Vaxil Bio Enters Into Letter of Intent With Copper Bullet Mines in Respect of a Proposed Reverse Takeover

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NESS-ZIONA, Israel, Jan. 10, 2024 (GLOBE NEWSWIRE) — Vaxil Bio Ltd. (“Vaxil” or the “Company”) (TSXV:VXL) and Copper Bullet Mines Inc., a corporation existing under the laws of Canada (“CBMI”) are pleased to announce that they have entered into a non-binding letter of intent dated January 9, 2024 (the “LOI”), pursuant to which Vaxil and CBMI intend to complete a business combination or other similarly structured transaction which will constitute a reverse take-over of Vaxil (the “Transaction”). It is intended that the Transaction will be an arm’s length “Reverse Takeover” for Vaxil as that term is defined in Policy 5.2 of the Corporate Finance Manual of the TSX Venture Exchange (the “TSXV”).

The LOI is to be superseded by a definitive merger, amalgamation or share exchange agreement (the “Definitive Agreement”) to be signed on or prior to February 28, 2024, or such later date as may be mutually agreed upon by the parties in writing. The Transaction is subject to requisite regulatory approval, including the approval of the TSXV, and standard closing conditions, including the approval of the directors of each of Vaxil and CBMI of the Definitive Agreement, completion of due diligence investigations to the satisfaction of each of Vaxil and CBMI, and the conditions described below. The legal structure for the Transaction will be confirmed after the parties have considered all applicable tax, securities law and accounting efficiencies.

Vaxil is at arm’s length to CBMI, and no director, officer or insider of Vaxil or CBMI beneficially owns, or controls or directs, directly or indirectly, any securities of the other party. Therefore, the Transaction is expected to be an Arm’s Length Transaction as defined under TSXV Policy 1.1 – Interpretation and will not be considered a “related party transaction” for the purpose of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions.

About Vaxil Bio Ltd.

Vaxil is incorporated under the provisions of the Business Corporations Act (Ontario) with its registered and head office in Toronto, Ontario. Vaxil is a “reporting issuer” in the provinces of Alberta, British Columbia, and Ontario.

Vaxil will hold a meeting of its shareholders (the “Vaxil Shareholders’ Meeting”), as soon as reasonably practicable, to vote on the Transaction and the Divestment (as defined below). Matters to be approved by Vaxil’s shareholders at Vaxil Shareholders’ Meeting, among other matters:

• a change of name of the Company to such name as is directed by CBMI and acceptable to applicable regulatory authorities effective upon closing of the Transaction (the “Closing”);
• the consolidate its shares on a ratio to be determined;
• the approval of a new equity incentive plan to be effective upon Closing;
• the election of a slate of directors appointed by CBMI, which elections will be effective upon Closing;
• the approval of the Transaction; and
• the approval of the Divestment.

In addition to the Transaction, it is expected that prior to the closing of the Transaction Vaxil will divest all existing assets except cash to unrelated third parties (the “Divestment”), which may require shareholder approval and is subject to approval of the TSXV.

Trading in the common shares of Vaxil (each an “Vaxil Share”) has been halted in accordance with the policies of the TSXV and will remain halted until such time as all required documentation in connection with the Transaction has been filed with and accepted by, and permission to resume trading has been obtained from, the TSXV. There can be no assurance that trading of Vaxil Shares will resume prior to the completion of the Transaction.

About Copper Bullet Mines Inc.

Since its incorporation on April 10, 2021, the team at CBMI, has acquired through staking and option a significant land package in the heart of Arizona’s Copper Triangle. CBMI’s Copper Springs property has more than 96 historic drill holes and a historic, non-43-101 compliant inferred mineral resource of 47 million tonnes grading 0.4% copper (NI 43-101 Technical Report Copper Springs Project, Gila County, Arizona. Feinstein, 2022), equating to over 400 million lbs of copper contained. This historic resource is one of many exploration targets across the Copper Springs project and represents approximately 10% of the HSOB (Historic Supergene Oxide Blanket) footprint which was identified by wide spaced drilling in the 1960s.

The project is adjacent to Arizona State highway 60, located 1 hour east of Phoenix. High voltage power lines cross the project and water is available from perennial springs. The Copper Springs Project is surrounded by producing mines, including Capstone’s Pinto Valley, KGHM’s Carlotta mine, Group Mexico’s Ray Mine, and various other mines and projects owned by South 32, BHP, Rio Tinto and Freeport-McMoRan.

The Globe Miami area, the northeast part of the Copper Triangle where the Copper Springs project is situated has produced over 37 billion lbs of copper. A recent report published by the Arizona Geological Study suggest unmined resources to be over 94 billion lbs of copper (Geology and History of the Globe-Miami Region, Gila and Pinal County, Arizona. Briggs, 2022). The Copper Triangle is also home to 2 of the 3 copper smelters in the USA.

From exploration through discovery, development, capital raising, and successful execution of commercial mining and milling operations, CBMI’s team includes a full-range of experienced industry professionals. Additional information about CBMI may be found on its website: www.copperbulletmines.com

Any reference to historical estimates and resources should not be relied upon. These historical estimates are not current and a Q. P. has not done sufficient work to classify the historical estimate and Copper Bullet Mines Inc. is not treating the historical estimate as a current resource estimate.

Concurrent Financing

In connection with the Transaction, CBMI intends to complete a brokered private placement, of subscription receipts (the “Subscription Receipts”), with an agent or syndicate of agents to be selected, on a best-efforts basis, to raise aggregate gross proceeds of a minimum of $1,500,000 (the “Concurrent Financing”), at an anticipated price of $0.20 per Subscription Receipt (the “Concurrent Financing Price”). The proceeds of the Concurrent Financing will be used for general corporate and working capital purposes and to fund exploration expenses on CBMI’s mineral properties. The Concurrent Financing is a condition precedent to the Transaction. The agent(s) will receive a cash commission up to 8.0% of the aggregate gross proceeds realized by CBMI from the Concurrent Financing. CBMI will also issue to the agent(s) that number of compensation warrants (the “Compensation Warrants”) equal to 8.0% of the aggregate number of Subscription Receipts sold pursuant to the Concurrent Financing. Each Compensation Warrant will entitle the holder thereof to acquire one CBMI Share at an exercise price equal to the Concurrent Financing Price for a period of 24 months following the Closing.

Upon satisfaction of the conditions to closing the Transaction, the escrow release conditions in respect of the Subscription Receipts, each Subscription Receipt will automatically be exchanged for, without additional payment or further action on the part of the holder thereof, one common share of CBMI (each a “CBMI Share”). In connection with the completion of the Transaction, the CBMI Shares issued to Subscription Receipt holders will be subsequently cancelled and exchanged for equivalent common shares of Vaxil.

Selected Financial Information of CBMI

The following selected consolidated financial information of CBMI has been supplied to Vaxil by CBMI for purposes of inclusion herein in accordance with TSXV requirements:

Conditions to Transaction

Prior to completion of the Transaction (and as conditions of closing):

• Completion of mutual satisfactory due diligence investigations of CBMI and Vaxil
• The parties will prepare a management information circular or filing statement in accordance with the rules of the TSXV, outlining the terms of the Transaction.
• Vaxil and CBMI will enter into a Definitive Agreement in respect to the Transaction on or prior to February 28, 2024.
• Vaxil and CBMI will, if necessary, obtain the requisite board and shareholder approvals for the Transaction and any ancillary matters contemplated in the Definitive Agreement.
• All requisite regulatory approvals relating to the Transaction, including, without limitation, the TSXV, will have been obtained.
• CBMI will close the Concurrent Financing for gross proceeds of not less than $1,500,000.

The Proposed Transaction

Pre-Closing Capitalization of Vaxil

As of the date hereof, Vaxil has issued and outstanding 136,978,973 common shares of Vaxil (each an “Vaxil Share”) and securities exercisable or exchangeable for, or convertible into, or other rights to acquire, an aggregate of 13,109,440 Vaxil Shares at various exercise prices per Vaxil Share. The Vaxil Shares are currently listed on the TSXV under the symbol “VXL”.

Consolidation

As a condition to closing the Transaction, concurrently with, or immediately prior to Closing, and subject to Vaxil shareholder approval, Vaxil will undertake a share consolidation (the “Consolidation”). The Consolidation will occur on the basis of one (1) post-Consolidation common share of Vaxil (“Vaxil Consolidated Shares”) for such number of Pre-Consolidation Vaxil Shares as determined by the equation (A/B) * C, which is anticipated to be a consolidation ratio of 1:16.3557, where:

Pre-Closing Capitalization of CBMI

CBMI is incorporated under the Canada Business Corporations Act and, as of the date hereof, has (a) 32,237,000 CBMI Shares issued and outstanding, (b) 150,000 warrants exercisable to acquire 150,000 CBMI Shares (the “CBMI Warrants”) at an exercise price of $0.10 and expire on March 27, 2025. The holders of CBMI Warrants may, at the option of the holders thereof, elect to replace their CBMI Warrants with warrants to acquire Vaxil Shares, but otherwise bearing the same terms as the CBMI Warrants which they replace.

CBMI has agreed to pay 2674443 Ontario Inc. (the “Finder”), an arm’s length party, a finder’s fee of $200,000 plus applicable tax, payable in CBMI Shares immediately prior to the closing of the Transaction at a deemed price per CBMI Share equal to the Concurrent Financing pricing, which would be immediately issued and exchanged for Vaxil Shares upon the successful closing of the Transaction.

Terms of the Transaction

It is currently anticipated that Vaxil will acquire CBMI by way of a three-corner amalgamation, share exchange, plan of arrangement or other similar form of transaction as agreed by the parties to ultimately form the resulting issuer (the “Resulting Issuer”). The final structure of the Transaction is subject to the receipt of tax, corporate and securities law advice for both Vaxil and CBMI. Upon completion of the Transaction, the Resulting Issuer will carry on the business of CBMI.

Pursuant to the Transaction, one (1) Vaxil Consolidated Shares will be issued to the holders of CBMI Shares in exchange for each one (1) CBMI Share issued and outstanding as at the effective date of the Transaction.

Pursuant to the terms of the LOI, it is proposed that Vaxil will acquire all of the issued and outstanding shares of CBMI for an aggregate purchase price of $7,747,400 payable on a non-cash basis by the issuance of such aggregate number of shares of the Resulting Issuer (the “Resulting Issuer Shares”) to the CBMI shareholders, pro rata, based on the number of CBMI Shares held by each CBMI shareholder at a price per Resulting Issuer Share equal to the Concurrent Financing Price.

Upon completion of the Transaction, it is expected that the former shareholders of CBMI will hold approximately 65.64% of the shares of the Resulting Issuer (the “Resulting Issuer Shares”). (on a non-diluted basis), the former shareholders of Vaxil will hold approximately 17.05% of the Resulting Issuer Shares, the Subscription Receipts holders will hold approximately 15.27% of the Resulting Issuer Shares and the Finder will hold approximately 2.04% of the Resulting Issuer Shares.

It is expected that the Resulting Issuer will be classified as a Tier 2 Mining Issuer.

In connection with the Transaction, within 20 days of signing of the LOI, Vaxil will provide CBMI with a loan facility in an amount not to exceed $125,000 (the “Loan”), subject to TSXV approval. The Loan will be secured over the assets of CBMI, including any of the subsidiary of CBMI, as well as a pledge of shares of the subsidiary of CBMI. Interest on the Loan shall accrue on any outstanding amount at the rate of 10% per annum, payable upon maturity. Once the Loan has been funded, until the earlier of (i) the Loan being fully repaid, or (ii) the closing of the Transaction, Vaxil shall be entitled to appoint a board observer to CBMI.

Insiders, Officers and Board of Directors of the Resulting Issuer

Upon completion of the Transaction, it is anticipated that the board of directors of the Resulting Issuer shall consist of a minimum of three and a maximum of ten directors, a majority of whom shall be nominated by CBMI. The nominees of CBMI are expected to consist of, at a minimum, Daniel Weir, Mohamad Basim Anwer, Erika Dohring, Doug Harris, Keith Minty and Gadi Levin. The parties expect Daniel Weir to act as CEO Arif Shivji to act as CFO and Dr. Michael Feinstein to be VP Exploration.

Following completion of the Transaction, it is anticipated that no one will exercise control or direction over more than 10% of the issued and outstanding shares of the Resulting Issuer.

The following sets outs the names and backgrounds of all persons who are expected to be considered insiders of the Resulting Issuer.

Daniel Weir, CEO and Director

Daniel has worked for over 20 years at some of the top financial firms in Canada. He worked as an Institutional Equity Trader, Sales and Investment banking as well as a broker. He was the Head of Institutional Equity Sales at a boutique firm focused on financing Mining companies. Having raised billions of dollars, both publicly and privately, Mr. Weir has expertise at evaluating and financing mining deals. He has sat on boards of potash, graphite and copper-zinc mining companies. Dan spent the past 8 years working in Africa, developing a graphite project. Mr. Weir has overseen exploration projects, and the designing and engineering of processing plants. Mr. Weir graduated from the University of Toronto.

Mohamad Basim Anwer, Director

Mohamad has 20 years of multisector experience, which includes wealth management, project logistics and financing, mining and LME metals warehousing and distribution. During his tenure with Thani Investments in Dubai, and subsequent to that he was engaged in Mining projects as an advisor assisting with project planning and corporate valuations and financing of mineral resource projects worldwide. He is based in Dubai, with additional offices in Zug, Switzerland, the UK, Morocco, and Singapore. He is the Chairman of Peninsula Shipping, and CEO of Regionality Group of companies. His businesses operate in various countries as product distribution and advisory partners. Mr. Anwer graduated from Purdue University in the USA.

Erika Dohring, Director

Erika has extensive knowledge and expertise in epithermal gold and silver deposits, as well as base metals systems including porphyry copper and VMS. She grew into a career as an exploration geologist with exposure to capital markets and economic evaluation, and most recently as an entrepreneur. As manager of corporate development and JV programs of Riverside Resources, she successfully launched and led multiple early-stage gold and silver exploration programs and was part of the team that spun out the public company Capitan Silver Corp. Most recently, Mrs. Dohring has launched two private Mexican ventures. Mrs. Dohring graduated from Institut Beauvais in France with a Master’s Degree in Geology and Mining Engineering.

Doug Harris, Director

Doug has over 25 years of audit, buy side, sell side and advisory experience participating in over $2 billion of transactions. Doug has served as a director of several public companies, chairing audit and independent committees, and provides advisory and CFO services through his company Harris Capital Corporation to a number of mining companies. Mr. Harris obtained his MBA from the Rotman School of Management at the University of Toronto.

Keith Minty, Director

Keith has 30 years of professional experience in mineral resource exploration and development of precious and base metals and industrial minerals in Canada and internationally. He has been directly involved in increasing mineral resource project’s value through resource development, constructing, operating and managing gold and platinum group metal projects. Mr. Minty has been associated with resource exploration and development companies such as Hunter Dickinson, Viceroy Resources, North American Palladium, and Aurvista Gold. He is currently an active member of the board of directors of companies. Mr. Minty obtained a B.Sc. in Mining Engineering from Queen’s University, he received his MBA from Athabasca University.

Gadi Levin, Director

Mr. Levin is the chairman and CEO of Vaxil Bio and has also served as Chief Financial Officer and Director of Vaxil Bio Ltd since March 1, 2016. In addition, Mr. Levin is a director of EV Nickel Inc. and Eco (Atlantic) Oil and Gas Ltd. Mr. Levin has over 20 years of experience working with public U.S., Canadian and multi-jurisdictional public companies, primarily in the CFO function. Mr. Levin began his CPA career at the accounting firm Arthur Andersen, where he worked for nine years, specializing in U.S. listed companies involved in initial public offerings. Mr. Levin has a Bachelor of Commerce degree in Accounting and Information Systems from the University of Cape Town, South Africa, and a post graduate diploma in Accounting from the University of South Africa. He received his Chartered Accountant designation in South Africa and has an MBA from Bar Ilan University in Israel.

Arif Shivji, CFO

Arif Shivji is a registered CPA in BC & Alberta, US CPA in Illinois, and a CFA charterholder. After his MBA from the Richard Ivey School Business, Shivji became Manager of Transaction Services with PwC Advisory where he performed buy-side due diligence on acquisitions in Canada, US, and UK. Mr. Shivji has been providing part time CFO services to private & public companies. In addition, he has set up two CPCs on the TSX and a junior mining IPO on the CSE exchange. Previously, Shivji was founder & CFO of Predator Midstream that grew to 90 staff when it was sold to a large public company (Secure Energy). Since May 2021, Shivji has been CFO of Copper Bullet leveraging his 25 years of professional finance experience.

Dr. Michael Feinstein, VP Exploration

Michael is a Geological Scientist and Consultant with global experience coordinating, leading, and supporting high-value geological exploration and evaluation initiatives. Michael has led the evaluation of more than 40 properties and managed mineral exploration initiatives for more than 15 international clients. He excels at identifying profitable business opportunities for landowners and potential investors, conducting extensive scientific investigation of geological features to determine the presence of valuable minerals. His experience leading successful projects is a result of his persistence in addressing the problems at hand and keeping the big picture in view.

Sponsorship

The Transaction may require sponsorship under the policies of the TSXV unless an exemption from sponsorship is granted. Vaxil intends to apply for an exemption from sponsorship requirements of the TSXV in connection with the Transaction. There can be no assurance that such exemption will ultimately be granted.

Qualified Person

Michael Feinstein, is the “Qualified Person” under National Instrument 43-101-Standards of Disclosure for Mineral Projects, and he has reviewed and approved the scientific and technical disclosure contained in this press release.

Advisors

Bayline Capital Partners is acting as financial advisor to CBMI.

Further Information

All information contained in this news release with respect to Vaxil and CBMI was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.

The securities to be issued in connection with the Transaction 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 (as defined in Regulation S promulgated under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

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

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the 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 TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

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 RELEASE.

Cautionary Statements Regarding Forward Looking Information

This news release contains “forward-looking information” within the meaning of applicable securities laws relating to the proposal to complete the Transaction, the Divestment and associated transactions. Any such forward-looking statements may be identified by words such as “expects”, “anticipates”, “believes”, “projects”, “plans” and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Statements about, among other things, the expected terms of the Transaction and Divestment, the number of securities of Vaxil that may be issued in connection with the Transaction, the ownership ratio of the Resulting Issuer post-closing, the Concurrent Financing, shareholder approval, CBMI’s strategic plans and the parties’ ability to satisfy closing conditions and receive necessary approvals are all forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Although such statements are based on management’s reasonable assumptions, there can be no assurance that the Transaction or the Divestment will occur or that, if the Transaction or the Divestment do occur, it will be completed on the terms described above. Vaxil and CBMI assume no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by applicable law.

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