Exceptional Technologies Fund 5 (VCC) Inc.
TSX VENTURE : XF

February 28, 2007 14:15 ET

ExFund 5 to Distribute Securities Pursuant to Liquidation Plan Approved by Shareholders

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Feb. 28, 2007) - Exceptional Technologies Fund 5 (VCC) Inc. (the "Company") (TSX VENTURE:XF) announces its intention to proceed with the Plan of Liquidation approved by its shareholders on December 20, 2006. The Plan of Liquidation involves the distribution of the Company's investment assets, as described below, the delisting of the Company's common shares from the TSX Venture Exchange, and the voluntary dissolution of the Company.

Relevant dates are as follows:

Halt in Trading - close of trading on Monday, March 12, 2007

Record Date for Distribution of Investment Assets - Thursday, March 15, 2007

Distribution Date - on or about March 30, 2007

Only shareholders of record as of the Record Date will receive a distribution on the Distribution Date. It is intended that shares of the Company will cease to trade on the Exchange as of Monday, March 12, 2007, and that delisting of the shares will occur thereafter. The Company will be dissolved on completion of the Plan of Liquidation.

There are currently 5,949,011 issued and outstanding common shares of the Company.

Investment Assets to be distributed

The Company's current portfolio investments, and the portion of such investments to be distributed on a pro-rata basis to shareholders (the "Liquidating Distribution") as of the Record Date, are as follows:



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Securities to be
Name of Portfolio Securities held distributed on
Company by ExFund 5 Distribution Date
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TIR Systems Ltd. 1,225,000 common shares 1,175,000 TIR shares (1)
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Vigil Health Solutions
Inc. 4,010,058 common shares 100% of the Vigil shares
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Idelix Software Inc. 714,286 common shares 100% of the Idelix shares,
350,000 Series 1 through the distribution
preferred shares of Idelix Securities
200,000 Series 2 Receipts representing a
preferred shares beneficial interest in
the Idelix shares (1)
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Tantalus Systems Corp. 154,166 common shares 100% of the Tantalus
264,898 preferred shares shares, through the
distribution of Tantalus
Securities Receipts
representing a
beneficial interest in
the Tantalus shares (1)
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Notes:
1) See below under "Other Relevant Information".


Other Relevant Information

In order to complete the Plan of Liquidation on a timely basis, shareholders of the Company will be receiving beneficial (but not legal or registered) ownership of the Company's investment holdings in the non-publicly traded securities of Idelix Software Inc. ("Idelix") and Tantalus Systems Corp. ("Tantalus") held by the Company. Accordingly, shareholders of the Company as of the Record Date will receive their pro-rata share of "receipts" evidencing beneficial ownership in the securities of Idelix held by the Company (the "Idelix Securities Receipts") and their pro-rata share of "receipts" evidencing beneficial ownership in the securities of Tantalus held by the Company (the "Tantalus Securities Receipts").

Discovery Capital Management Corp., a wholly owned subsidiary of Discovery Capital Corporation and the former manager of the Company (the "Manager"), will act as custodian of the Idelix Securities Receipts and the Tantalus Securities Receipts until such time as there is a liquidity event (such as a sale or an initial public offering) in either Idelix or Tantalus that results in the Manager receiving cash or securities that are freely tradable, for distribution when such cash or securities are available, to shareholders of the Company as of the Record Date. For these purposes, the Manager will obtain from the Company's transfer agent a list of shareholders of record, as of the Record Date, and maintain this list for future distribution purposes. The services of the Company's transfer agent, Computershare Investor Services Inc., will be terminated upon dissolution of the Company.

The Manager will also hold in custody 50,000 shares of TIR Systems Ltd. in order to defray the current working capital deficiency of the Company (which includes payment of approximately $63,000 in management fees up to December 31, 2006, the final date for which these fees were payable, as well as a liability under the Small Business Venture Capital Act to repay tax credits of approximately $21,000), as well as the costs of completing the Plan of Liquidation. In addition, certain miscellaneous debt instruments with two former venture investments, currently totaling less than approximately $40,000, will also be held in custody to defray such expenses.

As a result of the above and the distribution of all other investment assets of the Company, it is not presently anticipated that any cash will form part of the Liquidating Distribution.

Tax Information

The exact income tax consequences of the Plan of Liquidation to each shareholder of the Company will depend on each Shareholder's particular circumstances. Management strongly recommends that all shareholders of the Company consult their own tax advisors for personal tax advice on the tax consequences of the Plan of Liquidation, and to do so prior to the Record Date.

The following general information is provided for the assistance of shareholders, but should not be relied upon as tax advice for individual circumstances:

An RRSP or RRIF trustee ("Trustee") acting on behalf of an RRSP or RRIF that is a shareholder of the Company, may decide that it cannot continue to hold the Idelix Securities Receipts and the Tantalus Securities Receipts in the RRSP or RRIF. In such event, the Trustee may distribute the Securities Receipts out to the annuitant or beneficiary of such RRSP. This will result in a taxable distribution to the recipient in an amount equal to the value of the Securities Receipts distributed. Although management understands that the Securities Receipts may be qualified investments for RRSPs and RRIFs, it will not be feasible, or even possible, for management to satisfy each Trustee that the Securities Receipts will be qualified investments. If the Securities Receipts are not accepted as qualified investments, the annuitant or beneficiary may be subject to income tax.

Accordingly, individuals who are annuitants or beneficiaries of RRSPs or RRIFs which are shareholders should consult their tax advisors to determine the tax consequences to them of receiving a distribution from their RRSPs or RRIFs of Securities Receipts, or to determine whether it is possible and appropriate, prior to the Record Date, to "swap" their ExFund 5 shares out of their RRSPs or RRIFs in order that the Securities Receipts are received, at the outset, in a non-RRSP or RRIF account.

Charles Cook, on behalf of the Manager

This news release includes statements about expected future events that are forward-looking in nature and subject to risks and uncertainties. Future events and results may vary substantially from what the Company currently foresees.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Discovery Capital Corporation
    Harry Jaako
    Co-CEO
    (604) 683-3000 ext. 105
    or
    Discovery Capital Corporation
    John McEwen
    Co-CEO
    (604) 683-3000 ext. 106
    or
    Discovery Capital Corporation
    Charles Cook
    CFO
    (604) 683-3000 ext. 102
    (604) 662-3457 (FAX)
    Email: info@discoverycapital.com
    Website: www.discoverycapital.com