VVT MED INC. — M&A Activity 2024

Oct 1, 2024

DXI Capital Corp. Announces Signing of Definitive Agreement for Proposed Acquisition of V.V.T. Med Ltd. and Exiteam Acquisition Corp.

Toronto, Ontario (Newsfile Corp. – October 1, 2024) – DXI Capital Corp. (TSXV: DXI.H) (“ DXI ”) is pleased to announce that it has entered into a definitive agreement dated September 30, 2024 (the “ Definitive Agreement ”) with V.V.T. Med Ltd. (“ VVT ”), an Israeli corporation, Exiteam Acquisition Corp. (“ EAC ”), a British Columbia corporation, and 1502987 B.C. Ltd. (“ DXI Subco ”), a wholly-owned subsidiary of DXI, pursuant to which DXI has agreed to acquire all of the issued and outstanding shares in the capital of VVT (the “ VVT Shares ”) and EAC (the “ EAC Shares ”), as well as all other issued securities of VVT and EAC (the “ Proposed Transaction ”). The Proposed Transaction is expected to enable DXI to meet the initial listing requirements of the TSX Venture Exchange (the “ TSXV ” or the “ Exchange ”) for the reactivation of DXI. Following the completion of the Proposed Transaction, DXI (the “ Resulting Issuer ”) will continue the business of VVT, being a new medical treatment for varicose veins and will be listed on the TSXV under the life sciences sector. All currency figures quoted herein are in Canadian dollars unless stated otherwise.

The Proposed Transaction

Pursuant to the terms of the Definitive Agreement, (i) DXI Subco and EAC will amalgamate to form an amalgamated entity under the Business Corporations Act (British Columbia), and (ii) DXI and each of the securityholders of VVT will enter into securities exchange agreements. As consideration for the completion of the Proposed Transaction, and subject to customary adjustments, including a proposed 4.67 to 1 share consolidation (the “ DXI Consolidation ”) of the issued and outstanding common shares of DXI (the “ Resulting Issuer Shares ”), holders of EAC Shares will receive one (1) Resulting Issuer Share for each EAC Share (the “ EAC Exchange Ratio ”). Any outstanding warrants or other exchangeable or convertible securities of EAC will be exchanged, on an equivalent basis, for securities of the Resulting Issuer. In addition, as consideration for the completion of the Proposed Transaction, and subject to customary adjustments, pursuant to the securities exchange agreements, each VVT Share will be exchanged for Resulting Issuer Shares on the basis of the VVT Exchange Ratio, as defined below. Based on the halt price of DXI’s common shares on November 24, 2023, the effective transaction price for the acquisition of VVT and EAC will be $0.56 per Resulting Issuer Share issued (the “ Transaction Price ”).

“ VVT Exchange Ratio ” means (i) 32,500,000, divided by (ii) the total number of VVT Shares outstanding immediately prior to the closing date of the Proposed Transaction (including, without limitation, VVT Shares issued upon the exercise or conversion of VVT stock options and VVT preferred shares), less the total number of VVT Shares issued pursuant to the conversion of the VVT convertible bonds (including the conversion of the principal thereof and any interest due and payable thereon).

Any outstanding options, warrants or other exchangeable or convertible securities of VVT will be exchanged, on an equivalent basis, for securities of the Resulting Issuer. VVT has 8% convertible bonds outstanding in the principal amount of $3,672,191, which, plus accrued interest, will be converted into approximately 10,391,627 units of VVT (the “ VVT Units ”) immediately prior to the closing date at a conversion price per VVT Unit of $0.42, with each VVT Unit consisting of one VVT Share and one share purchase warrant of VVT (the “ VVT Warrants ”). The VVT Warrants will be exercisable at $0.84 per VVT Share for two years from their date of issuance.

EAC is currently conducting a non-brokered private placement to be completed in conjunction with the Proposed Transaction (the “ Concurrent EAC Financing ”) consisting of subscription

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receipts (the “ Subscription Receipts ”) at a price of $0.56 per Subscription Receipt, to raise minimum gross proceeds of $4,500,000.

To date, EAC has issued 3,773,983 Subscription Receipts, generating total gross proceeds of approximately $2,113,431, along with 3,493,914 Units under the EAC Unit Financing (each as defined below) for additional gross proceeds of approximately $1,956,591, resulting in cumulative gross proceeds of approximately $4,070,022.

Each Subscription Receipt represents the right of the holder to receive, immediately prior to the closing of the Proposed Transaction, one unit of EAC (each a “ Unit ”) with each Unit consisting of one EAC Share and one warrant to acquire an EAC Share (a “ Unit Warrant ”). Each Unit Warrant is exercisable into one EAC Share at an exercise price of $0.84 per EAC Share for a period of two years from the issuance date of the Unit Warrants. EAC may pay a finder’s fee of 8% in cash and 8% broker’s warrants exercisable at $0.56 per EAC Share in connection with the Concurrent EAC Financing. Upon completion of the Proposed Transaction, all of the Units will be exchanged for equivalent securities of the Resulting Issuer at the EAC Exchange Ratio. Other than up to 25% of the gross proceeds raised under the Concurrent EAC Financing which may be released prior to the completion of the Proposed Transaction to provide necessary working capital to EAC and VVT, the gross proceeds of the Concurrent EAC Financing will be held in escrow until the completion of the Proposed Transaction. Any early releases from escrow conditions of such subscription proceeds will be made on commercial lending terms. Finders’ fees for the Concurrent EAC Financing will be paid in accordance with the policies of the TSXV.

Prior to the EAC Concurrent Financing, EAC completed a non-brokered private placement offering of Units, issuing 3,493,914 Units at a price of $0.56 per Unit for total gross proceeds of $1,956,591 (the “ EAC Unit Financing ”) .

It is expected that at least 50,080,541 Resulting Issuer Shares will be issued to acquire VVT and EAC at the Transaction Price (being a deemed enterprise value of $28,045,102.96), plus additional Resulting Issuer Shares issuable upon completion of the Concurrent Debt Settlement (currently estimated to be 1,875,000 Resulting Issuer Shares), as defined below, and the additional Resulting Issuer Shares issuable for the Concurrent EAC Financing (currently estimated to be 9,071,427, Resulting Issuer Shares). It is also expected that the Resulting Issuer will issue share purchase warrants and stock options for the purchase of an additional estimated 19,484,329 Resulting Issuer Shares to the extent unexercised to the date of completion of the Proposed Transaction.

The Proposed Transaction will constitute a reverse take-over of DXI by EAC and VVT. Trading in the shares of DXI is expected to remain halted until the Proposed Transaction has been completed.

DXI, EAC and VVT will provide further details in respect of the Proposed Transaction in due course by way of press release.

Concurrent Debt Settlement

As a pre-condition of closing the Proposed Transaction, DXI will settle unsecured indebtedness owed to certain of its principal shareholders in the current aggregate sum of $1,050,000, including accrued interest, immediately prior to or concurrent with the completion of the Proposed Transaction, which will be settled for Resulting Issuer Shares at $0.56 per share (the “ Concurrent Debt Settlement ”).

Additional details about the Proposed Transaction

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The Proposed Transaction will not constitute a non-arm’s length transaction pursuant to the policies of the TSXV, or a business combination or a related party transaction as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions .

DXI will be seeking from the TSXV a waiver from sponsorship for the Proposed Transaction.

Conditions to Closing

The completion of the Proposed Transaction is subject to the satisfaction of various conditions as are standard for a transaction of this nature, including but not limited to: (i) receipt of all requisite regulatory, stock exchange, court or governmental approvals, authorizations and consents; (ii) the absence of any material change or a change in a material fact or a new material fact affecting DXI, DXI Subco, EAC or VVT; (iii) the Resulting Issuer Shares, and all securities convertible into or exchangeable for Resulting Issuer Shares shall have been conditionally approved for listing on the Exchange; (iv) completion of the Concurrent EAC Financing for minimum gross proceeds of $4,500,000; and (v) the DXI Consolidation and the Concurrent Debt Settlement shall have been completed. There can be no assurance that the Proposed Transaction will be completed on the terms proposed above or at all.

Financial Information

VVT

The following table sets out selected historical financial information for VVT, derived from VVT’s audited financial statements for the years ended December 31, 2023 and 2022, which should be read in conjunction with VVT’s audited financial statements for the periods presented, which will be included in the filing statement to be filed by DXI on SEDAR+ in connection with the Proposed Transaction (the “ Filing Statement ”).

	Year Ended December 31, 2023 (USD)	Year Ended December 31, 2022 (USD)
Assets	$889,000	$885,000
Liabilities	$6,245,000	$4,425,000
Revenue	41,000	81,000
Net Income (loss)	$(2,116,000)	$(2,335,000)

EAC

The following table sets out selected historical financial information for EAC, derived from EAC’s audited financial statements for the years ended December 31, 2023 and 2022, which should be read in conjunction with EAC’s audited financial statements for the periods presented, which will be included in the Filing Statement.

	Year Ended December 31, 2023 (CAD)	Year Ended December 31, 2022 (CAD)
Assets	$2,386,285	$598,591

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Liabilities	$819,495	$102,680
Revenue	-	-
Net Income (loss)	$(253,373)	$ (266,938)

The Resulting Issuer

Upon completion of the Proposed Transaction, it is the intention of the parties that the Resulting Issuer will be renamed “VVT Medical Ltd.” or such other name as may be determined by the parties and accepted by applicable regulatory authorities (the “ Name Change ”). The Resulting Issuer will be a life sciences issuer under the policies of the TSXV.

The management team of the Resulting Issuer is anticipated to be comprised of: Erez Tetro (CEO and Director), Dor Sneh (CFO), Yair Aloni (Chairman), Dr. George Adams (Director) and Sophie Galper Komet (Director). Dr. Adams and Ms. Galper Komet will be independent directors. The directors shall hold office until the first annual meeting of the shareholders of the Resulting Issuer following closing, or until their successors are duly appointed or elected. Further information about Mr. Aloni and Mr. Tetro, including their bios, are included in DXI’s news release dated November 24, 2023. Brief biographies of the remaining individuals named above are provided below.

Dor Sneh, CFO. Mr. Sneh has 5 years of senior management experience in Finance. Before joining VVT, Dor served as a Group CFO at Water Ways Technologies (TSXV:WWT), where he led the company through its first years in the Canadian stock exchange. Dor has overseen complex deals, such as M&A, Due Diligence and several private placements. Dor holds a BA in Economics and Accounting from Haifa University.

Dr. George Adams, Independent Director. Dr. Adams is a scientist, a serial entrepreneur and a financier. He is Executive-Chairman of Ventripoint Diagnostics and previously was CEO from 2010-2022. From 2005-2010 he was CEO of Amorfix Life Sciences (now ProMIS neurosciences, TSX:PMN). Dr. Adams was Chairman of Sernova Corp (TSXV:SVA) and President and CEO of the UT Innovations Foundation from 1999 until 2004. Prior to this, he held research and executive positions with Boston Scientific Inc, Pfizer Inc, Corvita Canada Inc. and Canadian Red Cross, Blood Transfusion Service. He has been instrumental in founding over 30 companies who have raised $140 million and has been a Director of 10 venture capital funds and 10 start-up companies. Dr. Adams was named as a World Economic Foundation Technology Pioneer for 2007 and TBI Company of the year in 2009. Dr Adams has 124 scientific publications and is a reviewer for major scientific journals, federal granting agencies and Centres of Excellence.

Sophie Galper Komet, Independent Director. Ms. Galper Komet is a Canadian-based seasoned executive, financial expert and strategy consultant. She guides businesses ranging from start-ups to publicly traded companies to navigate the Canadian market. Ms. Galper Komet has served on the board of directors of numerous public companies and financial institutions, both on the Toronto Stock Exchange and Tel Aviv Stock Exchange, including serving as the chair of several board committees, as well as advisory board roles. Ms. Galper Komet possesses over 20 years of corporate finance experience with a focus on initial public offerings, bond offerings, mergers and acquisitions, and private equity solutions. Ms. Galper Komet obtained an MBA from Tel Aviv University (2001).

About VVT

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VVT develops, manufactures, and commercializes minimally invasive, non-thermal, nontumescent solutions for the treatment of varicose veins. VVT's products have a wide range of competitive advantages over alternatives, including fast and painless treatment without anesthesia and immediate results and recovery. VVT is a company incorporated under the laws of the State of Israel in August 2007, company number 51-399116-6, with its head office located at Hasadna 6, Kfar-Saba, Israel.

About EAC

EAC was incorporated in 2022 as a holding company for the purpose of carrying out the acquisition of VVT and listing on a Canadian stock exchange. EAC’s head office is located at 1055 West Georgia Street, Suite 1750, Vancouver, British Columbia.

About DXI

DXI was incorporated under the laws of Ontario, Canada, on March 29, 1968 under the name “Dejour Mines Limited”. DXI Capital Corp. is a public company trading on the NEX under the symbol of “DXI.H”, operated by the TSXV in Canada. The address of its registered office is 404 – 999 Canada Place, Vancouver, British Columbia.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This news release contains statements that constitute “forward-looking statements”. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause DXI’s actual results, performance or achievements, or developments to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur.

Forward-looking statements in this document include, among others, statements relating to expectations regarding the anticipated completion of the Proposed Transaction (including all required approvals), the Concurrent EAC Financing, the Name Change, the business plans of VVT and the Resulting Issuer, and other statements that are not historical facts. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors and risks include, among others: (a) that there is no assurance that the parties to the Proposed Transaction will obtain the requisite director, shareholder and regulatory approvals for the Proposed Transaction; (b) there is no assurance that the Concurrent EAC Financing will be completed or as to the actual offering price or gross proceeds to be raised in connection with the Concurrent EAC Financing; (c) following completion of the Proposed Transaction, the Resulting Issuer may require additional financing from time to time in order to continue its operations which may not be available when needed or on acceptable terms and conditions; (d) compliance with extensive government regulation; (e) domestic and foreign laws and regulations could adversely affect the Resulting Issuer’s business and results of operations; (f) the stock markets have experienced volatility that often has been unrelated to the performance of companies and these fluctuations may adversely affect the price of the Resulting Issuer’s securities, regardless of its operating performance; (g) adverse changes in the public perception of medical therapies for varicose veins; and (h) the impact of the ongoing military hostilities in the Middle East.

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The forward-looking information contained in this news release represents the expectations of DXI as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Except as required by law, DXI assumes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change.

This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. DXI’s securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “ U.S. Securities Act ”), or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

DXI’s common shares will remain halted until such time as permission to resume trading has been obtained from the TSXV. DXI is a reporting issuer in Alberta, British Columbia, Ontario and Québec.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, EAC and VVT shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSXV has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this news release.

Neither TSXV nor its Regulation Services Provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

For more information, please contact:

DXI CAPITAL CORP.

Robert L. Hodgkinson, CEO Email: rhodgkinson@dxicap.com Tel: (604) 638-5055

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