Vancouver, British Columbia – TheNewswire – March 31, 2022 - A-Labs Capital II Corp. (“ALAB” or the “Company”) (TSXV:ALAB.P), a capital pool company under Policy 2.4 – Capital Pool Companies of the TSX Venture Exchange (“Exchange”), is pleased to announce that it has entered into a definitive securities exchange agreement (the “Securities Exchange Agreement”) dated March 31, 2022, pursuant to which the Company has agreed to acquire all of the issued and outstanding securities of Orcanos Ltd. (“Orcanos”), subject to the terms and conditions contained in the Securities Exchange Agreement (the “Transaction”). In connection with the Transaction, the Company has also entered into an Amalgamation Agreement (as defined below) dated March 31, 2022 to provide for a three-cornered amalgamation with a special purpose corporation established to conduct the proposed Concurrent Financing (as defined below).

The Transaction will result in Orcanos becoming a wholly-owned subsidiary of the Company and will constitute the Company’s Qualifying Transaction, as defined in Policy 2.4 of the Exchange. Upon completion of the Transaction, ALAB (referred to as the “Resulting Issuer” following closing of the Transaction) will change its name to “Orcanos Holdings Inc.”, or such other name as determined by Orcanos and suitable to the Exchange, and will carry on the business of Orcanos as a technology issuer.

The Company also announces today that it has received conditional approval from the Exchange in connection with the Transaction and has filed a Filing Statement dated March 31, 2022 (the “Filing Statement”) in connection with the Transaction and pursuant to the policies of the Exchange. The Filing Statement, Securities Exchange Agreement, and Amalgamation Agreement (as defined below) can be found on the Company’s SEDAR profile at www.sedar.com.

Securities Exchange Agreement

The Securities Exchange Agreement dated March 31, 2022 was entered into among the Company, Orcanos, 1354386 B.C. Ltd. (“ALAB Subco”), 1351980 B.C. Ltd. (“Finco”), and the securitiesholders of Orcanos.  

Pursuant to the Securities Exchange Agreement, ALAB will acquire all of the ordinary shares of Orcanos outstanding immediately prior to completion of the Transaction (the “Orcanos Shares”) in consideration for the issuance of post-Consolidation (as defined below) common shares of ALAB (“Resulting Issuer Shares”) at the exchange ratio of 3,189.793 Resulting Issuer Shares for each one (1) Orcanos Share (the “Exchange Ratio”). The Exchange Ratio assumes that ALAB will undertake a consolidation immediately prior to closing of the Transaction at a ratio of 1.200604 pre-Consolidation common shares of ALAB to one (1) Resulting Issuer Share (the “Consolidation”). On a post-Consolidation basis, the deemed transaction price per Resulting Issuer Share issued in exchange for each Orcanos Share is CA$0.32 (US$0.25 using an exchange rate of US$1.00:CA$1.28).

Contemporaneously, pursuant to the Securities Exchange Agreement, all of the convertible securities of Orcanos (the “Orcanos Convertible Securities”) outstanding immediately prior to the completion of the Transaction will be cancelled in consideration for the issuance of that number of applicable convertible securities of the Resulting Issuer (the “Resulting Issuer Replacement Convertible Securities”) at the Exchange Ratio, with a resulting adjustment to the exercise price to take into account the Exchange Ratio and otherwise having substantially the same terms as the applicable Orcanos Convertible Securities.

As a result of the Transaction, without taking into account the Concurrent Financings (as defined below), it is expected that the Resulting Issuer will issue (i) 72,628,395 Resulting Issuer Shares to the holders of Orcanos Shares, (ii) 2,574,163 options of the Resulting Issuer to holders of options of Orcanos, and (iii) 354,067 warrants of the Resulting Issuer and 2,200,000 warrants of the Resulting Issuer to the Orcanos Advisor in exchange for the Orcanos Advisor Initial Warrants and Orcanos Advisor Additional Warrants, respectively (as such terms are defined below). The current shareholders of ALAB are expected to hold 4,800,000 Resulting Issuer Shares after taking into account the Consolidation. Please see the Filing Statement for complete details regarding the expected pro forma capitalization of the Resulting Issuer.

The Securities Exchange Agreement may be terminated in certain circumstances, including by either the Company or Orcanos if the Transaction has not been completed by May 30, 2022 or such other date as ALAB and Orcanos may agree in writing.

The completion of the Transaction is subject to a number of conditions, including, among others: obtaining all necessary corporate, third party and regulatory approvals, including Exchange approval; the respective representations and warranties of the parties being true and correct in all material respects at closing; the parties having performed or complied in all material respects with their respective covenants; no material adverse change having occurred in the business or affairs of ALAB or Orcanos; the completion of at least the Minimum Offering under the Concurrent Financings and completion of the Amalgamation under the Amalgamation Agreement (as such terms are defined below); the holding of the ALAB Meeting and receipt of Disinterested Shareholder Approval (as such terms are defined below); the completion of the Consolidation; the entering into of an escrow agreement as required by the Policy 5.4 of the Exchange; completion of the reconstitution of the board of directors and management of the Resulting Issuer; Orcanos having no reason to believe that the Tax Ruling (as defined below) will not be granted following closing of the Transaction; and certain other conditions customary for transactions of this nature.

The Concurrent Financings

The Transaction is conditional on Orcanos and/or Finco, a special purpose entity established by the directors of Orcanos for the purpose of conducting the Finco Concurrent Financing (as defined below), completing one or more private placement(s) (collectively, the “Concurrent Financings”) for gross proceeds of a minimum aggregate of CA$5,120,000 (US$4,000,000) (“Minimum Offering”) and a maximum aggregate of CA$7,680,000 (US$6,000,000) (“Maximum Offering”), all upon the terms and conditions as may be approved by Orcanos and ALAB in writing.

It is currently anticipated that the Concurrent Financings will be conducted as follows and pursuant to the following terms, which are subject to change in the context of the market:

(a)        for Israeli investors, a private placement by Orcanos of Orcanos subscription receipts (“Orcanos Subscription Receipts”) at a price of CA$1,020.734 (approximately US$797.448 using an exchange rate of US$1.00:CAD$1.28) per Orcanos Subscription Receipt (“Orcanos Concurrent Financing”). Each Orcanos Subscription Receipt will be automatically convertible, without any further action on the part of the holder and without payment of additional consideration, upon satisfaction of certain escrow release conditions immediately prior to the closing of the Transaction, into one (1) Orcanos subscription receipt share and one-half of one Orcanos subscription receipt warrant, with each whole warrant being exercisable into one (1) Orcanos Share at a price of CA$1,531.100 (approximately US$1,196.172 using an exchange rate of US$1.00:CAD$1.28) per share for a period of two years from the closing of the Transaction; and

(b)        for Canadian and non-Israeli offshore investors, a private placement by Finco of Finco subscription receipts (“Finco Subscription Receipts”) at a price of CA$0.32 (US$0.25 using an exchange rate of US$1.00:CAD$1.28) per Finco Subscription Receipt (“Finco Concurrent Financing”). Each Finco Subscription Receipt will be automatically convertible, without any further action on the part of the holder and without payment of additional consideration, upon satisfaction of certain escrow release conditions immediately prior to the closing of the Transaction, into one (1) Finco subscription receipt share (“Finco Share”) and one-half of one Finco subscription receipt warrant, with each whole warrant being exercisable into one (1) additional Finco Share at a price of CA$0.48 (approximately US$0.37 using an exchange rate of US$1.00:CAD$1.28) for a period of two years from the closing of the Transaction (“Finco Warrant”).

Unless otherwise noted, for the purposes of disclosure in this Press Release and the Filing Statement, it is assumed that the entire Minimum Offering and Maximum Offering, as applicable, under the Concurrent Financings will be completed by Finco (i.e., without a portion of the Concurrent Financings completed by Orcanos). As such, pursuant to the Finco Concurrent Financing, it is expected that Finco will issue 16,000,000 Finco Subscription Receipts for gross proceeds of CA$5,120,000 (US$4,000,000), in the event of the Minimum Offering, and 24,000,000 Finco Subscription Receipts for gross proceeds of CA$7,680,000 (US$6,000,000), in the event of the Maximum Offering.

It is expected that the gross proceeds raised under the Finco Concurrent Financing will be deposited into escrow at closing of the Finco Concurrent Financing, such escrowed proceeds to be released to Finco upon the satisfaction or waiver (if capable of waiver) of certain escrow release conditions typical of this type of transaction (collectively, the “Escrow Release Conditions”) on or before 120 days from the closing of the Finco Concurrent Financing.  In the event that the Escrow Release Conditions are not satisfied or waived (if capable of waiver) on or before the Escrow Release Deadline, the escrowed proceeds from the Finco Concurrent Financing, together with any accrued interest, will be returned to the holders of the Finco Subscription Receipts on a pro rata basis and such Finco Subscription Receipts will be cancelled without further action.

The aggregate proceeds (less any fees payable as noted above) raised under the Finco Concurrent Financing will become available to the Resulting Issuer by means of a three-cornered amalgamation under the Business Corporations Act (British Columbia) (the “Amalgamation”) among ALAB, ALAB Subco (a newly incorporated wholly-owned subsidiary of ALAB), and Finco (a newly incorporated entity established by the directors of Orcanos for the purposes of completing the Finco Concurrent Financing). See the heading “The Amalgamation” below for further details.

Upon satisfaction of the Escrow Release Conditions, it is expected that 16,000,000 Finco Shares and 8,000,000 Finco Warrants, assuming the Minimum Offering, and 24,000,000 Finco Shares and 12,000,000 Finco Warrants, assuming the Maximum Offering, will be issued immediately prior to the Amalgamation upon conversion of the Finco Subscription Receipts. At closing, pursuant to the Amalgamation, such Finco Shares and Finco Warrants will be exchanged for Resulting Issuer Shares and warrants of the Resulting Issuer (“Resulting Issuer Warrants”), respectively, on a one-for-one basis.

The Concurrent Financings may be undertaken on a brokered or non-brokered basis, which has not yet been determined as of the date of this Press Release. Finco expects to pay certain fees to an agent and/or certain eligible finders (if any) in connection with the Finco Concurrent Financing, such fees to be in the context of the market. For the purposes of this Press Release and the Filing Statement, such fees are assumed to be the following: (i) a cash fee equal to 8% of the aggregate gross proceeds raised under the Finco Concurrent Financing (with the exception of President’s List if applicable); and (ii) such number of Finco compensation options equal to 8% of the aggregate number of Finco subscription receipts issued by Finco pursuant to the Finco Concurrent Financing (with the exception of President’s List if applicable) (“Finco Compensation Options”). Each Finco Compensation Option is expected to entitle the holder thereof to acquire, at a price of CA$0.32 (US$0.25 using an exchange rate of US$1.00:CAD$1.28) for a period of two years, one (1) common share of Finco and one-half of one common share purchase warrant of Finco (having the same terms as the Finco Warrant).

The Amalgamation

The Amalgamation will be completed immediately prior to, and as a condition to, the completion of the securities exchange pursuant to the Transaction in order to make the funds from the Finco Concurrent Financing available to the Resulting Issuer. The Amalgamation will be completed pursuant to the terms and conditions of an amalgamation agreement dated March 31, 2022 among ALAB, ALAB Subco and Finco (the “Amalgamation Agreement”). A copy of the Amalgamation Agreement is available on the Company’s SEDAR profile at www.sedar.com.

Immediately prior to the Amalgamation, upon satisfaction of the Escrow Release Conditions, all the Finco Subscription Receipts will automatically convert into Finco Shares and Finco Warrants. Pursuant to the Amalgamation, ALAB Subco will amalgamate with Finco to form a company resulting from the amalgamation (“Amalco”). On Amalgamation, instead of receiving shares and warrants of Amalco, holders of Finco Shares and Finco Warrants will receive, from the Resulting Issuer, Resulting Issuer Shares and Resulting Issuer Warrants, respectively, on a one for one basis. In addition, the Resulting Issuer will issue Resulting Issuer compensation options to the agent and/or eligible finders (if any) to replace the Finco Compensation Options.

Orcanos Advisory Agreement

Orcanos and A-Labs Finance and Advisory Ltd. (the “Orcanos Advisor”) entered into an amended and restated advisory agreement dated March 1, 2022 (the “Orcanos Advisory Agreement”), with an effective date of September 19, 2021. The Orcanos Advisory Agreement amended and restated a prior advisory agreement between the parties dated September 19, 2021 (the “Former Orcanos Advisory Agreement”). The Orcanos Advisor is a private Israel-based advisory firm that is controlled by Mr. Doron Cohen, a current director and the Chief Executive Officer of ALAB and proposed director of the Resulting Issuer.

Pursuant to the Orcanos Advisory Agreement, the Orcanos Advisor provides advisory services relating to strategic advice, branding and position, marketing, corporate finance, business strategy and sales, as well as transaction advisory services relating to a listing and go-public process and other similar services. The Orcanos Advisory Agreement has a term of 24 months from the effective date, subject to earlier termination upon 60 days prior written notice.

Pursuant to the Orcanos Advisory Agreement, at closing of the Transaction, Orcanos will pay the Orcanos Advisor for services rendered until closing of the Transaction (collectively, the “Orcanos Advisor Fees”): (i) a cash fee of US$300,000; and (ii) a fee of US$550,000 satisfied by the issuance of 689.70 warrants of Orcanos (the “Orcanos Advisor Additional Warrants”), which will be exchanged, at the Exchange Ratio pursuant to the Securities Exchange Agreement, for 2,200,000 warrants of the Resulting Issuer (i.e., based upon a deemed value of US0.25 per underlying Resulting Issuer Share), with each such Orcanos Advisor Additional Warrant exercisable for a period of five (5) years from the closing of the Transaction at an exercise price of US$ 0.001 per share.

The Orcanos Advisory Agreement also provides that, commencing on the closing of the Transaction and during the remaining term of the Orcanos Advisory Agreement, Orcanos will pay to the Orcanos Advisor a monthly retainer fee of US$30,000 in cash for continued services thereunder.

In addition to the fees payable under the Orcanos Advisory Agreement, pursuant to services rendered under the Former Orcanos Advisory Agreement, Orcanos granted to the Orcanos Advisor 111warrants of Orcanos (“Orcanos Advisor Initial Warrants”), with each such Orcanos Advisor Initial Warrant exercisable for a period of five (5) years from the date of grant at an exercise price of NIS 0.01 per share. Such Orcanos Advisor Initial Warrants will be cancelled and exchanged, at the Exchange Ratio pursuant to the Securities Exchange Agreement, for 354,067 warrants of the Resulting Issuer.

Proposed Tax Ruling

In connection with the Transaction, Orcanos and the Orcanos securitiesholders have applied to obtain a tax ruling (“Tax Ruling”) from the Israeli Tax Authority (“ITA”) with respect to a tax deferral on capital gains and other Israeli tax considerations that will apply to the Orcanos securitiesholders and the Resulting Issuer.

The Tax Ruling will be subject to the certain limitations and restrictions which must be observed, including but not limited to the following: (a) the Resulting Issuer must hold at least 51% of the Orcanos Shares acquired pursuant to the Transaction for at least two years from the Closing of the Transaction (such two year period, the “Limitation Period”); (b) the aggregate Resulting Issuer Shares to be held by the Trustee (as defined below) shall at all times during the Limitation Period represent 25% or more of the total issued and outstanding Resulting Issuer Shares; (c) the principal economic activity of Orcanos will continue for at least the Limitation Period; (d) the majority of assets (exceeding 50%) of the companies participating in the Transaction cannot be sold during the Limitation Period (except involuntary sale) and will be utilized in the regular course of business; and (e) such other limitations as will be set out in the Tax Ruling based on the specific facts of the Transaction.

The Tax Ruling will require that, upon completion of the Transaction, all Resulting Issuer Shares and Resulting Issuer Replacement Convertible Securities issued to former securityholders of Orcanos will be deposited with, and registered in the name of, a trustee (the “Trustee”) in accordance with the provisions of a trust agreement among the Trustee and the relevant securityholders of Orcanos (the “Trust Agreement”). The Trust Agreement will be in place to ensure that any applicable Israeli tax will be withheld and remitted to the ITA.

The Tax Ruling also requires that, upon completion of the Transaction, the share certificate representing the Orcanos Shares which were acquired by the Resulting Issuer be held in escrow by, or registered in the name of (if required), the Trustee in accordance with the provisions of the Tax Ruling and an escrow or trust agreement to be entered into between the Resulting Issuer and the Trustee.

Consolidation and Name Change

Subject to Exchange approval, immediately prior to, and as a condition to, the closing the Transaction, ALAB expects to complete the Consolidation on the basis of 1.200604 pre-Consolidation ALAB Shares to one (1) Resulting Issuer Share and to change its name to “Orcanos Holdings Inc.”, or such other name as determined by Orcanos.

Management and Board of Directors of Resulting Issuer

Upon completion of the Transaction, it is expected that each current member of the board of directors of the Company, other than Doron Cohen, will resign and the board of directors of the Resulting Issuer will be comprised of five (5) individuals, subject to acceptance by the Exchange: (i) Zohar Peretz; (ii) Rami Azulay; (iii) Doron Cohen; (iv) Sivan Hechter-Ungar and (v) such additional nominee as selected by Orcanos and acceptable to the Exchange. The management of the Resulting Issuer is expected to be Zohar Peretz (CEO and Secretary), Konstantin Lichtenwald (CFO), Rami Azulay (CMO); and Gil Pry-Dvash (Chief Product Officer of Orcanos, which will be the wholly-owned subsidiary of the Company). Mr. Lichtenwald is a current director of ALAB and is expected to resign from such position at closing and be appointed as CFO of the Resulting Issuer.

The following are the biographies of the proposed directors and officers of the Resulting Issuer who are known at this time. Information regarding a proposed fifth director will be disclosed at a later date, once determined.

Zohar Peretz - Proposed CEO and Director

Mr. Peretz has over 23 years of experience in the software industry and has specialized in developing medical device compliance software solutions. Since 2004, Mr. Peretz has been the co-founder and CEO of Orcanos. Prior to that, from 2002 to 2004 Mr. Peretz owned a software business which provided software development, design, testing, integration and implementation services to several Israeli companies. In 2000, Mr. Peretz was a product manager at CellPay Israel Ltd., a mobile commerce application provider, where he managed customer relations and participated in software design and development of various products. From 1998 to 2000, Mr. Peretz served as a project development manager at Endan IT Solutions Ltd, an information technology software and consulting company, where he led a team of 11 employees who were involved in several development and design projects. Mr. Peretz began his career as a programmer at Amdocs Ltd., a leading provider of billing, customer relationship management, and order management software systems to the telecommunications industry, where he developed billing systems and implemented such systems at customer sites. Mr. Peretz holds a Bachelor of Science in Industrial Engineering from Ben-Gurion University of the Negev, Israel.

Rami Azulay – Proposed Chief Marketing Officer and Director

Mr. Azulay has over 26 years of experience in the high-tech industry, where he served in senior management roles at different companies. Mr. Azulay specializes in the deployment of lifecycle and quality management systems. Since 2004, Mr. Azulay has been the co-founder of Orcanos. At Orcanos, Mr. Azulay has served in different roles such as Chief Marketing Officer, Head of Sales, and co-CEO. Prior to that, from 2003 to 2005, Mr. Azulay served as a Director of Professional Services at Traina Inc., a market infrastructure technology provider, where he managed the database administrator, technical writer, development, support and quality assurance teams. From 1999 to 2003, Mr. Azulay served as the Director of Quality Assurance at ExaLink, a provider of wireless Internet services acquired by Mavenir Systems, where he led the R&D department and was responsible for all user interface design and implementation. Mr. Azulay began his career as a programmer at Amdocs Ltd., a leading provider of billing, customer relationship management, and order management software systems to the telecommunications industry, where he served for 4 years as the R&D Team Leader. Mr. Azulay holds a Bachelor of Science in Mechanical Engineering and a Master of Science in Computer Science, both from the University of New Haven, Connecticut, United States.

Doron Cohen – Proposed Director

Mr. Cohen is CEO and Managing Partner at A-Labs Finance and Advisory Ltd., a finance and advisory investment house. He holds a Non-Executive Director position in Banxa holdings Inc. (TSXV: BNXA) and serves as a board member at Vertical Field Ltd. He has founded and served as CEO of six different companies and brings over 25 years of experience in corporate management and entrepreneurship across various sectors, including telecom, mobile, media, and advertising. Previously, Mr. Cohen was VP of Marketing and Business Development at an $8 billion FTSE 250 publicly traded company. Mr. Cohen has been a mentor at various organizations, such as IBM, TheHive and Startupbootcamp, where he has provided guidance to entrepreneurs and start-ups with business, sales and marketing strategies and investor relations.

Konstantin Lichtenwald – Proposed CFO

Mr. Lichtenwald specializes in providing corporate finance, valuation, taxation, financial reporting, consulting and other accounting services to both small businesses and public commodity resource companies. Mr. Lichtenwald also assists in many aspects of clients’ administration, financing and other finance-related activities. Mr. Lichtenwald worked at Ernst & Young GmbH, Germany, in the assurance department. He earned his Bachelor of Business Administration from Pforzheim University, Germany, and holds the professional designation of Chartered Professional Accountant (CPA and CGA) and is a member of Chartered Professional Accountants of British Columbia and Canada. Mr. Lichtenwald has had extensive experience as a controller, Chief Financial Officer and a director of numerous publicly traded and private corporations in several industries.

Sivan Hechter-Ungar – Proposed Director

Ms. Hechter-Ungar has over 20 years of experience serving in senior management roles in multiple companies. Ms. Hechter-Ungar has a deep understanding of the financial implications of strategies adopted by companies and this knowledge has enabled her to lead complex cross-organizational projects. Since October 2021, Ms. Hechter-Ungar has been serving as the VP of Corporate Finance at A-Labs Finance & Advisory, a company whose principal business is to provide corporate advisory and finance services, where she is responsible for developing a strategy for potential and new portfolio companies and for providing a financial, business, and economic analysis of each portfolio company. Prior to that, from 2012 to 2021, Ms. Hechter-Ungar served as the VP Finance, Head of CIS Business Finance and later as Head of Finance Strategy at Cognyte Software Ltd. (spin-off from Verint Systems Inc.), a security analytics software company, where, among others, she updated the methodology, processes and systems of the company while working closely with the product management team on the implementation of new processes. From 2005 to 2011, Ms. Hechter-Ungar served as the Head of the Department of Economic Planning and later as Head of Economics at Hot Telecommunications Ltd., a company that provides telecommunication services, where she was responsible, among others, of preparing the company’s business plans, preparing the annual operating plans as well as multi-year plans and analyze the financial feasibility of the company’s projects. Ms. Hechter-Ungar holds a B.Sc. in Chemistry and a Master’s Degree in Economics, majoring in Micro-Economics and Finance, both from the Tel-Aviv University, Israel.

Gil Pry-Dvash  – Chief Product Officer of Orcanos

Mr. Pry-Dvash has over 28 years of experience in the software industry and has specialized in building product strategy, product roadmap, and leading product development groups. From 2011 to 2020, Mr. Pry-Dvash managed the product development center of Intrado Ltd. (Israel). In this role, Mr. Pry-Dvash was responsible for developing the Intrado Webcasting and Virtual Events platform. From 2009 to 2011, Mr. Pry-Dvash was the Chief Technology Officer and General Manager of Unisfair Inc., acquired by West Corporation in 2011. Between 1999 to 2008, Mr. Pry-Dvash held several roles in IncrediMail Ltd., including Chief Technology Officer and General Manager, leading all technical and operational aspects of the company towards a successful initial public offering and listing on NASDAQ in 2006. Mr. Pry-Dvash holds a BSc degree in Mathematics and Computer Science and an MBA degree with a major in Finance, both from Bar-Ilan University, Israel.

Not a Non-Arm's Length Qualifying Transaction

The Transaction is not a Non-Arm’s Length Qualifying Transaction within the meaning of the policies of the Exchange.

Disinterested Shareholder Approval and Related Party Transactions

Although the Transaction does not constitute a Non-Arm’s Length Qualifying Transaction, the Exchange has advised ALAB that it will consider the Orcanos Advisor Fee, which is payable by Orcanos to the Orcanos Advisor at closing, as a payment to a Non-Arm’s Length Person (as defined in the policies of the Exchange) with respect to ALAB under Policy 2.4 of the Exchange. Such payment is permitted provided that ALAB receives Disinterested Shareholder Approval (as defined below) in accordance with Exchange policies.

Although the Transaction is not a “related party transaction” within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”), the following incidental actions under the Transaction may be considered related party transactions for ALAB for the purposes of MI 61-101 (collectively, the “Related Party Transactions”): (i) the issuance of a total of  2,554,067 warrants of the Resulting Issuer to the Orcanos Advisor in the Orcanos Advisor’s capacity as a securitiesholder of Orcanos, in exchange for the securities of Orcanos held by the Orcanos Advisor, pursuant to the Securities Exchange Agreement; (ii) the issuance of  267,943 Resulting Issuer Shares by the Resulting Issuer to LIBI Holdings Inc. (“Libi”), in Libi’s capacity as a shareholder of Orcanos, in exchange for the Orcanos Shares held by Libi, pursuant to the Securities Exchange Agreement; (iii) the issuance of  2,666,667 Resulting Issuer Shares to 12.64 Fund, Limited Partnership (the “L.P. Fund”), in the L.P.’s Fund capacity as an Orcanos Shareholder, in exchange for the Orcanos Shares held by the L.P. Fund, pursuant to the Securities Exchange Agreement; and (iv) the payment of the consulting fee by the Resulting Issuer to the Orcanos Advisor after closing of the Transaction under the Orcanos Advisory Agreement as described above. Doron Cohen, a current director and officer of the Company and a proposed director of the Resulting Issuer, is the controlling shareholder of the Orcanos Advisor and Libi. Doron Cohen and Noah Herscovici (a current director and officer of the Company) collectively own more than 50% of the voting shares of the general partner of the L.P. Fund.

The Related Party Transactions are exempt from the formal valuation requirements set out in Subsection 5.5(b) of MI 61-101 as at the time of the transactions, the securities of the Company were not listed or quoted on one of the exchanges or markets specifically identified in MI 61-101. The Company will seek Disinterested Shareholder Approval to satisfy the minority shareholder approval requirements set out in MI 61-101 as noted below.

ALAB intends to hold an annual and special meeting of shareholders (the “ALAB Meeting”) on May 4, 2022 at 11:00 a.m. (Eastern Time) to approve, among other things: (i) certain annual general matters; (ii) by way of Disinterested Shareholder Approval pursuant to Policy 2.4 of the Exchange, the payment of the Orcanos Advisor Fees; and (iii) by way of Disinterested Shareholder Approval pursuant to MI 61-101, the Related Party Transactions. “Disinterested Shareholder Approval”, whether under MI 61-101 or the Exchange’s policies, as the case may be, means approval by ordinary resolution at the ALAB Meeting excluding votes attached to the common shares of ALAB held by the Orcanos Advisor, Doron Cohen and/or Noah Herscovici, as applicable. Further details will be contained in the Management Information Circular of the Company to be filed on SEDAR in connection with the ALAB Meeting.

Sponsorship

ALAB has sought and has been granted a waiver from the Exchange to the requirement to engage a sponsor in connection with the Transaction.

About Orcanos

Orcanos Ltd. is a private Israeli software company that is developing and marketing an integrated compliance software platform used by businesses to manage their product development processes for regulated industries, such as medical device development. Orcanos’ platform is relevant for regulated product development projects, where the ability to effectively organize and manage teams and observe regulations and best practices is valued.

Orcanos launched the commercial version of its current principal product in 2017, being an integrated software solution for application lifecycle management, quality management systems, and regulatory compliance management. Orcanos’ integrated solution provides a digital solution that enables its customers to ease the time-to-market product hurdles by streamlining the product development and manufacturing process while enabling real-time quality and regulatory compliance management.

Further Information

Trading in the common shares of the Company will remain halted until the Transaction has been completed, or until the Exchange receives the requisite documentation to resume trading.

In connection with the Transaction, and pursuant to the requirements of the Exchange, the Company has filed the Filing Statement on its issuer profile on SEDAR (www.sedar.com), which contains details regarding the Transaction, the Company, Orcanos and the Resulting Issuer.

Completion of the 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. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

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

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

For further information regarding ALAB, contact:

Doron Cohen, CEO

doron@alabs.co

972 545-224-017

 

For further information regarding Orcanos, please contact:

 

Zohar Peretz, CEO

zoharp@orcanos.com

972-525-582-578

 

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 RELEASE.

INFORMATION CONCERNING ORCANOS HAS BEEN PROVIDED TO THE COMPANY BY ORCANOS FOR INCLUSION IN THIS PRESS RELEASE.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES, THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1993, AS AMENDED, OR ANY SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

Caution Regarding Forward-Looking Information

The information in this news release includes certain information and statements about management’s view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Forward looking statements in this news release include, but are not limited to: the closing of the Transaction, Concurrent Financings, Amalgamation and related transactions; the expected terms and structure of the Concurrent Financings, including the expected fees payable to any agents and/or eligible finders; the expected or anticipated benefits of the Transaction, including the proposed business of the Company after completion of the Transaction. Because of these risks and uncertainties and as a result of a variety of factors, including with respect to the closing of the Transaction and related transactions, the timing and receipt of all applicable regulatory, corporate, shareholder and third party approvals, the anticipated benefits from the Transaction and the satisfaction of other conditions to closing the Transaction, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward-looking statements. Although the Company believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statement will prove to be correct. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise.

NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES