Mr. Dale McClanaghan reports

LOTUS ANNOUNCES DELAY OF FILING AUDITED ANNUAL FINANCIALS

Lotus Ventures Inc. has informed shareholders of a recent delay in filing its audited financial statements.

Lotus was required to file the following on SEDAR by Dec. 29, 2022, in the normal course but was not able to file:

• Audited financial statements for the year ended Aug. 31, 2022, as required by Part 4 of National Instrument 51-102;
• Management discussion and analysis (MD&A) relating to the audited financial statements as required by Part 5 of National Instrument 51-102; and
• Chief executive officer and chief financial officer certificates related to the audited financial statements as required by National Instrument 52-109 Certification of Disclosure in the issuers' annual and interim filings.

Accordingly, the company applied to the British Columbia Securities Commission pursuant to National Policy 12-203 Cease Trade Orders for Continuous Disclosure Defaults for an order that the commission issue a management cease trade order until the required filings are made.

During the issuer's fiscal 2022 period, there were unforeseen challenges including, but are not limited to, staffing and information technology issues. A significant IT challenge affecting this audit cycle was the transition to a new inventory software from one specialized IT provider for its seed-to-sale tracking software to another. Under the terms of the issuer's cannabis licence, stringent recordkeeping requirements must be met requiring complex processes and software. Lotus has a strong compliance record. In line with this commitment Lotus is implementing a new inventory management and recordkeeping system which once fully working, will be much less labour intensive. As a result of this transition, processes were changed and the production of year-end materials was delayed. Such materials were provided to this issuer's auditors with insufficient time for them to adequately complete their engagement before the statutory filing deadline. The audit remains in progress and the company is working expeditiously to facilitate information requests. The company anticipates being able to file the audited financial statements by Jan. 31, 2023, and intends to satisfy the provisions of the alternative information guidelines so long as it remains default.

We seek Safe Harbor.