Court File and Parties

Court File No.: CL-26-00000044

Date: February 13, 2026

Superior Court of Justice – Ontario [Commercial List]

IN THE MATTER OF AND APPLICATION UNDER SECTION 182 OF THE BUSINESS CORPORATIONS ACT, R.S.O. 1990, C. B.16, AS AMENDED

AND IN THE MATTER OF RULES 14.05(2) AND 14.05(3) OF THE RULES OF CIVIL PROCEDURE

AND IN THE MATTER OF A PROPOSED ARRANGEMENT INVOLVING XANADU QUANTUM TECHNOLOGIES INC., XANADU QUANTUM TECHNOLOGIES LIMITED AND CRANE HARBOR ACQUISITIONS CORP.

Before: Justice Jana Steele

Counsel: Craig Lockwood, Lauren Harper & Tamara Kljakic, for the Applicant Xanadu Quantum Technologies Inc. Joseph Blinick and Will Bortolin, for the Applicant Crane Harbor Acquisition Corp. Brandon Fragomeni, for His Majesty the King in Right of Ontario

Heard: February 13, 2026

Endorsement

[ 1 ] The applicants, Xanadu Quantum Technologies Inc. ("Xanadu") and Crane Harbour Acquisition Corp ("SPAC") jointly seek relief under s. 182 of the Business Corporations Act, R.S.O. 1990, c. B.16 (the "OBCA").

[ 2 ] At this initial stage, the parties are seeking an interim order for advice and directions pursuant to s. 182(5) of the OBCA related to a proposed plan of arrangement (the "Arrangement").

[ 3 ] The parties first appeared before me on February 12, 2026. At that appearance, counsel for His Majesty the King in Right of Ontario ("HMKO") (for the Director) requested an adjournment to consider its position, given that SPAC is not yet an OBCA company. The requested adjournment was opposed by the applicants.

[ 4 ] After hearing submissions from the parties, I granted a one-day adjournment and directed HMKO and the applicants to have discussions.

[ 5 ] HMKO advised at the return that it does not take a position on the applicants' motion.

[ 6 ] Following the appearance today I released the two Interim Orders, with reasons to follow. My reasons are set out below.

Background

[ 7 ] The Arrangement involves, among other things, (i) the acquisition by Xanadu Quantum Technologies Limited ("Newco") of all the Xanadu shares in exchange for Newco Multiple Voting Shares and Newco Subordinate Voting Shares; and (ii) the acquisition by Newco of all the SPAC shares in exchange for Newco Subordinate Voting Shares, in accordance with the Business Combination Agreement.

[ 8 ] Both Xanadu and Newco are OBCA companies.

[ 9 ] Xanadu was continued under the OBCA on October 29, 2025 (it was previously a CBCA corporation). Xanadu is a quantum computing company developing full-stack quantum computing solutions for global customers.

[ 10 ] Newco was incorporated under the OBCA on October 2, 2025. On November 21, 2025, Newco confidentially filed with the U.S. Securities and Exchange Commission a registration statement on Form F-4. On January 27, 2026, Newco publicly filed an amended registration statement on Form F-4 with the SEC.

[ 11 ] SPAC is a special purpose acquisition company, currently existing under the laws of the Cayman Islands (pending the approval of the Continuance Resolution). SPAC is not a reporting issuer in Canada. SPAC Class A Shares and SPAC share rights are listed on the Nasdaq. In addition, units consisting of one SPAC Class A Share and one SPAC Share Right are listed on the Nasdaq. SPAC's Class B Shares are not listed for trading. The only issued and outstanding SPAC Class B Shares were purchased by Crane Harbor Sponsor, LLC (the "Sponsor") in a private placement. As part of the proposed arrangement, SPAC will be continued under the OBCA.

[ 12 ] The Applicants each seek an interim order of the court under section 182(5) of the OBCA.

Analysis

[ 13 ] The only issue before the Court is whether to grant the Interim Orders sought.

[ 14 ] Section 182(5) of the OBCA provides the Court with broad and general powers to provide advice and direction in connection with a proposed arrangement, including with respect to the process for the calling of a meeting of shareholders and the approval of an arrangement.

[ 15 ] Section 182(5) provides:

The corporation may, at any time, apply to the court for advice and directions in connection with an arrangement or proposed arrangement and the court may make such order as it considers appropriate, including, without limiting the generality of the foregoing,

(a) an order determining the notice to be given to any interested person or dispensing with notice to any person;

(b) an order requiring a corporation to call, hold and conduct an additional meeting of, or to hold a separate vote of, all or any particular group of holders of any securities or warrants of the corporation in such manner as the court directs;

(c) an order permitting a shareholder to dissent under section n185 if the arrangement is adopted;

(d) an order appointing counsel, at the expense of the corporation, to represent the interests of shareholders;

(e) an order that the arrangement or proposed arrangement shall be deemed not to have been adopted by the shareholders of the corporation unless it has been approved by a specified majority that is greater than two-thirds of the votes cast at a meeting of the holders, or any particular group of holders, of securities of the corporation; and

(f) an order approving the arrangement as proposed by the corporation or as amended in any manner the court may direct, subject to compliance with such terms and conditions, if any, as the court thinks fit,

and to the extent that any such order is inconsistent with this section such order shall prevail.

[ 16 ] At the interim order stage, the purpose is "simply to set the wheels in motion for the application process relating to the arrangement and to establish the parameters for the holding of shareholder meetings to consider approval of the arrangement in accordance with the statute:" Re First Marathon Inc., [1999] O.J. No. 2805 (S.C.J.). The court is concerned with the approval of the mechanics for the notice and calling of the shareholder meeting to vote on the proposed arrangement, and to ensure that shareholders are given the opportunity to express their views and exercise their rights.

[ 17 ] However, a threshold issue arose regarding whether SPAC, one of the co-applicants, could avail itself of s. 182 of the OBCA given that it is currently incorporated under the laws of the Cayman Islands. As noted above, the other two corporations involved in the Arrangement (Xanadu and Newco) are OBCA companies.

[ 18 ] "Corporation" is defined in s. 1 of the OBCA to mean "a body corporate with share capital to which this Act applies."

[ 19 ] Xanadu is a corporation under the OBCA and accordingly satisfies the definition of "corporation" in the OBCA.

[ 20 ] SPAC is not yet a "corporation" under the OBCA. However, if the continuance resolution is passed by the SPAC shareholders, SPAC will also be an OCBA corporation before the final order is sought.

[ 21 ] The OBCA Director, having been notified of the application in accordance with s. 182(5.1) of the OBCA, appeared, but following the adjournment which afforded the Director some time to consider its position, did not take a position on the motion by Xanadu and SPAC seeking the interim orders.

[ 22 ] As noted by the applicants, section 182 of the OBCA is a flexible statutory provision. Similar to the equivalent "arrangement" provision in the Canada Business Corporations Act, RSC 1985, c. C-44 (the "CBCA"), courts have interpreted section 182 broadly and have approved its application in the context of a wide variety of corporate transactions. Pepall J. stated the following in Re Acadian Timber Income Fund (2009), 18 A.C.W.S. (3d) 985 (Ont. Sup. Ct. J.) [Commercial List], a CBCA arrangement matter, at para. 8:

Under section 192 of the CBCA, the court has the power to make such interim orders as it deems fit. The word "arrangement" is to be given its widest character, limited only by the corporation's own by-laws or general legislation. The purpose of an arrangement is to provide a flexible mechanism that can be adapted to the needs of a particular case. As Farley J. stated in Re Fairmont Hotels & Resorts: "…I think it is an error to forget that the very flexibility of the arrangement provision was designed to allow the solution of difficult and awkward situations." In the Policy Statement of the Director, the Director endorses the position that the arrangement provisions of the Act are intended to be facilitative, should not be construed narrowly, and further recognizes that the term arrangement is not exhaustively defined.

[ 23 ] I agree with the submission of the applicants that an interim order is useful and appropriate in these circumstances, notwithstanding the timing of SPAC's continuance to the OBCA between the interim and final orders. Section 182(5) of the OBCA gives the court broad latitude to make "such order as it considers appropriate." As noted by the applicants, SPAC will be an OBCA corporation at the operative time; that is, when the Arrangement is done. The continuance of SPAC under the OBCA is a step that will be taken prior to the submission to this Court for the final order approving the plan of arrangement. As noted by the applicants, the fact that SPAC is not currently a "corporation" at the time of the interim order motion is an immaterial quirk of timing. SPAC will be a "corporation" when the final order approving the Arrangement is sought. At this time, SPAC merely seeks to get the ball rolling, notify shareholders, conduct its shareholders' meeting, etc.

[ 24 ] While SPAC potentially could have sought the continuance prior to seeking the interim order, it would have been, at best, impractical. Among other things, the only reason that SPAC will seek to continue into Ontario is for the express purpose of effecting the arrangement. Accordingly, the resolution with respect to the continuance of SPAC is necessarily intertwined with the resolution approving the proposed arrangement. In addition, there would have been wasted time and resources expended holding two successive meetings of SPAC, months apart, for the purposes of concluding a single transaction.

[ 25 ] Moreover, there have been other cases where this court has granted interim orders to non-OBCA moving parties in similar circumstances, where it is contemplated that the continuance of the company from another jurisdiction to the OBCA will be completed before the arrangement. The applicants provided the Director and the Court with examples of interim orders having been granted in numerous similar instances, including the following:

a. In the Matter of a proposed arrangement involving Chantrell Ventures Corp. and Osisko Mining Inc. (CV-19-620623-00CL): On May 27, 2019, Hainey J. granted an interim order to Chantrell under s. 182(5) of the OBCA notwithstanding that it was a BCBCA company at such time. Paragraph 2(a) of the interim order indicates that a continuance resolution was to be voted upon at the same shareholder meeting as the arrangement resolution (as the parties have proposed in the instant case).

b. In the Matter of a proposed arrangement involving Aurico Gold Inc. and Alamos Gold Inc. (CV-15-10967-00CL): This was a joint application by Aurico, an OBCA corporation, and Alamos, a BCBCA corporation. It was contemplated that during the interim period, Alamos would continue from the BCBCA to the OBCA. An interim order was granted on or about May 22, 2015 by Wilton-Seigel J., which provided for, among other things, the special meeting of Alamos shareholders being called for the purposes of approving the continuance of Alamos from the BCBCA to the OBCA and approving the arrangement.

[ 26 ] I further note that this same flexible approach has been adopted by this court where the applicant was a real estate investment trust, or other similar vehicles: Re Noranda Income Trust Fund, 2023 ONSC 1452, at paras. 24-25; Innvest Real Estate Investment Trust (Re), 2010 ONSC 4292; Re Innvest REIT, 2011 ONSC 7693.

[ 27 ] As noted by D.M. Brown J. (as he then was) in Innvest REIT: "[i]t is important for the health of our economy that participants can expect a reasonably consistent application by the courts of processes involving financial and commercial transactions."

[ 28 ] At this interim stage, the court must be satisfied that "reasonable grounds exist to regard the proposed transaction as an 'arrangement'": Innvest REIT, at para. 9. When the parties return before the court for the final hearing, the court will determine whether the applicable statutory criteria have been satisfied, whether the proposed arrangement is fair and reasonable, and whether it has been put forward in good faith. When the parties return for final court approval, the results of the votes of the shareholders of Xanadu and SPAC in respect of the proposed arrangement will be known.

[ 29 ] Reasonable grounds exist here to regard the proposed transaction as an arrangement. Under s. 182(1) of the OBCA an "arrangement" includes: "(f) an exchange of securities of the corporation held by security holders for other securities, money or other property of the corporation or securities, money or property of another body corporate that is not a take-over bid as defined in Part XX of the Securities Act." The proposed arrangement constitutes an "arrangement" because it involves the exchange of shares of Xanadu and SPAC for securities of another body corporate (Newco) and it is not a takeover bid.

[ 30 ] At this interim stage, the Court is concerned with the approval and authorization of the mechanics for the notice and calling of the special meetings for the shareholder votes. The proposed Xanadu Interim Order would allow Xanadu to hold the Xanadu Meeting scheduled for March 5, 2026 for the purposes of voting on the Arrangement, or to approve the Arrangement by means of a written resolution. SPAC intends to hold the SPAC Meeting to seek approval of the continuance and Arrangement on or about March 16, 2026, subject to the ongoing review of the Circular by the SEC.

[ 31 ] The Court, in exercising its discretionary powers under s. 182(5) of the OBCA, should ensure that shareholders are properly notified of a proposed arrangement and that they will receive sufficient information to consider the proposed arrangement. The proposed Interims Orders addresses the questions of notice and approval that are typically provided for in an Interim Order granted by the Court under section 182(5) of the OBCA. Among other things, the Interim Orders address: (a) the provision of notice of the Xanadu Meeting and the SPAC Meeting; (b) the quorum for the Xanadu Meeting and the SPAC Meeting; (c) the solicitation and revocation of proxies; (d) the applicable voting requirements; (e) applicable dissent rights; and (f) notice of the Application hearing.

[ 32 ] The proposed Interim Orders sought are consistent with the Commercial List Model Order in all material respects. As noted by the applicants there are limited variations that are appropriate to the unique circumstances of the Arrangement, including:

a. The Xanadu Interim Order specifies that the Xanadu Arrangement Resolution may be approved in writing, which is consistent with Xanadu's governing documents; and

b. The SPAC Interim Order omits references to Ontario law in respect of the calling and holding of the meeting, because SPAC currently exists under the laws of the Cayman Islands (pending the approval of the Continuance Resolution).

[ 33 ] Having considered the written and oral submissions, I am satisfied that it is appropriate for the requested Interim Orders to be granted in the form signed by me today, with immediate effect and without the necessity of formal issuance and entry.

Justice Jana Steele

Date: February 13, 2026