Cuspis Capital II Ltd. and 11197894 Canada Ltd., To Be Renamed IC Group Holdings Inc., Announce $3 Million Private Placement

(TheNewswire)

Toronto – TheNewswire - July 29, 2024 – 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 that, further to Cuspis’ news release dated March 5, 2024 (the “March Press Release”), which announced Cuspis and IC Group’s intention to enter into a business combination agreement (the “Business Combination Agreement”) in connection with their proposed business combination (the “Proposed Transaction”) to ultimately form the resulting issuer (the “Resulting Issuer”) that will continue on the business of IC Group, IC Group has now entered into an engagement agreement with Research Capital Corporation (“RCC”) (the “RCC Engagement Agreement”) concerning the Concurrent Financing (as defined in the March Press Release).

Subscription Receipt Equity Financing

Pursuant to the terms of the RCC Engagement Agreement, RCC has agreed to act as the lead agent and sole book runner (the “LeadAgent”), on behalf of a syndicate comprised of RCC and Ventum Financial Corp. (together with the Lead Agent, the “Agents”) in connection with a private placement offering (the “Offering”), on a commercially reasonable “best efforts” basis, for up to $3,000,000 in aggregate gross proceeds of subscription receipts of IC Group (each, a “Subscription Receipt” and collectively, the “Subscription Receipts”) at $1.00 per Subscription Receipt (the “Offering Price”). IC Group will also grant to the Agents an option (the “Agents’ Option”) to offer up to an additional number of Subscription Receipts for gross proceeds of up to 15% of the gross proceeds of the Offering at any time up to 48 hours prior to the closing of the Offering.

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”).

The parties will enter into an agency agreement (the “Agency Agreement”) to be settled as soon as is reasonably practicable. Please see below under “Further Details on Subscription Receipt Equity Financing” for full details on the Offering, including the compensation to be paid to the Agents in connection with the Offering.

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.

IC Group presently owns a minority stake in Emotion Media Inc. (“Fannex”). Fannex provides teams in the live sports and entertainment industry a software platform to create, distribute, and orchestrate content, including promotions in stadium via digital screens or mobile devices to digitally engage fan audiences, capture valuable data, and support customer conversion initiatives. IC Group anticipates entering into an agreement between IC Group and Fannex with respect to the acquisition of all of the outstanding shares in the capital of Fannex by IC Group (the “Fannex Acquisition”). The purchase price payable by IC Group for the purchase of the remaining Fannex shares is equal to $3,462,683.18, payable by a deposit of $50,000, a cash payment of $200,054.90, and the balance by the issuance of 407,098 IC Group Shares, on a pre-split basis. The purchase of the Fannex shares is intended to close on August 15, 2024.

As of the date hereof, on a pre-split basis, there are 3,267,717 IC Group Shares outstanding. The following persons own, control or direct 10% or more of the outstanding shares:

Summary of Financial Information

A summary of certain (unaudited) financial information for IC Group is included in the tables below:

During the year ended December 31, 2023 and the six-month period ending June 30, 2024, the Company incurred the following non-recurring expenses:

Note 1

At December 31, 2023, the Company made a decision to immediately commence replacement of the main operating system acquired with the Mobile Messaging business assets, as this was anticipated to accelerate revenue growth. The Company performed an impairment test as at December 31, 2023 on the acquired license and software. The excess carrying value was recorded in earnings as an impairment loss of $275,000.

During the six-month period ended June 30, 2024, the Company incurred approximately $695,000 of consulting and software costs with respect to installing a new main operating system for the Mobile Messaging business and transitioning customers. The conversion of all existing customer and carrier message routing was successfully completed in July 2024.

Transaction Summary

Cuspis and IC Group propose entering 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 4.3103 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 and assuming the minimum Offering, the current shareholders of IC Group will hold approximately 29,000,000 Resulting Issuer Shares representing approximately 83.1% of the Resulting Issuer Shares, the current shareholders of Cuspis will hold 2,900,000 Resulting Issuer Shares representing approximately 8.3% of the outstanding Resulting Issuer Shares and investors in the Offering will hold 3,000,000 Resulting Issuer Shares representing approximately 8.6% 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 below.

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 has not been 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 Broker Warrants (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.

Upon closing of the Offering, the gross proceeds (less 50% of the Agents’ Fees (defined below) and expenses of the Agents payable on the closing date of the Offering) (the “Escrowed Funds”) will be delivered to and held by a licensed Canadian trust company or other escrow 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, the ‎Lead Agents and the Escrow Agent. The Escrowed Funds (less the remaining 50% of the Agents’ Fees 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 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 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 contained in the Agency Agreement being true and accurate in all material respects, as if made on and as of the escrow release date; and

(E) IC Group and the Agents having delivered a joint notice and direction to the Escrow Agent, confirming that the conditions set forth in (A) to (D) above have been met or waived (together from (A) to (E), 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), it shall be IC Group’s sole responsibility and liability to contribute such amounts as are necessary to satisfy any such shortfall.

The securities to be issued under the Offering will be offered by way of private placement in each of the provinces of Canada and such other jurisdictions as may be determined by IC Group and the Agents, in each case, pursuant to applicable exemptions from the prospectus requirements under applicable securities laws.

The Offering is expected to close on or about the week of August 12, 2024, or such other date as agreed upon between IC Group and the Lead Agent and is subject to certain conditions set out in the Agency Agreement. In connection with, and as a condition to, the completion of the Proposed Transaction, the Resulting Issuer Shares (including those issued in exchange for the Underlying Shares and issuable pursuant to the warrants and options of the Resulting Issuer) will be listed on the TSXV.

In connection with the Offering, the Agents will receive an aggregate cash fee equal to 9.0% of the gross proceeds from the Offering, including in respect of any exercise of the Agents’ Option (the “Agent’s Fee”), subject to a reduction for certain orders on a “President’s List”. The Agents will also be issued broker warrants equal in number to 9.0% of the number of Subscription Receipts sold under the Offering, including in respect of any exercise of the Agents’ Option (the “Broker Warrants”), subject to a reduction for certain orders on a “president’s list”. Each Broker Warrant 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 Broker Warrants will be exchanged for broker warrants 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 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.

Proposed Directors and Senior Management Team

Upon completion of the Proposed Transaction, the following individuals will comprise the board of directors and management of the Resulting Issuer:

Duncan McCready, (Director, President and CEO) (Oakville, Ontario)

Duncan, with more than 30 years of brand-activation, and promotion-tech experience working with global brands, is a co-founder of IC Group and Insured Creativity, and provides overall leadership and strategic direction. Duncan led the MBO of IC Group in 2015, prior successful exits in 1997 and 2006, and more recently led the acquisition by IC Group of 2 marketing service businesses. Outside of IC Group, Duncan supports the development of new startups through mentorship and board level participation. Duncan has been on IC Group’s board since 2015.

Marc Caron (Director, Officer: Corporate Secretary) (Winnipeg, Manitoba)

Marc is a senior executive (BSc. EE, P.Eng., MBA, CMC, ISACA-CRISC) with over 30 years’ of international business and M&A experience bridging the disciplines of operations, information technology, data security and business leadership. Marc mentors new entrepreneurs and business startups in the community, playing active board and advisory roles to support growth. Marc has been on IC Group’s board since 2015 and leads IC Group’s delivery, technology, and information security teams.

Michael Svetkoff (Director) (Oakville, Ontario)

Mike is a director and investor in IC Group and brings 30 years of senior executive experience in corporate finance and private equity. Mike has been involved in 100+ transactions and $1B of private equity. Mike has been on IC Group’s board since 2015.

C. Fraser Elliott (Director) (Toronto, Ontario)

Since 1987, Mr. Elliott has been the President of CFE Financial Inc. (“CFE”), a private investment banking company, which has provided consulting and financial services including mergers, acquisitions, and structured financings to a variety of businesses in both the public and private sectors to assist in their growth. Mr. Elliott obtained his B.A. in Economics from the University of Western Ontario and his Honors Bachelor of Commerce, Accounting from the University of Windsor.

Mr. Elliott was Chief Financial Officer of Tangarine Payment Solutions Corp. (“Tangarine Corp.”), a public company which he had listed on the TSX Venture Exchange and then arranged for the successful sale of the business in March 2009. In May 2009, Mr. Elliott became Chairman of Gowest Gold Ltd., a publicly listed gold exploration and development company (TSX-V: GWA). He has been active in raising the profile of the business, including the completion of a number of financings totaling approximately $120 million. Between 2011 to 2013, Mr. Elliott was appointed Chief Financial Officer of ONEnergy Inc. (TSX-V: OEG, formerly Look Communications Inc.) and Unique Broadband Systems, Inc. (NEX: KUR). He resigned his position from Unique Broadband Systems, Inc. in July 2013, and he resigned from ONEnergy Inc. in February 2014. He resigned as a director of Sylogist Ltd. (TSX-V:SYZ) in August 2020, where he served as Chairman of the audit committee.

He currently sits on the board of Cuspis Capital II Ltd. (TSX-V:CCII.P), Gowest Gold Ltd. (TSX-V: GWA), and is Managing Director of Cuspis Capital Partners Ltd.

He has served on a variety of school and charitable organization boards over the past 25 years.

Jack Schoenmakers (Director) (St. Catharines, Ontario)

Mr. Schoenmakers has spent the majority of his working career in the energy industry. Mr. Schoenmakers is currently President of Schoevest Investment Inc., Managing Director of Cuspis Capital Partners Ltd., and presently serves on the board of Cuspis Capital II Ltd. (TSX-V: CCII.P) and also has served on venture listed company boards, including Thermal Energy International Inc. (from 2012-2018; TSX-V: TMG) and Tribute Resources Inc. (from 2005-2018; TSX-V: TRB). Mr. Schoenmakers has also sat on the Boards of several private companies including Nothing But Nature (from 2005-2017) which was acquired by Greenspace Brands Inc. (TSXV: JTR) in January of 2017. Mr. Schoenmakers co-founded and acted as President of Ontario Energy Savings Corp., (previously traded as Just Energy Group Inc. on the TSX under the symbol “JE”). Mr. Schoenmakers was previously the president of Avenue Energy, where he managed oil and natural gas assets in Ontario and Alberta, traded gas at various points in Canada and marketed natural gas to large volume industrial customers. Mr. Schoenmakers was previously a board member of the Ontario Energy Association and past chair of the Ontario Energy Marketers Association. Mr. Schoenmakers obtained his B.A. in Economics from the University of Waterloo.

John Penhale (Officer: CFO) (Oakville, Ontario)

Mr. Penhale, a Chartered Professional Accountant, is currently a consultant to IC Group. He is a seasoned financial executive, having served in senior finance, risk management and treasury roles in private and public companies, including CIBC’s Merchant Bank.

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 the Company 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

Will@CuspisCapital.com

(416) 214-0876

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

Duncan McCready
Duncan.McCready@ICGroupInc.com
(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 Cuspis 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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