FREmedica Technologies Inc. entered into letter of intent to acquire Israel Capital Canada Corp. (TSXV:IL.P) in a reverse merger transaction on March 27, 2021. FREmedica Technologies Inc. entered into a securities exchange agreement to acquire Israel Capital Canada Corp.

in a reverse merger transaction on January 14, 2022. The Israel Capital will pay 18 million share and 10% royalty as part of consideration. In addition, Israel Capital has agreed to settle outstanding shareholder loans provided by Waveforce to FREmedica in the approximate amount of CAD 1,245,000 through the issuance of 3,557,143 common shares in the capital of Israel Capital at a deemed price of CAD 0.35 per common share.

In addition, on January 14, 2022, Israel Capital Canada Corp. agreed to pay 18 million shares and 1,427,868 warrants with each such Payment Warrant being exercisable into one common shares of the Company at a price of CAD 0.1944 per common share. The Payment Shares will be issued to Waveforce Electronics Inc., the parent company of FREmedica, and Waveforce will distribute 6 million of the Payment Shares to its shareholders as a dividend upon closing of the Transaction.

The Israel Capital has also agreed to advance up to CAD 25,000 to FREmedica, subject to Exchange approval, which FREmedica will use to pay for its audit and legal fees. To assist FREmedica with the related costs of the Transaction, Israel Capital Canada Corp. advanced CAD 100,000 to FREmedica in the form of a bridge loan on January 10, 2022.

The Bridge Loan is secured by a promissory note and general security agreement and bears no interest. The Bridge Loan was advanced to FREmedica in addition to the CAD25,000 that the Israel Capital Canada Corp. previously advanced to FREmedica on September 24, 2021.

In connection with the Transaction, Israel Capital Canada Corp. intends to complete a non-brokered private placement of a minimum of 7,142,854 units of Israel Capital Canada Corp. and a maximum of up to 8,571,429 Units at a price of CAD 0.35 per Unit for aggregate gross proceeds of a minimum of CAD 2.5 million and a maximum of CAD 3 million.

Each Unit will consist of one common share and one-half of one common share purchase warrant. Each Warrant will allow the holder thereof to acquire one common share for a period of 24 months at an exercise price equal to CAD 0.70 per share. Israel Capital has agreed to change its name to FREmedica Inc. The Board of the Israel Capital currently consists of four directors (Stephen Davis, Hari Varshney, Brad Aelicks and Dr. Keith Pyne).

On completion of the Transaction, it is expected that one independent director will be added to the Board such that it consists of five directors, of which three will be independent. The current directors of the Israel Capital will have an option to remain on the board of directors of the Company for one year following completion of the Transaction. The Israel Capital will grant FREmedica a right to nominate one additional director for appointment to the Board, subject to acceptance by the Exchange and all required shareholder approvals.

The Letter Agreement provides that the parties will execute a comprehensive agreement to supersede the Letter Agreement by April 30, 2021. Israel Capital Canada Corp. received conditional acceptance from the TSX Venture Exchange for the Transaction on December 17, 2021.

The transaction is subject to the receipt of all necessary approvals of the boards of directors of Israel Capital and FREmedica, the receipt of all required consents and approvals, including without limitation, approval of the Transaction by the Exchange as Israel Capital's Qualifying Transaction, Israel Capital satisfying the initial listing requirements set by the Exchange for a Tier 2 technology issuer, the completion by Israel Capital of the private placement, and the completion of satisfactory mutual due diligence. Closing of the Transaction is expected to occur on or prior to July 30, 2021.