(TheNewswire)
Toronto – TheNewswire - December 22, 2023 – Cuspis Capital III Ltd. (TSXV:CIII.P) (“ Cuspis ” or the “ Corporation ”), acapital pool company as defined under TSX Venture Exchange(“ TSXV ” or the “ Exchange ”) Policy 2.4 – Capital Pool Companies (“ Policy2.4 ”), is pleased to announce that it hasreceived conditional approval from the Exchange for theCorporation’s proposed Qualifying Transaction (“ Transaction ”) withCytophage Technologies Inc. (“ Cytophage ”). The Transaction will resultin the combination of Cuspis and Cytophage to ultimately form theresulting issuer (the “ Resulting Issuer ”) that will continue on thebusiness of Cytophage. The parties anticipate that the closing ofthe Transaction (the “ Closing ”) , and the listing of the commonshares of the Resulting Issuer (the “ Resulting Issuer Shares ”) on the Exchange, will occur inJanuary 2024, subject to the final approval of the Exchange.
Cuspis is also pleased to announce that, further to theCorporation’s news release dated November 6, 2023, Cytophage isclosing its $2,500,000 concurrent financing, and has completed thefirst 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 adelay of electronic funds transfer, Cytophageexpects the second (final) tranche of the Offering, for aggregategross proceeds of $50,000, to close on or about December 27,2023. The Offering constitutes the ConcurrentFinancing (as defined in Policy 2.4) in respect of the Transaction. Completion of the Offering, together with theproceeds of a non-brokered private placement of units of Cytophagepreviously completed (for aggregate gross proceeds of approximately$523,000), satisfies the concurrent financing condition of the Transaction .
Immediately prior to the Closing, and provided theEscrow Release Conditions (as defined below) are satisfied or waived(to the extent waiver is permitted), each Subscription Receipt shallbe exchanged automatically, for no additional consideration and withno further action on the part of the holder thereof, into one unit ofCytophage (a " Unit "). Each Unit will consist of oneClass A common share of Cytophage (such Class A common shares beingthe “ CytophageShares ", and the Cytophage Sharescomprising the Units being the “ Underlying Shares ”)and one-half of one common share purchase warrant of Cytophage (eachwhole warrant, an " Underlying Warrant "). Each UnderlyingWarrant will entitle the holder to purchase one Cytophage Share (a" WarrantShare ", and together with the UnderlyingShares and the Underlying Warrants, the " Underlying Securities ") at an exercise price equal to $1.40 until the datethat is 24 months following the date of the Closing, subject toacceleration in accordance with the terms of a warrant indenture datedthe date hereof entered into between Cytophageand TSX Trust Company, as warrant agent.
In connection with the Transaction, it is intendedthat, among other things: (i) the Subscription Receipts will beconverted into Underlying Shares and Underlying Warrants; (ii) all ofthe outstanding Cytophage Shares (including the Underlying Shares)will be exchanged for Resulting Issuer Share on a basis of oneResulting Issuer Share for each one Cytophage Share (the" ExchangeRatio "); (iii) the Underlying Warrants andthe Finder Warrants (as defined below) will be exchanged for warrantsand 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 tocomplete the Transaction ,fund regulatory approval(s) for existing Cytophage products, thedevelopment of new Cytophage products and for working capital andgeneral 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 ReceiptAgent ”) pursuant to the terms of asubscription receipt agreement dated the date hereof (the“ Subscription ReceiptAgreement ”) ?entered into among Cytophage,Cuspis and the Escrow Agent. The Escrowed Fundswill be released (together with the interest thereon) to Cytophageupon satisfaction of the following escrow release conditions and theEscrow Agent receiving a certificate from Cytophage and Cuspis priorto the Termination Time (as defined below) to the effect that:
(A) all conditions precedent to theTransaction in accordance with the business combination agreementdated November 6, 2023 entered into among Cytophage, Cuspis and10179321 Manitoba Ltd., a wholly-owned subsidiary of Cuspis (the“ DefinitiveAgreement ”), have been completed, satisfied,or waived;
(B) Cytophage and Cuspis, as applicable, notbeing in breach or ?default of any of their material covenants orobligations under the Definitive Agreement or the Subscription?Receipt Agreement;
(C) all required shareholder and regulatoryapprovals, including, without limitation, the conditional approval ofthe TSXV for the listing of the Resulting Issuer Shares on the TSXVand the Transaction, have been received;
(D) the Resulting Issuer securities issuedin exchange for the Underlying Securities are not subject to anystatutory or other hold period in Canada, other than as may berequired by the TSXV;
(E) the satisfaction of such other customaryescrow release conditions requested by Cytophage or Cuspis, actingreasonably, to be set out in the Subscription Receipt Agreement; and
(F) Cytophage and Cuspis have delivered ajoint notice and direction to the Escrow Agent, confirming that theconditions 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 ReleaseConditions does not occur on or prior to the date that is 180 daysfollowing the closing date of the Offering (the “ Closing Date ”), orsuch other date as may be mutually agreed to in writing amongCytophage and Cuspis, or (ii) Cytophage and Cuspis has advised thepublic that either of them does not intend to proceed with theTransaction (in each case, the earliest of such times being the“ TerminationTime ”), then all of the issued and outstandingSubscription Receipts shall be cancelled and the Escrowed Funds shallbe used to pay holders of Subscription Receipts an amount equal to theOffering Price of the Subscription Receipts held by them (plus anamount equal to a pro rata share of any interest or other incomeearned thereon (less applicable withholding tax, if any)). If theEscrowed Funds are not sufficient to satisfy the aggregate OfferingPrice paid for the then issued and outstanding Subscription Receipts(plus an amount equal to a pro rata share of the interest earnedthereon), it shall be Cytophage’s sole responsibility and liabilityto contribute such amounts as are necessary to satisfy any suchshortfall.
The securities issued under the Offering were offeredby way of private placement exemptions from the prospectusrequirements under applicable securities laws.
In connection with the Offering, certain dulyregistered and eligible finders (the “ Finders ”) areentitled to an aggregate cash fee of $42,525.00, being an amount equalto 7.0% of the aggregate gross proceeds raised from subscribersintroduced by them. As additional consideration, the Finders alsoreceived an aggregate of 35,525 finder’s warrants (“ Finder’s Warrants ”), being an amount equal to 7.0% of the number ofSubscription Receipts issued to subscribers introduced by them, whichwill be paid upon the satisfaction of the Escrow Release Conditions.One Finder will only receive a cash fee for its efforts in connectionwith the Offering. Each Finder’s Warrant is exercisable at anexercise price of $1.00 to acquire one Unit at any time during thetwenty-four (24) months following the date on which the Escrow ReleaseConditions are fully satisfied, or the closing of the Offering, if theTransaction is not completed. The Finders shall not be paid any cashfee from the proceeds of the Offering representing the Escrowed Fundsuntil such time as the Escrow Release Conditionsare satisfied. Upon the completion of the Transaction, the Finder’sWarrants will be exchanged for finder’s warrants of the ResultingIssuer on economically equivalent terms.
Certain insiders of the Corporation purchased anaggregate of 155,000 Subscription Receipts under the Offering andcertain insiders of Cytophage purchased an aggregate of 226,000Subscription Receipts under the Offering.
The securities described herein have not been, and willnot be, registered under the United States Securities Act of 1933, asamended (the “ U.S.Securities Act ”), or any state securitieslaws, and accordingly, may not be offered or sold within the UnitedStates except in compliance with the registration requirements of theU.S. Securities Act and applicable state securities requirements orpursuant to exemptions therefrom. This press release does notconstitute an offer to sell or a solicitation to buy any securities inany jurisdiction.
Finally, Cuspis announces that it intends to provide aloan to Cytophage in the amount of $225,000 (the “ Loan ”) pursuant toa loan agreement, subject to the approval of the Exchange. The Loan isintended to provide Cytophage with working capital as the partiesprogress towards completion of the Transaction. In accordance withExchange policies, the Loan will be secured, and in the event theQualifying Transaction is not completed, will be repaid in full to theCorporation. On December 22, 2023, Cuspis advanced $25,000 toCytophage pursuant to a 10% interest bearing promissory note, aspermitted by Policy 2.4.
All information contained in this press release withrespect to Cuspis and Cytophage (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.
Investors are cautioned that, except as disclosed inthe disclosure document to be prepared and filed in connection withthe Transaction, as required by the TSXV, any information released orreceived with respect to the Transaction may not be accurate orcomplete and should not be relied upon.
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 theCorporation will remain halted pursuant to Section 2.5 of ExchangePolicy 5.2 – Changes ofBusiness and Reverse Takeovers and Section2.3(b) of Policy 2.4.
For more information regarding Cuspis, please contactWilliam Ollerhead, the Chief Executive Officer of the Corporation.
William Ollerhead, CEO
Cuspis Capital III Ltd.
(416) 214-0876
There can be no assurance that theQualifying Transaction will be completed as proposed or at all. Forfurther information on the closing conditions, please see the NovemberPress Release.
Neither the TSX Venture Exchange norits Regulation Services Provider (as that term is defined in thepolicies of the TSX Venture Exchange) accepts responsibility for theadequacy or accuracy of this release.
CAUTIONARY STATEMENT REGARDINGFORWARD-LOOKING INFORMATION: This press release contains “forward-looking information” and“forward-looking statements” (collectively, “ forward-lookingstatements ”) within themeaning of applicable Canadian securities legislation. All statements,other than statements of 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 not anticipate”, “plans”,“budget”, “scheduled”, “forecasts”. “estimates”,“believes” or intends” or variations of such words and phrasesor stating that certain actions, events or results “may” or“could, “would”, “might” or “will” be taken to occur orbe achieved) are not statements of historical fact and may beforward-looking statements. In this press release, forward-lookingstatements relate, among other things, to: the Transaction and certainterms and conditions thereof; the completion of the Transaction;closing of the second (final) tranche of the Offering on the datespecified herein or at all; satisfaction of the Escrow ReleaseConditions; the issuance of the Loan by Cuspis to Cytophage; repaymentof the Loan by Cytophage; securing the Loan; approval of the Loan bythe Exchange. Forward-looking statements are necessarily based upon anumber of estimates and assumptions that, while considered reasonable,are subject to known and unknown risks, uncertainties, and otherfactors which 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.
This news releasesdoes not constitute an offer to sell or the solicitation of an offerto buy any securities in any jurisdiction.
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