Gap Partners, Inc. Files Early Warning Report in Respect of Securities of Salona Global Medical Device Corporation

Athens, Georgia--(Newsfile Corp. - March 13, 2023) - Gap Partners, Inc. ("GPI"), a corporation existing under the laws of the State of Georgia controlled by Luke Faulstick and Stephen Hollis, announces that on May 21, 2021 it completed a transaction with Salona Global Medical Device Corporation ("Salona") pursuant to which Brattle Acquisition I Corp. (the "Subsidiary"), a South Dakota corporation and wholly-owned subsidiary of Salona, acquired all of the issued and outstanding shares of South Dakota Partners, Inc. ("SDP") from the shareholders of SDP (the "Acquisition") in consideration for 1,916,200 common stock of the Subsidiary (the "Exchangeable Shares"). The Acquisition was completed pursuant to a purchase agreement dated September 8, 2020 among Salona, the Subsidiary, SDP, GPI, Mr. Faulstick, Mr. Hollis and the other shareholders and principals of SDP, as amended (the "Definitive Agreement"). In connection with the Acquisition, Salona and the shareholders of SDP (the "SDP Sellers") entered into a contribution agreement dated May 21, 2021 (the "Contribution Agreement"), as amended pursuant to which each Exchangeable Share may be exchanged for 10 Class "A" Non-Voting Shares of Salona (the "Consideration Shares"). Each Consideration Share shall be convertible, at the option of the holder and subject to certain limitations, into one common share in the capital of Salona (a "Common Share") from time to time, in each case subject to the share terms attaching to the Consideration Shares which prohibits any holder thereof to convert such Consideration Shares into Common Shares if such conversion would result in the holder holding more than 9.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares issuable upon conversion of such Consideration Shares (the "Beneficial Ownership Limitation"). In addition, pursuant to the terms of the Contribution Agreement, in no case shall any SDP Seller be permitted to convert the Consideration Shares held by such SDP Seller if, immediately following such conversion, the SDP Seller would hold, directly or indirectly, more than 368,500 Common Shares as a result of one or more conversions of Consideration Shares (the "Contractual Ownership Limitation").

In connection with the Acquisition, as consideration for the sale of its shares of SDP to the Subsidiary, GPI received 1,148,189 Exchangeable Shares. Due to a consideration adjustment mechanism contained in the Definitive Agreement, the ultimate number of Exchangeable Shares issuable to GPI in connection with the Acquisition was determined on July 28, 2022. Such Exchangeable Shares are convertible into 11,481,890 Consideration Shares, subject to the Beneficial Ownership Limitation and the Contractual Ownership Limitation. The Exchangeable Shares acquired by GPI were acquired directly from the Subsidiary and not through the facilities of any stock exchange or other marketplace. On February 23, 2023, GPI converted 1,148,189 Exchangeable Shares held by GPI into 11,481,890 Consideration Shares. The Consideration Shares acquired by GPI were acquired directly from Salona and not through the facilities of any stock exchange or other marketplace.

Immediately prior to the completion of the Acquisition, GPI did not own or exercise control or direction over any securities of Salona, including the Consideration Shares. However, Mr. Faulstick, a 50% shareholder of GPI, the President and Chief Executive Officer of Salona and a joint actor of GPI, owned and continues to own 347,659 Common Shares, purchase warrants exercisable for 57,943 Common Shares and options to acquire 900,000 Common Shares which were issued to Mr. Faulstick following the completion of the Acquisition in connection with his employment with Salona. On February 23, 2023, GPI converted 1,148,189 Exchangeable Shares into 11,481,890 Consideration Shares representing 73.1% of the issued and outstanding Consideration Shares.

The Exchangeable Shares were acquired for investment purposes. GPI may, from time to time, take such actions in respect of its holdings in securities of Salona as it may deem appropriate, in light of the circumstances then existing, including the purchase of additional Common Shares or other securities of Salona or the disposition of all or a portion of GPI's securityholdings in Salona, subject in each case to applicable securities laws and the terms of such securities including but not limited to, the Beneficial Ownership Limitation and the Contractual Ownership Limitation.

GPI' head office is located at PPI, PO Box 81606, Athens, Georgia, 30608.

GPI will file an early warning report pursuant to National Instrument 62-104 - Take-Over Bids and Issuer Bids on SEDAR (www.sedar.com) under Salona's SEDAR profile. For more information or to obtain a copy of such report, please contact Stephen Hollis at 706-207-2881.

Contact Person:

Name: Stephen Hollis
Title: President
706-207-2881
Email: SteveHollis@ppiway.com

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