DEPARTURE BAY CAPITAL ANNOUNCES EXECUTION OF DEFINITIVE AGREEMENT AND UPDATES ON PROPOSED QUALIFYING TRANSACTION WITH CHEELCARE

Departure Bay Capital Corp. has entered into an arm's-length definitive business combination agreement dated Feb. 24, 2025, with 9302204 Canada Inc. (operating as Cheelcare), whereby Departure Bay Capital's wholly owned subsidiary, 16729053 Canada Inc. (Subco), will amalgamate with Cheelcare to complete Departure Bay Capital's qualifying transaction in accordance with the policies of the TSX Venture Exchange.

About Cheelcare

9302204 Canada (operating as Cheelcare) is a private company incorporated under the Canada Business Corporations Act (CBCA) and stands as a technological and manufacturing company dedicated to removing barriers to mobility. Cheelcare co-founders Eugene Cherny and Dima Paltsev started Cheelcare based in Richmond Hill, Ont., Canada, in 2015. Cheelcare is determined to improve the lives of millions living with disabilities by delivering life-changing technology to the wheelchair market. Cheelcare's portfolio includes three growing lines of patented devices: innovative safety accessories; the industry-award-winning power add-on for manual wheelchairs known as Companion; and Curio, a technologically advanced robotic complex rehab power wheelchair. Its products are available through more than 150 dealer locations and over 20 VA Medical Centers, including Canada's largest retailer of wheelchair equipment and one of the United States largest DME (durable medical equipment) retailers.

Select financial information of Cheelcare

The financial information of Cheelcare is provided below.

Terms of the transaction

The transaction will be carried out pursuant to the terms of the definitive agreement, a copy of which will be available on Departure Bay Capital's SEDAR+ profile. The below description of the terms of the transaction and the definitive agreement is qualified in its entirety by reference to the full text of the definitive agreement.

Under the terms of the definitive agreement, Departure Bay Capital, Subco and Cheelcare will effect the amalgamation in accordance with the CBCA and pursuant to the amalgamation agreement dated Feb. 24, 2025. The transaction will be completed for an aggregate purchase price of approximately $7,891,511.25 through the issuance of an aggregate of 10,522,015 resulting issuer common shares (as defined below) at a price of 75 cents per share. Subco and Cheelcare will amalgamate to form an amalgamated entity (Amalco), which will continue as a wholly owned subsidiary of Departure Bay Capital (upon completion of the transaction, referred to as the resulting issuer).

Immediately prior to the completion of the transaction and as a condition to the completion of the transaction, Departure Bay Capital will consolidate its issued and outstanding common shares on the basis of three preconsolidation Departure Bay Capital common shares for each one postconsolidation Departure Bay Capital common share. Currently, the share capitalization of Departure Bay Capital comprises: 4.5 million Departure Bay Capital common shares issued and outstanding, stock options exercisable for 450,000 Departure Bay Capital common shares, and broker warrants exercisable for 200,000 Departure Bay Capital common shares. All incentive stock options and outstanding warrants of Departure Bay Capital are anticipated to be adjusted on the basis of the Departure Bay Capital consolidation ratio. Departure Bay Capital shall also obtain the necessary approvals for the change of Departure Bay Capital's name to Cheelcare Inc. (or such other substantially similar name as may be determined by Cheelcare) and will appoint three nominees of Cheelcare to its board of directors (as detailed below).

In addition, immediately prior to the completion of the transaction and as a condition to the completion of the transaction, Cheelcare will split its issued and outstanding common shares on such basis as shall result in Cheelcare having 10,522,015 Cheelcare common shares issued and outstanding following completion of the split, excluding any securities issued in the private placement (as defined below) and the Cheelcare convertible debenture conversion (as defined below). There are currently 8,005,690 Cheelcare common shares issued and outstanding. All incentive stock options of Cheelcare are anticipated to be adjusted on the basis of the Cheelcare share split ratio.

After the Cheelcare split and immediately prior to the amalgamation, the issued and outstanding principal amount of Cheelcare's convertible debentures will automatically be converted in accordance with the terms thereof into Cheelcare common shares on a postsplit basis at the conversion price stipulated in the certificates of the Cheelcare convertible debentures and any accrued and unpaid interest will be converted into Cheelcare common shares on a postsplit basis, subject to the terms of Cheelcare convertible debentures. In addition, each subscription receipt (as defined below) issued pursuant to the private placement shall automatically convert into one unit (as defined below) and each unit consists of one Cheelcare common share and one-half of one common share purchase warrant.

The Cheelcare convertible debenture conversion will result in the issuance of units to certain officers and directors of Departure Bay Capital and will constitute a related party transaction but is exempt from the formal valuation and minority approval requirements of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions, as Departure Bay Capital's securities are not listed on any stock exchange identified in Section 5.5(b) of MI 61-101 and the fair market value of the units issued to the insiders does not exceed 25 per cent of Departure Bay Capital's market capitalization.

Concurrently with the amalgamation, each holder of Cheelcare common shares (which, for greater certainty, includes the holders of Cheelcare common shares issued pursuant to the Cheelcare convertible debenture conversion, the holders of any Cheelcare common shares issued as payment of accrued and unpaid interest on the Cheelcare convertible debentures and the holders of Cheelcare common shares issued pursuant to the conversion of the subscription receipts) will receive one fully paid and non-assessable common share of the resulting issuer in exchange for each issued and outstanding Cheelcare common share on a postsplit basis held by such shareholder.

Concurrently with the amalgamation, the resulting issuer shall issue the options of the resulting issuer and warrants of the resulting issuer in accordance with its existing terms to the holders of options of Cheelcare and Cheelcare warrants, respectively, on a postsplit basis, at the exchange ratio.

For further information regarding the transaction, see the press releases of Departure Bay Capital dated Oct. 30, 2024, and Dec. 13, 2024.

Significant conditions to closing

The completion of the transaction is subject to a number of conditions, including but not limited to: (i) obtaining necessary third party approvals; (ii) exchange acceptance; (iii) the approval of the shareholders of Cheelcare for the amalgamation; (iv) the approval by the board of directors of Cheelcare and Departure Bay Capital; (v) closing of a private placement for gross proceeds of not less than $2.5-million and a maximum of $3.5-million; (vi) the unanimous shareholder agreement of Cheelcare shall have been terminated in accordance with its terms; (vii) dissent rights shall not have been exercised by holders of more than 10 per cent of the Cheelcare common shares; (viii) the Departure Bay Capital consolidation and the name change, (ix) the resulting issuer common shares to be issued to the Cheelcare shareholders pursuant to the transaction, being freely tradable (subject to the usual restrictions under National Instrument 45-102, Resale of Securities) and being issued as fully paid and non-assessable resulting issuer common shares, free and clear of any and all encumbrances, except those as may be imposed pursuant to the escrow restrictions of the exchange.

The obligations of Departure Bay Capital and Cheelcare pursuant to the definitive agreement shall terminate in certain specified circumstances, including, but not limited to, the transaction not being completed by May 29, 2025.

Shareholder approval

The transaction is subject to shareholder approval of Cheelcare but not to Departure Bay Capital shareholder approval.

Proposed management and board of directors of resulting issuer

The directors of the Resulting Issuer are anticipated to be: (i) Mr. Cherny; (ii) Mr. Paltsev; (iii) Roy Ellis; and two directors to be nominated by Departure Bay Capital. The senior management team of the resulting issuer will consist of those officers appointed by the new board of directors of the resulting issuer concurrent with the closing of the transaction and is anticipated to include Mr. Cherny, president and chief executive officer, and Mr. Paltsev, chief financial officer and corporate secretary.

Biographies for the anticipated principals and insiders (as such terms are defined in the policies of the exchange) are provided below. Departure Bay Capital anticipates issuing a subsequent press release disclosing the biographies of any additional princpials and insiders once such individuals are confirmed.

Mr. Cherny (chief executive officer and director of the resulting issuer)

Mr. Cherny is an innovator with a proven record in creating growth for new and existing businesses, including over 20 years as vice-president at Hummingbird and general manager at Open Text.

Mr. Cherny has over a decade of C-suite executive experience within the software development and medical device industry, leading a start-up venture to over $20-million in ARR (annual recurring revenue). His expertise is operational strategy, technology and engineering.

Mr. Paltsev (chief financial officer, corporate secretary and director of the resulting issuer)

Mr. Paltsev has over 20 years of leadership experience in engineering and project development across various industries, including automotive and motorcycle design and manufacturing. Mr. Paltsev holds an MSc in automotive engineering and an MBA from the Graduate School of Business, University of Chicago. He brings in decades of experience in engineering, manufacturing, project management and finance.

Filing statement

In connection with the transaction, Departure Bay Capital and Cheelcare shall prepare and file a filing statement outlining the definitive terms of the transaction and describing the business to be conducted by the resulting issuer, in accordance with the policies of the exchange. It is expected that the resulting issuer will be listed on the TSX-V as a Tier 2 technology issuer (as such term is defined in the TSX-V corporate finance manual).

Arm's-length transaction

The transaction was negotiated by parties who are dealing at arm's length with each other and, therefore, the transaction is not a non-arm's-length qualifying transaction in accordance with the policies of the exchange.

No non-arm's-length parties to Departure Bay Capital hold securities in Cheelcare other than: (i) 66,666 subscription receipts indirectly acquired by Alan Savage, chief financial officer and a director of Departure Bay Capital; (ii) $50,000 of Cheelcare convertible debentures purchased directly by Trevor Treweeke, chief executive officer, corporate secretary and a director of Departure Bay Capital; (iii) $99,999.50 of Cheelcare convertible debentures purchased indirectly by Paul Andreola, a director of Departure Bay Capital; and (iv) $25,000 of Cheelcare convertible debentures purchased indirectly by Jake Bouma, a director of Departure Bay Capital.

Private placement of subscription receipts and debentures of Cheelcare

As a condition to the definitive Agreement, Cheelcare closed its non-brokered private placement of subscription receipts for aggregate gross proceeds of $3,499,999.50, at a price of 75 cents per subscription receipt. Cheelcare closed a first tranche of the private placement on Dec. 31, 2024, pursuant to which it issued 4,523,604 subscription receipts and a second tranche on Jan. 29, 2025, pursuant to which it issued 143,062 subscription receipts. Concurrent with the closing of the transaction, each subscription receipt will automatically convert without any further action or payment of any additional consideration therefor, into one unit of Cheelcare, with each unit being comprising one postsplit common share and one-half of one warrant of Cheelcare, with each whole warrant entitling the holder thereof to acquire one Cheelcare common share (postsplit) at a price of $1.50 until the date that is 24 months following the closing date of the transaction, subject to certain acceleration provisions. the proceeds from the subscription receipts will be used to finance the general working capital and business requirements of the resulting issuer.

In addition to the closing of its non-brokered private placement of subscription receipts, Cheelcare also closed a private placement of debentures for an aggregate of $502,999.50.

The subscription receipts and debentures were offered by way of a private placement pursuant to exemptions from prospectus requirements under applicable Canadian securities laws. All securities issued in connection with the private placement are subject to the statutory hold period for non-reporting issuers in accordance with applicable Canadian securities laws.

Loans

On Dec. 13, 2024, Departure Bay Capital provided Cheelcare with a secured loan in the amount of $50,000 for financing operating expenses and the transaction. The outstanding principal amount will bear interest at 8 per cent per annum and, together with any accrued and unpaid interest thereon, shall become due and payable to Departure Bay Capital 20 business days after the date of the earlier of: (i) the receipt of final approval of the exchange of the transaction; and (ii) the termination of the transaction pursuant to the terms of the definitive agreement.

In accordance with Policy 2.4, Capital Pool Companies, of the exchange, on Nov. 13, 2024, Departure Bay Capital also issued an unsecured promissory note for a principal amount of $25,000 bearing interest at 8 per cent per annum and which shall become due and payable to Departure Bay Capital upon the same terms as the loan.

Finders' fees

No finders' fees or commissions are payable by Cheelcare or Departure Bay Capital in connection with the closing of the transaction, other than with respect to the private placement.

Sponsorship

Under the policies of the exchange, the parties to the transaction are required to engage a sponsor for the transaction unless an exemption or waiver from this requirement can be obtained. Departure Bay Capital and Cheelcare plan to request a waiver of this requirement by the exchange.

About Departure Bay Capital Corp.

Departure Bay Capital is a capital pool company created pursuant to the policies of the TSX-V. It does not own any assets, other than cash or cash equivalents and its rights under the definitive agreement. The principal business of Departure Bay Capital is to identify and evaluate opportunities for the acquisition of an interest in assets or businesses and, once identified and evaluated, to negotiate an acquisition or participation subject to acceptance by the TSX-V so as to complete a qualifying transaction in accordance with Policy 2.4.