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Toronto – TheNewswire – December 22, 2023 – Cuspis Capital III Ltd. (TSXV:CIII.P) (“Cuspis” or the “Corporation”), a capital pool company as defined under TSX Venture Exchange (“TSXV” or the “Exchange”) Policy 2.4 – Capital Pool Companies (“Policy 2.4”), is pleased to announce that it has received conditional approval from the Exchange for the Corporation’s proposed Qualifying Transaction (“Transaction”) with Cytophage Technologies Inc. (“Cytophage”). The Transaction will result in the combination of Cuspis and Cytophage to ultimately form the resulting issuer (the “Resulting Issuer”) that will continue on the business of Cytophage. The parties anticipate that the closing of the Transaction (the “Closing”), and the listing of the common shares of the Resulting Issuer (the “Resulting Issuer Shares”) on the Exchange, will occur in January 2024, subject to the final approval of the Exchange.
Cuspis is also pleased to announce that, further to the Corporation’s news release dated November 6, 2023, Cytophage is closing its $2,500,000 concurrent financing, and has completed the first tranche of its non-brokered private placement offering (the “Offering”) of subscription receipts (the “Subscription Receipts”) at a price of $1.00 per Subscription Receipt (the “Offering Price”), for aggregate gross proceeds of $2,450,000. Due to a delay of electronic funds transfer, Cytophage expects the second (final) tranche of the Offering, for aggregate gross proceeds of $50,000, to close on or about December 27, 2023. The Offering constitutes the Concurrent Financing (as defined in Policy 2.4) in respect of the Transaction. Completion of the Offering, together with the proceeds of a non-brokered private placement of units of Cytophage previously completed (for aggregate gross proceeds of approximately $523,000), satisfies the concurrent financing condition of the Transaction.
Immediately prior to the Closing, and provided the Escrow Release Conditions (as defined below) are satisfied or waived (to the extent waiver is permitted), each Subscription Receipt shall be exchanged automatically, for no additional consideration and with no further action on the part of the holder thereof, into one unit of Cytophage (a “Unit“). Each Unit will consist of one Class A common share of Cytophage (such Class A common shares being the “Cytophage Shares“, and the Cytophage Shares comprising the Units being the “Underlying Shares”) and one-half of one common share purchase warrant of Cytophage (each whole warrant, an “Underlying Warrant“). Each Underlying Warrant will entitle the holder to purchase one Cytophage Share (a “Warrant Share“, and together with the Underlying Shares and the Underlying Warrants, the “Underlying Securities“) at an exercise price equal to $1.40 until the date that is 24 months following the date of the Closing, subject to acceleration in accordance with the terms of a warrant indenture dated the date hereof entered into between Cytophage and TSX Trust Company, as warrant agent.
In connection with the Transaction, it is intended that, among other things: (i) the Subscription Receipts will be converted into Underlying Shares and Underlying Warrants; (ii) all of the outstanding Cytophage Shares (including the Underlying Shares) will be exchanged for Resulting Issuer Share on a basis of one Resulting Issuer Share for each one Cytophage Share (the “Exchange Ratio“); (iii) the Underlying Warrants and the Finder Warrants (as defined below) will be exchanged for warrants and finder warrants, respectively, of the Resulting Issuer; and (iv) Cuspis will change its name to “Cytophage Technologies Ltd.”
The net proceeds from the Offering will be used to complete the Transaction, fund regulatory approval(s) for existing Cytophage products, the development of new Cytophage products and for working capital and general corporate purposes.
The gross proceeds of the Offering (the “Escrowed Funds”) are being held in escrow by TSX Trust Company, acting as escrow agent (the “Subscription Receipt Agent”) pursuant to the terms of a subscription receipt agreement dated the date hereof (the “Subscription Receipt Agreement”) entered into among Cytophage, Cuspis and the Escrow Agent. The Escrowed Funds will be released (together with the interest thereon) to Cytophage upon satisfaction of the following escrow release conditions and the Escrow Agent receiving a certificate from Cytophage and Cuspis prior to the Termination Time (as defined below) to the effect that:
(A) all conditions precedent to the Transaction in accordance with the business combination agreement dated November 6, 2023 entered into among Cytophage, Cuspis and 10179321 Manitoba Ltd., a wholly-owned subsidiary of Cuspis (the “Definitive Agreement”), have been completed, satisfied, or waived;
(B) Cytophage and Cuspis, as applicable, not being in breach or default of any of their material covenants or obligations under the Definitive Agreement or the Subscription Receipt Agreement;
(C) all required shareholder and regulatory approvals, including, without limitation, the conditional approval of the TSXV for the listing of the Resulting Issuer Shares on the TSXV and the Transaction, have been received;
(D) the Resulting Issuer securities issued in exchange for the Underlying Securities are not subject to any statutory or other hold period in Canada, other than as may be required by the TSXV;
(E) the satisfaction of such other customary escrow release conditions requested by Cytophage or Cuspis, acting reasonably, to be set out in the Subscription Receipt Agreement; and
(F) Cytophage and Cuspis have delivered a joint notice and direction to the Escrow Agent, confirming that the conditions set forth in (A) to (D) above have been met or waived (together from (A) to (F), the “Escrow Release Conditions”).
If (i) the satisfaction of the Escrow Release Conditions does not occur on or prior to the date that is 180 days following the closing date of the Offering (the “Closing Date”), or such other date as may be mutually agreed to in writing among Cytophage and Cuspis, or (ii) Cytophage and Cuspis has advised the public that either of them 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 Offering 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 (less applicable withholding tax, if any)). If the Escrowed Funds are not sufficient to satisfy the aggregate Offering 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 Cytophage’s sole responsibility and liability to contribute such amounts as are necessary to satisfy any such shortfall.
The securities issued under the Offering were offered by way of private placement exemptions from the prospectus requirements under applicable securities laws.
In connection with the Offering, certain duly registered and eligible finders (the “Finders”) are entitled to an aggregate cash fee of $42,525.00, being an amount equal to 7.0% of the aggregate gross proceeds raised from subscribers introduced by them. As additional consideration, the Finders also received an aggregate of 35,525 finder’s warrants (“Finder’s Warrants”), being an amount equal to 7.0% of the number of Subscription Receipts issued to subscribers introduced by them, which will be paid upon the satisfaction of the Escrow Release Conditions. One Finder will only receive a cash fee for its efforts in connection with the Offering. Each Finder’s Warrant is exercisable at an exercise price of $1.00 to acquire one Unit at any time during the twenty-four (24) months following the date on which the Escrow Release Conditions are fully satisfied, or the closing of the Offering, if the Transaction is not completed. The Finders shall not be paid any cash fee from the proceeds of the Offering representing the Escrowed Funds until such time as the Escrow Release Conditions are satisfied. Upon the completion of the Transaction, the Finder’s Warrants will be exchanged for finder’s warrants of the Resulting Issuer on economically equivalent terms.
Certain insiders of the Corporation purchased an aggregate of 155,000 Subscription Receipts under the Offering and certain insiders of Cytophage purchased an aggregate of 226,000 Subscription Receipts under the Offering.
The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and accordingly, may not be offered or sold within the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This press release does not constitute an offer to sell or a solicitation to buy any securities in any jurisdiction.
Finally, Cuspis announces that it intends to provide a loan to Cytophage in the amount of $225,000 (the “Loan”) pursuant to a loan agreement, subject to the approval of the Exchange. The Loan is intended to provide Cytophage with working capital as the parties progress towards completion of the Transaction. In accordance with Exchange policies, the Loan will be secured, and in the event the Qualifying Transaction is not completed, will be repaid in full to the Corporation. On December 22, 2023, Cuspis advanced $25,000 to Cytophage pursuant to a 10% interest bearing promissory note, as permitted by Policy 2.4.
All information contained in this press release with respect to Cuspis and Cytophage (but excluding the terms of the Transaction) was supplied by the parties respectively, for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party.
Investors are cautioned that, except as disclosed in the disclosure document to be prepared and filed in connection with the Transaction, as required by the TSXV, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon.
The TSXV has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release. Trading in the listed securities of the Corporation will remain halted pursuant to Section 2.5 of Exchange Policy 5.2 – Changes of Business and Reverse Takeovers and Section 2.3(b) of Policy 2.4.
For more information regarding Cuspis, please contact William Ollerhead, the Chief Executive Officer of the Corporation.
William Ollerhead, CEO
Cuspis Capital III Ltd.
(416) 214-0876
There can be no assurance that the Qualifying Transaction will be completed as proposed or at all. For further information on the closing conditions, please see the November Press Release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This press release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this press release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected” “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”. “estimates”, “believes” or intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this press release, forward-looking statements relate, among other things, to: the Transaction and certain terms and conditions thereof; the completion of the Transaction; closing of the second (final) tranche of the Offering on the date specified herein or at all; satisfaction of the Escrow Release Conditions; the issuance of the Loan by Cuspis to Cytophage; repayment of the Loan by Cytophage; securing the Loan; approval of the Loan by the Exchange. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay or failure to receive shareholder, director or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Except as required by law, Cuspis assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
This news releases does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
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