | 11035875 | 719764 | 11755639 |
| Property, plant and equipment, net | 18578433 | 91602 | 18670035 |
| Intangible assets, net | 12241717 | 6373666 | 18615383 |
|  | **41856025** | **7185032** | **49041057** |

---

---

| | |
|:---|:---|
| **17** | **Contingencies** |

---

In the ordinary course of business, from time to time, the Company is involved in various claims related to operations, rights, commercial, employment or other claims. While the outcome of these matters may not be estimable at the reporting date, the Company makes provision, where possible, for the estimate outcome of such claims or proceedings.

---

| | |
|:---|:---|
| **18** | **Related party transactions** |

---

Key management personnel are those persons having the authority and responsibility for planning, directing and controlling activities of the entity, directly or indirectly and consists of the Chief Executive Officer, Chief Financial Officer, Chief Cultivation Officer, Chief Operating Officer, President, and Directors.

**MTL Cannabis Corp.**

**NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS**

September 30, 2025 and 2024

[unaudited] [expressed in Canadian dollars, except share amounts]

Compensation expense, which consists of salaries, benefits and bonuses for the Company's key management personnel for the three and six months ended September 30, 2025, was $1,967,933 and $2,652,296 (2024 – $657,502 and $1,284,242). Compensation expense for the six months ended September 30, 2025 includes 2,000,000 RSUs and 3,000,000 DSUs granted to key management personnel on June 6, 2025, and 750,000 DSUs granted on August 28, 2025. The aggregate fair value of the RSUs and DSUs granted was $700,000 and $1,552,000, respectively. The Company recognized $107,806 and $135,929 in expense for RSUs granted and $88,139 and $111,131 in expense for DSUs granted during the three and six months ended September 30, 2025, respectively.

During the three and six months ended September 30, 2025, the Company purchased $531,066 and $1,373,090 (2024 – $498,386 and $2,401,588) of equipment and services at market rates from companies owned by key management personnel. As of September 30, 2025, the Company had an outstanding balance of $601,769 (March 31, 2025 – $3,150,207) recorded in trade and other payables.

During the three and six months ended September 30, 2025, the Company made rental and lease payments to related parties totaling $661,131 and $1,345,494 (2024 – $830,067 and $1,880,672).

On July 30, 2025, the Company also issued two new promissory notes to the Chief Cultivation Officer and Chief Operating Officer in the amount of $2,312,358 per note. The new notes mature on August 30, 2028, subject to demand by the lender, and bear interest at 17% per annum (Note 9). During the three and six months ended September 30, 2025, the Company accrued interest of $275,302 and $465,275 (2024 – $193,625 and $381,629) on notes payable balances from the Chief Cultivation Officer and Chief Operating Officer, or companies controlled by the Chief Cultivation Officer and Chief Operating Officer. The Company repaid $1,061,950 and $1,251,923 during the three and six months ended September 30, 2025 (2024 – $187,928 and $678,052). As of September 30, 2025, the Company had an outstanding balance payable of $8,189,402 (March 31, 2025 – $4,533,268) recorded in notes payable in relation to these notes (Note 9).

During the three and six months ended September 30, 2025, the Company accrued interest of $1,141 and $114,817 (2024 – $166,076 and $386,737) on a promissory note from a director. The Company repaid $4,184,932 and $4,253,425 during the three and six months ended September 30, 2025 (2024 – $46,487 and $266,236). As of September 30, 2025, the Company had an outstanding balance payable of $nil (March 31, 2025 – $4,138,607) recorded in notes payable (Note 9).

---

| | |
|:---|:---|
| **19** | **Capital management** |

---

The Company's capital management objectives are to maintain financial flexibility in order to pursue its strategy of organic growth and to provide returns to its shareholders. The Company defines capital as the aggregate of its capital shares, notes payable, borrowings, and convertible debentures.

Total managed capital is as follows:

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | March 31,<br> 2025 |
|  | **$** | $|
| Notes payable | **8189401** | 14552353 |
| Borrowings | **19447982** | 350438 |
| Convertible debentures | **—** | 7583236 |
| Share capital | **12306550** | 11075877 |
|  | **39943933** | 33561904 |

---

The Company manages its capital structure in accordance with changes in economic conditions. In order to maintain or adjust its capital structure, the Company may elect to issue or repay financial liabilities, issue shares, repurchase shares, pay dividends or undertake any other activities as deemed appropriate under the specific circumstances. The Company is not subject to any externally imposed capital requirements.