Mr. Dale Burstall reports

COMPOSITE ALLIANCE GROUP ANNOUNCES ADDITIONAL AMENDMENTS TO PREVIOUSLY ISSUED DEBENTURES AND LOANS

Further to Composite Alliance Group Inc.'s news release dated Sept. 29, 2021, it has entered into amending agreements with the related party creditors Malchemy Corp. Ltd., Team Alpha Ltd. (TAL) and K Plus Capital LLC for the following debentures, pursuant to the terms and conditions of which the maturity date of the debentures has been extended from Jan. 31, 2026, to Jan. 31, 2031 (the amending agreements).

The company also announces that pursuant to an assignment and novation agreement among TME, Composite Alliance and Malchemy, Malchemy has terminated convertible bonds (CB) issued by the company's wholly owned subsidiary, Techni Modul Engineering S.A. (TME), to Malchemy in the principal amount of 1,500,005 euros, and certain loan arrangements owed to Malchemy by TME in the aggregate principal amount of 950,000 euros, bearing interest at 0 per cent and maturing on Jan. 31, 2026 (the loans), in exchange for a new non-convertible loan in the principal amount of 2,450,005 euros, bearing interest at 0 per cent, and maturing on Jan. 31, 2026 (the new loan). In addition, pursuant to the assignment agreement the company has agreed to assume the obligation to pay the new loan in exchange for the issuance of equity of TME to Composite Alliance (TME will remain a wholly owned subsidiary of Composite Alliance). Composite Alliance and Malchemy have entered into a debt forgiveness agreement (the forgiveness agreement) pursuant to which Malchemy irrevocably forgives and releases Composite Alliance from payment of 2,205,005 euros of the new loan in exchange for Composite Alliance repaying the remaining principal amount of 245,000 euros no later than Dec. 31, 2027.

Malchemy is an entity controlled by Sicheng Zhang, a director, officer and shareholder of the company, and TAL and K Plus are entities controlled by Jim Hsieh, a director, officer and shareholder of the company. Other than the amendments described herein, the terms of the debentures remain the same. The purpose of the amending agreements and the new loan issued pursuant the assignment agreement and modified by the forgiveness agreement is to extend the maturity dates to provide Composite Alliance with more flexibility to repay the debentures and new loan and to reduce the amount owing by Composite Alliance directly or through TME. The amending agreements, assignment agreement and forgiveness agreement are subject to the approval of the TSX Venture Exchange.

Related party participation

The amending agreements, assignment agreement and forgiveness agreement are with entities controlled by insiders of Composite Alliance. As insiders of the company participated in these transactions, they are deemed to be related party transactions as defined under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions.

The amending agreements, assignment agreement and forgiveness agreement were unanimously approved by the board of directors of the company, with Mr. Zhang abstaining on approval of the amending agreements with Malchemy and the assignment agreement and forgiveness agreement, and Mr. Hsieh abstaining on approval of the amending agreements with TAL and K Plus.

Composite Alliance entering into the amending agreements, assignment agreement and forgiveness agreement is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 (pursuant to subsections 5.5(b) and 5.7(1)(f)) as Composite Alliance is not listed on specified markets and the amending agreements, assignment agreement and forgiveness agreement are in respect to loans to Composite Alliance or TME with no equity or voting component.

The company did not file a material change report more than 21 days before the effective date of the amendments because the company wished to effect the amendments on an expedited basis for business reasons.

We seek Safe Harbor.