An anonymous director reports

XTRACT ONE CLOSES $7.2M PUBLIC OFFERING AND $1.4M INVESTMENT BY STRATEGIC PARTNER

Xtract One Technologies Inc. has closed its previously announced public offering conducted by Eight Capital, as lead agent and sole bookrunner, and Echelon Wealth Partners Inc.

Pursuant to the offering, the company issued 14,057,500 units at a price of 51 cents per unit for aggregate gross proceeds of $7,169,325, which includes the partial exercise of the overallotment option granted to the agents. Each unit consists of one common share of the company and one common share purchase warrant. Each warrant is exercisable into one common share until April 24, 2027, at an exercise price of 64 cents, subject to adjustment in certain events.

In connection with the offering, the agents received an aggregate cash fee of $500,799.60 and 981,960 common share purchase warrants. Each agent warrant is exercisable into one common share at an exercise price of 51 cents until April 24, 2026.

Concurrent private placement

Concurrent with closing of the offering, the company has also completed the issue and sale of 2,696,228 units, on a private placement basis, to MSG Sports Ventures LLC, a wholly owned subsidiary of Madison Square Garden Sports Corp., for total gross proceeds of $1,375,076.28.

All securities issued and made issuable under the concurrent private placement are subject to Canadian hold period and may not be traded until Aug. 25, 2024, except as permitted by applicable securities legislation and the rules and policies of the Toronto Stock Exchange, in addition to applicable U.S. resale restrictions. No finders' fees or commissions were paid in connection with the concurrent private placement.

The concurrent private placement with MSG Sports constitutes a related party transaction within the meaning of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 as the fair market value of the participation in the concurrent private placement by MSG Sports does not exceed 25 per cent of the market capitalization of the company in accordance with MI 61-101. The company did not file a material change report more than 21 days before the expected closing of the concurrent private placement as the details of the concurrent private placement and the participation therein by MSG Sports were not settled until shortly prior to closing and the company wished to close on an expedited basis for sound business reasons.

Xtract One intends to use the proceeds of the offering and the concurrent private placement for working capital and general corporate purposes.

About Xtract One Technologies Inc.

Xtract One Technologies is a leading technology-driven threat detection and security solution leveraging AI (artificial intelligence) to provide seamless and secure patron access control experiences. The company makes unobtrusive threat detection systems that enable venue building operators to prioritize and deliver improved patron experiences while providing unprecedented safety. Xtract One's innovative Gateway product enables companies to covertly screen for weapons at points of entry without disrupting the flow of traffic. Its AI-based software allows venue and building operators to identify weapons and other threats inside and outside of facilities and receive valuable intelligence for optimizing operations.

We seek Safe Harbor.