As disclosed in Quarterly Report on Form 10-Q filed on November 8, 2023, Charge Enterprises, Inc. has been involved in disputes with the holders of its notes payable dated May 19, 2021 and December 17, 2021 (collectively, the ?Notes?). These disagreements relate to, among other things, the position taken by the holders of the Notes that certain provisions of the securities purchase agreements pursuant to which they purchased the Notes and other of the Company?s securities prohibit the Company from refinancing the Notes and from incurring additional indebtedness following repayment of the Notes without their consent, as well as the holders? view that the Company?s guarantees of its subsidiaries?

indebtedness could constitute a breach of the securities purchase agreements pursuant to which the holders purchased the Notes and an event of default under the Notes. On November 15, 2023, the Company received a letter (the ?Default Letter?) from Arena Investors, LP (?Arena?) on behalf of the holders of the Notes alleging that the Company?s guarantee of the obligations of its wholly-owned subsidiaries, Nextridge, Inc. and ANS Advanced Network Services, Inc. under a Loan Agreement with Pioneer Bank entered on October 21, 2022 (the ?ANS Facility?) was in violation of certain restrictions on the incurrence or guarantee of indebtedness found in the Securities Purchase Agreements by and between the Company and Arena, dated November 3, 2020, May 19, 2021, and December 17, 2021 (collectively, the ?Purchase Agreements?). The Default Letter further alleges that this guarantee, which was incurred over a year ago and disclosed in Form 8-K, filed on October 27, 2022, constitutes an event of default under the Notes.

As of the date of this Report, there are currently no amounts outstanding under the ANS Facility. The Default Letter claims that an additional $3,345,297.87 in interest (reflecting the difference in the default interest rate of 20% and the interest rate of 7.5% per annum commencing from October 25, 2022 on an aggregate principal amount of $25,847,409.00) and additional legal fees, expenses and other costs of at least $692,216.15 are immediately due and payable. The Default Letter also seeks a 20% per annum late fee on any overdue accrued and unpaid interest pursuant to Section 2(c) of the Notes.

The Default Letter further claims that each purchaser in respect of each relevant Purchase Agreement is owed $11,550,000 as partial liquidated damages. Notwithstanding that the Purchase Agreements provide for liquidated damages of $30,000 per issuance or incurrence of indebtedness, Arena has calculated such partial liquidated damages as $30,000 per day since the date the Company entered into the guarantee. The Company disagrees with the positions taken by Arena in the Default Letter, including the existence of any default and the calculation of the amount of liquidated damages, and believes it has valid defenses to the matters raised in the Default Letter.