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Lonsdale Public Ventures Inc. Announcement Concerning Qualifying Transaction with Cannasat Therapeutics Inc.

CNNMatthews, February 8, 2022

TORONTO, ONTARIO--(CCNMatthews - Feb. 8, 2006) - LONSDALE PUBLIC VENTURES INC. (TSX VENTURE:LON.P) (the "Corporation") announced today further details of its agreement in principle to acquire Cannasat Therapeutics Inc. ("Cannasat"). This acquisition will involve an amalgamation between Cannasat and the Corporation and will be the Corporation's non-arm's length qualifying transaction (the "Qualifying Transaction") pursuant to the policies of the TSX Venture Exchange Inc. (the "Exchange").

Cannasat is a private company incorporated under the laws of Canada on January 16, 2022 with its head office in Toronto, Ontario. Cannasat is researching the therapeutic benefits of cannabis and developing novel cannabinoid pharmaceutical products.

The acquisition of Cannasat by the Corporation will provide Cannasat with a vehicle to become a public issuer on the Exchange. Each shareholder of Cannasat will receive shares in the capital of the amalgamated company in exchange for shares held by them in Cannasat. It is estimated that the shareholders of Cannasat will hold approximately 90% and the shareholders of the Corporation will hold approximately 10% of the issued shares in the capital of the amalgamated company.

The Corporation is classified as a capital pool company pursuant to the rules of the Exchange. The principal business of the Corporation is identifying and evaluating assets or businesses with a view to completing a transaction to acquire a business which, when completed, would result in the resulting issuer meeting the minimum listing requirements of the Exchange.

The Corporation completed its initial public offering of 3,750,000 Common Shares on June 29, 2005, at a price of $0.20 per Common Share for gross proceeds to the Corporation of $750,000. The proceeds of the offering provided the Corporation with a total of $1,155,000 with which to identify and evaluate companies, businesses or assets with a view to completing a Qualifying Transaction.

Details of the Proposed Qualifying Transaction

The Corporation and Cannasat entered into an amalgamation agreement (the "Amalgamation Agreement") to continue as one corporation under the Business Corporations Act (Canada) with the name "Cannasat Therapeutics Inc." ("Amalco"). Since the transaction is non-arm's length, the Corporation is required to seek shareholder approval of the transaction pursuant to the policies of the Exchange. The Corporation has issued an information circular pursuant to Exchange policies containing full disclosure regarding Cannasat and the transaction. The information circular is accessible on SEDAR by viewing the Corporation's public documents (

As part of the amalgamation, the Corporation intends to apply for a Certificate of Continuance to continue the Corporation from the Business Corporations Act (Ontario) to the Business Corporations Act (Canada). Also, as part of the amalgamation, the Corporation will consolidate its shares, fix the number of directors of the Corporation at seven and elect new directors, change its name to "Cannasat Therapeutics Inc." and change its auditors to Deloitte & Touche LLP. Biographical information about the new directors is set out below.

Lonsdale Shareholders

At present, the Corporation has 7,800,000 Common Shares issued and outstanding and has granted options to acquire 780,000 Common Shares to its directors and options to acquire 375,000 Common Shares to the agent under its initial public offering. As part of the amalgamation, the Corporation has agreed to consolidate its shares on the basis of 1.194 Common Shares for each Amalco Common Share.

After completion of the amalgamation, holders of Common Shares of the Corporation will hold 6,532,664 Common Shares of Amalco. In addition, the holders of the Corporation's options will be reduced on the same basis and the holders will be entitled to acquire 653,266 and 314,070 Amalco Common Shares respectively.

Cannasat Shareholders

At present, Cannasat has 12,000,000 Common Shares and 9,449,238 Class A Shares issued and outstanding. It is anticipated that prior to the amalgamation, Cannasat will undertake a private placement and issue up to an additional 3,333,333 Class A Shares to accredited and certain non-accredited investors for maximum proceeds of $3,000,000. Additionally, Cannasat has 2,090,000 warrants outstanding which entitle the holders to acquire 3,135,000 Class A Shares and 1,525,000 options outstanding each entitling the holder to acquire 1,525,000 Class A Shares.

Pursuant to the terms of the Amalgamation Agreement, the holders of Common Shares and Class A Shares of Cannasat will receive three Common Shares of Amalco with a deemed value of $0.30 per share for each Cannasat Common Share owned. Also, at the time of the amalgamation, each outstanding Cannasat warrant will be exchanged for one Amalco replacement warrant and each outstanding Cannasat option will be exchanged for one Amalco replacement option with the applicable exercise price.

After completion of the amalgamation, the securityholders of Cannasat will receive an aggregate of 74,347,715 Amalco Common Shares (assuming the maximum Cannasat private placement is completed), Amalco replacement warrants to acquire 9,405,000 Amalco Common Shares and Amalco replacement options to acquire 4,575,000 Amalco Common Shares.

In accordance with the policies of the Exchange, if the Cannasat private placement is in an amount less than $2,362,680 then the number of Amalco Common Shares to be issued to the holders of the Cannasat Common Shares shall be reduced in accordance with the policies of the Exchange so that the total number of surplus securities issued and outstanding immediately following the amalgamation equals 50% of the total number of Amalco Common Shares.

Additional Information

The amalgamation will be a non-arm's length transaction as Lorne Gertner, the Chairman, Chief Executive Officer and a Director of the Corporation, is a Director and one of the principal shareholders of Cannasat; David Hill, a Director of the Corporation, is also a Director and one of the principal shareholders of Cannasat; Joseph Mimran, a Director and the Chief Financial Officer of the Corporation, is a Director and principal shareholder of Cannasat; and Charles F. Stone III and Mark Rider are Directors of the Corporation and, either directly or indirectly, shareholders of Cannasat.

No formal valuation of Cannasat was made for the purposes of the amalgamation nor was there a prior valuation or offer for Cannasat. The transaction value was determined by agreement between the Corporation and Cannasat and unanimously approved by each of their respective boards of directors. No independent committee of either board was established for this purpose. A majority of the directors of the Corporation have provided a certificate to the Exchange in accordance with Policy 5.9 of the Exchange confirming the transaction valuation methodology and criteria. The transaction value was based on the relative values of the Corporation and Cannasat having regard for their net assets, the prices for which shares had been or are to be issued and the market value of early stage biotech companies comparable to Cannasat.

In connection with the private placement, Cannasat has retained Dominick & Dominick Securities Inc. as agent to assist on a best efforts basis to complete the Cannasat private placement on or before February 28, 2006. The agent will receive a commission of 2% of the gross proceeds derived from investors introduced by Cannasat and 8% of the gross proceeds derived from all other investors participating in the private placement and will be entitled to reimbursement for its expenses. In addition, the agent will receive a non-transferable option to purchase up to 10% of the Cannasat Class A Shares that are sold pursuant to the private placement at an effective price of $0.30 for each Amalco Common Share for a term of 24 months following completion of the private placement.

Dominick & Dominick Securities Inc., subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.

The completion of the transaction is subject to a number of conditions. These include performance of the terms of the Amalgamation Agreement, approval by the Exchange, approval of the transaction from a majority of the minority shareholders, approval of the continuation of the Corporation under the Business Corporations Act (Canada), completion of a private placement by Cannasat resulting in gross proceeds of a minimum of $1,000,000 and maximum of $3,000,000 and signing of employment agreements and non-competition agreements by certain key personnel of Cannasat. There can be no assurance that the transaction will be completed as proposed or at all.

Details About Cannasat Therapeutics Inc.

Cannasat is researching the therapeutic benefits of cannabis and developing novel cannabinoid pharmaceutical products. Cannasat is pursuing two complementary business strategies. The first consists of medicinal cannabis research and education with Cannasat's business partner, Prairie Plant Systems Inc., the only government licensed grower and distributor of medicinal cannabis in Canada. The second is the development of novel cannabinoid-based pharmaceutical products to be introduced to the market through the traditional regulatory drug approval process.

Significant Milestones

Cannasat stands at the crossroads of the convergence of science, healthcare, government policy and shifting social norms with respect to the therapeutic uses of cannabis and cannabinoids. Since its incorporation in January of 2004, Cannasat has undertaken a number of steps in pursuit of its business strategy including:

Closed three seed rounds of investment raising approximately CAD$ 4.4 million

Completed an investment in and strategic alliance agreement with Prairie Plant Systems Inc., the only government licensed grower and distributor of medicinal cannabis in Canada

Assembled a team of researchers, business leaders, legal experts, and other specialists in medicinal cannabis, cannabinoids and drug development to pursue its business strategy

Engaged with Health Canada to facilitate Cannasat's cannabinoid-based product development strategy

Received Narcotic Dealer's License from Health Canada's Office of Controlled Substances to conduct cannabinoid research

Acquired and continuing to develop the intellectual property rights to key technologies and processes that will facilitate the development of proprietary cannabinoid-based products

Initiated pre-clinical research on novel cannabinoid-based products

Over the next 12 to 24 months Cannasat will be conducting further pre-clinical work in Cannasat's own labs and other select research facilities. Eventually, Cannasat plans to have a number of approved cannabinoid-based prescription products available for sale in Canada and other countries.

Financial Information

Based on audited year-end financial statements of Cannasat as at December 31, 2004, Cannasat had revenue of approximately $11,902, expenses of $767,385 and a net loss of $755,483. Based on unaudited financial statements of Cannasat as at September 30, 2005, Cannasat had revenue of approximately $39,535, expenses of $1,416,953 and a net loss of $1,428,418 for the nine-month period then ended.

After the amalgamation, it is estimated that Amalco will have a minimum of $2,540,763 and a maximum of $4,440,763 in initial net consolidated pro forma working capital as at October 31, 2021 based on the interim financial statements of Cannasat for the period ending September 30, 2021 and the interim financial statements of the Corporation for the interim period ending October 31, 2005, and after giving effect to the completion of the Cannasat private placement. Of this amount, a minimum of approximately $1,564,022 and a maximum of approximately $3,464,022 will be from Cannasat and approximately $976,741 will be from the Corporation.

Directors and Senior Management

As part of the Qualifying Transaction, Cannasat's current directors and officers will assume management responsibilities for the Corporation. Accordingly, other than David Hill and Lorne Gertner, the remaining directors and officers of the Corporation will resign and the following individuals will be elected as directors in their place. The board of directors of Amalco will be Lorne Gertner, David Hill, Alan Ryley, Rochelle Stenzler, Alan Torrie, Don Ziraldo and Moses Znaimer. Mr. Znaimer will be the Chairman of the Board. David Hill, Andrew Williams, Umar Syed and Anne Raghurai will be appointed as senior officers of Amalco.

Lorne Gertner, Director
Lorne Gertner is the Chairman and Chief Executive Officer of Hill & Gertner Capital Corporation, an investment and merchant banking firm providing capital and related advisory services to mid-market companies and entrepreneurs in transition. Under his direction, Hill & Gertner Retail Partners has played an active role in most of the major retail restructurings in Canada, including Eaton's. From 1982 to 1997, Mr. Gertner was President and owner of Mister Leonard Inc., one of Canada's largest women's apparel manufacturers. He has a Bachelor of Architecture from the University of Toronto and practiced architecture in the early 1980's. Mr. Gertner is a member of Young Presidents' Organization and a founder of the Gertner Charitable Foundation.

David Hill, Director and Chief Executive Officer
David Hill is the President and co-founder of Hill & Gertner Capital Corporation, a merchant bank specializing in the retail and consumer products sector. Over the past five years, Hill & Gertner has been involved in a number of the major retail and consumer product transactions in Canada, including Eaton's, Dylex and Hip Interactive. Mr. Hill has co-founded and served as the President of two public companies.

Dr. Alan Ryley, Director
Alan Ryley is a practicing General Surgeon at Joseph Brant Memorial Hospital in Burlington, Ontario. Dr. Ryley has been on the board of the Ontario Medical Association for the past seven years and has been the chairman of the Political Action Committee in Ontario for five years.

Anne Raghurai, Chief Financial Officer
Anne Raghurai is a member of the Certified General Accountants Association. During the last 8 years, she established an accounting practice that provides bookkeeping, accounting, financial and income tax services to the small to mid-size market, and specialized accounting services to larger firms. Prior to her full- time practice, Ms. Raghurai was employed with a number of companies in the private and public sectors in various capacities, including, CFO, Controller, Senior Accountant and Accounting Supervisor.

Rochelle Stenzler, Director
Rochelle Stenzler is the former President and General Manager of Pharma Plus Drugmart, which was Ontario's largest retail drug store chain, operating 143 stores and employing 2,700 people. Mrs. Stenzler's experience also includes serving as President of Revlon Canada and TLC Laser Eye Centers Inc.

Umar Syed, Vice President, Scientific & Strategic Affairs
Umar Syed has nearly 15 years of experience in the pharmaceutical and healthcare industry. Mr. Syed has an MBA from the Richard Ivey School of Business, a BSc (Pharmacy) from the University of Alberta, and has over six years of clinical experience at The London Health Sciences Centre as a senior clinical pharmacist and advisor. Recently, he has worked in top-tier strategy consulting to the pharmaceutical and healthcare industries in New York, Boston, and Toronto as well as in Biotech Equity Research at BMO/Nesbitt Burns in Toronto.

Alan Torrie, Director
Alan Torrie is an experienced senior executive from the healthcare and life sciences industry. Mr. Torrie was an executive manager in various roles at MDS Inc. for the past 18 years, helping it become one of Canada's foremost diversified life sciences companies. Mr. Torrie most recently served as Executive Vice President at MDS Inc. and has been past President and CEO of Diagnostics Sector at MDS and President of MDS Laboratories. Mr. Torrie is also former President and CEO of Joseph Brant Hospital.

Andrew Williams, Vice President, Operations
Andrew Williams has several years experience working as a management consultant and in leadership and business development roles of early stage businesses. During this time, Mr. Williams worked in a variety of industries and with numerous companies, including: Canadian Tire Corporation, CDI/Corinthian, Global Mentoring, Mellon Bank (US), Ontario Hydro and PNC Bank (US). Mr. Williams has an economics degree from Queen's University (1994) and an MBA from the Richard Ivey School of Business at the University of Western Ontario (2001).

Donald Ziraldo, Director
Donald Ziraldo is co-founder of Inniskillin Wines and is known for having pioneered Canada's estate winery movement. He subsequently founded the Vintners Quality Alliance (VQA), a standards-setting body with rigorous requirements that is the Canadian equivalent of France's Appellation d'Origine Controlee (AOC) system and Italy's Denominazione di Origine Controllata e Garantita (DOCG). He was also instrumental in creating the Cool Climate Oenology and Viticulture Institute at Brock University, where Canadian winemaking techniques are taught.

Moses Znaimer, Chairman of the Board
Moses Znaimer is known to the Canadian arts and business communities for having brought an original drive in television and allied communications arts into a comfortable alignment with the practical demands of commerce. He is co-founder and former President and/or Chairman and Executive Producer of CityTV and sixteen other Specialty Channels including MuchMusic, Bravo!, Space and Canadian Learning Television. He is Founder/Chairman/Executive Producer of both the MZTV Museum and Archive and the MZTV Film and Television Production and Distribution Company.

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

The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this release.

Contact Information

Lonsdale Public Ventures Inc.
Lorne Gertner
W: (416) 955-7775 ext. 222
F: (416) 703-8752

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