Alphinat inc. — AGM Information 2022

Feb 4, 2022

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ALPHINAT INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TAKE NOTICE that an Annual Meeting of Shareholders (the “ Meeting ”) of Alphinat Inc. (the “ Corporation ”) will be held at:

Place: Alphinat Inc.- Virtual meeting. You will not be able to physically attend the meeting other than by logging in to the following link at the time of the meeting.

https://global.gotomeeting.com/join/855637653

You may call in and listen by telephone, but you will not be able to speak or vote at this meeting:

Telephone: Canada: +1 (647) 497-9391 Access Code: 855-637-653

United States: +1 (646) 749-3129 Access Code: 855-637-653

Date: February 23, 2022 Time: 2:00 p.m. (Montreal time)

The purposes of the Meeting are:

1. To receive and consider the financial statements of the Corporation for the fiscal year ended August 31, 2021 and the auditors’ report thereon;

2. To confirm number of directors;

3. To elect directors;

4. To appoint auditors and authorize the directors to fix their remuneration;

5. To transact such other business as may properly be brought before the Meeting.

If you are unable to attend the Virtual Meeting in person, please date, sign and return the enclosed form of proxy. We strongly recommend that you vote by proxy in view of the current health crisis. Proxies to be used at the Meeting must be deposited with Computershare Investor Services Inc. (Attention: Proxy Department), 100 University Avenue, 9[th] Floor, Toronto, Ontario M5J 2Y1 before 2:00 p.m. on the second to last business day before the Meeting or with the Secretary of the Corporation before the commencement of the Meeting or at any adjournment thereof.

DATED at Montreal, Québec January 20, 2022

BY ORDER OF THE BOARD OF DIRECTORS

(signed) Curtis Page President & Chief Executive Officer

ALPHINAT INC.

MANAGEMENT PROXY CIRCULAR

SOLICITATION OF PROXIES BY MANAGEMENT

This Management Proxy Circular (the “Circular”) is furnished in connection with the solicitation by the management of Alphinat Inc. (the “Corporation”) of proxies to be used at the Annual Meeting of shareholders (the “Meeting”) of the Corporation to be held at the time and place and for the purposes set forth in the Notice of Meeting. It is expected that the solicitation will be made primarily by mail. However, officers and employees of the Corporation may also solicit proxies by telephone, telecopy, e-mail or in person. The total cost of solicitation of proxies will be borne by the Corporation. As part of its precautionary measures in response to the COVID-19 outbreak, the Corporation STRONGLY RECOMMENDS that Registered Shareholders exercise their right to vote by proxy PRIOR TO THE MEETING. Shareholders joining by telephone conference will be able to listen to the Meeting but will not be able to vote. Management will answer questions following the formal portion of the Meeting. The Web-link for joining the virtual meeting is set forth in the notice of meeting, as is the telephone number for accessing the meeting as a listener.

APPOINTMENT AND REVOCATION OF PROXIES

The persons named in the enclosed form of proxy are directors and officers of the Corporation. A shareholder has the right to appoint as his or her proxy a person, who need not be a shareholder, other than those whose names are printed on the accompanying form of proxy. A shareholder who wishes to appoint some other person to represent him or her at the Meeting may do so either by inserting such other person’s name in the blank space provided in the form of proxy and signing the form of proxy or by completing and signing another proper form of proxy.

A shareholder who has given a proxy may revoke it, as to any motion on which a vote has not already been cast pursuant to the authority by it, by an instrument in writing executed by the shareholder or by the shareholder’s attorney authorized in writing or, if the shareholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized. The revocation of a proxy, in order to be acted upon, must be deposited with Computershare Investor Services Inc. (Attention: Proxy Department), 100 University Avenue, 9th Floor, Toronto, Ontario M5J 2Y1 before 2:00 p.m. on the second to last business day before the Meeting or with the Secretary of the Corporation before the commencement of the Meeting or at any adjournment thereof.

EXERCISE OF DISCRETION BY PROXIES

Shares represented by properly executed proxies in favour of the persons designated in the enclosed form of proxy, in the absence of any direction to the contrary, will be voted for the: (i) election of directors; and (ii) appointment of auditors, the whole as stated under such headings in this Circular. Instructions with respect to voting will be respected by the persons designated in the enclosed form of proxy. With respect to amendments or variations to matters identified in the Notice of Meeting and with respect to other matters, which may properly come before the Meeting, such shares will be voted by the persons so designated in their discretion. At the time of printing this Circular, management of the Corporation knows of no such amendments, variations or other matters.

VOTING SHARES

As at January 14, 2022, there were 63,148,956 issued and outstanding common shares of the Corporation. There are no other issued and outstanding shares. Each common share entitles the holder thereof to one vote. The Corporation has fixed January 17, 2022, as the record date (the “ Record Date ”) for the purpose of determining shareholders entitled to receive notice of the Meeting. Pursuant to the Canada Business Corporations Act , the Corporation is required to prepare, no later than ten days after the Record Date, an alphabetical list of shareholders entitled to vote as of the Record Date that shows the number of shares held by each shareholder. A shareholder whose name appears on the list referred to above is entitled to vote the shares shown opposite his or her name at the Meeting. The list of shareholders is available for inspection during usual business hours at the head office of the Corporation and at the Meeting.

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NON-REGISTERED SHAREHOLDERS

Only registered shareholders or the persons they appoint as their proxies are permitted to vote at the Meeting. However, in many cases, shares beneficially owned by a person (a “ Non-Registered Holder ”) are registered either: (i) in the name of an intermediary (an “ Intermediary ”) that the Non-Registered Holder deals with in respect of the common shares, such as securities dealers or brokers, banks, trust companies, and trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans; or (ii) in the name of a clearing agency of which the Intermediary is a participant. In accordance with National Instrument 54-101 of the Canadian Securities Administrators, entitled “Communication with Beneficial Owners of Securities of a Reporting Issuer”, the Corporation has distributed copies of the Notice of Meeting and this Circular (collectively, the “ Meeting Materials ”) to the clearing agencies and Intermediaries for distribution to Non-Registered Holders. Intermediaries are required to forward the Meeting Materials to Non-Registered Holders, and often use a service company for this purpose. Non-Registered Holders will either:

• (a) typically, be provided with a computerized form (often called a “voting instruction form”) which is not signed by the Intermediary and which, when properly completed and signed by the Non-Registered Holder and returned to the Intermediary or its service company, will constitute voting instructions which the Intermediary must follow. In order for the applicable computerized form to validly constitute a voting instruction form, the Non-Registered Holder must properly complete and sign the form and submit it to the Intermediary or its service company in accordance with the instructions of the Intermediary or service company. In certain cases, the Non-Registered Holder may provide such voting instructions to the Intermediary or its service company through the Internet or through a toll-free telephone number; or

• (b) less commonly, be given a proxy form which has already been signed by the Intermediary (typically by a facsimile, stamped signature), which is restricted to the number of shares beneficially owned by the Non-Registered Holder but which is otherwise not completed. In this case, the Non-Registered Holder who wishes to submit a proxy should properly complete the proxy form and submit it to Computershare Investor Services Inc. (Attention: Proxy Department), 100 University Avenue, 9[th] Floor, Toronto, Ontario M5J 2Y1.

In either case, the purpose of these procedures is to permit Non-Registered Holders to direct the voting of the common shares, which they beneficially own.

Should a Non-Registered Holder who receives a voting instruction form wish to vote at the Meeting in person (or have another person attend and vote on behalf of the Non-Registered Holder), the Non-Registered Holder should print his or her own name, or that of such other person, on the voting instruction form and return it to the Intermediary or its service company. Should a Non-Registered Holder who receives a proxy form wish to vote at the Meeting in person (or have another person attend and vote on behalf of the Non-Registered Holder), the Non-Registered Holder should strike out the names of the persons set out in the proxy form and insert the name of the Non-Registered Holder or such other person in the blank space provided and submit it to Computershare Investor Services Inc. at the address set out above.

In all cases, Non-Registered Holders should carefully follow the instructions of their Intermediary, including those regarding when, where and by what means the voting instruction form or proxy form must be delivered.

A Non-Registered Holder may revoke voting instructions, which have been given to an Intermediary at any time by written notice to the Intermediary.

PRINCIPAL SHAREHOLDERS

As at January 17, 2022, to the best knowledge of the Corporation, the following is the only person who beneficially owned, directly or indirectly, or exercised control or direction over, more than 10% of the common shares of the Corporation:

Name and municipality of residence Andrée Lecoq(1)(2)................................................................................ Montréal (Québec)	Number of common shares 16,138,441	Percentage 25.56%

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• (1) The information is taken from the SEDI website at www.sedi.ca on January 17, 2022. The information taken from the report filed on SEDI is not within the direct knowledge of the Corporation.

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• (2) This number includes 7,436,343common shares of the Corporation held by 3445801 Canada Inc., a company controlled by Andrée Lecoq and 7,257,651 common shares of the Corporation held by Fiducie Lecoq, of which Andrée Lecoq is the sole trustee and 1,444,447common shares owned directly by Andrée Lecoq.

ELECTION OF DIRECTORS

The Board currently consists of five directors and will remain at five directors upon the election of the Board of Directors at the Annual Meeting. In the absence of instructions to the contrary, the persons named in the enclosed form of proxy intend to vote FOR the election of the five nominees whose names are set forth below. Each director will hold office until the next annual meeting of shareholders or until the election of his or her successor, unless the director resigns or his or her office becomes vacant by removal, death or other cause.

The following table sets out the name of each of the persons proposed to be nominated for election as director, all other positions and offices with the Corporation now held by such person, his or her principal occupation, the year in which such person became a director of the Corporation, and the number of common shares of the Corporation that such person has advised are beneficially owned or over which control or direction is exercised by such person as at the date indicated below:

Name, municipality of residence and position with the Corporation Michel Lemoine(1)(2) Montréal, Québec, Canada Chairman and Director Curtis Page(3) Ottawa, Ontario, Canada President & Chief Executive Officer and Director Benoit Ste-Marie(1)(3) Montréal, Québec, Canada Director Marcel Elefant(2) (3) Montréal, Québec, Canada Director Eric David(1) (2)(3) Toronto, Ontario, Canada Director Karyn Pellatt-Caron Côte Saint-Luc, Québec, Canada Director

Principal occupation First year as director Number of shares beneficially owned or over which control is exercised as at January 17, 2022(4) Management, Mediation and Arbitration Consultant and Corporate director 2005 3,553,750 President and Chief Executive of Alphinat Inc. 2008 5,504,655 Managing Director of Corporation des propriétaires immobiliers du Québec (CORPIQ) 2009 3,052,000 Director of Corporations 2012 2,547,625 Managing Partner of XENNIUM Consulting Inc. Managing Partner - KPC Consulting 2019 2020 300,000 50,000

(1) Member of the Audit Committee

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• (2) Member of the Corporate Governance Committee

• (3) Member of the Compensation and Human Resources Committee

• (4) Includes options vested as at August 31, 2021

To the knowledge of the Corporation, none of the nominees for election as a director of the Corporation:

• (a) is, or within the last ten years has been, a director, chief executive officer or chief financial officer of any company that:

• (i) was subject to a cease trade order, an order similar to a cease trade order, or an order that denied the relevant company access to any exemption under applicable securities legislation, and which in all cases was in effect for a period of more than 30 consecutive days (an “ Order ”), which Order was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer of such company; or

• (ii) was subject to an Order that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer of such company; or

• (b) is, or within the last ten years has been, a director or executive officer of any company that, while the proposed director was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or

• (c) has, within the last ten years, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or become subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold his assets.

None of the foregoing nominees for election as director of the Corporation has been subject to:

• (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or

• (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable security holder in deciding whether to vote for a proposed director.

COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

Compensation Discussion & Analysis

This discussion describes the Corporation’s compensation program for each person who acted as President and Chief Executive Officer (“ CEO ”), Chief Financial Officer (“ CFO ”) and the three most highly-compensated executive officers (or three most highly-compensated individuals acting in a similar capacity), other than the CEO and the CFO, whose total compensation was more than $150,000 in the Corporation’s last financial year (each a “ Named Executive Officer ” or “ NEO ” and collectively the “ Named Executive Officers ”). This section will address the Corporation’s philosophy and objectives and provide a review of the process that the Compensation and Human Resources Committee (see footnote 4 under “Election of Directors”) follows in deciding how to compensate the Named Executive Officers. This section will also provide discussion and analysis of the Compensation and Human Resources Committee’s specific decisions about the compensation of the Named Executive Officers for the financial year ended August 31, 2021.

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Compensation Program Philosophy

The Corporation’s executive compensation philosophy and program objectives are directed primarily by two guiding principles. First, the program is intended to provide competitive levels of compensation, at expected levels of performance, in order to attract, motivate and retain talented executives. Second, the program is intended to create an alignment of interests between the Corporation’s executives and shareholders, so that a significant portion of each executive’s compensation is linked to maximizing shareholder value. In support of this philosophy, the executive compensation program is designed to reward performance that is directly relevant to the Corporation’s short-term and long-term success. The Corporation attempts to provide both short-term and long-term incentive compensation that varies based on corporate and individual performance.

The Corporation’s executive compensation program is structured into three main components: base salary, annual incentives (bonuses) and long-term incentives, including stock options (“ Options ”) granted pursuant to the Corporation’s Stock Option Plan established in 2005, as amended from time to time (the “ Stock Option Plan ”). The following discussion describes the Corporation’s executive compensation program by component of compensation and discusses how each component relates to the Corporation’s overall executive compensation objective. In establishing the executive compensation program, the Corporation believes that:

• base salaries provide an immediate cash incentive for the Named Executive Officers and should be at levels competitive with peer companies that compete with the Corporation for business opportunities and executive talent;

• annual incentive bonuses encourage and reward performance over the financial year compared to predefined goals and objectives and reflect progress toward company-wide performance objectives and personal objectives; and

• Options ensure that the Named Executive Officers are motivated to achieve long term growth of the Corporation, continuing increases in shareholder value and provide capital accumulation linked directly to the Corporation’s performance.

The Corporation places equal emphasis on base salary and Options as short-term and long-term incentives, respectively. Annual incentive bonuses are related to performance and may form a greater or lesser part of the entire compensation package in any given year.

Purpose

The Corporation’s executive compensation program has been designed to accomplish the following long-term objectives:

• create a proper balance between building shareholder wealth and competitive executive compensation while maintaining good corporate governance;

• produce long-term, positive results for the Corporation’s shareholders;

• align executive compensation with corporate performance and appropriate peer group comparisons; and

• provide market-competitive compensation and benefits that will enable the Corporation to recruit, retain and motivate the executive talent necessary to be successful.

Compensation Process

The Compensation and Human Resources Committee administers the executive compensation program. The Corporation has not adopted a formal policy with respect to the remuneration of its Named Executive Officers.

The Compensation and Human Resources Committee has the authority to retain independent consultants to advise it on compensation matters.

Base Salaries

The Named Executive Officers receive a base salary, which is based primarily on the level of responsibility of the position, qualifications and experience of the officer and market conditions.

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The base salaries of the Named Executive Officers are reviewed annually to ensure they consider the following factors: market and economic conditions, levels of responsibility and accountability of each NEO, skill and competencies of NEO, retention considerations and level of demonstrated performance.

Base salaries, including that of the CEO, are reviewed by the Compensation and Human Resources Committee on the basis of its opinion as to a fair and responsible compensation package, taking into account, the contribution of the CEO to the Corporation’s long-term growth and the Compensation and Human Resources Committee members’ knowledge of remuneration practices in Canada.

Variable Cash Incentive Awards – Bonuses

The Compensation and Human Resources Committee’s philosophy with respect to Named Executive Officer bonuses is to align the payment of bonuses with the performance of the Corporation, based on predefined goals and objectives established by the Compensation and Human Resources Committee and management and the relative contribution of each of the executive officers, including the CEO, to that performance. During the fiscal year ended August 31, 2021, no bonuses were paid to the Named Executive Officers. The payments of bonuses are usually determined by the Compensation and Human Resources Committee on the basis of a combination of two elements: (i) the advancement of the Corporation’s projects; and (ii) the Named Executive Officer’s individual contribution to the foregoing positive results.

Long-Term Incentive Plans

The Corporation provides long-term incentive compensation to the Named Executive Officers through the Stock Option Plan.

Stock Option Plan

A maximum of 12,629,791 common shares may be issued under the Stock Option Plan. The Compensation and Human Resources Committee recommends the granting of Options from time to time based on its assessment of the appropriateness of doing so in light of the long-term strategic objectives of the Corporation, its current stage of development, the need to retain or attract particular key personnel, the number of Options already outstanding and overall market conditions. The Compensation and Human Resources Committee views the granting of Options as a means of promoting the success of the Corporation and higher returns to its shareholders. As such, the Compensation and Human Resources Committee does not grant Options in excessively dilutive numbers or at exercise prices not reflective of the Corporation’s underlying value. During the fiscal year ended August 31, 2021, 800,000 Options were granted to the Named Executive Officers. See “Stock Option Plan” for a description of the material features of the Stock Option Plan.

Group Benefits/Perquisites

The officers of the Corporation benefit from life, medical and long-term disability insurance. None of the officers benefit from any retirement plan of the Corporation.

Summary of the Compensation of the Named Executive Officers

The following table provides information for the financial year ended August 31, 2021, 2020 and 2019, regarding compensation paid to or earned by the Named Executive Officers.

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Summary Compensation Table

Name and Principal Occupation	Year	Salary(1) ($)	Share- Based Awards (2) ($)	Option- Based Awards (3) ($)	Non-Equity Incentive Plan Compensation ($)	Non-Equity Incentive Plan Compensation ($)	Pension Value(5) ($)	All other Compensation ($)	Total Compensation ($)
					Annual Incentiv e Plans(4)	Long- Term Incentive Plans
Curtis Page President and Chief Executive Officer	2021 2020 2019	250,793 217,308 165,000	n/a n/a n/a	38,807 31,294 n/a	n/a n/a n/a	n/a n/a n/a	n/a n/a n/a	793 2,697 2,697	290,393 251,299 167,697
Marc Chartrand CPA CA, Chief Financial Officer	2021 2020 2019	18,338 29,710 38,921	n/a n/a n/a	n/a n/a n/a	n/a n/a n/a	n/a n/a n/a	n/a n/a n/a	n/a n/a n/a	18,338 29,701 38,921

________(1) This column discloses the actual salary earned during the fiscal year indicated.

(2) The Corporation does not have a share-based compensation plan.

(3) This column discloses the total value of stock options granted to the Named Executive Officers during the fiscal year indicated. The value of stock options was calculated using the Black-Scholes option pricing model at the time of grant.

(4) The amounts disclosed in the column are granted as annual cash bonuses and are attributable in the fiscal year indicated with payment deferred. (5) The Corporation does not have a retirement plan.

The following table sets out the details of all grants of Options to the Named Executive Officers as at August 31, 2021.

		Option-Based Awards	Option-Based Awards		Share-Based Awards	Share-Based Awards
Name	Number of Securities Underlying Unexercised Options (#)	Option Exercise Price ($)	Option Expiration Date	Value of Unexercised In-the- Money Options(1) ($)	Number of Performance Shares that Have not Vested (#)	Market or Payout Value of Performance Shares that Have not Vested(2) ($)
Curtis Page	800,000 1,000,000 200,000	0.12 0.12 0.12	February 26, 2024 November 30, 2022 November 30,2021	nil nil nil	n/a n/a n/a	n/a n/a n/a
Marc Chartrand CPA CA	nil	n/a	n/a	nil	n/a	n/a

________ (1) This column sets out the aggregate value of in-the-money unexercised options as at August 31, 2021, calculated based on the difference between the market price of the common shares underlying the Options as at August 31, 2021 $0.105 and the exercise price of the Options.

(2) The Corporation does not have a share-based compensation plan.

Incentive Plan Awards – Value Vested or Earned During the Year

The following table sets out, for each NEO, the value of option-based awards and share-based awards, which vested during the financial year ended August 31, 2021 and the value of non-equity incentive plan compensation earned during the financial year ended August 31, 2021.

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Name	Option-Based Awards – Value Vested During the Year(1)	Share-Based Awards – Value Vested During the Year(2)	Non-Equity Incentive Plan Compensation – Value Earned During the Year
Curtis Page	nil	n/a	n/a
Marc Chartrand CPA CA	nil	n/a	n/a

_______ (1) Calculated based on the difference between the market price of the shares underlying the Options at the vesting date and the exercise price of the Option on the vesting date.

(2) The Corporation does not have a share-based compensation plan.

Termination and Change of Control Benefits

Employment Agreement with Curtis Page

In May, 2008 the Corporation concluded with Curtis Page, now President and Chief Executive Officer, an employment contract for an initial duration of two years with an annual salary of $120,000 as well as additional employment benefits extended including reimbursement of reasonable expenses pertaining to execution of his role as Executive Vice President, Chief Operating Officer and Chief Financial Officer. This annual salary was increased to $130,000 starting as of January 1, 2014, then increased to $165,000 starting as of September 1, 2014 and then increased to $250,000 starting as of February 1, 2020. His salary is reviewed each year and can be adjusted at the discretion of the board of directors. The contract can be terminated by the Corporation for reason of “serious cause” as foreseen by article 2094 of The Quebec Civil Code.

Employment Agreement with Marc Chartrand CPA CA

Mr. Marc Chartrand is the Chief Financial Officer of the Corporation since July 24, 2017. His services agreement may be terminated at any time without penalty or termination benefits.

Director Compensation

During the fiscal year ended August 31, 2021. Eric David was the sole independent director to receive compensation for a consulting mandate and no other compensation was paid to the other independent directors of the Corporation.

Options are granted to directors pursuant to the Stock Option Plan, the material terms and conditions of which are set out below under “Stock Option Plan”.

Name	Fees earned ($)	Share- based awards ($)(1)	Option- based awards ($)(2)	Non-equity incentive plan compensatio n ($)	Pension value ($)	All other compensat ion ($)	Total ($)
Michel Lemoine	nil	n/a	2,360	nil	nil	nil	2,360
Benoit Ste-Marie	nil	n/a	2,360	nil	nil	nil	2,360
Marcel Elefant	nil	n/a	2,360	nil	nil	nil	2,360
Eric David	nil	n/a	2,360	nil	nil	9,600	11,960
Karyn Pellatt-Caron	nil	n/a	2,360	nil	nil	nil	2,360
Total	nil	n/a	$11,800	nil	nil	nil	$21,400

________ (1) The Corporation does not have a share-based compensation plan.

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(2) The value of stock options was calculated using the Black-Scholes option pricing model at the time of grant.

Incentive Plan Awards

The following table sets out the details of all grants of Options to the directors of the Corporation as at August 31, 2021.

		Option-Based Awards	Option-Based Awards		Share-Based Awards	Share-Based Awards
Name	Number of Securities Underlying Unexercised Options (#)	Option Exercise Price ($)	Option Expiration Date	Value of Unexercised In-the- Money Options(1) ($)	Number of Shares or Units of Shares that Have Not Vested (#)	Market or Payout Value of Share- Based awards that Have Not Vested(2) ($)
Michel Lemoine	50,000 250,000 218,250	0.12 0.12 0.12	Jan. 26, 2024 Nov. 30, 2022 Nov. 30, 2021	nil	n/a	n/a
Benoit Ste-Marie	50,000 250,000	0.12 0.12	Jan. 26, 2024 Nov.30, 2022	nil	n/a	n/a
Marcel Elefant	50,000 250,000	0.12 0.12	Jan. 26, 2024 Nov. 30, 2022	nil	n/a	n/a
Eric David	50,000 250,000	0.12 0.12	Jan. 26, 2024 Nov. 30, 2022	nil	n/a	n/a
Karyn Pellatt-Caron	50,000	0.12	Jan. 26, 2024	nil	n/a	n/a

_____ (1) This column sets out the aggregate value of in-the-money unexercised Options as at August 31, 2021, calculated based on the difference between the market price of the shares underlying the Options as at August 31, 2021 $0.105 and the exercise price of the Options.

(2) The Corporation does not have a share-based compensation plan.

Incentive Plan Awards – Value Vested or Earned During the Year

The following table outlines, for each director, the value of option-based awards and share-based awards which vested during the year ended August 31, 2021 and the value of non-equity incentive plan compensation earned during the year ended August 31, 2021.

Name	Option-Based Awards – Value Vested During the Year(1) ($)	Share-Based Awards – Value Vested During the Year(2) ($)	Non-Equity Incentive Plan Compensation – Value Earned During the Year ($)
Michel Lemoine	4,830	n/a	n/a
Benoit Ste-Marie	4,830	n/a	n/a
Marcel Elefant	4,830	n/a	n/a

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Name	Option-Based Awards – Value Vested During the Year(1) ($)	Share-Based Awards – Value Vested During the Year(2) ($)	Non-Equity Incentive Plan Compensation – Value Earned During the Year ($)
Eric David	4,830	n/a	n/a
Karyn Pellatt-Caron	918	n/a	n/a

________ (1) Calculated based on the difference between the market price of the shares underlying the Options at the vesting date and the exercise price of the Option on the vesting date.

(2) The Corporation does not have a share-based compensation plan.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets out certain details as at August 31, 2021, the end of the Corporation’s last fiscal year, with respect to compensation plans pursuant to which equity securities of the Corporation are authorized for issuance.

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Number of shares
remaining available for
Number of shares to be Weighted-average future issuance under the
issued upon exercise of exercise price of Equity Compensation
outstanding options, outstanding options, Plans (excluding securities
warrants and rights warrants and rights reflected in column (a))
Plan Category (a) (b) (c)
Equity compensation plans
previously approved by 7,086,250 $0.12 5,543,541
shareholders
Equity compensation plans not
previously approved by Nil Nil Nil
shareholders
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The options referred to in the table above were granted under the Stock Option Plan. See “Stock Option Plan” below for a description of the material features of the Stock Option Plan.

AUDIT COMMITTEE INFORMATION

Audit Committee Charter

The Charter of the Audit Committee is annexed hereto as Schedule A .

Composition of the Audit Committee

The Audit Committee is currently composed of Michel Lemoine, Eric David and Benoit Ste-Marie. Under National Instrument 52-110 Audit Committees (“ NI 52-110 ”), a director of an audit committee is “independent” if he or she has no direct or indirect material relationship with the issuer, that is, a relationship, which could, in the view of the Board of Directors, reasonably be expected to interfere with the exercise of the member’s independent judgment. The Board of Directors has determined that Michel Lemoine, Eric David and Benoit Ste-Marie are independent members of the Audit Committee.

The Board of Directors has determined that each of the three current members of the Audit Committee is “financially literate” within the meaning of section 1.6 of NI 52-110, that is, each member has the ability to read and understand a set of financial

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statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation’s financial statements, including financial statements prepared in accordance with International Financial Reporting Standards.

Education and Relevant Experience

The education and related experience of each of the members of the Audit Committee that is relevant to the performance of his or her responsibilities as a member of the Audit Committee are set out below.

Michel Lemoine was a member of the Barreau du Québec (Québec Bar) from 1964 and 2018. He was a founding member of the engineering firm Pellemon Inc., which he ran from 1981 until it was acquired by SNC-Lavalin in May 1997 where he continued to work until 1999 as Vice President and General Manager, Industrial Division. Since 1999, Mr. Lemoine has principally been an Arbitrator and Mediator for the construction industry and has been on several boards of directors.

Eric David is the Managing Partner of XENNIUM Consulting Inc.and has held the roles of Executive VP Strategy of CSDC Systems Inc. (now part of Granicus) from 1994 until 2017. He started his career in the software industry in 1991 at INTERLEAF and Eric had been a significant shareholder and member of senior management for CSDC Systems Inc during his 27 year tenure, leading strategy and transactions in Canada and internationally.

Benoit Ste-Marie is Managing Director of “Corporation des propriétaires immobiliers du Québec” (CORPIQ), Canada’s largest association of rental property owners and managers. Prior he was a Directeur at SECOR Conseil. He has over 21 years of strategic and banking IT corporate development consulting experience. Mr. Ste-Marie was also active in electronic business development in one of Québec’s largest financial institutions.

Pre-Approval Policies and Procedures for Audit Services

The Audit Committee has not adopted specific policies and procedures for the engagement of non-audit services. However, the Charter of the Audit Committee provides that the provision of any non-audit services must first be considered by the Audit Committee.

External Auditors’ Fees

(a) Audit Fees

“Audit fees” consist of fees for professional services for the audit of annual consolidated financial statements and related matters. Raymond Chabot Grant Thorton (RCGT), Chartered Accountants, the Corporation’s external auditors, billed the Corporation $ 42,947 in audit fees during the fiscal year ended August 31, 2021 and billed the Corporation $44,625 in audit fees during the fiscal year ended August 31, 2020.

(b) Audit-Related Fees

“Audit-related fees” consist of fees for professional services that are reasonably related to the performance of the audit or review of the Corporation's consolidated financial statements and which are not reported under “Audit Fees” above. Raymond Chabot Grant Thorton (RCGT), Chartered Accountants the Corporation’s external auditors, billed the Corporation $ 0 in auditrelated fees during the fiscal year ended August 31, 2021 and billed the Corporation $ 0 in audit-related fees during the fiscal year ended August 31, 2020.

(c) Tax Fees

“Tax fees” consist of fees for professional services for tax compliance, tax advice and tax planning. Raymond Chabot Grant Thorton (RCGT), Chartered Accountants, the Corporation’s external auditors, billed the Corporation $ nil in tax fees during the fiscal year ended August 31, 2021 and $ nil in tax fees during the fiscal year ended August 31, 2020.

(d) All Other Fees

“All other fees” consists of fees paid for services other than the audit fees, audit-related fees and tax fees described above. Raymond Chabot Grant Thorton (RCGT), Chartered Accountants, the Corporation’s external auditors, billed the Corporation

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$ nil in other fees during the fiscal year ended August 31, 2021 and $ nil in other fees during the fiscal year ended August 31, 2020.

Reliance on Exemption

The Corporation is relying on the exemption set out in section 6.1 of NI 52-110 Audit Committees with respect to certain reporting obligations.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

As at January 17, 2022 none of the executive officers, directors, employees or former executive officers, directors or employees of the Corporation or any of its subsidiaries were indebted to the Corporation or any of its subsidiaries and, as at the same date, the indebtedness, if any, of such persons to other entities was not the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Corporation or any subsidiary thereof.

None of the: (i) persons who are or who were, at any time during the fiscal year ended August 31, 2021, directors or executive officers of the Corporation; (ii) proposed nominees for election as a director of the Corporation; or (iii) associates of any such director, executive officer or proposed nominee, were, at any time during the fiscal year ended August 31, 2021, indebted to: (a) the Corporation or any of its subsidiaries; or (b) another entity, if such indebtedness has been the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Corporation or any subsidiary thereof, other than “routine indebtedness” as defined in National Instrument 51-102 Continuous Disclosure Obligations of the Canadian Securities Administrators.

APPOINTMENT AND REMUNERATION OF AUDITORS

Raymond Chabot Grant Thornton (« RCGT »), Chartered Accountants, have served as the auditors of the Corporation since November 7, 2019. Except where authorization to vote with respect to the appointment of auditors is withheld, the persons named in the accompanying form of proxy intend to vote for the appointment of RCGT, Chartered Accountants, as the auditors of the Corporation, at such remuneration as may be determined by the Board of Directors.

STOCK OPTION PLAN

In 2005, the Board of Directors of the Corporation established the Stock Option Plan for the directors, officers and employees of, and consultants to, the Corporation, pursuant to which 3,937,955 common shares, representing 11.10% of the issued and outstanding common shares of the Corporation as at January 5, 2009, were initially reserved for issuance. In November 2009, the Board of Directors amended, subject to regulatory and shareholders approval, the Stock Option Plan so as to increase the number of common shares reserved for issuance there under to 5,323,666, which represented 15% of all of the issued and outstanding common shares of the Corporation at that time. Except for this increase, no other terms of the Stock Option Plan were modified. On January 27, 2011, the Board of Directors further amended, subject to regulatory approval, the Stock Option Plan to add a provision to the Stock Option Plan with respect to the withholding and remittance of amounts on amount of tax in connection with the exercise or disposition of Options granted under the Stock Option Plan. On January 18, 2012, the Board of Directors amended, subject to regulatory and shareholders approval, the Stock Option Plan so as to set the number of common shares reserved for issuance there under to 7,193,041 which represented 15% of all of the issued and outstanding common shares of the Corporation at that time. On December 16, 2020 the Board of Directors amended the Stock Option Plan to increase the number of shares available under the plan to 12,629,791, subject to regulatory and shareholders approval, the Stock Option Plan so as to set the number of common shares reserved for issuance there under to 12,629,791which represented 20% of all of the issued and outstanding common shares of the Corporation at that time.

The purpose of the Stock Option Plan is to provide the participants with an opportunity to purchase shares of the Corporation and to benefit from the appreciation thereof. This provides an increased incentive for the participants to contribute to the future success and prosperity of the Corporation, thus enhancing the value of the Corporation’s shares for the benefit of all the shareholders and increasing the ability of the Corporation to attract and retain individuals of exceptional skill.

As at the date of this Circular, there are 12,629,791 options to purchase common shares reserved under the Stock Option Plan. There remain 6,379,791 shares available therefore for granting.

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INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

For the purposes of this Circular, “informed person” of the Corporation means: (a) a director or executive officer of the Corporation: (b) a director or executive officer of a person or company that is itself an informed person or subsidiary of the Corporation; (c) any person or company who beneficially owns, directly or indirectly, voting securities of the Corporation or who exercises control or direction over voting securities of the Corporation or a combination of both, carrying more than 10% of the voting rights attached to all outstanding voting securities of the Corporation, other than voting securities held by the person or company as underwriter in the course of a distribution; and (d) the Corporation, if it has purchased, redeemed or otherwise acquired any of its own securities, for so long as it holds any of its securities.

To the best of the Corporation’s knowledge, no informed person of the Corporation, and no associate or affiliate of any such person, has or had any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any transaction since September 1, 2018 that has materially affected the Corporation, in any proposed transaction that could materially affect the Corporation, or in any matter to be acted upon at this Meeting, other than the matters specifically set forth herein and other then as disclosed in the corporations press release of November 21, 2018 relating to the conversion of Class A and Class B Debentures into common shares.

ADVANCE NOTICE BY-LAW

On January 28, 2014, the Board adopted the Advance Notice By-Law, which requires that advance notice be given to the Corporation in circumstances where nominations of persons for election as a director of the Corporation are made by shareholders other than pursuant to: (i) a requisition of a meeting made pursuant to the provisions of the CBCA; or (ii) a shareholder proposal made pursuant to the provisions of the CBCA. The By-law was ratified by the shareholders at the Annual and Special Meeting of the shareholders on February 26, 2014.

Among other things, the Advance Notice By-Law fixes a deadline by which shareholders must submit a notice of director nominations to the Corporation prior to any annual or special meeting of shareholders where directors are to be elected and sets forth the information that a shareholder must include in the notice for it to be valid.

In the case of an annual meeting of shareholders, notice to the Corporation must be given no less than 30 nor more than 65 days prior to the date of the annual meeting provided, however, that in the event that the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be given no later than the close of business on the 10th day following such public announcement.

In the case of a special meeting of shareholders (which is not also an annual meeting), notice to the Corporation must be given no later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting was made. The Advance Notice By-Law will allow the Corporation to receive adequate prior notice of director nominations, as well as sufficient information on the nominees. The Corporation will thus be able to evaluate the proposed nominees’ qualifications and suitability as directors. It will also facilitate an orderly and efficient meeting process.

SHAREHOLDER PROPOSALS

The Canada Business Corporations Act provides, in effect, that a registered holder or beneficial owner of shares that is entitled to vote at an annual meeting of the Corporation may submit to the Corporation notice of any matter that the person proposes to raise at the meeting (referred to as a “ Proposal ”) and discuss at the meeting any matter in respect of which the person would have been entitled to submit a Proposal. The Canada Business Corporations Act further provides, in effect, that the Corporation must set out the Proposal in its management proxy circular along with, if so requested by the person who makes the Proposal, a statement in support of the Proposal by such person. However, the Corporation will not be required to set out the Proposal in its management proxy circular or include a supporting statement if, among other things, the Proposal is not submitted to the Corporation at least 90 days before the anniversary date of the notice of meeting that was sent to the shareholders in connection with the previous annual meeting of shareholders of the Corporation. As the notice in connection with the Meeting is dated January 10, 2022 the deadline for submitting a proposal to the Corporation in connection with the next annual meeting of shareholders is October 11, 2021.

The foregoing is a summary only shareholders should carefully review the provisions of the Canada Business Corporations Act relating to Proposals and consult with a legal advisor.

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CORPORATE GOVERNANCE PRACTICES

National Policy 58-201 Corporate Governance Guidelines and National Instrument 58-101 Disclosure of Corporate Governance Practices set out a series of guidelines for effective corporate governance. The guidelines address matters such as the composition and independence of corporate boards, the functions to be performed by boards and their committees, and the effectiveness and education of board members. Each reporting issuer, such as the Corporation, must disclose on an annual basis and in prescribed form, the corporate governance practices that it has adopted. The following is the Corporation’s required annual disclosure of its corporate governance practices.

1. Board of Directors

Disclose how the board of directors facilitates its exercise of independent supervision over management, including:

• (i) the identity of directors who are independent; and

• (ii) the identity of directors who are not independent, and the basis for that determination.

The Board of Directors considers that Marcel Elefant, Michel Lemoine, Eric David, Karyn Pellatt-Caron and Benoit Ste-Marie are independent within the meaning of Multilateral Instrument 52-110 Audit Committees .

The Board of Directors considers that Curtis Page is not independent within the meaning of Multilateral Instrument 52-110 Audit Committees in that each is a senior officer of the Corporation.

Meetings of the Board of Directors are chaired by its Chairman, Michel Lemoine, an independent director. If necessary, the independent members of the Board of Directors can meet without non-independent directors and members of management present.

2.

Directorships

If a director is presently a director of any other issuer that is a reporting issuer (or the equivalent) in a jurisdiction or a foreign jurisdiction, identify both the director and the other issuer.

The following directors are currently directors of other issuers that are reporting issuers (or the equivalent) in a jurisdiction of Canada or a foreign jurisdiction:

Name of Director	Issuer
n/a	n/a.

3. Orientation and Continuing Education

Describe what steps, if any, the board takes to orient new board members, and describe any measures the board takes to provide continuing education for directors.

Generally, the Compensation and Human Resources Committee is responsible for the adoption of the policies of the Corporation relating to the orientation of new directors and the continuing education of existing directors. However, the Corporation does not currently have a formal orientation program in place for new directors, nor has it taken any measures to provide continuing education for the directors.

4.

Ethical Business Conduct

Describe what steps, if any, the board takes to encourage and promote a culture of ethical business conduct.

In terms of ensuring ethical business conduct, the Board has adopted a code of business and ethical conduct applicable to all the directors, senior officers, employees of the Corporation and its key contractors as part of its corporate practices. In addition, in terms of the disclosure of information, the Board has adopted a disclosure policy aimed at ensuring that any communication emanating from the Corporation is timely, accurate as regards the underlying facts

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and disclosed in accordance with applicable regulatory requirements. Finally, the Board has adopted a policy regarding securities transactions effected by insiders aimed at informing the Corporation’s insiders of their responsibilities in this regard and to ensure compliance therewith.

Alphinat provides a safe and secure workplace and remains an equal opportunity employer promoting equal economic independence for all regardless of gender, race, religion or personal orientation. Our company requires respect and understanding all our decisions and strive to increase representation of society statistics in our entry, management, executive and board of director positions.

5. Nomination of Directors

Disclose what steps, if any, are taken to identify new candidates for board nomination, including:

• (i) who identifies new candidates; and

• (ii) the process of identifying new candidates.

The Corporate Governance and Nomination Committee is responsible for recommending potential new directors and assessing the performance and contribution of directors. The Corporate Governance and Nomination Committee is currently composed of Michel Lemoine, Marcel Elefant and Benoit Ste-Marie. Meetings of the Corporate Governance and Nomination Committee are chaired by its Chairperson, Michel Lemoine, an independent director of the Corporation. Marcel Elefant and Benoit Ste-Marie are independent directors of the Corporation.

6. Compensation

Disclose what steps, if any, are taken to determine compensation for the directors and CEO, including:

• (i) who determines compensation; and

• (ii) the process for determining compensation.

The process by which the Corporation currently determines the compensation of the executive officers of the Corporation is described in the section entitled “Compensation of Executive Officers and Directors – Compensation Discussion & Analysis” above.

7. Other Board Committees

If the board has standing committees other than the audit, compensation and nominating committees, identify the committees and describe their function.

The Board of Directors has not constituted committees other that the Audit Committee, Compensation and Human Resources Committee and Corporate Governance and Nomination Committee. The Corporate Governance and Nomination Committee is currently composed of Michel Lemoine, Marcel Elefant and Eric David. The Corporate Governance and Nomination Committee is responsible for corporate and governance matters which include the following responsibilities:

• (a) the adoption of principles and guidelines relating to corporate governance that are relevant to the Corporation, as regards the: (i) size and composition of the Board; (ii) orientation of new directors; (iii) continuous education of directors; (iv) compensation and the term of directors’ mandates; (v) evaluation from time to time of the performance of the Board, its committees and individual directors, and (vi) description of the role of each director, as well as the qualifications and skills that each director should bring to the Board;

• (b) overseeing that the Board and management respect practices and procedures that are designed to ensure compliance with all applicable laws and ethical standards, including the adoption of policies and corporate procedures and the adoption of a written code of business and ethical conduct that is applicable to directors, officers and employees of the Corporation and which is designed to promote and foster integrity and deter inappropriate action or wrongdoing;

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• (c) recommending candidates for election or appointment to the Board, including examining any nominees recommended by shareholders; and

• (d) to the extent possible, satisfying itself as to the integrity of the senior management of the Corporation such that the senior officers create a culture of integrity throughout the Corporation.

8. Assessments

Disclose what steps, if any, that the Board takes to satisfy itself that the board, its committees, and its individual directors are performing effectively.

The Corporate Governance Committee is responsible for assessing the effectiveness of the Board of Directors, its committees and individual directors. In carrying out this mandate, a formal evaluation of the effectiveness of the Board and each of its members is conducted from time to time. The recommendations resulting from this evaluation process are submitted to the Chairman of the Board in order to allow him to take measures that are necessary or advisable in this regard.

ADDITIONAL INFORMATION

Financial information about the Corporation is contained in its comparative consolidated financial statements and Management’s Discussion and Analysis for the fiscal year ended August 31, 2021, and additional information about the Corporation is available on SEDAR at www.sedar.com.

If you would like to obtain, at no cost to you, a copy of any of the following documents:

• (a) the comparative financial statements of the Corporation for the fiscal year ended August 31, 2021 together with the accompanying report of the auditors thereon and any interim financial statements of the Corporation for periods subsequent to August 31, 2021 and Management’s Discussion and Analysis with respect thereto; and

• (b) this Circular,

please send your request to:

Alphinat Inc. 2000, Peel Street, Suite 680 Montreal, Québec H3A 2W5

Telephone: (514) 398-9799 Telecopy: (514) 398-9353 E-mail: info@alphinat.com

It is also possible to obtain information concerning the Corporation by visiting its web site at www.alphinat.com.

OTHER MATTERS

Management of the Corporation knows of no other matter to come before the Meeting other than those referred to in the Notice of Meeting. However, if any other matters which are not known to the management should properly come before the Meeting, the accompanying form of proxy confers discretionary authority upon the persons named therein to vote on such matters in accordance with their best judgment.

AUTHORIZATION

The contents and the mailing of this Circular have been approved by the Board of Directors of the Corporation.

(signed) Curtis Page

President & Chief Executive Officer

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DATED at Montreal, Québec January 20, 2022

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SCHEDULE A

AUDIT COMMITTEE CHARTER OF ALPHINAT INC.

The Audit Committee of the Board of Directors assists the Board of Directors in fulfilling its oversight responsibilities relating to the quality and integrity of the Corporation’s accounting, auditing, and financial reporting practices and in discharging such other duties as directed by the Board of Directors or imposed by legislative authorities or securities exchanges.

Structure and Organization

1. The membership of the Committee shall consist of at least three members of the Board of Directors, the majority of members of which shall not be employees, controlling shareholders or officers of the Corporation or of an affiliate or associate of same. Committee members and the Committee Chair shall be designated by, and serve at the pleasure of, the Board of Directors. All members shall be financially literate and at least one member shall be competent in the field of accounting or financial management, subject to, in either case, the Board of Directors’ discretion.

2. The Committee shall meet at least four times per year or more frequently as circumstances require. The Committee may ask officers of the Corporation or others to attend the meetings and provide pertinent information as necessary. The Committee’s quorum shall be a majority of its members.

3. The Committee is expected to maintain free and open lines of communication with management and the external auditors.

4. The Committee shall have the authority to investigate any matter brought to its attention and to retain an external advisor in this respect if it deems such to be appropriate.

6. A secretary shall be appointed at each meeting by the committee members.

7. The committee has the authority to determine its own procedure.

General Responsibilities

1. Meet periodically with representatives of the external auditors, the Director, Internal Audit, and management in separate sessions to discuss any matters that the Committee or these groups believe should be discussed privately ( in camera ) with the Committee. Provide an opportunity for the external auditors to meet with the internal auditors as appropriate, without officers of the Corporation being present.

2. Prepare the minutes of all Committee meetings and report on such meetings to the Board of Directors.

3. Review and reassess the adequacy of this Charter annually.

Responsibilities for Engaging External Auditors

1. Recommend for approval by the Board of Directors and ratification by the shareholders the selection and retention of an independent firm of Chartered Accountants as external auditors, approve the compensation of the external auditors, and review and approve in advance the discharge of the external auditors.

2. Review the independence of the external auditors. In considering the independence of the external auditors, the Committee shall review the nature of the services provided by the external auditors and the fees charged by them, as well as such other matters as the Committee shall deem appropriate.

3. The Audit Committee shall also ensure that the external auditor is in good standing with the Canadian Public Accountability Board (CPAB) and that no action has been taken by the CPAB against it. The Audit Committee shall also ensure that the external auditor meets the rotation requirements applicable to partners and staff participating in the audit of the Corporation.

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1. Arrange for the external auditors to be available to the Board of Directors at least once annually to help provide a basis for the Board’s approval of the external auditors’ appointment.

2. Pre-approve all non-audit related services to be provided to the Corporation or to one of its subsidiaries by the Corporation’s external auditors, as applicable.

3. De minimis non-audit services shall satisfy the pre-approval requirement if:

4. (a) The aggregate amount of all the non-audit services that were not pre-approved is reasonably expected to represent no more than 5% of the total amount of fees paid by the Corporation and its subsidiary entities to the Corporation’s external auditor during the fiscal year in which the services are provided;

5. (b) The Corporation or its subsidiaries, as the case may be, did not recognize the services as non-audit services at the time of the engagement; and

6. (c) The services are promptly brought to the attention of the Audit Committee and approved, prior to completion of the audit, by the Audit Committee or by one or more of its members to whom authority to grant such approvals has been delegated by the Audit Committee.

Responsibilities for oversight of the quality and integrity of accounting, auditing, and financial reporting practices of the Corporation

1. Oversee directly the work of the external auditors engaged for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services. The Committee shall also be directly responsible for resolving disagreements between management and the external auditors regarding financial reporting.

2. Review, with management and the external auditors and before they are issued, any financial statements, MD&As and press releases in connection with the Corporation’s earnings. The Committee’s review should cover the quality of the financial reporting, and such other matters as the Committee shall deem appropriate.

3. Review, with the external auditors and management, the external auditors’ audit plan for the current year and the following year.

4. Review, with the external auditors and the Finance and Accounting Department staff, the adequacy and effectiveness of the accounting, financial and computerized information systems controls of the Corporation.

5. Establish procedures for the receipt, retention and treatment of complaints received regarding accounting, internal accounting controls or auditing matters. Such complaints are to be treated confidentially and anonymously.

6. Review and approve all related party transactions undertaken by the Corporation.

Periodic Responsibilities

1. Review periodically with management any legal and regulatory matters that may have a material impact on the Corporation’s financial statements, compliance policies, and compliance programs.

2. Review with management and approve transactions involving officers and/or members of the Board of Directors, which require disclosure under the rules of the TSX-V.

3. Oversee the Corporation’s business compliance program and periodically examine whether it is relevant to implement improvements to the business compliance program and make suggestions to management in this respect.

4. Perform such other duties prescribed by law, the Corporation’s Charter or by-laws, or by the Board of Directors.

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1. Review fees for services rendered and related fees and those arising in connection with newly-approved services since the previous meeting as required by the external auditors during the period, as well as an updated projection of the total costs for the current fiscal year.

2. The Audit Committee shall review and approve the Corporation’s hiring policies regarding partners, employees and former partners and employees of the current and former external auditor of the Corporation.

3. The Audit Committee shall establish a process for identifying the main business risks and ensuring that adequate risk management measures are in place. Such process will require management to be consulted in order to know how risks are managed and the solicitation of the advice of the Internal Audit Department with respect to the efficiency of risk mitigation strategies.

Authority of the Audit Committee

The Committee shall have the authority:

1. To engage independent counsel and other advisors as it determines to be necessary to carry out its duties.

2. To set and pay the compensation for any advisors employed by the Committee. The Committee shall notify the Board of Directors of the extent of financing required to pay the compensation of the independent expert advisors retained to advise the Committee.

3. To communicate directly with the internal and external auditors.

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