ZYUS Life Sciences Corporation Announces Completion of RTO

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

TORONTO–(BUSINESS WIRE)–ZYUS Life Sciences Corporation (formerly, Phoenix Canada Oil Company Limited (“PCO”)) (the “Company” or the “Resulting Issuer”) is pleased to announce the completion of the previously announced reverse takeover transaction (the “RTO”) with ZYUS Life Sciences Inc. (“Former ZYUS”) in accordance with the terms of an arrangement agreement dated November 15, 2022, as amended (the “Arrangement Agreement”), pursuant to which PCO and Former ZYUS completed a business combination by way of a plan of arrangement. As a result of the RTO, Former ZYUS is now a wholly-owned subsidiary of the Company.

“The closing of this transaction is the beginning of a transformational moment in ZYUS’ history and provides us with the resources to further advance our operations and accelerate our clinical research activities,” said Brent Zettl, President and Chief Executive Officer of the Company. “This achievement brings us one step closer to providing patients with an approved pharmaceutical drug as an alternative to current pain management therapies. Our mission is to improve the quality of life and well-being for the billions of people worldwide who suffer from chronic pain.”

A management information circular dated March 24, 2023 (the “Circular”) in respect of RTO was filed under the Company’s profile on SEDAR at www.sedar.com. It is anticipated that the Resulting Issuer Common Shares (as defined below) will commence trading on the TSX Venture Exchange (the “Exchange”) on June 19, 2023 under the symbol “ZYUS”, subject to the Exchange providing final approval of the listing of the Resulting Issuer Common Shares.

Concurrent Financing

On June 5, 2023, Former ZYUS closed a private placement of subscription receipts (the “Subscription Receipts”) at a price of $1.60 per Subscription Receipt (the “Issue Price”) for aggregate gross proceeds of approximately $20,130,131 (the “Subscription Receipt Financing”). Immediately prior to the completion of the RTO, the net proceeds from the sale of the Subscription Receipt Financing were released from escrow to Former ZYUS, resulting in the issuance of 12,581,332 common shares of Former ZYUS (the “Former ZYUS Shares”). Pursuant to the Arrangement Agreement, the Former ZYUS Shares issued on conversion of the Subscription Receipts were automatically exchanged for Resulting Issuer Common Shares based on the exchange ratio of 0.704440586 (the “Exchange Ratio”) of a Resulting Issuer Common Share for each Former ZYUS common share.

Resulting Issuer Capitalization

69,847,381 Resulting Issuer Common Shares are issued and outstanding as at June 9, 2023 after giving effect to the RTO, including the completion of the conversion of the Subscription Receipts. The effective issue price of the Resulting Issuer Common Shares for the purposes of the RTO, based on the Issue Price of the Subscription Receipts adjusted by the Exchange Ratio, is $2.27, resulting in a market capitalization for the Resulting Issuer Common Shares of $158,559,100.00. The 69,847,381 Resulting Issuer Common Shares that are issued and outstanding as at June 9, 2023 after giving effect to the RTO consist of the following: (i) 38,600,435 Resulting Issuer Common Shares issued to holders of common shares of Former ZYUS, (ii) 9,476,649 Resulting Issuer Common Shares issued as a result of the conversion of $ 17,068,200.28 principal amount and accrued interest of convertible debentures of Former ZYUS ($15,515,000 principal amount and $1,553,200.28 in accrued interest), (iii)7,593,436 Resulting Issuer Common Shares issued as a result of the conversion of $14,108,235.31 principal amount and accrued interest of convertible promissory notes of Former ZYUS ($12,303,984.00 principal amount and $1,804,251.31 in accrued interest), (iv)8,862,758 Resulting Issuer Common Shares issued to the former Subscription Receipt Holders and (v) 5,314,103 Resulting Issuer Common Shares held by shareholders of PCO.

In addition, 6,123,435 Resulting Issuer Common Shares have been reserved for issuance for 3,924,885 warrants and 2,198,550 options. The exercise prices of these options and warrants, adjusted to reflect the Exchange Ratio, range from $ 1.42 to $ 3.55 per share.

37,541,436 Resulting Issuer Common Shares, 1,341,009 warrants and 970,260 options owned or controlled by “Principals” (as defined under Exchange policies) are subject escrow under the policies of the Exchange (the “TSXV Escrow”) to be released over periods of up to 36 months (18 months in respect of 2,349,059 Resulting Issuer Common Shares). Of these Resulting Issuer Common Shares subject to escrow, 35,172,618 Resulting Issuer Common Shares are also subject contractual lock-up agreements with the agents involved in the Subscription Receipt Financing for a period of 180 days (“Agent Lock Up Period”). In addition, 39,296,002 Resulting Issuer Common Shares (including 35,172,618 Resulting Issuer Common Shares that are subject to the TSXV Escrow and the Agent Lock Up Period) are subject to contractual resale restrictions previously imposed by Former ZYUS for a period of 180 days, with 30% of such Resulting Issuer Common Shares being released at 90 days from the date of closing of the Arrangement.

Summary of the RTO

Pursuant to the Arrangement Agreement, PCO acquired all of the issued and outstanding shares of Former ZYUS pursuant to a plan of arrangement under Section 14-24 of The Business Corporations Act, 2021 (Saskatchewan) (the “Arrangement”), resulting in:

1. each shareholder of Former ZYUS receiving 0.704440586 common share of the Resulting Issuer in exchange for each common share of Former ZYUS, including 24,235,649 common shares of Former ZYUS that were issued upon conversion of convertible debentures and promissory notes immediately prior to the RTO;
2. PCO changing its name to “ZYUS Life Sciences Corporation”;
3. Former ZYUS becoming a wholly-owned subsidiary of the Resulting Issuer;
4. new corporate governance policies and bylaws of the Resulting Issuer being adopted;
5. a new omnibus equity incentive plan of the Resulting Issuer being adopted; and
6. the board of the Resulting Issuer being reconstituted to include Brent Zettl, Dr. Charlotte Moore Hepburn, Richard Hoyt, John Knowles and Garnette Weber.

The Arrangement was approved by an order of the Saskatchewan Court of King’s Bench issued on June 6, 2023.

92% of the Resulting Issuer Common Shares are held by persons who were shareholders of Former ZYUS, with the balance held by shareholders of PCO.

Executive Officers and Board of Directors

Pursuant to the Arrangement Agreement, the Resulting Issuer’s executive team will include: Brent Zettl (President, Chief Executive Officer, Corporate Secretary & Director), John Hyshka (Chief Financial Officer), Keith Carpenter (Chief Strategy and Investment Officer) and Dr. Lionel Marks de Chabris (Chief Medical Officer). The members of the Resulting Issuer’s board of directors are Brent Zettl, Dr. Charlotte Moore Hepburn, Richard Hoyt, John Knowles and Garnette Weber.

Auditor

In connection with the completion of the RTO, KPMG LLP, at its office in Saskatoon, Saskatchewan will be appointed as the auditor of the Company.

Distribution of Warrants to shareholders of Phoenix Canada Oil Company Limited

Shareholders of the Resulting Issuer who held common shares of PCO as of the close of business on June 5, 2023, will be entitled to a distribution of an aggregate of 479,019 share purchase warrants exercisable at $3.55 per share until January 7, 2025 subject to acceleration (the “Warrants”). The Warrants will only be distributed to the shareholders of PCO who held common shares of PCO as of the close of business on June 5, 2023 and 0.090141 Warrant will be distributed for each common shares of PCO effective on or about June 13, 2023. The Warrants will not be listed on the Exchange.

Early Warning Disclosure Pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues

Upon the completion of the RTO, Brent H. Zettl becomes a holder of more than 10% of the issued and outstanding Resulting Issuer Common Shares. Mr. Zettl owns, directly and indirectly, or controls approximately 49% of the issued and outstanding Resulting Issuer Common Shares (approximately 52% of the issued and outstanding Resulting Issuer Common Shares on a partially diluted basis).

A copy of the press release and early warning report to be filed in connection with Mr. Zettl’s security holdings will be available on the Company’s SEDAR Profile at www.sedar.com or contact ZYUS Investor Relations at the phone number or email noted below.

About ZYUS

ZYUS is a Canadian-based life sciences company focused on the global development and commercialization of cannabinoid-based pharmaceutical drug product candidates and innovative exempt market therapeutics. Through clinical research, ZYUS is committed to furthering the understanding of cannabinoids with the clinical development of its pharmaceutical drug product candidates and intellectual property activities to protect its novel formulations. Additionally, ZYUS is dedicated to delivering high quality, cGMP / EU GMP-compliant cannabinoid products to patients through the exempt global medical market. The ZYUS vision is to elevate cannabinoid-based therapeutics as a standard of care and expand the potential of protein-based formulations in pursuit of a transformational impact on patients’ lives around the world. ZYUS: Advancing the Science of Well-Being. For additional information, visit www.zyus.com.

Additional Information

For additional information concerning the Company, the RTO and the Subscription Receipt Financing, please refer to the Circular and the press release of the Company dated June 6, 2023 which are available under the Company’s SEDAR profile at www.sedar.com.

Cautionary Note Regarding Forward-Looking Statements

This news release contains “forward-looking information” within the meaning of applicable securities laws relating to the listing and trading of shares on the Exchange, the Company’s business, the Company’s ability to advance operations and accelerate clinical research activities, the ability of the Company to realize on its strategic plans and objectives, the ability of the Company to introduce products that act as alternatives to current pain management therapies and intentions of those subject to early warning disclosure requirements. Any such forward-looking statements may be identified by words such as “expects”, “anticipates”, “intends”, “contemplates”, “believes”, “projects”, “plans” and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Statements about, among other things, the expected listing and trading on the Exchange, the Company’s business, the Company’s ability to advance operations and accelerate clinical research activities, the Company’s strategic plans and objectives, the Company’s ability to introduce products that act as alternatives to current pain management therapies and the intentions of those subject to early warning disclosure requirements are all forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Although such statements are based on management’s reasonable assumptions, there can be no assurance that the Exchange will grant final approval in respect of the listing and trading of the Resulting Issuer Shares on the Exchange or that, if such listing and trading does occur, it will be completed on the terms and timing described above, that the Company will be able to advance operations and accelerate clinical research activities, that the Company will be to realize its strategic plans and objectives or that the Company will be able to introduce products that act as alternatives to current pain management therapies. The Company assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances or actual results unless required by applicable law. When available, readers are encouraged to refer to the Circular for information as to the risks and other factors which may affect the Company’s business objectives and strategic plans.

Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) has in any way passed upon the merits of the RTO and associated transactions and neither of the foregoing entities has in any way approved or disapproved of the content of the release.

Contacts

For more information, please contact:

ZYUS Media Inquiries
[email protected]
1-833-651-7723

ZYUS Investor Relations
[email protected]
1-888-651-9987