KALiNA Power Limited provided this monthly update on development of its Flagship 64MW Primary Site; the KALiNA Energy Centre ­ Saddle Hills (‘Saddle Hills’), located in the County of Saddle Hills, Alberta, Canada. Schedule for Full Notice to Proceed ("FNTP"): KPO's Canadian subsidiary, KALiNA Distributed Power Limited ("KDP") is progressing project development milestones for its Saddle Hills project, which continues to target FNTP during Q4-2021. Commercial Gas Supply Arrangements: Negotiations for long-term gas to power tolling agreements continue against a backdrop of rising natural gas prices and even more significant increases in power costs in Alberta. Over the last 12 months, gas prices have increased from $2.07/GJ to $3.75/GJ1, while power prices have increased from $54.14/MWh to $124.10/MWh2. Year to date power prices for 2021 have averaged $102/MWh. In addition, KDP is taking steps to secure ownership of low-cost gas reserves for its portfolio of power projects. If successful, this would deliver a reliable and secure supply of gas at prices considerably below market, along with significant upside economics. Engineering Procurement Fabrication & Construction: On schedule with costs and construction phase timeline being addressed. Contracting of definitive agreements with major equipment vendors is well advanced. Enerflex has recently submitted its Class 2 FEED detailed estimating and engineering report: Schedule to achieve FNTP in Q-4 2021 remains on track but the schedule through the construction phase may be extended. Overall costs for equipment, construction, and installation may increase. KDP and Power Engineers have reviewed the materials and are scheduling a detailed analysis with Enerflex to identify areas of improvement for both costs and schedule. Permitting and Environmental: On schedule with no material concerns identified. In late July, KDP filed its Alberta Utilities Commission ("AUC") Rule 007 regulatory application. Notifications have been sent out to Saddle Hills County, Aboriginal communities, and regional stakeholders. The County has confirmed receipt and does not have any questions. The AUC has confirmed completion of its initial review of the application. KDP expects to receive requests for additional information from the AUC in the coming weeks. An application to Alberta Environment and Parks ("AEP") is to be filed in support of the AUC application, consistent with the information provided in the Rule 007 filing. Now that the AUC application has been submitted, KDP will shortly be filing its AEP application. Electrical Interconnection: On hold with no material concerns identified. ATCO and AESO have largely completed the Stage 2 studies for the Saddle Hills project that are necessary to contract for the interconnection and will require deposits. To properly manage the timing of contractual commitments and the overall coordination of schedules to FNTP, KDP has advised ATCO and AESO to temporarily put the process on hold while the balance of the project deliverables for FNTP are completed. Gas interconnection: On schedule with no material concerns identified. Continuing work for the 2.5 km gas pipeline connecting the project to the main line. EPCM Engineering firm selected and have completed preliminary design work to prepare pipeline permit application. Government Funding: Engaging various Government funding programs for engineering and modularization of various applications of the Kalina Cycle Technology and for project deployment. Regulatory: Adjustments based on discontinuation of DTS credits: As previously reported, the AUC issued its decision to discontinue the Demand Transmission Service ("DTS") portion of the Distributed-Connected Generation ("DCG") credit mechanism and leave the Supply Transmission Service ("STS") portion in place. Saddle Hills can operate without DTS revenues by employing economic dispatch to generate power only when power prices are adequate. While economic dispatch does not fully recover lost DTS Credit revenue, KDP intends to partially make up the shortfall from "grid ancillary services revenue" that would not be available were the project to operate at or near baseload capacity. Appeals Process: Kalina, and a consortium of other distributed power developers and generators, has filed a Stage 1 Review and Variance application with the Alberta Utilities Commission ("AUC") seeking a review of the AUC's decision that eliminated the DTS Credits. The Stage 1 application is making its way through the AUC process that will determine whether to grant the hearing of the Review and Variance. A decision regarding Stage 1 is expected in third quarter of 2021. In addition, the consortium has filed an application for permission to appeal with the Alberta Court of Appeal. The Alberta Court of Appeal has now set 4 November 2021 to hear the permission to appeal from both the Kalina consortium and an application that was separately filed by WCSB Power.