Pontus has entered into a lease agreement (the "Surrey Farm Lease Agreement") with 1108190 B.C. Ltd. (the "Landlord"), an arm's length party to Pontus, pursuant to which Pontus agreed to lease a 20,570 sq/ft. commercial growing, processing and research facility located in Surrey, British Columbia (the "Surrey Farm") for a term of 5 years starting on November 1, 2020 (the "Term"). Upon the entry into of the Surrey Farm Lease Agreement, Pontus prepaid 4 month's base rent of approximately $101,000. With the securing of the Surrey Farm, Pontus will no longer be pursuing the construction of the previously announced 10,000 sq/ft. processing farm in Delta, British Columbia. According to the terms of the Surrey Farm Lease Agreement, the base net lease payment payable to the Landlord for the Surrey Farm is $14 per sq/ft. for the first 3 years of the Term and $16 per sq/ft. for the 4th and 5th years of the Term. The Surrey Farm Lease Agreement provides for one further consecutive renewal term for an addition 5 years (the "Renewal Term"), which renewal option must be exercised by Pontus no later than 6 months prior to the expiration of the Term. The terms and conditions of the Renewal Term are to be on same terms and conditions as the Term, except that the base rent shall be set at the most probable fair market rent obtainable by a landlord from an unrelated party, provided such base rent is not less than the base rent of the final year of the term prior to the Renewal Term. As an incentive to enter into the Surrey Farm Lease Agreement, the Landlord agreed to waive the first month's lease payment in order for Pontus to complete essential tenant improvements to accommodate the installation of the CEVAS system. Pontus intends to produce, package and distribute its products, including its Pontus Protein Power+ protein powder, from the Surrey Farm across North America as well as internationally upon receipt of the requisite Canadian Food Inspection Agency ("CFIA") approvals. Pontus began tenant improvements to the Surrey Farm facility in late October, 2020.