Court File and Parties

Court File No.: BK-26-03318323-0031

Date: February 13, 2026

Superior Court of Justice - Ontario

Re: In the Matter of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended In the Matter of the Notice of Intention to Make a Proposal of JointCraft Inc., of the City of Vaughan, in the Province of Ontario

Before: Justice J. Dietrich

Counsel: Trevor Courtis, Meena Alnajar, Counsel for JointCraft Inc. Lexie Cooper, Doug Bourassa, Sonu Dhanju-Dhillon, Counsel for 1158667 Ontario Ltd. Rachel Nicholson, Denna Jalili, Counsel for Proposal Trustee Karen Fung, Proposal Trustee

Heard: February 13, 2026

Endorsement

[ 1 ] JointCraft Inc. (the " Company ") filed a notice of intention to make a proposal (" NOI ") pursuant to s. 50.4(1) of the Bankruptcy and Insolvency Act (the " BIA ") on January 9, 2026. On February 9, 2026, I made an order extending the stay period pursuant to s. 50.4(9) of the BIA until today February 13, 2026.

[ 2 ] Defined terms used but not otherwise defined herein have the meaning provided to them in factum of the Company filed for use on this motion.

[ 3 ] The Company requested two Orders.

[ 4 ] First an order (the " Extension and DIP Approval Order ") is sought which approves

a. interim financing pursuant to a DIP Term Sheet dated February 9, 2026, with its existing secured lender, 1158667 Ontario Limited (" 115 Ontario ") as Lender up to a maximum amount of $870,000 and grants a corresponding DIP Lender's Charge;

b. a further extension of the Stay Period pursuant to s. 50.4(9) of the BIA for 45 days until March 30, 2026;

c. a D&O Charge in the amount of $135,000 in favour of the Company's directors and officers;

d. an Administration Charge in the amount of $85,000;

e. the first report of Harris & Partners Inc. in its capacity as proposal trustee (the " Proposal Trustee ") dated February 8, 2026 (the " First Report ") and the second report of the Proposal Trustee dated February 11, 2026 (the " Second Report " and collectively with the First Report, the " Reports "), and the activities set out therein; and

f. the Insurance Financing Proposal.

[ 5 ] Second, an order (the " SISP Order ") is sought which approves a sale and investment solicitation process for the assets and business of the Company (the " SISP ") and the Stalking Horse Term Sheet between the Company and 1158667 Ontario Limited (in such capacity, the " Stalking Horse Bidder ") dated January 9, 2026 (the " Stalking Horse Term Sheet ") solely for the purpose of facilitating the Company and the Stalking Horse Bidder entering into a definitive agreement (the " Stalking Horse Agreement ") which shall, in turn, constitute the Stalking Horse Bid under the SISP.

[ 6 ] In support of the relief requested by the Company, the Proposal Trustee filed the Reports.

[ 7 ] No opposition to relief requested was raised, and at the start of the hearing counsel to the Company advised that approval of the Second Report would not be sought given its recent filing.

[ 8 ] The Company is a licensed cannabis contract manufacturer that specializes in the production of pre-assembled cannabis products, including pre-rolls, premium vapes and edibles. The Company operates from a leased 60,000 square foot facility located in Vaughan, Ontario. The Company is licensed by Health Canada to manufacture the Cannabis Products at the premises.

[ 9 ] Background in respect of the filing and the Company is set out in my endorsement of February 9, 2026 and is not repeated here.

[ 10 ] As noted, the current Stay Period expires today. The relief that the Company initially sought today was all part of one package. The DIP Lender was the Stalking Horse Bidder. It was a condition under the DIP Facility that SISP Order including approval of the Stalking Horse Term Sheet be approved before advances were made. The Company is exceedingly short on liquidity. The Cash Flow Forecast attached to the First Report shows that as the week ending February 14, 2026, the Company is only forecast to have an opening balance of $86,000.

[ 11 ] At the outset of the hearing, I expressed a number of concerns with the relief sought. First, the SISP was predicated on a Stalking Horse Agreement that does not exist. The Stalking Horse Term Sheet, which contemplates a credit bid by 115 Ontario, provided that it will form the basis of a definitive agreement to be entered into by the parties. Second, the SISP also contained very abbreviated milestones, in particular Phase 1 Bids, even though they were non-binding letters of intent, were required to exceed the consideration provided for in the Stalking Horse Agreement (which does not exist) and were due in only nine business days. Third, the Stalking Horse Term Sheet speaks to a reverse vesting transaction, without certainty as to how employees and contracts are to be treated. Finally, the Stalking Horse Term Sheet and requested SISP Order contemplates the approval of Break Fee in favour of the Stalking Horse Bidder, even though the Stalking Horse Agreement has not been entered into.

[ 12 ] I recognize that the Company has limited liquidity and limited alternative options in the circumstances and available timeframe. I also recognize that stalking horse agreements have certain benefits. These include those relating to stability for the ongoing business for the Company, its employees, contractual counterparties and customers. See Danier Leather Inc. (Re), 2016 ONSC 1044 at para 44.

[ 13 ] The primary problem here is that the Stalking Horse Term Sheet, although binding, is not the definitive agreement - that is the Stalking Horse Agreement, which has not been entered into. Accordingly, the benefits of a stable backstop and certainty for the ongoing business, employees and customers are illusive in this case. It is not clear what conditions and terms may form part of the ultimate Stalking Horse Agreement and there is no certainty on whether contracts or employees will be assumed by Stalking Horse Bidder who is the only secured creditor and proposed DIP Lender.

[ 14 ] After hearing my concerns, counsel requested the matter be stood down. When the hearing resumed, counsel for the Company and Proposal Trustee advised that discussions were continuing and an extension of the Stay Period until the next business day, being Tuesday, February 17, 2026 was requested. Counsel for 115 Ontario did not object to or consent to the revised brief extension of the Stay Period.

[ 15 ] The stay may be extended by the Court under s. 50.4(9) of the BIA where the Court is satisfied that: (a) the insolvent person has acted, and is acting, in good faith and with due diligence; (b) the insolvent person would likely be able to make a viable proposal if the extension being applied for were granted; and (c) no creditor would be materially prejudiced if the extension being applied for were granted.

[ 16 ] I am satisfied that the short stay extension should be granted. There is no evidence that the Company has acted in bad faith or conducted itself in an unacceptable manner. This short extension will allow the Company and 115 Ontario with the Proposal Trustee to discuss alternatives to a sale process and financing. The Proposal Trustee notes that the Company has sufficient liquidity for the requested brief extension, and the Company has advised there will be no operations on February 17, 2026. Accordingly, there is no evidence of any material prejudice to any creditor if the requested extension is granted and the Proposal Trustee supports the extension.

[ 17 ] Order to go in the form signed by me this day.

The Honourable Justice J. Dietrich

Date: February 13, 2026