Mr. James Sbrolla reports

TORONTO CLEANTECH CAPITAL INC. ANNOUNCES PROPOSED QUALIFYING TRANSACTION WITH TURKEY HILL SUGARBUSH LTD.

Toronto Cleantech Capital Inc. entered into a non-binding letter of intent with Turkey Hill Sugarbush Ltd. on May 8, 2023. The LOI outlines the general terms and conditions pursuant to which Toronto Cleantech and THS expect to effect a business combination that will result in Toronto Cleantech acquiring all of the issued and outstanding securities of THS in exchange for securities of Toronto Cleantech and will result in a reverse takeover of Toronto Cleantech by THS, as described below. The proposed transaction will constitute a qualifying transaction of Toronto Cleantech under the policies of the TSX Venture exchange, as such term is defined in exchange Policy 2.4 (Capital Pool Companies).

The qualifying transaction

Pursuant to the terms of the LOI, Toronto Cleantech, THS and THS's parent entity, THS LP, will negotiate and enter into a definitive agreement and other transaction documentation, incorporating the principal terms of the LOI. Upon completion of the proposed transaction, Toronto Cleantech will have acquired 100-per-cent ownership of THS, and the business of THS will become the business of the entity resulting from the proposed transaction. Pursuant to the proposed transaction, the existing shareholders of THS immediately prior to the proposed transaction will receive such number of common shares of Toronto Cleantech equal to the value of, and in exchange for, the common shares of THS held by such shareholder, which is expected to be 2.874 Toronto Cleantech shares for every one THS share.

For the purposes of the proposed transaction, the deemed value of each Toronto Cleantech share shall be 18.4 cents per share based on the issue price of the concurrent financing (as such terms are defined below). The value of THS is anticipated to be $4,708,931, based on 8,903,733 THS shares issued and outstanding immediately prior to the proposed transaction. It is anticipated that THS shareholders will represent 45.61 per cent of the shareholders of the resulting issuer, and Toronto Cleantech shareholders will represent the rest.

The final structure for the proposed transaction is subject to satisfactory due diligence, and tax, corporate and securities law advice on the part of both Toronto Cleantech and THS. There is no assurance that a definitive agreement will be negotiated or entered into.

Certain common shares of the resulting issuer to be issued pursuant to the proposed transaction are expected to be subject to restrictions on resale or escrow under the policies of the exchange, including the securities to be issued to principals (as such term is defined in the policies of the exchange), which will be subject to the escrow requirements of the exchange.

The completion of the proposed transaction is subject to several conditions, including, but not limited to:

• Completion of satisfactory due diligence by both parties;
• Approval of the proposed transaction by the board of directors of THS and Toronto Cleantech;
• Receipt of all necessary regulatory approvals, including the approval of the exchange;
• Other customary conditions for a transaction of this nature.

Concurrent financing

In conjunction with, or prior to the closing of the proposed transaction, Toronto Cleantech will complete a non-brokered private placement. Pursuant to the concurrent financing, Toronto Cleantech is proposing to issue up to 19,021,739 Toronto Cleantech shares at a price of 18.4 cents per share for gross proceeds of up to $3.5-million.

The proceeds of the concurrent financing will be used to finance the business of the resulting issuer, including general and administrative expenses for the resulting issuer, for certain transaction expenses incurred by the parties to date, including Toronto Cleantech discharging an existing royalty payment obligation, and for general working capital purposes.

No commission, finder's fee or similar payment (whether in the form of cash, securities or an interest in assets) is expected to be paid by Toronto Cleantech in connection with the concurrent financing. Additional details of the concurrent financing will be outlined in a future press release of Toronto Cleantech.

Proposed significant assets

The proposed transaction will involve Toronto Cleantech acquiring significant assets in the maple syrup product industry.

Starting as a family-owned maple syrup farm in Knowlton, Que., THS was incorporated under the Canada Business Corporations Act in 1976 to package and sell maple products. Forty-four years later, THS continues to grow, and in 2019, THS moved to a 50,000-square-foot facility, which houses THS's state-of-the-art bottling and labelling plant, distribution centre, and corporate offices. With over 100 different products, THS's clients range from travel and tourism, gourmet food and specialty shops, to supermarkets.

The parties intend for the resulting issuer to continue THS's commitment to sustainability in the maple syrup industry while exploring diversifying its product line and developing new markets domestically and internationally.

The resulting issuer will change its name to Turkey Hill Sugarbush Ltd. or such other similar name as is determined by the parties and acceptable to applicable regulators.

Upon completion of the proposed transaction, the resulting issuer will carry on the business of THS, including continuing THS's commitment to sustainability in the maple syrup industry while exploring diversifying its product line and developing new markets domestically and internationally.

Financial highlights of the THS are found in the attached table.

                         FINANCIAL HIGHLIGHTS

Year-end            Nov. 30, 2022   Nov. 30, 2021   Nov. 30, 2020

Total assets           $4,626,337      $4,222,248      $5,364,229  
Total liabilities      $6,156,224      $4,689,650      $5,289,788  
Revenues               $7,372,952      $3,227,957      $4,063,295  
Net profit/(losses)   ($1,062,485)      ($700,393)    ($1,405,691)

The financial information was prepared by management of THS as at the dates noted and are unaudited.

Location and jurisdiction

THS is incorporated under the laws of Quebec, Canada, and its assets are located in Granby, Que.

Identification of non-arm's-length parties

In accordance with Policy 2.4, the following individuals are considered non-arm's-length parties to the qualifying transaction (as such term is defined in Policy 2.4):

• James Sbrolla, chief executive officer of Toronto Cleantech, is considered a non-arm's-length party (as such term is defined in the policies of the exchange) as he is also a unitholder of the limited partnership.
• Eric Beutel, director of Toronto Cleantech, is considered a non-arm's-length party as he is also a unitholder and insider of the LP and has a familial relationship with David Beutel, chairman of THS.
• Dimitris Stubos, corporate secretary of Toronto Cleantech, is considered a non-arm's-length party as he is also a unitholder of the LP.

Toronto Cleantech and THS do not have a common control person, and related parties of Toronto Cleantech do not own a majority of shares in THS or a majority of units in the LP. Accordingly, the proposed transaction will not constitute a non-arm's-length qualifying transaction (as such term is defined in Policy 2.4), and it is not anticipated that the proposed transaction will be subject to shareholder approval.

Proposed directors and officers of the resulting issuer

The board and management of the resulting issuer shall be composed of the following individuals.

David Beutel -- director and chair

David Beutel is currently chair of the board of directors of THS. He is also president of Belweather Capital Partners Inc. and vice-president/secretary of Oakwest Corporation Ltd., both private investment companies in Toronto. For over 25 years, David Beutel has been working to build smaller, earlier-stage and high-growth businesses as a founder, adviser and investor in Canada and the United States. In addition to THS, David Beutel is also non-executive chairman of Diamond Estates Wines and Spirits Inc. and of Accord Financial Corp. He holds a BA from the University of Pennsylvania and an MBA from the Schulich School of Business (York University).

Eric Beutel -- director

Eric Beutel is a private investor and corporate director, having spent over 35 years in the investment industry. Eric Beutel is president of Debric Holdings Inc. Eric Beutel has substantial board experience, serving on several audit, credit and investment committees in the financial, cleantech and retail sectors. He currently sits on the board of Toronto Cleantech, is chair of the board of directors of Intouch Insight Ltd. and sits as an independent trustee of The Vector Mortgage Trust. Eric Beutel also sits on the board of two not-for-profit organizations. He holds an MBA from the University of Ottawa.

Ian Anderson -- director

Mr. Anderson has been the president of CKF Inc. since June, 2009. Before accepting this role, he was executive vice president and chief operating officer. CKF is a plastic packaging and moulded pulp product company, producing food and protective packaging. CKF operates a global supply chain which services retail, foodservice and consumer products companies from eight manufacturing plants across North America.

Mr. Anderson sits as a board member for Toronto Cleantech and The International Molded Fiber Association, and is a member of Foodservice Packaging Institute. He is a past board member of Char Technologies, Stewardship Ontario and Crown Packaging Products Canada. He served on the sustainability advisory committee at the Canadian Plastics Industry Association (now CIAC) and was vice-chair of the Nova Scotia Canadian Manufacturers & Exporters.

Prior to joining CKF, Mr. Anderson worked in the packaging industry, managing plants and businesses across the Americas and the United Kingdom. He is a native of Hamilton, Ont., and currently resides there.

David Bell -- director

Mr. Bell has more than 30 years experience in corporate banking, investment banking and private equity and as the chief financial officer and co-founder of a private royalty investment company. He currently sits on the board of directors of THS. He holds an MBA from University of Toronto and the chartered financial analyst (CFA) designation.

Tom Zaffis -- chief executive officer

Spanning over 35 years of experience in the maple syrup industry, Mr. Zaffis has held leadership positions as sales manager, general manager, chief operating officer and eventually president and CEO of Turkey Hill Sugarbush. Graduating from McGill University in agrology in 1991 and with certificates as a fixed mechanic, he holds a strong belief in leading by example. He has provided training to many current industry experts, and has been instrumental in designing and developing many systems and packaging that have become industry standards.

Principals or insiders of the resulting issuer

In addition to the foregoing proposed directors and officers, the following are persons who are expected to qualify as principals or insiders (as such terms are defined in the policies of the exchange) of the resulting issuer:

• Belweather Capital Partners, a private investment and advisory company incorporated under the laws of the Province of Ontario, is expected to own more than 10 per cent of the outstanding common shares of the resulting issuer following completion of the proposed transaction. Belweather is controlled by David Beutel, who acts as chair of THS and is expected to act as chair of the resulting issuer.
• Debric Holdings Inc., a private investment and advisory company incorporated under the laws of the Province of Ontario, is expected to own more than 10 per cent of the outstanding common shares of the resulting issuer following completion of the proposed transaction. Debric is controlled by Eric Beutel, who sits on the board of Toronto Cleantech and is expected to sit on the board of the resulting issuer.

Absence of control

Following the completion of the proposed transaction, there will be no individual, entity or group of concerted parties in a control position of the resulting issuer, as defined by applicable securities regulations.

Finder's fee

There will be no finder's fee or commission paid in relation to the proposed transaction.

Loans made to Turkey Hill

Toronto Cleantech and THS intend to enter into a loan agreement whereby Toronto Cleantech will lend $250,000 to THS to assist with its continuing operational costs and expansion initiatives.

Further details pertaining to the loan agreement, including its terms, will be disclosed in a subsequent press release in accordance with Policy 2.4. The loan and related loan agreement are subject to the approval of the exchange, in accordance with its policies and procedures.

Trading halt

Trading of Toronto Cleantech shares on the exchange has been halted at Toronto Cleantech's request and will remain halted pending the exchange's receipt of satisfactory documentation and completion of the proposed transaction.

Sponsor

Sponsorship of a qualifying transaction of a capital pool company is required by the exchange unless exempt in accordance with exchange policies. Toronto Cleantech intends to seek a waiver from the sponsorship requirements, subject to the provisions set forth in exchange's policies. However, there is no assurance that a waiver from this requirement can or will be obtained. In the event a waiver is not granted, Toronto Cleantech will seek to fulfill all sponsorship requirements as stipulated by the exchange.

About Toronto Cleantech Capital Inc.

Toronto Cleantech is a capital pool company listed on the exchange. The company focuses on identifying and evaluating businesses and assets with a view to a potential acquisition by completing a qualifying transaction (like the proposed transaction).

Toronto Cleantech's share capital consists of 11.5 million Toronto Cleantech shares issued and outstanding and 1.15 million stock options exercisable for Toronto Cleantech shares at a price of 10 cents each, expiring July 2, 2026, and 200,000 warrants exercisable for Toronto Cleantech shares at a price of 10 cents each, expiring on June 30, 2023.

About Turkey Hill Sugarbush Ltd.

Turkey Hill Sugarbush Ltd. was incorporated under the laws of Quebec, Canada, and has been a leader in the maple syrup industry supplying high-quality pure maple syrup and maple-syrup-related products since 1976. Its assets are located in Granby, Que.

We seek Safe Harbor.