Mr. Nader Vatanchi reports

KEON CAPITAL INC. EXECUTES DEFINITIVE AGREEMENTS RESPECTING PROPOSED TRANSACTION WITH FRAME HOLDINGS INC.

Keon Capital Inc. has provided an update respecting its previously announced transaction with Frame Holdings Inc. pursuant to which Keon will acquire all of the issued and outstanding Frame shares from the Frame shareholders (see Keon's news release dated Nov. 6, 2023, announcing the execution of a letter of intent respecting the transaction).

Transaction agreements

Keon, Frame and 1469253 B.C. Ltd. (Subco, a newly incorporated wholly owned subsidiary of Keon) have executed a business combination agreement and an amalgamation agreement, each dated as of March 12, 2024. The transaction is structured as a three-cornered amalgamation, with Frame amalgamating with Subco and becoming a wholly owned subsidiary of Keon. Shareholders of Frame will receive one common share in the capital of Keon in exchange for each outstanding common share of Frame held by them, with Keon expected to issue an aggregate of approximately 40 million Keon shares (assuming the minimum Frame financing of $2-million) to the Frame shareholders under the transaction.

In connection with the transaction, Keon will conduct a one-for-2.8 share consolidation of issued and outstanding Keon common shares, and any shares issued to Frame shareholders under the transaction will be on a postconsolidation basis. In addition, prior to closing the transaction, Frame is expected to complete an equity financing, having gross proceeds of no less than $2-million and no more than $3-million through the issuance of Frame common shares to participating investors at a price of 20 cents per share. The exact number of Keon shares to be issued to Frame shareholders under the transaction will depend on the size of the Frame private placement. Keon intends to issue additional Keon shares to an arm's-length third party finder, such number of shares to be the maximum allowable under exchange policies and to be determined based on the number of Keon shares issued to Frame shareholders under the transaction.

In connection with the transaction, Frame has loaned Keon an aggregate of $20,000 for transaction expenses pursuant to a loan agreement between Keon and Frame dated as of Jan. 9, 2024. The loan will accrue interest at 5 per cent per annum, calculated and compounded monthly at the end of each calendar month. Keon may repay the loan and any interest payable thereon at an time, and shall be required to repay the loan and interest on or before the earlier of: (a) the date which is 30 days from termination of the business combination agreement for any reason; and (b) Dec. 31, 2024.

Closing of the transaction will be subject to a number of conditions, including completion of the Keon share consolidation, completion of the Frame private placement, approval of the exchange and approval of the amalgamation by the Frame shareholders.

The transaction

The transaction will be a change of business and reverse takeover for Keon under Policy 5.2 of the TSX Venture Exchange. The transaction will not constitute a transaction with any non-arm's-length party of Keon (as such term is defined by the exchange). The transaction is not a related-party transaction as such term is defined by Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) and is not subject to Policy 5.9 of the exchange. As a result, no meeting of the shareholders of Keon is required pursuant to Policy 5.2 of the exchange or applicable securities laws.

Sponsorship of the transaction may be required by the exchange unless a waiver is granted by the exchange. Keon intends to apply for a waiver of sponsorship; however, there can be no guarantee that a waiver will be granted.

About Frame Holdings Inc.

Frame, incorporated under the Business Corporations Act (British Columbia) in November, 2022, is a start-up manufacturer and seller of tiny prefabricated homes using off-site construction based in North Vancouver, B.C. In 2023, Frame completed the prototype for its first flagship product, Riverside, which is a 269-square-foot tiny home complete with a murphy bed, full kitchen, bath and loft. Frame intends to stand out in the marketplace through elegant minimalist design and sustainable, socially responsible practices through material sourcing and production efficiency. The company intends to sell to two primary customers segments: (a) direct to consumers (homeowners); and (b) land bankers and property developers, offering a turnkey solution. No shareholder of Frame currently holds more than 7 per cent of the issued and outstanding Frame shares.

As will be reflected in Frame's audited financial statements for the financial year ended Oct. 31, 2023, which will be included in the company's filing statement to be prepared in connection with the transaction, as at that date, Frame had total assets of $547,084 (including cash of $235,537), total liabilities of $231,767, nil revenues and a net loss of $829,413.

The resulting issuer on closing

On closing of the transaction, the resulting issuer will be an industrial issuer on the exchange. The resulting issuer will be renamed Frame Holdings Inc. or a similar name mutually acceptable to Keon and Frame, and trading of the resulting issuer's shares is expected to be under the exchange symbol HOME.V.

The resulting issuer is expected to have the following directors and officers on closing of the transaction.

Conor Power, chief executive officer and director

Mr. Power is a venture capitalist who was born and raised in Vancouver, B.C. Over the last three years, he has financed many early-stage start-ups, with the majority of his investments focused on health and wellness, consumer goods, on-line marketplaces, and technology.

Harry Nijjar, chief financial officer and corporate secretary

Mr. Nijjar is currently a managing director with Malaspina Consultants Inc. and provides CFO and strategic financial advisory services to his clients across many industries, responsible for the financial reporting and other administrative functions. He holds a CPA CMA designation from the Chartered Professional Accountants of British Columbia and a BComm from the University of British Columbia.

Chris Naychuk, chief operating officer

Mr. Naychuk is a professional engineer with 30 years of construction/management experience. His expertise includes excellent communication skills, change leadership and project management, evidence-based decision making, corporate development, strategy and business development, business performance and lean manufacturing, and corporate governance, as well as capital portfolio management and leasing. He currently serves as the senior director of business development for Mitsui Home Canada, specializing in the design/manufacture of prefabricated walls and stairs for large multifamily projects. Additionally, his career includes roles as director of manufacturing for Lafarge Western Canada, manager of strategy and business development for Lafarge Western Canada, manager of financial advisory services at PricewaterhouseCoopers, and corporate engineer in training at BC Hydro. He graduated from the University of Waterloo (civil engineering) with honours and completed his MBA in finance from the Sauder School of Business.

Kent Patenaude, director

Mr. Patenaude is a Cree status Indian from the Sucker Creek First Nation with a background in business administration. He currently serves as the director of business development for Lu'ma Development Management, specializing in social purpose real estate projects in Canada. With extensive experience in senior indigenous relations and engagement positions, he has developed and maintained relationships with indigenous communities while ensuring cultural sensitivity and inclusivity in various projects. Additionally, he has been the president of the board for Lu'ma Native Housing Society for the past 11 years.

Chief Roy Whitney, director

Chief Whitney is the current chief of the Tsuut'ina Nation, a first nations community located just outside of Calgary, Alta., Canada, a position he was first elected to in 1984 and has held cumulatively for 36 years. Chief Whitney is also a successful businessman, having established and run an aboriginal consulting firm, Wynterose Consulting Group Ltd., from 2001 to 2012, that provided indigenous consultation and engagement services to major corporations and projects, including Enbridge Pipelines Inc., Northern Gateway pipeline project and Shell Canada, among others. He has also held many prominent positions in the resource industry, including director of aboriginal relations for a division of BP Canada, Husky Energy and Norant Resources. In addition to his chieftainship and his business ventures, Chief Whitney has held many board positions, including chairman of the National Aboriginal Economic Development Board, Calgary Stampede, Niechie Institute, National Parole Board, the Prime Minister's dinner co-chair, chief board member of Alberta Gaming, Calgary Economic Development Authority and the First Nations Bank of Canada, and he is currently a member of BMO Bank of Canada's indigenous advisory council.

Nader Vatanchi, director

Mr. Vatanchi has spent a decade in finance, starting with Edward Jones and IG Wealth Management in 2012, where he spent a combined six years before selling his business to pursue his entrepreneurial goals. He currently serves as chief executive officer of the company, CEO of Musk Metals Corp. and CEO of Forty Pillars Mining Corp. He graduated with a bachelors of arts in criminology from Simon Fraser University.

Ashish Misquith, director

Mr. Misquith has extensive experience in business development and start-ups. He has invested in multiple private and public companies and initial public offerings. He is the founder of Swiftgrade, an artificial intelligence application that allows teachers to grade students in a timely and efficient manner. He is an advocate for continuous education and is a former semi-professional tennis player.

Trading of the common shares of Keon will remain halted in connection with the dissemination of this news release and will recommence at such time as the exchange may determine, having regard to the completion of certain requirements pursuant to exchange Policy 5.2. Further details respecting the proposed transaction will follow in future news releases.