Vancouver, British Columbia--(Newsfile Corp. - March 14, 2019) - Vanity Capital Inc. (TSXV: VYC) (the "Company") and
XynaRx Pharmaceuticals Corp. ("XynaRx") are pleased to announce the entering into of an arm's length binding letter of
intent (the "LOI") accepted effective March 11, 2019, pursuant to which the Company will acquire all of the issued and
outstanding shares in the capital of XynaRx. The previously announced non-binding letter of intent between the Company and Akseera
Pharma Corp. was terminated by agreement between the parties.
It is currently anticipated that the Transaction will be effected by way of a three-cornered amalgamation involving a newly
formed wholly owned subsidiary of the Company (the "Transaction"). The resulting issuer that will exist upon completion of
the Transaction (the "Resulting Issuer") will change its business from mining to life sciences. The final structure of the
Transaction will be determined by the parties following receipt of tax, corporate and securities law advice. Upon the closing of
the Transaction (the "Closing") and the concurrent Offering defined below, it is expected that current shareholders of the
Company will hold 13.53 percent of the common shares of the Resulting Issuer (the "Resulting Issuer Shares") and current
shareholders of XynaRx will hold 78.61 percent of the Resulting Issuer Shares (on a non-diluted basis) (the "Consideration
Shares"). The Consideration Shares held by the directors, officers and insiders of XynaRx will be subject to escrow
requirements by the applicable stock exchange and to a performance agreement as negotiated between the parties.
XynaRx is a privately held British Columbia incorporated company focused on incorporating cannabidiol ("CBD") in
over-the-counter ("OTC") healthcare products and generic medication. XynaRx intends to manufacture in-house and distribute
its products in global markets. Management of XynaRx has developed a pipeline to introduce 15 OTC products and generic medications
with CBD as an active ingredient (the "XynaRx Products") over the next five years. Research and development will be
conducted in-house for incorporating CBD in the 15 XynaRx Products and for conducting human trials.
On completion of the Transaction, all of the current officers and directors of the Company shall resign, and the Company will
have the right to nominate one member to the Resulting Issuer's Board of Directors. The members of the executive management team
and directors of the Resulting Issuer will be detailed within a forthcoming news release upon execution of the definitive
agreement.
The Company intends to apply to the TSX Venture Exchange (the "TSXV") to have its common shares delisted from the TSXV
before completion of the Transaction. The Company will seek "majority of the minority" shareholder approval (meaning officers,
directors and persons holding more than 10 percent of the Company and their associates voting shares cannot vote to approve the
delisting) at the special meeting of the shareholders of the Company to be held March 21, 2019.
On closing the Transaction, the Resulting Issuer will pay a finder's fee equal to five percent of the Consideration Shares in
either cash and/or shares of the Resulting Issuer, as directed by XynaRx.
Completion of the Transaction is subject to a number of conditions including, but not limited to: completion of satisfactory due
diligence by each of the Company and XynaRx; execution of a definitive agreement between the Company and XynaRx in respect of the
Transaction; the receipt of all necessary regulatory and third-party consents and approvals, including without limitation,
acceptance of the Transaction and the common shares for trading on an Exchange; receipt of customary legal opinions; approval of
the Transaction by the shareholders of XynaRx; and other actions necessary to complete the Transaction. 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.
More details about the Transaction and the Resulting Issuer will be provided in a detailed news release when the parties enter
into a definitive agreement in respect of the Transaction. Investors are cautioned that, except as disclosed in the listing
statement, information circular or any other applicable Transaction disclosure document 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 the Company should be considered highly speculative.
Concurrent Financing
As a condition to the completion of the Transaction, the parties will complete a non-brokered private placement financing for
aggregate gross proceeds of a minimum of $6,000,000 through the issuance of subscription receipts of XynaRx ("Subscription
Receipts") at a price of $1.00 per Subscription Receipt (the "Offering"). The net proceeds of the Offering will be
placed in escrow with an escrow agent on behalf of the purchasers of the Subscription Receipts and will be released to XynaRx on
satisfaction of certain escrow release conditions (the "Conditions"), which will include the completion of the Transaction
on or before June 30, 2019 (the "Termination Time"). Should the Conditions not be satisfied prior to the Termination Time,
the Subscription Receipts will be cancelled and all proceeds from the Offering will be returned to the subscribers.
Each Subscription Receipt will entitle the holder thereof to receive, without any further action on the part of the holder or
payment of any additional consideration, upon satisfaction of the Conditions prior to the Termination Time, one unit of XynaRx
(each, a "Unit") consisting of one common share in the capital of XynaRx (each, a "XynaRx Share") and one common
share purchase warrant (each whole common share purchase warrant, a "XynaRx Warrant"), with each XynaRx Warrant exercisable
for one XynaRx Share at $1.50 per share for a period of 24 months from the date of satisfaction of the Conditions. The XynaRx
Shares and XynaRx Warrants will be exchanged for like securities of the Resulting Issuer on closing of the Transaction.
The net proceeds from the Offering will be used by the Resulting Issuer to advance the business of XynaRx and general working
capital.
Finder's fees of up to five percent of the subscription amounts raised in the Transaction Private Placement may be paid to an
arm's length party on close of the Transaction.
Trading Halt
The shares of the Company are currently halted from trading, and the trading of shares of the Company is expected to remain
halted until delisted from the TSXV and completion of the Transaction with XynaRx.
About Vanity
The Company is currently a TSXV listed junior exploration company. The Company holds 69 claim units covering approximately 1,000
acres it had staked in February 2017 in the Phillips Township, Kenora District, Ontario (the "Phillips Property"). The
Company intends to turn over these claims to an arm's length third party for nominal consideration if it is able to provide its
shareholders with a strategic alternative to enhance shareholder value.
Contact
For further information, contact:
Harry Miller
Chief Executive Officer
(425) 453-0355
Cautionary Statements
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.
Forward-Looking Information
This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities
legislation. Such forward-looking information is not representative of historical facts or information or current conditions, but
instead represents only the Company's beliefs regarding future events, plans or objectives, many of which, by their nature, are
inherently uncertain and outside of the Company's control. Generally, such forward-looking information can be identified by the use
of forward-looking terminology such as "plans," "expects" or "does not expect," "is expected," "budget," "scheduled," "estimates,"
"forecasts," "intends," "anticipates" or "does not anticipate," or "believes," or variations of such words and phrases or may
contain statements that certain actions, events or results "may," "could," "would," "might" or "will be taken," "will continue,"
"will occur" or "will be achieved." The forward-looking information contained herein may include, but is not limited to,
information concerning the Transaction and the XynaRx Offering, expectations regarding whether the Transaction will be consummated,
including whether conditions to the consummation of the Transaction will be satisfied, delisting from the TSXV, the timing for
completing the Transaction, expectations for the effects of the Transaction or the ability of the Resulting Issuer to successfully
achieve its business objectives, expectations regarding whether the XynaRx Offering will be consummated, and expectations for other
economic, business and/or competitive factors.
By identifying such information in this manner, the Company is alerting the reader that such information is subject to known and
unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of
the Company to be materially different from those expressed or implied by such information. In addition, in connection with the
forward-looking information contained in this news release, the Company has made certain assumptions. Among the key factors that
could cause actual results to differ materially from those projected in the forward-looking information is the following: the
ability to consummate the Transaction and the XynaRx Offering; the ability to delist from the TSXV; the ability to obtain requisite
regulatory and securityholder approvals and the satisfaction of other conditions to the consummation of the Transaction on the
proposed terms and schedule; the ability to satisfy the conditions to the consummation of the XynaRx Offering or to the conversion
of the Subscription Receipts; the potential impact of the announcement or consummation of the Transaction on relationships,
including with regulatory bodies, employees, suppliers, customers and competitors; changes in general economic, business and
political conditions, including changes in the financial markets; changes in applicable laws; compliance with extensive government
regulation; and the diversion of management time on the Transaction and the XynaRx Offering. Should one or more of these risks,
uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove
incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or
expected.
Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the
forward-looking information is reasonable, undue reliance should not be placed on such information, and no assurance or guarantee
can be given that such forward-looking information will prove to be accurate, as actual results and future events could differ
materially from those anticipated in such information. The forward-looking information contained in this news release is made as of
the date of this news release, and the Company does not undertake to update any forward-looking information that is contained or
referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking
information attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/43414
