Rights Offering FAQ

The following is a summary of the principal features of the rights offering of GreenFirst Forest Products Inc. (GreenFirst) and should be read together with, and is qualified in its entirety by, the more detailed information and financial data and statements contained in the final prospectus of GreenFirst dated July 2, 2021. A copy of the final prospectus can be found under GreenFirst’s profile on SEDAR at www.sedar.com. We caution that the prospectus is primarily addressed to shareholders as of the Record Date of July 9, 2021 and not to persons who acquired their rights in the market after the Record Date. In all circumstances, we encourage shareholders and rightsholders to contact their financial and legal advisors to better understand their rights and obligations.

1. How many rights will I receive and what do they entitle me to receive?

Each shareholder as of the Record Date for the rights offering will receive three rights for each common share held at such time. The Record Date for the rights offering is July 9, 2021.

Each right will entitle the holder thereof to acquire, at an exercise price of C$1.50, one subscription receipt. Each subscription receipt will be automatically exchanged, without further action or consideration, into a common share of GreenFirst upon satisfaction of the closing conditions to GreenFirst’s previously announced acquisition of lumber and forestry assets. If the closing conditions are not satisfied by October 1, 2021 (subject to certain extensions), the holder of the subscription receipts will receive the exercise price plus accrued interest thereon.

2. When will the stock trade ex-rights?

The common shares of GreenFirst will commence trading on the TSX Venture Exchange on an “ex-rights” basis on the opening of trading on July 8, 2021 (i.e. on the first trading day preceding the Record Date of July 9, 2021). Purchasers of common shares of GreenFirst at that time are not entitled to receive the rights.

3. What is expected to happen to the GreenFirst share price following the ex-rights date?

While there can be no certainty concerning our share price, it is expected that the common shares of GreenFirst are currently trading “cum-rights”. Accordingly, it is expected that GreenFirst’s share price will fall when the common shares begin trading ex-rights at the opening of trading on July 8, 2021 to reflect that that the common shares no longer include the rights which trade separately.

4. When will the rights begin trading?

The rights will be listed and commence trading on the TSX Venture Exchange at the opening of trading on July 8, 2021 which is the first trading day preceding the Record Date of July 9, 2021. The rights will trade under the symbol “GFP.RT” with a corresponding FIGI# of BBG011PNB9K4.

5. How long will the rights trade?

The rights will remain open for exercise until 5:00 pm (Eastern time) on July 30, 2021. The TSX Venture Exchange will stop trading of rights on the Exchange at 12:00 noon (Toronto time) on this date.

We caution that, if you are a beneficial holder, your participant (being a bank, broker or other intermediary) may have additional procedures and deadlines. You should contact your participant to confirm inquire about their specific procedures and deadlines.

6. Will my rights show up in my brokerage account? If not, how do I access them?

For Canadians, if you are a registered shareholder, a “DRS Statement” will be sent to you confirming your holdings of your rights along with a Rights Subscription Form permitting you to exercise your rights. Per the instructions contained in your Rights Subscription Form, payment of the aggregate exercise price in respect of your rights must be paid to Computershare Investor Services Inc. by certified cheque, bank draft of money order.

If you are a beneficial shareholder, including a person who currently holds common shares in a brokerage account, if your bank, broker or other intermediary held your shares through CDS (usually through a Canadian intermediary or on the GFP symbol traded on the TSX Venture Exchange) your rights are expected to be deposited directly into your brokerage account. It is expected that the rights will be issued to your participant (i.e., your bank, broker or other intermediary) on July 12, 2021 (i.e. one trading day following the Record Date of the rights offering of July 9, 2021). Your participant may have other procedures or policies that can further delay seeing the rights appear in your account.

We remind shareholders as of the Record Date that any registered shareholder with an address in the United States, or which otherwise appears to be subject to US securities laws, including any shareholder whose bank, broker or other intermediary holds the shares through the Depository Trust Company (DTC) (usually through a US intermediary or on the ICLTF symbol traded on the pink sheets), will not initially receive their rights. Such shareholders may come forward and submit the requisite documentation to GreenFirst stating that they are an “Approved Eligible Holder” as described in the prospectus (generally meaning a US Accredited Investor or Qualified Institutional Buyer) at which time such shareholder will, subject to certain additional procedures at the intermediary level, receive their rights. Any registered U.S. shareholder or any shareholder who holds their rights, directly or indirectly, through DTC and who does not become an Approved Eligible Holder and receives (or have their broker receives) such rights will have their rights sold on their behalf, with the proceeds paid to such shareholder.

7. I am not Canadian, will I receive any Rights,

Any registered shareholder with an address in an Ineligible Jurisdiction (i.e., outside of Canada, or which otherwise appears to be subject to securities laws outside of Canada) and any shareholder whose intermediary holds the shares through through Depository Trust Company (DTC) are not expected to initially receive their rights. Such shareholders may come forward and submit the requisite documentation to GreenFirst stating that they are an “Approved Eligible Holder” as described in the prospectus (generally meaning a US Accredited Investor or Qualified Institutional Buyer), at which time such shareholder will, subject to certain additional procedures at the intermediary level, receive their rights. Any registered U.S. shareholder or any shareholder who holds their rights, directly or indirectly, through DTC and who does not become an Approved Eligible Holder and receives (or have their broker receives) such rights will have their rights sold on their behalf with the proceeds paid to such shareholder.

8. What will happen if I am an Ineligible Holder and do not become Approved Eligible Holder

GreenFirst’s transfer agent, commencing on July 26, 2021, will start to attempt to sell any Rights which a registered Ineligible Holder was otherwise entitled to. At the closing of the rights offering, any proceeds received by the Rights Agent with respect to such sale of Rights net of brokerage fees and costs incurred and, if applicable, the Canadian tax required to be withheld, will be divided on a pro rata basis among such registered Ineligible Holders. The Rights Agent will deliver the proceeds of such sale by mailing cheques (in Canadian funds) as soon as practicable to such registered Ineligible Holders at their addresses recorded on the books and records of GreenFirst. Amounts of less than $10.00 will not be remitted.

We caution that this process applies to registered Ineligible Holders (generally being a registered shareholder with an address in the United States, or which otherwise appears to be subject to U.S. securities laws), including Cede & Co. on behalf of Depository Trust Company (DTC). This process will not apply directly to beneficial shareholders. If you hold your shares through a broker, bank or other intermediary holding your shares through CDS, it is not expected that you will receive any proceeds as the result of the above-noted process. If you hold your shares through a broker, bank or other intermediary holding your shares through DTC, it is expected that such intermediary will deposit your entitlement to the sale proceeds into your account.

9. I am entitled to be an Approved Eligible Holder, which should I do?

Please complete the form of representation letter (or see downloadable file below) and submit it to rights@gffp.ca.

If accepted, GreenFirst will advise you that your representation letter has been accepted. Thereafter:

(i) if you acquired rights after the Record Date of July 9, 2021, in most circumstances no further action should be required and you should be able to exercise your rights. We encourage you to contact your intermediary to discuss any additional internal procedures or deadlines they may have.
(ii) if you are a registered holder of common shares as of the Record Date, GreenFirst will ask its transfer agent to mail to you a DRS Statement confirming your rights entitlement. It is expected to take approximately 2 business days to mail following the acceptance (not the submission) of your representation letter. You must be approved as an Approved Eligible Holder prior to 5:00 p.m. on July 23, 2021 to receive your rights.
(iii) if you are a beneficial holder of common shares as of the Record Date and your intermediary holds the rights through CDS, in most circumstances, you will be permitted to provide our acceptance to your broker, bank or other intermediary and thereafter begin to transact in the rights.
(iv) if you are beneficial holder of common shares as of the Record Date and your and your intermediary held your shares through Depository Trust Company (DTC), in most circumstances, your intermediary will be required to elect to receive your rights in DRS Statement through the DTC. Once your intermediary makes such election, DTC will contact GreenFirst’s transfer agent so that it can deliver your rights to you or your intermediary. In doing so, it is important that you ask your intermediary to include your representation letter and a reference to your name as it appears in your representation letter in its request to DTC. The timing for our transfer agent to be advised of the requirement to receive a DRS statement will depend on your intermediary’s ability to complete a timely communication with DTC. This process often takes approximately 2 business days, but should be discussed with your intermediary. After DTC advises our transfer agent of your request to receive a DRS Statement, if all documentation provided by your intermediary remains in order, you will then receive by mail a DRS Statement confirming your rights entitlement. This is expected to take approximately an additional 2 business days following the date DTC contacts GreenFirst’s transfer agent and provides all required materials.

We note that the deadline to become an Approved Eligible Holder is July 23, 2021. If you believe that you are entitled to rights as you held shares of GreenFirst on the Record Date of July 9, 2021 through DTC, as set out above, your intermediary will need to take additional steps to make your rights exercisable. Each broker, bank or other intermediary has different internal procedures and deadlines. With the approaching deadlines and expiration dates, we encourage you to contact your intermediary to discuss if they are able to meet the various deadlines.

10. I acquired rights / additional rights after the Record Date of July 9, 2021, may I exercise the rights?

If you are Canadian and acquired rights, or additional rights, through your brokerage account, you should be able to exercise your rights in accordance with the procedures provided by your broker.

If you are not Canadian (including American or from another foreign jurisdiction) and acquired rights, or additional rights, through your brokerage account, we kindly ask that you provide us with the form of representation letter (and supporting documentation; see downloadable file below) and submit it to rights@gffp.ca, following which you should be free to exercise your rights in accordance with the procedures provided by your broker. If you have previously provided GreenFirst with a representation letter (and supporting documentation), no additional action is required. While the deadline to become an Approved Eligible Holder is July 23, 2021, we wish to advise persons who acquired rights after the Record Date of July 9, 2021, and who believe that they need to submit a representation letter in order to exercise such rights, that GreenFirst will continue to accept representation letters after July 23, 2021. The deadline of July 23, 2021 remains in place for any person who believes they are entitled to rights due to having been a shareholder of GreenFirst on the Record Date of July 9, 2021 and having held such shares in registered form or through DTC.

We encourage you to contact your intermediary to discuss any additional internal procedures or deadlines they may have.

11. How do I exercise my rights?

If you are a registered shareholder, please complete the Rights Subscription Form enclosed with your DRS Statement. Additional instructions are found on the Rights Subscription Form and summarized in the prospectus. Your rights must be exercised before 5:00 pm (Eastern time) on July 30, 2021.

If you are a beneficial holder, each participant (being a bank, broker or other intermediary) has different procedures and deadlines. You should contact your participant to confirm what their specific procedures are.

12. Are there commissions or fees attached to exercising the rights?

GreenFirst does not charge any commissions or fees to shareholders to exercise their rights. Per the instructions contained in your Rights Subscription Form, payment of the aggregate exercise price in respect of your rights must be paid to Computershare Investor Services Inc. by certified cheque, bank draft of money order.

13. What is the “Additional Subscription Privilege”?

The Additional Subscription Privilege provides a shareholder who fully exercises its rights to subscribe for an additional number of subscription receipts, subject to proration. All Additional Subscription Privilege requests will be honored if sufficient subscription receipts are available at the expiry date of the rights offering (i.e. July 30, 2021). Subscription receipts will be distributed on a pro rata basis only if there are insufficient remaining subscription receipts to satisfy all Additional Subscription Privilege requests.

14. Is the rights offering dilutive to existing shareholders?

All shareholders have the right to purchase subscription receipts based on the number of common shares they own as of the Record Date (i.e. July 9, 2021). Each right will entitle the holder thereof to acquire, at an exercise price of C$1.50, one subscription receipt (the “Basic Subscription Privilege”).

If a shareholder does not exercise all of its rights pursuant to the Basic Subscription Privilege, the shareholder’s equity ownership in GreenFirst will be diluted by the issuance of common shares issuable pursuant to the terms of the subscription receipts upon the exercise of the rights to other shareholders and, if applicable, the common shares issuable pursuant to the terms of the standby commitment, which dilution may be significant.

There will be no dilutive effective to shareholders who exercise all of the rights issued to them.

15. What happens if I change my mind to purchase subscription receipts after submitting my subscription form?

All subscriptions for rights are irrevocable once submitted to GreenFirst.

16. Will be Rights, Subscription Receipts or Common Shares be Subject to any trading restrictions?

It is expected that persons who have provided a representation letter to receive Rights and ultimately receive (or whose broker receives) those rights evidenced by a DRS Statement will receive such Rights subject to a US restrictive legend. Until the legend is removed all underlying securities (including the Subscription Receipts issued upon exercise of the Rights and the Common Shares issuable on automatic exchange of the Subscription Receipts) will likewise bear that legend. The legend restricts the trading of the applicable security in the United States. The legend can typically be removed at the time of a sale in accordance with, among certain other exceptions, “Rule 904 of Regulation S”. Such a sale is often done through the facilities of the TSX Venture Exchange (under the “GFP” root symbol). The process requires a security holder to complete the documentation requested by their broker, which is then submitted to GreenFirst’s transfer agent. We encourage you to discuss with your financial and legal advisors concerning the nature of these restrictions and to contact your intermediary to discuss any additional internal procedures or deadlines they may have.

About GreenFirst:

GreenFirst is a forest-first business, focused on environmentally sustainable forest management and lumber production. We believe that sustainable forest planting and harvesting, coupled with the long-term green advantage of lumber, provide GreenFirst with significant cyclical and secular advantages in building products. GreenFirst’s long-term pursuit is to be a global leader in environmentally sustainable lumber. For more information, please visit: www.gffp.ca.

Forward-Looking Information:

Certain information in this document constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this document that are not statements of historical fact are forward-looking statements. Forward looking statements are often identified by terms such as “may”, “should”, “anticipate”, “expect”, “potential”, “believe”, “intend”, “estimate” or the negative of these terms and similar expressions. Forward-looking statements in this document include, but are not limited to, statements with respect to the rights offering (including the conditions, timing considerations, anticipated use of proceeds, completion thereof, transfer restrictions, settlement and intermediary matters and the standby commitment), statements with respect to the proposed acquisition, TSX Venture Exchange matters (including with respect to listing of certain securities of GreenFirst) and statements with respect to the share price of the common shares. Forward-looking statements are based on assumptions, including expectations and assumptions concerning: interest and foreign exchange rates; capital efficiencies, the lumber industry (and its growth and growth rates) in North America, and GreenFirst’s future plans and ability to complete future investments. While GreenFirst considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Readers are cautioned not to place undue reliance on forward-looking statements. In addition, forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; future legislative, tax and regulatory developments.

Readers are cautioned that the foregoing list is not exhaustive and other risks are set out in GreenFirst’s public disclosure record filed under GreenFirst’s profile on www.sedar.com. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this document are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and thus are subject to change thereafter. GreenFirst disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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