POSTMEDIA NETWORK CANADA CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2025 and 2024

Approved for issuance: January 12, 2026

JANUARY 12, 2026

MANAGEMENT'S DISCUSSION AND ANALYSIS

This management's discussion and analysis of financial condition and results of operations of Postmedia Network Canada Corp. ("PNCC") as well as its direct and indirect subsidiaries, including Postmedia Network Inc. ("PMNI"), PNI Maritimes GP Inc. ("PNI Maritimes GP"), PNI Maritimes LP (collectively, "we", "our", "us", the "Company" or "Postmedia") should be read in conjunction with the condensed consolidated financial statements and related notes of Postmedia for the three months ended November 30, 2025 and 2024. The condensed consolidated financial statements of Postmedia for the three months ended November 30, 2025 and 2024 and the audited consolidated financial statements of Postmedia for the years ended August 31, 2025 and 2024 are available on SEDAR+ at www.sedarplus.ca.

All amounts are expressed in Canadian dollars unless otherwise noted. The interim condensed consolidated financial statements of Postmedia for the three months ended November 30, 2025 and 2024 have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"). We applied the going concern basis of accounting in preparing the financial statements which is dependent upon our ability to generate sufficient profits and cash flows to ensure we have sufficient liquidity to meet our obligations as they fall due. Management is satisfied that cash flow forecasts, taking into account any reasonably possible changes in results and other uncertainties, will provide sufficient liquidity for at least the next twelve months.

This management's discussion and analysis is dated January 12, 2026 and does not reflect changes or information subsequent to this date. Additional information in respect of Postmedia is available on SEDAR+ at www.sedarplus.ca.

Caution Regarding Forward-Looking Statements

Certain statements contained in this MD&A and documents referenced herein constitute "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian securities laws (collectively referenced herein as "forward-looking statements"), including the provincial securities legislation in Canada. These statements are subject to a number of risks described in the section entitled "Risk Factors" contained in our annual management's discussion and analysis for the years ended August 31, 2025 and 2024. These statements relate to future events or future performance and reflect the Company's expectations and assumptions regarding the growth, results of operations, performance and business prospects and opportunities of the Company and its subsidiaries. Forward-looking statements are often, but not always, identified by the use of the words such as "may", "would", "could", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential", "pursue", "continue", "seek" or the plural or negative of these terms or other similar expressions concerning matters that are not historical facts. In particular, statements regarding the Company's or any of its subsidiary's objectives, plans and goals, including those related to future operating results, financial performance, and the markets and industries in which the Company and its subsidiaries operate are or involve forward-looking statements. Specific forward-looking statements in this document include, but are not limited to:

the Company's business strategies, operational activities and strategic priorities;
the Company's strategy and operations with respect to Saltwire's publications;
the Company's business strategies, operational activities and strategic priorities;
the Company's strategy and operations with respect to Saltwire's publications;
the future growth opportunities for digital revenue and parcel revenue;
print and digital advertising market trends;
circulation revenue trends;
the price of newsprint;

newspaper circulation volume and production trends;
seasonal advertising patterns and seasonal influence on media consumption habits;
the Company's cost savings and transformation initiatives; and
the Company's cash on hand and cash flows from operations, including the receipt of the Canadian journalism tax credits as described below under the heading "Recent Developments", and available borrowings under our ABL Facility.

Forward-looking statements are based on several factors and assumptions that management believes are reasonable at the time they are made, but which may lead to actual results that differ materially from our expectations expressed in, or implied by, such forward-looking statements. As a result, we cannot guarantee that any forward-looking statement will materialize and we caution you against relying on any of these forward-looking statements. Forward-looking statements are included in this MD&A for the purpose of assisting investors and others in understanding our business strategies, objectives and plans. Readers are cautioned that such information may not be appropriate for other purposes. In making certain forward-looking statements, we have made certain assumptions, including, without limitation, assumptions about:

the Company's future operating results;
the future general economic and market conditions;
the impact of increasing competition on the Company and industry mergers and acquisitions on the Company;
changes in the industries and changes in laws and regulations related to the industries in which the Company operates;
consumer and customer preferences;
the ability of the Company to execute on and integrate acquisition and other growth strategies and opportunities and realize the expected benefits therefrom;
changes in the markets and industries in which the Company operates and the ability of the Company to adapt to such changes;
the current geopolitical landscape;
general economic and industry growth rates;
the economic impact of any potential recession on consumer behavior and advertising sales;
that we will be able to successfully integrate, and realize synergies from, the businesses and assets that we acquired in the Saltwire Asset Purchase Transaction;
that general economic conditions in Canada will not deteriorate significantly further;
that we will be able to attract and retain key personnel in key positions;
that we will be able to continue implementing and/or implement additional cost savings and transformation initiatives;
assumptions and estimates regarding the timing and amounts of future revenues, expenses, and cost reduction and transformation initiatives and their impact on liquidity, which includes the use of the ABL Facility;
assumptions including the discount rate and mortality rates, among others to measure the net defined benefit obligation;
the market multiples used to calculate fair value less costs of disposal;

Forward-looking statements are also based upon the assumption that none of the identified risk factors that could cause actual results to differ materially from the anticipated or expected results described in the forward-looking information and statements will occur.

Forward-looking statements are inherently subject to risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections, or conclusions will not prove to be accurate, that assumptions may not be correct, and that objectives, strategic goals and priorities will not be achieved. A number of known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, could cause actual events, performance or results to differ materially from what is projected in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, but are not limited to: liquidity risks; competition from digital and other forms of media may impair our ability to generate advertising and circulation revenue; our failure to maintain our print and online newspaper readership and circulation levels would limit our ability to generate advertising and circulation revenue, in addition to changes in the economic environment; we compete with alternative emerging technologies and may have to invest a significant amount of capital to address continued technological development; failure to fulfill our strategy of building our digital media and online businesses would adversely affect our business prospects; the integration of the assets acquired in the Saltwire Asset Purchase Transaction (as hereinafter defined) may not occur as planned; risks related to our indebtedness (including, without limitation: the risk that our substantial indebtedness could adversely affect our financial condition; despite our current level of indebtedness, we may be able to incur substantially more debt, which could further exacerbate the risks to our financial condition described; the terms of the First-Lien Notes and the Second-Lien Notes restrict our current and future operations, particularly our ability to respond to changes or to take certain actions; we may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful; and we may be adversely affected by foreign exchange fluctuations).

In evaluating forward-looking statements in this document or in the documents referenced herein, investors and prospective investors should specifically consider the foregoing and various other risks, uncertainties and other factors which may cause actual events, performance, or results to differ materially from any forward-looking statement.

This is not an exhaustive list of the factors that may affect any of the Company's forward-looking statements. Please refer to a discussion of the above and other risk factors related to the business of the Company and the industry in which it operates that will continue to apply to the Company, which are discussed in our annual management's discussion and analysis for the years ended August 31, 2025 and 2024 under the heading "Risk Factors" and the Company's Annual Information Form ("AIF") for the year ended August 31, 2025 available on SEDAR+ at www.sedarplus.ca.

These forward-looking statements are made as of the date of this MD&A or, in the case of documents referenced herein, as of the date of such documents, and the Company does not intend, and does not assume any obligation, to update or revise them to reflect new events or circumstances, except in accordance with applicable securities laws. Investors and prospective investors are cautioned not to place undue reliance on forward-looking statements.

Additional IFRS Accounting Standards Measure

We use operating income before depreciation, amortization, impairment and restructuring and other and other as presented in the condensed consolidated financial statements for the three months ended November 30, 2025 and 2024, to assist in assessing our financial performance. Management and the Board of Directors of Postmedia use this measure to evaluate consolidated operating results and to assess Postmedia's ability to incur and service debt. In addition, this measure is used to make operating decisions as it is an indicator of performance including of how much cash is being generated by Postmedia and assists in determining the need for additional cost reductions as well as the evaluation of personnel and resource allocation decisions. Operating income before depreciation, amortization, impairment and restructuring and other is referred to as an additional IFRS Accounting Standards measure and may not be comparable to similarly titled measures presented by other companies. The most directly comparable IFRS Accounting Standards financial measure is net loss.

Overview and Background

Our business consists of news and information gathering and dissemination operations, with products offered in local, regional and major metropolitan markets in Canada through print, online and mobile platforms. Our operations include an extensive distribution network, which also offers distribution services, for advertising flyers and parcels. The combination of these distribution platforms provides audiences with a variety of media through which to access and interact with our content. The breadth of our reach and the diversity of our content enable advertisers to reach their target audiences on a local, regional or national scale through the convenience of a single provider. We have the highest weekly print readership of newspapers in Canada, based on Vividata Spring 2025 survey data and represent more than 140 brands across multiple print, online, and mobile platforms.

For financial reporting purposes we have one operating segment, the Newsmedia segment, which publishes daily and non-daily newspapers and operates digital media and online assets including each newspaper's online website. The Newsmedia segment's revenue is primarily from print and digital advertising and circulation/subscription revenue.

Recent Developments

In 2024, Postmedia, alongside other news media companies, commenced legal action against OpenAI Inc. in an effort to address OpenAI's use of our intellectual property for their own commercial gain, which is an inappropriate and illegal use of Canadian content. This is the first case in Canada to address the use of copyrighted content to train AI systems.

During the three months ended November 30, 2025, we extended the maturity of the asset-based lending facility ("ABL Facility") to September 30, 2028.

During the three months ended November 30, 2025, we have launched Tails Told, a new digital platform that helps pet owners honour the animals who have touched their lives. Inspired by Lives Told, our biography platform, Tails Told turns users' memories into professionally crafted digital tributes complete with photos and personalised storytelling.

We continue to identify and undertake cost reduction and transformation initiatives in an effort to address revenue decline in the legacy print business and key growth areas of digital advertising, digital subscriptions and parcel services.

The Income Tax Act (Canada) contains measures specific to our industry including a journalism tax credit whereby qualifying news organizations may apply for a refundable labour tax credit applied to the qualified salaries of journalists as adjusted for other forms of assistance received. During the three months ended November 30, 2025, the Company recognized a recovery of compensation expense of $3.1 million, related to the journalism tax credits (2024 – $3.0 million). As at November 30, 2025, the net aggregate journalism tax credit receivable of $15.0 million is included in trade and other receivables on the condensed consolidated statement of financial position (August 31, 2025 - $11.9 million). The recognition of the journalism tax credits receivable is based on the Company's interpretation of the federal budget and the related legislation. Actual amounts received may differ from the amounts currently recorded based on future CRA and/or Revenue Québec interpretations of eligibility, qualifications and determination of the tax credits. We currently record benefits under the Journalism Tax Credit support program based on the regulations in place at the beginning of the fiscal year.

Key Factors Affecting Operating Results

Revenue is earned primarily from advertising, circulation and parcel services sources. Advertising revenue is a function of the volume, linage or impressions, of advertising sold and rates charged. Circulation revenue is derived from subscriptions for newspapers, including All Access Subscriptions (across the four platforms of print, web, tablet and smartphone), ePaper and Digital Access subscriptions, single copy sales at retail outlets and vending machines and is a function of the number of newspapers sold and the price per copy. Parcel services revenue consists of revenue from our distribution network, which offers distribution services for advertising flyers and parcels.

Our major advertising categories are print and digital advertising. Advertising is influenced by both the overall strength of the economy and significant structural changes in the newspaper industry and media in general. The continuing shift in advertising dollars from print advertising to advertising in other formats, particularly online and other digital platforms including search and social media websites, combined with periods of economic uncertainty have contributed to significant declines in print advertising and a competitive digital advertising market. We continue to believe digital revenue represents a future growth opportunity for Postmedia and as a result we are focused on various products and initiatives in this area including digital marketing services that provide customized, full-service solutions to increase a business' overall revenue including website development, search engine optimization (SEO) and search engine marketing (SEM). We anticipate the print and digital advertising markets to remain challenging and expect the current quarter trends to continue in fiscal 2025.

In the three months ended November 30, 2025, PNI Maritimes LP continued the integration of the Saltwire Assets Purchase Transaction which continued to expand the Company's circulation and parcel markets.

Our principal expenses consist of compensation, newsprint, distribution and production. As a result of the continuing trends in the legacy print business, we continue to pursue additional cost reduction initiatives.

Our operating results are affected by variations in the cost and availability of newsprint. Newsprint is the principal raw material used in the production of our newspapers and other print publications. It is a commodity that is generally subject to price volatility. We take advantage of the purchasing power that comes with the large volume of newsprint we purchase, as well as our proximity to paper mills across Canada, to minimize our total newsprint expense.

Our distribution is primarily outsourced to third-party suppliers. The key drivers of our distribution expenses are fuel costs and circulation, insert and parcel volumes.

Our production expenses include the costs related to outsourced production of our newspapers, digital advertising production costs and ink and other production supplies.

Other Factors

Seasonality

Revenue has experienced, and is expected to continue to experience, seasonality due to seasonal advertising patterns and seasonal influences on media consumption habits. Historically, our advertising revenue and accounts receivable is typically highest in the first and third fiscal quarters, while expenses are relatively constant throughout the fiscal year.

Critical accounting estimates and presentation

The preparation of financial statements in accordance with IFRS Accounting Standards requires management to make estimates, assumptions and judgements that affect the reported amounts of assets and liabilities, related amounts of revenues and expenses, and disclosure of contingent assets and liabilities. Although these estimates, assumptions and judgements are based upon management's knowledge of the amount, event or actions; actual results could differ from those estimates, assumptions and judgements. The critical accounting estimates and presentation used in our interim condensed consolidated financial statements for the three months ended November 30, 2025 and 2024 are not materially different from those disclosed in our annual management's discussion and analysis and annual audited consolidated financial statements for the years ended August 31, 2025 and 2024.

The company completes forecasting models that are used to assess our going concern assumption and liquidity needs. The forecasting models use considerable judgment applied by management and includes key assumptions and estimates regarding the timing and amounts of future revenues, expenses, and cost reduction and transformation initiatives and their impact on liquidity. The forecasting models and estimates of expected liquidity needs are sensitive to these assumptions. If, over the course of the next year, market conditions deteriorate further than anticipated, costs are higher than projected, and/or income as a result of the Online News Act is different in amount or timing from management's forecasts, the Company may need to implement additional cost savings and transformation initiatives and/or seek additional sources of financing to ensure that the Company can continue to meet its liquidity needs.

Online News Act

The federal Online News Act (Canada) (the "Online News Act"), commonly known as Bill C-18, is intended to help Canadian news organizations reach fair commercial agreements with the largest online platforms, such as search engines and social media sites. The Online News Act received Royal Assent on June 22, 2023 and subsequently came into force on December 15, 2024. On November 29, 2023, the Department of Canadian Heritage announced an agreement with Google LLC (Google) under which Google would contribute $100 million to Canadian news organizations annually, indexed to inflation. Google held an open call to news organizations that wish to receive compensation under the Online News Act which ended on April 30, 2024. In 2024, Postmedia submitted required applications for eligibility of receipt of related contributions and is awaiting results of the distribution allocation. During the three months ended November 30, 2025, we received cash of $5.0 million related to revenues recognized from the Online News Act, commonly known as Bill C-18.

Operating Results

Postmedia's operating results for the three months ended November 30, 2025 as compared to the three months ended November 30, 2024

	2025	2024
Revenues
Advertising	56,437	56,473
Circulation	33,720	35,936
Parcel services	16,706	13,149
Other	5,012	4,712
Total revenues	111,875	110,270
Expenses
Compensation	36,007	35,608
Newsprint	2,542	2,872
Distribution	39,127	37,514
Production	11,919	10,639
Other operating	17,185	18,167
Operating income before depreciation, amortization, impairment and restructuring and other	5,095	5,470
Depreciation	3,128	3,419
Amortization	560	556
Impairment	188	-
Restructuring and other	1,055	2,026
Operating income (loss)	164	(531)
Interest expense	11,458	10,743
Foreign currency exchange losses	8,201	12,914
Net financing expense relating to employee benefit plans	262	289
Loss on disposal of right of use assets	110	250
Loss (gain) on derivative financial instruments and financial assets at fair value through profit and loss	512	(242)
Net loss after income taxes	(20,379)	(24,485)

Revenue

Advertising

Advertising revenue decreased a nominal amount, to $56.4 million for the three months ended November 30, 2025 as compared to the same period in prior year, as a result of a decrease in digital advertising of 5.6%, partially offset by increases from print advertising of 2.6%. The increase in print advertising was primarily due to increases in insert advertising of 16.1%, partially offset by a decrease in run of paper advertising of 12.7%. The decrease in digital advertising was primarily as a result of decreases in direct owned and operated digital advertising, partially offset by an increase in digital marketing services.

Circulation

Circulation revenue decreased $2.2 million, or 6.2%, to $33.7 million for the three months ended November 30, 2025 as compared to the same period in the prior year. The decrease in circulation revenue was a result of decreases in home delivery and single copy circulation and the decrease in print volumes.

Parcel services

Parcel services revenue increased $3.6 million, or 27.1%, to $16.7 million for the three months ended November 30, 2025, as compared to the same period in the prior year. The increase in parcel services revenue was a result of increases in parcel volumes.

Other

Other revenue increased $0.3 million, or 6.4% to $5.0 million for the three months ended November 30, 2025, as compared to the same period in the prior year. The increase was a result of an increase in commercial print revenues, partially offset by a decrease in other licensing revenues.

Expenses

Compensation

Compensation expenses increased $0.4 million, or 1.1%, to $36.0 million for the three months ended November 30, 2025, as compared to the same period in the prior year. The increase was a result of an increase in equity compensation related to restricted stock units and commission expenses, partially offset by an increase in the journalism tax credit receivable for the three months ended November 30, 2025, as compared to the same period in the prior year. Excluding the impact of the journalism tax credits, compensation expenses increased $0.8 million, or 2.1%, to $39.4 million for the three months ended November 30, 2025.

Newsprint

Newsprint expenses decreased $0.3 million, or 11.5%, to $2.5 million for the three months ended November 30, 2025 as compared to the same period in the prior year primarily as a result of a decrease in newsprint consumption, a decrease to newspaper page counts and circulation volumes, and continued usage reduction efforts.

Distribution

Distribution expenses increased $1.6 million, or 4.3%, to $39.1 million for the three months ended November 30, 2025, as compared to the same period in the prior year. The increase was primarily a result of increases in parcel services revenue which is in-line with distribution expenses, partially offset by decreases in distribution expenses for home delivery which aligns with decreases in circulation revenue.

Production

Production expenses increased $1.3 million, or 12.0%, to $11.9 million for the three months ended November 30, 2025, as compared to the same period in the prior year. The increase was primarily a result of increases in outside printing and outside production costs which is in line with increases in inserts advertising revenue, as discussed above.

Other operating

Other operating expenses decreased $1.0 million, or 5.4%, to $17.2 million for the three months ended November 30, 2025, as compared to the same period in the prior year. The decrease in other operating expenses was primarily related to decreases in technology and rent expenses, partially offset by increases in outside services and client relation expenses.

Operating income before depreciation, amortization, impairment and restructuring and other

Operating income before depreciation, amortization, impairment and restructuring and other decreased $0.4 million to $5.1 million for the three months ended November 30, 2025 as compared to the same period in the prior year. The decrease was as a result of a decrease in circulation revenue and an increase in distribution and production expenses, partially offset by increases in parcel services revenue and a decrease in other operating expenses, all as discussed above.

Depreciation

Depreciation expense decreased $0.3 million to $3.1 million for the three months ended November 30, 2025 as compared to the same period in the prior year. The decrease was primarily as a result of assets and right-of-use assets that were fully depreciated during the year ended August 31, 2025.

Amortization

Amortization expense increased a nominal amount to $0.6 million for the three months ended November 30, 2025 as compared to the same period in the prior year.

Restructuring and other

Restructuring expenses decreased $0.3 million, or 44.4%, to $0.4 million for the three months ended November 30, 2025. Restructuring expenses included both involuntary terminations and voluntary buyouts. Other expenses decreased $0.6 million, or 49.6%, to $0.7 million for the three months ended November 30, 2025. Other expenses included non-operating costs pertaining to the strategic exit of certain assets.

Operating income (loss)

Operating income was $0.2 million for the three months ended November 30, 2025, as compared to an operating loss of $0.5 million for the same period in the prior year. The increase in operating income in the three months ended November 30, 2025 was primarily the result of a decrease in restructuring and other expenses, partially offset by the decrease in Operating income before depreciation, amortization, impairment and restructuring and other, all as discussed above.

Interest expense

Interest expense increased $0.7 million to $11.5 million for the three months ended November 30, 2025, as compared to the same period in the prior year. Interest expense primarily relates to interest on our long-term debt that was recognized using the effective interest rate method, which amortizes the initial debt issuance costs and includes both cash and non-cash interest. The increase in interest was primarily due to an increase in the paid-in-kind interest on our 10.25% Senior Secured Notes due 2027 ("Second-Lien Notes") and ABL Facility, partially offset by a decrease in the paid-in-kind interest on our First-Lien Notes.

Foreign currency exchange losses

Foreign currency exchange losses for the three months ended November 30, 2025 were $8.2 million as compared to a foreign currency exchange loss of $12.9 million in the same period in the prior year. The decrease in foreign currency exchange losses was primarily due to fluctuations in the Canadian dollar relative to the US dollar and the impact on our US dollar denominated long term debt.

Loss on disposal of right-of-use assets

During the three months ended November 30, 2025 we disposed of right-of-use assets and realized a nominal loss of $0.1 million. During the three months ended November 30, 2024, we disposed of right-of-use assets and realized a loss of $0.3 million.

Loss (gain) on derivative financial instruments and financial assets at fair value through profit and loss

The loss on derivative financial instruments and financial assets at fair value through profit and loss for the three months ended November 30, 2025 was $0.5 million as compared to a gain of $0.2 million during the same period in the prior year. The loss in the three months ended November 30, 2025 and gain in the three months ended November 30, 2024 relate to the revaluation of shares and warrants of Mogo Inc.

Net loss after income taxes

Net loss after income taxes decreased $4.1 million to $20.4 million for the three months ended November 30, 2025, as compared to the same period in the prior year. The decrease in net loss after income taxes was primarily the result of a decrease in foreign currency exchange losses and an increase in operating income, partially offset by an increase of interest expense, and an increase in loss on derivative financial instruments and financial assets at fair value through profit and loss, in each case as described in further detail above.

Consolidated quarterly financial information

($ in thousands of Canadian dollars, except per share information)	Fiscal 2026	Fiscal 2025				Fiscal 2024
	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2
Total revenues	111,875	101,244	109,162	110,820	110,270	93,157	100,812	97,338
Net (loss) income	(20,379)	(44,688)	7,905	(15,987)	(24,485)	(3,077)	(15,880)	(20,097)
Net (loss) earnings
Basic and diluted	$ (0.21)	$ (0.45)	$ 0.08	$ (0.16)	$ (0.25)	$ (0.03)	$ (0.16)	$ (0.20)
Cash flows from (used in) operating activities	4,478	(2,918)	2,537	2,905	9,490	(8,909)	(4,237)	1,147

Liquidity and capital resources

Our principal uses of funds are for working capital requirements, debt servicing and capital expenditures. Based on our current and anticipated level of operations, we believe that our cash on hand and cash flows from operations, which includes the receipt of the journalism tax credits as described above under the heading "Recent Developments", and available borrowings under our ABL Facility will enable us to meet our working capital, debt servicing, capital expenditure and other funding requirements for the next twelve months. However, our ability to fund our working capital needs, debt servicing and other funding requirements depends on our future operating performance and cash flows. There are a number of factors which may adversely affect our operating performance and our ability to meet these obligations as described above under the heading "Key Factors Affecting Operating Results". Our cash flows from operating activities may be impacted by, among other things, the overall strength of the economy, competition from digital media and other forms of media as well as competition from technology companies. The news media industry is under significant competitive pressures from global technology companies resulting in the permanent closure of numerous traditional competitors. To address the competitive imbalance in the Canadian news media industry the Government of Canada recently passed the Online News Act (Canada) which aims to help ensure that dominant digital platforms compensate news businesses when their content is made available on their services.

As at November 30, 2025, we had US$1.5 million ($2.1 million) available on the ABL Facility. In addition, Chatham Asset Management LLC ("Chatham LLC") and certain investment funds or accounts for which Chatham LLC or its affiliates acts as an investment advisor, sub-advisor or manager (collectively, "Chatham") has committed to provide further financial support of up to $30 million, if needed for a period to December 31, 2026.

Material contractual obligations related to financial instruments include debt repayments and interest payments on long-term debt. These contractual undiscounted obligations as well as accounts payable, accrued liabilities, provisions, lease obligations and other long-term liabilities and their maturities as at November 30, 2025, are as follows:

	Total	Less than 1 year	1-3 years	3-5 years	5 years or more
Accounts payable	27,742	27,742	-	-	-
Accrued liabilities	29,285	29,285	-	-	-
Provisions	1,124	1,124	-	-	-
Lease obligations	21,353	7,753	12,233	845	522
Contingent consideration	19,553	3,507	5,329	5,587	5,130
Other long-term liabilities (1)	5,353	1,127	2,492	1,734	-
Long-term debt (2)	399,718	-	399,718	-	-
Cash Interest payments (3)	3,910	1,173	2,345	392	-
Paid-in-kind interest payments (4)	82,484	-	82,484	-	-
Total	590,522	71,711	504,601	8,558	5,652

(1) Cash funding obligation payable to the CAAT Pension Plan related to the transferred defined benefit plans.
(2) Principal repayments of long-term debt are based on the mandatory contractual payments.
(3) Cash interest payments on long-term debt relate to the New First-Lien Notes and are based on fixed contractual interest rates.
(4) Paid-in-kind interest payments on long-term debt relate to the Second-Lien notes and the Unsecured Promissory Notes and are based on fixed contractual interest rates.

Cash flows from operating activities

Our principal sources of liquidity are cash flows from operating activities. For the three months ended November 30, 2025, our operating cash flows were inflows of $4.5 million (2024 – inflows of $9.5 million). The decrease in cash inflows in the three months ended November 30, 2025 related to operating activities were $5.0 million, primarily due to a lower positive net change in working capital and a decrease in non-cash foreign currency exchange losses, partially offset by a decrease in net loss after income taxes, an increase in non-cash interest, and an increase in losses on derivative financial instruments and financial assets at fair value through profit and loss.

As at November 30, 2025 we had cash of $5.3 million (August 31, 2025 - $3.3 million).

Cash flows used in investing activities

For the three months ended November 30, 2025, our investing cash flows were outflows of $0.6 million (2024 – outflows $0.5 million). The cash outflows from investing activities during the three months ended November 30, 2025 included outflows related to the purchase of property, plant and equipment of $0.2 million and purchases of intangible assets of $0.4 million. The cash outflows from investing activities during the three months ended November 30, 2024 included outflows related to the purchase of property, plant and equipment of $0.1 million and purchases of intangible assets of $0.4 million.

Cash flows used in financing activities

For the three months ended November 30, 2025, our financing cash flows were outflows of $1.8 million (2024 – outflows of $5.2 million). Net cash outflows from financing activities during the three months ended November 30, 2025 consisted of the repayment of the ABL Facility, repayment of contingent consideration, and lease payments, partially offset by advances from the ABL Facility. Net cash outflows from financing activities during the three months ended November 30, 2024 consisted of the repayment of the short term promissory note and lease payments, partially offset by advances from ABL Facility.

Indebtedness

As at November 30, 2025, we had US$11.2 million First-Lien Notes outstanding, US$232.7 million Second-Lien Notes outstanding, US$24.6 million drawn on the ABL Facility and $23.1 million Unsecured Promissory Notes (August 31, 2025 – US$11.2 million First-Lien Notes, US$232.7 million Second-Lien Notes, $23.1 million Unsecured Promissory Notes outstanding, and US$23.5 million drawn on ABL Facility). As at November 30, 2025, the Company's weighted average cost of borrowing was 11.06%.

The following tables set out the principal and carrying amount of our long-term debt outstanding as at November 30, 2025 and August 31, 2025. The first column of the table translates, where applicable, our US dollar debt to the Canadian equivalent based on the closing foreign exchange rate on November 30, 2025 of US$1:$1.4026 (August 31, 2025 – US$1:$1.3738).

($ in thousands of Canadian dollars)				As at August 31, 2025
	Principal Outstanding	Financing fees, discounts and other	Carrying Value	Principal Outstanding	Financing fees, discounts and other	Carrying Value
First-Lien Notes	15,664	(647)	15,017	15,342	(681)	14,661
Second-Lien Notes	326,437	(75)	326,362	319,714	(86)	319,628
ABL Facility	34,517	(526)	33,991	32,232	(657)	31,575
Unsecured Promissory Note	23,100	-	23,100	23,100	-	23,100
Total	399,718	(1,248)	398,470	390,387	(1,424)	388,963

Financial Position As at November 30, 2025 and August 31, 2025

($ in thousands of Canadian dollars)	As at November 30, 2025	As at August 31, 2025
Current assets	79,937	70,511
Total assets	134,180	128,025
Current liabilities	97,474	78,434
Total liabilities	553,595	527,010
Deficiency	(419,415)	(398,985)

The increase in our current assets was primarily due to increases in cash and trade and other receivables due to the seasonality of our business and the Canadian Journalism Collective. Total assets increased as a result of the increase in current assets, partially offset by decreases in property and equipment, right of use assets and derivative financial instruments and other assets. Current liabilities had increased as a result of increases in accounts payable and accrued liabilities as a result of an increase in accrued interest, partially offset by a decrease in contract liabilities. The increase in total liabilities was a result of an increase in current liabilities and the carrying value of long-term debt, partially offset by a decrease in lease obligations and employee benefit obligations.

Related Party Transactions

As at November 30, 2025, Chatham Asset Management LLC ("Chatham LLC") and certain investment funds or accounts for which Chatham LLC or its affiliates acts as an investment advisor, sub-advisor or manager (collectively, "Chatham") owns 62,331,849, or approximately 63%, of the Company's shares and 31% of the outstanding voting rights. As at November 30, 2025, the Company has $15.7 million (US$11.2 million) of First-Lien Notes, $326.4 million (US$232.7 million) of Second-Lien Notes and $23.1 million Unsecured Promissory Notes with Chatham.

Related party transactions payable to Chatham outstanding as at November 30, 2025 were US$7.9 million ($11.1 million) with no activity for the three months ended November 30, 2025. These transactions are in accordance with a services agreement with The McClatchy Company, an affiliate of Chatham which was terminated during the year ended August 31, 2025, primarily due to reassessments of strategic projects and changes in the expected future economic benefits of certain technology assets.

Financial Instruments and Financial Instruments Risk Management

The financial instruments and financial risk management policies and related risks are the same as disclosed in the audited consolidated financial statements for the years ended August 31, 2025 and 2024, except as discussed below.

Foreign currency risk

As at November 30, 2025, approximately 94% of the outstanding principal on the Company's long-term debt was payable in US dollars (August 31, 2025 – 94%). As at November 30, 2025, the Company was exposed to foreign currency risk on the US$232.7 million of Second-Lien Notes, US$11.2 million of First-Lien Notes and US$24.6 million on the ABL Facility outstanding (August 31, 2025 - US$232.7 million of Second-Lien Notes, US$11.2 million of First-Lien Notes and US$23.5 million on the ABL Facility outstanding).

Interest rate risk

The ABL Facility bears interest at floating rates while the First-Lien Notes, Second-Lien Notes and Unsecured Promissory Notes bear interest at fixed rates. Therefore, changes in interest rates only expose us to cash flow interest rate risk on the portion of the ABL Facility that is drawn, at the time of the interest rate change.

Guarantees and Off-Balance Sheet Arrangements

We do not have any significant guarantees or off-balance sheet arrangements.

Risk Factors

The risks relating to our business are described in the section entitled "Risk Factors" included in our annual management's discussion and analysis for the years ended August 31, 2025 and 2024.

Internal Controls

Disclosure controls and procedures within Postmedia have been designed to provide reasonable assurance that all relevant information is identified to its management, including the President and Chief Executive Officer ("CEO") and the Executive Vice President, Chief Financial Officer and Chief Transformation Officer ("CFO"), as appropriate, to allow required disclosures to be made in a timely fashion.

Internal controls over financial reporting have been designed by management, under the supervision of and with the participation of the CEO and CFO, to provide reasonable assurance regarding the reliability of Postmedia's financial reporting and the preparation of financial statements for external purposes in accordance with IFRS Accounting Standards.

The CEO and CFO have evaluated whether there were changes to Postmedia's internal control over financial reporting during the three months ended November 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting. There were no changes expected to have a material effect on internal control over financial reporting identified during their evaluation.

Share Capital

As at January 12, 2026 we had the following number of shares and options outstanding:

Class C voting shares	294,022
Class NC variable voting shares	98,749,179
Total shares outstanding	99,043,201
Total options and restricted share units outstanding (1)	7,214,969

(1) The total options and restricted share units outstanding are convertible into 7,214,969 Variable Voting Shares. The total options and restricted share units outstanding include 6,642,460 that are vested and 572,509 that are unvested.