Mr. Michael Rodyniuk reports

FLUROTECH, TO BE RENAMED CONSOLIDATED AEROSPACE FINANCE CORPORATION, ANNOUNCES $22 MILLION EQUITY FINANCING

Flurotech Ltd. will be renamed Consolidated Aerospace Finance Corp. (CAFC) pursuant to the name change hereinafter described, and Great Slave Helicopters 2018 Ltd. (GS Heli) has noted that further to the news releases dated April 19, 2024, and March 11, 2024, the parties, along with 15915074 Canada Inc. (FinanceCo or the company), a wholly owned subsidiary of Flurotech (the parties), have agreed to terms with Research Capital Corp. (RCC) with respect to terms of the offering (as defined herein).

RCC has agreed to act as the lead agent and sole bookrunner, on behalf of a syndicate of agents, including CIBC World Markets Inc., ATB Capital Markets Inc. and Canaccord Genuity Corp., in connection with a best-efforts basis, private placement offering of subscription receipts of FinanceCo at a price of $4.00 per subscription receipt for aggregate gross proceeds of up to $22-million, pursuant to an agreed upon term sheet dated May 1, 2024.

Each subscription receipt will entitle the holder thereof, without payment of any additional consideration and without further action on the part of the holder, upon the satisfaction of the escrow release conditions (as defined herein) to receive one common share of the company (an underlying share or underlying shares).

As previously announced, the parties entered into a definitive agreement dated April 19, 2024, in respect of the proposed acquisition of GS Heli by Flurotech. It is intended that the transaction will constitute a reverse takeover transaction of Flurotech, as such term is defined in Policy 5.2 of the TSX Venture Exchange. Additionally, it is intended that the transaction will constitute a reactivation under the policies of the TSX-V and that upon completion of the transaction and satisfaction of all conditions of the TSX-V, Flurotech as it exists upon completion of the transaction will have its listing transferred from the NEX board of the TSX-V to the TSX-V. The transaction is expected to be completed in Q2 2024.

About GS Heli

GS Heli is a privately held corporation existing under the Canada Business Corporations Act (the CBCA). Headquartered in Yellowknife, NWT, GS Heli is a helicopter company with a long-standing reputation for safety, a diverse range of specialized services and logistical support. GS Heli has over 36 years of successful operations, a fleet of single and twin-engine turbine helicopters, and a team of experienced professionals that continue to meet the needs of its customers in the public and private sectors. The only shareholder that holds a controlling interest both directly and indirectly in GS Heli is Pat Campling.

Following the closing, the resulting issuer will operate in the aviation industry, addressing the needs of helicopter aviation in the Northwest Territories, Yukon, Nunavut, Saskatchewan, Alberta, Northwest Ontario and British Columbia. With the largest local helicopter support infrastructure in Northern Canada, CAFC anticipates it will significantly expand the demand for its services, drawing on a senior executive team and board that bring experience in key target markets from aviation and aircraft sectors and its strong partnerships with first nations throughout the Northwest Territories, Nunavut, British Columbia and Alberta.

Transaction highlights -- Consolidated Aerospace Finance Corp.

Scalable consolidation strategy

• Following the transaction, CAFC intends to focus on a disciplined roll-up strategy of accretive acquisitions of businesses in the aerospace sector.
• Fragmented aviation and aerospace industry is poised for consolidation by experienced operators and supported by trends of retiring business owners accelerating succession plans.
• Enhancing shareholder returns through prudent use of leverage.

Compelling investment opportunity

• Flurotech's initial transaction shall be the acquisition of GS Heli, a provider of specialized helicopter aviation services and logistical support.
• Attractive acquisition multiple based on $65-million acquisition price.

Focus on operational efficiency to drive rerating in the public markets

• Acquire businesses at EV/EBITDA (enterprise value/earnings before interest, taxes, depreciation and amortization) multiples based on trailing EBITDA and taking into account required annual maintenance capex and its effect on free cash flow, and seek to achieve a premium multiple by rerating in the public markets.
• Focus on driving margin expansion utilizing deep domain operational experience in the aviation and aerospace industry to streamline acquired company operations.
• Opportunity to establish future quarterly dividend from portion of free cash flow from operations.

World-class leadership team

• Distinguished team of aviation industry leaders with proven record of aerospace acquisition execution capabilities in the public and private markets.

Summary transaction terms

In consideration for acquiring all of the issued and outstanding shares of GS Heli, the former holders of GS Heli shares will receive an aggregate acquisition price of $65-million, subject to customary adjustments. The purchase price is expected to be satisfied through: (i) the net proceeds of the offering, including the agents' option (as defined herein); (ii) $35-million in senior debt (the bank financing); and (iii) $8-million of the purchase price shall be satisfied through the exchange of GS Heli shares for two million resulting issuer shares (as defined herein) at the deemed price per share on the closing date of the transaction. In connection with the transaction, Flurotech entered into a term sheet for $35-million in senior debt and $5-million revolving facility.

Financing details

In connection with the transaction it is intended that, among other things: (i) the subscription receipts will be converted into underlying shares; (ii) all the outstanding common shares of the company (including the underlying shares, will ultimately be exchanged for common voting shares of the resulting issuer (defined herein) on a basis of one resulting issuer share (on a postconsolidation basis) following completion of the consolidation of the company shares on the basis of one company share for every 26.67 preconsolidation company shares, and (iii) Flurotech shall change its name to Consolidated Aerospace Finance Corp. Each resulting issuer share will have a deemed price of $4.00 at closing of the transaction.

FinanceCo and Flurotech will grant to the agents an option to offer up to an additional number of subscription receipts equal to 15 per cent of the subscription receipts raised in the offering, at any time up to 48 hours prior to the closing of the offering.

The net proceeds of the offering will be used for the acquisition of GS Heli and related transaction costs and expenses.

The gross proceeds of the offering, less the expenses of the agents and 50 per cent of the agents' cash commission, will be deposited and held by a licensed Canadian trust company or other escrow agent mutually acceptable to the agents and the company in an interest-bearing account pursuant to the terms of a subscription receipt agreement to be entered into on the closing date among the company, the lead agent, the escrow agent and, if reasonably required by the lead agent, Flurotech. The escrowed funds (less any remaining costs and expenses of the agents) will be released from escrow to the company upon satisfaction of the following conditions no later than the 120th day following the closing date, or such other date as may be mutually agreed to in writing between the company and the lead agent, including:

1. The completion, satisfaction or waiver of all conditions precedent to the transaction in accordance with the definitive agreement, to the satisfaction of the agents;
2. The receipt of all required shareholder and regulatory approvals, including, without limitation, the conditional approval of the TSX-V for the listing and the transaction, approval of the name change, and completion of the consolidation;
3. The resulting issuer securities issued in exchange for the underlying shares not being subject to any statutory or other hold period in Canada;
4. The representations and warranties of the company contained in the agency agreement to be entered into in connection with the offering being true and accurate in all material respects, as if made on and as of the escrow release date;
5. The company and the agents having delivered a joint notice and direction to the escrow agent, confirming that the conditions set forth in (1) to (4) herein have been met or waived.

As a condition precedent to the execution by the lead agent of the joint notice and direction referred to in (5) herein, the chief executive officer of the company (or such other officers as may be acceptable to the agents, acting reasonably) will certify to the agents that the escrow release conditions (other than that set out in (5) herein) have been satisfied.

If (i) the satisfaction of the escrow release conditions does not occur on or prior to the escrow release deadline, or such other date as may be mutually agreed to in writing among the company, Flurotech and the agents, or (ii) the company has advised the agents or the public that it does not intend to proceed with the transaction (in each case, the earliest of such times being the termination time), then all of the issued and outstanding subscription receipts shall be cancelled and the escrowed funds shall be used to pay holders of subscription receipts an amount equal to the issue price of the subscription receipts held by them (plus an amount equal to a pro rata share of any interest or other income earned thereon). If the escrowed funds are not sufficient to satisfy the aggregate purchase price paid for the then issued and outstanding subscription receipts (plus an amount equal to a pro rata share of the interest earned thereon), it shall be the company's and Flurotech's sole responsibility and liability to contribute such amounts as are necessary to satisfy any such shortfall.

In connection with, and as a condition to, the completion of the transaction, the resulting issuer shares (including those issued in exchange for the underlying shares and issuable pursuant to the warrants and options of the resulting issuer) will be listed on the TSX-V.

The securities to be issued under the offering will be offered by way of private placement in each of the provinces of Canada and such other jurisdictions as may be determined by FinanceCo, Flurotech and the agents, in each case, pursuant to applicable exemptions from the prospectus requirements under applicable securities laws.

The offering is expected to close on or about the week of May 27, 2024, or such other date as agreed upon between FinanceCo, Flurotech and the agents and will be subject to certain conditions set out in the agency agreement of the offering.

In connection with the offering, the agents will receive an aggregate cash commission equal to 7.0 per cent of the gross proceeds from the offering, including in respect of any exercise of the agents' option, subject to a reduction for orders on a president's list. Upon the satisfaction or waiver (to the extent waiver is permitted) of the escrow release conditions, the agents will also be issued broker warrants equal to 7.0 per cent of the number of subscription receipts sold under the offering, including in respect of any exercise of the agents' option, subject to a reduction for orders on a president's list. Each broker warrant shall be exercisable to acquire one resulting issuer share at an exercise price of $4.00 per resulting issuer share for a period of 24 months following the satisfaction or waiver of the escrow release conditions.

Proposed management and directors of resulting issuer

The following sets out the names and backgrounds of all persons who are expected to be the officers and directors of the resulting issuer.

Michael Rodyniuk, president, chief executive officer and director

Mr. Rodyniuk is a distinguished aviation industry leader. His experience in leadership roles includes president and CEO positions at Canadian North Airlines, West Wind Aviation, Wasaya Airways and an executive vice-chairman at Hawaii Island Air, Mr. Rodyniuk brings a proven record of success to CAFC. He served as senior vice-president and airport chief operating officer at Winnipeg Airports Authority, director of revenue at WestJet, and VP and COO at Exchange Income Corp. Mr. Rodyniuk is a graduate of the University of Manitoba's Asper School of Management with an MBA, as well as a graduate of Mount Royal University (College). Mr. Rodyniuk and Michael Swistun are former colleagues, working together building the aviation division of another publicly traded company. Mr. Rodyniuk is certified by the Canadian Institute of Corporate Directors as an ICD.D.

Michael Swistun, chief investment officer and director

Mr. Swistun, a former capital markets executive with Exchange Income and Wellington West Capital, will lead the company's investment review and strategic operations. Mr. Swistun is a chartered financial analyst, and most recently served as the secretary to the Economic Development Board of the Prov. of Manitoba. Mr. Swistun served as CEO of ASBEX Inc., based in Ottawa, where he led a speciality trade contractor during its transition of ownership. Previously served as the managing director of FMI Capital Advisories Inc., where he worked closely with construction company owners on financial advisory, mergers and acquisitions, valuations, and ownership transfer issues. Prior to these roles, Mr. Swistun served as director of acquisitions for Winnipeg-based Exchange Income where he led the company's acquisition efforts in the aerospace and manufacturing and distribution industries throughout North America. Mr. Swistun has a bachelor of commerce in finance and marketing from the Asper School of Business as the University of Manitoba.

James O'Brien, chief legal officer/VP corporate development, corporate secretary and director

A former M&A (merger and acquisition) partner at MLT Aikins for 12 years representing a broad range of clients and regularly advising on various corporate matters focusing on the sale and acquisition of businesses across a wide array of industries including agriculture, manufacturing, aviation, transport and health care. Founder of a Canadian real estate asset management firm focused on the development of multifamily housing. Current board member/chair of the audit committee of a Nasdaq-listed public company.

Pat Campling, director

Mr. Campling is an aviation executive from Northern Saskatchewan with over 43 years of aviation experience and comes from a long line of aviation pioneers and innovators, being the son of the late Pat Campling Sr., the founder of La Ronge Aviation. Mr. Campling is the former CEO and accountable executive of Great Slave Helicopters. Prior to his role as CEO of Great Slave Helicopters, Mr. Campling was the co-founder of Trans West Air and served as interim chief executive of Saskatchewan-based group West Wind Aviation.

Ravi Latour, director

Mr. Latour is a partner at Borden Ladner Gervais LLP (BLG) and is the regional group manager for BLG Calgary's Corporate & Capital Markets Group. Mr. Latour has extensive experience in a broad range of securities and corporate law matters, acting for issuers, underwriters, agents, private equity, venture capital and investors in corporate finance and mergers and acquisition matters, including going-public transactions, plans of arrangements and restructurings. Mr. Latour is a member of BLG's environmental, social and governance (ESG) leadership team, a member of BLG's M&A steering committee, United States and United Kingdom strategy committees, and the co-chair of the firm's race action committee. He is consistently recognized as a leading lawyer in Canada, including most recently in the 2024 edition of The Canadian Legal Lexpert directory (corporate mid-market, private equity, corporate commercial law and energy -- oil and gas categories), the 2024 edition of Best Lawyers in Canada (Corporate Law), the 2023 edition of the Lexpert Special Edition: Technology & Health Sciences, the 2023 edition of the Lexpert Special Edition: Finance and M&A, and as a Lexpert Rising Star: leading Lawyer Under 40, among other notable recognition and awards. Mr. Latour graduated from the University of Manitoba with a Juris Doctor degree in 2012 and was admitted to the Alberta bar in 2013.

Sid Dutchak, director

Mr. Dutchak has a background in corporate and commercial law from Saskatchewan, transitioned to Calgary in 1992 as CEO of a publicly traded company. He was previously Saskatchewan's Attorney General and chairman of Saskatchewan Mining Development Corp. (now Cameco Corp.). In Calgary, Mr. Dutchak has focused on managing public companies, serving in senior roles across various exchanges in Canada and the U.S. He is skilled in structuring public companies and organizing financings and has been a key player in private and public startup ventures. He holds a BLaw from the University of Saskatchewan and is honoured with the Queen's Counsel designation for his legal and public service achievements.

Finders' fees

Upon closing of the transaction, Flurotech proposes to pay a fee to certain finders, being Mr. Rodyniuk, Mr. Swistun and Mr. O'Brien, who found and facilitated the transaction, in efforts to align the interests of the shareholders and the management team of the resulting issuer. Mr. Rodyniuk is a non-arm's-length party to Flurotech and Mr. Swistun and Mr. O'Brien are non-arm's-length parties to the resulting issuer. The proposed finder's fee shall be equal to 5 per cent in the aggregate of the transaction value, satisfied by way of issuing resulting issuer shares at the issue price of the subscription receipts, and is subject to approval of the TSX-V and, if applicable, disinterested shareholder approval.

Trading halt

In accordance with TSX-V Policy 5.2, the common shares of Flurotech are currently halted from trading and are expected to remain halted pending closing of the transaction and listing of the resulting issuer on the TSX-V.

About Flurotech Ltd.

Flurotech was incorporated under the Business Corporation Act (Alberta) on May 24, 2018. Flurotech is currently inactive with limited operations and the common shares of Flurotech are currently listed on the NEX. Flurotech has no commercial operations and no assets other than cash, operating losses and is a reporting issuer in the provinces of Alberta and British Columbia.

We seek Safe Harbor.