Mr. David Eaton reports

PENBAR CAPITAL LTD. ANNOUNCES DEFINITIVE AGREEMENT FOR THE ACQUISITION OF EMISSIONS EV TECHNOLOGIES LTD.

Further to Penbar Capital Ltd.'s news releases dated Oct. 4, 2023, Oct. 31, 2023, and Nov. 15, 2023, the company, 1451356 B.C. Ltd., a newly incorporated wholly owned subsidiary of Penbar (NewCo), Emissions EV Technologies Ltd., a private arm's-length British Columbia company, and Emission EV Operating Corp., a wholly owned subsidiary of Emissions EV, have entered into an amalgamation agreement dated Nov. 24, 2023, pursuant to which Penbar will acquire all of the issued and outstanding securities of Emissions EV.

The transaction is subject to the approval of the TSX Venture Exchange, and is intended to constitute Penbar's qualifying transaction (as defined in Policy 2.4). The combined company that will result from the completion of the transaction (thereafter referred to as the resulting issuer) will be renamed Emissions EV Technologies or such other name as agreed to by Penbar and Emissions EV. Subject to TSX-V approval, the common shares of the resulting issuer will trade on the TSX-V, and the business of the resulting issuer will be the business of Emissions EV. It is expected that the resulting issuer will be listed on the TSX-V as a Tier 2 technology issuer.

About Emissions EV Technologies Ltd.

Emission EV specializes in the design, manufacturing and production of electrically powered industrial and commercial vehicles. Emissions EV is dedicated to changing the logistics and production sector by providing sustainable transportation solutions that are at the forefront of the electric vehicle (EV) industry today. Emissions EV's collaborative approach involves close engagement with its customers, allowing them to contribute their unique needs and insights to the project, ensuring that the machines that are created for their use are completely without compromise.

Based in New Westminster, B.C., Emissions EV creates environmentally friendly, efficient and reliable vehicles that not only meet industry standards and regulatory requirements but also partner with local suppliers and vendors to manage and maintain the strictest standards in compliance and finished product quality.

By combining its technical capabilities with its ingenious design engineering support, Emissions EV aims to drive innovation, reduce emissions and usher in a brighter, more sustainable future in hard-to-decarbonize sectors of the global auto industry.

Summary of the transaction

Pursuant to the terms of the amalgamation agreement, Penbar will acquire all of the issued and outstanding common shares in the capital of Emissions EV by way of a three-cornered amalgamation whereby NewCo and Emissions EV will amalgamate to form a new amalgamated entity (AmalCo), and Amalco will be a wholly owned subsidiary of Penbar. In addition, Emission EV Operating will be a wholly owned subsidiary of Amalco.

At the time of closing of the transaction, each of the outstanding Emissions EV shares will be cancelled and, in consideration for such Emissions EV shares, each holder of Emissions EV shares will receive one postconsolidation (as defined below) common share in the capital of Penbar for each Emissions EV share held by such Emissions EV shareholder.

Penbar expects to issue an aggregate of 67,091,767 Penbar shares (on a postconsolidation basis) for the Emissions EV shares issued and outstanding immediately prior to the completion of the concurrent financing (as defined below). In addition, Penbar expects to:

1. Issue 10 million Penbar share purchase performance warrants to be issued to the former holder of performance warrants of Emissions EV entitling the holder thereof to acquire one postconsolidation Penbar share at a price of 15 cents per Penbar share, subject to the satisfaction of certain performance conditions enumerated in the certificates representing the Penbar performance warrants;
2. Issue 15.5 million Penbar share purchase warrants to be issued to the former holders of share purchase warrants of Emissions EV entitling the holders thereof to acquire one postconsolidation Penbar share at a price of two cents per share until July 28, 2024.

Share consolidation

Prior to completion of the transaction, Penbar will seek to consolidate its outstanding Penbar shares on the basis of two preconsolidation Penbar shares for every one postconsolidation Penbar share.

Concurrent financing

In connection with the transaction, it is anticipated that Emissions EV will complete a non-brokered private placement financing of at least 13,333,334 Emissions EV common shares at a price of 15 cents per Emissions EV common share to raise aggregate gross proceeds of approximately $2-million. No finder's fees, cash commissions and/or broker warrants are expected to be paid and/or issued in relation to the concurrent financing.

The proceeds from the concurrent financing are intended to be used to pursue the business goals and objectives of the resulting issuer as well as for its general working capital purposes. Further information on the resulting issuer's business goals and objectives will be provided in the filing statement to be filed with the TSX-V in connection with the transaction.

Corporate advisory fee

In connection with the transaction, the parties agreed that on closing and subject to approval of the TSX-V, an arm's-length corporate adviser will be paid a merger and acquisition advisory fee of one million resulting issuer shares. No other fees will be paid.

Closing of the transaction

The completion of the transaction is subject to the satisfaction of various conditions as are standard for a transaction of this nature, including but not limited to: (i) the company having had the reasonable opportunity to perform searches and other due diligence, and being satisfied with the results of such due diligence; (ii) receipt of all requisite consents, waivers and approvals for the transaction, including the approval of the TSX-V; (iii) the absence of any material adverse change in the business, affairs or operations of Penbar or Emissions EV; (iv) completion of the concurrent financing; and (v) Emissions EV and Penbar, as applicable, having received the requisite approvals from their respective shareholders in order to complete the transaction.

Assuming the completion of the transaction and the concurrent financing, and that no convertible securities of Penbar are exercised, 83,425,100 resulting issuer shares are expected to be issued and outstanding on the date of closing, of which approximately 2.4 per cent of the resulting issuer shares are anticipated to be held by the current shareholders of the company, approximately 80.4 per cent are anticipated to be held by the Emissions EV shareholders, approximately 16 per cent will be held by the subscribers to the concurrent financing and approximately 1.2 per cent will be held by the adviser.

The transaction is an arm's-length transaction and therefore will not require shareholder approval under Policy 2.4 for that reason.

Directors, officers and insiders of the resulting issuer

Following the closing, it is expected that the following individuals will be appointed as management and directors of the resulting issuer:

Clinton Wong, chief executive officer

Mr. Wong has over 30 years of experience in the automotive modification and upfitting industry. With an extensive history of project management and mechanical design engineering roles, Mr. Wong undertook six years of EV development which led toward founding Emissions EV (formerly, MEK Electrified Ventures) in 2020. With Mr. Wong leading the production and development team, Emissions EV has delivered safe, rugged and dependable vehicles to mining and industrial customers. Mr. Wong has completed programs at BCIT in business venture management, building science, drafting, and metal fabrication and welding, which serves to strengthen the hands-on approach to product development and manufacturing.

Sheri Rempel, chief financial officer and director

Ms. Rempel has more than 25 years of accounting and financial management experience. Ms. Rempel started her career with public companies in 2001 and currently provides senior financial and advisory services to Canadian private and public corporations, acting in officer or controller capacities.

Peter Smyrniotis, director

Mr. Smyrniotis is a founder, operator and board-level executive adept in launching high-growth disruptive companies, shipping new products to market, and building teams and revenue through growth stages (from seed to liquidity). He has extensive experience in corporate governance and fundraising. He is also currently a director with Victory Square Technologies, Spark Real Estate Software and CoPilot AI.

Darren Miller, director

Mr. Miller is the founder of Indrocorp Technologies Inc., doing business as Indrotek, a company operating in the field of technology and drone operations, and has more than 25 years of experience in the energy sector, including operating oil and gas businesses that he successfully sold. His companies provided oil field operations as well as pipeline and 56 facility construction projects in the petroleum industry. He later joined the financial sector at Walton Capital Management Inc. where he became immersed in international real estate investment and later co-founded Insure Wealth Group. In 2019, Mr. Miller co-founded Indrotek, a company rapidly gaining attention internationally with both industry and military in the remotely piloted aircraft system (RPAS drone) defence sector. He holds several board positions.

Ken Marshall, director

Mr. Marshall has extensive experience in the information technology and telecommunications sectors, having served in various positions at Rogers Communications throughout his career. Mr. Marshall was the senior vice-president, national residential marketing (Toronto), where he led the wireline marketing group in the launch of the Ignite platform, and also served as the regional president (Atlantic region) and the vice-president -- Enterprise business unit. Mr. Marshall has spent his post telecom time working with emerging start-up organizations. He serves on the board of Genesis, Newfoundland and Labrador's primary innovation hub and incubator; Growler Energy Inc., in the field of renewable energy production; and served on the board of Celtx, an on-line platform for film, video and game production. Mr. Marshall obtained a bachelor of commerce (honours) from Memorial University in 1984 and a master of business administration (finance) from Dalhousie University in 1985.

Additional information on the proposed directors, officers and Insiders (as defined in the policies of the TSX-V) of the resulting issuer will be included in a subsequent press release.

Financial information of Emissions EV

A summary of the financial information (unaudited) of Emissions EV for the years ended Dec. 31, 2021, and Dec. 31, 2022, disclosed in accordance with TSX-V policies, is included in the table below:

                                YEAR ENDED               YEAR ENDED
                             DEC. 31, 2021            DEC. 31, 2022
                                 (AUDITED)                (AUDITED)
                                       ($)                      ($)

Total revenues:                    683,707                  790,783
Total assets:                      917,235                2,169,463
Total liabilities:               2,471,637                2,994,683
Basic and diluted loss         (two cents)            (three cents)
per share:
Total expenses:                    993,480                1,097,773
Net loss and                     (729,182)                (847,408)
comprehensive (loss):

Additional financial information with respect to Emissions EV will be provided in the filing statement to be filed with the TSX-V in connection with the transaction.

Sponsorship

Sponsorship of a qualifying transaction of a capital pool company is required by the TSX-V unless an exemption from the sponsorship requirement is available. Penbar intends to apply for a waiver from the sponsorship requirements. There is no assurance that the company will be able to obtain such a waiver.

About Penbar Capital Ltd.

Penbar 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 amalgamation agreement. The principal business of Penbar 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 the policies of the TSX-V.

We seek Safe Harbor.