FLUENT — Regulatory Filings 2020

Jan 27, 2020

FORM 51-102F3

MATERIAL CHANGE REPORT

1. NAME AND ADDRESS OF COMPANY

Cansortium Inc. (the "Company") 82 NE 26th St, Suite 100 Miami, Florida 33137

1. DATE OF MATERIAL CHANGE

January 16, 2020.

1. PRESS RELEASE

A News Release was issued and disseminated on January 17, 2020, through Canada NewsWire. The News Release has been filed on SEDAR.

1. SUMMARY OF MATERIAL CHANGE

The Company has amended the terms of its existing US$12.9 million Promissory Note due December 1, 2020 (the "Amended Note") and simultaneously satisfied its other obligations due to the lender under the Amended Note's original terms. The Amended Note has no amortization, does not begin paying cash interest until April 1, 2020, matures on December 1, 2022 and is exchangeable into common shares in the capital of the Company ("Common Shares", and each, a "Common Share") at any time at a price of US$0.60 per Common Share. Over US$12.0 million of other contingent liabilities have also been restructured using shares previously returned by the founders to the Company, significantly reducing the Company's liabilities without dilution to existing shareholders.

1. FULL DESCRIPTION OF MATERIAL CHANGE

5.1 Full Description of Material Change

On August 13, 2018, Fluent Servicing, LLC f/k/a Knox Servicing, LLC ("Servicing"), Cansortium Florida, LLC ("Cansortium Florida"), Cansortium Holdings LLC ("Cansortium Holdings", and together with Servicing, Cansortium Florida and Cansortium Holdings, the "Cansortium Affiliates"), William M. Smith, individually ("Smith"), and Can Endeavour LLC ("Can Endeavour") entered into that certain Smith Transaction Agreement (the "Smith Transaction Agreement"), pursuant to which Cansortium Florida acquired all of Can Endeavour's rights, title and interest in the units in Servicing (the "KS Units") held by Can Endeavour in exchange for US$23,325,000.00, which consideration was comprised of units in Cansortium Holdings and cash to be paid out pursuant to a promissory note.

On January 1, 2019, the Cansortium Affiliates, Sage Investing LLC ("Sage"), Smith and Can Endeavour, entered into an Amendment No. 1 to the Smith Transaction Agreement (the "First Amendment"), pursuant to which the parties thereto amended certain terms

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of the Smith Transaction Agreement. In connection with the First Amendment, among other things: (a) Consortium Florida issued to Can Endeavour a secured promissory note in the principal amount of US$12,561,477.59, dated January 1, 2019 (the "Note"); (b) Consortium Florida and Can Endeavour entered into a Security Agreement, dated as of January 1, 2019 (the "Security Agreement"), pursuant to which the Note is secured against certain collateral specified therein; (c) Consortium Holdings, Servicing and Can Endeavour entered into a Guaranty, dated as of January 1, 2019 (the "Guaranty"), pursuant to which Consortium Holdings and Servicing guaranteed the performance of the obligations of Consortium Florida under the Note; and (d) Consortium and Can Endeavour entered into a Guaranty, dated as of March 22, 2019 (the "Cansortium Guaranty"), pursuant to which the Company guaranteed the performance of the obligations of Consortium Florida under the Note.

On January 16, 2020, the Company, the Consortium Affiliates, Smith, Can Endeavour, Sage and Endeavour Holdings LLC ("Endeavour Holdings") entered into an Amendment No. 2 to the Smith Transaction Agreement (the "Second Amendment"), pursuant to which the parties thereto amended certain terms of the Smith Transaction Agreement, as amended by the First Amendment. Under the Second Amendment, among other things: (a) the Company, Sage and Endeavour Holdings were added as parties to the Smith Transaction Agreement, as amended by the First Amendment; (b) the parties thereto provided for the issuance and execution of the Amended Note (as hereinafter defined); (c) subject to all necessary regulatory approvals, Can Endeavour received the right to nominate two (2) individuals for appointment to the board of directors of the Company; and, (d) in full settlement and satisfaction of certain contingent liabilities of the Company owed to Can Endeavour under the Smith Transaction Agreement, as amended by the First Amendment, the Company agreed to transfer to Endeavour Holdings (as Can Endeavour's designee) an aggregate of 14,215,385 Common Shares (or the equivalent thereof) previously surrendered to the Company by certain founders of the Company (the "Second Amendment Shares"), such Second Amendment Shares, as well as 4,400,000 Common Shares owned by Endeavour Holdings prior to the date of the Second Amendment, being made subject to a price "Floor" of US$0.65 per Common Share. The price Floor is secured by the Security Agreement, the Guaranty and the Consortium Guaranty. If, at any time prior to 5:00 P.M. (EST) on May 31, 2023, Endeavour Holdings elects to sell some or all of its Common Shares subject to the Floor, and the purchase price is less than US$0.65 per share, then the Company (or its designee) shall have the first right to purchase all or any portion of the contemplated Common Shares to be sold for US$0.65 per Common Share. Alternatively, Consortium may elect to pay in cash to Endeavour Holdings on the date of such sale the difference between US$0.65 and the actual sale price per Common Share. Endeavour Holdings shall provide five (5) business days' notice to the Company of the contemplated sale of any Common Shares subject to the Floor below the US$0.65 per Common Share Floor. The price Floor shall be cancelled if the closing price of the Common Shares is US$4.13 per Common Shares or more for twenty (20) consecutive trading days while maintaining a trading volume of at least three (3) million Common Shares each trading day of such period. Endeavour Holdings agreed that, unless approved in advance in writing by the board of directors of the Company, neither it nor any of its affiliates will, until May 1, 2020, directly or indirectly, exercise its stock price Floor rights and sell any Common Shares that are subject to the Floor.

In connection with the Second Amendment, Consortium Florida issued to Can Endeavour, and the Company executed as a party thereto, an amended and restated

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secured promissory note in the principal amount of US$12,933,290.02 (the "Principal Amount"), dated as of January 16, 2020 (the "Amended Note"), thereby amending and restating the terms of the Note. Under the Amended Note, among other things: (a) the Amended Note is secured by the Guaranty, the Consortium Guaranty and the Security Agreement, pursuant to which Consortium Florida granted to Can Endeavour a first-priority security interest in sixty percent (60%) of the KS Units; (b) cash payments for the accrued and outstanding interest owed by Consortium Florida will not become payable until April 1, 2020; (c) the Amended Note will mature on December 1, 2022 (the "Maturity Date"); (d) in the event the Company breaches or defaults on the terms of the secured trust indenture dated May 23, 2019, to which the Company is a party, subject to the cure of any such breach or default by the Company during any applicable cure period, Can Endeavour will be free to, upon written notice to the Company, require immediate payment of all amounts owing by Consortium Florida to Can Endeavour under the Amended Note; (e) if the Company fails to deliver to Can Endeavour the required Common Shares upon the exercise by Can Endeavour of its exchange right under the Amended Note with respect to any portion of the Principal Amount, as hereinafter described; and, (f) at any time prior to the earlier of (i) the business day prior to any repayment of the Amended Note in accordance with the terms thereof, and (ii) the business day immediately preceding the Maturity Date, Can Endeavour will have the right, but not the obligation, to exchange, for no additional consideration, all or any part of the Principal Amount (each, an "Exchange Amount") into such number of fully paid and non-assessable Common Shares calculated by dividing the Exchange Amount in question by an exchange price equal to US$0.60 per Common Share (subject to adjustment, as further described in the Amended Note), provided that no Exchange Amount proposed to be exchanged for Common Shares may be less than US$1,000,000.00, unless the portion of the Principal Amount remaining is less than US$1,000,000.00 in which case, the entire remaining amount will be exchanged for Common Shares. For greater certainty, if Can Endeavour elects to convert all or a portion of the Principal Amount, then the applicable amount of accrued and unpaid interest on the Principal Amount being converted must be paid by Consortium Florida to Can Endeavour up to, but excluding, the applicable date of exchange.

5.2 Disclosure for Restructuring Transactions

Please see item 5.1 above.

6. RELIANCE ON SUBSECTION 7.1(2) OF NATIONAL INSTRUMENT 51-102

Not applicable.

7. OMITTED INFORMATION

No information has been intentionally omitted from this form.

8. EXECUTIVE OFFICER

For further information contact Chief Legal Officer, at 305-441-9085.

9. DATE OF REPORT

January 26th, 2020.

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