Martello Technologies Group Inc. — Capital/Financing Update 2021

Mar 5, 2021

MARTELLO TECHNOLOGIES GROUP INC. 390 March Rd., Suite 110 Ottawa, Ontario K2K 0G7

MATERIAL CHANGE REPORT

March 5, 2021

Item 1. Name and Address of Company

The name of the reporting issuer is Martello Technologies Group Inc. (the “ Issuer " or “ Martello ”). Its head office is located at 390 March Rd., Suite 110 Ottawa, Ontario K2K 0G7.

Item 2. Date of Material Change

The material change occurred on March 4, 2021.

Item 3. News Release

The Issuer disseminated a News Release via CISION on March 4, 2021, and filed the News Release on SEDAR on March 4, 2021.

Item 4. Summary of Material Changes

Martello announced that in addition to the bought deal offering previously announced on February 25, 2021 and March 3, 2021 (the "Bought Deal Offering"), the Company intends to complete a concurrent non-brokered private placement of up to 2,310,502 units at an offering price of $0.19 per unit (the "Private Placement Units") for aggregate gross proceeds of up to approximately $439,000 (the "Concurrent Private Placement").

Item 5. Full Description of Material Changes

Each Private Placement Unit shall consist of one common share of the Company, and one-half of one common share purchase warrant (each whole warrant a "Warrant"). Each Warrant will entitle the holder thereof to purchase one common share of the Company (a "Warrant Share") at a price of $0.30 per Warrant Share for a period of two years following the closing of the Concurrent Private Placement.

The Concurrent Private Placement is being conducted pursuant to the exercise by HO Industries SAS of its pre-emptive right granted by the Company pursuant to the Company's agreement dated April 28, 2020 to acquire 100% of the shares of GSX Participations SA. The Concurrent Private Placement and the sale and purchase of the Private Placement Units will be completed on a non-brokered private placement basis, pursuant to exemptions from the prospectus requirements under applicable securities laws.

The Bought Deal Offering will be completed pursuant to the terms of an underwriting agreement between the Company and Paradigm Capital Inc., acting as sole bookrunner on behalf of a syndicate of underwriters (collectively, the "Underwriters"). The Underwriters are not acting in connection with, and no fee or commission will be paid to the Underwriters in respect of, the Private Placement Units issued under the Concurrent Private Placement. Closing of the

Concurrent Private Placement is subject to a number of conditions, including without limitation, receipt of all regulatory approvals.

The proceeds raised from the Bought Deal Offering and the Concurrent Private Placement are expected to be used by the Company for research and development activities, scaling sales and delivery capacity, working capital and general corporate purposes.

The Concurrent Private Placement is expected to close on or about March 18, 2021.

Items 6 and 7. Reliance on Subsection 7.1(2) of National Instrument 51-102 and Omitted Information

The Issuer is not relying on sub-section 7.1(2) of National Instrument 51-102 or the equivalent provisions of the securities legislation in other jurisdictions governing the Issuer for the filing of this report nor is any information being omitted in reliance thereon.

Item 8. Executive Officers

For further information, please contact John Proctor, President and Chief Executive Officer of the Issuer, at 613-271-5989.

Item 9. Date of Report

Dated this 5th day of March 2021.