Westaim : Q4 2023 Investor Presentation

Q4 2023 Investor Presentation

March 27, 2024

Safe Harbour Statement

This document and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part either directly or indirectly without the prior written consent of each of The Westaim Corporation ("Westaim" or the "Corporation" or the "Company" or "we" or "our"), Skyward Specialty Insurance Group, Inc. ("Skyward Specialty"), Arena FINCOs (as defined in Westaim's December 31, 2023 Management's Discussion and Analysis ("MD&A")) and Arena Investors Group Holdings, LLC ("AIGH" or "Arena"). Arena is a private company, through its wholly-owned subsidiaries and subsidiaries which Arena has a controlling interest. Arena operates as two businesses, Arena Investors and Arena Institutional Services ("AIS"). Arena Investors operates as an investment manager offering third-party clients access to fundamentals-based, asset-oriented credit and other investments that aim to deliver attractive yields with low volatility. Arena Investors provides investment services to third-party clients consisting of but not limited to institutional clients, insurance companies, private investment funds and other pooled investment vehicles. AIS provides non-investment advisory services for Arena and third parties. The Company's investment in Arena is accounted for using the equity method and consists of investments in corporations or limited partnerships where the Company has significant influence.

This document is not, and under no circumstances is it to be construed as, an advertisement or a solicitation for any investment or any investment product with respect to Westaim or any of the entities described herein. The information set forth herein does not purport to be complete and no obligation to update or otherwise revise such information is being assumed unless required by law. Where any opinion is expressed in this presentation, it is based on the assumptions and limitations mentioned herein and is an expression of present opinion only. No warranties or representations can be made as to the origin, validity, accuracy, completeness, currency or reliability of the information. In addition, certain of the information contained herein is preliminary and is subject to change. Unless otherwise stated, the information contained herein is current as of the date of this presentation. There is no guarantee that any of the goals, targets or objectives described herein will be achieved. This document is not intended to provide specific investment, financial, legal, accounting and/or tax advice.

This document contains certain historical results and performance data including, without limitation, relating to Skyward Specialty, Arena FINCOs and Arena. Such historical results and performance data have been prepared and provided solely by the relevant party and have not been independently verified or audited. The historical results and performance data have been included in this document for illustrative purposes only. The historical results and performance data are in no way indicative of any future results, performance or returns by any of Westaim, Skyward Specialty, Arena FINCOs and Arena.

Certain statements in this presentation are "forward-looking statements". Any statements that express or involve discussions with respect to predictions, target yields and returns, internal rates of return, expectations, beliefs, plans, projections, objectives, 'Arena operating leverage and AUM (as defined herein) growth, assumptions or future events or performance (often, but not always using words or phrases such as "expects", "does not expect", "is expected", "seeks", "endeavours", "anticipates", "does not anticipate", "plans", "estimates", "believes", "does not believe" or "intends", "does not intend" or stating that certain actions, events or results may, could, would, might or will occur or be taken, or achieved) are not statements of historical fact and may be "forward-looking statements". In particular, but without limiting the foregoing, this presentation contains forward-looking statements pertaining to: Westaim's withdrawal of Arena FINCOs capital; Arena's pipeline, and core strategies; growth of fee paying AUM, Arena's future focus. Forward-looking statements are based on expectations, estimates and projections as well as other relevant factors at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. These include, but are not limited to, the risk factors discussed in Westaim's Annual Information Form for its fiscal year ended December 31, 2022, which is available on SEDAR+ atwww.sedarplus.ca, as same may be modified or superseded by a subsequently filed Annual Information Form. Except as required by law, Westaim does not have any obligation to advise any person if it becomes aware of any inaccuracy in or omission from any forward-looking statement or to update such forward-looking statement.

Supplementary financial measures concerning Skyward Specialty contained in this presentation are unaudited and have been derived from the Skyward Specialty Fourth Quarter 2023 Results filed with the U.S. Securities and Exchange Commission atwww.sec.gov/edgar. Such statements are the responsibility of the management of Skyward Specialty. The Skyward Specialty Supplementary Financial Measures, including any Skyward Specialty non-GAAP (as defined herein) measures contained therein, have not been reconciled to International Financial Reporting Standards ("IFRS") and so may not be comparable to the financial information of issuers that present their financial information in accordance with IFRS.

The Skyward Specialty Supplementary Financial Measures (the "Skyward Specialty Supplementary Financial Measures") should be read in conjunction with the Company's historical financial statements. For more information about Skyward Specialty, please see Skyward Specialty's audited financial statements for the year ended December 31, 2023 available atwww.sec.gov/edgar.

The Skyward Specialty Supplementary Financial Measures have been provided solely by Skyward Specialty. Although Westaim has no knowledge that would indicate that any of the Skyward Specialty Supplementary Financial Measures contained herein are untrue or otherwise misleading, neither Westaim nor any of its directors or officers assumes any responsibility for the accuracy or completeness of such information, or for any failure by Skyward Specialty to disclose to Westaim events or facts which may have occurred or which may affect the significance or accuracy of any such financial information but which are unknown to Westaim.

Westaim disclaims and excludes all liability (to the extent permitted by law), for losses, claims, damages, demands, costs and expenses of whatever nature arising in any way out of or in connection with the Skyward Specialty Supplementary Financial Measures, their accuracy, completeness or by reason of reliance by any person on any of them.

Safe Harbour Statement

Supplementary financial measures concerning the Arena FINCOs and Arena (the "Arena Supplementary Financial Measures") contained in this presentation are unaudited and have been derived from the audited consolidated financial statements of the Arena FINCOs and Arena for the years ended December 31, 2023 and 2022 and the unaudited consolidated financial statements of Arena FINCOs and Arena for the three months ended December 31, 2023 and 2022, which have been prepared in accordance with either IFRS or US GAAP. Such statements are the responsibility of the management of the Arena FINCOs and Arena. The Arena Supplementary Financial Measures, including any Arena FINCOs and Arena non-GAAP measures contained therein, may not be reconciled to IFRS and so may not be comparable to the financial information of issuers that present their financial information in accordance with IFRS.

The Arena Supplementary Financial Measures should be read in conjunction with the Company's historical financial statements including the notes thereto and the related MD&A as well as the Company's other public filings.

The Arena Supplementary Financial Measures have been primarily provided by the management of the Arena FINCOs and Arena. Although Westaim has no knowledge that would indicate that any of the Arena Supplementary Financial Measures contained herein are untrue or otherwise misleading, neither Westaim nor any of its directors or officers assumes any responsibility for the accuracy or completeness of such information, or for any failure by the Arena FINCOs and Arena to disclose to Westaim events or facts which may have occurred or which may affect the significance or accuracy of any such financial information but which are unknown to Westaim.

Westaim disclaims and excludes all liability (to the extent permitted by law), for losses, claims, damages, demands, costs and expenses of whatever nature arising in any way out of or in connection with the Arena Supplementary Financial Measures, their accuracy, completeness or by reason of reliance by any person on any of them.

The information contained herein is based on publicly available information, internally developed data and other sources. Although Westaim believes such information to be accurate and reliable, it has not independently verified any of the data from third party sources cited or used.

All amounts herein are in United States million dollars unless otherwise indicated. Certain comparative figures have been reclassified to conform to the presentation of the current period, and certain totals, subtotals and percentages may not reconcile due to rounding.

Non-GAAP Measures

Westaim

Westaim reports its consolidated financial statements using Generally Accepted Accounting Principles ("GAAP") and accounting policies consistent with IFRS. Westaim uses both IFRS and non-generally accepted accounting principles ("non-GAAP") measures to assess performance. Westaim cautions readers about non-GAAP measures that do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures used by other companies.

Book Value Per Share ("BVPS") is a non-GAAP measure - see section 15 of Westaim's MD&A for the year ended December 31, 2023 for a discussion of non-GAAP measures including a reconciliation to Westaim's financial results determined under IFRS.

Skyward Specialty

Supplementary financial measures concerning Skyward Specialty contained in this presentation are unaudited and have been derived from the Skyward Specialty's Fourth Quarter 2023 Press Release filed with the U.S. Securities and Exchange Commission atwww.sec.gov/edgar.

Skyward Specialty uses US GAAP and non-GAAP measures to assess performance. Please refer to Appendix - Skyward Specialty Supplementary Financial Measures for Skyward Specialty's non-GAAP measures.

Arena FINCOs and Arena

Arena FINCOs and Arena uses US GAAP, IFRS and non-GAAP measures to assess performance.

Net Return (a non-GAAP measure) on the Arena FINCOs investment portfolios is the aggregate of investment income, net of gains (losses) on investments less interest expense, management, asset servicing and incentive fees, and other operating expenses of the Arena FINCOs divided by average carrying values for the Arena FINCOs, for the period.

Gross Return (a non-GAAP measure) on the Arena FINCOs investment portfolios is the aggregate of investment income, net of gains (losses) on investments less interest expense divided by average carrying values for the Arena FINCOs, for the period.

Realized Internal Rate of Return ("IRR"): Realized calculations are presented net of investment level expenses and gross of fund level fees (e.g. management and incentive fees), which can impact returns significantly.

Gross Underwritten IRR (a non-GAAP measure): Investment-level gross underwritten IRR represents the internal rate of return prior to or at the time of making the initial investment as reflected in and supported by loan agreements, including, but not limited to, note purchase agreements and origination agreements.

Current IRR reflects all investment activity, i.e, prior actual cash flows and future projected cash flows (which are discounted as of the reporting date), from the inception of each applicable investment through December 31, 2023. The current IRR may not be representative of the realized IRR upon exit of each investment, which may increase or decrease.

Underwritten IRRs: Investment-level gross underwritten IRR represents the internal rate of return prior to or at the time of making the initial investment as reflected in and supported by loan agreements, including, but not limited to, note purchase agreements and origination agreements. The underwritten IRR is one of many metrics considered by Arena prior to investment and is not typically updated after the initial funding date. The underwritten IRR may be presented as a single percentage or a range. Such gross IRRs are estimated and do not take into account any entity level management fees, incentive allocation and/or any other associated fees, all of which may significantly reduce the net return received attributable to any investment. These underwritten IRRs are not a proxy for investment performance for any strategy or fund. The underwritten IRRs disclosed herein are being presented for the purpose of providing insight into the investment objectives of, Arena detailing anticipated risk and reward characteristics in order to facilitate comparisons with other investments and for establishing a benchmark for future evaluation of Arena Investors' strategy. The IRRs are also being presented because financially sophisticated investors may find this information useful in determining where Arena's strategies may fit within their investment portfolios. The IRRs included in this presentation are not intended, and must not be regarded, as a representation, warranty or prediction that any Arena vehicles will achieve any particular return with respect to any particular investment opportunity or for a particular time period, or that Arena and its investors will not incur losses. In evaluating these IRRs, it should be noted that (a) there can be no assurance that Arena will be able to source and consummate investments of the type it is seeking to make and (b) the assumptions underlying the IRRs may prove not to be accurate or not materialize. There can be no assurance that the objective of the investment shown can be met or that substantial losses will be avoided.

Assets under management ("AUM"): AUM refers to the assets for which Arena Investors provides investment management, advisory or certain other investment-related services. AUM is generally based on the net asset value of the funds managed by Arena Investors plus any unfunded commitments. Arena Investors' calculation of AUM may differ from the calculations of other asset managers, and as a result, may not be comparable to similar measures presented by other asset managers. Arena Investors' calculations of AUM are not based on any definition set forth in the governing documents of the investment funds and are not calculated pursuant to any regulatory definitions.

Fee Paying Assets Under Management ("FP AUM") refers to the AUM on which Arena earns management fees and/or incentive income.

Arena

With respect to the section on Arena the information therein is being provided solely in relation to the management company and the investment manager, including their funds, subsidiaries and affiliates.

Returns shown are unaudited. Past performance is not indicative or a reliable indicator of future performance. Actual results may vary.

The information set forth herein does not purport to be complete, is unaudited and subject to change. Arena has no obligation to update or revise such information other than as may be required by applicable law. Unless otherwise stated, the information contained herein is current as of the date of the presentation.

This document does not constitute investment advice nor is it a recommendation or an offer of investment advisory services or products. No person in any jurisdiction may treat this document as a solicitation or offer of any advisory product or service. A prospective investor must rely solely on the terms and associated disclosures in any final offering memoranda, investment management agreement and associated subscription documents (if any), which would constitute the only basis upon which offerings of any product or service may be made.

Investments in Arena vehicles are speculative in nature and involve risk. There can be no assurance that investment objectives will be achieved and investment results may vary substantially over time. These investments are not intended to be a complete investment program for any investor. There is no secondary market for an investor's interest in Arena funds and none is expected to develop. Arena's funds are not registered under the Investment Company Act of 1940 and accordingly are not extensively regulated. Opportunities for redemption and transferability of interests are restricted, so investors may not have access to capital when it is needed. Leverage may be employed in the funds, which can make investment performance volatile. Valuation of the investments may involve uncertainties and the exercise of judgment. An investor should not make an investment unless the investor is prepared to lose all or a substantial portion of its investment. The fees and expenses charged in connection with investments may be higher than the fees and expenses of other investment alternatives and may offset profits, and the performance-based compensation paid to Arena may create an incentive for Arena to make more speculative investments than would otherwise be the case. Arena has total authority and control over its funds and the use of a single advisor applying generally similar investment programs could mean a lack of diversification and, consequently, higher risk. For a comprehensive list of risk factors, an investor must review the risk factors as specified in the related confidential information memorandum for a specific fund or investment management agreement, which will be made available upon request.

The information provided herein should not be considered a recommendation regarding a particular investment. The actual and potential investments discussed herein are meant to be examples of Arena's investment approach. It should not be assumed that any of the investments discussed herein will prove to be profitable, or that the investment recommendations or decisions made by Arena in the future will be profitable. The particular investments discussed herein are those that most closely represent the current average-sized Arena investment in a particular category (Corporate Private Investments, Real Estate Investments and Structured Finance and Assets). In addition, Arena makes investments in Corporate Securities, including liquid investments such as convertible structured investments, as well as other public and private investments within Arena's stable income strategies which are not fully discussed herein. Further information is available upon request.

In addition, performance of market indices is being provided for the purpose of making general market data available as a point of reference only. Arena believes there are no known directly comparable indices for the Arena Special Opportunities Strategies composite which is comprised of the Arena Special Opportunities Fund, LP and Arena Special Opportunities (Offshore) Master, LP (collectively, the "Fund"). The Fund's investments are not limited to the investments listed by the market indices. The Fund may invest in different securities and engage in different trading strategies from the indices. In addition, it should be noted that the sector, industry, stock and country exposures, volatility, risk characteristics and holdings of the Fund differ materially from those of the indices. The indices do not reflect fees and expenses associated with the active management of portfolios. The performance returns of the indices were obtained from Bloomberg and other third-party sources and include the reinvestment of earnings. Although Arena believes these sources to be reliable, it is not responsible for errors or omissions from these sources.

The statements contained herein contain certain forward-looking statements that are based on Arena's beliefs as well as assumptions made by and information currently available to Arena. When used herein, the words "anticipate," "believe," "could," "estimate," "expect," "going forward," "intend," "may," "modeled," "ought to," "plan," "project," "seek," "should," "will," "would," and similar expressions, as they relate to Arena or Arena's management are intended to identify forward-looking statements. These forward-looking statements include, without limitation, statements relating to investments, business prospects, future developments, trends and conditions in the industry and geographical markets in which Arena operate, Arena strategies, plans, objectives and goals, as well as Arena ability to control costs, statements relating to prices, volumes, operations, margins, overall market trends, risk management and exchange rates. These forward-looking statements reflect Arena's views at the time such statement were made with respect to future events and are not a guarantee of future performance or developments. You are strongly cautioned that reliance on any forward- looking statements involves known and unknown risks and uncertainties.

Net annualized returns inceptions to date are net of fees as disclosed and net of deal and operating expenses (including asset servicing expenses of 0.5% for drawdown, open-ended, FINCOs, SI-REC and 0.75% for NZ REC). All returns are based on the reinvestment of principal, interest, and dividends received. Fee schedules for returns shown include management fees with a range of 0.35%-2%, incentive fees with a range of 7.5% incentive to 20% and preferred returns or hurdles applicable on specific vehicles.

The Westaim Corporation

The Westaim Corporation

Westaim is a publicly listed (TSXV:WED) Canadian investment holding company specializing in providing long-term capital to businesses operating primarily within the global financial services industry. Our focus has been, and continues to be, to seek high quality investment opportunities that allow us to partner with businesses and aligned management teams that are well positioned to compound wealth and provide above average returns over the long-term for our shareholders.

Specialty Property and Casualty Insurance 17.5% ownership(1)

Alternative Investment Manager 51% ownership(2)Westaim's Proprietary Capital Invested with Arena 100% ownership

Skyward Specialty (NASDAQ: SKWD) is a rapidly growing and innovative US specialty insurance company, delivering commercial property and casualty products and solutions on a non-admitted and admitted basis. Skyward Specialty operates through eight underwriting divisions - Accident & Health, Captives, Global Property & Agriculture, Industry Solutions, Professional Lines, Programs, Surety and Transactional E&S. SKWD stock is traded on the Nasdaq Global Select Market, which represents the top fourth of all Nasdaq listed companies.

Skyward Specialty's subsidiary insurance companies consist of Houston Specialty Insurance Company, Imperium Insurance Company, Great Midwest Insurance Company, and Oklahoma Specialty Insurance Company. These insurance companies are rated A- (Excellent) by A.M. Best Company.

Arena is a global institutional asset manager that provides creative solutions for those seeking capital in special situations. Arena operates as two businesses, Arena Investors and AIS.(3)

As at December 31, 2023, Arena had over 180 professionals working for the company.(4)

Arena's committed AUM of approximately $3.2 billion includes Westaim's proprietary capital of approximately $150 million plus third party institutional and high net worth clients.(4)

• (1) As at December 31, 2023, Westaim held its 17.5% interest in Skyward Specialty through one of Westaim's wholly-owned Canadian subsidiaries.

  The Arena FINCOs are specialty finance companies that primarily purchase diversified asset-backed credit and other investments and in certain circumstances, facilitate the origination and creation of credit investments for their own account and for third parties.

  Arena FINCOs' capital has been and remains very strategic in the development of Arena and the Arena FINCOs have participated as lead investor in several new product offerings.

• (2) The remaining 49.0% is Bernard Partners, LLC ("BP LLC") equity and profit sharing percentage, and under the associate agreements, BP LLC has the right to earn-in up to 75% equity ownership percentage in the associates and to thereby share up to 75% of the profit of the associates based on achieving certain AUM and cash flow thresholds. Effective April 1, 2022, BP LLC achieved the threshold to increase its equity ownership of Arena from 0% to 49% and Westaim's equity ownership decreased from 100% to 51% to equal the share of profits that the Company has been entitled to in all prior periods.

• (3) AIGH is a private company, operating through its wholly-owned subsidiaries and subsidiaries which Arena has a controlling interest. Arena consists of two main business lines, Arena Investors and Arena Institutional Services. Arena Investors operates as a global investment manager offering third-party clients, including the Arena FINCOs, access to fundamentals-based, credit and asset-oriented investments that aim to deliver above-market returns with low volatility. Arena Investors provides investment services primarily to institutional third-party clients consisting of, but not limited to, insurance companies, endowments, foundations, pensions, sovereign funds and other pooled investment vehicles or private investment funds. AIS leverages certain intellectual property to offer third-party services to other entities to assist in the management of their investments.

• (4) As at December 31, 2023, the number of professionals includes consultants who dedicate a significant amount of time to Arena, but does not include senior advisors or joint venture partners.

Westaim Q4 2023 and FY 2023 Operating Highlights

Westaim's Q4 2023 and FY 2023 earnings continue to be driven by gains on its Skyward Specialty ownership

• • Q4 2023 Net Income attributable to AIGH (100%) was $1.1 million compared to Q4 2022 Net Income attributable to AIGH of $0.3 million; FY 2023 Net Income attributable to AIGH (100%) was $8.7 million compared to FY 2022 Net Income attributable to AIGH of $1.5 million(1)

  • • Committed AUM was $3.2 billion at December 31, 2023, as compared to $3.5 billion at December 31, 2022

  • • Fee-Paying AUM at December 31, 2023 was $2.5 billion, as compared to $2.6 billion at December 31, 2022

Arena

• • Since inception, Arena has deployed ~$5 billion into 370+ privately negotiated transactions; 215 privately negotiated transactions have been exited with 195 multi-strategy investments having a realized IRR of 20.1% gross

• • Arena's AUM pipeline remains strong with several product offerings marketing to a well diversified base of sophisticated investors (insurance companies, pension funds, endowment funds, foundations and other investors)

• • AIGH EBITDA (100%) is $1.0 million in Q4 2023 compared to an AIGH EBITDA (100%) of $0.8 million in Q4 2022; FY 2023 AIGH EBITDA (100%) is $10.1 million compared to a FY 2022 AIGH EBITDA of $3.3 million

Arena FINCOs

• • Arena FINCOs' Q4 2023 Net Loss was $0.9 million (-0.5% net investment return) compared to Q4 2022 Net Loss of $6.1 million (-3.6% net investment return); Arena FINCOs' FY 2023 Net Loss was $6.0 million (-3.7% net investment return) compared to FY 2022 Net Loss of $2.4 million (-1.6% net investment return)(1)

  • • At December 31, 2023, the fair value of Arena FINCOs was $147.2 million compared to $160.1 million at December 31, 2022

  • • Westaim received cash distributions of $6.9 million from Arena FINCOs in FY 2023, which had the effect of decreasing the carrying value of the investment

• • Skyward Specialty's Net Income (100%) was $29.3 million in Q4 2023 compared to Net Income (100%) of $20.4 million in Q4 2022; Skyward Specialty's Net Income (100%) was $86.0 million in FY 2023 compared to Net Income of $39.4 million in FY 2022; adjusted operating income(1) was $24.3 million in Q4 2023 compared to $11.6 million in Q4 2022; adjusted operating income was $80.8 million in FY 2023 compared to $58.6 million in FY 2022

  Skyward Specialty Insurance Group

  • • Underwriting performance remains strong with an adjusted combined ratio of 90.9% in Q4 2023 vs. 92.8% in Q4 2022; 90.9% in FY 2023 vs. 92.6% in FY 2022

  • • Net investment income was $13.4 million in Q4 2023 vs. $5.3 million in Q4 2022; net investment income was $39.8 million in FY 2023 vs. $36.9 million in FY 2022; the increase in income from core fixed income portfolio for Q4 2023 and FY 2023 was due to (i) a larger asset base as Skyward Specialty continued to increase allocation to core fixed income portfolio and (ii) a higher book yield of 4.5% at December 31, 2023 compared to 3.7% at December 31, 2022(2)

  • • Total stockholders' equity at December 31, 2023 increased to $661.0 million from $421.7 million at December 31, 2022

  • • Q4 2023 Annualized Return-on-equity ("ROE") of 19.6% vs. 19.9% in Q4 2022; FY 2023 ROE of 15.9% vs. 9.3% in FY 2022; Q4 2023 Annualized Adjusted ROE of 16.3% vs. 11.3% in Q4 2022; FY 2023 Annualized Adjusted ROE of 14.9% vs. 13.8% in FY 2022

• • Westaim's Q4 2023 Net Profit was $35.1 million compared to Q4 2022 Net Profit of $32.8 million; FY 2023 Net Profit was $183.9 million compared to FY 2022 Net Profit of $18.0 million

  • • Diluted earnings per share in Q4 2023 of $0.26 compared to Q4 2022 diluted earnings per share of $0.23; Diluted earnings per share in FY 2023 of $1.32 compared to FY 2022 diluted earnings per share of $0.12

    Westaim

  • • At December 31, 2023, Westaim's book value was $518.3 million which was $3.83 (C$5.08) per fully diluted share compared to December 31, 2022 book value of $363.2 million or $2.56 (C$3.46) per fully diluted share(1)

  • • Westaim ended FY 2023 with a strong cash position of $135.0 million

• (1) For further details, please refer slide 4 for Non-GAAP measures.

• (2) Excludes income from operating cash for the fourth quarter and years ended December, 31, 2023 and 2022.

Westaim Summary Q4 2023 and FY 2023 Operating Results

(Amounts in millions of US$ except per share data)

Three months ended December 31

Year ended

December 31

Income from investment in Skyward Specialty

Income from investment in Arena

(Loss) income from investments in Arena FINCOs and ASOF(1)

2023 2022 $51.9 $40.5

2023 2022 $210.3 $26.8

0.6 0.1 (1.0)(6.1)$51.5 $34.5

4.5 0.7

Income from investments

(6.2)(2.4)$208.6 $25.1

Holding company operating expenses	($12.9)	($1.6)	($18.4)	($7.2)
Preferred securities interest expense	-	(0.5)	(1.0)	(1.9)
Interest and fee income	1.8	0.6	4.2	2.3

($11.1)

Net holding company operating and interest expenses

($1.5)

($15.2)

($6.8)

Share-based compensation expense	(2.9)	(0.2)	(6.7)	(0.9)
Foreign exchange (loss) gain	(0.3)	(0.2)	(0.6)	0.1

-

Derivative warrants - change in fair value gain

-

0.1

0.1

Total net holding company expenses	($14.3)	($1.9)	($22.4)	($7.5)
Income taxes (expense) recovery	(2.1)	0.2	(2.3)	0.4
Profit and comprehensive income	$35.1	$32.8	$183.9	$18.0
Earnings per fully diluted share	$0.26	$0.23	$1.32	$0.12

(1)Arena Special Opportunities Fund, LP ("ASOF").

• • Profit and comprehensive income for Q4 2023 was $35.1 million ($0.26 diluted earnings per share) compared to a profit and comprehensive income of $32.8 million ($0.23 diluted earnings per share) in Q4 2022

• • Profit and comprehensive income in FY 2023 was $183.9 million ($1.32 diluted earnings per share) compared to a profit and comprehensive income of $18.0 million ($0.12 diluted loss per share) in FY 2022

• • Westaim's income from its investment in Skyward Specialty in Q4 2023 was $51.9 million compared to an income of $40.5 million in Q4 2022; Westaim's income from its investment in Skyward Specialty in FY 2023 was $210.3 million compared to an income of $26.8 million in FY 2022. The valuation of its investment in Skyward Specialty at December 31, 2023 was $236.5 million, consistent with the Skyward Specialty trading price at December 31, 2023 of $33.88 per common share with its ownership of 6,979,639 common shares as compared to the December 31, 2022 valuation of $218.9 million at $15.00 per common share with 14,567,139 common shares

• • Net performance of Arena FINCOs was a net loss of $0.8 million in Q4 2023 (-0.5% net investment return) compared to a net loss of $6.0 million (-3.6% net investment return) in Q4 2022

• • Arena fee-paying AUM was $2.5 billion at December 31, 2023 vs. $2.6 billion at December 31, 2022

Westaim Summary Statement of Financial Position

As at

(Amounts in millions of US$ except per share data)

December 31, 2023 September 30, 2023 December 31, 2022

Assets

Cash

Other assets

Investment in Skyward Specialty Investment in Arena

Investment in Arena FINCOs Investment in ASOF

$135.0

$39.3 $3.4

2.5

2.1 0.8

236.5

289.5 218.9

27.6

28.8 26.9

147.2

148.1 160.1 • In each of June and November 2023, Skyward Specialty

3.0 $551.8

3.1 3.2

Total Assets

$510.9 $413.3

Liabilities

Accounts payable, income taxes payable and accrued liabilities

$33.5

$15.2 $13.1

Preferred securities Derivative warrant liability Total Liabilities

- -

- 36.9

- 0.1

$33.5

$15.2 $50.1

Shareholders' equity

518.3

495.7 363.2

Total Liabilities and Shareholders' Equity

$551.8

$510.9 $413.3

Number of common shares outstanding Fully diluted book value per share -in US$ Fully diluted book value per share -in C$1

131,757,285 $3.83 C$5.08

135,491,943 $3.56 C$4.82

* Period end exchangeratesofUSDtoCDN:$1.32405atDecember31,2023;$1.35535atSeptember30,2023and$1.35360atDecember31,2022.

141,386,718 $2.56 C$3.46

• • Book value per fully diluted share increased $1.27 (49.6%) to $3.83 at December 31, 2023 from $2.56 at December 31, 2022. Book value per fully diluted share increased C$1.62 (46.8%) to C$5.08 at December 31, 2023 from C$3.46 at

  December 31, 2022

• • In January 2023, Skyward Specialty listed on the Nasdaq

  Global Select Market under the ticker symbol "SKWD"

completed a secondary offering (the "Secondary Offering").

Westaim sold 3,987,500 Skyward Specialty common shares and 3,600,000 Skyward Specialty common shares in the Secondary Offerings and received net cash proceeds of $87.4 million and $104.9 million in Q2 2023 and Q3 2023 respectively; as at December 31, 2023, Westaim owns 6,979,639 Skyward Specialty common shares

• • Westaim's strong cash position enabled the cash to be deployed to redeem its preferred securities liability. On July 17, 2023, Westaim redeemed and delisted all of the 5,000,000 preferred securities for C$50 million, equivalent to $37.9 million, and cancelled 14.3 million warrants

• • The Company was in a position to fund further share buy backs; in FY 2023, Westaim acquired and canceled 9,896,178 common shares at a cost of $26.4 million through its normal course issuer bid ("NCIB")

Westaim Diluted Earnings per Share (US$): Three months ended December 31, 2023

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