Kelso Technologies : 2023 Management Information Circular

MANAGEMENT INFORMATION CIRCULAR

INTRODUCTION

This Management Information Circular (the "Information Circular") accompanies the Notice of Annual General and Special Meeting given to the holders (the "Shareholders") of common shares (the "Common Shares") of Kelso Technologies Inc. ("Kelso" or the "Corporation") in respect of the annual general and special meeting (the "Meeting") of Shareholders to be held on Thursday, June 1, 2023 at the Delta Hotel by Marriott, 1310 Water Street, Kelowna, British Columbia, Canada V1Y 1P3, at the hour of 10:00 a.m. Pacific time. References in this Information Circular to the Meeting include any adjournment(s) or postponement(s) of the Meeting.

Figures in this Information Circular are expressed in United States dollars ("US$") or in Canadian dollars ("C$"), unless otherwise stated. As at December 31, 2022 the value of the Canadian dollar, based on the Bank of Canada's daily rate of exchanges, was US$0.7383 respectively.

PROXIES AND VOTING RIGHTS

Solicitation of Proxies

The solicitation of proxies is being made on behalf of Management. Costs of the solicitation of proxies for the Meeting will be borne by the Corporation. It is expected that solicitations of proxies will be made primarily by mail, but proxies may also be solicited by telephone or other personal contact by directors, officers and employees of the Corporation without special compensation. In addition to the use of mail, proxies may be solicited by personal interviews, personal delivery, telephone or any form of electronic communication or by directors, officers and employees of the Corporation who will not be directly compensated, therefore. The Corporation has arranged for Intermediaries (as defined below) to forward Meeting Materials (as defined below) to Non-Registered Shareholders (as defined below) by those Intermediaries as the Registered Shareholders (as defined below) and the Corporation may reimburse the Intermediaries for their reasonable fees and disbursements in that regard.

Only a Shareholder whose name appears on the certificate(s) representing its Common Shares (a "Registered Shareholder") or its duly appointed proxy nominee is permitted to vote at the Meeting. A Shareholder is a non- registered Shareholder (a "Non-Registered Shareholder") if its Common Shares are registered in the name of an intermediary, such as an investment dealer, brokerage firm, bank, trust company, trustee, custodian, administrator or other nominee, or a clearing agency in which the intermediary participates (each, an "Intermediary"). Accordingly, most Shareholders of the Corporation are Non-Registered Shareholders because the Common Shares they own are not registered in their names but are instead registered in the name of the Intermediary through which they own the Common Shares.

More particularly, a person is a Non-Registered Shareholder in respect of Common Shares which are held on behalf of that person, but which are registered either: (a) in the name of an Intermediary that the Non-Registered Shareholder deals in respect of the Common Shares; or (b) in the name of a clearing agency (such as The Canadian Depository for Securities Limited ("CDS")) of which the Intermediary is a participant. In Canada, the vast majority of securities are registered under the name of CDS, which acts as nominee for many Canadian brokerage firms. Common Shares so held by brokers or their nominees can only be voted (for or against resolutions) upon the instructions of the Non-Registered Shareholder. Without specific instructions, Intermediaries are prohibited from voting Common Shares held for Non-Registered Shareholders.

These proxy solicitation materials are being sent to both Registered Shareholders and Non-Registered Shareholders. If the Corporation or its agent has sent these materials directly to a Non-Registered Shareholder, such Non-Registered Shareholder's name and address and information about its holdings of Common Shares have been obtained in accordance with the requirements under applicable securities laws from the Intermediary holding the Common Shares on such Non- Registered Shareholder's behalf.

Non-Registered Shareholders who have not objected to their Intermediary disclosing certain information about them to the Corporation are referred to as non-objecting beneficial owners ("NOBOs"), whereas Non-Registered Shareholders who have objected to their Intermediary disclosing ownership information about them to the Corporation are referred to as objecting beneficial owners ("OBOs"). In accordance with National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer ("NI 54-101"), the Corporation has elected to send the Notice of Meeting, this Information Circular and the related form of proxy or voting instruction form (collectively, the "Meeting Materials") indirectly to the NOBOs and to the OBOs through their Intermediaries.

How to Vote

Your vote is important. It is recommended that you vote your shares in advance of the meeting. Only registered shareholders and duly appointed proxyholders will be permitted access to the meeting. The Corporation is not aware of any items of business to be brought before the Meeting other than those set out in the Notice of Meeting and further described in this Information Circular. There will be no management presentation on the business or operations of the Corporation at the Meeting.

Registered Shareholders who are unable to attend the Meeting in person, or any adjournment(s) or postponement(s) of the Meeting are requested to date, complete, sign and deposit the accompanying proxy for use at the Meeting or any adjournment(s) or postponement(s) of the Meeting. To be valid, proxies must be dated, completed, signed and deposited with Computershare Investor Services Inc., Proxy Department (a) by mail using the enclosed return envelope or one addressed to Computershare Investor Services Inc., Proxy Department, 8th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1; (b) by telephone from a touch tone phone 1-866-732-VOTE (8683) (c) by by facsimile to 1-(416)263-9524 or 1-866-249-7775; or (c) through the internet at www.investorvote.com using your 15-digit control number found on your proxy. Your proxy must be received by no later than 10:00 a.m. Pacific time on Tuesday, May 30, 2023 or at least 48 hours (excluding Saturdays, Sundays and holidays) before the time that the Meeting is to be reconvened after any adjournment(s) or postponements(s) of the Meeting. The deadline for the deposit of proxies may be waived or extended by the Chair of the Meeting at the Chair's discretion without notice. If you vote by Telephone or the Internet, DO NOT mail back the proxy.

Non-Registered Shareholders will receive voting instructions from the Intermediary through which they hold their Common Shares. Please follow the instructions provided on your voting instruction form to vote your Common Shares. If you vote by Telephone or the Internet, DO NOT mail back the voting instruction form.

Registered Shareholders

The persons named in the accompanying form of proxy are nominees of the Corporation's Management. A Shareholder has the right to appoint a person or company (who need not be a Shareholder) to attend and act for and on the Shareholder's behalf at the Meeting other than the persons designated as proxyholders in the accompanying form of proxy. To exercise this right, the Shareholder must either:

1. on the accompanying form of proxy, strike out the printed names of the individuals specified as proxyholders and insert the name of the Shareholder's nominee in the blank space provided; or
2. complete another proper form of proxy.

In either case, to be valid, a proxy must be dated and signed by the Shareholder or by the Shareholder's attorney authorized in writing. In the case of a company, the proxy must be signed by a duly authorized officer of, or attorney for, the company.

The completed proxy, together with the power of attorney or other authority, if any, under which the proxy was signed, or a notarially certified copy of the power of attorney or other authority, must be delivered to Computershare Investor Services Inc., Proxy Department (a) by mail using the enclosed return envelope or one addressed to Computershare Investor Services Inc., Proxy Department, 8th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1; (b) by telephone from a touch tone phone 1-866-732-VOTE (8683) (c) by facsimile to 1-(416)263-9524 or 1-866-249-7775; or

1. through the internet at www.investorvote.com using your 15-digit control number found on your proxy. Your proxy must be received by no later than 10:00 a.m. Pacific time on Tuesday, May 30, 2023 or at least 48 hours (excluding Saturdays, Sundays and holidays) before the time that the Meeting is to be reconvened after any adjournment(s) or postponement(s) of the Meeting. The deadline for the deposit of proxies may be waived or extended by the Chair of the Meeting at the Chair's discretion without notice. If you vote by Telephone or the Internet, DO NOT mail back the proxy or the voting instruction form.

Non-Registered Shareholders

Only Registered Shareholders or duly appointed proxyholders for Registered Shareholders are permitted to vote at the Meeting. Non-Registered Shareholders (whether NOBOs or OBOs) are advised that only proxies from Shareholders of record can be recognized and voted at the Meeting.

The Intermediary holding Common Shares on behalf of a Non-Registered Shareholder is required to forward the Meeting Materials to such Non-Registered Shareholder (unless such Non-Registered Shareholder has waived its right to receive the Meeting Materials) and to seek such Non-Registered Shareholder's instructions as how to vote its Common Shares in respect of each of the matters described in this Information Circular to be voted on at the Meeting. Each Intermediary has its own procedures which should be carefully followed by Non-Registered Shareholders to ensure that their Common Shares are voted by the Intermediary on their behalf at the Meeting. The instructions for voting will be set out in the voting instruction form provided by the Intermediary. Non-Registered Shareholders should contact their Intermediary and carefully follow the voting instructions provided by such Intermediary. Alternatively, Non-Registered Shareholders who wish to vote their Common Shares in person at the Meeting may do so by appointing themselves as the proxy nominee by writing their own name in the space provided on the voting instruction form provided to them by the Intermediary and following the Intermediary's instructions for return of the executed voting instruction form.

All references to Shareholders in this Information Circular and the accompanying Notice of Meeting and proxy or voting instruction form are to Shareholders of record at the close of business on the Record Date (as defined below) unless specifically stated otherwise.

All references to Shareholders in this Information Circular and the accompanying Notice of Meeting and form of proxy are to Shareholders of record at the close of business on the Record Date (as defined below) unless specifically stated otherwise.

A Shareholder who has given a proxy may revoke it at any time before the proxy is exercised:

1. by an instrument in writing that is:
2. 1. signed by the Shareholder, the Shareholder's legal personal representative or trustee in bankruptcy or, where the Shareholder is a company, a duly authorized officer of, or attorney for, the company; and
   2. delivered to Computershare Investor Services Inc., Proxy Department, at 8th Floor, 100 University Avenue, Toronto, Ontario, Canada M5J 2Y1 or to the registered office of the Corporation located at Suite 2600 - 595 Burrard Street, Vancouver, British Columbia, Canada V7X 1L3 at any time up to and including the last business day preceding the day of the Meeting or any adjournment(s) or postponement(s) of the Meeting;
3. by sending another proxy with a later date to Computershare Investor Services Inc., Proxy Department, before10:00 a.m. Pacific time on Tuesday, May 30, 2023 or at least 48 hours (excluding Saturdays, Sundays and holidays) before any adjourned or postponed Meeting;
4. by attending the Meeting and notifying the Chair of the Meeting in writing prior to the commencement of the Meeting that the Shareholder has revoked its proxy; or
5. in any other manner provided by law.

A revocation of a proxy does not affect any matter on which a vote has been taken prior to the revocation. Revocation of Proxies

Voting and Exercise of Discretion by Proxyholders

A Shareholder may indicate the manner in which the persons named in the accompanying form of proxy are to vote with respect to a matter to be acted upon at the Meeting by marking the appropriate space. The Common Shares represented by the proxy will be voted for, against, or withheld from voting in accordance with the instructions given by the Shareholder in the proxy on any ballot that may be called for.

If the Shareholder specifies a choice in the proxy with respect to a matter to be acted upon, then the Common Shares represented thereby will be voted for, against, or withheld from the vote on that matter accordingly. If no choice is specified in the proxy with respect to a matter to be acted upon, it is intended that the proxyholder named by Management in the accompanying form of proxy will vote the Common Shares represented by the proxy in favour of each matter identified in the proxy and for the nominees for election to the Corporation's Board of Directors and auditor.

The accompanying form of proxy also confers discretionary authority upon the named proxyholder with respect to amendments or variations to the matters identified in the accompanying Notice of Meeting and with respect to any other matters which may properly come before the Meeting. As of the date of this Information Circular, Management of the Corporation is not aware of any such amendments or variations, or any other matters that will be presented for action at the Meeting other than those referred to in the accompanying Notice of Meeting. If, however, other matters that are not now known to Management properly come before the Meeting, then the persons named in the accompanying form of proxy intend to vote on them in accordance with their best judgment.

The Corporation is not relying on the notice-and-access delivery procedures outlined in NI 54-101 to distribute copies of Meeting Materials.

INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

Except as may be disclosed herein, no director or executive officer of the Corporation, or any person who has held such a position since the beginning of the last completed financial year end of the Corporation, nor any nominee for election as a director of the Corporation, nor any associate or affiliate of the foregoing persons, has any substantial or material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meeting.

VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES

The Corporation is authorized to issue an unlimited number of common shares (the "Common Shares") without par value, of which 54,320,086 are issued and outstanding as of April 19, 2023, and an unlimited number of Class "A" preference shares (the "Preference Shares") without par value, of which 5,000,000 are designated Class "A" convertible voting preference, series 1 shares (the "Convertible Shares") without par value.

The Common Shares have been listed posted for trading on the TSX under the symbol "KLS" since May 22, 2014, prior to which the Common Shares traded on the TSX Venture Exchange ("TSXV"). The Common Shares have traded on the NYSE American ("NYSE American") under the symbol "KIQ" since October 14, 2014, prior to which the Common Shares traded on the U.S. OTCQX over the counter market ("OTCQX International") under the symbol "KEOSF".

In accordance with applicable laws, the board of directors of the Corporation (the "Board") has fixed a record date as at April 19, 2023 (the "Record Date") for the purposes of determining Shareholders entitled to receive notice of, and to vote at, the Meeting, and has obtained a list of all persons who are Registered Shareholders at the close of business on the Record Date and the number of Common Shares registered in the name of each Registered Shareholder on that date. Each Registered Shareholder as at the close of business on the Record Date will be entitled to receive notice of the Meeting and will be entitled to one vote at the Meeting for each Common Share registered in his or her name as it appears on the list.

To the knowledge of the directors and executive officers of the Corporation, as at the Record Date, no person or company beneficially owns, directly or indirectly, or exercises control or direction over, securities carrying 10% or more of the voting rights attached to all outstanding voting securities of the Corporation:

BUSINESS OF THE MEETING

Receipt of Financial Statements

The audited consolidated annual financial statements of the Corporation for the year ended December 31, 2022 and accompanying auditor's report (the "Financial Statements") will be tabled at the Meeting. Copies of the Financial Statements have been provided to Shareholders who have opted to receive such materials. The Financial Statements can also be found on the Corporation's website at www.kelsotech.com and are also available under the Corporation's profile on SEDAR at www.sedar.com in Canada and on EDGAR at www.sec.gov in the United States. No vote by the Shareholders is required to be taken with respect to the Financial Statements.

Number of Directors

The Articles of the Corporation provide that the Board must consist of a minimum of three directors, to be elected annually by the Shareholders. The Board currently consists of seven (7) directors. At the Meeting, the Shareholders will be asked to set the number of directors of the Corporation at seven (7). The Board recommends a vote "FOR" the setting of the number of directors of the Corporation at seven (7). In the absence of a contrary instruction, the persons designated by management of the Corporation in the enclosed proxy intend to vote FOR the setting of the number of directors of the Corporation at seven (7).

Appointment and Remuneration of Auditors

Unless otherwise instructed, the proxies given pursuant to this solicitation will be voted for the appointment of Smythe, LLP as auditors of the Corporation to hold office until the close of the next annual meeting of the Corporation, at a remuneration to be fixed by the directors of the Corporation. Smythe, LLP were first appointed as auditors of the Corporation on November 16, 2009. The Board recommends a vote "FOR" the appointment of Smythe, LLP, as the auditor of the Corporation to hold office until the close of the next annual meeting of Shareholders and to authorize the directors to fix the auditor's remuneration.

ELECTION OF DIRECTORS

The term of office of each of the present directors expires at the Meeting. The Board proposes to nominate the persons named in the table below for re-election as directors of the Corporation. The nominees consist of the existing directors of the Corporation.

Each director elected will hold office until the next annual general meeting of the Corporation or until their successor is duly elected or appointed, unless the office is earlier vacated in accordance with the Articles of the Corporation or the Business Corporations Act (British Columbia) or he or she becomes disqualified to act as a director.

Advance Notice Policy

On June 5, 2013, the Shareholders approved the adoption of new articles of the Corporation (the "New Articles") which replaced the then existing Articles in their entirety. The New Articles contained an Advance Notice Policy (the "ANP"), which includes, among other things, a provision that requires advance notice be given to the Corporation in circumstances where nominations of persons for election to the Board are made by shareholders of the Corporation. The New Articles which contain the ANP are posted on the Corporation's website at www.kelsotech.com. As at the date of this Circular, the Corporation has not received notice of any director nominations pursuant to the ANP. Accordingly, at this time, the only persons eligible to be nominated for election to the Board at the Meeting are the below nominees.

Majority Voting Policy

In accordance with good corporate governance practices and procedures, the Board of directors of the Corporation adopted a Majority Voting Policy at a meeting of the Board on March 23, 2015. The Majority Voting Policy provides