Mr. Mike Seckler reports

SALONA GLOBAL EXTENDS BIODEX ACQUISITION DEBT DURATION TO JULY 2025

Salona Global Medical Device Corp. has executed an agreement to extend the payment terms of the debt incurred in connection with its acquisition of Biodex Medical Systems Inc.

On April 3, 2023, the Company acquired all of the outstanding equity of Biodex in consideration for, among other things, the Company's future obligation to pay an aggregate of approximately US$10 million, which included (i) approximately US$1.5 million payable under a loan for nuclear medicine medical device inventory and parts which was due May 15, 2023; (ii) approximately US$1.5 million payable under a working capital loan which was due on June 15, 2023 (the "WC Loan"); and (iii) approximately US$7 million in three payments: US$2 million payable on June 30, 2023, US$3 million payable September 30, 2023 and US$2 million payable December 31, 2023 (the "Acquisition Debt"). The Company's obligation to pay both the Acquisition Debt and the WC Loan are secured by a pledge of all of the outstanding shares of Biodex.

As of July 25, 2023, the remaining amounts to be paid according to the closing statement by the Company under the Agreement are (i) the Acquisition Debt is total US$6,756,525.45 plus interest; and (ii) the WC Loan total of US$1,502,765.63, for a total of US$8,259.291.08

The Company entered into an agreement dated August 4, 2023 (the "Debt Extension Agreement") which extends the maturity date for amounts payable under (i) the WC Loan to October 31, 2023; and (ii) the Acquisition Debt to July 31, 2025.

The Company is working towards finalizing a US$2 million asset-based lending (ABL) facility on the Biodex assets with its current lender. As of June 30, 2023, these unencumbered assets totaled in excess of US$2.5 million in accounts receivable and inventory. Subject to successfully closing on the ABL facility, SGMD intends to use a portion of this facility to pay down the WC Loan.

Pursuant to this Debt Extension Agreement, all cash in excess of US$2.5 million held by the Company is required to be paid to reduce the Acquisition Debt until payments are current. The Debt Extension Agreement also requires the Company to increase its ABL facility to 80% of working capital to provide further case to reduce amounts owing under the Acquisition Debt. The Company has the right to prepay the Acquisition Debt at any time without cost or penalty.

"These agreements should give us the ability to generate additional cash flow and focus on growth," said Mike Seckler, CEO. "As I mentioned recently, I plan to conduct a strategic review with an aim to put us back on a path to revenue growth and achieve a market multiple consistent with our peers thereby increasing our share price."

We seek Safe Harbor.