Mr. Cameron MacDonald reports

THE WESTAIM CORPORATION REPORTS Q1 2023 RESULTS

The Westaim Corp. has released its unaudited financial results for the quarter ended March 31, 2023. Westaim recorded a GAAP (generally accepted accounting principles) net profit of $94.5-million (66 cents diluted earnings per share) for Q1 2023 compared with a GAAP net profit of $3.5-million (two cents diluted earnings per share) for Q1 2022. All amounts are in United States dollars, except as otherwise noted.

At March 31, 2023, Westaim's consolidated shareholders equity was $457.7-million and the company had 141,386,718 common shares outstanding. Book value per fully diluted share was $3.21 ($4.34 (Canadian)) at Dec. 31, 2022, compared with $2.56 ($3.46 (Canadian)) at Dec. 31, 2022.

Key results for Q1 2023

Skyward Specialty

At March 31, 2023, the carrying value of Westaim's investment in Skyward Specialty was $319.0-million using a fair value of $21.87 per Skyward Specialty common share as compared with the valuation at Dec. 31, 2022, of $218.9-million using a fair value of $15.00 per Skyward Specialty common share. As a result, Westaim recorded an increase in its valuation of Skyward Specialty of $100.1-million in Q1 2023 compared with a decrease of $1.2-million in Q1 2022.

On Jan. 18, 2023, Skyward Specialty closed its initial public offering (IPO) on the Nasdaq exchange at an IPO price of $15 per share. From Jan. 18, 2023, to May 15, 2023, Skyward Specialty has traded between $17.50 to $25.32 per share with a daily average trading volume of 218,676 shares and the May 15, 2023, market cap was $928.6-million. The closing price on March 31, 2023, was $21.87 per share.

Arena FINCOs

• Q1 2023 net loss from Arena FINCOs was $2.7-million (negative-1.7-per-cent net return) compared with a net profit of $2.6-million (1.5-per-cent net return) in Q1 2022.
• Arena FINCOs' results reflect mark-to-market valuations within its portfolio.
• Arena FINCOs provide a source of liquidity to Westaim which included distributions of $4.4-million in Q1 2023 and $2.5-million in Q1 2022.

Arena Investors

• Arena Investors' achieved fee related earnings (FRE) of $1.3-million in Q1 2023 compared with $1.5-million in Q1 2022 which included total recurring revenue of $10.8-million in Q1 2023 compared with $10.0-million in Q1 2022 from its fee-paying assets under management (AUM).
• Net incentive fees of $1.1-million in Q1 2023 were lower than the $8.2-million in Q1 2022 reflecting lower positive fund performance.
• Committed AUM was $3.3-billion at March 31, 2023, and $3.4-billion at April 1, 2023, as compared with $3.5-billion at Dec. 31, 2022, and $3.5-billion at March 31, 2022. Fee-paying AUM was $2.4-billion at March 31, 2023, $2.6-billion at Dec. 31, 2022, and $2.6-billion at March 31, 2022.
• From inception through March 31, 2023, Arena Investors has deployed approximately $5.0-billion into 350-plus privately negotiated transactions.
• Westaim recorded its share of net income from Arena Investors of $1.0-million for Q1 2023 compared with $4.8-million in Q1 2022.

Supplementary financial measures from Arena Investors' financial statements are shown in the attached table.

"We are pleased to see the maturation of Westaim's investment in Skyward Specialty and the public markets' support for post-IPO trading of Skyward Specialty's common shares. Arena Investors' global platform continues to expand and is well positioned to prosper within the macro environment. With six active campaigns throughout 2023, we expect Arena to provide investors compelling opportunities and capture operating efficiencies within their growing business," said Cameron MacDonald, president and chief executive officer of Westaim.

"Further details of the underlying performance for each of Skyward Specialty, Arena FINCOs and Arena Investors are included for Westaim's shareholders' review in the Q1 2023 investor presentation posted on our website. We look forward to hosting Westaim's annual general meeting in person on Thursday, May 18, 2023, at 9 a.m. ET at Vantage Venues, 150 King St. West, Toronto, Ont., M5H 1J9. Following this meeting at 9:30 a.m., Westaim will hold its investor day both in person at the same location, and virtually as well."

This press release should be read in conjunction with Westaim's unaudited interim consolidated financial statements and management's discussion and analysis for the three months ended March 31, 2023, and 2022 which were filed on SEDAR. These documents and the company's Q1 2023 investor presentation can be found on the company's website.

About The Westaim Corp.

Westaim is a Canadian investment company specializing in providing long-term capital to businesses operating primarily within the global financial services industry. The company invests, directly and indirectly, through acquisitions, joint ventures and other arrangements, with the objective of providing its shareholders with capital appreciation and real wealth preservation. Westaim's strategy is to pursue investment opportunities with a focus toward the financial services industry and grow shareholder value over the long term. Westaim's investments include significant interests in Skyward Specialty, Arena Investors and Arena FINCOs.

We seek Safe Harbor.