Mr. John Proctor reports

MARTELLO ANNOUNCES CLOSING OF REVERSE TAKEOVER TRANSACTION

Martello Technologies Group Inc. (formerly Newcastle Energy Corp.) has closed its reverse takeover transaction with Martello Technologies Corp. as previously described in its news releases dated April 12, June 6 and July 6, 2018, and more particularly set out in its filing statement dated June 29, 2018, which is available under the profile of the company at SEDAR. The company's common shares will commence trading on the TSX Venture Exchange as a Tier 2 technology issuer under the symbol MTLO once the TSX-V's conditions for listing are satisfied and the TSX-V issues its final exchange bulletin confirming the completion of the RTO.

Reverse takeover transaction

Pursuant to an amalgamation agreement, 10831794 Canada Inc., a wholly owned subsidiary of the company, and Martello amalgamated under the Canada Business Corporation Act. As a result of the amalgamation: (i) all securities of Martello will be cancelled; (ii) the issued and outstanding shares in the capital of 10831794 Canada will be converted into one common share in the capital of the surviving corporation of the amalgamation (Amalco); and (iii) in exchange for each security held in the capital of Martello, each security holder will receive 3.2 securities in the capital of the resulting issuer. The surviving corporation of the amalgamation is Martello and will be a wholly owned subsidiary of the company.

Outstanding share capital and escrow

Following the closing of the RTO, the company has a total of 171,883,976 common shares issued and outstanding and 1,028,576 warrants, and has issued or reserved for issuance 18,072,000 incentive stock options.

The company has undertaken to only permit the exercise of 17,188,398 stock options under its stock option plan until such time as disinterested shareholder approval is obtained for the issuance of the overallotment of 883,603 stock options. Further, certain officers and directors of the company have agreed to amend their option agreements such that an aggregate of 883,603 stock options held by them as a group will not vest until such time as disinterested shareholder approval is obtained for the issuance of the overallotment.

An aggregate of 49,913,419 common shares and 8,064,000 stock options held by the principals of the company are subject to Tier 2 value escrow and will be released from escrow as follows: Ten per cent of the escrowed shares will be released from escrow on the issuance of the final exchange bulletin, and an additional 15 per cent will be released every six months thereafter.

In addition, certain non-principal shareholders of Martello are subject to the following TSX-V seed share resale restrictions (SSRR):

• Arm's-length shareholders holding an aggregate of 5,512,079 shares of the resulting issuer, who were issued shares of Martello at a cost of less than five cents, are subject to an SSRR release equivalent to Tier 2 value escrow.
• Arm's-length shareholders holding an aggregate of 98,666 shares of the resulting issuer, who were issued shares of Martello at a price of 35 cents after March 29, 2018, are subject to SSRR with a four-month hold, with 20 per cent released every month with the first release on closing of the RTO.

New board and management

Effective on the closing of the RTO, and pursuant to the resolutions passed at the shareholders meeting on June 22, 2018, the directors of the resulting issuer will be Dr. Terence Matthews, Bruce Linton, Colley Clarke, Niall Gallagher, Mike Michalyshyn and Don Smith. Dr. Matthews and Mr. Linton are co-chairmen of the board; John Proctor is the president and chief executive officer; Erin Crowe is the chief financial officer; Niall Gallagher is vice-president, product management; Doug Bellinger is chief technology officer; and Christa Plumley is corporate secretary.

We seek Safe Harbor.