Mr. Vitali Savitski reports

BIRCHTREE INVESTMENTS ANNOUNCES NON-BROKERED SUBSCRIPTION RECEIPT FINANCING, AMENDMENT TO DIGITAL MOTION SHARE EXCHANGE AGREEMENT AND LOAN TO DIGITAL MOTION

Birchtree Investments Ltd. has proposed a non-brokered private placement of subscription receipts, made an amendment to its share exchange agreement with Digital Motion Corp. and advanced a loan to Digital Motion Corp.

For further details regarding the proposed acquisition of Digital Motion by the company pursuant to a share exchange agreement dated March 22, 2026, please see the company's news releases dated April 1, 2026, and Dec. 30, 2025.

Private placement

The company announces a proposed non-brokered private placement of a minimum of 2.5 million and up to 5.5 million subscription receipts at a price of 20 cents per subscription receipt for gross proceeds of a minimum of $500,000 and up to $1.1-million. Closing of the offering is expected to occur in one or more tranches.

Each subscription receipt will automatically convert, without payment of additional consideration or further action by the holder, into one common share of the company upon satisfaction of the following conditions: (i) receipt of the approval of the shareholders of the company required to complete the transaction; (ii) receipt of all required approvals of the Canadian Securities Exchange in connection with the transaction; and (iii) completion of the transaction or satisfaction of all conditions precedent to completion of the transaction other than the release of the escrowed funds.

The gross proceeds of the offering will be held in escrow by the company pending satisfaction of the escrow release conditions. If the escrow release conditions are not satisfied by 5 p.m. Vancouver time on Dec. 31, 2026, or if the SEA (as defined below) is terminated, the subscription receipts will be cancelled and the subscription price will be returned to the holders.

The subscription receipts will be offered by way of private placement to investors in Canada and to purchasers outside of Canada and the United States pursuant to available exemptions from the prospectus requirements under applicable securities laws. The subscription receipts and the common shares issuable upon conversion thereof, will be subject to a hold period of four months and a day from the applicable closing date of the offering. No finders' fees or commissions are payable in connection with the offering.

Upon satisfaction of the escrow release conditions, the company intends to use the net proceeds from the offering for transaction costs related to the transaction, to pursue the business of Digital Motion, and for working capital and general corporate purposes. The offering is subject to receipt of all necessary regulatory approvals, including the approval of the CSE.

Amendment to share exchange agreement

Further to the company's news release dated April 1, 2026, the company, DMC AcquisitionCo Ltd., a wholly owned subsidiary of the company, Digital Motion and others, have entered into an amending agreement dated Oct. 21, 2026, to the definitive agreement (as amended by the amending agreement, the SEA). Under the amending agreement, the following conditions to closing of the transaction have been removed: (i) the condition that the company have a net working capital position of not less than $200,000; and (ii) the condition in favour of the sellers of Digital Motion that the trading price of the common shares be at least 20 cents per common share. The amending agreement also extends the date by which the transaction must be completed to Dec. 31, 2026, or such later date as the parties may agree in writing. The amending agreement is conditional upon the company advancing the loan to Digital Motion, as described below.

Loan to Digital Motion

In connection with the amending agreement, the company has advanced $150,000 to Digital Motion, evidenced by a promissory note. The loan bears interest at 10 per cent per annum, payable on maturity, and matures on the earlier of: (i) 12 months from the date of the advance; and (ii) 30 days following the termination of the SEA. If the SEA is terminated, Digital Motion may elect to repay the loan, including accrued and unpaid interest, in shares of Digital Motion based on a valuation of $20-million (U.S.). Digital Motion will use the proceeds of the loan for transaction costs related to the transaction and for working capital and general corporate purposes.

The common shares will remain halted on the CSE until the listing statement (as defined in the company's news release dated April 1, 2026) is made publicly available under the company's SEDAR+ profile.

About Birchtree Investments Ltd.

Birchtree is an investment company with the long-term goal of divesting its investment assets at a profit. For more information, please see Birchtree's continuous disclosure documents, available under the company's SEDAR+ profile.

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