Calgary, Alberta–(Newsfile Corp. – September 2, 2022) – High Mountain 2 Capital Corporation (TSXV: HMCC.P) (the “Corporation“) a capital pool company as defined under Policy 2.4 – Capital Pool Companies (“CPC“) of the TSX Venture Exchange (the “Exchange“), announces changes that are in accordance with the Amended CPC Policy.

Changes in Accordance with Amended CPC Policy

The Corporation is pleased to announce that due to changes made by the Exchange to its CPC program and changes to the Exchange’s Policy 2.4 – Capital Pool Companies, which became effective as at January 1, 2021 (the “Amended CPC Policy“), the Corporation intends to implement certain amendments to further align its policies with the Amended CPC Policy, in addition to its annual and special matters at the Meeting (defined below).

Pursuant to the Amended CPC Policy, in order for the Corporation to align certain of its policies with the Amended CPC Policy it is required to obtain the approval of disinterested shareholders of the Corporation. As a result, the Corporation will be seeking such approval at its upcoming annual general and special meeting of shareholders scheduled to be held on October 12, 2022 (the “Meeting“), for the following matters: (i) to remove the consequences of failing to complete a Qualifying Transaction (“QT“) within 24 months of the Corporation’s date of listing on the Exchange (the “Listing Date“); (ii) to amend the Corporation’s stock option plan (the “Option Plan“) to, among other things, incorporate amendments informed by the Exchange’s new Policy 4.4 – Security Based Compensation, adopted November 24, 2021, and, as required under the Amended CPC Policy, permitting the Corporation to reserve for issuance 10% of the common shares of the Corporation (“Common Shares“) as at the date of grant of any stock option, rather than 10% of the Common Shares outstanding as at the closing of the Corporation’s initial public offering (“IPO“); and (iii) to amend the escrow release conditions and certain other provisions of the Corporation’s Escrow Agreement (the “Escrow Agreement“). These proposed amendments are described in further detail below.

Removal of the Consequences of Failing to Complete a QT within 24 Months of the Listing Date

Prior to the amendments to the Exchange’s Policy 2.4 – Capital Pool Companies (the “Former Policy“) there were certain consequences if a QT was not completed within 24 months of the Listing Date. These consequences included a potential for Common Shares to be delisted or suspended, or, subject to the approval of the majority of the Corporation’s shareholders, transferring Common Shares to list on the NEX and cancelling certain seed shares. The Amended CPC Policy allows CPCs to remove these consequences assuming disinterested shareholder approval is obtained. The Corporation intends to ask disinterested shareholders to approve the removal of such consequences at the Meeting, as it believes that it will afford the Corporation greater flexibility to complete a QT that is beneficial to all interested parties, and will also allow the Corporation to better withstand market volatility.

Amendments to the Option Plan

The amendments to the Option Plan, will (i) incorporate amendments informed by the Exchange’s new Policy 4.4 – Security Based Compensation, adopted November 24, 2021; (ii) allow the total number of Common Shares reserved for issuance as options not to exceed 10% of the Common Shares issued and outstanding as at the date of grant, rather than at the closing date of the IPO, for options issued prior to the QT; (iii) allow the number of Common Shares reserved for issuance as options to any individual director or senior officer not to exceed 5% of the Common Shares outstanding as at the date of grant, rather than at the closing date of the IPO, for options issued prior to the QT; (iv) allow the number of Common Shares reserved for issuance as options to Consultants, as defined in the Option Plan, not to exceed 2% of the Common Shares outstanding as at the date of grant, rather than at the closing date of the IPO, for options issued prior to the QT; and (v) require, prior to the granting of options, the optionee to first enter into an escrow agreement agreeing to deposit the options, and the Common Shares acquired pursuant to the exercise of such options, into escrow as described in the Escrow Agreement.

Amendments to the Escrow Agreement

The Corporation intends to ask disinterested shareholders to approve the Corporation making certain amendments to the Escrow Agreement, including allowing the Corporation’s escrowed securities to be subject to an 18 month escrow release schedule as detailed in the Amended CPC Policy, rather than the current up to 36 month escrow release schedule in the Former Policy. In addition, the Corporation wishes to amend the Escrow Agreement such that all options granted prior to the date the Exchange issues a final bulletin for the QT (“Final QT Exchange Bulletin“) and all Common Shares that were issued upon exercise of such options prior to the date of the Final QT Exchange Bulletin will be released from escrow on the date of the Final QT Exchange Bulletin, other than options that (a) were granted prior to the IPO with an exercise price that is less than the issue price of the Common Shares issued in the IPO; and (b) any Common Shares that were issued pursuant to the exercise of such options issued below the issue price, which will be released from escrow in accordance with the 18 month escrow release schedule as detailed in the Amended CPC Policy.

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Other Changes

Under the Amended CPC Policy, the Corporation is permitted to implement certain other changes from the Former Policy without obtaining shareholder approval. As a result, the Corporation wishes to have the option to take advantage of all the changes under the Amended CPC Policy that do not require shareholder approval, which became effective on January 1, 2021, including, but not limited to:

1. increasing the maximum aggregate gross proceeds to the treasury that the Corporation can raise from the issuance of Common Shares in the IPO, seed shares and private placement to the new maximum of $10,000,000, rather than $5,000,000 which was the limit under the Former Policy;

2. removing the restriction which provided that no more than the lesser of 30% of the gross proceeds from the sale of securities issued by the Corporation and $210,000 may be used for purposes other than identifying and evaluating assets or businesses and obtaining shareholder approval for a proposed QT, and implementing the restrictions on the permitted use of proceeds and prohibited payments under the Amended CPC Policy, under which reasonable general and administrative expenses not exceeding $3,000 per month are permitted;

3. removing the restriction on the Corporation issuing new agent’s options in connection with a private placement; and

4. removing the restriction such that now one person has the ability to act as the chief executive officer, chief financial officer and corporate secretary of the Corporation at the same time.

The Corporation believes that the Amended CPC Policy is in the best interests of the shareholders as it will allow the Corporation to have greater flexibility and mechanisms to increase shareholder value.

For further information, please contact:

High Mountain 2 Capital Corporation
Bill Kanters – President, Chief Executive Officer, and Director
Phone: (403) 619-7118

Forward-Looking Information Cautionary Statement

Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or the Corporation’s future performance. The use of any of the words “could”, “expect”, “believe”, “will”, “projected”, “estimated” and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Corporation’s current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, the requisite shareholder approvals in connection with the Amended CPC Policy matters. Actual results and developments may differ materially from those contemplated by forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information. The statement made in this press release are made as of the date hereof. The Corporation disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

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