Cuspis Capital II Ltd. And 11197894 Canada Ltd., to Be Renamed IC Group Holdings Inc., Announce Closing of $1,205,250 Private Placement

Toronto – November 7, 2024 – TheNewswire – Cuspis Capital II Ltd. (TSXV: CCII.P) (the “Corporation” or “Cuspis”), a capital pool company as defined under TSX Venture Exchange (“TSXV” or the “Exchange”) Policy 2.4 – Capital Pool Companies, and 11197894 Canada Ltd. (“IC Group”) are pleased to announce the closing of a brokered private placement offering of subscription receipts of IC Group (“Subscription Receipts”) at a price of $1.00 per Subscription Receipt (the “Offering Price”) for aggregate gross proceeds of $ 1,205,250 (the “Offering”).

The Offering was led by Research Capital Corporation, as lead agent and sole bookrunner (the “Lead Agent”), on behalf of a syndicate of agents, including Ventum Financial Corp. (together with the Lead Agent, the “Agents”).

Further to Cuspis’ news releases dated July 29, 2024 and March 5, 2024 the Offering was completed in connection with a business combination agreement to be entered into between Cuspis and IC Group (the “Business Combination Agreement”), in connection with the proposed business combination of Cuspis and IC Group (the “Proposed Transaction”) to ultimately form the resulting issuer (the “Resulting Issuer”) that will continue on the business of IC Group.

Subscription Receipt Equity Financing

Immediately prior to the closing of the Proposed Transaction (the “RTO Closing”), and provided the Escrow Release Conditions (defined below) are satisfied or waived (to the extent waiver is permitted), each one Subscription Receipt shall be exchanged automatically, for no additional consideration and with no further action on the part of the holder thereof, into one unit of IC Group (a “Unit”).

Each Unit will consist of one IC Group Share (each an “Underlying Share”) and one common share purchase warrant (each warrant, an “Underlying Warrant”). Each Underlying Warrant will entitle the holder to purchase one IC Group Share (a “Warrant Share”, and together with the Underlying Shares and the Underlying Warrants, the “Underlying Securities”) at an exercise price equal to $1.20 until the date that is 48 months following the date of the RTO Closing (the “RTO Closing Date”).

Please see below under “Further Details on Subscription Receipt Equity Financing” for full details on the Offering, including the compensation paid to the Agents in connection with the Offering.

Transaction Summary

Cuspis and IC Group intend to enter into the Business Combination Agreement which provides for the Proposed Transaction to proceed by way of a “three-cornered” amalgamation whereby IC Group will amalgamate with a wholly-owned subsidiary of Cuspis (the “Amalgamation”) and the resulting entity will become a wholly-owned subsidiary of Cuspis.

Under the terms of the Proposed Transaction, IC Group will complete a share split (the “Share Split”), that will result in IC Group having a total of 29,000,000 shares outstanding prior to the closing of the Offering, as defined below, and following the completion of the acquisition of Fannex. Following the Share Split, the holders of Common shares of IC Group (“IC Group Shares”), including those shares acquired by way of the Offering (as defined below) will receive one post-Consolidation (as defined below) common share of Cuspis (“Resulting Issuer Share”) in exchange for each IC Group Share. In addition, upon the completion of the Proposed Transaction, all options and warrants exercisable for IC Group Shares outstanding at completion of the Proposed Transaction will be exchanged for options and warrants exercisable for Resulting Issuer Shares, on the same economic terms and conditions as such original outstanding securities. Following the completion of the Proposed Transaction, Cuspis will become the “Resulting Issuer”. In connection with the Proposed Transaction, Cuspis will consolidate its shares on the basis of 1 share for each 4.3103448 shares held (the “Consolidation”), and change the name of Cuspis to IC Group Holdings Inc. or another name that is acceptable to IC Group (the “Name Change”) immediately prior to the closing of the Proposed Transaction.

Upon completion of the Proposed Transaction the current shareholders of IC Group will hold approximately 86.77% of the Resulting Issuer Shares, the current shareholders of Cuspis will hold approximately 8.68% of the outstanding Resulting Issuer Shares and investors in the Offering will hold Resulting Issuer Shares representing approximately 4.55% of the outstanding Resulting Issuer Shares.

The parties also anticipate that in conjunction with and upon closing of the Proposed Transaction, the Resulting Issuer’s board of directors will consist of five directors. The board of directors and management of the Resulting Issuer are expected to be comprised of the individuals identified in the Cuspis’ news release dated July 29, 2024.

Cuspis held an annual and special meeting of its shareholders on June 28, 2024, to approve certain related matters in connection with the Proposed Transaction, including the Consolidation and the Name Change.

Completion of the Proposed Transaction is subject to a number of conditions, including, but not limited to, the receipt of regulatory approval, including the approval of the TSXV, completion of the Offering, the approval of the Consolidation and Name Change by the Cuspis shareholders, the approval of the Amalgamation by the IC Group shareholders and certain standard closing conditions, including there being no material adverse change in the business of Cuspis or IC Group prior to completion of the Proposed Transaction.

Cuspis is not a Non-Arm’s Length Party (as defined by Exchange policies) of IC Group. None of the directors and officers of Cuspis presently own IC Group Shares. Accordingly, the Proposed Transaction does not constitute a Non-Arm’s Length Qualifying Transaction (as defined by Exchange policies) and minority shareholder approval of the Proposed Transaction by Cuspis’ shareholders is not required.

Further Details on Subscription Receipt Equity Financing

In connection with the Proposed Transaction, it is intended that, among other things: (i) the Subscription Receipts will be converted into Underlying Shares and Underlying Warrants; (ii) all of the outstanding IC Group Shares (including the Underlying Shares) will be exchanged for Resulting Issuer Shares on a basis of one Resulting Issuer Share for each one IC Group Share (the “Exchange Ratio”) following completion of the Share Split and Consolidation; (iii) the Underlying Warrants and the Compensation Options (defined below) will be exchanged for warrants and options, respectively, of the Resulting Issuer with the number and the exercise price adjusted based on the Exchange Ratio; and (iv) Cuspis will change its name to “IC Group Holdings Inc.”

The net proceeds from the Offering will be used to complete the Proposed Transaction and for working capital and general corporate purposes.

The gross proceeds of the Offering (less 50% of the Agents’ Fees (defined below), 50% of the Advisory Fee (defined below), the Corporate Finance Fee (defined below) and expenses of the Agents payable on the closing date of the Offering) (the “Escrowed Funds”) are being held in escrow by an agent (the “Escrow Agent”) pursuant to the terms of a subscription receipt agreement to be ‎entered into on the closing date of the Offering among IC Group, Cuspis, the ‎Lead Agent and the Escrow Agent. The Escrowed Funds (less the remaining 50% of the Agents’ Fees, 50% of the Advisory Fee and any remaining costs and expenses of the Agents) will be released (together with the interest thereon) to IC Group upon satisfaction of the following escrow release conditions and the Agents receiving a certificate from IC Group prior to the Termination Time (defined below) to the effect that:

(A)        the completion, satisfaction or waiver of all conditions precedent to the Proposed Transaction in accordance with the Business Combination Agreement, to the satisfaction of the Lead Agent, on behalf of the Agents;

(B)        the receipt of all required shareholder and regulatory approvals, including, without limitation, the conditional approval of the TSXV for the listing of the Resulting Issuer Shares on the TSXV and the Proposed Transaction, and completing of the Share Split and Consolidation;

(C)        the Resulting Issuer securities respectively issued in exchange for the Underlying Securities not being subject to any statutory or other hold period in Canada;

(D)        the representations and warranties of IC Group and Cuspis contained in the agency agreement to be entered into on the closing date of the Offering among the Agents, IC Group and Cuspis being true and accurate in all material respects, as if made on and as of the escrow release date;

(E)        the Business Combination Agreement, which will supersede the letter of intent dated March 4, 2024 between IC Group and The Corporation, shall have been executed by the parties thereto in form and substance satisfactory to the Agents and their counsel, acting reasonably; and

 

(F)        IC Group, Cuspis and the Lead Agent, on behalf of the Agents, having delivered a joint notice and direction to the Escrow Agent, confirming that the conditions set forth in (A) to (E) above have been met or waived (together from (A) to (F), the “Escrow Release Conditions”).

If (i) the satisfaction of the Escrow Release Conditions does not occur on or prior to the date that is 90 days following the closing date of the Offering, or such other date as may be mutually agreed to in writing among IC Group, Cuspis, and the Agents, or (ii) IC Group has advised the Agents or the public that it does not intend to proceed with the Proposed Transaction (in each case, the earliest of such times being the “Termination Time”), then all of the issued and outstanding Subscription Receipts shall be cancelled and the Escrowed Funds shall be used to pay holders of Subscription Receipts an amount equal to the Offering Price of the Subscription Receipts held by them (plus an amount equal to a pro rata share of any interest or other income earned thereon). If the Escrowed Funds are not sufficient to satisfy the aggregate Offering Price paid for the then issued and outstanding Subscription Receipts (plus an amount equal to a pro rata share of the interest earned thereon), IC Group and Cuspis shall be jointly and severally liable for and will contribute such amounts as are necessary to satisfy any such shortfall.

In connection with the Offering, the Agents received an aggregate cash fee of $28,862.50 (the “Agents’ Fee”) and the Lead Agent received an advisory fee in the amount of $21,771.25 (the “Advisory Fee”) and a corporate finance fee in the amount of $50,000 (the “Corporate Finance Fee”). On closing of the Offering, the Agents received 50% of the Agents’ Fee and the Lead Agent received the Corporate Finance Fee and 50% of the Advisory Fee, with the balance forming part of the Escrowed Funds. On the RTO Closing Date, the Agents will also be issued an aggregate of 28,863 broker warrants (the “Broker Warrants”) and an aggregate of 21,771 advisory broker warrants (“Advisory Broker Warrants”, together with the Broker Warrants, the “Compensation Options”). Each Compensation Option shall be exercisable to acquire one Unit for a period of 48 months following the RTO Closing Date at the Offering Price. Upon the completion of the Proposed Transaction, the Compensation Options will be exchanged for options of the Resulting Issuer on equivalent terms.

The securities described herein 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 laws, and accordingly, may not be offered or sold within the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This press release does not constitute an offer to sell or a solicitation to buy any securities in any jurisdiction.

About IC Group

IC Group, headquartered in Winnipeg, Manitoba, was incorporated on July 31, 2023 under the Canada Business Corporations Act, and is the product of a July 31, 2023 amalgamation that consolidated entities that have effectively been in active business since 1989, to continue as IC Group.  IC Group is a leading marketing services technology company with over 30 years’ experience delivering impactful digital promotions, loyalty, rebate, messaging, and specialty insurance solutions for Fortune 500 brands in global jurisdictions.

About Cuspis

Cuspis completed its initial public offering on December 11, 2020. The common shares of Cuspis are listed for trading on the TSXV under the symbol “CCII.P”. Cuspis has not commenced commercial operations and has no assets other than cash. Cuspis was incorporated under the laws of the Province of Ontario.

Conditions to the Proposed Transaction

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to:

 

• completion of the Offering;  

• negotiation and execution of the Business Combination Agreement in respect of the Proposed Transaction and as may be contemplated by the Business Combination Agreement; 

• completion of the Consolidation and Name Change; 

• preparation and filing of a disclosure document, as required by the TSXV (the DisclosureDocument”) outlining the definitive terms of the Proposed Transaction and describing the business to be conducted by Cuspis following completion of the Proposed Transaction, in accordance with the policies of the TSXV;  

• completion of the Fannex Acquisition; 

• completion of the Share Split;  

• receipt of all shareholder, third party and requisite regulatory approvals (including IC Group shareholder approval) relating to the Amalgamation and the Proposed Transaction; and 

• acceptance by the TSXV. 

 

There can be no assurance that the Offering or the Proposed Transaction will be completed as proposed or at all.

 

Sponsorship

 

Cuspis intends to make an application for exemption from the sponsorship requirements of the TSXV in connection with the Proposed Transaction, however there is no assurance that the TSXV will exempt Cuspis from all or part of applicable sponsorship requirements.

 

Further Information

 

The parties will provide further details in respect of the Proposed Transaction and the Offering by way of updating press releases as the Proposed Transaction and the Offering progress.

 

All information contained in this press release with respect to Cuspis and IC Group (but excluding the terms of the Proposed Transaction) was supplied by the parties respectively, 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 Proposed Transaction is subject to a number of conditions, including but not limited to, acceptance of TSXV and if applicable pursuant to the requirements of TSXV, majority of the minority approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

 

Investors are cautioned that, except as disclosed in the Disclosure Document to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed 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 TSXV has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release. Trading in the listed securities of Cuspis will remain halted pursuant to Policy 5.2 Section 2.5 and Policy 2.4 Section 2.3(b).

For more information regarding Cuspis, please contact William Ollerhead, the Chief Executive Officer of the Corporation.

William Ollerhead, CEO

[email protected]

(416) 214-0876

 

For more information regarding IC Group, please contact Duncan McCready, the Chief Executive Officer of IC Group.

Duncan McCready
[email protected]
(204) 487-5000

Neither the 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.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: the Proposed Transaction and certain terms and conditions thereof; the business of IC Group; the completion of the Business Combination Agreement; the terms and completion of the Offering; the board of directors and management of the Resulting Issuer upon completion of the Proposed Transaction; the Name Change and Consolidation; the Exchange Ratio; TSXV sponsorship requirements and intended application for exemption therefrom; shareholder and regulatory approvals; and future press releases and disclosure. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay failure to obtain shareholder, director or regulatory approvals.  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. Cuspis disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful. The securities referred to herein 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 registration requirements.

 

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