Impact Development Group — Regulatory Filings 2024

Aug 22, 2024

Form 51-102F3 MATERIAL CHANGE REPORT

1. Name and Address of the Issuer

Impact Development Group Inc. (the “ Company ” or “ IDG ”) 1 Adelaide Street East, Suite 801 Toronto, Ontario M5C 2V9

2. Date of Material Change

August 19, 2024.

3. News Release

A press release disclosing the material change was issued by the Company through Newsfile on August 19, 2024, and filed on www.sedarplus.ca.

4. Summary of Material Change

The Company announced that it had entered into a non-binding term sheet (the “ Term Sheet ”) to acquire 100% of the issued and outstanding shares of Fusion Inc. (“ Fusion ”).

It had also announced that it has paused all planning and development activities related to its Santiago project in Panama.

5. Full Description of Material Change

Fusion Acquisition Summary

On August 19, 2024, the Company and Fusion entered into the Term Sheet which outlined the terms and conditions pursuant to which the Company and Fusion would complete a transaction that will result in an acquisition of Fusion by the Company (the “ Proposed Transaction ”).

Under the terms of the Term Sheet, the Company agreed to issue to Fusion, or shareholders of Fusion, an aggregate of (a) 1,666,667 IDG common shares (“ IDG Shares ”), each issued at a deemed price of USD $3.00 (collectively, the “ Consideration Shares ”); (b) 1,166,668 IDG Shares (collectively, the “ Earn-Out Shares ”), conditional upon the satisfaction of revenue milestones on the first, second, and third year anniversaries of the closing of this Proposed Transaction; and (c) 1,000,000 warrants, each exercisable by the holder for the purchase of one IDG Share at a price equal to the greater of (i) of USD$3.00; or (ii) the closing price of the IDG Shares on the closing date of the Proposed Transaction. If any of the revenue milestones are met after the applicable mandatory exercise date, then the warrants associated with such prior mandatory exercise date shall be required to be exercised within 15 days.

All securities issued pursuant to this Proposed Transaction are subject to a hold period of four months and one day from the date of issuance.

Activities in Panama

Following the appointment of new presidential leadership in Panama on July 1[st] , 2024, the Company had reprioritized its strategic objectives in Panama due to the Ministry of Housing and Land Management (“ MIVIOT ”) commencing its review of the Solidarity Fund Program (the “ Program ”). The Program provided subsidies in connection with homes built for social interest purposes, and the Company, as at August 1, 2024, had 176 houses that received MIVIOT subsidy certification from this Program. The Company has been waiting on the disbursement of the subsidy payment for these 176 houses, as well as an additional 40 homes that have been delivered during the year but had yet to receive the subsidy payments from the Program. In total, there are 216 homes that remain at risk of not receiving the subsidy payments should MIVIOT permanently discontinue the Program following their review.

Pending further guidance from MIVIOT, the Company had reprioritized strategic objectives to focus on the delivery of existing housing inventory under construction. Subsequently, the Company had paused all planning and development activities related to Phase 8, Phase 6/7, and La Reserva 2 at the Santiago project.

6. Reliance on subsection 7.1(2) of National Instrument 51-102

Not applicable.

7. Omitted Information

No significant facts have been omitted from this report.

8. Executive Officer

Tom Wenz CEO and Director Tel: + 1 (702) 329-8038 Email: twenz@ihcpanama.com

9. Date of Report

August 22, 2024.

Cautionary Note Regarding Forward-Looking Information

This material change report contains certain “forward-looking statements” that reflect the Company’s current expectations and projections about its future results. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. Forward-looking statements in this material change report include, but are not limited to, statements relating to the Company’s business activities in Panama; the Company’s plans to bring its expertise acquired in the Panamanian market into the US market; the Company’s plans to expand its global reach; the Company’s plans to utilize Fusion’s software platform to expand into adjacent markets and revenue streams; and the Company’s hopes of promoting the development of affordable housing across a wider geographic area.

The forward-looking statements, while considered reasonable by the Company, are inherently based upon assumptions that are subject to significant risks and uncertainties, including, but not limited to, the Company being able to carry out its business plan as contemplated in the term sheet; the Company’s ability to continue receiving subsidies from the MIVOT as part of the Program; MIVIOT continuing to disburse subsidies representing approximately 15% of the total purchase price of homes built for social purposes in Panama; the Company continuing to plan and develop housing at the Santiago project related to Phase 8, 6/7, and La Reserva 2; the Company maintaining and retaining the intellectual property rights to the Fusion software platform; and the Company’s plans to scale and develop more sustainable housing solutions in Central America and globally. Although the Company believes that the expectations reflected in forward-looking statements are reasonable, they can give no assurances that the expectations of any forward-looking statements will prove to be correct.

Such statements and information reflect the current view of the Company. Risks and uncertainties exist that may cause actual results to differ materially from those indicated or implied in the forward-looking statements and information. Such factors include, among others: the limited business history of the Company; the Company’s reliance on key management; risks related to the Company’s growth strategy, including that previous and future acquisitions do not meet expectations or potential acquisitions cannot be completed; dependence on and availability of third party financing; the business of the Company being subject to broader economic and political factors; disruptions or changes in the credit or security markets; financial results of the Company’s operations; unanticipated costs and expenses; and general market and industry conditions.

The forward-looking information contained in this material change report represents the expectations of the Company as of the date of this material change report and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While the Company may elect to, it does not undertake to update this information at any particular time except as required in accordance with applicable laws.