PyroGenesis Canada 40F 2022 Annual report | PYRGF Filing

Table

of Contents

Exhibit 99.1

PYROGENESIS CANADA INC.

ANNUAL INFORMATION FORM

FOR THE YEAR ENDED DECEMBER 31, 2022

Dated March 30, 2023

Table

of Contents

TABLE OF CONTENTS

Explanatory Notes

Forward-Looking Statements

Market and industry data

Corporate Structure

4.1.

Name, Address and Incorporation

4.2.

Subsidiaries

General Development of the Business

5.1.

Year Ended December 31, 2020

5.2.

Year Ended December 31, 2021

5.3.

Year Ended December 31, 2022

5.4.

Recent Developments

Business of the Company

6.1.

General

6.2.

Products and Services

6.3.

Installation & Servicing

6.4.

Research and Development, Internal and External Funded Projects

by Customers

6.5.

Markets and Opportunities

Intellectual Property and Research and Development

6.11.

Environmental Protection

Dividends and Distributions

Description of Capital Structure

8.1.

Authorized Share Capital

8.2.

Stock Options

Market for Securities

9.1.

Trading Price and Volume

9.2.

Prior Sales

10.

Directors and Executive Officers

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

10.4.

Conflicts of Interest

10.5.

Board Independence

11.

Audit Committee and Other Committees

11.1.

Audit Committee

Audit Committee Charter

Composition of the Audit Committee

Pre-Approval Policies and Procedures

External Fees by Audit Category

11.2.

Other Committees

Nominating and Corporate Governance Committee

Compensation Committee

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Interest of Management and Others in Material Transactions

15.

Transfer Agent and Registrar

Additional Information

19.

Glossary of Terms

SCHEDULE “A” CHARTER OF THE AUDIT COMMITTEE

Table

of Contents

Explanatory Notes

The

information

this

annual

information

form

(this

“

AIF

”)

PyroGenesis

stated

December

31,

2022,

unless otherwise indicated.

For an explanation

of the capitalized

terms and expressions and

certain defined terms, please

refer to the

“Glossary

of Terms”

at the end of this AIF.

this

AIF,

unless

the

context

otherwise

requires,

references

the

“Company”

“PyroGenesis”

refer

PyroGenesis Canada Inc. together with its subsidiaries.

In this AIF,

unless otherwise indicated,

all references to

“$” are to Canadian

dollars, all references to

“US$” are to

U.S. dollars, and all references to “€” are to euros. Amounts

are stated in Canadian dollars unless otherwise indicated.

This

AIF

should

read

conjunction

with

the

information

contained

the

Company’s

consolidated

financial

statements

and

notes

for

the

year

ended

December

31,

2022,

and

the

management’s

discussion

and

analysis

thereon.

The Company has certain proprietary or

contractual rights to certain company names, product

names, trade names

and

trademarks

used

this

AIF

that

are

important

its

business,

including

PyroGenesis,

PYROGENESIS

(LOGO),

PYROGENESIS

ADDITIVE,

PYROGENESIS

ADDITIVE

(LOGO)

PYROGENESIS

ALUMINUM,

PYRO

GREEN-GAS,

PYRO

GREEN-GAS

(LOGO),

SPHEROGENESIS,

NEXGEN,

DROSRITE,

PUREVAP,

SPARC,

APT,

APT-HP,

RPT,

MINIGUN, SPT,

PPRS and,

PAGV.

The Company

has omitted

the registered

trademark (®)

and trademark

(™) symbols

and any other related symbols

for such trademarks and

all related trademarks, including

those related to specific

products

or services, when used in this AIF.

Forward-Looking Statements

This

AIF

contains

forward-looking

statements

and

forward-looking

information

(collectively,

“

forward-looking

statements

”) within the meaning

of applicable securities

legislation. All statements

other than statements of

historical fact

contained in this AIF

are forward-looking statements,

including, without limitation,

the Company’s statements

regarding its

products and services; the execution of its growth strategy; relations with suppliers and

customers; future financial position;

business strategy; potential acquisitions; potential

business partnering; litigation; and plans

and objectives. In certain

cases,

forward-looking

statements

can

identified

the

use

words

such

“plans”,

“expects”

“does

not

expect”,

“is

expected”, “budget”, “scheduled”,

“estimates”, “forecasts”, “intends”,

“anticipates” or “does

not anticipate”, or

“believes”, or

variations of such words and phrases

or state that certain actions,

events or results “may”, “could”,

“would”, “might” or “will

be taken”, “occur” or “be achieved” and similar words or the negative

thereof. These forward-looking statements are based

management’s

current

expectations

and

are

subject

number

risks,

uncertainties,

and

assumptions,

including

market

and

economic

conditions,

business

prospects

opportunities,

future

plans

and

strategies,

projections

and

anticipated events

and trends

that affect

the Company

and its

industry.

Although management

of the

Company believes

that

the

expectations

reflected

such

forward-looking

statements

are

reasonable

and

are

based

reasonable

assumptions

and

estimates

the

date

hereof,

there

can

assurance

that

these

assumptions

estimates

are

accurate or that any of these expectations will prove accurate.

Actual

results

and

developments

are

likely

differ,

and

may

differ

materially,

from

those

anticipated

the

Company and expressed or implied by

the forward-looking statements contained in this AIF. Such statements are based on

a number of assumptions and risks which may prove to be incorrect.

Important assumptions relating to the forward-looking

statements contained in this AIF include, among other things,

assumptions concerning:

•

the Company’s business strategies, strategic objectives

and growth strategy;

•

the Company’s expected production volumes, rates

and costs;

•

the Company’s current and future capital resources

and the need for additional financing;

•

the Company’s ability to increase sales from new and existing customers, and the results of the successful

completion of the Company’s current projects;

•

management’s expectation that the Company will achieve

growth and profitability;

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•

the Company’s overall financial performance;

•

the Company continuing to maintain sufficient

and effective production and research and development;

•

there being no significant reduction in the availability of

qualified and cost-effective human resources;

•

there will be adequate liquidity available to the Company

to carry out its operations;

•

the Company’s ability to obtain and retain key

personnel; and

•

the success of intellectual property applications.

By their nature, forward-looking statements require assumptions and are subject to inherent risks and

uncertainties

including

those

discussed

herein.

There

significant

risk

that

predictions

and

other

forward-looking

statements

will

not

prove

accurate.

Readers

are

cautioned

not

place

undue

reliance

forward-looking

statements

made

herein

because a

number

of factors

could cause

actual future

results, conditions,

actions

or events

to differ

materially from

the

targets, expectations, estimates or intentions expressed in the

forward-looking statements.

The future

outcomes that

relate to

forward-looking statements

may be

influenced by

many factors,

including, but

not limited to, the risk

factors described under

the heading “Risk Factors”.

The Company cautions that

the foregoing list of

factors

not

exhaustive,

and

that,

when

relying

forward-looking

statements

make

decisions

with

respect

the

Company, investors

and others should carefully consider these factors, as well as other uncertainties and potential events,

and the inherent uncertainty of forward-looking statements.

Although the forward-looking statements

contained in this AIF

are based upon

what management currently believes

to be reasonable assumptions, the Company cannot assure investors that actual results, performance or achievements will

consistent

with

these

forward-looking

statements

and

additional

risks

and

uncertainties

discussed

the

Company’s

materials filed with the

Canadian securities regulatory

authorities from time

to time, available

under the Company’s

profile

on SEDAR at

www.sedar.com and on EDGAR at www.sec.gov. There can be no

assurance that forward-looking statements

will prove

to be

accurate, as actual

results and

future events

could differ materially

from those

anticipated in

such statements.

Accordingly,

readers

should

not

place

undue

reliance

forward-looking

statements.

Forward-looking

statements

are

provided

the

date

this

AIF,

and

the

Company

assumes

obligation

update

revise

such

forward-looking

statements to reflect new events or circumstances except as

required under applicable securities laws.

The

forward-looking

statements

contained

this

AIF

are

expressly

qualified

their

entirety

this

cautionary

statement and are made as of the date of this AIF or such

other date specified herein.

Market and industry data

Unless otherwise indicated, information contained in

this AIF concerning the industry and the

markets in which the

Company operates, including

its general expectations, market

position and market

opportunity, is based on information

from

industry publications and

reports generated by

several third parties

and management estimates.

Unless otherwise indicated,

management estimates are derived from

publicly available information released by independent industry

analysts and third-

party sources, as well

as data from the

Company’s internal research, and are

based on assumptions made by

the Company

based on such data and its knowledge of

such industry and markets, which the Company believes to be

reasonable. These

industry

publications

and

reports

generally

indicate

that

the

information

contained

therein

was

obtained

from

sources

believed to

be reliable,

but do

not guarantee

the accuracy

and completeness

of such

information. The

Company has

not

independently verified the

data in such

publications, reports

or resources, and

such information is

inherently imprecise. In

addition, projections,

assumptions and estimates

of the Company’s

future performance

and the future

performance of the

industry in which the Company operates are necessarily subject

to a high degree of uncertainty and risk due to a variety of

factors, including those described under “Forward-Looking

Statements” and “Risk Factors”.

Corporate Structure

4.1.

Name, Address and Incorporation

PyroGenesis is a corporation

governed by the provisions

of the Canada Business

Corporations Act (“

CBCA

”) and

results from an amalgamation

completed on July 11,

2011,

under the CBCA, of Industrial

Growth Income Corporation

and

PyroGenesis

Canada

Inc.,

predecessor

entity

incorporated

June

2006,

form

the

Company.

Prior

the

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amalgamation,

which

constituted

its

qualifying

transaction,

Industrial

Growth

Income

Corporation

was

capital

pool

company listed on the TSX-

The Company’s head and registered

office is located at 1744

William Street, Suite 200,

Montréal, Québec, Canada,

H3J 1R4.

4.2.

Subsidiaries

August

11,

2021,

PyroGenesis

acquired

all

the

issued

and

outstanding

Pyro

Green-Gas

Inc.

(formerly AirScience Technologies

Inc.) (“

Pyro Green-Gas

”), a private corporation incorporated under the laws of Canada.

Pyro Green-Gas has three subsidiaries: 1) AirScience

Technologies

Pvt. Ltd., a private corporation incorporated under the

laws of India;

2) AirScience Italia

S.r.l., a

private corporation incorporated

under the laws of

Italy; and 3)

Alga-Labs Inc., a

private corporation

incorporated under

the laws

of Canada.

Pyro Green-Gas

owns 99.99%

of the

issued and

outstanding

shares of

AirScience

Technologies

Pvt. Ltd.

and

90.00%

of the

issued

and outstanding

of AirScience

Italia

S.r.l.

Alga-Labs Inc. is a wholly owned subsidiary of Pyro Green-Gas.

General Development of the Business

The following is a summary of the significant events

that have influenced the general development

of the business

of the Company over the last three completed years.

5.1.

Year Ended December 31,

2020

Business Highlights and Milestones

March

2020,

the

Company

announced

the

successful

completion

testing

900

kilowatts

plasma

torch

system valued

at more

than

$1,000,000

which had

been installed

pursuant

to an

agreement

entered

into

on January

2019, between the Company and RISE Energy Technology

Center AB, a Swedish company.

On March 24,

2020, the Company announced it

had received the first

payment of approximately $1.44

million under

the

Drosrite

International

Exclusive

Agreement

dated

August

29,

2019,

between

Drosrite

International

LLC

(“

Drosrite

International

”), a US-based company,

and PyroGenesis (the “

Drosrite International Exclusive

Agreement

”). Under the

terms

this

agreement,

Drosrite

International

had

received

the

required

rights

from

PyroGenesis

perform

Drosrite

International’s obligations under a 2019 agreement it had entered into with

Radian Oil & Gas Services Company, an oil and

gas services company

operating in the

Middle East (the

“

Dross Processing Service

Agreement

”). For more

information

on the Drosrite

International Exclusive Agreement, the

Dross Processing Services Agreement,

and the relationship

between

Drosrite International and PyroGenesis, see “Directors

and Executive Officers - Conflicts of Interest”.

On April 30, 2020, PyroGenesis announced it

had successfully completed the first phase of

a multi-phase modeling

contract with a

client that

aimed at

evaluating the

performance of

PyroGenesis’ proprietary

torches in an

existing iron

ore

industrial furnace. On

September 1,

2020, the

Company announced the

completion and acceptance

of its

modeling contract,

which demonstrated that replacing fossil fuel burners with PyroGenesis’ proprietary

plasma torches could play a significant

role

reducing

the

client’s

greenhouse

gas

(“

GHG

”)

emissions

and

assist

the

client

attaining

its

GHG

reduction

objectives.

On June 11, 2020, the Company

announced it had signed a second multi-phase torch modeling contract, aimed

evaluating the

performance of

PyroGenesis’ proprietary

torches in

an existing

iron ore

industrial furnace

with the

goal of

replacing existing fossil fuel burners with PyroGenesis’ plasma

torches.

On August 18, 2020, the Company announced the realization of a development agreement with HPQ Nano Silicon

Powders Inc.

(“

HPQ Nano

”), a

wholly owned

subsidiary of

HPQ Silicon

Resources Inc.

(“

HPQ

”), which

aims to

transform

silicon

into

spherical

silicon

nano

powders

and

nanowires

for

use

lithium-ion

batteries.

The

agreement,

valued

approximately

$3,000,000,

includes

royalty

rights

the

future

sales

nano

silicon

powders

and

wires

HPQ

Nano,

royalty rights that can be converted by PyroGenesis into

a 50% ownership stake in HPQ Nano.

On September

4, 2020,

the Company

announced an

$11.5

million contract

to provide

waste destruction

systems

for two US Navy ships.

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September

22,

2020,

the

Company

announced

business

initiative

increases

its

presence

on-site

processor of aluminum dross, with the aim to reduce landfill waste, reduce harmful GHG emissions, and recover aluminum

while minimizing the creations of potentially toxic minerals.

On November

24, 2020,

the Company

announced it

had signed

a plasma

torch contract

to provide

one high

powered

(approximately one

megawatt) plasma

torch with

ancillary equipment

to a

major iron

ore producer

in connection

with the

pelletization process.

On December 16,

2020, the Company

announced it had

signed an addition

al contract with

a US-based

tunneling

client to design, manufacture, test, and supply a plasma torch system

tailored for tunneling.

Corporate Developments and Financings

On March

18, 2020,

the Company

completed a

$903,000 non-brokered

secured convertible

loan with

Fiducie de

Crédit Mellon Trust (the “

Pascali Trust

”), a trust of which Company’s Chief Executive Officer, P.

Peter Pascali, is a trustee,

officer

and

beneficiary

(the

“

2020 Convertible

Loan

”).

The

2020

Convertible

Loan

bore

interest

the

rate

12%

per

annum, with interest

payable in cash

on a quarterly

basis, had a

September 17, 2021,

maturity date,

and was convertible

into common

shares of

the Company

at a

conversion price

of $0.28

per common

share. The

2020 Convertible

Loan was

secured

hypothec

the

universality

all

the

present

and

after

acquired

moveable

property

and

assets

the

Company.

The

2020

Convertible

Loan

was

subsequently

converted

common

accordance

with

its

terms

September 30, 2020, resulting

in 3,225,000 common shares

being issued. As the

2020 Convertible Loan was

provided by

the Pascali Trust,

the 2020 Convertible Loan

constituted a “related party

transaction” as defined in

MI 61 101. The

party transaction was exempt from

the formal valuation and minority

approval requirements of MI 61-101,

as the transaction

had

value

less

than

25%

the

Company’s

market

capitalization

(calculated

accordance

with

61-101).

The

transaction was unanimously

approved by the

board of directors

of the Company.

See “Directors and

Executive Officers -

Conflicts of Interest”.

On July 28,

2020, the Company

requested that

the Pascali Trust

convert the

2020 Convertible

Loan on or

before

September 30, 2020.

The Pascali Trust

agreed to such

request subject to

the prepayment of

5 years rent,

plus estimated

yearly municipal taxes, no

later than December 31,

2020, for a

total prepayment of $1,438,530.

As a result

of the conversion

of the 2020 Convertible Loan, the Company saved approximately $110,000 of interest payments that would otherwise have

been

required

paid

under

the

2020

Convertible

Loan.

The

agreement

with

the

Pascali

Trust

respect

the

prepayment

rent

constituted

“related

party

transaction”

defined

61101.

The

party

transaction

was

exempt from the formal

valuation and minority

approval requirements of

MI 61-101, as

the transaction had

a value of less

than

25%

the

Company’s

market

capitalization

(calculated

accordance

with

61-101).

The

transaction

was

unanimously

approved

the

board

directors

the

Company.

See

“Directors

and

Executive

Officers

Conflicts

Interest”.

On September 1,

2020, PyroGenesis announced that it

had acquired 4,000,000 units

of HPQ in

a private placement

at a

price of

$0.60 per

unit for

a total

investment $2.4

million. Each

unit consists

of one

common share

of HPQ

and one

common share of HPQ purchase warrant. Each warrant entitles the Company to purchase one common share of HPQ at a

price of $0.61 for a period of 36 months following the

issue date.

On September

22, 2020,

at the

Company’s

annual general

meeting, the

five then

current members

of the

Board

were

re-elected

and

two

additional

nominees,

Ms.

Rodayna

Kafal

and

Mr.

Rodney

Beveridge,

were

also

elected

the

Board.

November

10,

2020,

the

Company

closed

bought-deal

short

form

prospectus

offering

(the

“

2020

Public

Offering

”) pursuant to an underwriting agreement dated October 20, 2020, entered into between the

Company and Mackie

Research

Capital

Corporation,

sole

underwriter

and

sole

bookrunner.

Under

the

2020

Public

Offering,

the

Company

issued 3,354,550 units of the

Company (“

2020 Units

”) at a price of

$3.60 per unit for

aggregate proceeds of $12,076,380,

including the

full exercise

of the

over-allotment option

by the

underwriter.

Each unit

is comprised

of one

Common Share

and one-half of one Common Share

purchase warrant. Each whole warrant (a

“

2020 Public Offering Warrant

”) entitles the

holder thereof to purchase one additional Common Share at an exercise price of $4.50. The 2020 Public Offering Warrants

are governed by

a warrant indenture

dated November 10,

2020 (the “

2020 Warrant

Indenture

”). On March

15, 2021, the

Company announced

its exercise

of its

right under

the 2020

Warrant

Indenture to

accelerate the

expiry date

of the

2020

Public Offering

Warrants

to April

14, 2021.

The Company

paid the

underwriter

cash commission

equal to

6.5% of

the

gross proceeds of the 2020 Public

Offering and issued it an

aggregate of 191,414 non-transferable

compensation options,

which were

exercisable into

2020 Units

at a

price of

$3.60 per

unit at

any time

up to

24 months

from closing

of the

2020

Public Offering.

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On November 20, 2020, the

Common Shares commenced trading

on the TSX under the

trading symbol “PYR”, at

which time the Common Shares were delisted from the

TSX-

On December 22,

2020, PyroGenesis announced

it had submitted

a formal application

to list its

Common Shares

on the NASDAQ.

5.2.

Year Ended December 31,

2021

Business Highlights and Milestones

On March 17, 2021, PyroGenesis announced that it

had received a grant from the Quebec

Ministry of the Economy

and Innovation to fund a project aimed at developing

a solution to recover residues of spent pot lining,

which are produced

in the primary aluminum industry and are considered harmful.

On April 8, 2021, PyroGenesis announced the appointment of

Ms. Nannette Ramsey as an independent director.

April

19,

2021,

PyroGenesis

unveiled

that

its

additive

manufacturing

NEXGEN

powder

production

line

was

operational and

producing

powders. PyroGenesis’

NEXGEN

plasma

atomization

system has

recorded

a production

rate

exceeding 25 kg/h, surpassing all published plasma-atomized

production rates for titanium known to the Company.

On May 27, 2021, PyroGenesis announced that it had received a

grant from Sustainable Development Technology

Canada for

the financing

of the

development of

a novel

production

process to

transform

quartz into

fumed silica

using a

plasma

reactor,

reducing

hazardous

waste

and

GHG

emissions

attributed

the

established

fumed

silica

production

process.

On July 6, 2021, PyroGenesis

announced the signature of a

contract valued at approximately

$4 million with HPQ

Silica Polvere

Inc. (“

HPQ Polvere

”), a

wholly owned

subsidiary of

HPQ. Under

this contract,

PyroGenesis was

tasked to

design, develop and manufacture a

novel one-step plasma-based reactor and

process for the conversion

of quartz to fumed

silica.

The

contract

includes

annual

royalty

payments

HPQ

Polvere

PyroGenesis

future

sales

arising

from

the

project and PyroGenesis may,

at any time, convert said royalties into a 50% ownership stake

in HPQ Polvere.

On August 17,

2021, the Company

announced the signing

of a

$1.2 million contract

for two

air plasma torch

systems

with an existing Asian client. These torches are to be incorporated

into the client’s medical waste destruction

systems.

September

22,

2021,

PyroGenesis

announced

that

Pyro

Green-Gas

had

been

selected

supply

its

landfill

biogas purification system

to Carbonaxion Bioénergies Inc.,

the promoter of

the GNR Neuville

project, which is

being carried

out at the environmental complex of the Régie régionale

de gestion des matières résiduelles de Portneuf.

On October 19, 2021, PyroGenesis announced that

it had been awarded an Innovative Solutions Canada

phase 2

(prototype development) contract to develop a unique hybrid ceramic powder processing system for the National Research

Council Canada, Canada’s largest federal research

and development organization.

October

20,

2021,

PyroGenesis

announced

the

creation

PyroGenesis

Aluminum,

new

division

bringing

together PyroGenesis’

aluminum industry

offerings to

provide the

following primary

products and

services:

i) DROSRITE

sales and tolling services; ii) conversion

of dross residues into valuable chemicals; iii)

upstream applications where plasma-

based solutions

are expected

to reduce

GHG emissions;

iv) high

powered plasma

torches geared

to replacing

fossil fuel

burners; and v) conversion of spent pot lining residues

into a valuable end-product.

On October

28, 2021,

PyroGenesis announced that

it had

been selected

to provide

a $9.2

million land-based system

to destroy

perfluoroalkyl and

polyfluoroalkyl substances.

The Company

would provide

its plasma

based thermal

process

equipment in a two-phase

project geared toward providing

a land-based system

to destroy these substances.

On October

7, 2022, the Company announced that contract negotiations had

been suspended and discontinued.

On December

8, 2021,

PyroGenesis announced

the launch

of a

new zero-carbon

emission hydrogen

production

project

which

aims

compete

with

conventional

technologies

produce

environmentally

friendly

hydrogen.

successful,

PyroGenesis’

new

hydrogen

production

technology

would

convert

methane

hydrogen,

thereby

creating

zero-carbon emission hydrogen.

Table

of Contents

Corporate Developments and Financings

During the year, the Company repurchased and cancelled 840,094 common shares at a weighted average price of

$4.96 per share, for total cash considerations of $4,183,617,

including commissions of $16,678.

On January 12, 2021, PyroGenesis announced

that it intended to implement a normal

course issuer bid according

to which the Company could purchase

over a twelve-month period up

to 5,000,000 common shares (approximately

3.14%

of the then issued and outstanding).

On March 3, 2021, PyroGenesis announced the appointment

of Mr. Ben Naccarato

as an independent director.

On March 10,

2021, the Company

announced that

its application to

list its Common

Shares on the

NASDAQ had

been approved. Trading commenced on March 11, 2021, under the ticker symbol “PYR” and trading of its Common Shares

ceased to be traded on the OTCQB. In connection with the NASDAQ listing, the Company

announced that, to maintain the

overall

independence

the

Board

Directors,

Mr.

Michael

Blank

resigned

director

and

member

the

Audit

Committee but would continue to serve as the Company’s

acting Chief Financial Officer.

On August

11,

2021, PyroGenesis

finalized

its strategic

acquisition

of Pyro

Green-Gas

and its

subsidiaries

for a

total cash

consideration of approximately

$4.4 million. Montreal-based

Pyro Green-Gas designs

and builds

(i) gas upgrading

systems to convert

biogas into renewable

natural gas (“RNG”), (ii)

pyrolysis-gas purification systems, (iii)

biogas and landfill-

gas flares

and thermal

oxidizers, and

(iv) systems

for the

purification of

coke-oven gas

(a by-product

in the

primary steel

industry arising from

the conversion of coal

into coke) into high

purity hydrogen. Pyro

Green-Gas is also known

for its line

of landfill gas flares which reduce GHG emissions from

landfills.

On September 20, 2021, PyroGenesis announced that it had been added to the FTSE

Global Total

Cap Index and

FTSE Global

Micro Cap

Index. The

FTSE Global

Total

Cap Index

is a

market-capitalization

weighted index

representing

the performance of

large, mid and

small cap stocks,

across emerging and

developed companies.

The FTSE Global

Micro

Cap

Index

provides

deep

representation

micro

cap

stocks.

Both

indexes

are

used

the

basis

for

performance

benchmarks and investment products, such as funds, derivatives, and

exchange-traded funds by investment professionals

globally.

On September 27,

2021, PyroGenesis announced the

appointment of Mr. Andre Mainella,

as Chief Financial

Officer

(CFO) of the Company.

5.3.

Year Ended December 31,

2022

Business Highlights and Milestones

On February 2, 2022,

PyroGenesis announced the

receipt of a US$3,000,000

purchase order for

the first of

three

10-tonne DROSRITE systems from an existing client.

On February 7,

2022, PyroGenesis

announced that

it had signed

an agreement

with a European

research center

for the

sale

of a

plasma

torch

system which

will

be used

to develop

a process

to convert

hydrocarbons,

including GHG

producing gases such as methane, into non-hazardous

chemicals.

On April

25, 2022,

PyroGenesis confirmed

that the

Company’s DROSRITE

dross recovery

technology (a

total of

seven DROSRITE systems) had been successfully commissioned

for Ma’aden Aluminum.

On May

19, 2022,

PyroGenesis announced

that it

had completed

a commercial

order for

titanium powders.

The

order

derived

from

the

Company’s

partnership

agreement

with

Aubert

Duval,

multinational

specializing

upscale

metallurgy,

and

the

powder

question

was

produced

PyroGenesis’

production

facility

using

its

NexGen

plasma

atomization system.

September

2022,

the

Company

announced

that

had

been

selected

international

producer

magnesium metal, to

test PyroGenesis’

zero-emission plasma torches as

part of their

process for transforming mining

waste

and recycled minerals into high-value metal.

On October

6, 2022,

PyroGenesis

confirmed

that

its Gen3

PUREVAP

Quartz

Reduction

Reactor pilot

plant had

completed the

month-long power-up

process and

was initiating

the testing

phase of

its transformation

of quartz

into high

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of Contents

purity

silicon.

The

plant

designed

produce

multiple

systems

that

can

operate

under

harsh

conditions,

including

extremely high temperatures and under vacuum.

On November 2, 2022, PyroGenesis announced that it had passed its annual quality audit for two key international

standards: ISO 9001:2015, and AS9100D.

The audits encompassed all of

PyroGenesis’ facilities for the purpose

of meeting

compliance with the existing quality management designations.

On November 10, 2022, PyroGenesis

announced that it had successfully

produced hydrogen from methane

using

zero-carbon emission hydrogen production technology.

Corporate Developments and Financings

On October

19, 2022, PyroGenesis

announced the

completion of

a non-brokered

private placement

consisting of

the issuance and

sale of 1,014,600

units of the

Corporation at a

price of $1.30

per unit, for

gross proceeds of

$1,318,980

to the Company.

Each unit consisted

of one Common

Share and one

warrant entitling the

holder thereof to

purchase one

Common Share at a price of $1.75 until October 19, 2024.

On November 22,

2022, PyroGenesis received

a notice (“Notice”)

from the NASDAQ

stating that the

Company is

not in compliance

with the

minimum bid

price requirement

(“Minimum Bid

Requirement”) of

US$1.00 per

share under

the

NASDAQ Listing

Rule 5550(a)(2) based

upon the

closing bid

price of

the Company’s Common

Shares for

the 30

consecutive

business days prior

to the date

of the Notice.

The Notice has

no immediate effect

on the listing

or trading of

the Common

Shares on NASDAQ,

and the Company’s

operations are not

affected by the

receipt of the

Notice. Under NASDAQ

Listing

Rule

5810(c)(3)(A),

the

Company

had

180

calendar

days

from

the

date

the

Notice,

until

May

22,

2023,

regain

compliance with the Minimum Bid Requirement, during which time the Common Shares will continue to trade on NASDAQ.

If at

any time

before May 22,

2023, the bid

price of

the Common Shares

closes at

or above

US$1.00 per share

for a minimum

of 10 consecutive business days, the Company will regain compliance with the Minimum Bid Requirement.

If the Company

does

not

regain

compliance

with

the

Minimum

Bid

Requirement

May

22,

2023,

the

Company

may

eligible,

upon

satisfaction of certain NASDAQ listing

requirements, for an additional

period of 180 calendar days

to regain compliance or

the

Common

may

subject

delisting

from

NASDAQ.

The

Company

will

closely

monitor

the

situation

and

considering various strategies to regain compliance with the Minimum

Bid Requirement under the Nasdaq Listing Rules.

5.4.

Recent Developments

On January

10,

2023,

PyroGenesis

announced

a contract

to provide

its SPARC™

refrigerant

waste destruction

system to

a subsidiary

of The

Trust

for the

Destruction of

Synthetic Refrigerants,

a New

Zealand government

-mandated

organization. The project,

initially valued at $6

million, aims to assist

New Zealand in its

stated goals of reducing

synthetic

gas emissions by 25% no later than 2035.

On January 12, 2023, PyroGenesis announced

an initial contract with a

major European multinational chemical, oil,

and gas conglomerate to assess the

applicability of PyroGenesis’ plasma torches for use

in the client’s chemical production

process.

January

17,

2023,

PyroGenesis

announced

that

Pyro

Green-Gas

signed

contract

with

North

American

lithium-ion battery

recycler

for the

delivery of

a system

to decontaminate

the dust

generated during

the battery

recycling

process.

On February

8, 2023,

PyroGenesis announced

that Mr.

Alan Curleigh

is returning

to lead

PyroGenesis’ Board

Directors

Chair.

Mr.

Peter

Pascali

stepped

down

Chair

and

will

continue

serve

Chief

Executive

Officer,

President and Director of PyroGenesis. The Board now

has eight directors, of whom six are independent.

On March 8, 2022,

PyroGenesis announced the

completion of a non-brokered

private placement consisting

of the

issuance and sale

of 5,000,000 units

of the Company

at a price of

$1.00 per unit, for

gross proceeds of $5,000,000

to the

Company. Mr. Pascali subscribed to 2,500,000

Units under the

private placement. Each

unit consists of

one Common Share

and one warrant entitling the holder to purchase one Common Share at a price of $1.25

until March 7, 2025. The Common

and

warrants

issued

connection

with

the

private

placement

well

the

Common

underlying

the

warrants are subject to a hold period of four months and one day

from the date of closing.

Table

of Contents

Business of the Company

6.1.

General

PyroGenesis

high-tech

company

and

leader

the

design,

development,

manufacture,

and

commercialization

advanced

plasma

processes

and

sustainable

solutions

aimed

reducing

GHG

and

providing

economically

attractive

alternatives

conventional

“dirty”

processes.

PyroGenesis

has

created

proprietary,

patented,

advanced

plasma

technologies

that

are

being

vetted

and

adopted

industry

leaders

five

markets:

(i)

iron

ore

pelletization; (ii) aluminum; (iii) waste management; (iv)

steel making; and (v) additive manufacturing.

With a team of experienced engineers, scientists and technicians working at its Montreal head office and 3,800 m2

and 2,940 m2

manufacturing facilities, the

Company endeavours to

continuously innovate and provide

original and inventive

cleantech products to the marketplace. Its core competencies allow PyroGenesis to provide plasma torches, plasma waste

processes, high-temperature metallurgical

processes, and additive manufacturing

powders to the global

marketplace. The

operations of PyroGenesis are ISO 9001 and AS9100D

certified.

6.2.

Products and Services

The Company’s specialized products and

services are commercialized to

customers operating in a

wide range of industries,

including

the

defense,

metallurgical,

mining,

advanced

materials

(including

printing),

oil

gas,

and

environmental

industries. The products and services of PyroGenesis

include:

•

Plasma torches systems, used for, among other things, replacing conventional burners in pelletizing of iron

ore furnaces (mining sector) and other industrial furnaces

(mainly metallurgy sector);

•

Waste destruction and waste-to-energy systems,

offered predominantly to customers in the environmental

and defense industries, and for the destruction of end-of-life

refrigerants;

•

Systems for

the recovery

of aluminum

and other

metal from

dross (a

residue

generated by

primary and

secondary metal producers), offered mainly to customers

in the mining and metallurgical industries;

•

Production

high

purity

spherical

metal

powders,

which

are

predominantly

offered

customers

the

additive manufacturing (also known sometimes as 3D printing)

industry;

•

Development

processes

produce

high

purity

silicon

metals,

nano

powders

and

nanowires,

offered

predominantly

customers

the

mining

and

metallurgical

industries

well

those

the

battery

manufacturing and/or disposal business;

•

Systems

for

upgrading

biogas

and

landfill

gas

into renewable

natural

gas,

used

the

environmental

industry;

•

Systems

used

the

petrochemical

and

metallurgical

industries

for

the

purification

industrial

gases,

including

the

extraction

hydrogen

from

coke

oven

gas,

the

purification

natural

gas

into

high

purity

methane, and the purification of pyrolytic gases;

•

Development of a process to produce fumed silica, used

in the polymer, cosmetics,

and paint industries;

•

Installation, commissioning, and start-up services; and

•

Internally and externally funded research and development

projects.

Plasma Torches for Iron Ore Pelletization

PyroGenesis

manufactures

and

commercializes

proprietary

plasma

torches

and

plasma

torch

systems

used

replace fossil

fuel burners

in industrial

iron ore

pelletization process.

The Company’s

plasma torches

can heat

gas up

10,000°F,

which is as hot as the surface of the sun.

Pelletization is the

process in which

iron ore fines

are agglomerated into

small balls with

some additives and

then

heated

high

temperatures

induration

furnace

make

them

resistant.

The

resulting

pellets

are

then

used

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downstream and typically on a different site to make iron and steel in blast furnaces

and in direct reduction of iron (DRI). In

conventional technology,

the process

heat is

provided by

fuel oil or

natural gas

burners. The

combustion of

fossil fuels

these burners results in the production

of GHGs, notably carbon dioxide. Because plasma

torches use renewable electricity

to generate heat, they offer an environmentally

attractive alternative to fossil fuel burners.

The objective of

the Company is

to be

a significant player

in the

world-wide movement to

reduce the carbon

footprint

in mining and

manufacturing. PyroGenesis

offers a patented

process to replace

fossil fuel burners

with electrically heated

plasma torches, thereby reducing GHG emissions for

the iron ore pelletization industry. The Company believes its solutions

can be economically attractive

with greater environment

benefits than the traditional

alternatives. By using

the Company’s

solutions, companies

can convert

their existing

burners

and systems

often without

needing to

shut down

their facility

for

installation and with minimal changes to their processes.

Waste Destruction and Waste-to-Energy

Systems

PyroGenesis manufactures and

commercializes a broad

range of waste destruction

and waste-to-energy systems

to customers in the environmental and defense industries. At the core of these systems are the Company’s plasma torches

and

plasma

gasification

reactors.

The

Company

believes

offers

one

the

most

complete,

easy-to-operate,

high

temperature,

plasma-based

treatment

systems.

The

waste

destruction

and

waste-to-energy

systems

offered

the

Company include the following:

•

Plasma Arc Waste Destruction Systems

(“

PAWDS

”) for waste destruction onboard ships;

•

Steam

Plasma

Arc

Refrigerant

Cracking

(“

SPARC

”)

systems

for

the

destruction

certain

refrigerants,

including

chlorofluorocarbons

(“

CFCs

”),

hydrofluorocarbons

(“

HFCs

”)

and

hydrochlorofluorocarbons

(“

HCFCs

”);

•

Plasma Arc Chemical

Warfare Agent

Destruction Systems

(“

PACWADS

”), which

are mobile platforms

for

the onsite destruction of chemical warfare agents;

•

Plasma

Resource

Recovery

Systems

(“

PRRS

”)

for

land-based

waste

destruction

and

waste-to-energy

applications;

•

Plasma torches for waste gasification and combustion; and

•

Plasma Arc Gasification and Vitrification (“

PAGV

”).

Plasma Arc Waste Destruction System (PAWDS)

Originally

developed

the

Company

the

late

1990s

for

the

gasification

waste

onboard

Navy

aircraft

carriers, PAWDS

was the

first plasma

destruction system

for marine

use on

US Navy

aircraft carriers.

PAWDS

uses the

plasma eductor for the fast gasification

of milled waste. Navy waste

is comparable to the combustible

fraction of municipal

solid

waste,

comprised

paper,

cardboard,

plastics,

wood

and

rags.

Since

launching

PAWDS

1999,

the

Company

received orders

for four

PAWDS

for the

US Navy,

two of

which have

been delivered

and installed

on the

Gerald R.

Ford

(CVN-78) and the

John F.

Kennedy (CVN-79) aircraft

carriers, and two

of which are

to be installed

in two planned

aircraft

carriers during

the construction

of those

vessels. Developed

in collaboration

with the

US Navy,

at 1/5th

the size

and half

the weight of a

typical marine incinerator, the patented PAWDS has a capacity of 3.5

tons/day. PAWDS

is a highly compact,

inherently safe and efficient alternative to the shipboard

waste incinerators.

Steam Plasma Arc Refrigerant Cracking (SPARC)

The SPARC

process is

the Company’s

patented technology

for the

destruction of

old refrigerants

such as

CFCs,

HFC and HCFCs. The system is pre-assembled on skids

and has demonstrated high destruction and removal efficiency

than

99.9999%.

The

SPARC

system

uses

water

vapour

(steam)

torch

destroy

the

refrigerants

quickly

and

efficiently. The system is designed to handle wastes that have very high

chlorine and fluorine content. An integrated caustic

scrubber ensures that

hydrochloric acid (HCl)

and hydrofluoric acid (HF)

emissions are well

below accepted limits. The

base

system is designed for a destruction capacity of 50 kilograms

per hour based on the refrigerant R12.

Plasma Arc Chemical Warfare Agent

Destruction System (PACWADS)

PACWADS

was developed by the Company

for the US and UK

special forces to destroy

chemical warfare agents

on site. The system

is installed on

two trailers and

can be deployed

quickly in areas

where chemical warfare

agents must

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be immediately destroyed. Performance tests

on simulants have demonstrated destruction

and removal efficiency

of more

than 99.99999%.

The system

is designed

to destroy

the equivalent

of two

barrels (or

approximately 318

litres) per

day of

sarin, a deadly nerve gas, and is also suitable for the destruction

of a variety of other chemical warfare agents.

Plasma Resource Recovery System (PRRS)

The PRRS is used to convert waste to syngas (synthesis

gas) and inert slag (a glass-like by-product left

over after

a desired

metal

has

been

separated

(i.e.,

smelted)

from

its

raw ore).

The

PRRS

combines

a direct

current

graphite

arc

furnace, where the

inorganic portion of

waste is vitrified,

and the organic

portion is gasified.

The produced

syngas is then

cleaned up in a

plasma-fired eductor, similar to the one used

in the PAWDS technology, where tars are converted into clean

syngas (i.e. carbon monoxide and hydrogen).

The resulting syngas is further cleaned

of contaminants (such as HCl, sulfur

compounds, particulates

and volatile heavy

metals) using filters

and scrubbers.

The resulting syngas

can be used

as fuel

in a gas engine. The inert slag can be used as construction

material.

Plasma Torches

for Waste Gasification Systems

PyroGenesis’

plasma

torch

systems

are

used

waste-to-energy

applications,

advanced

material

production,

metallurgical

processing,

thermal

treatment

and

nanotechnology

manufacturing.

cleantech

alternative

fossil

fuel

burning, PyroGenesis’ electricity-driven plasma torch systems are easy to operate and offer a high level of safety, reliability

and service life of wear components.

Plasma Arc Gasification and Vitrification (PAGV)

PAGV systems convert incinerator ash and other hazardous inorganic material to

an inert, non-toxic slag. Slag is a

glass like

material, composed

of several

oxides, typically

silica

based. Using

the Company’s

unique furnace

design, the

proprietary arc plasma technology uses graphite electrodes and an electrical current to create arcs between the electrodes

and the melt, generating a high

temperature environment (typically above 1500°C) and melting the mineral matter into

slag.

This slag can be

used in a wide

range of applications, namely as

a building material for construction (e.g.

aggregate asphalt

and flooring as

well as partial

replacement for

cement in

concrete). The

PAGV

systems minimize

future legacy

issues for

operators of

incinerators (notably

municipalities

as well

as managers

of incineration

operations

for industrial,

hazardous,

biomedical, and animal

(slaughterhouse) waste) with a

relatively simple melting

process for their

grate and fly

ash. Asbestos

waste from decommissioning operations is also an excellent use

for this technology.

Systems for the Recovery of Aluminum and Other

Metal from Dross

Dross, a by-product of the

smelting process for aluminum and other metals, presents

the metallurgical industry with

challenges

and

opportunities.

dross

normally

composed

roughly

60%

metal

and

40%

residue.

Traditional

dross

treatment techniques

typically contaminate

the residues

with salt.

Metallurgical companies

aim to

recover metal

found in

dross while properly disposing of the oft-contaminated

residue.

PyroGenesis produces

systems for

the recovery

of aluminum

and other

metal from

dross through

its DROSRITE

process. This

process is

a salt-free,

cost-effective, sustainable

process for

maximizing metal

recovery from

dross without

any hazardous by-products. By using the DROSRITE technology, the residues can be converted into high-margin chemical

and metallurgical

products, including ammonium

sulphate and

aluminum sulphate. DROSRITE

allows the

treatment of dross

at its

source of

generation in a

controlled atmosphere,

tilting rotary furnace,

and minimizes

costly loss

of metal

while reducing

a smelter’s carbon footprint and energy consumption.

Table

of Contents

The following images compare the traditional

process for the recovery and treatment

of dross with the DROSRITE

process:

These systems are predominantly offered to customers in the metallurgical industry, targeting mainly the aluminum

and zinc industries.

Production of High Purity Spherical Metal Powders

The Company

produces

high purity

spherical

metal

powders

through

its plasma

atomization

process,

which

are

predominantly offered to customers in the additive

manufacturing (also known as 3D printing) industry.

PyroGenesis’

plasma

atomization

process

(known

NEXGEN

plasma

atomization)

allows

the

Company

produce and

sell high purity

spherical metal powders,

including titanium alloy

powders. Many existing

reactive metals cannot

easily

transformed

into

high

purity

spherical

powders,

especially

not

finer

size

cuts

such

-45μm/+15μm.

PyroGenesis’ NEXGEN process

offers an

improved yield

in the

finer size

cuts along

with a

higher production

rate. In

addition,

PyroGenesis can

convert a

wider variety

of metals

and alloys

into high

purity spherical

powders since

its plasma

torches

use argon gas and the reactor is backfilled with argon. This ensures the powders produced are

not exposed to any oxygen

during the

production process

and, as

a result,

PyroGenesis is

able to

produce high

purity powder

such as

titanium alloy

powders (Ti 6Al-4V grade 23).

Development of Processes to Produce High Purity

Silicon Metals, Nano Powders and Nanowires

The Company

is developing

processes

to produce

high purity

silicon metals

through

its PUREVAP

process

and

nano powders and

nanowires through

its PUREVAP

NSiR process.

These applications are

expected to be

predominantly

offered to

customers in

the mining

and metallurgical

industries, including

those involved

in the

making and/or

disposal of

batteries.

PUREVAP is a patent pending, one-step proprietary process being developed by the Company that uses a plasma

arc within

a vacuum furnace

to produce

high purity metallurgical

grade silicon and

solar grade silicon

from quartz. PUREVAP

reduces the

quartz with

carbon using

a plasma

submerged

arc. Under

vacuum,

and at

very low

operating

pressure, the

silicon is

refined in

a one-step

process removing

impurities and

transforming

it to

a purer

form, resulting

in a

high purity

silicon.

The

Company

expects

that

the

silicon

grades

produced

PUREVAP

will,

when

commercialized,

used

for

different applications, including solar energy.

The PUREVAP

NSiR process

is designed to

transform silicon

into spherical

silicon nano

powders and

nanowires

for use

in lithium-ion

batteries. This proprietary

process is

designed to

be highly

scalable and

is hoped

to allow

the production

of silicon

nano

powders

large

quantities

a competitive

cost

with

other

materials

used

the

lithium-ion

space.

The

PUREVAP NSiR can

use different purities of silicon as feedstock.

HPQ

Nano

acquired

the

intellectual

property

rights

the

PUREVAP

NSiR

system

2020

and

PyroGenesis

entitled to a royalty of 10% on the future sales of nano silicon powders and wires by

HPQ Nano, subject to the terms of the

contract.

The

royalty

stream

can,

any

time,

converted

PyroGenesis

into

50%

ownership

HPQ

Nano.

PyroGenesis has retained

a royalty-free, exclusive,

irrevocable, worldwide

license to use

the new system

for all purposes

other than the manufacturing of nano silicon powders and wires.

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of Contents

Upgrading of Biogas and Landfill Gas Into Renewable

Natural Gas (RNG)

Through Pyro

Green-Gas, the

Company offers

equipment for

the upgrading

of biogas

and landfill

gas into

RNG.

Pyro

Green-Gas'

equipment

combines

different

technologies

and

effects

the

removal

contaminants

from

biogas

and

landfill gas,

such as

hydrogen sulfide,

oxygen nitrogen,

volatile organic

compounds,

and moisture.

Pyro Green

-Gas can

offer both individual equipment and fully integrated

turnkey systems to its customers.

Systems for the Purification of Industrial Gases

Through Pyro

Green-Gas, the Company

offers equipment for

gas purification and

air emission

controls. Pyro Green-

Gas can

offer

both individual

equipment

and fully

integrated

turnkey systems

to its

customers. The

technologies

can be

used,

for

example,

for

coke

oven

gas

purification,

natural

gas

purification

into

high

quality

methane,

and

purification

pyrolytic gas and syngas (similar to the substances produced

during the application of the Company’s PRRS).

Development of a Process to Produce Fumed Silica

From Quartz

This plasma-based process allows a direct quartz-to-fumed silica transformation, removing the

usage of hazardous

chemical in the conventional making of fumed silica

and eliminating the hydrogen chloride gas normally

associated with its

manufacturing.

Furthermore,

the

process

requires

15,000

kWh

produce

metric

ton

fumed

silica,

representing

significant reduction in the energy footprint normally associated

with manufacturing fumed silica. And because the process

uses quartz as

feedstock, it is

expected that capital

requirements to build

a plant using

this plasma-based

process will be

significantly less than the capital requirements required to

build a traditional fumed silica plant.

HPQ Polvere acquired the intellectual property

rights to the fuming silica

patent in 2021 and PyroGenesis is

entitled

to a royalty

of 10% on

the future

annual gross

sales of fumed

silica by HPQ

Polvere, subject

to the terms

of the contract.

The royalty stream can,

at any time, be

converted by PyroGenesis

into a 50% ownership

of HPQ Nano.

PyroGenesis has

retained

royalty-free,

exclusive,

irrevocable,

worldwide

license

use

the

new

system

for

all

purposes

other

than

the

manufacturing of nano fumed silica.

6.3.

Installation & Servicing

PyroGenesis

offers

its

client

installation,

commissioning,

and

start-up

services.

These

services

are

typically

quoted

option

equipment

sales

contracts.

Separately,

PyroGenesis

offers

aftersales

services

its

customers,

including the sale of spare and replacement parts, consumable

parts, and onsite or remote service on installed systems.

6.4.

Internally and Externally Funded Research and Development

Projects

The

Company

relies

combination

internally

funded

and

externally

funded

R&D

grow

its

intellectual

property portfolio.

For externally

funded R&D,

the company

typically retains

intellectual property

rights for

the developed

technology,

while providing

licensing rights

to the client

in the sector

of application

and the

geographic area

of interest

the client.

6.5.

Markets and Opportunities

Waste Destruction and Waste-to-Energy

Systems

Marine Waste Treatment

Market (PAWDS)

Marine waste has been

an issue for lawmakers

and corporations for decades.

The disposal of waste

overboard is

harmful

the

marine

environment.

National

governments

and

international

organizations

(such

the

International

Maritime Organization) have adopted

rules to minimize the discharge

of harmful waste and

effluents from commercial

and

non-commercial ships.

At the

same time,

onboard storage

of waste

takes up

valuable space

within the

hull of

a ship

and

the eventual disposal in port is

costly and, if not handled properly, harmful to the environment. To mitigate this, modern ship

builders have incorporated onboard marine incinerators

to treat waste. However, these incinerators

also occupy significant

space, sometimes ascending through several decks of

a ship.

Table

of Contents

PyroGenesis’ PAWDS

provides an innovative

solution to these

issues. The

entire system

can fit in

the headroom

of a single

deck. It

is also

capable of

being started

up or

shut down

in a matter

of minutes.

Finally,

it does

not create

the

same level of GHG and other harmful emissions associated

with traditional incinerators.

At present, the

most attractive target

market for the

PAWDS

is military navies.

PyroGenesis has and

continues to

business

with

the

Navy

and

its

contractors.

PyroGenesis

has

already

outfitted

Navy

aircraft

carriers

with

its

PAWDS

and will

continue

aggressively

exploring this

market. The

price of

each

PAWDS

built for

the US

Navy

currently

ranges between US$5 to 6 million and new US aircraft carriers

are built every five to seven years.

In addition to new navy vessels, PyroGenesis also sees a potential market in the retrofitting of existing ships. As of

March 2023,

the U.S.

Navy fleet

comprises approximately

240 active

in commission

ships, including

aircraft carriers.

The Company

believes some

or all

of these

existing aircraft

carriers may

be candidates

for retrofitting

their legacy

waste

management systems with a PAWDS.

Waste-to-Energy Market (PRRS)

Waste management is a large and

growing market on a global scale. The methods

of managing waste are shifting

from disposal towards recycling and

resource recovery.

Governments, industries, and society

in general are seeking more

sustainable waste management

practices that have

lower environmental impacts

than traditional solutions

such as landfill

or incineration.

Just as

responsible waste

treatment systems

are seen

as an environment

and societal

priority,

solutions that

are

capable of

transforming waste

into energy

has also

seen major

growth on

a global

scale. Recent

research identified

the

global waste to energy

market as valued in excess of

US$35 billion in 2019, with

projections that it will

exceed US$50 billion

by 2027.

PyroGenesis looks to continue to expand its business in this fast-growing area. The Company believes its PRRS is

already a viable and economic alternative for small capacity projects compared to conventional

incinerators.

The system is

well suited for the

decentralized treatment of industrial, hazardous, and

clinical waste. As such, in

the short to medium

term,

the

Company

targeting

markets

that

are

readily

accessible

for

plasma

waste-to-energy

conversion,

which

include

industrial, hazardous, non-hazardous remote communities, military bases, and

medical wastes. In the medium

to long term,

the Company also intends to target the municipal solid

waste market with larger system capacities of up to 100

tons/day.

PyroGenesis is currently engaged in pilot testing of its PRRS technology with two

Canadian clients. The aim of the

testing is to

establish the design

basis for larger

commercial systems

that will be

proposed to the

customers following

the

end of pilot

testing. PyroGenesis

is working with

one such client,

Aluminerie Alouette,

to create a

plasma solution to

treat

the

hazardous

solid

wastes

produced

this

industrial

client.

The

Aluminerie

Alouette

project

aims

not

only

produce

energy rich

syngas that

the client

will use

to reduce

its consumption

of purchased

fuels, but

also to

generate a

valuable,

safe material from the client’s waste.

End-of-Life Refrigerant Destruction (SPARC)

The

international

community

has

long

recognized

that

certain

substances

have

been

having

harmful

effects

ozone depleting substances (“ODS”) as well

as impacting climate change. These substances

often attack the ozone layer,

the protective shield

that covers

earth’s atmosphere

and protects its

ecologies and inhabitants

from harmful solar

UV and

UVC

radiation.

They

also

can

lead

the

emission

GHGs,

which

alters

the

global

climate.

Refrigerants

used

the

refrigeration

cycle

of air

conditioning

systems

and

heat

pumps

have

played

a significant

factor

both.

CFC

and HCFC

refrigerants are potent ODSs, while CFC, HCFC, and HFC

refrigerants all contribute to GHG emissions.

While emissions

from ODS

have started

to fall

and the

ozone layer

slowly heal,

there remains

an active

need for

safe

and

effective

means

controlling

and

disposing

these

harmful

refrigerants.

PyroGenesis’

SPARC

system

uses

plasma technology

to destroy

CFCs, HCFCs

and HFCs,

including from

end-of-life cooling

apparatus. These

gases must

typically be destroyed when they cannot be recycled.

https://www.nvr.navy.mil/NVRSHIPS/FLEETSIZE.HTML.

https://www.alliedmarketresearch.com/waste-to-energy-

market#:~:text=The%20global%20waste%20to%20energy,4.6%25%20from%202020%20to%202027.

Table

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PyroGenesis

continues

explore

potential

applications

for

the

SPARC

technology,

especially

markets

with

limited conventional incineration capacity.

An example is the project initiated with The Trust for the Destruction of Synthetic

Refrigerants,

New

Zealand

government-mandated

organization,

which

the

SPARC

system

will

used

destroy

refrigerants and assist New Zealand in its ambitious goals

to reduce synthetic gas emissions.

Plasma Torch Market

A plasma

torch

is a

device

for generating

directed

flow

plasma

and,

as indicated

numerous

parts

this

document,

can

used

several

applications.

PyroGenesis’

plasma

torches

are

used

in,

among

other

things,

waste

treatment systems

(waste gasification

and vitrification),

its PAWDS

and PRRS

systems,

thermal spray

(plasma spray)

advanced materials production, and metallurgical applications.

Plasma torches can

be effective

and relatively

safe replacements

to conventional

fuel or gas

burners in industrial

furnaces. For

example, customers

use PyroGenesis’

patented pelletizing

apparatus

to perform

the induration

of iron

ore

concentrate pellets in

a tunnel

furnace heated by

plasma torches. By

using PyroGenesis’ electricity powered

plasma torches

instead of

burning natural

gas, heavy

oil, or

pulverized

coal to

power burners,

the generation

of harmful

GHGs

(notably

carbon dioxide) is greatly reduced relative to conventional iron ore

pelletizing processes.

The Company

sees excellent

potential for growth

in the

sale of plasma

torch systems.

The global

iron ore

pellets

market alone

already exceeds

US$45 billion

and the

demand for

iron ore

pellets is

expected to

near 540,000

kilotons by

2027.

To date, PyroGenesis

occupies only a fraction of this market. But given the global appetite for more environmentally

sustainable and economically viable industrial solutions, the Company expects more new and existing customers to look to

refit existing burners with its plasma torch systems and

considers itself well placed to see growth in this area.

Systems for the Recovery of Aluminum and Other

Metal from Dross

Dross is a by-product of the smelting process for aluminum

and other metals. As described early in this document,

dross presents

both a challenge

and an opportunity

for those in

the metallurgical

industry.

Dross is typically

composed of

both metal

and residue

and companies

want to

recover the

valuable metal

while treating

and/or disposing

of the residue,

which is usually contaminated.

Aluminum is one of the most popular metals in

the world. Global annual production of aluminum exceeds 65 million

metric tons

and, from

that aluminum

production, nearly

5 metric tons

of dross

is generated

annually.

While this

presents

exciting opportunities

for PyroGenesis,

it is

important to

note that

more than

half of

all aluminium

is produced

in China,

market that the Company

does not do much

business in and which

is traditionally complicated

to enter (for reasons

which

include

relative

lack

intellectual

property

protection,

restricted

market

conditions,

and

sometimes

politicized

commercial environment).

Over the past several years,

PyroGenesis has shifted its

DROSRITE marketing strategy from

a model focused on

selling

equipment

one

which

DROSRITE

offered

service

via

tolling

agreement.

tolling

arrangement,

PyroGenesis would build, own and operate the DROSRITE system and associated equipment for the aluminum smelter on

the smelter plant location. Although tolling revenues can vary widely

depending on the sector and geographic location, this

tolling model offers PyroGenesis the opportunity to

create recurring revenues.

Because the DROSRITE technology not only

allows users to recover valuable metal

but also treat dross and

create

valuable residues, PyroGenesis has the

opportunity to become a leader

as an onsite dross processor

that delivers a zero-

landfill/reduced carbon solution.

Production of High Purity Silicon Metals, Nano Powders and

Nanowires

Solar Industry

Solar photovoltaic (PV) systems have grown at a

tremendous rate. The International Energy Agency estimates that

Solar PV generation increased by a

record 179 TWh (up 22%)

in 2021 to exceed 1

000 TWh and already accounts for

3.6%

Iron Ore Pellets Market Size, Share & Trends Analysis Report By Product (Blast Furnace, Direct Reduced), By Trade (Captive,

Seaborne), By Region, And Segment Forecasts, 2020 – 2027. See https://www.grandviewresearch.com/industry-analysis/iron-ore-

pellets-market.

On trending technologies of aluminium dross recycling: A review, by Ankur Srivastava and Arunabh Meshram (March 2023). See

https://www.sciencedirect.com/science/article/abs/pii/S0957582023000113

Table

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of global

electricity

generation5. Solar

grade silicon

metal (SOG

Si), used

in manufacturing

solar cells,

is a

key material

needed to meet the growing demand for solar energy. Each new gigawatt of solar energy capacity requires 5,000 tonnes of

solar grade silicon metal and strong demand is expected to fuel

growth.

Battery Industry

Battery manufacturing is another

high-growth industry. The lithium-ion battery market size

is estimated to grow

from

US$44.2

billion

2020 to

US$94.4

billion

2025,

equivalent

compound

annual

growth

rate

16.4%.

Research

indicates that

replacing graphite

with nano

silicon powders

could allow the

manufacturing of

high-performance lithium-ion

batteries with the capability of delivering an almost

tenfold (10x) increase in anode capacity,

inducing a 20-40% gain in the

energy density of

the next generation

of lithium-ion batteries

Manufacturing of silicon

nano powders is

not yet commercially

feasible with selling prices of US$30,000/kg.

Production of Fuming Silica

Fumed

silica

(pyrogenic

silica)

white

microscopic

powder

with

high

surface

area

and

low

bulk

density.

Its

commercial applications encompass various industries including personal care, pharmaceuticals,

agriculture (food & feed),

adhesives, sealants, construction, batteries and automotive to name a few. Demand for fumed silica is growing but present

manufacturing processes are hindering its growth potential

Production of High Purity Spherical Metal Powders

The

global

metal

additive

manufacturing

(also

known

the

printing)

continues

see

strong

growth

and

expected to

continue to

expand. The

market size

reached US$

6.36 billion

in 2022

and is

expected to

reach US$

22.60

billion by 2030.

At present, PyroGenesis

focuses its additive

manufacturing sales and

marketing efforts on

titanium and its

alloys.

Titanium is a

highly sought-after material

in the aeronautical, biomedical,

and high-end automotive

industry due to its

high

strength, low density, high fracture toughness, excellent corrosion resistance and superior biocompatibility. Titanium

is also

a high margin

material (in part

because of its

attributes and desirability).

PyroGenesis will consider

additional high margin

materials to maximize the potential of its NEXGEN technology.

While plasma atomized powders can be of a higher

quality than gas atomized powders, their widespread

adoption

has so far been limited

by their higher price.

In addition to PyroGenesis,

some of the key

players in the making

of additive

manufacturing powders through plasma

atomization are 6K Additive,

Tekna

Advanced Materials, and AP&C,

which is part

of GE. With its

NEXGEN technology,

PyroGenesis aims to

gain a competitive advantage

in the market by

producing high-

quality powder by

plasma atomization

at rates comparable

to gas atomization,

all while maximizing

the yield of

powder in

the preferred size range for additive manufacturing.

PyroGenesis’ additive manufacturing sales

and marketing efforts are

done on an international footing.

Through an

exclusive

distribution

agreement,

Aubert

Duval

supports

PyroGenesis’

sales

the

European

market.

PyroGenesis

continues

its

own

sales

efforts

the

North

American

and

Asian

markets

and

frequent

discussions

with

potential

customers,

including

well-established

aerospace

companies.

PyroGenesis

draws

its

plasma

torch

and

powder

production expertise to design and develop its own torches

and equipment for additive manufacturing.

Renewable Natural Gas

The biogas industry

is well established

on a

global level and

remains strong in

North America. Investments

in biogas

production and purification represent approximately $20 billion.

There are many RNG plants in operation or in development

and the market for RNG purification remains highly competitive.

Solar PV Report, by Piotr Bojek (September 2022). See https://www.iea.org/reports/solar-pv

Markets and Markets: “Lithium-Ion Battery Market – Global Forecast to 2025”.

Chemical Engineering News: “In the Battery Materials World, the Anode’s Time Has Come”, Volume

97, Issue 14 (2019).

HPQ-Silicon Resources Inc.: Innovative Silicon Solutions, 2020.

https://hpqsilicon.com/press-release/hpq-silicon-and-pyrogenesis-sign-an-agreement-to-develop-a-new-environmentally-friendly-

process-to-manufacture-fumed-silica/

“Metal 3D Printing Market Size to Hit $22.60 Billion by 2030”, by Grand View Research, Inc. (September 13, 2022). See:

https://www.prnewswire.com/news-releases/metal-3d-printing-market-size-to-hit-22-60-billion-by-2030---grand-view-research-inc-

301623035.html

Table

of Contents

6.6.

Growth Strategy

As interest in the Company’s products and services

has increased and the variety of uses for its core technologies

has

expanded,

the

Company

has

evolved

its

strategy

concentrate

its

solution

set

under

three

categories.

These

categories represent economic drivers that are key to

global heavy industry:

Energy Transition & Emission Reduction:

•

fuel

switching,

utilizing

the

Company’s

electrically

powered

plasma

torches

and

biogas

upgrading

technology to help reduce fossil fuel use and greenhouse

gas emissions.

Commodity Security & Optimization:

•

recovery of viable metals, and optimization

of production to increase output, to

maximize raw materials and

improve availability of critical minerals.

Waste Remediation:

•

safe destruction of

hazardous materials, and

the recovery and

valorization of underlying

substances such

as chemicals and minerals.

Currently,

within

each

category

the

Company

offers

several

solutions

different

stages

leading

commercialization, including the partial list in the diagram

below:

Going forward,

the Company’s

efforts will

be focused

around helping

customers overcome

challenges within

this

spectrum. More

information

can be

found on

each of

these solutions

and the

markets in

which they

operate above

(see

“Products and Services” and “Markets and Opportunities”)

Levering off its expertise in ultra-high temperature industrial processes, the Company typically aims to introduce its

products to markets by selling to, or partnering with,

industry-leading companies. These industry leaders not

only bring the

credibility sought when introducing new

technology but also valuable insight into

the market and potential

customers as well

as important market

feedback. This corporate

strategy of

leveraging off

these strategic partnerships

seeks growth

geared

at (i) broadening the customer base and (ii)

increasing sales to existing customers. Each of the Company’s existing product

lines has been, or

is in the process

of being, vetted or

adopted by industry

leaders. The Company

also seeks eco-friendly

business, primarily targeting offerings that reduce GHGs as opposed

to those who do not. As

part of its growth strategy, the

Company

will

also

selectively

consider

opportunities

broaden

and

enhance

its

product

and

market

scope

through

acquisitions.

6.7.

Employees

The Company had, as of December

31, 2022, 107 part-time and

full-time employees. Pyro Green-Gas

has 9 part-

time and full-time employees.

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The Company prides

itself in hiring

talented individuals

with a complementary

mix of professional

experience and

industry

knowledge.

The

Company

continues

develop

working

environment

wherein

everyone

valued

for

their

contribution

the

team

and

rewarded

for

their

accomplishments.

The

Company

believes

that

has

one

the

highest

concentrations of plasma expertise under one roof in the world. As of December 31, 2022, all of the Company’s employees

were non-unionized.

6.8.

Facilities

The headquarters of the Company

are located at 1744 William

Street, Suite 200, Montréal, Québec,

Canada, H3J

1R4

leased

premises,

which

are

leased

from

the

Pascali

Trust,

party

which

Peter

Pascali,

the

Chief

Executive Officer of the

Company,

is a trustee, officer

and beneficiary.

See “Directors and Executive

Officers - Conflicts

Interest”.

The Company operates two manufacturing facilities, one facility which is 40,902 sq. ft. (3,800 m2) and is located at

5655 Philippe-Turcot,

Montréal, Québec,

Canada, H4C

3K8 (the “Turcot

Facility”) and

the second

facility which

is 31,632

sq.

ft.

(2,939

m2)

and

located

9371

Wanklyn

Street,

LaSalle,

Québec,

Canada,

H8R

1Z2

(the

“Wanklyn

Facility”).

These facilities are used

to manufacture systems, produce metal

powders, and host various

pilot systems for demonstration

and testing, as well as to provide spare parts to the Company’s

existing client base.

The

Company

leases

the

Wanklyn

Facility.

Although

the

Company

continues

pay

rent

pursuant

lease

agreement for the Turcot

Facility,

it exercised its contractual

option to purchase the

property in 2022. The

exercise of said

option

and

the

ownership

the

Turcot

Facility

are

the

subject

legal

proceedings

described

below

(see

“Legal

Proceedings”).

The Company’s subsidiaries Pyro Green-Gas, Air Science

Technologies

Private Limited and Air Science

Italia S.r.l.

lease office premises in Montreal (Québec, Canada),

India and Italy,

respectively.

6.9.

Distribution Methods

The

Company

sells

its

products

and

systems

primarily

through

direct

sales

its

own

internal

sales

team.

The

marketing of the Company’s products is provided

by its internal sales and marketing group located

in Montréal, Canada.

Under a mutual exclusive agreement with Aubert &

Duval, PyroGenesis supplies plasma atomized titanium powder

to Aubert & Duval for distribution to the additive

manufacturing market in Europe. In addition, Drosrite

International has the

right to

manufacture,

market,

sell

and

distribute

DROSRITE

systems

and

the

DROSRITE

technology

the

Kingdom

Saudi Arabia and certain other countries in the Middle

East, on an exclusive basis. See “Directors and

Executive Officers -

Conflicts of Interest”.

The business

of the

Company is

neither cyclical

nor seasonal.

The Company’s

products have

long sales

cycles,

which are generally unaffected by seasonal variations.

The Company’s agreements are

typically for the

sale of equipment. The

Company gets paid on

milestone payments

that reflect progress on the projects. Usually,

the Company tries to also obtain advance payments. For the sale of powders

and parts, the Company generally invoices and gets paid

upon delivery.

6.10.

Intellectual Property and Research and Development

The intellectual property and proprietary rights of

PyroGenesis as well as its research and development

efforts are

important

its

business.

Considering

the

time

and

investment

required

develop

new

products

and

obtain

marketing

authorization,

the

Company

places

considerable

importance

protecting

its

research

findings,

trade

secrets

and

technologies.

Intellectual Property

efforts

secure,

maintain,

and

protect

its

intellectual

property,

proprietary

rights

and

exclusive

technology,

PyroGenesis

relies

combination

patents,

trademarks,

trade

secrets,

and

other

rights

well

licenses,

non-

disclosure agreements, and various other contractual arrangements. Nothing, however,

can guarantee that the Company’s

protective measures are sufficient to prevent illicit or wrongful appropriation or misuse of its technology or the development

of the same or similar technology by a third part

Table

of Contents

Tradenames and Trademarks

PyroGenesis uses

the following

tradenames and trademarks

in connection

with the

sale of

its services

and products,

some of which are registered:

●

PYROGENESIS

●

PYROGENESIS ADDITIVE

●

PYROGENESIS ALUMINUM

●

PYRO GREEN-GAS

●

AIRSCIENCE TECHNOLOGIES

●

NEXGEN

●

DROSRITE

●

PUREVAP

●

SPARC

●

APT

●

APT-HP

●

RPT

●

MINIGU

●

SPT

●

PAWDS

●

PACWADS

●

PPRS

●

PAGV

●

AVITA

The tradenames and logos are used

everywhere the Company does business and the

common law trademarks are or have

been used

in connection

to the

sale of

specific products.

In addition,

PyroGenesis has

registered trademarks

or filed

for

registered

trademark

protection

the

following

jurisdictions:

Australia,

Brazil,

Canada,

China,

European

Union,

United

Kingdom, Indonesia, Israel,

India, Japan,

Korea (Republic

of), Mexico, New

Zealand, Russian

Federation, Turkey,

United

States and Vietnam.

Patents

As of March 1, 2023, the

Company owned a total of

148 patents (32 granted,

116 pending)

relating to its products

and processes.

Research & Development

The

Company’s

competitive

strategy

includes

strong

innovation

culture

and

long-standing

commitment

performing research and development.

The Company’s research

and development projects in various

areas, including but

Table

of Contents

not limited

to, the

production

of metallic

powders and

the development

of plasma

torches, are

performed and

conducted

internally out of its Montréal facility.

February

27,

2023,

the

Company

employed

twelve

engineers,

scientists

and

technicians

who

are

fully

dedicated to research and development projects. Separately, the Engineering and Process Startup and Optimization teams

are also involved

in research

and development

projects. Most

research and

development projects

are funded

by external

customers or government

grants and are

initiated to respond

to a specific

customer need. Follow

-on work and

equipment

sales can often result from these initial

research and development projects. Research and development projects are mainly

focused on product extension.

Internal research and

development expenses vary

widely from year to

year and depend on

Company priorities.

6.11.

Environmental Protection

The Company currently has active permits, including from the City

of Montréal, to carry out manufacturing activities

at the Wanklyn Facility and conduct research

and development and operate production systems at the

Turcot Facility.

The Company usually needs to

apply for a new permit each time

a new project involving testing occurs.

There are

no costs to these permits except the time required to

prepare the documentation for the City of Montréal. The time to

obtain

a permit is usually between two and four months.

6.12.

Foreign Operations

The Company, through its subsidiaries Air

Science Technologies Private Limited and Air Science

Italia S.r.l., carries

out operations in

India and Italy, respectively. The Company is in

the process of developing

a European operational strategy

to produce titanium metal powders

on the European continent. The

Company continues to consider expanding its

corporate

footprint in other jurisdictions, including the United States.

6.13.

Competition

PyroGenesis competes with

a substantial number

of companies in

the industries in

which it operates,

some of which

have greater technical and financial resources.

There can be no assurance that such

competitors are not already devoting

(or will not

devote in the

future) substantially

more resources

to the development

and marketing

of products

and services

that compete

with

those

the Company

or that

new

or existing

competitors

will

not enter

the

various

markets

in which

PyroGenesis is

active. There

can be

no assurance

that competitors

will not

develop new

and unknown

technologies with

which

the

Company

may

have

difficulty

competing.

Furthermore,

failure

remain

cost

competitive

may

result

PyroGenesis losing business to its competitors.

For

example,

the

Company

faces

competition

from

Europlasma

the

waste

destruction

and

waste-to-energy

systems markets, the Company faces competition from Altek, a division of Harsco Corp., in the systems for the recovery of

aluminum and

other metal

from dross

market, and

the Company

faces competition

from AP&C,

a GE

Additive company,

and Tekna,

a portfolio company

of Arendals Fossekompani

ASA, in the

production of high

purity spherical

metal powders

market.

Several companies

in the

world develop

and promote

thermal plasma

torches, most

notably Europlasma

S.A. in

France, Scanarc Plasma

Technologies

AB in Sweden,

Tetronics

Technologies

Ltd. in the

UK, Phoenix Solution

Company

in the USA, and Plazarium in Russia and Germany.

Dividends and Distributions

The Company has

not paid any

dividends, has no

policy on paying

dividends or distributions,

and has no

present

intention to pay dividends. The Company currently intends

to reinvest any earnings to fund the development

and growth of

its

business.

Any

future

payments

dividends

will

the

discretion

the

Board

and

will

depend

many

factors,

including, among other things, the Company’s

financial condition, current and anticipated capital

requirements, contractual

requirements, solvency tests imposed by applicable corporate

law and other factors it may deem relevant.

Description of Capital Structure

Table

of Contents

8.1.

Share Capital and Issued and Outstanding Shares

The sections

below describe some

of the

material terms of

the Common Shares

and the

number of

Common Shares

issued and outstanding. These descriptions are not

meant to be exhaustive and are

subject to, and qualified in their

entirety

by reference to, the terms and provisions of the Company’s

articles of incorporation (the “

Articles

”).

Description of Common Shares

The Company

is authorized

issue

unlimited

number

Common

without

par

value.

Subject

to the

rights,

privileges,

restrictions

and

conditions

attaching

any

preferred

authorized

the

future,

the

rights

the

holders of Common Shares, as a class, are equal in all respects

and include the following rights:

•

Voting: The right to vote at

any meeting of shareholders;

•

Dividends:

The

right

receive,

and

when

declared

the

directors

the

Company,

any

dividends

payable on such dates, for

such amounts and at such

place or places as the

Board may from time to

time

determine; and

•

Liquidation

Dissolution:

The

right

receive

the

remaining

property

the

Company

liquidation

dissolution.

Outstanding Common Shares

As at the date of this AIF,

there were 178,580,395 Common Shares issued and

outstanding.

8.2.

Stock Options and Warrants

The following table sets forth, as of the

date of this AIF,

the aggregate number of exchangeable securities

that are

outstanding.

Number of exchangeable

Number of listed

Description of Security

securities

Stock Options

(1)

9,815,500

Warrants

(2)

6,014,600

Notes:

(1)

Details

of stock

options outstanding:

(i) 300,000

stock options

exercisable at

a price

$0.51 until

July 3,

2023, (ii)

100,000 stock

options

exercisable at a price

of $0.51 until September

29, 2024, (iii) 100,000

stock options exercisable at

a price of

$0.45 until January 2,

2025, (iv)

2,195,500 stock options exercisable at a price of

$4.41 until July 16, 2025 (v) 50,000 stock options

exercisable at a price of $4.00 until October

26, 2025, (vi) 550,000 stock options exercisable

at a price of $8.47 until April

6, 2026, (vii) 200,000 stock options

exercisable at a price of $6.59

until June 1, 2026,

(viii) 100,000 stock options

exercisable at a price of

$6.70 until June 14,

2026, (ix) 100,000 stock

options exercisable at a

price of $5.04 until

October 14, 2026, (x) 1,920,000

stock options exercisable at a

price of $3.13 until December

17, 2026, (xi) 100,000 stock

options exercisable at a price

of $3.61 until December 30,

2026, (xi) 450,000 stock

options exercisable at a

price of $3.33 until January

3, 2027,

(xii) 400,000 stock options exercisable at a

price of $2.96 until April 5,

2027, (xiii) 1,500,000 stock options exercisable at

a price of $3.88 until

June 2, 2027, (xiv) 125,000 stock options exercisable

at a price of $2.14 until July 20, 2027, (xv)

1,625,000 stock options exercisable at a price

of $1.03 until January 2, 2028.

(2)

For more

details on

the share

purchase warrants

outstanding, please

refer to

the Company’s

audited consolidated

financial statements

and

related notes thereto for the year ended December

31, 2022.

Market for Securities

9.1.

Trading Price and Volume

The Common Shares are listed on the

TSX under the symbol “PYR”. The

following table sets forth, for the periods

indicated, the reported

high and low

prices and the

aggregate volume

of trading

of the Common

Shares on

the TSX. The

Common Shares are also

listed on the

NASDAQ since March 11, 2021, under the symbol

“PYR” and on

the Frankfurt (FRA)

exchange under the symbol “8PY”.

Table

of Contents

Period

High ($)

Low ($)

Average Daily

Trading Volume

January 2022

3.89

2.19

424,821

February 2022

3.90

2.20

402,998

March 2022

3.23

2.02

199,866

April 2022

3.13

2.30

219,418

May 2022

3.35

2.16

250,945

June 2022

3.89

2.30

284,496

July 2022

2.61

1.54

267,611

August 2022

2.42

1.74

194,559

September 2022

2.08

1.51

167,318

October 2022

1.68

0.94

324,916

November 2022

1.39

0.97

268,102

December 2022

1.14

0.84

221,204

9.2.

Prior Sales

The following table summarizes

the issuances of

unlisted securities of the

Company during the financial year ended

December 31, 2022.

Number of

Price

Securities

Per

Total

Date of Grant

Type of Security

Issued

Security

Consideration

January 3, 2022

Stock Options

450,000

3.36

n/a

April 5, 2022

Stock Options

400,000

2.96

n/a

June 2, 2022

Stock Options

1,500,000

3.88

n/a

July 13, 2022

Stock Options

125,000

2.14

n/a

October 19, 2022

Warrants

1,014,600

1.75

n/a

10.

Directors and Executive Officers

The Articles of the

Company provide for a minimum

of three directors and a

maximum of 15 directors. Each

director

holds office until the close of

the next annual general meeting of

the Company,

or until his or her successor

is duly elected

or appointed, unless his or her office is earlier vacated.

10.1.

Name and Occupation

The following table lists the names of the directors and executive officers of the Company as of the date of this AIF

and

their

province/state

and

country

residence,

their

positions

and

offices

held

with

the

Company,

their

principal

occupations during

the past

five years,

the date

on which

they first

became officers

or directors

of the Company,

and the

number

and

percentage

Common

which

beneficially

owned,

directly

indirectly,

over

which

control

direction is exercised, by each of them.

Table

of Contents

Name,

Positions

Committee

Director or

Principal

Number (and

Province/State

and Offices

(s) of the

Officer of

Occupation for the

Percentage) of

and Country

Held with

Board of

the

Previous Five Years

Common

the

Directors

Company

Shares Owned

Company

Since/Until

or Controlled

Peter Pascali

President

None

2006

President and Chief

Executive Officer of the

Company since 2006.

80,925,698

(1)

Chief Executive Officer

Chair of the Board of

Directors

(45.32)%

Québec, Canada

Pierre Carabin

Chief Technology

Officer & Chief

Strategist

None

2006

Chief Technology

Officer & Chief Strategist

of the Company since

2018. Previously, Chief

Technology officer from

2016 to 2018.

506,500

(0.28)%

Québec, Canada

Alan Curleigh

Independent Director –

Board of Directors

Chair of the Board of

Directors

2023 (Also a

Director and

Chair from

2010 until 2019

Corporate director (was

Chair of the Board of

Directors of the Company

from 2010 until 2019)

60,000

(0.03)%

Québec, Canada

Robert M. Radin

Lead Independent

Director – Board of

Directors

Member of the Audit

Committee

2012

President of Radin &

Associates Consulting,

LLC since 2011.

673,500

Chair of the

Compensation

Committee

Member of the

Nominating and

Corporate Governance

Committee

Member of the

Strategic Initiatives

Committee

(0.38)%

South Carolina, USA

Andrew Abdalla, CPA, CA

Independent Director –

Board of Directors

Chair of the Audit

Committee

2018

Senior Partner at

chartered accountancy

and business advisory

firm MNP LLP.

107,800

Member of the

Compensation

Committee

Member of the

Nominating and

Corporate Governance

Committee

(0.06)%

Québec, Canada

Dr. Virendra Jha

Independent Director –

Board of Directors

Chair of the

Nominating and

Corporate Governance

Committee

2019

Corporate director

100,000

Table

of Contents

Member of the

Compensation

Committee

(0.06)%

Québec, Canada

Rodayna Kafal

Vice President,

Investor Relations and

Strategic Business

Development

Officer since

2016

Vice President, Investor

Relations and Strategic

Business Development of

the Company.

17,407

Director – Board of

Directors

Director since

2020

(0.01)%

Québec, Canada

Nannette Ramsey

Independent Director -

Board of Directors

Member of the

Compensation

Committee

2021

Corporate director

1,000

Member of the

Nominating and

Corporate Governance

Committee

Chair of the Strategic

Initiatives Committee

(0.001)%

Florida, USA

Ben Naccarato

Independent Director –

Board of Directors

Member of the Audit

Committee

2021

Executive Vice President

and Chief Financial

Officer at Perma-Fix

Environmental

Services Inc.

350

Member of the

Compensation

Committee

Member of the

Strategic Initiatives

Committee

(0.0002)%

Georgia, USA

Andre Mainella

Chief Financial Officer

None

2021

Chief Financial Officer

since 2021

7500

Director of Consolidation

and Corporate

accounting, Cogeco

Communications Inc. until

2021

(0.004)%

Québec, Canada

Mark Paterson

General Counsel

None

2023

General Counsel since

2023

General Counsel of Tanet

Fintech Group Inc. from

2021-2022

Director - Legal Affairs of

Future Electronics Inc.

from 2010-2021

(0.00)%

Québec, Canada

Notes:

●

Mr.

Pascali

holds

66,642,941

Common

directly,

and

indirectly

holds

controls

(i)

7,251,000

Common

through

holding

company,

8339856

Canada

Inc.,

which

the

sole

shareholder,

(ii)

4,000,000

Common

Shares through

a foundation,

The

2 Percent

Solution

Foundation,

and

(ii)

3,031,757

Common

Table

of Contents

through the

Pascali Trust,

a family

trust of

which he

is a

trustee, officer

and a

beneficiary.

“Description of

Capital

Structure - Stock Options ”.

All

executive

officers

the

Company

are

full

time

employees

the

Company

and

none

are

independent

contractors.

As of the date of

this AIF, the directors and executive officers of the Company, as a group, beneficially own, directly

or indirectly, or exercise control or direction over,

an aggregate of 82,399,755 Common Shares representing 46.14% of the

issued and outstanding Common Shares.

10.2.

Biographies

The following

biographies provide certain

selected information in

respect of

the persons who

are serving

as directors

and executive officers of the Company:

Peter Pascali – President and, Chief Executive Officer

and Director

Mr. P.

Peter Pascali, after

graduating with an

MBA from McGill

University in 1983,

became an investment

banker

specializing in

mergers and

acquisitions and

public offerings.

He initially

worked for

the Bank of

Nova Scotia

and then,

1987,

joined

Westpac

Banking

Company.

1989,

joined

DeGeorge

Financial

Company

strategic

advisor.

Mr.

Pascali

has

been

with

the

Company

since

its

incorporation

2006

where

has

been

responsible

for

developing

the

business

strategy

and

marketing

focus

for

commercializing

the

Company’s

technologies

and

running

the

business.

Mr.

Pascali continues to develop the Company’s strategy and oversee the operational management as the President and Chief

Executive Officer.

In his leadership role, Mr.

Pascali spearheads the Strategic Management

Team

which is responsible for

the strategic planning and execution of the Company’s

business plans.

Alan Curleigh – Director and Chair of the Board of Directors

Alan Curleigh

has a

wealth

of experience

international

business,

capital

projects,

and board

governance.

For

many years

he was

a senior

executive and

Board member

of a

leading Canadian

engineering contracting

company.

Mr.

Curleigh subsequently served

as a

representative on multiple

corporate boards and

associations. Most notably, Mr. Curleigh

was

federally

appointed

Canada’s

International

Trade

Minister

Chair

the

Board

Directors

the

Canadian

Commercial Corporation,

a crown

corporation mandated

to support

the growth

of international

trade by helping

Canadian

exporters

gain

access

to,

and

negotiate

with,

foreign

government

procurement

markets

–

role

held

for

years.

Additionally, Mr.

Curleigh was Chair of the Audit Committee for Veterans

Affairs Canada, was the Chair of the Board of the

Canadian Manufacturers

and Exporters, Canada’s

largest industry

association, was a

board member and

treasurer of the

Canadian Exporters Association;

and a

Board Member for

NorthStar Trade Finance. Mr. Curleigh

has been a

visiting Faculty

Member at

the Directors

College, a

joint initiative

between The

Conference

Board of

Canada and

McMaster

University’s

DeGroote School

of Business

and Canada’s

premier school

of governance,

where he

has lectured

extensively on

Board

governance issues since

the school’s

inauguration. For his

many contributions to

leadership and business

in Canada, Mr.

Curleigh is the

recipient of numerous awards,

including the Queen Elizabeth

II Diamond Jubilee Medal

for dedicated service

to peers and country in building a stronger export sector

for Canada.

Robert M. Radin – Director,

Member of the Audit

Committee, Member of the

Nominating and Corporate Governance

Committee,

Chair of the Compensation Committee, and Member

of the Strategic Initiatives Committee

Robert M. Radin retired from

the U.S. Army in 2011

after serving for over 35

years and attaining the rank

of Major

General.

His

last

assignment

was

the

U.S.

Army

Assistant

Deputy

Chief

Staff,

G-4,

(Logistics),

the

Pentagon,

Washington,

DC. In

this position

he was

responsible for

policy development,

strategic planning

and budget

programming

for distribution,

logistics force structure,

readiness reporting, Army

pre-positions stocks, contingency

contracting and

support

of U.S. Army worldwide operations. Prior to

joining the Army Staff, he served as

the Commanding General of the U.S. Army

Sustainment Command

at Rock

Island, Illinois.

Other key

assignments include:

Deputy Chief

of Staff

for Operations

and

Logistics for the U.S. Army Materiel Command

from 2005 to 2007; Commanding

General of the Joint Munitions Command

from

2004

2005;

and

from

2003

2004

was

deployed

Kuwait

the

Commanding

General,

U.S.

Army

Materiel

Command-SWA and was responsible for support of U.S. land forces in Kuwait, Iraq, Afghanistan and Djibouti. After retiring

from the Army in

June 2011,

he founded Radin

& Associates Consulting,

LLC, a firm that

assists clients with

supply chain

related issues.

Mr.

Radin has

graduated from

the U.S.

Military Academy

at West

Point and

holds postgraduate

degrees

from the Florida Institute of Technology

and the National Defense University.

Table

of Contents

Dr. Virendra

Jha – Director,

Member of the Compensation

Committee,

and Chair of the Nominating

and Corporate

Governance Committee

Dr. Virendra Jha, member of the order

of Canada, has over 42

years of experience in the

Canadian Space Program

ranging from in-depth engineering work

to senior management positions in both

the private and the public

sectors. Dr. Jha

began his

space career

in 1972 when

he joined

the aerospace

group of

RCA Limited

Montréal, which

later became

Spar

Aerospace Limited. In 1988, he became the

Director of Engineering at Spar Aerospace

Limited. In 1991 Dr.

Jha joined the

Canadian Space Agency as

Director of the Space Mechanics

Group. In 1996, he

was promoted to the

position of Director

General, Space Technologies

Branch of the CSA. From 2003 till 2008, he was the

Vice-President responsible for Science,

Technology

and Programs

at the Canadian

Space Agency.

As Vice

President, Dr.

Jha provided strategic

direction, vision

and leadership to all

core technical sectors of

the Agency.

From November 2005 until

February 2006, Dr.

Jha also served

as the Acting President of the Canadian Space Agency.

He was Chief Engineering Adviser at the Canadian Space Agency

until his retirement in 2014.

Dr. Jha received his B. Tech. degree in Mechanical Engineering from the Indian Institute of Technology Delhi India,

his

Master’s

degree

Mechanical

engineering

from

McMaster

University,

Hamilton,

Canada,

and

his

Ph.D.

degree

Mechanical

Engineering

from

Concordia

University,

Montréal,

Canada

and

the

C.Dir.

(Chartered

Director)

Degree

from

McMaster

University,

Hamilton,

Canada.

Dr.

Jha’s

technical

contributions

Canadian

Space

Program

well

International

Space activities

have been

significant.

His leadership

and commitment

to the

profession

is reflected

by his

recognition and active participation in many groups, committees

and advisory boards.

Dr.

Jha currently

serves as

a director

on the

Board of

the Atomic

Energy of

Canada Limited,

a Canadian

federal

Crown corporation and Canada’s largest nuclear science

and technology laboratory.

Andrew Abdalla

– Director

Member of

the Compensation

Committee,

Member of

the Nominating

and Corporate

Governance Committee and Chair of the Audit Committee

Andrew Abdalla,

CPA,

CA, is

a partner

at MNP

LLP,

a leading

national accounting,

tax and

business

consulting

firm in Canada. Mr.

Abdalla brings to the Board

of Directors more than 20

years of strategic planning,

and tax advice, with

a specific focus on sales and income tax, acquisitions and divestitures, business valuations,

corporate reorganizations and

spinoffs. Mr. Abdalla

received his Chartered Professional Accountant

(CPA, CA)

designation in 1987. He holds a Bachelor

of Commerce and a graduate diploma in public accounting

from Concordia University in Montréal.

Rodayna Kafal – Director and Vice

President, Investor Relations and Strategic Business Development

Upon graduating

from McGill

University in

2009 (Bachelor’s

degree in

Chemical Engineering),

Ms. Kafal

took on

lead roles in process engineering at

the Natural Gas Technologies Centre in Montréal, Québec, where she was responsible

for

managing

number

high-level

projects.

Thereafter,

she

enrolled

two-year

graduate

program

Industrial

Engineering

and

Project

Management

École

Polytechnique

Montréal.

Ms.

Kafal

joined

PyroGenesis

with

strong

background

process

engineering,

combined

with

practical

experience

sales,

promotional

activities

and

business

relations. Ms.

Kafal has

been a

member of

PyroGenesis’ Strategic

Management

Group since

2016 where

she has

been

instrumental in providing input

into all aspects

of PyroGenesis’ growth and

represented the views of

the investor community.

As Vice President,

Investor Relations and

Strategic Business Development,

Ms. Kafal continues

to oversee PyroGenesis’

complete investor relations program, while managing the Company’s

marketing team.

Ben Naccarato – Director,

Member of the Compensation Committee, Member of the Audit Committee,

and Member

of the Strategic Initiatives Committee

Mr. Naccarato, CPA, CMA, is the Executive Vice-President and Chief Financial Officer at Perma-Fix Environmental

Services Inc., a NASDAQ-listed environmental

services company,

providing unique radioactive mixed and

industrial waste

management services. Mr.

Naccarato brings to the Board more

than 30 years of experience

in senior financial positions in

the environmental industry.

Mr. Naccarato

is a graduate

from the University

of Toronto

with a Bachelor

of Commerce and

Finance Degree as well

as being a Chartered Professional

Accountant and Certified Management Accountant (CPA, CMA).

Nannette

Ramsey –

Director,

Member

the

Compensation

Committee,

and

Chair

the

Strategic

Initiatives

Committee

Ms.

Ramsey

holds

undergraduate

degrees

Economics,

Engineering

and

MBA.

She

brings

process

engineering and machining and

materials expertise from Caterpillar

Tractor Company,

J.I. Case and more recently

served

as the

Site Manager

and Associate

Director

of Engineering

for Edgewood

Chemical

Biological Center’s

site at

the Rock

Table

of Contents

Island Arsenal

in Illinois.

She was

responsible for

strategic planning,

budgeting, industrial

base analysis,

engineering and

testing, quality assurance and information technology solutions

to a variety of customers.

Pierre Carabin – Chief Technology

Officer and Chief Strategist

Mr.

Pierre

Carabin,

Eng.,

has

over

thirty

years

experience

process

engineering

and

environmental

technologies. Throughout

his 23

years at

PyroGenesis,

he has

been instrumental

in the

development

of the

Company’s

various

technology

platforms.

the

inventor

co-inventor

than

one

hundred

pending

and

issued

patents

relating to high temperature chemical processes.

As Chief Technology

Officer,

he leads PyroGenesis’ engineering team in

the design and development of plasma systems and is also member of the Company’s Strategic Management Team

which

is responsible for the strategic planning and execution

of the Company’s business plan.

Prior

joining

PyroGenesis

1998,

Mr.

Carabin

worked

the

pulp

and

paper

industry

for

years,

notably

developing

paper

recycling

machinery.

Mr.

Carabin

holds

Master’s

degree

Chemical

Engineering

with

honors

from

McGill University,

and, to

date, he

has contributed

to more

than 50

technical communications

for various

journals and

technical conferences. Mr.

Carabin also volunteers

for the Air

and Waste

Management Association

(AWMA)

and Ecotech

Québec, the cleantech cluster in Québec.

Andre Mainella – Chief Financial Officer

Upon graduating from Concordia University,

Mr. Mainella has since then accumulated

over 20 years of experience

in accounting.

Andre began his

career at Raymond

Chabot Grant Thornton.

As a senior

audit manager,

he worked on

diverse

list

audit

and

non-audit

mandates

for

private

and

publicly-traded

companies.

His

broad

experience

includes clients in various business sectors such as

manufacturing, distribution, retail, real estate and airlines.

Mr. Mainella

had

the

opportunity

assist

the

implementation

accounting

standards,

initial

public

offerings

well

business

acquisitions and divestitures.

From 2013

2015,

Mr.

Mainella

occupied

the

role

finance manager

for the

Canadian

operations

Orica,

provider of

commercial explosives

and blasting

systems for

the mining

and construction

sectors.

Andre was

responsible

for the

financial information,

budgeting &

forecasting, in

addition to

advising on

new sales

contracts and

capital projects,

among others.

Subsequently,

Mr.

Mainella

joined

Cogeco,

telecommunications

and

media

company,

their

director

consolidation

and

corporate

accounting.

managed

the

activities

corporate

accounting,

shared

services,

and

the

consolidation of

the Canadian

and American

financial results.

Mr.

Mainella was

part of

the Cogeco

corporate team

for 6

years

and

contributed

various

manners

the

implementation

the

company’s

numerous

acquisitions,

enterprise

resource planning implementation, new accounting standards,

and involvement in the corporate insurance policies.

Mr.

Mainella

received

his

Chartered

Professional

Accountant

designation

2001.

holds

Bachelor

Commerce and a graduate diploma in public accounting

from Concordia University in Montreal.

Mark Paterson – General Counsel

Mark Paterson is a senior business lawyer with comprehensive corporate

and commercial experience, including in

senior in-house roles as

well as private practice.

He has an

extensive legal understanding in

a wide array of

areas, including

in contract negotiations,

M&A management, conflict

resolution, human resources,

and corporate and

regulatory compliance.

Prior

joining

PyroGenesis,

Mr.

Paterson

was

General

Counsel

for

Tenet

Fintech

Group,

publicly

traded

company

specialized in

innovative fintech

and AI

applications. From

2010 to

2021, he

served as

Director –

Legal Affairs

for Future

Electronics, a large, multinational distributor of electronic components. Before joining

Future Electronics, Mr. Paterson was

General

Counsel

and

Vice-President

Strategic

Alliances

for

Luxury

Retreats,

provider

high-end

vacation

accommodations.

He began

his

legal career

at Fasken,

one

of the

leading business

law firms

in Canada,

working in

its

corporate

law

department.

Mr.

Paterson

member

the

Quebec

bar

and

holds

BCL

and

LLB

degrees

from

McGill

University. He also

holds a B.A. from Bishop’s University.

10.3.

Cease Trade Orders, Bankruptcies,

Penalties or Sanctions

Except as

indicated below,

to the knowledge

of the Company,

no director

or executive

officer of

the Company

is,

the

date

this

AIF,

was

within

years

before

the

date

this

AIF,

director,

chief

executive

officer

chief

financial officer of any company (including the Company), that: (a) was subject

to a cease trade order, an order

similar to a

cease trade

order,

or an

order that

denied such

company access

to any

exemption under

securities legislation

(each an

Table

of Contents

“

Order

”) that was issued while the director or executive officer was acting in the capacity as director, chief executive officer

or chief financial officer, or (b) was subject to an Order that was issued after the director or executive officer ceased to be a

trustee, director,

chief executive

officer or

chief financial

officer and

which resulted

from an

event that

occurred while

that

person was

acting in

the capacity

as director,

chief executive

officer or

chief financial

officer.

As announced

on February

23, 2023

by the

Company,

the AMF

issued an

order suspending

a private

placement of

units of

the Company.

The AMF

alleged in the order that the Company did not satisfy all of the requirements

necessary to complete the financing under the

listed issuer financing exemption under Part 5A of National

Instrument 45-106 – Prospectus Exemptions.

the knowledge

of the

Company,

director

or executive

officer

of the

Company,

or a

shareholder

holding

sufficient number of securities

of the Company to

affect materially the

control of the Company,

(a) is, as at

the date of this

AIF,

or has been

within the

10 years

before the date

of this

AIF,

a director or

executive officer

of any company

(including

the

Company)

that,

while

that

person

was

acting

that

capacity,

within

year

that

person

ceasing

act

that

capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or

instituted

any

proceedings,

arrangement

compromise

with

creditors

had

receiver,

receiver

manager

trustee

appointed to hold its assets; or (b) has, within

the 10 years before the date of this

AIF,

become bankrupt, made a proposal

under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement

or compromise

with creditors,

or had a

receiver,

receiver manager

or trustee

appointed to

hold the

assets of

the director,

executive officer or shareholder.

the knowledge

of the

Company,

director

or executive

officer

of the

Company,

or a

shareholder

holding

sufficient

number

securities

the

Company

affect

materially

the

control

the

Company

has

been

subject

any

penalties

sanctions

imposed

court

relating

securities

legislation

securities

regulatory

authority

has

entered into

a settlement

agreement with

a securities

regulatory authority,

or has

been subject

to any

other

penalties or

sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable

investor making

an investment decision.

10.4.

Conflicts of Interest

There are

potential

conflicts

of interest

which

the

directors

and officers

of the

Company

may be

subject

connection

with

the

operations

the

Company.

particular,

the

Pascali

Trust,

which

Peter

Pascali,

the

Chief

Executive

Officer

the

Company,

trustee,

officer

and

beneficiary

the

landlord

under

the

lease

regarding

the

Company’s corporate headquarters. See “Business of the

Company - Facilities” and “General

Development of the Business

Year

Ended

December

31,

2020

Corporate

Developments

and

Financings”.

Over

the

past

three

completed

financial

years, P.

Peter Pascali has also participated in financings of the Company, and he may continue to do so in the future. See

“General Development

of the

Business -

Year

Ended December

31, 2020

- Corporate

Developments and

Financings”. In

addition

being

the

Chief

Executive

Officer

the

Company,

Peter

Pascali

also

controlling

shareholder

the

Company. See “Risk

Factors - Influence of the Significant Shareholders”.

On October 9,

2019, Drosrite International, a

US-based private company owned

by Alex Pascali,

the son of

P. Peter

Pascali, entered

into the

Dross Processing

Service Agreement

with Radian

Oil &

Gas Services

Company,

an oil

and gas

services company operating in

the Middle East (the

“Dross Processing Service Agreement”). The

Dross Processing Service

Agreement

was

structured

as a

“BOOT”

agreement

(build,

own,

operate

and

transfer)

having

20-year

term

and

using

PyroGenesis’

DROSRITE

technology.

The Dross

Processing

Service Agreement

provides that

Drosrite

International

will

manufacture and

deliver to

Radian Oil

& Gas

DROSRITE TPY

systems which

will be

installed at

the aluminium

smelting

facility

Ma’aden

Aluminum

Company

located

Ras

Al-Khair,

Saudi

Arabia.

addition,

Drosrite

International

will

oversee the

installation of

the systems

at the

Ras Al-Khair

facility.

Drosrite International

will also

supply spare

parts over

the 20-year

duration of

the

Dross Processing

Service Agreement

and be

entitled to

receive

an annual

royalty.

The

total

value of

the

project

exceeds

US$17 million.

The amount

remaining

to be

collected

is approximately

US$9

million of

the

initial US$17 million purchase order with remaining billings of roughly US$1 million to be issued. There is also an additional

approximately

US$450,000

collected

for

transportation,

storage,

and

insurance

fees.

See

also

the

Company’s

consolidated

financial

statements

and

notes

for

the

year

ended

December

31,

2022,

and

the

management’s

discussion and analysis thereon.

In connection with the Dross Processing Service Agreement between

Drosrite International and Radian Oil & Gas,

the Drosrite International Exclusive

Agreement was entered into

between PyroGenesis and Drosrite

International on August

29, 2019, under which Drosrite International received the required rights from PyroGenesis

to perform its obligations under

its

agreement

with

Radian

Oil

Gas.

Under

the

Drosrite

International

Exclusive

Agreement,

PyroGenesis

will

receive

payments

equal

the

payments

received

Drosrite

International

under

its

Dross

Processing

Service

Agreement

with

Radian Oil & Gas.

Table

of Contents

The sole

director,

officer,

and shareholder

of Drosrite

International is

Alex Pascali,

an employee

of the

Company

and

the

son

Peter

Pascali,

Chief

Executive

Officer

the

Company.

Drosrite

International

does

not

receive

any

management, administration or other fee from the Company.

Drosrite International is, on an accounting basis, a subsidiary

of the Company and

not a client, as

under applicable accounting standards the

Company is considered to effectively control

Drosrite

International.

The

Company

has

indemnify

Drosrite

International

for

any

claims

and

liabilities

incurred

connection with

the Drosrite

systems. The

Company’s

Drosrite technology

was protected

by patents

until 2017

and new

patent applications pertaining to the technology have been

filed before 2017, which patent applications are pending.

To the best of

the Company’s knowledge,

other than

as disclosed

in this

AIF, there are no

known existing

or potential

conflicts of interest among the Company, the directors and officers of the Company or other members of management or of

any proposed

promoter,

director,

officer

or other

member

management

as a

result of

their

outside

business

interests

except that

certain of the

directors and officers

serve as directors

and officers of

other companies, and

therefore it is

possible

that

conflict

may

arise

between

their

duties

the

Company

and

their

duties

director

officer

such

other

companies.

A director who has a

material interest in a matter

before the Board or any

committee on which he

or she serves is

required to disclose such interest as soon as the director becomes aware of it. In situations where a director has a material

interest

matter

considered

the

Board

any

committee

which

she

serves,

such

director

may

required to

absent himself

or herself

from the

meeting while

discussions and

voting with

respect to

the matter

are taking

place. Directors are also required

to comply with the relevant

provisions of applicable corporate

laws regarding conflicts of

interest. Under the CBCA, directors who have a

material interest in any person or entity that is a party

to a material contract

or a proposed material contract

with the Company are required under

the CBCA, subject to certain

exceptions, to disclose

that

interest

and

generally

abstain

from

voting

any

resolution

approve

such

contract.

addition,

directors

and

executive officers are required to act honestly

and in good faith with a view to the best interests of the

Company.

10.5.

Board Independence

The Board believes that sound

corporate governance practices

are essential to the effective,

efficient and prudent

operation of the Company and to the enhancement of

shareholder value.

Under National Instrument

58-101 - Disclosure

of Corporate Governance

Practices, a director

is considered to

independent if the director is independent

within the meaning of section 1.4

NI 52-110

. Pursuant to section 1.4 of NI

52-

110, an independent

director is a director who is free

from any direct or indirect relationship

which could, in the view of

the

board, be reasonably expected to interfere with a director’s independent judgment. Based on information provided by each

director concerning their background, employment

and affiliations, the Board has

determined that, of the eight directors on

the Company’s

Board, P.

Peter Pascali

and Rodayna

Kafal are

not independent

under section

1.4 of

NI 52-110

because

they are executive officers of the Company.

11.

Audit Committee and Other Committees

11.1.

Audit Committee

The

Company’s

Audit

Committee

responsible

for

assisting

the

Board

monitoring

the

performance

management in ensuring that

the Company is operating

in an ethical

manner and encouraging management

to demonstrate

a strong commitment to integrity.

The Audit Committee is also responsible for providing assistance to the Board in fulfilling

its financial reporting and

control

responsibilities

the

shareholders

the

Company

and

the

investment

community.

The

Audit

Committee’s

primary responsibilities in this regard are to: (i) oversee the accounting and financial reporting process of the Company and

the audit of its financial statements; (ii) monitor the Company’s financial reporting process and internal control systems; (iii)

review and

appraise

the audit

activities of

the Company’s

independent

auditors;

(iv) meet

periodically

with

management

and with the independent auditors; and (v) assess the relevance and reliability of the Company’s financial reports to ensure

they accurately portray the underlying economic circumstances

and financial performance of the Company.

Audit Committee Charter

The

Audit

Committee’s

mandate

promote

and

ensure

that

the

Company

complies

with

high

standards

financial reporting,

risk management

and ethical

behavior.

The Audit

Committee Charter

is attached

hereto as

Schedule

“A”.

Table

of Contents

Composition of the Audit Committee

The Audit Committee

is comprised of

three directors,

Messrs. Abdalla (Chair

of the Audit

Committee), Naccarato,

and Radin.

Each of

the three

members meets the

independence requirements for

members of

the Audit

Committee pursuant

to NI 52-110,

NASDAQ Rule

5605 and Rule

10A-3 under the

Securities Exchange

Act of 1934,

as amended.

Each of the

three members is financially literate within the meaning of NI 52-

0 and NASDAQ Rule 5605, has an understanding of the

accounting

principles

used

prepare

financial

statements

and

varied

experience

the

general

application

such

accounting principles, and

has an understanding

of the internal

controls and procedures

necessary for financial

reporting.

For additional details regarding the

education and experience of each

member of the Audit Committee,

see “Directors and

Executive Officers”.

Pre-Approval Policies and Procedures

The

Audit

Committee

must

pre-approve

all

non-audit

services

provided

the

Company

its

external

auditors.

External Fees by Audit Category

Fees incurred with the

auditors for audit and

non-audit services in the

last two fiscal years

for audit fees are

outlined

in the following table.

Fees paid to RCGT LLP in Fiscal

Year ended December 31,

2022

Year ended December 31,

2021

Audit Fees

(1)

531,818

325,500

Audit-Related Fees

(2)

13,000

—

Tax

-Related Fees

(3)

—

9,975

All Other Fees

57,725

21,000

Total

Fees

602,543

356,475

Notes:

(1) “Audit

Fees” include

fees necessary

to perform

the annual

audit of

the Company’s

consolidated financial

statements,

and for services that are normally

provided in connection with statutory

and regulatory filings or engagement

related to the

annual consolidated financial statements.

(2)

“Audit-Related

Fees”

include

translation

services

and

fees

for

accounting

consultations

matters

reflected

the

financial statements.

(3) “Tax

-Related Fees” includes fees for tax compliance, tax planning and tax advice. Tax planning and tax advice includes

assistance with tax audits and Research and Development

tax credits.

11.2.

Other Committees

addition

the

Audit

Committee,

the

Board

has

established

three

other

standing

committees,

namely

the

Nominating and Governance Committee, the Compensation

Committee, and the Strategic Initiatives Committee.

Nominating and Corporate Governance Committee

The Company’s

Nominating and

Corporate Governance

Committee consists

of four

directors, each

of whom

is a

person determined by

the Board to

be an independent

director, and

is charged with

reviewing, overseeing and

evaluating

the

Company’s

corporate

governance

and

nominating

policies.

The

Nominating

and

Corporate

Governance

Committee

comprises Dr.

Virendra Jha

(Chair), Andrew

Abdalla, Robert

M. Radin,

and Nannette

Ramsey.

The Board

has adopted

written

charter

setting

forth

the

purpose,

composition,

authority

and

responsibility

the

Nominating

and

Corporate

Governance Committee.

Table

of Contents

Compensation Committee

The Company’s Compensation

Committee consists of

five directors, each

of whom is a

person determined by

the

Board

independent

director,

and

charged

with

reviewing,

overseeing

and

evaluating

the

Company’s

compensation policies.

The Compensation

Committee comprises

Robert M.

Radin (Chair),

Andrew Abdalla,

Dr.

Virendra

Jha, Ben Naccarato and

Nannette Ramsey. The Board has adopted

a written charter setting

forth the purpose, composition,

authority and responsibility of the Compensation Committee.

Strategic Initiatives Committee

The Company’s

Strategic Initiatives

Committee consists

of three

directors, each

of whom

is a person

determined

by the Board to be an independent director and is charged with

assisting the Board by providing input to strategic decisions

and

their

implementation.

The

Strategic

Initiatives

Committee

comprises

Nannette

Ramsey

(Chair),

Ben

Naccarato

and

Robert M.

Radin. The

Board has

adopted a

written charter setting

forth the

purpose, composition, authority

and responsibility

of the Strategic Initiatives Committee.

12.

Risk Factors

The Company has identified below

certain significant risks relating to

the business of the

Company and the industry

in which

it operates.

The following

information

is only

a summary

of certain

risk

factors and

is qualified

in its

entirety by

reference to,

and must

be read

in conjunction

with, the

detailed information

appearing elsewhere

in this

AIF.

These risks

and uncertainties

are not the

only ones facing

the Company.

Additional risks

and uncertainties

not currently

known to the

Company, or that the Company currently considers immaterial, may also impair the operations of the Company. If any such

risks

materialize

into

actual

events

circumstances,

the

Company’s

assets,

liabilities,

financial

condition,

results

operations (including future

results of

operations), business and

business prospects, are

likely to

be materially

and adversely

affected. There is no assurance

that risk management steps

taken will avoid future loss due

to the uncertainties described

below

other

unforeseen

risks.

investment

the

Common

other

securities

the

Company

highly

speculative

and

involves

high

degree

risk.

Before

making

any

investment

decision,

prospective

investors

should

carefully consider all the information contained in this document

including, in particular,

the risk factors described below.

12.1.

Risks Related to the Company’s Business

and Industry

Operating Income (Loss) and Negative Operating Cash

Flow

The Company

has a

history

losses

and

negative

cash

flows.

The

Company’s

operations

have

not

generated

sufficient

earnings

and

cash

flows

date

result

consistent

profitability

positive

cash

flows.

For

the

year

ended

December 31,

2022, the

Company had

net losses

of $32,167.027,

cash flows

used in operations

of $11,128,885,

and an

accumulated deficit

of $93,384,858.

the extent

that the

Company has

net losses

and negative

operating cash

flows in

future periods, it may

need to allocate

a portion of its

cash reserves to

fund such negative

cash flows. The

Company may

also be required

to raise additional

funds through the

issuance of equity

or debt securities,

or otherwise. There

can be no

assurance that the Company will be able to generate positive cash flows from its operations, that additional capital or other

types of financing will be available when needed or that

these financings will be on terms favourable to the Company.

The Company’s ability to continue as a going

concern is dependent upon its ability in

the future to grow its revenue,

achieve

profitable

operations,

successfully

develop

and

introduce

new

products

and,

the

meantime,

obtain

the

necessary financing

to meet

its obligations

and repay

its liabilities

when they

become due.

While the

Company has

been

successful

securing

financing

the

past,

raising

additional

funds

dependent

number

factors

outside

the

Company’s control, and as such there is no assurance that it will be able to do so in the future. If the Company

is unable to

obtain sufficient additional financing,

it may have to curtail operations

and development activities, any of which

could harm

the business,

financial

condition and

results of

operations. In

addition, the

Company may

not generate

significant

gains,

and may suffer losses, from the value of its strategic

investments in the future.

Actual Financial Position and Results of Operations May Differ Materially from

the Expectations of the Company’s

Management

The

Company’s

actual

financial

position

and

results

operations

may

differ

materially

from

management’s

expectations. The

Company has

from time to

time experienced

changes in

its operating

plans and delays

in the timing

its plans. As

a result, the Company’s revenue,

net income and cash

flow may differ materially from

the Company’s projected

revenue, net income and cash flow. The process for estimating the Company’s revenue, net income and cash flow requires

the use of judgment in determining the appropriate assumptions

and estimates. These estimates and assumptions may be

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revised as additional information becomes available

and as additional analyses are

performed. In addition, the assumptions

used in planning may not prove to be accurate, and other factors may affect the Company’s financial condition

or results of

operations.

Revenue Risks

PyroGenesis

may

experience

delays

achieving

revenues,

particularly

with

plasma

gasification

projects

which

have a long

sales cycle. Revenues

may be delayed

or negatively

impacted by issues

encountered by the

Company or its

clients including:

●

unforeseen engineering and/or environmental problems;

●

delays or inability to obtain required financing, licenses, permits

and/or regulatory approvals;

●

supply interruptions and/or labour disputes;

●

foreign exchange fluctuations and/or collection risk; and

●

competition from other suppliers and/or alternative energy

solutions that are less capital intensive.

There is no assurance that the business of the

Company will perform as expected or that returns from the

business

will support the expenditures needed to develop it.

Concentration Risk

date, a

small number

of customers

have accounted

for a

majority of

PyroGenesis’ revenues.

As its

business

expands, the Company

expects that revenue

distribution will be

over a larger

number of different

customers. For

the year

ended December 31, 2022, sales

of PyroGenesis to its

two principal customers accounted for approximately

52% of its total

revenue. For

the year

ended December

31, 2021,

sales to

two principal

customers

accounted for

approximately 79%

PyroGenesis’

total

revenue.

The

loss

of,

reduction

in,

purchase

orders

anticipated

purchase

orders

from

PyroGenesis’ principal

customers could

have a

material adverse

effect

on its

business, financial

condition and

results of

operations.

Additionally,

one

PyroGenesis’

customers

unable

meet

its

commitments

PyroGenesis,

the

Company’s business, financial condition and results

of operations could be adversely affected.

result

the

Drosrite

International

Exclusive

Agreement

and

the

Dross

Processing

Service

Agreement,

significant

revenues

may

generated

by the

Company

from payments

made to

Drosrite

International

under

the Dross

Processing

Service

Agreement.

The

Company

will

longer

receive

payments

under

such

arrangement

the

Dross

Processing

Service

Agreement,

which

involves

third

party

foreign

jurisdiction,

terminated,

which

could

have

material adverse effect on the business, financial

condition and results of operations of the Company.

Technology Development and Manufacturing

Capability Risks

PyroGenesis recently expanded into new

areas of business and, as a result,

many of the Company’s products

are

at various

stages of

the development

cycle. The

Company may

be unable

to commercialize

such products,

or it

may be

unable

manufacture

such

products

commercially

viable

manner.

Whilst

management

confident

both

the

Company’s technology and in

its team of

experienced engineers, scientists and

technicians, management cannot know with

certainty

which

the

Company’s

products

will

commercialized,

when

any

such

products

will

commercialized,

whether any such products will be manufactured and distributed

profitably.

Additional financing and dilution

PyroGenesis may require additional financing. There

can be no assurance

that additional financing will be

available

to the Company when needed, or on terms acceptable to the Company.

PyroGenesis’ inability to raise financing to support

ongoing operations or

to fund capital

expenditures could limit

the Company’s growth and

may have a

material adverse effect

upon the Company.

The Company

does not

exclude raising

additional funds

by equity

financing. In

addition,

as of

the date

of this

AIF,

9,815,500 stock

options and 6,014,600

warrants are

currently issued

and outstanding.

The exercise

of stock

options

and/or warrants, as well as any new equity financings,

represents dilution factors for present and future shareholders.

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Reliance on Third Party Suppliers, Service Providers

Distributors and Manufacturers

The Company’s

direct and

indirect suppliers,

service providers,

distributors and

manufacturers

may elect,

at any

time,

breach

otherwise

cease

participate

supply,

service,

distribution

manufacturing

agreements,

other

relationships,

which

the

Company’s

operations

rely.

Loss

its

suppliers,

service

providers,

distributors

and

manufacturers

could

have

material

adverse

effect

the

Company’s

business

and

operational

results.

Further,

any

disruption

the

manufacturing

process

done

third

party

manufacturers

could

have

material

adverse

effect

the

business,

financial

condition

and

results

operations

the

Company.

The

Company

cannot

ensure

that

alternative

production capacity would

be available in

the event

of a disruption,

or if it

would be available,

that it could

be obtained on

favorable terms.

Manufacturing Facilities

The

vast

majority

the

Company’s

products

are

manufactured

its

two

manufacturing

facilities

located

Montréal,

Québec.

Accordingly,

the

Company

highly

dependent

the

uninterrupted

and

efficient

operation

its

manufacturing facility.

If for

any reason

the Company

is required

to discontinue

production at

its facility,

it could

result in

significant delays in

production of the

Company’s products

and interruption of

the Company’s

sales as it

seeks to resume

production. The

Company

may be

unable to

resume production

on a

timely basis.

If operations

at the

facility

were to

disrupted

result

equipment

failures,

natural

disasters,

fires,

accidents,

work

stoppages,

power

outages

other

reasons, the Company’s business, financial condition

and/or results of operations could be materially adversely

affected.

Sales Cycle and Fixed Price Contracts

PyroGenesis sales cycle is long and the signing of

new contracts is subject to delay,

over which the Company has

little control. The Company also enters

into sales contracts with fixed pricing,

which may be impacted by changes

over the

period of implementation. There is no assurance that delays or problems in fulfilling contracts with clients will not adversely

affect the Company’s activities, operating

results or financial position.

Reliance on Technology

PyroGenesis

depends

upon

continuous

improvements

technology

meet

client

demands

with

respect

performance and cost, and to explore additional

business opportunities. There can be no assurance

that the Company will

be successful in its

efforts in this regard or

that it will have

the resources available to

meet this demand. Whilst

management

anticipates that

its research

and development

efforts will

allow the

Company to

explore additional

business opportunities,

there

guarantee

that

such

business

opportunities

will

presented

realized.

The

commercial

advantage

the

Company will depend to a significant extent on the intellectual property and proprietary

technology of PyroGenesis and the

ability

the

Company

prevent

others

from

copying

such

proprietary

technologies.

PyroGenesis

currently

relies

intellectual property rights and

other contractual or proprietary

rights, including (without limitation)

confidential

procedures,

contractual

provisions,

licenses

and

patents,

protect

its

proprietary

technology.

PyroGenesis

may have to engage in

litigation in order to protect

its patents or other

intellectual property rights, or to

determine the validity

scope

the

proprietary

rights

others.

This

type

litigation

can

expensive

and

time

consuming,

regardless

whether or

not the

Company is successful.

PyroGenesis may seek

patents or

other similar

protections in

respect of

particular

technology; however, there can be no assurance that any future patent applications

will actually result in issued patents, or

that,

even

patents

are

issued,

they

will

sufficient

scope

strength

provide

meaningful

protection

any

commercial

advantage

the

Company.

Moreover,

the

process

seeking

patent

protection

can

itself

long

and

expensive. In the meantime, competitors may develop technologies that are similar or superior to PyroGenesis’ technology

or design around the patents owned by the Company, thereby adversely affecting the Company’s competitive advantage in

one or more of its areas of business. Despite the efforts

of the Company, its intellectual

property rights may be invalidated,

circumvented, challenged, infringed or

required to be licensed to others.

It cannot be assured that

any steps the Company

may take

to protect

its intellectual

property rights

and other

rights to

such proprietary

technologies that

are central

to the

Company’s operations will prevent misappropriation

or infringement of its technology.

Changes to Contracts

PyroGenesis

dependent

upon

its

ability

establish

and

develop

new

relationships

and

build

existing

relationships

with

current

clients.

The

Company

cannot

provide

assurance

that

will

successful

maintaining

advancing

its

relationships

with

current

clients

procure

additional

clients.

addition,

PyroGenesis

cannot

provide

assurance that its customers and the

end users of its products will

continue to provide the Company

with business, or that

existing customers

and end

users will

not seek

to renegotiate

or terminate

existing contracts

providing for

the sale

of the

Company’s products and

technology based on

circumstances on which

the Company is

not currently

aware. Any termination

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or amendment of

a contract under

which the Company

derives an important

portion of its

revenues, including

the Drosrite

International

Exclusive

Agreement

and

the

Dross

Processing

Service

Agreement,

and

any

adverse

change

the

relationship

of the

Company

with its

customers

and end

users, will

have an

adverse

effect

on the

Company’s

business,

financial condition and results of operations.

Sales to governments and governmental

entities are subject to specific

additional risks, such as delays

in funding,

termination of

contracts

or sub-contracts

at the

convenience

of the

government,

termination, reduction

or modification

contracts or sub-contracts in

the event of changes

in the government’s policies

or as a result of budgetary

constraints and

increased or unexpected costs resulting in losses or reduced

profits under fixed price contracts.

Foreign Exchange Exposure

PyroGenesis’ products

and services

are increasingly

being sold

in markets

outside of

Canada, whilst

most of

its

operating expenses

and capital

expenditures are

denominated in

Canadian dollars.

As a result,

the Company

is exposed

fluctuations

the

foreign

exchange

rates

between

Canadian

dollar

and

the

currency

which

particular

sale

transacted,

which

may

result

foreign

exchange

losses

that

could

affect

earnings.

Foreign

sales

are

predominantly

denominated in U.S. dollars. The Company has not to date sought to hedge the risks associated with fluctuations in

foreign

exchange rates.

Competition

The industry in which the Company

operates is competitive and PyroGenesis

competes with a substantial number

of companies which have

greater technical and

financial resources. There can

be no assurance that

such competitors will

not substantially increase the resources devoted to the development

and marketing of products and services

that compete

with those of

the Company

or that new

or existing

competitors will

not enter

the various

markets in which

PyroGenesis is

active. There

can be

no assurance

that competitors

will not

develop new

and unknown

technologies with which

the Company

may have difficulty

competing. Furthermore,

failure to

remain cost competitive

may result in

PyroGenesis losing

business

to its competitors.

The plasma

technology

PyroGenesis

competes

against

other

plasma

and

conventional

technologies.

Without

limitation,

the

demand

for

the

plasma

technology

PyroGenesis,

particularly

waste

destruction

and

waste-to-energy

systems, can be impacted by the commodity prices of the energy source used for the process and the price at which waste

is accepted by

landfills and

traditional waste

processing plants.

While the Company

believes that

demand for sustainable

waste management practices

that have

lower environmental impacts

than traditional solutions

such as landfill

or incineration

increasing,

the

high

flows

electricity

necessary

operate

the

waste

destruction

and

waste-to-energy

systems

PyroGenesis have an

impact on the

operational costs

of the Company’s

systems, and traditional

solutions may

constitute

lower-cost solutions, particularly if commodity prices (including

of oil and natural gas) are low or experience a decline.

Management and Key Personnel

PyroGenesis

depends

the

skills

and

experience

its

executive

and

management

team

and

other

key

employees.

The

Company

relies

heavily

its

ability

attract

and

retain

highly

skilled

personnel

competitive

environment. PyroGenesis may be

unable to recruit, retain, and

motivate highly skilled executives

and employees in order

to assist the Company’s

business, especially activities

that are essential to

the success of

the Company.

Failure to recruit

and retain

highly skilled

executives

and

employees

may adversely

affect

PyroGenesis’

business, financial

condition

and

results of operations.

Implementation of a Strategic Plan

PyroGenesis’ commercial strategy aims to leverage its products, consumables, and services whilst focusing on the

resolution of problems

within niche markets within

the industries served by

the Company.

There can be no

assurances as

to the

success

of the

Company’s

strategic

plan,

which

should

be considered

under

the risks

perspective

and

difficulties

frequently encountered by a developing business.

Adverse Decisions of Sovereign Governments

PyroGenesis

conducts

increasing

portion

its

business

internationally.

There

assurance

that

any

sovereign government, including Canada’s, will not establish laws or regulations that may be detrimental to the Company’s

interests or

that PyroGenesis

will continue

to have

access to

the regulatory

agencies in

the countries

in which

it sells

seeks

sell,

directly

indirectly,

its

products

and

services.

Governments

have,

from

time

time,

established

foreign

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exchange controls, which could

have a material adverse effect

on the Company’s business,

financial condition and results

of operations.

Risks Related to International Operations

A substantial

portion of the

Company’s sales

are made to

customers and

end users

outside Canada,

including in

the United States, the European Union and

the Middle East. The Company conducts

its international operations directly or

through distributors

or other

agents or

intermediaries, including

Drosrite International.

The Company

plans to

continue to

expand its international sales and marketing

efforts. International operations are subject

to a number of inherent risks, and

the Company’s future results could be adversely affected

by a number of factors, including:

•

unfavorable political or economic environments;

•

requirements

preferences

for

domestic

products

solutions,

which

could

reduce

demand

for

the

Company’s products;

•

differing existing or future regulatory and certification

requirements;

•

unexpected legal or regulatory changes;

•

greater difficulty in collecting accounts receivable

and longer collection periods;

•

difficulties in enforcing contracts;

•

any inability to effectively protect intellectual property;

•

tariffs

and

trade

barriers,

export

regulations

and

other

regulatory

and

contractual

limitations

the

Company’s ability to sell its products; and

•

potentially adverse tax consequences, including multiple and

possibly overlapping tax structures.

Fluctuations

in currency

exchange rates

could materially

adversely

affect

sales denominated

in currencies

other

than the Canadian dollar

and cause a reduction

in revenues derived from

sales in a particular country.

Financial instability

foreign

markets

could

also

affect

the

sale

the

Company’s

products

international

jurisdictions.

addition,

the

Company may be denied

access to its end

customers as a result

of a closing of

the borders of the

countries in which it

its

products are sold due to economic, legislative, political, military

and other conditions in such countries.

There can be

no assurance

that such factors

will not materially

adversely affect

the operations,

growth prospects

and sales of

the Company

and, consequently,

its results

of operations. In

addition, revenues

the Company earns

in other

jurisdictions may be

subject to taxation by

more than one

jurisdiction, which could materially

adversely affect the Company’s

earnings. Each of these factors could have an adverse effect on the Company’s business, financial condition and results of

operations.

Governmental Regulation

PyroGenesis is subject to a variety of federal, provincial, state, local and international laws and regulations relating

namely to

the environment,

health and

safety,

export controls,

currency exchange,

labour and

employment and

taxation.

These laws and regulations

are complex, change frequently

and have tended to become

more stringent over time. Failure

to comply with these

laws and regulations may

result in a variety

of administrative, civil and

criminal enforcement measures,

including assessment

of monetary

penalties, imposition

of remedial

requirements and

issuance of

injunctions as

to future

compliance. The Company

may be subject to

compliance audits by regulatory

authorities in the various countries

in which

it operates.

Government-funded Defense and Security Programs

Like most

companies that

supply products

and services

to governments,

the Company

is subject

to routine

audit

and investigation procedures

of government agencies.

These agencies may

review the Company’s

performance under its

contracts,

business

processes,

cost

structure,

and

compliance

with

applicable

laws,

regulations

and

standards.

The

Company’s incurred costs for

each year are

subject to audit

by government agencies, which

can result in

payment demands

related to costs

they believe

should be

disallowed. The

Company works

with governments

to assess

the merits

of claims

and

where

appropriate

reserve

for

amounts

disputed.

The

Company

could

required

provide

repayments

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governments, which may have a negative effect on its results of operations. Contrary to cost-reimbursable contracts, some

costs may not

be reimbursed or

allowed under fixed-price

contracts, which may

have a negative

effect on the

Company’s

results of operations if it experiences costs overruns.

Environmental Liability

PyroGenesis

subject

various

environmental

laws

and

regulations

enacted

the

jurisdictions

which

operates,

which

govern

the

manufacturing,

processing,

importation,

transportation,

handling

and

disposal

certain

materials used

in the

Company’s

operations. Management

believes that

it has

adequate procedures

in place

to address

compliance with current environmental laws and regulations. Furthermore, management monitors the Company’s practices

concerning the handling of environmentally hazardous materials. However,

there can be no assurance that the Company’s

procedures

will

prevent

environmental

damage

occurring

from

spills

materials

handled

the

Company

that

such

damage has not

already occurred.

On occasion, substantial

liabilities to third

parties may be

incurred. The Company

may

have

the

benefit

insurance

maintained

the

operator,

however

the

Company

may

become

liable

for

damages

against which it cannot adequately

insure or against which it

may elect not to

insure because of high costs

or other reasons.

The Company’s

clients are

subject to similar

environmental laws

and regulations,

as well as

limits on emissions

to the air

and discharges

into surface

and sub-surface

waters. While

regulatory developments

that may

follow in subsequent

years

could have

the effect

of reducing

industry activity,

the Company

cannot predict

the nature

of the

restrictions that

may be

imposed. The

Company may

be required

to increase

operating expenses

or capital

expenditures in

order to

comply with

any new restrictions or regulations.

Product Liability and Other Lawsuits

PyroGenesis is

subject to

a variety

of potential

product liabilities claims

and other

lawsuits related with

its operations,

including

liabilities

and

expenses

associated

with

product

defects.

The

Company

maintains

product

liability

and

other

insurance coverage that management believes is generally

in accordance with the market practice in its industry,

but there

can be no assurance that the Company will always be

adequately insured against all potential liabilities.

malfunction

the

inadequate

design

the

Company’s

products

could

result

product

liability

other

tort

claims.

Accidents

involving

the

Company’s

products

could

lead

personal

injury

physical

damage.

Any

liability

for

damages resulting

from malfunctions

could be

substantial and

could materially

adversely affect

the Company’s

business

and

results

operations.

addition,

well-publicized

actual

perceived

problem

could

adversely

affect

the

market’s

perception of the Company’s products and affect

its reputation. This could result in a decline in demand for the

Company’s

products, which would materially adversely affect

the Company’s financial condition and results

of operations.

The sale

and use

of products

and processes

developed or

sold by

the Company

may entail

potential liability

and

possible

warranty

claims.

The Company

is also

required

indemnify

Drosrite

International

for any

claims

and

liabilities

incurred in

connection with the

Drosrite systems. The

Company may be

subject to personal

injury claims for

injuries resulting

from use of its products. Although the

Company maintains product liability insurance,

there can be no assurance that such

insurance will

continue to

be available

on commercially

reasonable terms

or that

the risks

covered or

coverage amounts

will be sufficient to cover all claims.

Information Systems Disruptions

The Company

relies

on various

information

technology

systems

to manage

its operations.

Over

the last

several

years,

the

Company

has

implemented,

and

continues

implement,

modifications

and

upgrades

such

systems,

including changes

to legacy

systems, replacing

legacy systems

with successor

systems with

new functionality, and acquiring

new systems with

new functionality.

These types

of activities subject

the Company

to inherent costs

and risks

associated

with replacing and

changing these systems,

including impairment of

the Company’s ability

to fulfill

customer orders, potential

disruption of

its internal

control structure, substantial

capital expenditures, additional

administration and operating

expenses,

retention of

sufficiently skilled

personnel to

implement and

operate the

new systems,

demands on management

time and

other

risks

and

costs

delays

difficulties

transitioning

integrating

new

systems

into

the

Company’s

current

systems. These

implementations, modifications,

and upgrades

may not result

in productivity

improvements at

a level that

outweighs the costs of implementation, or at all. In addition, the difficulties with implementing new technology systems may

cause

disruptions

the

Company’s

business

operations

and

have

material

adverse

effect

its

business,

financial

condition, or results of operations.

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Security Breaches

As part

of its

day-to-day business,

the Company

stores its

data and

certain data

about its customers

in its global

information technology system.

Unauthorized access to

the Company’s data,

including any regarding

its customers, could

expose the Company to a risk of

loss of this information, loss of

business, litigation and possible liability. Security measures

may

breached

intentional

misconduct

computer

hackers,

result

third-party

action,

employee

errors,

malfeasance

otherwise.

Additionally,

third

parties

may

attempt

fraudulently

induce

employees

customers

into

disclosing sensitive information

such as usernames,

passwords or other

information in order

to gain access

to the data

the

Company’s

customers

the

Company’s

data,

including

the

Company’s

intellectual

property

and

other

confidential

business

information,

the

Company’s

information

technology

systems.

Because

the

techniques

used

obtain

unauthorized access, or to sabotage systems, change frequently and generally are not recognized until launched against a

target, the Company may

be unable to anticipate

these techniques or

to implement adequate preventative

measures. Any

security breach could

result in a

loss of

confidence by the

Company’s customers, damage its

reputation, disrupt its

business,

lead to legal liability and negatively impact its future sales,

business, operations and financial results.

Public Health Crises

Public

health

crises,

including

local,

regional,

national

international

outbreak

contagious

disease,

could

have

adverse effect on

local economies, the

global economy,

and the markets

in which the

Company operates

and markets its

products, and may

adversely impact the

price and demand

for the Company’s

products and the

ability of the

Company to

operate and market

its products. Any

such alterations or

modifications could cause

substantial interruption to

the Company’s

business, any

of which

could have

a material

adverse effect

on the

Company’s operations

or financial

results, and

could

include temporary closures of

one or more

of the Company’s or

its partner’s offices or

facilities; temporary or long-term

labor

shortages; temporary or long-term adverse impacts on the Company’s supply chain and distribution channels; the potential

of increased network vulnerability and

risk of data loss resulting

from increased use of remote

access and removal of data

from the Company’s facilities.

2020

and

2021

saw

The

global

outbreak

COVID-19

have

devasting

effects

populations

and

led

governments

worldwide enacting emergency

measures to protect

against the spread of

the virus. In 2022,

the detrimental effects

of the

COVID-19 pandemic

on economies

and businesses

lessened with

the lifting

of most

public health

restrictions

during the

year. Like most businesses, PyroGenesis was affected

by the pandemic. However, the Company took measures to protect

its

employees

and

the

company

general

and

continued

its

operations

throughout

the

pandemic.

Notwithstanding

the

foregoing, there

is no

guarantee that

the global

effects of the

pandemic will

continue to improve

and if

new strains, outbreaks,

or other adverse

effects arise,

the Company and

its vendors and

suppliers may

be unable to

continue operations

or keep

up with increasing

demands as

a result

of COVID-19

and customers

may experience

delays or interruptions

in service

the delivery

of products, which

may be detrimental

to the

Company’s reputation, business, results

of operations and

financial

position.

The

Company

cautions

that

impossible

fully

anticipate

quantify

the

effect

and

ultimate

impact

the

COVID-19 pandemic as the situation still continues to evolve.

Litigation

The Company may from time

to time become party

to litigation, including in the

ordinary course of business

which

could adversely

affect its

business. Should

any litigation

in which

the Company

becomes involved

be determined

against

the Company,

such a decision could

adversely affect the

Company’s ability to

continue operating and

the market price for

the Common Shares

and could use

significant resources.

Even if the

Company is

involved in litigation

and wins, litigation

can redirect significant Company resources. Litigation may also create a negative perception of the Company’s

brand. See

“Legal Proceedings”.

Trade Secrets May Be Difficult to Protect

The

Company’s

success

depends

upon

the

skills,

knowledge

and

experience

its

scientific

and

technical

personnel,

consultants

and

advisors,

well

contractors.

Because

the

Company

operates

highly

competitive

industry,

relies

part

trade

secrets

protect

its

proprietary

products

and

processes.

However,

trade

secrets

are

difficult

protect.

The

Company

generally

enters

into

confidentiality

non-disclosure

agreements

with

its

corporate

partners,

employees,

consultants,

outside

scientific

collaborators,

developers

and

other

advisors.

These

agreements

generally

require

that

the

receiving

party

keep

confidential,

and

not

disclose

third

parties,

confidential

information

developed by the receiving

party or made known to

the receiving party by

the Company during the course

of the receiving

party’s relationship with the Company. These agreements also generally provide that inventions conceived by the receiving

party

the

course

rendering

services

the

Company

will

its

exclusive

property,

and

the

Company

enters

into

assignment agreements to perfect its rights.

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These

confidentiality,

inventions

and

assignment

agreements,

where

place,

may

breached

and

may

not

effectively

assign intellectual

property rights

to the

Company.

The Company’s

trade secrets

also could

be independently

discovered by

competitors, in

which case

the Company

would not

be able

to prevent

the use

of such

trade secrets

by its

competitors. The enforcement of a claim alleging that a party illegally obtained and was using the Company’s trade secrets

could be difficult, expensive and time consuming and the outcome could be unpredictable. The failure to obtain or maintain

meaningful trade secret protection could adversely affect

the Company’s competitive position.

Risks Related to Acquiring Companies

The Company

has in

the past

and may

in the

future acquire

other companies

and there

are risks

inherent in

any

such acquisition.

Specifically,

there could

be unknown

or undisclosed

risks or

liabilities of

such companies

for which

the

Company is not sufficiently indemnified. Any such unknown or undisclosed risks or liabilities could materially and adversely

affect the Company’s financial performance and results of

operations. The Company could encounter additional transaction

and integration

related costs

or other factors

such as

the failure to

realize all

of the

benefits from

such acquisitions.

All of

these factors could cause dilution

to the Company’s earnings per

share or decrease or

delay the anticipated accretive effect

of the acquisition and cause a decrease in the market price of the Company’s

securities. The Company may not be able to

successfully integrate and combine the operations, personnel and technology infrastructure of any such acquired company

with its existing operations.

If integration is not

managed successfully by

the Company’s

management, the Company

may

experience interruptions in its business activities, deterioration in its employee and customer relationships, increased costs

integration

and

harm

its reputation,

all

of which

could

have

material

adverse

effect

the

Company’s

business,

financial

condition

and

results

operations.

The

Company

may

experience

difficulties

combining

corporate

cultures,

maintaining

employee

morale

and

retaining

key

employees.

The

integration

any

such

acquired

companies

may

also

impose substantial demands on

the management. There is no

assurance that any acquisition will

be successfully integrated

in a timely manner or at all.

Global Economic Uncertainty

Demand

for

the

Company’s

products

and

services

are

influenced

general

economic

and

consumer

trends

beyond

the

Company’s

control.

There

can

assurance

that

the

Company’s

business

and

corresponding

financial

performance

will

not

adversely

affected

general

economic

consumer

trends.

particular,

global

economic

conditions are still tight, and if such conditions continue, recur or worsen, there can be no assurance that they will not have

a material adverse effect on the Company’s

business, financial condition and results of operations.

Furthermore, economic conditions may produce downward pressure on

stock prices and on the availability

of credit

for financial

institutions and

corporations. If

any market

disruption and

volatility continue,

the Company

might experience

reductions

business

activity,

increased

funding

costs

and

funding

pressures,

as applicable,

a decrease

the

market

price

the

Common

Shares,

decrease

asset

values,

additional

write-downs

and

impairment

charges

and

lower

profitability.

Inability to Renew Leases

The

Company

may

unable

renew

maintain

its

leases

(commercial

real

property)

commercially

acceptable

terms

all.

Any

inability

renew

lease,

any

renewal

lease

with

rental

rate

higher

than

the

prevailing rate

under the

applicable lease

prior to

expiration, may

have an

adverse impact

on the

Company’s operations,

including disruption of its operations

or an increase in its cost

of operations. In addition, in the

event of non-renewal of any

of the Company’s

leases, the Company

may be unable

to locate suitable

replacement properties

for its facilities

or it may

experience delays in relocation that could lead to a disruption in its operations. Any disruption in the Company’s operations

could have an adverse effect on its financial condition

and results of operations.

Financial Reporting and Other Public Issuer Requirements

public

company,

the

Company

subject

the

reporting

requirements

the

Canadian

Securities

Administrators, or the

CSA, and

the U.S. Securities

Exchange Act

of 1934, as

amended, and the

rules and regulations

the listing standards of the TSX

and NASDAQ and the U.S. Sarbanes-Oxley Act.

The requirements of these laws, rules and

regulations have increased and will continue

to increase the Company’s legal,

accounting, and financial compliance costs,

make some activities

more difficult,

time-consuming, and

costly,

and place significant

strain on the

Company’s personnel,

systems, and resources. The Company is continuing to

develop and refine its disclosure controls and other

procedures that

are designed to ensure that information required to

be disclosed by the Company in the reports

that it will file with the CSA

recorded,

processed,

summarized,

and

reported

within

the

time

periods

specified

CSA

rules

and

forms

and

that

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of Contents

information required

to be

disclosed in

reports under

applicable securities

laws is

accumulated and

communicated to

the

Company’s principal

executive and

financial officers.

The Company

is also

continuing to

improve its

internal control

over

financial reporting. In order to

improve the effectiveness

of its disclosure controls and

procedures and internal control over

financial reporting, the

Company has expended,

and anticipate

that it

will continue to

expend, significant

resources, including

accounting-related costs and significant management oversight.

The

Company

has

identified

certain

material

weaknesses

its

internal

controls,

fully

explained

its

management’s

discussion

and

analysis

for

the

year

ended

December

31,

2022,

under

“Disclosure

Controls

and

Procedures”. Additional weaknesses in the Company’s disclosure

controls and internal control over financial reporting may

also be discovered in the future. Any failure

to develop or maintain effective controls

or any difficulties encountered in their

implementation or improvement

could harm

the Company’s

results of operations

or cause the

Company to fail

to meet its

reporting obligations and may result in a restatement of the Company’s financial statements for prior periods. Any failure to

improve and

maintain

effective

internal

control over

financial

reporting

also could

adversely

affect

the results

of periodic

management

evaluations

and

annual

independent

registered

public

accounting

firm

attestation

reports

regarding

the

effectiveness

the

Company’s

internal

control

over

financial

reporting

that

the

Company

will

eventually

required

include

its periodic

reports

that will

filed

with

the

CSA.

Ineffective

disclosure

controls

and

procedures

and

internal

control over financial reporting could also cause investors to lose confidence in the Company’s reported financial and other

information, which could have

a negative effect

on the trading price

of the Common Shares.

In addition, if the

Company is

unable to continue to meet these requirements, it may not be able

to remain listed on the TSX and/or NASDAQ.

Influence of the Significant Shareholders

the Company’s

knowledge, no

shareholder beneficially

owns, or controls

or directs,

directly or indirectly,

than

10%

the

voting

rights

attached

the

Company’s

outstanding

voting

securities,

except

for

Mr.

Peter

Pascali,

President and

Chief Executive

Officer of

the Company,

who holds

or controls,

directly or

indirectly,

80,925,698 Common

Shares,

representing

aggregate

45.32%

the

total

voting

rights

attached

the

outstanding

Common

Shares,

and

2,500,000 share

purchase warrants

and options

to acquire

an additional

4,270,000 Common

Shares (increasing

the total

number of Common

Shares held or

controlled, directly

or indirectly,

by him to

87,695,698 Common

Shares, or 47.31%

the Common

Shares, on

a fully

diluted basis).

In addition,

from time

to time,

the Company

may have

other shareholders

who

have

the

ability

exercise

significant

influence

over

matters

submitted

the

shareholders

the

Company

for

approval, whether subject to approval by a

majority of the shareholders of the

Company or subject to a class

vote or special

resolution. See “Directors and Executive Officers

- Conflicts of Interest”.

Joint Venture/Partnership Arrangements

The Company

may participate

in joint

ventures and

partnerships

with third

parties. A

joint venture

or partnership

arrangement involves

certain additional

risks including:

(i) the possibility

that a partner

may at any

time have economic

business interests

or goals

that are

inconsistent with

those of

the Company

or take

actions contrary

to the instructions

requests of

the Company

or contrary

to the

Company’s objectives;

(ii) the

risk that

the partner

could experience

financial

difficulties or seek the protection of bankruptcy, insolvency or other laws, which could result in additional financial demands

on the Company;

and (iii) the

need to obtain

the partner’s consent

with respect to

certain major decisions.

In addition, the

sale or transfer of an interest in joint ventures and partnerships will generally

be subject to rights of first refusal or first offer

and certain other joint

venture or partnership agreements may provide

for buy-sell or similar

arrangements. Such rights may

be triggered at a time

when the Company may not desire the

sale but may be forced to

do so because it does not

then have

the financial

resources

with

which

to purchase

the other

parties’

interests. The

terms

of any

joint venture

or partnership

arrangement

may

not

allow

the

Company

realize

anticipated

benefits

and

may

adversely

affect

the

Company

and

its

business.

Limited Control Over the Company’s Operations

Holders of the Common Shares have limited

control over changes in the Company’s policies and operations, which

increases

the

uncertainty

and

risks

investment

the

Company.

The

Board

determines

major

policies,

including

policies regarding

financing, growth,

debt capitalization and

any future

dividends to

shareholders of

the Company. Generally,

the Board may amend or revise these and other policies without a vote of the holders

of the Common Shares. The Board’s

broad

discretion

setting

policies

and

the

limited

ability

holders

the

Common

exert

control

over

those

policies increases the uncertainty and risks of an investment

in the Company.

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of Contents

Change in Tax Laws

New income, sales, use

or other tax laws,

statutes, rules, regulations or

ordinances could be enacted

at any time.

Further,

existing

tax

laws,

statutes,

rules,

regulations

ordinances

could

interpreted,

changed,

modified

applied

adversely to the

Company.

These enactments and

events could require

the Company to

pay additional tax

amounts on a

prospective or

retroactive basis,

thereby substantially

increasing the

amount of

taxes the

Company is

liable to

pay in

the

relevant tax jurisdictions.

Accordingly,

these events could

decrease the capital

that the Company

has available to

operate

its business. Any or all of these events could harm the

business and financial performance of the Company.

Forward-Looking Information

The forward-looking information

included in this AIF relating

to, among other things,

the Company’s future

results,

performance, achievements, prospects, targets, intentions or opportunities or the markets in which it operates (including, in

particular, the information contained under “Business of the Company”, and

the other statements listed in

“Forward-Looking

Statements”)

based

opinions,

assumptions

and

estimates

made

the

Company’s

management

light

its

experience and

perception of

historical trends,

current conditions and

expected future developments,

as well

as other

factors

that the Company believes are appropriate and reasonable in the circumstances. However, there can be no assurance that

such estimates and assumptions will

prove to be correct. The Company’s

actual results in the future may

vary significantly

from the historical and estimated results and those variations may

be material. The Company makes no representation that

its actual

results

in the

future

will be

the same,

in whole

or in

part, as

those

included in

this AIF.

See “Forward

-Looking

Statements”.

Credit Facilities

The Company’s credit facilities and

financing agreements mature on

various dates. There can

be no assurance that

such credit facilities or financing agreements will be renewed or refinanced, or if renewed or refinanced, that the renewal or

refinancing will

occur on

equally favourable

terms to

the Company.

The Company’s

ability to

continue operating

may be

adversely

affected

the

Company

not

able

renew

its

credit

facilities

arrange

refinancing,

such

renewal

refinancing, as the case may

be, occurs on terms

materially less favorable to the

Company than at present. The

Company’s

current credit

facilities and

financing agreements

impose covenants

and obligations

on the

Company.

There is

a risk

that

such loans may go into

default if there is a

breach in complying with such

covenants and obligations, which

could result in

the lenders realizing on their security and causing the

Company’s shareholders to lose some or all of

their investment.

12.2.

Risks Related to the Company’s

Securities

Potential Volatility of Common Share

Price

The market price of the

Common Shares could be

subject to significant fluctuations.

Some of the factors

that may

cause the market price of the Common Shares to fluctuate

include:

•

the

public’s

reaction

the

Company’s

press

releases,

announcements

and

filings

with

regulatory

authorities and those of its competitors;

•

fluctuations in broader stock market prices and volumes;

•

changes in market valuations of similar companies;

•

investor perception of the Company,

its prospects or the industry in general;

•

additions or departures of key personnel;

•

commencement of or involvement in litigation;

•

announcements

the

Company

its

competitors

strategic

alliances,

significant

contracts,

new

technologies, acquisitions, commercial relationships, joint

ventures or capital commitments;

•

variations

the

Company’s

quarterly

results

operations

cash

flows

those

other

comparable

companies;

•

revenues

and

operating

results

failing

meet

the

expectations

securities

analysts

investors

particular quarter;

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of Contents

•

changes in the Company’s pricing policies or the pricing

policies of its competitors;

•

future issuances and sales of Common Shares;

•

sales of Common Shares by insiders of the Company;

•

third party disclosure of significant short positions;

•

demand for and trading volume of Common Shares;

•

changes

securities

analysts’

recommendations

and

their

estimates

the

Company’s

financial

performance;

•

short-term fluctuation in

stock price caused

by changes in

general conditions in

the domestic and

worldwide

economies or financial markets; and

•

the other risk factors described under this heading of the AIF.

The realization of any of these risks and other factors

beyond the Company’s control could cause

the market price

of the Common Shares to decline significantly.

In addition, broad market and industry factors may harm the market price of the Common Shares. Hence, the price

of the

Common Shares

could fluctuate

based upon

factors that

have little

or nothing

to do

with the

Company,

and these

fluctuations could materially reduce the

price of the Common Shares regardless

of the Company’s operating performance.

the

past,

following

significant

decline

the

market

price

company’s

securities,

there

have

been

instances

securities class action

litigation having

been instituted

against that company.

If the Company

were involved

in any similar

litigation, it

could incur

substantial costs,

management’s

attention and

resources could

be diverted

and it

could harm

the

Company’s business, operating results and financial

condition.

In addition, the Company

may face the risk

of being delisted from

the TSX and/or NASDAQ

if decreases in the

price

of the Common Shares do not allow the Company to

meet certain conditions of the listing exchange(s).

Market Liquidity

The market price for the Common

Shares could be subject to wide

fluctuations. Factors such as the announcement

of significant

contracts,

technological

innovations,

new

commercial

products,

patents,

a change

regulations,

quarterly

financial results,

future sales

of Common

Shares by

the Company

or current

shareholders, and

many other

factors could

have considerable

repercussions on

the price

of the

Common Shares.

In addition,

the financial

markets may

experience

significant price

and value

fluctuations that

affect the

market prices

of equity

securities of

companies that

sometimes are

unrelated

the

operating

performance

these

companies.

Broad

market

fluctuations,

well

economic

conditions

generally may adversely affect the market price of

the Common Shares.

Dividends to Shareholders

The Company

does not

anticipate paying

cash dividends

on the

Common Shares

in the

foreseeable future.

The

Company currently intends to retain all future earnings to fund the development and growth

of its business. Any payment of

future dividends will be at

the discretion of the

directors and will depend

on, among other things, the

Company’s earnings,

financial

condition,

capital

requirements,

level

indebtedness,

statutory

and

contractual

restrictions

applying

the

payment of dividends, and other considerations that the directors

deem relevant.

Impact of Future Sales by Existing Shareholders

If the

Company’s

shareholders sell

substantial amounts

of the

Common Shares

in the

public market,

the market

price of the

Common Shares could

decrease. The perception

among investors that

these sales will

occur could also

produce

this effect.

All currently

outstanding Common

Shares other

than those subject

to lock-up

agreements, if

any,

executed by

certain

existing

shareholders

are, subject

applicable

securities

laws,

generally

immediately

available

for

resale

the

public markets.

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of Contents

Subject to compliance with applicable securities laws, the Company’s officers, directors and their affiliates may sell

some or all

of their Common

Shares in the

future. No

prediction can be

made as

to the effect,

if any,

such future sales

Common Shares will have on

the market price of

the Common Shares prevailing from

time to time. However, the future sale

of a substantial number

of Common Shares

by the Company’s

officers, directors

and their affiliates,

or the perception

that

such sales could occur, could

materially adversely affect prevailing market prices

for the Common Shares.

Additional Common Shares issuable upon

the exercise of stock options

or warrants may also be available

for sale

the

public

market,

which

may

also

cause

the

market

price

the

Common

fall.

Accordingly,

substantial

amounts of Common Shares are sold in the public market,

the market price could fall.

Working Capital and Future Issuances

The Company may issue additional Common Shares in the future which may dilute

a shareholder’s holdings in the

Company. The Articles

permit the issuance of an unlimited number of Common Shares,

and shareholders of the Company

will have no pre-emptive rights in connection

with any further issuances. The directors

of the Company have the discretion

determine

the

provisions

attaching

the

Common

and

the

price

and

the

terms

issue

further

Common

Shares.

Additional equity

financing may

be dilutive to

holders of

Common Shares.

Debt financing

may involve

restrictions

on the Company’s financing

and operating activities. Debt

financing may be

convertible into other securities

of the Company

which may result in immediate or

resulting dilution. In either case, additional financing may

not be available to the Company

on acceptable terms

or at all.

If the Company

is unable to

raise additional funds

as needed, the

scope of its

operations or

growth may

be reduced

and, as

a result,

the Company

may be

unable to

fulfil its

long-term goals.

In this

case, investors

may lose

all or part

of their

investment. Any

default under

such debt

instruments could

have a

material adverse

effect on

the Company,

its business or the results of operations.

Securities or Industry Analysts

The

trading

market

for

Common

could

influenced

the

research

and

reports

that

industry

and/or

securities analysts, or

others, may publish

about the Company, its business,

the market or

competitors. If any

of the analysts

who may

cover the

Company’s business change their

recommendation regarding the

Common Shares adversely, or

provide

more favourable

relative recommendations

about its

competitors, the

share price

would likely

decline. If

any analyst

who

may cover

the Company’s

business were

to cease

coverage or

fail to

regularly publish

reports on

the Company,

it could

lose visibility in the financial markets, which in turn could

cause the share price or trading volume to decline.

.3.

Risks Related to the Company’s

Status as a Foreign Private Issuer

Information Publicly Available to the Company’s U.S.

Shareholders

The Company

is a

foreign private

issuer under

applicable U.S.

federal securities

laws. As

a result,

the Company

does not

file the

same reports

that a

U.S. domestic

issuer would

file with

the U.S.

Securities and

Exchange Commission

(the “

SEC

”), although the Company

is required to file

with or furnish to

the SEC the continuous

disclosure documents that

the Company is required to file in

Canada under Canadian Securities Laws, in certain respects the reporting obligations are

less

detailed

and

less

frequent

than

those

U.S.

domestic

reporting

companies.

addition,

the

Company’s

officers,

directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions of Section 16

of the U.S. Exchange Act. Therefore, the

Company’s shareholders may not know on as timely a

basis when the Company’s

officers,

directors

and

principal

shareholders

purchase

sell

Common

the

reporting

periods

under

the

corresponding Canadian insider reporting requirements

are longer.

As a foreign private issuer, the Company

is exempt from the rules and regulations under the Exchange

Act related

to the furnishing and

content of proxy statements.

The Company is also

exempt from Regulation FD,

which prohibits issuers

from making selective disclosures of

material non-public information. While

the Company complies with the

corresponding

requirements

relating

proxy

statements

and

disclosure

material

non-public

information

under

Canadian

Securities

Laws, these requirements differ from

those under the Exchange Act

and Regulation FD and

shareholders should not expect

to receive the same information at the same time as such information is provided

by U.S. domestic companies. In addition,

the Company may not be required under the Exchange Act to file

annual and quarterly reports with the SEC as promptly as

U.S. domestic companies whose securities are registered

under the Exchange Act.

In addition,

as a

foreign private

issuer, the Company has

the option

to follow

certain Canadian corporate

governance

practices, except

to the

extent that

such laws

would be

contrary to

U.S. securities

laws, and

provided that

the Company

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discloses the requirements it is not following and describe the Canadian practices it follows instead. The Company plans to

rely

this

exemption.

result,

the

Company’s

shareholders

may

not

have

the

same

protections

afforded

shareholders of U.S. domestic companies that are subject

to all U.S. corporate governance requirements.

Loss of Foreign Private Issuer Status in the Future

In order

to maintain

its status

as a

foreign private

issuer,

a majority

of the

Company's

Common Shares

must be

either

directly

indirectly

owned

non-residents

the

U.S.

unless

the

Company

also

satisfies

one

the

additional

requirements necessary

to preserve

this status.

The Company

may in

the future

lose its

foreign private

issuer status

if a

majority of the

Common Shares

are held

in the United

States and

the Company

fails to

meet the

additional requirements

necessary to avoid

loss of foreign

private issuer

status. The

regulatory and compliance

costs to the

Company under

U.S.

federal

securities

laws

U.S.

domestic

issuer

may

significantly

than

the

costs

the

Company

incurs

Canadian foreign private

issuer eligible to use

the multi-jurisdictional disclosure

system ("

MJDS

"). If the Company

is not a

foreign private

issuer,

it would

not be eligible

to use

the MJDS

or other

foreign issuer

forms and

would be

required to

file

periodic

and

current

reports

and

registration

statements

U.S.

domestic

issuer

forms

with

the

SEC,

which

are

detailed and extensive than the forms available

to a foreign private issuer.

In addition, the Company may lose the

ability to

rely upon exemptions from Nasdaq corporate governance

requirements that are available to foreign private issuers.

Inability for U.S. Investors to Enforce Certain Judgments

The Company is a corporation existing under the Canada

Business Corporations Act. A number of the Company’s

directors and officers are residents of Canada, and substantially all of the Company’s assets are located outside the United

States. As a result, it may be difficult

to effect service within the United

States upon the Company or upon its

directors and

officers.

Execution

United

States

courts

any

judgment

obtained

against

the

Company

any

the

Company’s

directors or officers

in United

States courts may

be limited to

the assets

of such companies

or such persons,

as the case

may be,

located in

the United

States. It

may also

difficult

for holders

of securities

who reside

in the

United

States to

realize in the United States upon judgments of courts of the United

States predicated upon civil liability and the civil liability

of the Company’s directors and executive officers

under the United States federal securities laws. The

Company has been

advised that

a judgment

of a

U.S. court

predicated solely upon

civil liability

under U.S.

federal securities

laws or

the securities

or “blue sky” laws of any

state within the United States,

would likely be enforceable

in Canada if the United

States court in

which the judgment was obtained has a basis

for jurisdiction in the matter that would be recognized

by a Canadian court for

the same purposes. However, there may be doubt

as to the enforceability in Canada

against these non-U.S. entities or their

controlling persons,

directors

and officers

who are

not residents

of the

United States,

in original

actions or

in actions

for

enforcement of judgments of courts of the United States, of liabilities predicated solely upon U.S. federal or state securities

laws.

Risks Relating to the Company’s Status as

an "Emerging Growth Company" Under U.S. Securities

Laws

The Company

is an

“emerging growth

company” as

defined in

section 3(a)

of the

Exchange Act

(as amended

the JOBS

Act, enacted

on April

5, 2012),

and the Company

will continue

to qualify

as an emerging

growth company

until

the earliest

to occur

of: (a)

the last

day of

the fiscal

year during

which the

Company

has total

annual gross

revenues of

US$1,070,000,000 (as

such amount

is indexed

for inflation

every five

years by

the SEC)

or more;

(b) the

last day

of the

fiscal year

of the

Company

following the

fifth anniversary

of the

date of

the first

sale of

common

equity securities

of the

Company pursuant to

an effective

registration statement

under the United

States Securities

Act of 1933,

as amended; (c)

the date

on which

the Company

has, during

the previous

three year

period, issued

more than

US$1,000,000,000 in

non-

convertible debt; and (d) the

date on which the

Company is deemed to be

a "large accelerated filer", as

defined in Rule 12b-

2 under the

Exchange Act. The

Company will qualify as

a large accelerated filer

(and would cease to

be an emerging growth

company) at

such time

when on

the last

business

day of

its second

fiscal quarter

of such

year the

aggregate worldwide

market value of its common equity held by non-affiliates

will be US$700,000,000 or more.

For

long

the

Company

remains

emerging

growth

company,

permitted

and

intends

rely

upon

exemptions from certain

disclosure requirements that are

applicable to other

public companies that are

not emerging growth

companies. These exemptions include

not being required to

comply with the auditor attestation

requirements of Section 404

of the

JOBS Act.

The Company

takes advantage

of some,

but not

all, of

the available

exemptions available

to emerging

growth companies.

The Company

cannot predict

whether investors

will find

the Common

Shares less

attractive because

the Company relies upon certain

of these exemptions. If some

investors find the Common Shares less

attractive as a result,

there may be a less active trading market

for the Common Shares and the Common

Share price may be more volatile. On

the other

hand, if

the Company

no longer

qualifies as

an emerging

growth company,

the Company

would be

required to

divert additional management time

and attention from the

Company's development and

other business activities and

incur

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of Contents

increased legal and financial costs to comply with the additional associated

reporting requirements, which could negatively

impact the Company's business, financial condition and

results of operations.

13.

Legal Proceedings

The Company may,

from time to

time be involved

in legal proceedings.

The Company

is not involved

in any legal

proceedings which, individually or in the aggregate, would be material to the Company’s consolidated financial condition or

results of operations, except as follows:

The Company filed

an originating

application on

August 11,

2022, petitioning

the Quebec

Superior Court to

order

P. Riopel (1993) Inc. to convey title

of the property

bearing civic address

5655 Philippe-Turcot, Montreal, Quebec, H4C

3K8.

The

property

the

location

one

the

Company’s

two

manufacturing

facilities.

The

petition

followed

the

Company’s

exercise of

its contractual

option to

purchase the

property for

$2,750,000. On

December 23,

2022, P.

Riopel (1993)

Inc.

filed a counterclaim in which it

sought damages in the

amount of $415,425, alleging that

the Company breached the lease

agreement between the parties.

On July 28, 2021,

an application for a

safeguard order and permanent

injunction was filed by

AirScience Systems

Inc. (“

ASSI

”) before the

Quebec Superior

Court against

Gas RNG Systems

Inc. (“

RNG Canada

”), RNG Investments

Inc.,

Glauber Equipment

Corporation, Mr.

Peter Glauber

and Mr.

Shivaji Ramalingam

(collectively,

the “Defendants”).

ASSI is

seeking

oppression

remedy,

alleging

the

wrongful

expulsion

ASSI

shareholder

and

Mr.

Gérard

Magnin

director from RNG Canada. On April 29,

2022, the Defendants filed a defence and a

counterclaim against ASSI, AirScience

Technologies

Inc.

(“

AST

”)

(now

Pyro

Green-Gas

Inc.,

wholly-owned

subsidiary

the

Company)

and

Mr.

Magnin

for

allegedly breaching their

obligations with respect

to a unanimous

shareholder agreement

governing RNG Canada

as well

as an operating agreement governing another entity, Gas RNG Systems LLC (“

RNG US

”). The Defendants, by way of their

counterclaim, seek damages in the amount of $4.9 million. PyroGenesis has maintained that AST was never a shareholder

of either RNG Canada or RNG US nor was it a party to

the disputed shareholders and operating agreements.

On October

6, 2021,

AST filed

an action

for damages

and unpaid

invoices against

RNG Canada,

RNG

US, Mr.

Shivaji Ramalingam, Mr. Peter Glauber, Mr. Paul-Louis Crouzat and Mr. Tarlok Nandhra before the Quebec Superior Court.

On February 13, 2022, a defence and

counterclaim was filed against AST and two former shareholders of

AST (Mr. Magnin

and Mr. Paul

D. Singh), seeking approximately

$712,000 in alleged compensatory

damages. The counterclaim also

seeks

a condemnation for legal fees, moral damages and punitive

damages for approximately $771,333.

On February 17,

2023, the

Company received

a motion from

the securities regulatory

authority in the

Province of

Québec,

filed

with

the

Superior

Court

Québec,

pursuant

which

the

AMF

asking

the

Court

determine

whether

certain documents previously requested

by the AMF from the

Company are subject to

solicitor-client privilege. The

motion

was filed by the

AMF in connection

with an investigation

being conducted in

the context of

applicable securities laws.

The

Company understands

the AMF

is investigating

certain actions

taken by

the President

and Chief

Executive Officer

of the

Company,

Mr.

Peter

Pascali, in

connection

with

settlement

agreement

entered

into on

April

30, 2018,

between the

Company and Phoenix Haute Technology

Inc. (“

Phoenix

”), a company controlled by the father of Mr. P.

Peter Pascali, and

ancillary transactions.

Pursuant

to the

terms

of a

board-approved

settlement

agreement,

and

as further

disclosed

in the

annual information form of the Company for the year

ended December 31, 2020, available under the Company’s

profile on

SEDAR at www.sedar.com, under “Interest of Management and Others in Material Transactions – Settlement of Claim”,

the

Company issued $3.7 million of units

comprised of common shares and warrants to Phoenix in

2018, to settle a $5.5 million

claim

Phoenix

with

respect

the

unpaid

portion

the

consideration

payable

the

Company

Phoenix

for

acquisition of

intellectual

property

rights completed

2011.

the

Company’s

knowledge, the

investigation

of the

AMF

does not

involve any

allegations of

wrongdoing by

the Company.

The AMF

has neither

announced any

proceedings

nor

filed

any

charges.

The

Company

believes

that

corporate

securities

laws

have

been

breached

but

cannot

predict

whether any enforcement action will result from the investigation.

14.

Interest of Management and Others in Material Transactions

Other than

as described

elsewhere in

this AIF

and as

described below, there is

no material interest,

direct or indirect,

of: (i)

any director

or executive

officer

of the

Company;

(ii) any

person or

company

that beneficially

owns, or

controls or

directs,

directly

or indirectly,

more than

10% of

the

Company’s

outstanding

voting

securities;

or (iii)

an associate

or any

affiliate of any persons or companies referred to above in (i) or (ii), in any transaction within the three years before the date

this

AIF

that

has

materially

affected

reasonably

expected

materially

affect

the

Company.

See

“Directors

and

Executive Officers - Conflicts of Interest”.

Table

of Contents

15.

Transfer Agent and Registrar

The transfer

agent and

registrar

of the

Company’s

Common Shares

is TSX

Trust

Company (Canada)

having an

office at

2001, Robert-Bourassa

Boulevard, Suite

1600, Montréal,

Québec, H3A

2A6. The

transfer agent

and registrar

the Company’s Common Shares

in the United States

is American Stock Transfer

& Trust Company,

LLC, having an office

6201 15th Ave, Brooklyn, NY 11219,

United States.

16.

Auditors

The auditors

of the

Company

are RCGT

at its

office

located at

600

la Gauchetiere

Street

West,

Suite

2000,

Montréal, Québec. RCGT has informed

the Company that it

is independent with respect to

the Company within the

meaning

of the relevant rules and related interpretations prescribed

by the relevant professional bodies in Canada.

17.

Material Contracts

This

AIF

includes

summary

description

certain

material

contracts.

Each

summary

description

discloses

all

material attributes

of the

applicable contract

but is

not complete

and is

qualified by

reference to

the terms

of the

material

contracts, which

are available

under the

Company’s SEDAR

profile at

www.sedar.com.

The following

are the

Company’s

only material contracts, other than

those contracts entered into in

the ordinary course of business,

which have been entered

into since the beginning of its last financial year, or entered into prior to such date, but which

are still in effect and which are

required to be filed with Canadian securities regulatory

authorities:

•

contract

between

PyroGenesis

and

HPQ

Silica

Polvere

Inc.,

wholly

owned

subsidiary

HPQ

Silicon

Resources

Inc.,

dated

June

30,

2021

whereby

HPQ

Silica

Polvere

Inc.

purchased

certain

intellectual

property and the Company contracted to advance the development of a green reactor and process used to

produce fumed silica directly from quartz in consideration for

$3,300,000, as described under “Business of

the Company - Development of a Process to Produce Fuming

Silica from Quartz”; and

•

contract between PyroGenesis and HPQ Silicon

Resources dated July 29, 2016 whereby HPQ

purchased

certain intellectual

property

and the

Company

contracted

to build

a PUREVAP

system

for C$7,070,000,

which

contract

refers

certain

terms

development

contract

between

HPQ

(f/k/a

Uragold

Bay

Resources Inc.) dated February 26,

2015, as amended from

time to time, as

described under the “Business

the

Company

Development

Processes

for

the

Production

High

Purity

Silicon

Metals,

Nano

Powders and Nanowires”;

18.

Additional Information

Additional information,

including with respect

to directors’ and

executive officers’

remuneration and

indebtedness,

principal holders

of the Company’s

securities, and

securities authorized

for issuance

under equity

compensation plans,

contained

the

Company’s

management

information

circular

for

its

most

recent

annual

meeting

shareholders

that

involved

the

election

directors

which

available

under

the

Company’s

SEDAR

profile

www.sedar.com.

Additional

financial information

is contained

in the

Company’s consolidated

financial statements

and management’s

discussion and

analysis for

the year

ended December

31,

2022. Further

information

about the

Company,

filed with

Canadian

securities

regulators,

available

online

under

the

Company’s

SEDAR

profile

www.sedar.com

filed

with

the

Securities

and

Exchange Commission at www.sec.gov.

19.

Glossary of Terms

“

2020 Convertible Loan

” has the meaning given to such term under “General Development of the Business – Year

Ended

December 31, 2022 – Corporate Developments and Financings”.

“

2020 Public

Offering

” has

the meaning

given to

such term

under “General

Development of

the Business

– Year

Ended

December 31, 2022 – Corporate Developments and Financings”.

“

2020 Public Offering Warrant

” has the meaning given to such term under “General Development

of the Business – Year

Ended December 31, 2022 – Corporate Developments

and Financings”.

“

2020 Units

” has the

meaning given to

such term

under “General Development

of the Business

– Year

Ended December

31, 2022 – Corporate Developments and Financings”.

Table

of Contents

“

AIF

” means this annual information form.

“

AMF

” means Autorité des marchés financiers.

“

Articles

” has the meaning given to such term under

“Description of Capital Structure”.

“

ASSI

” means AirScience Systems Inc.

“

AST

” means AirScience Technologies

Inc., now Pyro Green-Gas Inc., a wholly-owned subsidiary

of the Company.

“

Audit Committee

” means the Company’s audit committee.

“

Board

” or “

Board of Directors

” means the board of directors of the Company.

“

business day

” means

a day

other than

a Saturday,

Sunday or

a day

on which

the principal

chartered banks

located at

Toronto

are not open for business.

“

Canadian Securities Laws

” means the securities legislation or ordinance and

regulations thereunder of each province of

Canada and the rules, instruments, policies and orders

of each Canadian securities regulator made thereunder.

“

CBCA

” means the Canada Business Corporations Act.

“

CFC

” means chlorofluorocarbons.

“

Common

”

means

common

the

capital

the

Company,

described

under

“Description

Capital

Structure - Share Capital and Issued and Outstanding

Shares”.

“

Company

” has the meaning given to such term under “Explanatory

Notes”.

“

diluted basis

” means the

number of Common

Shares outstanding

assuming the exercise

of all outstanding

Options and

other rights to acquire Common Shares.

“

Drosrite International

” means Drosrite International LLC, a US-based

private company.

“

Drosrite International

Exclusive Agreement

” has

the meaning

given to

such term

under “Directors and

Executive Officers

- Conflicts of Interest”.

“

Dross Processing

Service Agreement

” has

the meaning

given to

such term

under “Directors

and

Executive Officers

Conflicts of Interest”.

“

forward-looking statements

” has the meaning given to such term under “Forward

-Looking Statements”.

“

GHG

” means greenhouse gas.

“

HCFC

” means hydrochlorofluorocarbons.

“

HFC

” means hydrofluorocarbons.

“

HPQ

” means HPQ Silicon Resources Inc., a corporation listed

for trading on the TSX-

“

HPQ Nano

” means HPQ Nano Silicon Powders Inc., a wholly

owned subsidiary of HPQ.

“

ISO

” means International Organization for Standardization.

“

MI 61-101

” means Multilateral Instrument 61-101 – Protection of

Minority Security Holders in Special Transactions.

“

NASDAQ

” means the NASDAQ Capital Market.

“

NI 52-110

” means National Instrument 52-110

— Audit Committees.

Table

of Contents

“

ODS

” means ozone depleting substances.

“

Option

” means an option to acquire a Common Share granted pursuant

to the Company’s option plan.

“

PACWADS

” means the Company’s Plasma Arc Chemical

Warfare Agent Destruction System.

“

PAGV

” means plasma arc gasification and vitrification.

“

Pascali Trust

” means Fiducie de

Crédit Mellon Trust, a trust

of which Company’s Chief

Executive Officer, P.

Peter Pascali,

is a trustee, officer and beneficiary.

“

PAWDS

” means the Company’s Plasma Arc Waste

Destruction System.

“

Phoenix

” has the meaning given to such term under “Legal

Proceedings”.

“

RCGT

” means Raymond Chabot Grant Thornton LLP,

the Company’s external auditors.

“

RGN

” means renewable natural gas.

“

RNG Canada

” means Gas RNG Systems Inc.

“

RNG US

” means Gas RNG Systems LLC.

“

PRRS

” means the Company’s Plasma Resource Recovery

System.

“

R&D

” means research and development.

“

SEC

” means the U.S. Securities Exchange Commission.

“

SEDAR

” means the System for Electronic Document

Analysis and Retrieval.

“

SPARC

” means Steam Plasma Arc Refrigerant Cracking.

“

TSX

” means the Toronto

Stock Exchange.

“

TSX-V

” means the TSX Venture

Exchange.

“

Turcot Facility

” means the facility located at 5655 Philippe-Turcot,

Montréal, Québec, Canada, H4C 3K8, as described in

“Business of the Company - Facilities”.

“

Wanklyn Facility

” means the

facility located at

9371 Wanklyn

Street, LaSalle, Québec,

Canada, H8R 1Z2,

as described

in “Business of the Company - Facilities”.

Table

of Contents

SCHEDULE “A” CHARTER OF THE AUDIT COMMITTEE

PYROGENESIS CANADA INC.

AUDIT COMMITTEE CHARTER

Approved by the Board of Directors

and effective as of October 25th, 2011

PREAMBLE

The

Audit

Committee’s

(the

“Committee”)

Charter

clarifies

its

responsibilities

delegated

the

Board

Directors

(the

“Board”). The

Charter is

used by

the Committee

to guide

the planning

and the

performance of

its work.

The Charter

also

clarifies the understanding the Committee has with the Company’s auditors and with management about the nature of their

involvement with the Committee and its work.

OVERALL MANDATE

Generally,

the

Committee

promotes

and

ensures

high

standard

financial

reporting,

risk

management

and

ethical

behavior for the Company and in doing so shall carry out the duties

and responsibilities as set out in this Charter.

COMPOSITION

The Committee shall consist

of at least three Directors

appointed by the Board who will

serve at the pleasure of

the Board

and, in any event, only so

long as he/she shall be a Board

member. The Committee will have an appropriate representation

of independent directors as required by law.

The composition of the Committee shall comply

with the rules and regulations

of the

stock exchange

on which

the shares

of the

Company are

listed as

well as

the Canadian

Securities Administrators

“Instruments”.

The

Board

may

fill

vacancies

the

Committee

election

from

their

number.

The

Board

shall

elect

the

Chairperson of the Committee.

In the absence

of the Chairperson, the

members of the Committee

shall appoint an

Acting

Chairperson. The

President of

the Company

shall not

be an

ex-officio

member of

the Committee,

but the

Chairperson of

the Board may,

at his/her discretion,

attend meetings

as an ex-officio

member.

An ex-officio

member shall be

vested with

all the rights and powers of appointed members.

ensure

the

Committee’s

effectiveness,

each

member

will

financially

literate

and

prepared

spend

the

time

necessary to address complex issues and to challenge

both management and the auditors, where necessary.

A quorum of

the Committee shall

consist of at

least two members

of the Committee

(for this purpose

the Committee shall

be deemed to consist of at

least three members, two being appointed by

the Board as aforesaid and one

being an ex-officio

member

aforesaid).

Notwithstanding

any

vacancy

the

Committee,

quorum

may

exercise

all

the

powers

the

Committee.

The Secretary

shall be

selected from

its members

or shall

be the

Corporate

Secretary.

The Secretary

of the

Committee

shall ensure that minutes of meetings are prepared for

distribution to Committee members.

DUTIES AND RESPONSIBILITIES

The Committee shall have the following duties and responsibilities:

OVERSEEING STANDARDS

OF INTEGRITY AND BEHAVIOUR

Management

responsible

for

the

Company’s

standards

behavior.

The

Committee

assists

the

Board

obtaining

assurances that management is

operating the Company in

an ethical manner and

encourages management to demonstrate

a strong commitment to integrity.

The

Committee

requests

that

management

report

periodically

how

the

Company’s

systems,

practices

and

controls

encourage, monitor and provide assurance of compliance with

laws, regulations and standards of ethical conduct, including

the control of expenses such as perquisites, expense

accounts and out-of-pocket expenses for officers

and directors.

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The Committee seeks the views

of the auditors about the

Company’s standards of

behavior. It discusses

with the auditors

the adequacy of the

systems and controls, and

the details of any

practices or transactions identified by

the auditors as being

potential

violation

the

legal

authorities,

well

the

details

any

“other

matters”

they

consider

bringing

the

attention

the

Board.

The

committee

seeks

the

views

auditors

remedies

curtail

inappropriate

practices

and

behaviors, as well as alternative remedies to rectify those

matters that are not in the Company’s best interest.

The Committee values financial integrity

and credibility.

It actively promotes an overall corporate

“tone” for quality financial

reporting, sound business risk practices, and ethical behavior.

OVERSEEING FINANCIAL REPORTING

Management is responsible for the Company’s financial

reporting. This includes preparation of accurate,

fair and complete

financial

reports,

the

selection

the

most

appropriate

accounting

principles

and

practices,

formulation

accounting

judgments and estimates,

and preparation of

the annual report

including its management’s

discussion and analysis

(MD&A),

budgets and other such reports.

The Committee

shall

provide

assistance

the

Board

in fulfilling

its financial

reporting

and control

responsibilities

to the

shareholders of the Company and to the

investment community. The Committee’s primary duties and responsibilities in this

regard are to:

(a)

oversee the accounting and financial

reporting processes of the Company

and the audit of its financial

statements

including:

the integrity of the Company’s financial statements;

ii.

the compliance with legal and regulatory requirements;

and,

iii.

the independent auditor’s qualifications and independence;

(b)

serve

independent

and

objective

party

monitor

the

Company’s

financial

reporting

process

and

internal

control systems;

(c)

review and appraise the audit activities of the Company’s

independent auditors;

(d)

provide open

lines of

communication among

the independent

auditors, financial

and senior

management and

the

Board for financial reporting and control matters and meet periodically with management

and with the independent

auditors.

The Committee assesses the relevance and the reliability of the financial reports to ensure that they portray, in the clearest

light possible, the underlying economic circumstances and financial

performance of the Company.

The Committee promotes accuracy,

truthfulness, integrity and credibility in financial reporting.

The Committee

discusses

with management

and auditors

the inherent

fairness,

accuracy

and completeness

of financial

disclosures as

well as

the Company’s

compliance with

legal and

regulatory requirements

and may

request attestation

this effect from them.

The Committee reviews

the key accounting

principles and the

significant judgments

and estimates with

management and

auditors. It seeks

their views with

respect to the

appropriateness and consistency of

the accounting principles and

practices,

not just their acceptability,

and the degree of aggressiveness or conservatism in

determining estimates.

As integral

components

of its

financial

review

processes,

the Committee

reviews

the operating

and

capital

budgets,

the

borrowing plan, summaries of the corporate

plan and budgets, the annual and

quarterly financial statements, including

the

MD&A

sections,

and

any

other

financial

information

which

will

distributed

the

public

and

requiring

approval

the

Board.

The Committee

assesses

how

well

the

Company’s

financial

information

reporting

package

meets

the

Board’s

needs

reviewing its form, content and level of details.

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OVERSEEING MANAGEMENT CONTROL PRACTICES

Management is responsible for

maintaining records and financial

management and control systems

that provide reasonable

assurance that assets

are safeguarded and maintained,

that Intellectual Property

(IP) is identified, protected

and secured,

that transactions

are in accordance

with regulations

and any

government directives

issued and

that financial,

human and

physical resources are managed economically and efficiently

and that operations are carried out effectively.

Management is responsible for identifying the principal

business risks facing the Company and formulating

the Company’s

risk tolerance levels and risk management policies for consideration and approval by

the Board. The Committee assists the

Board in this function, focusing on the financial risks.

The Committee holds management

accountable for the design

and functioning of the

Company’s control framework in order

monitor,

assess

and

mitigate

the

Company’s

business

risks

and

uncertainty,

well

legal,

environmental,

social

responsibility

and

ethical

compliance.

Periodically,

the

Committee

requests

that

management

provides

with

assessment of the effectiveness of the internal control structure and procedures, and, if warranted, with plans for improving

its effectiveness.

The Committee reviews

with the auditors

(internal, external and

special examiners

when applicable) their

assessments of

the

design

and

functioning

the

control

framework

and

the

systems

place

for

ensuring

that

the

business

risks

are

identified, monitored,

controlled and

within the

Company’s

limit of

tolerance, and

their views

on management’s

plans for

improvements.

OVERSEEING WORK OF AUDITORS

The Committee

recognizes

that the

Company’s

auditors

possess

substantial expertise

and

have significant

professional

responsibilities. It holds the auditors accountable for fulfilling

their respective responsibilities.

The Internal auditor (when established) will be accountable

to the Committee, in its capacity as a committee

of the Board.

The Committee demands independent and objective assessments of the Company’s standards of behavior,

its compliance

with authorities, its financial reporting, and its business risks

systems, practices and controls from the auditors.

The Committee oversees audit activities with respect to the

following two (2) types of audits:

(a)

the

annual

audit

deals

with

the

fairness

the

statements,

compliance

transactions

with

specified

legal

authorities, and any other matter identified by the external

auditor as important,

(b)

the internal audit

(when established), which is

a part of

management’s system of internal

control, deals with

matters

similar to those of the annual audit.

The Committee reviews and follows the five (5) generic

phases of each of the two (2) types of audits:

establishing the purpose and terms of reference for the audit;

selection and organization of a team of experienced professionals

to plan and conduct the audit;

conduct of the audit; and

reviews all the audit results and findings, and reports to the

Board.

The Committee

shall review

management’s

plans to

correct any

significant

problems raised

by the

internal

and external

auditors. It shall monitor and review management’s

progress in implementing its response plan.

The Committee ensures that management has not placed any inappropriate restrictions on the audits and confirms that the

external auditor is independent and able to maintain

its objectivity.

The Committee approves the mandate of the internal audit function, monitors the long term internal

audit plan and ensures

that the internal auditor has adequate resources to perform its responsibilities and has direct and open communication with

the Committee. It

reviews the reporting

relationship of the

internal auditor to

ensure that an

appropriate segregation of

duties

is maintained and

that the internal

auditor has an

obligation to report

directly to the

Committee on matters

affecting its duties,

irrespective of his or her reporting relationships.

The Committee

evaluates the

work of

each of

the auditors

with a

view to

determining the

level of

assurance that

can be

derived from their work.

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Periodically, the Committee

evaluates the performance of each auditor.

The Committee shall establish effective communication processes with management and the Company’s auditors, to

assist

it in monitoring objectively the quality and

effectiveness of the relationship among

the auditors, management and the Audit

Committee. It shall be responsible for the resolution of

disagreements between management and auditors.

OPERATIONAL RESPONSIBILITIES

Each

new

member

will

receive

orientation

about

the

Committee’s

work

and

responsibilities

and

all

members

are

encouraged to keep current about

accounting, auditing and financial reporting standards

and practices. In recognition of

the

importance of the

financial literacy skills

of its members,

the Committee relies

on the full support

of the Board

in acquiring

and in developing an approach to improve the necessary

skills, when required.

Annually,

the Committee

reviews the

Charter setting

out the

scope of

its responsibilities,

and, where

in the

opinion of

the

Committee, amendments

to the Charter

are required,

may propose such

amendments to

the Board for

consideration and

approval.

Annually, the Committee

will consider the appropriateness of preparing a report

to the Board describing its work.

OTHER RESPONSIBILITIES

Periodically,

in consultation

with the Chief

Financial Officer

and the auditors,

the Committee seeks

reasonable assurance

of the quality and sufficiency of the Company’s

accounting and financial personnel and other resources.

The Committee shall discuss or review in advance the

appointment of the Chief Financial Officer.

The Committee shall review procedures established by management for dealing with complaints from employees related to

financial reporting, controls and corporate conduct.

The Committee may investigate any matters that, at the

Committee’s discretion, fall within its duties.

The Committee shall perform such other functions as are

assigned to it by law or by the Board.

The Committee shall review with the general

counsel, legal and regulatory matters that, in the

opinion of management, may

have

material

impact

the

financial

statements,

organization

compliance

policies,

and

program

and

reports

received from regulators.

OPERATING PROCEDURES

The Committee shall meet quarterly, or more frequently as appropriate, in advance of regularly scheduled Board meetings.

Committee meetings shall be

called by the Committee

Chair or requested

by any Committee member

or by the Board

Chair.

Notice of each meeting of the

Committee shall be given to each member of

the Committee (including the Chair of the Board

as an ex-officio member of the Committee), and except in the case of an in-camera meeting, also to the Auditors, the Chief

Executive Officer

and the

Chief Financial

Officer of

the Company.

Notice of

the meeting

shall be

given either

orally or

electronic mail, not less than 48 hours before the time fixed for

the meeting. Members may waive notice of a meeting.

Meeting discussions may take place face to face, by teleconference

or through a reciprocal interchange of emails.

The agenda for each meeting will be established by the Chair

of the Committee.

Any decision made by

the Committee shall be

determined by a majority

vote of the members

of the Committee present.

member will be deemed to have consented

to any resolution passed or action

taken at a meeting of the Committee

unless

the member dissents.

The Chief Executive Officer and the Chief Financial Officer of the Company shall attend all Audit Committee meetings, with

the exception of in-camera meetings.

A matter put to vote

at a meeting of the

Committee shall be decided

by a majority of

the votes cast, and in

the event of an

equality of votes, the Chair has a deciding vote.

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The Secretary of the Committee

shall ensure that minutes of meetings

are prepared for distribution to Committee members,

and,

except

for

in-camera

meetings,

the

Auditors,

the

Chief

Executive

Officer

and

the

Chief

Financial

Officer

the

Company.

The Chair of the

Committee will report

to the Board

on proceedings and

deliberations of the

Committee, either orally

or in

writing, at the first subsequent meeting of the Board

or at such earlier time as the Committee in its discretion

may consider

advisable.

The Committee may retain at the

Company’s expense, with prior

Board approval, independent consultants

and such other

persons as the Committee shall determine necessary

to fulfill its duties and responsibilities.

LIMITATION

ON THE COMMITTEE’S DUTIES

In contributing

the

Committee’s

discharging

its

duties

under

this

Charter,

each

member

the

Committee

shall

obliged

only

exercise

the

care,

diligence

and

skill

that

reasonably

prudent

person

would

exercise

comparable

circumstances. Nothing

in this

mandate is

intended, or

may be

construed, to

impose on

any member

of the

Committee a

standard of care

or diligence that

is in any

way more onerous

or extensive than

the standard to

which all Board

members

are subject. The essence of the

Committee’s purpose is

to monitor, review

and when appropriate, recommend

changes to

financial

and

corporate

operating

standards

they

are

practiced

the

Company’s

management

gain

reasonable

assurance (but not to ensure) about fundamental activities

of the Company.

Positive
Negative
Uncertain
Constraining
Legalese
Litigious
Readability	6th grade Good

PyroGenesis Canada (PYRGF) 40-F2022 FY Annual report (Canada)

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