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September 12, 2022 – TheNewswire - Calgary, Alberta - Castlecap Capital Inc. (“CCI”) (TSXV:CSTL.P) and ATH (Australia) Pty Ltd. (“ATH”) are pleased to announce that, further to CCI’s news release dated March 31, 2022, CCI and ATH have entered into a definitive business combination agreement dated August 26, 2022 (the “Business Combination Agreement”) in connection with the proposed business combination of CCI and ATH, which transaction (the “Qualifying Transaction”) is intended to constitute CCI’s Qualifying Transaction (within the meaning of Policy 2.4 – Capital Pool Companies of the TSX Venture Exchange (the “Exchange”)), subject to meeting the requirements of the Exchange. CCI, as it exists upon completion of the Qualifying Transaction (the “Resulting Issuer”), will continue the business of ATH.

 

The Business Combination Agreement provides for the implementation of the Qualifying Transaction pursuant to which, among other things: (a) CCI will acquire, via a wholly-owned subsidiary, all of the issued and outstanding ordinary shares of ATH (“ATH Shares”) in exchange for an aggregate of 55,000,000 common shares of the Resulting Issuer to be issued at a deemed price of CDN$1.00 per share; (b) CCI will acquire all of the common shares of 2217317 Alberta Ltd. (“Alberta Finco”), an Alberta corporation established for purposes of completing the Canadian Financing (as defined below), pursuant to a three-cornered amalgamation of Alberta Finco and a wholly-owned subsidiary of CCI (the “Amalgamation”) whereby one common share of the Resulting Issuer will be issued in exchange for each common share of Alberta Finco; and (c) CCI will acquire all of the ordinary shares of CCI Finco Limited (“Australia Finco”), an Australia corporation established for purposes of completing the Australian Financing (as defined below), pursuant to a share exchange agreement which provides for the issuance of one common share of the Resulting Issuer in exchange for each common share of Australia Finco. The shareholders of ATH, Alberta Finco and Australia Finco will receive post-Consolidation (as defined below) common shares in the capital of CCI (each, a “CCI Consolidated Share”).

After giving effect to the Qualifying Transaction, each of ATH, Alberta Finco and Australia Finco will be a direct or indirect wholly-owned subsidiary of the Resulting Issuer and the ATH shareholders will collectively exercise control over CCI. All of the outstanding options of ATH (“ATH Options”) shall be cancelled on closing in exchange for CCI issuing to such ATH optionholders replacement stock options (“CCI Replacement Options”) having terms equivalent to the surrendered ATH Options with respect to the number of options, exercise price, vesting conditions and expiry date, but amended as required for compliance with the CCI stock option plan and the policies of the Exchange.

Prior to completion of the Qualifying Transaction, it is intended that CCI will: (a) effect a consolidation of the issued and outstanding common shares in the capital of CCI (“CCI Shares”) such that one (1) CCI Consolidated Share shall be issued in exchange for every three (3) pre-Consolidation common shares of CCI (the “Consolidation”); and (b) change its name to “ATH Health Ltd.” or such other name as agreed to by ATH and accepted by the applicable regulatory authorities (the “Name Change”).

Completion of the proposed Qualifying Transaction is subject to, among other things, receipt of all necessary regulatory and shareholder approvals, including the approval of the Exchange.

The Business Combination Agreement

Pursuant to the Business Combination Agreement, certain conditions precedent must be met prior to the closing of the Qualifying Transaction, including, but not limited to, (a) acceptance by the Exchange and receipt of other applicable regulatory approvals; (b) completion of the Concurrent Financing (as defined below) for aggregate gross proceeds of a minimum of CDN$10,000,000; (c) completion of the Consolidation and the Name Change; (d) the reconstitution of the board of directors of CCI (the “ATH Director Appointments”); (e) no material adverse change in the business, affairs, financial condition or operations of ATH or CCI has occurred between the date of entering into the Business Combination Agreement and the closing date of the Qualifying Transaction; (f) the Qualifying Transaction being completed by not later than December 31, 2022; and other customary closing conditions. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.

The Business Combination Agreement provides that ATH may, subject to acceptance by the Exchange, issue up to 1,336,660 ATH Shares in satisfaction of a finder’s fee payable to Confero Health Pty Limited, an arm’s length party, in connection with the completion of the Qualifying Transaction. The ATH Shares issuable in satisfaction of the finder’s fee will be acquired by CCI in exchange for up to 1,714,255 CCI Consolidated Shares on the same terms and conditions upon which it acquires the existing ATH Shares.  

The Business Combination Agreement will not constitute a Non-Arm’s Length Qualifying Transaction (as such term is defined in the policies of the Exchange). No person which is a Non-Arm’s Length Party (as such term is defined in the policies of the Exchange) of CCI has any direct or indirect beneficial interest in ATH or its assets prior to giving effect to the Qualifying Transaction and no such person is an insider of ATH. Similarly, there is no known relationship between or among any person which is a Non-Arm’s Length Party of CCI and any person who or which is a Non-Arm’s Length Party to ATH.

If all conditions to the implementation of the Qualifying Transaction have been satisfied or waived, CCI and ATH will carry out the Qualifying Transaction.

Upon completion of the Qualifying Transaction, it is anticipated that an aggregate of 55,000,000 CCI Consolidated Shares will be issued to former holders of ATH Shares (including the finder’s fee shares disclosed above) and that an aggregate of 5,500,000 CCI Consolidated Shares will be reserved for issuance to former holders of ATH Options pursuant to the terms and conditions of the CCI Replacement Options.

Upon completion of the Qualifying Transaction, it is expected that CCI will be a Tier 2 Life Sciences Issuer on the Exchange.

Trading in the CCI Shares is currently halted at the request of CCI in accordance with Exchange policies, and will remain halted until completion of the Qualifying Transaction. CCI intends to apply to the Exchange for reinstatement of trading of the CCI Shares when permitted pursuant to Exchange policies.  

Concurrent Financing

Canadian Financing

In connection with, and as a condition of, the Qualifying Transaction, CCI, through its wholly-owned subsidiary, Alberta Finco, will complete a non-brokered private placement financing of subscription receipts (the “Subscription Receipts”), at an issue price of CDN$1.00 per Subscription Receipt, for aggregate gross proceeds of up to CDN$10,000,000, (the “Canadian Financing”). The Subscription Receipts will be governed by the terms of a subscription receipt agreement (the “Subscription Receipt Agreement”) to be entered into between Alberta Finco and TSX Trust Company, as subscription receipt agent (the “Subscription Receipt Agent”). Each Subscription Receipt will be automatically exchanged, without any further action by the holder of such Subscription Receipt, and for no additional consideration, for one (1) common share of Alberta Finco upon the satisfaction of Escrow Release Conditions (as defined below). Upon completion of the Amalgamation, each underlying Alberta Finco issued in exchange for one (1) Subscription Receipt will then be exchanged for one (1) CCI Consolidated Share.

 

Proceeds of the Canadian Financing will be held in escrow pending satisfaction of customary escrow release conditions (the “Escrow Release Conditions”), including the completion, satisfaction or waiver of all conditions-precedent to the Qualifying Transaction, the receipt of all required shareholder and regulatory approvals, as applicable (including the approval of the Exchange) in connection with closing of the Qualifying Transaction, all as will be set forth in the Subscription Receipt Agreement to be entered into.  

 

Australian Financing

 

In connection with, and as a condition of, the Qualifying Transaction, CCI, through its wholly-owned subsidiary, Australia Finco, will complete a brokered private placement financing of ordinary shares (the “Australia Finco Shares”), at an issue price of CDN$1.00 per Australia Finco Share, for aggregate gross proceeds of up to CDN$15,000,000, (the “Australian Financing”, and together with the Canadian Financing, the “Concurrent Financing”). CCI shall enter into a share exchange agreement with each holder of Australia Finco Shares such that holders of Australia Finco Shares shall receive, in respect of each Australia Finco Share held, one (1) CCI Consolidated Share and the Australia Finco Shares will be transferred to CCI such that Australia Finco will be a wholly-owned subsidiary of CCI.

 

It is anticipated that net proceeds of the Concurrent Financing will be used: (a) to fund the business plan of ATH; (b) for Qualifying Transaction expenses; and (c) for general corporate purposes and future working capital of the Resulting Issuer. Although CCI intends to use the net proceeds of the Concurrent Financing as described herein, the actual allocation of proceeds may vary from the uses set forth herein, depending on future operations or unforeseen events or opportunities.

 

CCI, through its wholly-owned subsidiary, Australia Finco, has appointed JB Advisory Partners Pty Limited and Stock MarketPlace Pty Limited to act as joint lead managers (“JLM”) to complete the Australian Financing. Upon the successful placement of Australia Finco Shares for aggregate gross proceeds of at least CDN$10,000,000, the JLMs shall be entitled to: (a) a placement fee of 6% (excluding taxes) of funds raised by the JLMs; and (b) broker options – split in proportion between the JLMs pursuant to their placement of Australia Finco Shares, which such broker options shall entitle the holder to acquire: (i) 1,000,000 common shares of the Resulting Issuer with an exercise price of CDN$1.25 per common share and an expiry date of two years from the closing of the Qualifying Transaction; and (ii) 1,000,000 common shares of the Resulting Issuer with an exercise price of CDN$1.50 per common share and an expiry date of three years from the closing of the Qualifying Transaction.

 

About CCI

CCI is incorporated under the Business Corporations Act (Alberta) and is a capital pool company within the meaning of the policies of the Exchange. CCI has not commenced operations and has no assets other than cash. CCI’s principal business is the identification and evaluation of assets or businesses with a view to completing a “Qualifying Transaction” under Policy 2.4 – Capital Pool Companies of the Exchange.

About ATH

ATH is a privately-held corporation incorporated under the laws of Australia in 2014. ATH scientists have developed a first to market medical device for the detection of abnormal cell activity in the human body, known as the MyCellHealth self-test kit. The MyCellHealth self-test kit is designed to identify abnormal levels of targeted amino acids and their metabolites in urine, which has been recognized by independent research as attractive biomarkers for developing tumours in the body.

The MyCellHealth self-test kit is an at-home urine test with results available within 3 minutes. The patented reagent has been developed over 30 years and extensive clinical trials have confirmed its efficacy. Research has shown “Early detection saves lives.” The MyCellHealth self-test kit is inexpensive and non-invasive. It is NOT a diagnostic device, however, it detects important abnormalities which require further medical examination and diagnosis which can lead to potentially lifesaving treatment.  

 

As of the date hereof, there are 41,548,627 ATH Shares outstanding. The following persons own, control or direct 10% or more of the outstanding ATH Shares:

Name	Number of ATH Shares	Percentage of Outstanding ATH Shares
A & H Chisholm Holdings Pty Limited	9,661,667	23.25%
Nicolas DeLuca Investments Pty Limited	9,661,667	23.25%
Anex Industrial Corporation Pty Ltd.	7,000,000	16.85%

 

Summary of Financial Information

 

A summary of certain financial information for ATH, disclosed in accordance with Exchange policies, is included in the tables below:

 

ATH (Australia) Pty Ltd.	Period ended March 31, 2022 (unaudited)	Year ended June 30, 2021 (audited)
	A$	A$
Operations
Sales	-	-
Cost of Sales	-	-
General and administrative	420,555	733,407
Share-based compensation	958,490	609,023
Loss from operations for the period	1,379,045	1,342,430
Balance Sheet
Total assets	1,185,606	1,691,493
Total liabilities	66,769	152,100
Total equity	1,118,837	1,539,393

 

Further financial information will be included in the filing statement to be prepared in connection with the Qualifying Transaction.

 

Proposed Directors and Senior Management Team

Upon the closing of the Qualifying Transaction, it is anticipated that Ross Butler (Chair), Allan Farrar, Shane O’Neill and Charles Chebry will constitute the Board of Directors of the Resulting Issuer. The anticipated new senior management team of the Resulting Issuer will be comprised of Shane O’Neill (Chief Executive Officer) and Charles Chebry (Chief Financial Officer and Corporate Secretary).

The following are brief resumes of the currently proposed directors and officers of the Resulting Issuer following the Qualifying Transaction:

Ross Butler, Chairman and Director

Ross is currently Chair of Mercer Investments Australia, part of the global MMC Group, that is listed on the New York, London and Chicago Stock Exchanges. Mercer has $40 billion in funds under management, and also offers investment and actuarial consulting services. His previous roles include Deputy Chair of GNS, The New Zealand Government’s Crown Research Unit for geological and nuclear science, chairing the Crown’s rebuild companies following the Christchurch earthquakes, and the inaugural Chair of the Financial Services Code Committee for Professional Conduct, as appointee of the Financial Market Authority. Ross is a Chartered Fellow of the Institute of Directors, and a Member of the Australian Institute of Company Directors.

Allan Farrar, Director

Allan has over 35-years’ experience in corporate advisory roles and extensive experience in the Australian market. He retired from the role of Head of Corporate Finance at international accounting firm PKF in Sydney in 2016 and has been assisting the company in its establishment phase since that time. Allan is currently Chair of the ASX-listed Bond Exchange Holdings Limited and is the former Chair and a non-executive Director of the ASX-listed companies Longreach Group Limited, Sabre Group Limited, Balmoral Corporation Limited, HarTec Limited and Datadot Technology Limited and was also non-executive Director of the ASX-listed companies Amalgamated Equities Limited, Signature Leisure Limited, Lasseters Corporation Limited and Cypress Lakes Group Limited. Allan was also the Chair of Rosecorp (Rose Property Group), one of Sydney’s leading private development companies, from 2003 to 2014.

Charles Chebry, Director, Chief Financial Officer and Corporate Secretary

Charles is a Chartered Professional Accountant with over 30 years of executive and directorship experience in the public markets sector. He has worked in a variety of senior executive roles with the following companies listed on the TSX Venture Exchange including: Founder, Chief Executive Officer, President, and Director of CastleCap Capital Inc.; Founder, Chief Executive Officer, President and Chairman of Graphite One Resources Inc.; Founder, Chief Executive Officer, President and Chairman of Cedar Mountain Exploration Inc.; Founder, Chief Executive Officer and Chairman of Niblack Mineral Development Inc.; Founder, Chief Executive Officer and Chairman of Altiplano Minerals Ltd.; Founder, Chief Executive Officer and Chairman of Vela Minerals Ltd.; Chief Financial Officer and Director of both Olympia Trust Company and Olympia Financial Group Inc.; Chief Executive Officer and Director of Prevent Health Care International Corp.; Chief Financial Officer of Kivalliq Energy Corp. and Kaminak Gold Corp. Charles has an entrepreneurial flair having founded and listed several companies on the TSX Venture Exchange.

Shane O’Neill, Director and Chief Executive Officer

Shane is a Chartered Accountant (SA) that has over 15 years’ experience in executive roles. As an MD he covers a range of disciplines including company restructuring and rebranding. Before emigrating to Australia, he established a new entity in the Nigerian oil and gas sector, obtaining all required regulatory approvals, raising the capital required and commercially project managing the construction of the facility. Just under 50% of this business was acquired two years after commissioning - by one of the world’s largest commodity traders. Since arriving in Australia, Shane has consulted to a variety of small businesses and sits on a number of private company boards.

Proposed Scientific and Medical Team

In addition to the proposed Board of Directors and senior management team of the Resulting Issuer, a scientific and medical team consisting of Allan Chisholm and Nic De Luca shall support the senior management team of the Resulting Issuer.

The following are brief resumes of the currently proposed scientific and medical team of the Resulting Issuer following the Qualifying Transaction:

Allan Chisholm

Allan received a scholarship from a Swiss Pharmaceutical Company researching Azo Chemistry and subsequently was employed by them in 1969 – originally concentrating on research and development and then marketing and finally senior management. He holds numerous patents in chemical and process fields. Allan has undertaken clinical trials in universities and the general population with new IVD’s and delivery systems. Allan has published and presented numerous papers to Universities, Scientific bodies and conferences worldwide especially in the Asia Pacific Region.

 

Nic De Luca

Nic graduated as a Medical Practitioner from St Mary's Hospital, Imperial College, London, UK in 1992, also completing a BSc in 1991. He commenced Gastroenterology and Hepatology specialty training in the UK and was awarded Membership of the Royal College of Physicians in 1996. Nic moved to Sydney and was awarded Fellowship of the Royal Australasian College of Physicians in 2000. Nic is a Visiting Gastroenterologist at St Vincent’s Hospital, Sydney and visits both Westmead Private, St Vincent's Private & Norwest Private Hospitals. He sub-specialises in interventional endoscopy & inflammatory bowel disease. He is involved in undergraduate & post graduate medical training and supervision.

Proposed Qualifying Transaction

As the proposed Qualifying Transaction is not a “Non-Arm’s Length Qualifying Transaction” (within the meaning of Policy 2.4 of the Exchange), the Qualifying Transaction does not require approval of the shareholders of CCI (the “CCI Shareholders”). The Consolidation, the Name Change, and the ATH Director Appointments were all approved by the CCI Shareholders at an annual and special meeting of CCI Shareholders (the “CCI Meeting”), which was held on May 30, 2022.

Sponsorship of the Qualifying Transaction

Sponsorship of the Qualifying Transaction is required by the Exchange unless an exemption or waiver from this requirement can be obtained in accordance with the policies of the Exchange. CCI intends to apply to the Exchange for an exemption from the sponsorship requirements for the Qualifying Transaction based upon the Concurrent Financing and other exemptions available in Exchange policies. There is no assurance that an exemption from this requirement will be obtained.

Further Information

All information contained in this news release with respect to CCI and ATH was supplied by the respective party, 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.

Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. There can be no assurance that the Qualifying Transaction or the Concurrent Financing will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular of CCI or filing statement of CCI to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of CCI should be considered highly speculative.

The Exchange has not in any way passed upon the merits of the proposed Qualifying Transaction and has neither approved nor disapproved the contents of this news release.

The securities have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

For further information, please contact:

ATH (AUSTRALIA) PTY LTD.

Ross Butler, Chair

Phone: +6421-359-899

Email: ross@merlotconsulting.co.nz

CASTLECAP CAPITAL INC.  

Charles R. Chebry, President, Chief Executive Officer, Secretary and Director

Phone: 403-680-8511

Email:         charleschebry@outlook.com

Neither 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 news release.

 

Forward Looking Information

Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include but are not limited to statements or information with respect to: the Concurrent Financing; the terms and conditions of the Qualifying Transaction, including receipt of Exchange approval; the capitalization of the Resulting Issuer; the anticipated directors, officers and insiders of the Resulting Issuer; the filing statement to be prepared in connection with the Qualifying Transaction, including the information included therein; trading in the CCI Shares; the business of the Resulting Issuer; actions taken by CCI prior to completion of the Qualifying Transaction, including the Consolidation and the Name Change; and the closing of the Qualifying Transaction, including the Resulting Issuer’s status on the Exchange thereafter. Often, but not always, forward-looking statements or information can be identified by the use of words such as “anticipate”, “believe”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “should” or “will” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information.

With respect to forward-looking statements and information contained herein, CCI and ATH have made numerous assumptions including among other things, assumptions about the receipt of all necessary third party and regulatory approvals required for completion of the Qualifying Transaction, general business and economic conditions of ATH and the market in which it operates. The foregoing list of assumptions is not exhaustive.

Although management of CCI and ATH believe that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that forward-looking statements or information herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These factors include, but are not limited to: risks relating to the Concurrent Financing; risks relating to the receipt of all requisite approvals for the Qualifying Transaction, including the approval of the Exchange; changes in interest and currency exchange rates; risks relating to unanticipated operational difficulties (including failure of technology or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters); changes in general economic conditions or conditions in the financial markets; changes in laws; risks related to the direct and indirect impact of COVID-19 pandemic including, but not limited to, its impact on general economic conditions, the ability to obtain financing as required; and other risk factors as detailed from time to time in CCI’s final prospectus dated February 25, 2019 and other documents available under CCI’s profile at www.SEDAR.com. CCI and ATH do not undertake to update any forward-looking information, except in accordance with applicable securities laws.

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA