Mr. P. Peter Pascali reports

PYROGENESIS PROVIDES UPDATE ON AMF INVESTIGATION

PyroGenesis Canada Inc. has provided an update regarding the previously reported investigation by the Autorite des marches financiers, the securities regulatory authority in the province of Quebec, being conducted in the context of applicable securities laws.

As previously disclosed, the company understands the AMF has investigated certain actions taken by the president and chief executive officer of the company, P. Peter Pascali, in connection with a settlement agreement entered into on April 30, 2018, between the company and Phoenix Haute Technology Inc., a company controlled by the late father of Mr. Pascali, and ancillary transactions.

Pursuant to the terms of the board-approved settlement agreement and as further disclosed in the annual information form of the company for the year ended Dec. 31, 2020, available under the company's profile on SEDAR+, under "interest of management and others in material transactions -- settlement of claim," the company issued $3.7-million of units composed of common shares and warrants to Phoenix in 2018 to settle a $5.5-million claim of Phoenix with respect to the unpaid portion of the consideration payable by the company to Phoenix for an acquisition of intellectual property rights completed in 2011.

The AMF has initiated administrative proceedings against Mr. Pascali, Alan Curleigh, who is a director of the company, and the company for actions taken in connection with the 2018 Phoenix transactions. The AMF alleges that Mr. Pascali was in breach of Section 199.1(2) of the Securities Act (Quebec), that Mr. Pascali and the company made misrepresentations in breach of sections 196 and 197 of the Securities Act (Quebec), that Mr. Pascali and the company failed to comply with certain disclosure obligations under applicable securities legislation, and that Mr. Pascali and Mr. Curleigh failed to comply with their fiduciary duties as directors of the company. The AMF is seeking administrative penalties totalling $4.20-million against Mr. Pascali and a disgorgement order of $9.57-million to the AMF also from Mr. Pascali. The AMF is also seeking administrative penalties totalling $550,000 against the company. Separately, the AMF is also seeking orders prohibiting Mr. Pascali and Mr. Curleigh to act as an officer or director of a reporting issuer for five years.

"It is disappointing that after several years of an extensive investigation by the AMF and co-operation by PyroGenesis, the AMF felt that these proceedings were warranted," said Mr. Pascali. "The company will welcome its day in court where we are confident the truth will prevail and the motives behind those who supported this outcome will be exposed."

Based on prior AMF proceedings, these proceedings will likely take years to conclude. In the interim, investors can take comfort from the fact that after several years of investigation in which events occurring over a period of over 12 years were thoroughly reviewed, all allegations are in connection with only the 2018 Phoenix transactions. Separately, investors should be reassured by the fact that the administrative penalties being sought against the company are limited to $550,000, with the vast majority of the financial penalties and costs sought against Mr. Pascali. Management expects to be less distracted by these proceedings compared with the investigation process over the past several years. Management is committed to continue to operate PyroGenesis in the ordinary course with unwavering dedication to its clients and pursuing its shared goals.

Each of Mr. Pascali, Mr. Curleigh and the company denies the allegations against him/it, believes they are without merit and will vigorously defend himself/itself. The operations of the company continue as usual. The company, Mr. Pascali and Mr. Curleigh will continue to co-operate with the AMF, if and as requested, consistent with their practice to always co-operate with regulatory authorities.

About PyroGenesis Canada Inc.

PyroGenesis, a high-technology company, is a proud leader in the design, development, manufacture and commercialization of advanced plasma processes and sustainable solutions, which reduce greenhouse gases and are economically attractive alternatives to conventional dirty processes. PyroGenesis has created proprietary, patented and advanced plasma technologies that are being vetted and adopted by multiple multibillion-dollar industry leaders in four massive markets: iron ore pelletization, aluminum, waste management and additive manufacturing. With a team of experienced engineers, scientists and technicians working out of its Montreal office, and its 3,800-square-metre and 2,940-square-metre manufacturing facilities, PyroGenesis maintains its competitive advantage by remaining at the forefront of technology development and commercialization. The operations are ISO 9001:2015 and AS9100D certified, having been ISO certified since 1997.

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