(TheNewswire)
Toronto, Ontario – TheNewswire - June 1, 2023 – Cuspis Capital IIILtd. (TSXV:CIII.P) (“ Cuspis ” or the“ Corporation ”), a capital pool company as defined under TSX VentureExchange (“ TSXV ” or the “ Exchange ”) Policy 2.4 – Capital Pool Companies (“ Policy2.4 ”), is pleased to announce it has enteredinto a letter of intent dated May 31, 2023 (the “ LOI ”) withCytophage Technologies Inc. (“ Cytophage ”), a privatecompany continued under the laws of the Province ofManitoba , whereby Cuspis and Cytophage will complete an arrangement,amalgamation, share exchange, or similar transaction to ultimatelyform the resulting issuer (the “ Resulting Issuer ”)that will continue on the business of Cytophage (the “ Transaction ”),subject to the terms and conditions outlined below. Cuspis intendsthat the Transaction will constitute its Qualifying Transaction, assuch term is defined in the policies of the Exchange. Followingcompletion of the Transaction, the Resulting Issuer intends to list asa Tier 2 Industrial Issuer on the Exchange.
Cuspis completed its initial public offering inDecember, 2021. The common shares of Cuspis (the “ Cuspis Shares ”) arelisted for trading on the TSXV under the stock symbol “CIII.P”.Cuspis has not commenced commercial operations and has no assets otherthan cash. Cuspis was incorporated under the laws of the Province ofOntario.
Cytophage’s products and scientific platformrepresent a new tool to reverse the trend of increasing use ofantibiotics and the consequential global increase in antimicrobialresistance to these antibiotics.
Cytophage is based in Winnipeg, Manitoba and was formedon February 5, 2015. Cytophage Technologies Inc. developsbacteriophage (“phage”) products as an alternative to antibioticsand vaccines, to prevent and treat bacterial and viral infections thataffect human health, animal health and food safety. Bacteriophagesare viruses that have evolved to specifically target and destroystrictly bacterial cells and are safe for humans, plants and animals.To combat dangerous bacteria, Cytophage generates customized phages toaddress specific bacterial infections, including strains resistant toantibiotics. Cytophage has also recently developed a‘phage-display’ methodology to develop vaccine-like products usingbacteriophages for a number of potential applications in human andanimal health.
Given the majority of antibiotics produced are used inanimal agriculture, Cytophage’s first products focus on the animalhealth market, addressing common bacterial infections in livestock,beginning with poultry. Commercialization is expected before the endof 2023, with regulatory applications for several jurisdictionscurrently being prepared for Cytophage’s first commercial product– an E-coli and salmonella phage product to control E. coli andsalmonella in chickens, with subsequent poultry products, that arealready developed, being tested for C. perfringens. Cytophage is also evaluating further opportunities inanimal health such as mastitis in dairy cattle and E. Coli in sucklingpigs. Potential antiviral applications in animal health using‘phage-display’ that are being investigated include Swine Feverand Bovine Respiratory Syndrome. The total global market for animalantibiotics and antimicrobials is estimated to be more than US$ 4billion per annum 1 .
On the human health side, Cytophage is available tosupport Canada’s Special Access Program (SAP) that allows patientswith life-threatening illnesses to access therapies that have not yetbeen approved by Health Canada, as well as similar programs in placearound the world. Cytophage is currently testing its‘phage-display’ platform by developing an antiviral for COVID-19using a filamentous phage, focused on preventing transmission of thevirus. This work is intended to inform the development of newproducts for respiratory viruses including the potential for a broadstrain flu-vaccine.
Cuspis’s management believes Cytophage’s researchand platform represent a compelling opportunity in the face of risingbacterial resistance to antibiotics globally. A recent Economistpodcast 2 (and BBCarticle 3 ) highlights thesituation, and notes that in 2019 more than a million deaths worldwidewere attributed to infections caused by bacteria resistant toantibiotics, with that figure expected to rise to over 10 million by2050. The UN has said, “Antimicrobial resistance is one of thegreatest threats we face as a global community” 4 .
For its year ended December 31, 2022, Cytophage hadtotal assets of $2.240 million and total liabilities of $153 thousand,for net tangible assets of $2.09 million. Cytophage had in its fiscal 2022, and a net income (loss) of($3.72million). All such numbers are unaudited.
The LOI was negotiated at arm’s length and iseffective as of May 31, 2023. William Ollerhead, the CEO and adirector of Cuspis, holds (directly and indirectly) 832,500 commonshares of Cytophage. Grant McCutcheon, the CFO and a director ofCuspis, holds 74,000 common shares of Cytophage. Fraser Elliott, adirector of Cuspis, holds 254,000 common shares of Cytophage. JackSchoenmakers, a director of Cuspis, holds 30,000 common shares ofCytophage. These directors and officers of Cuspis collectively own2.82% of the total issued and outstanding Cytophage shares. None ofthe current directors or officers of Cuspis hold any director ormanagement position with Cytophage. The Transaction does notconstitute a Non-Arm’s Length Qualifying Transaction, and theapproval of the shareholders of Cuspis will not be required. In theevent that approval from the shareholders of Cytophage is required,such approval will be sought as a condition to the closing of theTransaction.
The material terms and conditions outlined in the LOIare non-binding on the parties and the LOI is, among other things,conditional on the execution of a definitive agreement (the“ DefinitiveAgreement ”) to be negotiated between theparties. It is currently anticipated that, immediately prior to thecompletion of the Transaction, Cuspis will effect a shareconsolidation (the “ Consolidation ”) on a basis to be determined,where the number of shares to be consolidated for each share (the“Consolidation Divisor”) is anticipated to be between 2 and5.
The LOI contemplates that as a condition of closing,Cytophage will complete a private placement of equity securities forgross proceeds of a minimum of $3,000,000 and a maximum of $5,000,000(the “ Concurrent Financing ”).Pursuant to the Transaction, 4.1534 divided by the ConsolidationDivisor Post-Consolidation Cuspis Shares, will be issued in exchangefor outstanding common shares of Cytophage (such ratio being the“ Exchange Ratio ”). The Value of Cytophage is established at $40,172,034,or $0.95 per share. The value of Cuspis has been established at$8.050 million, or $0.23 per (pre-Consolidation) share. Cuspisshareholders will own between 15.1% of the resulting issuer (if themaximum Concurrent Financing is raised), and 15.7% of the resultingissuer (if the minimum Concurrent Financing is raised). If agreedbetween Cuspis and Cytophage, Cuspis shareholders may also receiveshare purchase warrants of the resulting issuer, in such number andupon such terms as may be agreed upon.
There can be no assurance that a Definitive Agreementwill be successfully negotiated or entered into, or that theConcurrent Financing or the Transaction will be completed.
Upon completion of the Transaction, the parties intendfor the following individuals to comprise the board of directors andmanagement of the Resulting Issuer, while Cuspis will, at its option,nominate a 6 th director, acceptable to Cytophage.
Dr. Steven Theriault
Winnipeg, Manitoba
Dr. Steven Theriault, the founder of Cytophage, is asynthetic biologist with 20 years research and commercial experiencein generating biological solutions for biological problems. Hisresearch on the Ebola virus contributed to the development of theCanadian Ebola vaccine that was a critical tool in curtailing the 2016outbreak. As the Chief of the Applied Research Program at the CanadianScience Centre for Human and Animal Health, Dr. Theriault workedextensively at the global level on issues related to the efficacy ofmicrobiocides in containment laboratories and outbreak areas, geneticsystems to evaluate pathogenesis in viral infectious agents, andadvances in decontamination. As a professor at the University ofManitoba, he has taught numerous courses in microbiology, cellbiology, immunology and virology. Through his private laboratory, Dr.Theriault has commercialized his discoveries related to bioremediationand pathogen reduction processes. Dr. Theriault’s interests haveturned to addressing antimicrobial resistance through the use ofsynthetic bacteriophages. His template technology createsbacteriophages that are tailored to kill specific bacteria as opposedto the lengthy discover-in-nature process that currently exists. Tocommercialize his invention, Dr. Theriault established CytophageTechnologies Inc. and is currently the CEO and CSO of the Corporation
Director: Harold Wolkin
Toronto, Ontario
Harold Wolkin has over 30 years of experience as aninvestment banker and financial analyst. He has extensive experiencein advising CEO’s and Boards of Directors of both public and privatecompanies. Harold has successfully assisted 50+ companies in goingpublic and acquiring investment growth capital. Harold has takenleadership roles on numerous boards including his current roles asChair of the Audit Committee of Baylin Technologies and Lead Directorof Cipher Pharmaceuticals.
Robert Gabor
Winnipeg, Manitoba
Mr. Robert Gabor left the practice of law after 36years to accept the position as chair of the Public Utilities Board ofManitoba. As a partner at Aikins, MacAulay and Thorvaldson LLP, Mr.Gabor was the Head of the Commercialization Unit. His practice coveredthe areas of administrative law to corporate-commercial and technologylaw, including intellectual property, cyber security and privacy law.Mr. Gabor was appointed as a commissioner on the Royal Commission onElectoral Reform and Party Financing from 1990-92. Mr. Gabor is a PastMember of the International Board of Governors of The HebrewUniversity of Jerusalem. Mr. Gabor received the Queen’s DiamondJubilee Medal for community services in 2012.
Dr. Shantha Kodihalli
Winnipeg, Manitoba
Dr. Kodihalli is an accomplished R&D executive with20 years of experience in leading preclinical programs including thedevelopment and characterization of animal models, advancement ofvaccine and therapeutic against infectious agents, and progressingmedical countermeasures for licensure by the FDA. She has anextensive track record of therapeutic drug development againstinfectious disease targets from the pipeline, preclinical, clinical tolicensure. Dr. Kodihalli is accomplished in FDAAnimal Rule; Good Laboratory Practices; animal models of infectiousdisease and acute radiation syndromes; medical countermeasuredevelopment for licensure under the Animal rule; pre-IND and INDbriefing packages; BLA preparations for submission for both Animalrule and traditional licensure pathways for biologicals; governmentcontracting; and contract research organization oversight.
Andy Hurley
Boston, Massachusetts
Andy Hurley is an executive leader with over 30 yearsof experience in successfully building and leading commercial andmedical teams. His experience ranges from launching 21 different drugsacross global markets, to building first-in-company commercial teamsand launch strategies within (2) previous R&D companies as a CCO,to rebuilding a clinical operations department following leadershipdepartures and clinical setbacks, and leading a large commercialconsulting division within the top CCO organization in the industry. Recently, Andy joined Shield Therapeutics’ Executive Team as ChiefCommercial Officer with responsibility for USsales, marketing, operations, managed markets and patient services.Before joining Shield, Andy was Chief Commercialand Medical/Clinical Officer at Agenus Inc. where he was responsiblefor leading the commercial, medical affairs and clinical operationsfunctions. Prior to Agenus, Andy was Senior Vice President of acommercial division at Syneos Health where he led a global team thatlaunched nine products across several therapeutic areas during histenure at the company. Andy has also held senior leadership rolesacross commercialization, marketing, sales, and operations functionsat Ocular Therapeutix, Sunovion, Dyax, NitroMed and ForestPharmaceuticals. Andy has a Bachelor of Science in Consumer Studiesfrom the University of Vermont and did post-graduate work in Finance and Marketing atBentley University's McCallum Graduate School of Business.
Cytophage’s current management team includes:
CEO: Steven Theriault
Winnipeg, Manitoba
CFO: Michael Graham
Toronto, Ontario
Mr. Graham has been the CFO of Cytophage since 2017helping the Company raise almost $17M to support its growth anddevelopment. Immediately prior to joining Cytophage Mr. Graham was aDirector and the CFO of RHC Capital, a Canadian listed public issuer,aiding to restructure and execute a qualifying transaction. Mr. Grahamwas also the CFO of the resultant issuer, Royal Helium (TSXV: RHC). Before moving to work on the issuer side, Mr. Graham, spent over 10years in capital markets supporting growth companies in the public andprivate domain as an investment banker and institutional equitybroker.
President: Heather Medwick
Ms. Medwick has acted as President of Cytophage since2018. As the former President and CEO for the International Centre forInfectious Diseases, Ms. Medwick brings over 20 years of managementexperience in the administration, development, evaluation anddissemination of evidence-based knowledge for decision-making byindustry and government .
Conditions to the Transaction
Completion of the Transaction will be subject to anumber of conditions, including but not limited to, acceptance by theTSXV, approval of certain matters by the holders of the Cuspis Sharesand other customary conditions including:
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completion of the Concurrent Financing;
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execution by Cytophage of one or more commercial salesand/or distribution agreement(s), licensing agreement(s), royaltyagreement(s) or receipt of royalty payment(s) or other upfrontpayment, satisfactory to Cuspis;
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receipt of all director, shareholder and requisiteregulatory approvals (including Cytophage shareholder approval)relating to the negotiation and execution of a Definitive Agreement inrespect of the Transaction and as may be contemplated by theDefinitive Agreement;preparation and filing of a disclosure document,as required by the TSXV, (the Disclosure Document ”) outlining thedefinitive terms of the Transaction and describing the business to beconducted by Cuspis following completion of theTransaction, in accordance with the policies of the TSXV; and
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completion of the Consolidation.
There can be no assurance that the Transaction will becompleted as proposed or at all.
Sponsorship
Cuspis intends to make an application for exemptionfrom the sponsorship requirements of the TSXV in connection with theTransaction, however there is no assurance that the TSXV will exemptCuspis from all or part of applicable sponsorship requirements.
Further Information
Cuspis will provide further details in respect of theTransaction and the Concurrent Financing in by way of updating pressreleases as this information becomes available.
All information contained in this press release withrespect to Cytophage and Cuspis (but excluding the terms of theTransaction) was supplied by the parties respectively, for inclusionherein, without independent review by the other party, and each partyand its directors and officers have relied on the other party for anyinformation concerning the other party.
Completion of the Transaction is subject to a number ofconditions, including but not limited to, TSXV acceptance and ifapplicable pursuant to TSXV requirements, majority of the minorityshareholder approval. Where applicable, the Transaction cannot closeuntil the required shareholder approval is obtained. There can be noassurance that the transaction will be completed as proposed or atall.
Investors are cautioned that, except as disclosed inthe Disclosure Document to be prepared in connection with theTransaction, any information released or received with respect to theTransaction may not be accurate or complete and should not be reliedupon. Trading in the securities of a capital pool company should beconsidered highly speculative.
The TSXV has in no way passed upon the merits of theTransaction and has neither approved nor disapproved the contents ofthis press release.
Trading in the listed securities of the Corporationwill remain halted pursuant to Policy 5.2 Section 2.5 and Policy 2.4Section 2.3(b).
For further information:
William Ollerhead
Cuspis Capital III Ltd.
Tel. (416) 214-0876
Forward-Looking Information
This press release contains “forward-lookinginformation” and “forward-looking statements” (collectively,“ forward-lookingstatements ”) within the meaning of applicableCanadian securities legislation. All statements, other than statementsof historical fact, are forward- lookingstatements and are based on expectations, estimates and projections asat the date of this press release. Any statement that involvesdiscussions with respect to predictions, expectations, beliefs, plans,projections, objectives, assumptions, future events or performance(often but not always using phrases such as “expects”, or “doesnot expect”, “is expected” “anticipates” or “does notanticipate”, “plans”, “budget”, “scheduled”,“forecasts”. “estimates”, “believes” or intends” orvariations 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 ofhistorical fact and may be forward-looking statements. In this pressrelease, forward-looking statements relate, among other things, to:the Transaction and certain terms and conditions thereof; the businessof Cytophage, the Concurrent Financing; the Consolidation of CuspisShares; the Exchange Ratio, TSXV sponsorship requirements and intendedapplication for exemption therefrom; shareholder, director andregulatory approvals; and future press releases and disclosure.Forward-looking statements are necessarily based upon a number ofestimates and assumptions that, while considered reasonable, aresubject to known and unknown risks, uncertainties, and other factorswhich may cause the actual results and future events to differmaterially from those expressed or implied by such forward-lookingstatements. Such factors include, but are not limited to: generalbusiness, economic, competitive, political and social uncertainties;and the delay or failure to receive shareholder, director orregulatory approvals. There can be no assurance that such statementswill prove to be accurate, as actual results and future events coulddiffer materially from those anticipated in such statements.Accordingly, readers should not place undue reliance on theforward-looking statements and information contained in this pressrelease. Except as required by law, Cuspis assumes no obligation toupdate the forward-looking statements of beliefs, opinions,projections, or other factors, should they change, except as requiredby law.
Neither TSX Venture Exchange nor itsRegulation Services Provider (as that term is defined in policies ofthe TSX Venture Exchange) accepts responsibility for the adequacy oraccuracy of this release.
This press release does not constitute an offer to sellor a solicitation of an offer to buy any of the securities in theUnited States. The securities have not been and will not be registeredunder the United States Securities Act of 1933, as amended (the“ U.S. SecuritiesAct ”) or any state securities laws and may notbe offered or sold within the United States unless registered underthe U.S. Securities Act and applicable state securities laws, unlessan exemption from such registration is available.
NOT FOR DISTRIBUTION TO U.S. NEWSWIRESERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATIONDIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITEDSTATES.
1 ltdR and M. Animal Antibiotics and Antimicrobials - Global MarketTrajectory & Analytics. www.researchandmarkets.com.https://www.researchandmarkets.com/reports/5301887/animal-antibiotics-and-antimicrobials-global
2 https://www.economist.com/phage-pod
3 Roxby, P. (2022, January 20). Millionsare dying from drug-resistant infections, global report says. BBCNews. From https://www.bbc.com/news/health-60058120
4 United Nations. (n.d.). UN, GlobalHealth Agencies Sound Alarm on drug-resistant infections; newrecommendations to reduce 'staggering number' of future deaths | | UNnews. United Nations. Fromhttps://news.un.org/en/story/2019/04/1037471
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