FXC FAX Capital Corporation

FAX Capital Corp. (TSX: FXC) (“FAX” or the “Company”) today announced that it has filed its management information circular (the “Circular”) and related meeting materials for the annual general and special meeting (the “Meeting”) of holders of subordinate voting shares and multiple voting shares of the Company (the “Shareholders”) to be held on June 24, 2022. At the Meeting, Shareholders will be asked to consider, among other things, the proposed acquisition, indirectly through an acquisition company, by Fax Investments Inc. (“Fax Investments”), a wholly-owned subsidiary of Federated Capital Corp., of all of the issued and outstanding subordinate voting shares of FAX (the “Subordinate Voting Shares”) not already owned by Fax Investments or Blair Driscoll, the Company’s Chief Executive Officer (together, the “Continuing Shareholders”), by way of a statutory plan of arrangement under the Canada Business Corporations Act (the “Arrangement”). The Arrangement will be carried out pursuant to terms of an arrangement agreement between the Company, Fax Investments, 13998037 Canada Inc. and Federated Capital Corp. dated May 1, 2022 (the “Arrangement Agreement”).

Benefits of the Arrangement to Shareholders

Pursuant to the Arrangement, and as more particularly described in the Circular, each holder of Subordinate Voting Shares (other than the Continuing Shareholders) will receive $5.18 in cash per Subordinate Voting Share (the “Consideration”).

The Consideration represents:

	i)	a premium of approximately 53.7% to the closing price of $3.37 per Subordinate Voting Share on the Toronto Stock Exchange (the “TSX”) on April 29, 2022 (being the last trading day preceding the announcement of the Arrangement);
	ii)	a premium of approximately 47.7% to the 20-day volume-weighted average trading price of Subordinate Voting Shares on the TSX for the period ended on April 29, 2022; and
	iii)	the certainty of an all cash offer, which provides immediate liquidity.

About the Annual General and Special Meeting

The Meeting will be held on Friday, June 24, 2022 at 10:00 a.m. (Toronto time).

The Circular contains important information regarding the Arrangement, how Shareholders can participate and vote at the Meeting, the background that led to the Arrangement and the reasons for the unanimous determination of the special committee of independent directors of the Company, as well as the board of directors of the Company (the “Board”), with certain directors declaring their conflicts of interest and abstaining from voting, that the Arrangement is in the best interests of the Company. The Board, excluding interested directors, unanimously recommends that Shareholders vote IN FAVOUR of the Arrangement.

The Arrangement will constitute a “business combination” for purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Arrangement is subject to approval at the Meeting by: (i) at least two-thirds of the votes cast by Shareholders (voting together as a single class, with each holder of Subordinate Voting Shares being entitled to one vote per Subordinate Voting Share and each holder of the multiple voting shares being entitled to ten votes per multiple voting share); and (ii) a simple majority of the votes cast by holders of Subordinate Voting Shares (excluding the Subordinate Voting Shares held by the Continuing Shareholders and any other shares required to be excluded pursuant to MI 61-101). In addition, completion of the Arrangement is subject to other customary conditions, including receipt of court approval and final approval from the TSX. The Arrangement is not subject to a financing condition.

The Circular, form of proxy, voting instruction form and letter of transmittal, as applicable, for the Meeting contain comprehensive information with respect to how registered and beneficial Shareholders may vote on the matters to be considered at the Meeting. Shareholders are urged to read the Circular and its appendices carefully and in their entirety. The Circular is being mailed to Shareholders in compliance with applicable laws and the Interim Order (as defined below). The Circular is available on the Company's profile at www.sedar.com and on its website at www.faxcapitalcorp.com. Only Shareholders of record as of the close of business on May 20, 2022 are eligible to vote at the Meeting.

The deadline for completed proxies to be received by the Company's transfer agent is Wednesday, June 22, 2022 at 10:00 a.m. (Toronto time).

The Company will be holding the Meeting in a virtual-only format, which will be conducted via live webcast online at http://meetnow.global/M9AW7A2. During the live webcast, Shareholders will be able to hear the Meeting live, and registered Shareholders and duly appointed and registered proxyholders will be able to submit questions and vote while the Meeting is being held.

Receipt of Interim Court Order

On May 18, 2022, the Company obtained an interim order (the “Interim Order”) from the Ontario Superior Court of Justice (the “Court”) authorizing the holding of the Meeting and matters relating to the conduct of the Meeting.

Subject to obtaining Shareholder approval of the Arrangement at the Meeting, and the satisfaction of remaining customary conditions to the completion of the Arrangement contained in the Arrangement Agreement, including final approval of the Court, all as more particularly described in the Circular, the Arrangement is expected to close early in the third quarter of 2022.

About FAX Capital Corp.

The Company is an investment holding company with a business objective to maximize its intrinsic value on a per share basis over the long-term by seeking to achieve superior investment performance commensurate with reasonable risk. The Company intends to invest in equity, debt and/or hybrid securities of high-quality businesses. The Company initially intends to invest in approximately 10 to 15 high-quality small cap public and private businesses located primarily in Canada and, to a lesser extent, the United States. For further information, please visit the Company’s website at www.faxcapitalcorp.com.

For additional information please contact:

Investor RelationsTim Foran Email: IR@faxcapitalcorp.com Website: www.faxcapitalcorp.com

Media Relations Kieran Lawler Telephone: (416) 303-0799Email: Kieran.lawler@loderockadvisors.com

No Offer or Solicitation

This announcement is for informational purposes only and does not constitute an offer to purchase or a solicitation of an offer to sell Subordinate Voting Shares.

Cautionary Note Regarding Forward-Looking Information

This press release contains forward-looking information. Such forward-looking information or statements (“FLS”) are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Any such FLS may be identified by words such as “proposed”, “expects”, “intends”, “may”, “will”, and similar expressions. FLS contained or referred to in this press release includes, but is not limited to, statements regarding the proposed timing and various steps contemplated in respect of the Arrangement, the holding of the Shareholders’ Meeting, and the anticipated timing for closing of the Arrangement. Although the Company believes that the expectations reflected in such FLS is reasonable, undue reliance should not be placed on FLS because the Company can give no assurance that such expectations will prove to be correct.

FLS are based on a number of factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect, including: assumptions as to the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary Shareholder, Court and TSX approvals; the ability of the parties to satisfy, in a timely manner, the other conditions to the completion of the proposed Arrangement; and other expectations and assumptions concerning the proposed Arrangement. The anticipated dates indicated may change for a number of reasons, including the inability to receive, in a timely manner, the necessary Shareholder approvals, and Court approvals or the necessity to extend the time limits for satisfying the other conditions to the completion of the proposed Arrangement. Accordingly, investors and others are cautioned that undue reliance should not be placed on any forward-looking statements.

Risks and uncertainties inherent in the nature of the proposed Arrangement that could cause actual results to differ materially from those described in such FLS include, but are not limited to, the failure of the parties to obtain the necessary Shareholder, Court and/or TSX approvals or to otherwise satisfy the conditions to the completion of the proposed Arrangement; failure of the parties to obtain such approvals or satisfy such conditions in a timely manner; the possibility of adverse reactions or changes in business relationships resulting from the completion of the Arrangement; the possibility of litigation relating to the Arrangement; credit, market, currency, operational, liquidity and funding risks generally and relating specifically to the Arrangement; significant Arrangement costs or unknown liabilities; the failure to realize the expected benefits of the proposed Arrangement; and general economic conditions; as well as the identified risk factors included in the Company’s public disclosure, including the annual information form dated March 29, 2022, which is available on SEDAR at www.sedar.com and on the Company’s website at www.faxcapitalcorp.com. Failure to obtain the necessary Shareholder, Court and/or TSX approvals, or the failure of the parties to otherwise satisfy the conditions to the completion of the Arrangement or to complete the Arrangement, may result in the proposed Arrangement not being completed on the proposed terms, or at all. In addition, if the Arrangement is not completed, and the Company continues as an independent entity, there are risks that the announcement of the Arrangement and the dedication of substantial resources of the Company to the completion of the Arrangement could have an impact on its business, operating results and activities in general. The FLS in this press release reflect the current expectations, assumptions, judgements and/or beliefs of the Company based on information currently available to the Company, and are subject to change without notice. Consequently, the reader is cautioned not to place undue reliance on the FLS contained in this press release.

Any FLS speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any FLS, whether as a result of new information, future events or results or otherwise. The FLS contained in this press release are expressly qualified by this cautionary statement. For more information on the Company, please review the Company's continuous disclosure filings that are available at www.sedar.com.

No securities regulatory authority has either approved or disapproved of the contents of this news release. The TSX accepts no responsibility for the adequacy or accuracy of this release.