Dr. Anthony Holler reports

SUNNIVA INC. UPDATE

Sunniva Inc. has provided a corporate update.

Sunniva and its subsidiaries, including CP Logistics LLC (CPL), have no material assets, and they have ceased all operations as a result of the loss of the arbitration described herein. The board and management of Sunniva believe that there is no realistic path that would allow Sunniva or any of its subsidiaries to re-establish operations.

CPL was engaged in an arbitration commenced by CPL against Bobs LLC regarding CPL's rights to the Cathedral City glasshouse. As announced in September, 2022, CPL lost the arbitration and its leasehold interests in the glasshouse and subsequently entered into a settlement agreement with Bobs, under which CPL transferred a cannabis licence to Bobs in lieu of the monetary damages awarded to Bobs. CPL and Bobs also agreed that the transfer settled all obligations in full and agreed not to pursue additional legal action, including appeals against the other party and its affiliates.

Also as previously announced, through the course of the arbitration, CPL raised funds, principally to finance CPL's continuing expenses of the arbitration. Capital raises included private placements of secured debt. The principal security for the debt was any monetary or other award obtained by CPL under the arbitration, as CPL held no significant asset other than its rights to the glasshouse.

As a result of losing the arbitration on Sept. 22, 2022, CPL's outstanding obligations, including obligations to those such as its debtholders, advisers and trade creditors, far exceed its assets. As of that date, CPL had no significant assets, CPL discontinued all business operations, and there was no expectation that such operations would ever resume.

While CPL intends to take whatever action it can to dispute some of its outstanding obligations and past expenses, given its lack of resources such efforts will necessarily be constrained. No assurance can be given of any significant reduction in CPL's obligations or any recovery of expenses.