Cynapsus Therapeutics Files Final Short Form Prospectus
Marketwire, February 22, 2022
/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
TORONTO — Cynapsus Therapeutics Inc. (CTH: TSX-V) announced today that it has received a receipt for its final short form prospectus (the “Prospectus”) which was filed with the securities regulatory authorities in the Provinces of British Columbia, Alberta and Ontario in connection with a best efforts offering of common shares and warrants of Cynapsus for gross proceeds of $6 million to $8 million (the "Offering").
The outstanding common shares of the Corporation are listed and posted for trading on the TSX Venture Exchange Inc. (the “Exchange” or “TSXV”) under the trading symbol “CTH”. On February 20, 2013, the last day on which the common shares traded on the Exchange prior to the filing of the short form prospectus, the closing price of the common shares was $0.05.
Offering
The Prospectus will qualify the distribution of a minimum of 130,434,783 units and a maximum of 173,913,044 units (each, a “Unit”, and collectively, the “Units”) of the Corporation at a price of $0.046 per Unit (the “Offering Price”). Each Unit consists of one common share (each, a “Common Share”) in the capital of the Corporation and one common share purchase warrant (a “Warrant”) of the Corporation. Each Warrant will entitle the holder to purchase one Common Share (each, a “Warrant Share”) at a price equal to $0.0575 per Warrant Share for a period of 60 months after the closing of the Offering, except that the Warrants will be cancelled if they are not exercised within 30 days after prior written notice from the Corporation that the closing price of its Common Shares on the principal stock exchange of the Corporation has been three times the Offering Price for 20 consecutive trading days. The Units will immediately separate on closing into Common Shares and Warrants.
Debenture Conversions
The Corporation has issued secured, non-convertible Series A, B, C, D and E Debentures (collectively, the “Debentures”). As of February 21, 2013, the aggregate principal amount outstanding under the Debentures was $3,655,033. The Series A to E debentures bear interest at a rate of 10% per annum, making the total amount owing to debentureholders equal to $4,235,798.
Concurrent with the closing of the Offering, all but approximately $200,000 of the holders of the Series A to Series E debentures have agreed to a “shares-for-debt” exchange (the “Shares for Debt Exchange”) which will result in 87,613,989 Common Shares and 43,806,995 Debenture Warrants being issued. Each Debenture Warrant entitles the holder to acquire one Common Share at a price equal to $0.0575 for a period of 24 months after the Closing Date (as defined below).
Share Consolidation
The Company has applied to the Exchange for approval of the consolidation (the “Share Consolidation”) of the Company’s issued and outstanding Common Shares concurrent with the closing of the Offering on the basis of one new Common Share for every 10 Common Shares issued and outstanding.
Strategic Investor and New Control Person
A strategic pharmaceutical investor (“Strategic Investor”) intends to subscribe for $3.5 million of the Offering with such number of Units resulting in ownership of more than 20% of all the issued and outstanding Common Shares on a basic and fully diluted basis. If this is the case, then the Strategic Investor will be a new “Control Person” under the policies of the Exchange.
Pursuant to Section 1.10 of Exchange Policy 4.1 Private Placements, the Company is required to obtain shareholder approval for a new Control Person as a condition of closing the Offering. This approval may be obtained by an ordinary resolution at a general meeting or by the written consent of shareholders holding more than 50% of the issued listed shares of the Company.
Agency Agreement
The Corporation has retained M Partners Inc. to lead the Offering (the "Agent"). An agency agreement for the Offering was entered into between the Company and the Agent on February 21, 2013.
The Corporation has agreed to pay to the Agent a cash commission of up to 8% of the gross proceeds of the Offering (the “Agent’s Commission”). The Corporation has also agreed to pay the Agent a work fee (the “Work Fee”) in the amount of $87,500, plus HST, and to reimburse the Agent for certain expenses incurred in connection with the Offering.
The Corporation has agreed to grant the Agent non-transferrable warrants (each, a “Broker Warrant” and collectively, the “Broker Warrants”) to purchase Common Shares up to 8% of the Units sold pursuant to the Offering. Each Broker Warrant will entitle the holder to acquire one Common Share at a price of $0.0575 per share for a period of 60 months after closing of the Offering except that the Broker Warrants will be cancelled if they are not exercised within 30 days after prior written notice from the Corporation that the closing price of its Common Shares on the principal stock exchange of the Corporation has been $0.138 per Common Share for 20 consecutive trading days.
Closing
Provided that the minimum Offering is subscribed for, it is expected that the closing of the Offering will occur on or about February 28, 2013, or such later date as the Corporation and the Agent may agree (the “Closing Date”). The Offering will be discontinued if the minimum Offering has not been subscribed for on or prior to March 15, 2013, unless the Agent and each of the persons or companies that have subscribed for Units during that period consent to a continuation of the Offering.
Closing of the Offering is subject to Exchange approval. The net proceeds of the Offering will be used for to fund the Company’s CTH-201 Bioequivalence Study and for general working capital purposes.
US Disclaimer
This press release does not constitute an offer to sell or a solicitation to buy any of the securities in the United States. The securities 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 law and may not be offered or sold to, or for the account or benefit of, persons in the United States or “U.S. persons”, as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
The TSXV has in no way passed upon the merits of the proposed Offering and has neither approved nor disapproved the contents of this press release.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
About Cynapsus Therapeutics
Cynapsus is a specialty pharmaceutical company developing the only non-injectable (i.e. sublingual) delivery of the only approved drug (apomorphine) to be used as a rescue therapy for “off” motor symptoms of Parkinson’s disease. Over one million people in the U.S. and an estimated 5 million people globally suffer from Parkinson's disease. Parkinson’s disease is a chronic and progressive neurodegenerative disease that impacts motor activity, and its prevalence is increasing with the aging of the population. Based on a recent study and the results of the Company’s Global 500 Neurologists Survey, it is estimated that between 25 percent and 50 percent of patients experience “off” episodes in which they have impaired movement or speaking capabilities. Current medications only control the disease’s symptoms, and most drugs become less effective over time as the disease progresses.
Cynapsus’ drug candidate, APL-130277, is an easy-to-administer, fast-acting reformulation of apomorphine, which is approved in an injection formulation to rescue patients from “off” episodes. Cynapsus is focused on maximizing the value of APL-130277 by completing pivotal studies in advance of a New Drug Application expected to be submitted in 2015. Cynapsus anticipates a trade sale or out-licensing to an appropriate global pharmaceutical partner before such an application is submitted.
More information about Cynapsus (CTH: TSX‐V) is available at www.cynapsus.ca and at the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
Contact Information
Cynapsus Therapeutics
Anthony Giovinazzo
President and CEO
(416) 703-2449 x225
[email protected]
Andrew Williams
COO & CFO
(416) 703-2449 x253
[email protected]
Forward Looking Statements
This announcement contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Cynapsus to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks and uncertainties relating to Cynapsus’ business disclosed under the heading “Risk Factors” in its Annual Information Form filed on November 1, 2021 and its other filings with the various Canadian securities regulators which are available online at www.sedar.com. Although Cynapsus has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. 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 forward-looking statements. Cynapsus does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.
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