Forward Water Technologies Corp. and Fraser Mackenzie Accelerator Corp announce Revisions to Terms of Proposed Transaction and Concurrent Financing, Signing of Definitive Agreement for Proposed Business Combination

TORONTO, ON / ACCESSWIRE / July 22, 2024 / Forward Water Technologies Corp. (" FWTC ") (TSXV:FWTC) and Fraser Mackenzie Accelerator Corp. (the " FMAC ") (TSXV: FMAC.P) are pleased to announce that, further to their joint news releases of May 14, 2024 announcing the proposed transaction between FWTC and FMAC (the "Transaction"), and June 18, 2024 announcing the proposed private placement financing concurrent with the Transaction (the "Concurrent Financing"), they have revised the terms of the Transaction and the Concurrent Financing and have entered into a definitive agreement dated July 22, 2024 with respect to the Transaction (the "Definitive Agreement"). The Transaction is intended to be FMAC's qualifying transaction for purposes of TSX Venture Exchange ("TSXV") policies. FWTC, after completion of the Transaction, is referred to as the " Resulting Issuer ".

FWTC and FMAC have revised the terms of both the Proposed Transaction and the Concurrent Financing to accommodate an arm's length lead investor that proposes to subscribe for $1 million of the Concurrent Financing.

Revised Terms of Transaction

The Transaction is proposed to occur immediately following a 10 for 1 consolidation (the "Consolidation") of the FWTC Common Shares ("FWTC Shares"), and has been revised to change the exchange ratio. It is now proposed that all issued and outstanding FMAC common shares ("FMAC Shares") will be exchanged for FWTC Shares at an exchange ratio of approximately 0.95 FWTC Shares for every one (1) FMAC Share on a post-Consolidation basis (approximately 9.5 on a pre-Consolidation basis), (the "Exchange Ratio") with a total of 19,547,931 post-Consolidation FWTC Shares being issued based on the 20,571,000 FMAC Shares that are currently issued and outstanding (which excludes any securities that will be issued in connection with the Concurrent Financing and the conversion of certain outstanding indebtedness).

Each outstanding option and warrant to purchase an FMAC Share will be exchanged for or converted into comparable FWTC options or FWTC broker warrants based on the Exchange Ratio with each such FWTC Option or FWTC Broker Warrant entitling the holder to purchase FWTC Shares at the applicable exercise prices, with the appropriate adjustments for the Exchange Ratio.

Revised Terms of Concurrent Financing

In conjunction with the Transaction, FMAC proposes to raise a minimum of $1,400,000 and a maximum of $1,900,000 in gross proceeds from the sale of FMAC subscription receipts (each, a "Subscription Receipt") at a price of $0.107 per Subscription Receipt (the "Concurrent Financing Price"). Each Subscription Receipt will entitle the holder to receive one FMAC common share (an "FMAC Share") and one-half of an FMAC common share purchase warrant, each whole such warrant (an "FMAC Warrant") will entitle the holder to purchase one FMAC Share at an exercise price of $0.15 at any time prior to the third anniversary of the issuance of such warrant. The minimum and maximum gross proceeds amounts under the Concurrent Financing may be reduced, at the discretion of FMAC, to the extent that FWTC raises up to $200,000 in bridge financing ("Bridge Financing") prior to completion of the Transaction, in which case such minimum and maximum amounts would be proportionately reduced by the amount raised under the Bridge Financing. The Bridge Financing would entail the issuance of convertible debentures convertible into FWTC units at a post-Consolidation conversion price of $0.1126 per FWTC unit, each such unit being comprised of one FWTC Share and one warrant entitling the holder to purchase one FWTC Share at post-Consolidation exercise price of $0.1579 at any time prior to the third anniversary of such warrant.

As noted above, the Transaction is proposed to occur immediately following the Consolidation, at which time: (a) the FMAC Shares (including, for greater certainty, the FMAC Shares issued upon conversion of the Subscription Receipts) will be exchanged based on the Exchange Ratio for common shares in the capital of FWTC ("Resulting Issuer Shares") and the FMAC Warrants will be adjusted to entitle the holders thereof to purchase common shares of FWTC based on the Exchange Ratio ("Resulting Issuer Warrants") and (b) the Resulting Issuer Shares will be listed on the TSX Venture Exchange.

Certain directors of FMAC may subscribe for up to $100,000 of the Concurrent Financing. The directors of FMAC who may participate in the Concurrent Financing are considered related parties for the purposes of Multilateral Instrument 61-101 - Protection of Minority Shareholders in Special Transactions ("MI 61-101"), and their purchase of Subscription Receipts will constitute a "related party transaction" within the meaning of MI 61-101. FMAC is relying upon exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(b) and 5.7(1)(a), respectively - Fair Market Value Not More Than 25 Per Cent of Market Capitalization, on the basis that at the time the issuances were agreed to, neither the fair market value of the securities to be distributed to the FMAC directors, nor the consideration to be received for the securities, will exceed 25 per cent of FMAC's market capitalization. The Board of Directors of FMAC has, subject to the appropriate recusal of the interested directors, unanimously approved the issuances and no materially contrary view or abstention was expressed or made by any director in relation to the issuances. FMAC will not file a material change report in respect of the participation of the directors in the issuances at least 21 days before anticipated closing of the Concurrent Financing issuance as FMAC wishes to close on an expedited basis for sound business reasons.

Assuming completion of the Concurrent Financing, the equivalent of 12,433,393 post-Consolidation Resulting Issuer Shares (or 124,333,925 pre-Consolidation Resulting Issuer Shares), in the case of the minimum Concurrent Financing, and 16,873,890 post-Consolidation Resulting Issuer Shares (or 168,738,899 pre-Consolidation Resulting Issuer Shares) in the case of the maximum Concurrent Financing, will be issued to the investors in the Concurrent Financing on closing of the Transaction. The Concurrent Financing Price is equivalent to $0.01126 per FWTC Share on a pre-exchange, pre-Consolidation basis.

Definitive Agreement

The Definitive Agreement contemplates that completion of the Transaction is subject to satisfaction or waiver of several conditions, including the following:

• TSXV acceptance;

• Completion of the minimum Concurrent Financing;

• Outside closing date of September 30, 2024;

• FWTC's aggregate liabilities, after giving effect to the conversion of the FMAC Loan (as defined below) and certain other loans from existing FWTC shareholders, not exceeding $800,000;

• FMAC's assets net of liabilities being at least $1,250,000;

• receipt of all director and shareholder approvals of both FMAC and FWTC at the requisite shareholder approval thresholds;

• confirmation that no adverse material change in the business, affairs, financial condition or operations of FWTC or FMAC has occurred; and

• material compliance by both FWTC and FMAC with the Definitive Agreement.

Shareholders Meetings

FMAC will be required to convene and hold a meeting of its shareholders (the "FMAC Shareholders") prior to the Closing in order to consider a special resolution approving the Transaction (which resolution shall be subject to such voting thresholds as shall be required by corporate law and separately be subject to ordinary "minority approval" in accordance with the policies of the TSXV). FMAC and its board of directors shall recommend to FMAC Shareholders that they vote in favour of and adopt and approve the Transaction and any materials presented to FMAC Shareholders shall include a statement to that effect.

FWTC will be required to convene and hold a meeting of its shareholders (the "FWTC Shareholders") prior to the Closing in order to: (a) consider an ordinary resolution approving the Transaction (which resolution shall be subject to approval of the disinterested shareholders in accordance with the policies of the TSXV); and (b) consider a special resolution approving the Consolidation, (collectively, the "FWTC Shareholder Meeting Matters"). FWTC and its board of directors shall recommend to FWTC Shareholders that they vote in favour of and adopt and approve the FWTC Shareholder Meeting Matters and any materials presented to FWTC Shareholders shall include a statement to that effect.

Each of the directors and officers of FWTC shall promptly enter into a voting support agreement with FMAC in form and substance satisfactory to FMAC agreeing to vote all of their securities held in FWTC in favour of approving the FWTC Shareholder Meeting Matters, unless excluded from voting in accordance with the policies of TSXV or other applicable rules and regulations.

The Transaction will be carried out by parties dealing at arm's length to one another and therefore will not be considered a "Non-Arm's Length Qualifying Transaction" as such term is defined in the CPC Policy. The related parties of FWTC and FMAC do not own any interests in each other.

Loan Advance Status

FMAC and FWTC also announce that FMAC has advanced to FWTC $175,000 in the aggregate (including all prior advances) by way of secured loan (the "FMAC Loan"). The FMAC Loan shares a pari passu security ranking with FMAC's previous loans to FWTC and with loans previously advanced by existing FWTC shareholders FirstLine Venture Partners Corporation and Sustainable Chemistry Alliance. The FMAC Loan will mature on December 31, 2024 and will bear interest at a rate of 20% per annum commencing on the date that is 120 days following the entering into of the Definitive Agreement, with no interest being charged prior to such date. FMAC has obtained TSXV approval to loan up to $250,000 to FWTC (inclusive of all prior advances).

Further Information

For more information concerning the Transaction, see FWTC and FMAC's joints news releases dated May 14, 2024 and June 18, 2024. The parties will provide further details in respect of the Transaction in due course by way of press release in accordance with the requirements of the CPC Policy.

About Forward Water Technologies Corp.

Forward Water Technologies Corp. (TSX.V: FWTC) is a publicly traded Canadian company dedicated to saving the earth's water supply using its patented Forward Osmosis technology. The Company was founded by GreenCentre Canada, a leading technology innovation centre supported by the government of Canada. The Company's technology allows for the reduction of challenging waste streams simultaneously returning fresh water for re-use or surface release. The Company's mandate is to focus on the large-scale implementation of its technology in multiple sectors, including industrial wastewater, oil and gas, DLE, mining, agriculture and ultimately municipal water supply and re-use market sectors.

FWTC has immediate plans to treat brine from the direct lithium extraction (DLE) sector using is mobile pilot equipment this summer in conjunction with its partners. This project will establish FWTC's iFOTM technology as a valuable component in producing lithium carbonate from aquifer sourced brines for use in applications such as electric vehicle (EV) battery production.

In addition, the Company has initiated early-stage R&D for the treatment of food and beverage process streams.

For more information, please visit www.forwardwater.com.

About Fraser Mackenzie Accelerator Corp.

FMAC is a "capital pool company" which completed its initial public offering on February 22, 2023. The common shares of FMAC (" FMAC Shares ") are listed for trading on the TSX Venture Exchange Inc. (" TSXV ") under the stock symbol FMAC.P. FMAC has not commenced commercial operations and has no assets other than cash. It is intended that the Transaction, when completed, will constitute the "Qualifying Transaction" of FMAC pursuant to Policy 2.4 - Capital Pool Companies of the TSXV.

Contact Information:

Fraser Mackenzie Accelerator Corp.
Philip Benson, President & Chief Executive Officer
Email: pbenson@frasermackenzie.com
Telephone: 416-818-6163

Forward Water Technologies Corp.
C. Howie Honeyman, Chief Executive Officer
E-mail: howie.honeyman@forwardwater.com
Telephone: (519) 333-5888

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

Caution Concerning Forward Looking Information

This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends" "expects" and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward looking statements concerning the Transaction, the Concurrent Financing, the Bridge Financing, the Consolidation, the ability of FWTC and FMAC to meet the conditions of the Transaction in the required timeframes, obtaining the necessary exemptions and approvals from the TSXV or other regulatory bodies, including the business, name and function of the Resulting Issuer and certain financial information and forecasts. FWTC and FMAC caution that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of FWTC and FMAC, including expectations and assumptions concerning the FWTC, FMAC, the Concurrent Financing, the Resulting Issuer, the Transaction, the timely receipt of all required shareholder, court (if applicable) and regulatory approvals (as applicable), including the acceptance of the TSXV, the satisfaction of other closing conditions in accordance with the terms of the Definitive Agreement, as well as other risks and uncertainties, including those described in FWTC and FMAC's respective disclosure documents available on SEDAR+ at www.sedarplus.ca. The reader is cautioned that assumptions used in the preparation of any forward-looking statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of FWTC and FMAC. The reader is cautioned not to place undue reliance on any forward-looking statements. 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 press release are expressly qualified by this cautionary statement.

The forward-looking statements contained in this press release are made as of the date of this press release, and neither FWTC nor FMAC undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

SOURCE: Forward Water Technologies Inc.