Mr. P. Peter Pascali reports

P. PETER PASCALI UPDATES EARLY WARNING REPORT

P. Peter Pascali, president and chief executive officer of PyroGenesis Canada Inc., has filed an updated early warning report with respect to his shareholdings in PyroGenesis in connection with Mr. Pascali's acquiring 2,000 convertible debenture units of PyroGenesis at a price of $1,000 per convertible debenture unit under a brokered private placement of PyroGenesis that closed on July 21, 2023. Each convertible debenture unit is composed of $1,000 principal amount of 10.0 per cent unsecured convertible debentures and 1,000 warrants to purchase common shares of PyroGenesis.

The convertible debentures are governed by the terms of a convertible debenture indenture dated the closing date. The principal amount of each convertible debenture is convertible into common shares at the option of the holder, at a conversion price of $1.005 per convertible debenture share, subject to the terms and conditions of, and certain adjustments in, certain circumstances as provided for in the convertible debenture indenture. Each convertible debenture unit warrant entitles the holder thereof to purchase one common share for a period of 24 months after the closing date at a price of $1.25 per convertible debenture unit warrant share.

The 2,000 convertible debenture units acquired by Mr. Pascali are composed of $2-million convertible debentures and two million convertible debenture unit warrants. The $2-million convertible debentures are convertible, based on the conversion ratio, into 1,990,049 common shares in the share capital of PyroGenesis.

Mr. Pascali, as of the closing date and prior to completion of the transaction: (i) beneficially owned and controlled 66,642,941 common shares (representing 37.26 per cent of the issued and outstanding common shares); (ii) controlled 5,636,000 common shares beneficially owned by 8339856 Canada Inc. (the Holdco) (representing 3.15 per cent of the issued and outstanding common shares); (iii) controlled 3,818,957 common shares beneficially owned by Fiducie de Credit Mellon Trust (representing 2.13 per cent of the issued and outstanding common shares); and (iv) controlled four million common shares beneficially owned by The 2% Solution Foundation (representing 2.24 per cent of the issued and outstanding common shares). This represents, in aggregate, 80,097,898 common shares, or 44.78 per cent of the issued and outstanding common shares.

In addition, Mr. Pascali as of the closing date and prior to completion of the transaction: (i) beneficially owned and controlled options issued under PyroGenesis's share-based compensation plans (which include PyroGenesis's option plan and the PyroGenesis long-term incentive plan) to acquire 4.27 million common shares at a weighted-average price of $3.75 per share (of which 3.97 million are currently vested, and 300,000 are unvested and will vest in accordance with the plans); and (ii) beneficially owned and controlled 2.5 million warrants to acquire 2.5 million common shares.

Assuming the exercise of all the vested options and of all the preclosing warrants, an aggregate of 3.97 million and 2.5 million common shares would be issued, respectively, and the total ownership would increase to 84,067,898 common shares, or 45.98 per cent of the issued and outstanding common shares (based on the number of common shares issued and outstanding as of the closing date and after giving effect to the issuance of the 3.97 million and 2.5 million common shares issuable under such options and warrants, respectively). Of such total ownership of 84,067,898 common shares: (i) 70,612,941 common shares would be beneficially owned and controlled by Mr. Pascali; (ii) 5,636,000 common shares would be controlled by Mr. Pascali and beneficially owned by the Holdco; (iii) 3,818,957 common shares would be controlled by Mr. Pascali and beneficially owned by the trust; and (iv) four million common shares would be controlled by Mr. Pascali and beneficially owned by the foundation.

Assuming the exercise or conversion, as applicable, of the vested options, the preclosing warrants, the convertible debentures and the convertible debenture unit warrants, an aggregate of 3.97 million, 2.5 million, 1,990,049 and two million common shares would be issued, respectively, and the total ownership would increase to 90,557,947 common shares, or 47.83 per cent of the issued and outstanding common shares (based on the number of common shares issued and outstanding as of the closing date and after giving effect to the issuance of the common shares underlying the vested options, the preclosing warrants, the convertible debentures and the convertible debenture unit warrants). Of such total ownership of 90,557,947 common shares: (i) 77,102,990 common shares would be beneficially owned and controlled by Mr. Pascali; (ii) 5,636,000 common shares would be controlled by Mr. Pascali and beneficially owned by the Holdco; (iii) 3,818,957 common shares would be controlled by Mr. Pascali and beneficially owned by the trust; and (iv) four million common shares would be controlled by Mr. Pascali and beneficially owned by the foundation.

Assuming the exercise of the vested options, the unvested options, the preclosing warrants, the convertible debentures and the convertible debenture unit warrants, an aggregate of 3.97 million, 300,000, 2.5 million, 1,990,049 and two million common shares would be issued, respectively, and the total ownership would increase to 90,857,947 common shares, or 47.91 per cent of the issued and outstanding common shares (based on the number of common shares issued and outstanding as of the closing date and after giving effect to the issuance of the common shares underlying the vested options, the unvested options, the preclosing warrants, the convertible debentures and the convertible debenture unit warrants). Of such total ownership of 90,857,947 common shares: (i) 77,402,990 common shares would be beneficially owned and controlled by Mr. Pascali; (ii) 5,636,000 common shares would be controlled by Mr. Pascali and beneficially owned by the Holdco; (iii) 3,818,957 common shares would be controlled by Mr. Pascali and beneficially owned by the trust; and (iv) four million common shares would be controlled by Mr. Pascali and beneficially owned by the foundation.

The trust, the Holdco and the foundation may be considered to be joint actors with Mr. Pascali. Mr. Pascali is a: (i) trustee, executive officer and beneficiary of the trust; (ii) director, executive officer and the sole shareholder of the Holdco; and (iii) director of the foundation.

Mr. Pascali and any joint actor may, from time to time, acquire or dispose of ownership or control or direction over some or all of the securities of PyroGenesis depending on a number of factors.

For further information, including regarding the early warning report, including a copy of same (which is available under PyroGenesis's SEDAR profile), please contact Mr. Pascali at 514-937-0002.