Mr. Craig Steinberg reports

TRAIL BLAZING VENTURES LTD. ENTERS INTO DEFINITIVE AGREEMENT WITH HEMPALTA INC. IN RESPECT OF PROPOSED QUALIFYING TRANSACTION

Trail Blazing Ventures Ltd., further to its news release dated Oct. 11, 2023, has entered into a definitive amalgamation agreement dated Nov. 15, 2023, with Hempalta Inc. Pursuant to the amalgamation agreement, Trail Blazing's wholly owned subsidiary, 2562764 Alberta Inc. (Subco), will amalgamate with Hempalta to complete Trail Blazing's qualifying transaction in accordance with the policies of the TSX Venture Exchange.

In connection with the amalgamation, it is intended that Trail Blazing will be renamed to Hempalta Corp. (the resulting issuer) and is expected to trade under the symbol HEMP. The transaction is subject to the receipt of all necessary regulatory and shareholder approvals required by applicable corporate law, including the approval of the exchange, as well as the satisfaction of conditions to closing as set out in the amalgamation agreement. It is intended the resulting issuer will continue the business of Hempalta and be listed on the exchange as an industrial issuer, subject to exchange approval.

About Hempalta Inc.

Hempalta is a private company incorporated under the Business Corporations Act (Alberta) (ABCA) incorporated in November, 2021, under the name 2387761 Alberta Ltd. Hempalta is an agricultural technology company focused on harnessing the immense potential of industrial hemp. Hempalta is pioneering the global hemp carbon credit industry and utilizing advanced agricultural technology to process industrial hemp at scale.

Hempalta makes products from hemp grown sustainably in Southern Alberta and processes the hemp using a state-of-the-art HempTrain advanced processing plant at the company's production facility in Calgary, Alta., into various consumer products which are sold and distributed through various retail channels. Hempalta is led by passionate advocates for industrial hemp who have years of operations, manufacturing, marketing, consumer packaged goods and retail sales experience. The company has been named one of the top 10 start-ups in 2023 by Calgary's Launch Party and recognized as one of the 50 most investable cleantech companies in Canada by Foresight Canada.

Hempalta has 47,176,627 common shares issued and outstanding, 2,629,964 common share purchase warrants issued and outstanding, and 4.7 million incentive stock options to purchase common shares issued and outstanding. Additionally, Hempalta has an aggregate of $565,000 in convertible debentures presently outstanding which are expected to convert into 3,531,250 Hempalta shares automatically in connection with the closing of the transaction.

Terms of the proposed transaction

The transaction will be carried out pursuant to the terms of the amalgamation agreement, a copy of which is, or shortly will be, filed on Trail Blazing's SEDAR+ profile. The below description of the terms of the transaction and the amalgamation agreement is qualified in its entirety by reference to the full text of the amalgamation agreement.

Pursuant to the terms of the amalgamation agreement, at the effective time of the amalgamation, Hempalta will amalgamate with Subco to form an amalgamated entity (Amalco), which will continue as a wholly owned subsidiary of Trail Blazing. In connection with the completion of the amalgamation, each holder of Hempalta shares shall exchange their Hempalta shares for common shares in the capital of the resulting issuer (on a postconsolidation (as defined below) on the basis of one fully paid and non-assessable resulting issuer common share for every one Hempalta share held, for a deemed price of 17 cents per Hempalta share.

The transaction is expected to constitute a related party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Securityholders in Special Transactions. As Trail Blazing's common shares are only listed on the exchange, Trail Blazing intends to rely on an exemption to the formal valuation requirement of MI 61-101. For greater certainty, it is expected that the transaction will be subject to approval of the minority shareholders of Trail Blazing (excluding Darren Bondar) and accordingly Trail Blazing is expected to call a special meeting of shareholders to seek approval of the transaction by Trail Blazing's minority shareholders.

Trail Blazing intends to hold an annual and special meeting of its shareholders in December, 2023, to approve certain matters related to the transaction, including, among other matters, the:

• Appointment of Geib & Company, chartered professional accountants, as the auditor of Trail Blazing and the authorization of the board of directors of Trail Blazing to fix the remuneration thereof;
• Minority approval of the transaction;
• Election of the directors of Trail Blazing to hold office from the effective time of the completion of the transaction;
• Change in the name of Trail Blazing from Trail Blazing Ventures to Hempalta or such other name as the board of directors of Trail Blazing deems appropriate;
• Consolidation of the Trail Blazing common shares on a 1.7:1 basis;
• Approval of the resulting issuer stock option plan.

Additional details regarding the Trail Blazing meeting will be available in a management information circular that is expected to be delivered to shareholders of Trail Blazing. The amalgamation will be approved by the sole shareholder of Subco by way of a written resolution. The amalgamation will further require the approval of the shareholders of Hempalta.

In connection with the proposed transaction, it is expected that 47,176,627 resulting issuer common shares will be issued to the holders of Hempalta shares (not including Hempalta shares issuable upon the conversion of subscription receipts (as defined below)). Based on the number of Hempalta shares outstanding as of the date hereof, and assuming the exchange of each subscription receipt into underlying securities, it is expected that there would be a minimum of approximately 82,766,701 resulting issuer common shares and a maximum of approximately 93,825,524 resulting issuer common shares (assuming no exercise of the agent's option (as defined below)) outstanding upon completion of the transaction, on a non-diluted basis. On completion of the transaction, the current shareholders of Trail Blazing are expected to hold an aggregate of approximately 23,529,412 resulting issuer common shares, representing approximately 28.43 per cent of the minimum number of resulting issuer common shares and approximately 25.08 per cent of the maximum number of resulting issuer common shares (assuming no exercise of the agent's option), the current shareholders of Hempalta would hold an aggregate of 50,707,877 resulting issuer common shares, representing approximately 61.27 per cent of the minimum number of resulting issuer common shares and approximately 54.04 per cent of the maximum number of resulting issuer common shares (assuming no exercise of the agent's option), and investors in the private placement (as defined below) would hold an aggregate of a minimum of approximately 8,529,412 resulting issuer common shares (assuming the minimum offering) and a maximum of approximately 19,588,235 resulting issuer common shares (assuming the maximum offering), representing approximately 10.02 per cent of the minimum number of resulting issuer common shares and approximately 20.88 per cent of the maximum number of resulting issuer common shares.

The completion of the amalgamation is conditional on obtaining all necessary regulatory and shareholder approvals in connection with the matters described above and other conditions customary for a transaction of this type. Trail Blazing and Hempalta anticipate closing the transaction in mid- to late January, 2024.

Further financial information will be included in the filing statement to be prepared in connection with the transaction.

Private placement of subscription receipts of Hempalta

Prior to the completion of the transaction, Hempalta is expected to complete a brokered private placement, through Canaccord Genuity Corp. as lead agent with a syndicate of agents including Research Capital Corp. and Haywood Securities Inc., for aggregate gross proceeds of a minimum of $1.45-million and a maximum of $3.33-million, subject to the agent's option, of subscription receipts of Hempalta, at a price of 17 cents per subscription receipt. It is anticipated that the agent will be granted an option, exercisable in whole or in part at any time prior to the closing of the private placement, to increase the size of the Private placement by up to an aggregate of 15 per cent or $499,500.

The subscription receipts will be created and issued pursuant to the terms of a subscription receipt agreement to be entered into among Odyssey Trust Company, as subscription receipt agent, Hempalta, Trail Blazing and the agent.

Each subscription receipt will be automatically converted, without payment of additional consideration or further action by the holder thereof, into one Hempalta share, subject to adjustment in certain events, immediately before the completion of the transaction upon the satisfaction or waiver of the escrow release conditions (as to be defined in the subscription receipt agreement) on or before April 30, 2024.

In consideration for its services in connection with the private placement, Hempalta will pay to the agent a commission equal to 6 per cent of the aggregate gross proceeds from the sale of the subscription receipts (including subscription receipts issued pursuant to the exercise of the agent's option) payable in cash or subscription receipts, or any combination thereof at the option of the agent, which shall be paid in connection with the release of the proceeds from escrow. As additional consideration for the services of the agent, concurrently with the exchange of the subscription receipts into underlying securities (if and when), Hempalta will issue to the agent warrants to purchase resulting issuer common shares, in an amount equal to 6 per cent of the number of issued subscription receipts (including subscription receipts issued pursuant to the exercise of the agent's option), which warrants shall be exercisable at any time up to 24 months following the date of issuance thereof at a price of 17 cents per resulting issuer common share. A reduced cash commission equal to 3 per cent is payable and a reduced number equal to 3 per cent of broker warrants are issuable in respect of the sale of subscription receipts (including subscription receipts issued pursuant to the exercise of the agent's option) to purchasers identified by Hempalta to the agent. As further consideration for the services provided in connection with the private placement, Hempalta has agreed to pay Canaccord Genuity a corporate finance fee of $25,000 plus applicable taxes and a number of Hempalta shares equal to $25,000 on the closing of the private placement and the expenses of the agent up to $40,000 (plus applicable taxes and disbursements).

Upon closing of the private placement, the aggregate gross proceeds of the private placement, less the full amount of the agent's reasonable expenses incurred up to and as of the closing date of the private placement, will be deposited in escrow with the subscription receipt agent pending satisfaction or waiver of the escrow release conditions, in accordance with the provisions of the subscription receipt agreement. All such reasonable expenses of the agent will be paid out of proceeds from the sale of subscription receipts. If the escrow release conditions are not satisfied at or before the escrow release deadline, each of the then issued and outstanding subscription receipts will be cancelled and the subscription receipt agent will return to each holder of subscription receipts an amount equal to the aggregate purchase price of the subscription receipts held by such holder plus an amount equal to the holder's pro rata share of any interest or other income earned on the escrowed funds (less applicable withholding tax, if any). To the extent that the escrowed funds are insufficient to refund such amounts to each holder of the subscription receipts, Hempalta shall be liable for and will contribute such amounts as are necessary to satisfy the shortfall.

Proceeds of the private placement

It is intended that the net proceeds from the private placement will be used to expand the Calgary-based Hempalta processing plant, including the purchase of new equipment, and for general working capital following completion of the qualifying transaction.

Sponsorship

Under the policies of the exchange, the parties to the transaction will be required to engage a sponsor for the transaction unless an exemption or waiver from this requirement can be obtained. Trail Blazing intends to apply to the exchange for a waiver from the sponsorship requirements for the transaction based upon the waivers available in exchange policies. There is no assurance that a waiver from this requirement can or will be obtained.

Resulting issuer

Immediately following the completion of the transaction, the resulting issuer is expected to change its name to Hempalta, and the resulting issuer will be an industrial issuer under the policies of the exchange.

Conditions to completion of the transaction

It is intended that the transaction, when completed, will constitute Trail Blazing's qualifying transaction in accordance with Policy 2.4 of the exchange. Completion of the transaction is subject to a number of conditions precedent, including, but not limited to: (i) acceptance by the exchange and receipt of other applicable regulatory approvals; (ii) receipt of the required approvals at the Trail Blazing meeting; (iii) receipt of the requisite approval of the shareholders of Hempalta of the amalgamation; and (iv) completion of the private placement. There can be no assurance that the transaction will be completed as proposed or at all.

Proposed management and board of directors of resulting issuer

Concurrent with the completion of the transaction, it is expected that certain directors and officers of Trail Blazing will resign and the directors and officers of the resulting issuer will be as follows:

Mr. Bondar -- president, chief executive officer and director

Mr. Bondar is the founder, president and chief executive officer of Hempalta. Previously, Mr. Bondar was the founder, president and chief executive officer of Inner Spirit Holdings Ltd., the first cannabis retail company listed on the Canadian Securities Exchange. Mr. Bondar led the growth of Inner Sprit from its formation to its acquisition by Sundial Growers Inc. in July, 2021. Mr. Bondar previously served as the president and chief executive officer of Watch It! Inc. and Comfortable Image Inc., consumer retail and franchising businesses, serving in such roles since 2004 and 1999, respectively. Mr. Bondar holds a master's of business administration degree from the University of Alberta, a bachelor of arts degree from University of Western Ontario and has completed the Public Companies: Financing, Governance and Compliance course at Simon Fraser University.

Craig Steinberg -- director

Mr. Steinberg is a lawyer practicing with Steinberg Law. Mr. Steinberg is also the designated broker for Fortius Mortgage Corp., a mortgage brokerage licensed by the Real Estate Counsel of Alberta. Mr. Steinberg has practised law in private practice or as corporate counsel since July, 1998. He is a former partner of Miller Thomson LLP, a national law firm. Mr. Steinberg has extensive experience in advising companies on various real estate and corporate matters. In addition, Mr. Steinberg served as a director of Paragon Capital Corp. Ltd., a private Calgary-based mortgage investment company that underwrote over $1-billion in loans and joint ventures during Mr. Steinberg's tenure. Mr. Steinberg holds an honours bachelor of arts degree from Queen's University and a bachelor of laws degree from the University of Western Ontario, and has completed the Canadian Securities Institute's Canadian Securities Course (CSC) and Partners, Directors and Senior Officers Course (PDO).

L. Russell Wilson -- director

Mr. Wilson holds a master's of business degree from Queensland University of Technology. He is the vice-president, business development, of Prairie Merchant Corp., a private investment company. From November, 2016, to February, 2019, Mr. Wilson was the manager, new business ventures, of Prairie Merchant. Mr. Wilson previously served on, and was the chair of the audit committee of, the board of directors of Gaby Inc., a cannabis wellness company listed on the CSE, and was a director of Inner Spirit, a cannabis retailer, also listed on the CSE.

Adrian Stokes -- director

Mr. Stokes currently heads up ADL Private Office in Monaco, a private family office for the majority partner of Fullbrook Thorpe Investments LLP. His over 20 years of experience in financial services includes multiple positions with Barclays Wealth & Investment Management. Mr. Stokes is a board observer for Rent Plus U.K. Ltd., an affordable housing rent-to-buy offering, and holds a double major business degree from Greenwich Business School in London.

The fifth director for the resulting issuer will be appointed by Hempalta and Trail Blazing, acting reasonably, prior to the closing of the transaction. Additionally, the chief financial officer of Hempalta and the resulting issuer will be appointed by Hempalta prior to closing of the transaction.

Michael Ginevsky, corporate secretary

Mr. Ginevsky is a partner at DS Lawyers Canada LLP where he focuses primarily in the areas of capital markets, mergers and acquisitions, corporate governance, and securities regulatory compliance. Mr. Ginevsky received a bachelor of commerce degree from the University of British Columbia and juris doctor from the University of Alberta and resides in Calgary. Mr. Ginevsky was previously the corporate secretary of Inner Spirit, a cannabis retailer listed on the CSE.

Other insiders of the resulting issuer

Each of Prairie Merchant (PM) and Fullbrook Thorpe Investments (FTI) currently holds more than 10 per cent of the issued and outstanding Hempalta shares. It is anticipated that, following completion of the transaction, each entity will hold more than 10 per cent of the issued and outstanding common shares of the resulting issuer, and accordingly, will be an insider of the resulting issuer under the policies of the exchange.

PM is a corporation existing under the laws of the Province of Alberta and is controlled by W. Brett Wilson of Calgary, Alta. FTI is a limited liability partnership existing pursuant to the laws of the United Kingdom and is controlled by Andy Leaver of the United Kingdom.

Arm's-length transaction

Mr. Bondar is the chief executive officer, president and a director of both Hempalta and Trail Blazing and holds 6,521,000 common shares of Trail Blazing (16.3 per cent) and 10 million Hempalta shares (21.2 per cent). However, as no party is a control person of both Trail Blazing and Hempalta, the proposed transaction does not constitute a non-arm's-length qualifying transaction within the meaning of exchange Policy 2.4 and, as such, majority of the minority approval (as defined in exchange Policy 2.4) is not required to approve the proposed transaction pursuant to the policies of the exchange.

Notwithstanding the foregoing, as disclosed above, the transaction is expected to constitute a related party transaction within the meaning of MI 61-101, and it is expected that the transaction will be subject to approval of the minority shareholders of Trail Blazing (excluding Mr. Bondar) and accordingly, Trail Blazing is expected to call a special meeting of shareholders to seek approval of the transaction by Trail Blazing's minority shareholders.

Finder's fees

No finder's fees or commissions are payable by Trail Blazing or Hempalta in connection with the closing of the transaction, other than with respect of the private placement.

Information circular

In connection with the transaction and pursuant to exchange requirements, Trail Blazing will file an information circular under its profile on SEDAR+, which will contain details regarding the transaction, the amalgamation, the private placement, Trail Blazing, Hempalta and the resulting issuer.

Shareholder approval is not required with respect to the transaction under the rules of the exchange, however, as the transaction constitutes a related party transaction pursuant to MI 61-101, minority shareholder approval will be required. In the event any of the conditions set forth above are not completed or the transaction does not proceed, Trail Blazing will notify shareholders. Trading in the common shares of Trail Blazing will remain halted and is not expected to resume trading until the transaction is completed or until the exchange receives the requisite documentation to resume trading.

About Trail Blazing Ventures Ltd.

Trail Blazing is a capital pool company (CPC) that has not commenced commercial operations and has no assets other than cash. Except as specifically contemplated in the exchange's CPC policy, until the completion of its qualifying transaction, the corporation will not carry on business, other than the identification and evaluation of businesses or assets with a view to completing a proposed qualifying transaction.

We seek Safe Harbor.