Vancouver, British Columbia–(Newsfile Corp. – July 31, 2020) – Castlebar Capital Corp. (TSXV: CBAR.P) (“Castlebar” or the “Company”) is pleased to announce that it has entered into a binding letter of intent (the “LOI”) dated July 20, 2020 with Tellyo Oy (“Tellyo”) respecting a proposed business combination by way of a share exchange agreement or other similar form of transaction as the parties may mutually agree (the “Transaction”). Under the LOI, Castlebar and Tellyo have agreed to act in good faith to draft, negotiate and execute a definitive agreement (the “Definitive Agreement”) respecting the Transaction, which will supersede the LOI.

The Transaction is intended to qualify as Castlebar’s “Qualifying Transaction” as defined by Policy 2.4 of the TSX Venture Exchange (the “Exchange”). Following closing, the resulting issuer (the “Resulting Issuer”) will be a “Technology” issuer under the policies of the Exchange. Trading of the common shares of Castlebar will remain halted in connection with the dissemination of this press release and will recommence at such time as the Exchange may determine, having regard to the completion of certain requirements pursuant to Exchange Policy 2.4. Further details of the proposed Transaction will follow in future press releases.

About Tellyo

Tellyo was incorporated on January 30, 2012, under the Finnish Companies Act. Tellyo operates in the remote cloud-based video, editing, production and distribution services marketing industry, where Tellyo has secured a technology-leading position. Tellyo’s platform is built in the Amazon Web Services (AWS) environment, currently with installations in the European, North American and Oceania regions, offering services globally, to broadcasters, sports leagues and federations, media and events companies and corporate clients.

The Transaction

The Transaction is expected to proceed by way of share exchange agreement (or such other similar form of transaction as the parties may mutually agree) under which Castlebar will issue an aggregate of up to 50,000,000 Castlebar common shares pro rata to the Tellyo shareholders at deemed price of CAD$0.30 per share, representing an aggregate valuation for Tellyo under the Transaction of CAD$15,000,000. The majority shareholder of Tellyo, holding 79.31% of Tellyo’s issued and outstanding shares, is Extended Secure Technologies B.V. (“Exset”), a company incorporated in the Netherlands and registered with the Trade Register number 34385216. Exset is controlled 79% by Olga Kroon, a resident of Switzerland, and 21% by Viktor Dmitrochenko, a resident of Cyprus.

In addition, on closing of the Transaction or as soon as practicable thereafter, and subject to ensuring that the Resulting Issuer meets Exchange listing requirements, the Resulting Issuer is required to repay an aggregate of approximately €1,000,000 (approximately CAD$1,550,000) of outstanding debt of Tellyo, including approximately €835,000 (approximately CAD$1,300,000) of which is owed to Exset. Additional outstanding Tellyo debt of approximately €800,000 (approximately CAD$1,240,000) owing to Exset will be amortized over a period of five years with equal annual principal payments and interest of 4% per year.

The Transaction is subject to completion of certain conditions precedent, including without limitation: execution of the Definitive Agreement; the preparation and filing of a Filing Statement with the Exchange; completion by Castlebar of a private placement (the “Private Placement”) for gross proceeds of no less than CAD$5,000,000 at a price of no less than CAD$0.30 per share; completion of satisfactory mutual due diligence; receipt of required shareholder approvals (including Tellyo shareholder approval); and receipt of all necessary regulatory and Exchange approvals.

The Private Placement may also include the issuance of share purchase warrants, if agreed to in writing by the parties. The Company may pay finder’s fees and may issue finder’s warrants in connection with the Private Placement. Further information respecting the Private Placement will be provided in due course.

On Closing of the Transaction, a finder’s fee payable by the issuance of 1,000,000 common shares of the Resulting Issuer will be payable to Ansacha Capital Inc. (“Ansacha”) pursuant to a finder’s fee agreement between Tellyo and the Finder. Ansacha is incorporated pursuant to the laws of the Province of Quebec and is controlled by Jean-Francois Lemay, a resident of Quebec.

No non-arm’s length party to Castlebar has any direct or indirect beneficial interest in the Transaction, Tellyo, or Tellyo’s assets or is otherwise an insider of Tellyo. The Transaction does not constitute a “Non-Arm’s Length Qualifying Transaction” (as such term is defined by the Exchange). In addition, the Transaction is not a “related party transaction” as such term is defined by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions and is not subject to Policy 5.9 of the Exchange. As a result, no meeting of the shareholders of Castlebar to approve the Transaction is required pursuant to Policy 2.4 of the Exchange, applicable securities laws or applicable corporate laws.

Sponsorship of a Qualifying Transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies or unless a waiver is granted by the Exchange. Castlebar intends to apply for an exemption from the sponsorship requirements under section 3.4 of Exchange Policy 2.2 or a waiver of sponsorship if an exemption from sponsorship is unavailable; however, there can be no guarantee that a waiver will be granted if no exemption is available.

The Resulting Issuer

In conjunction with closing, the name of the Resulting Issuer will be changed to “Tellyo Corporation” or another name determined by Tellyo, acting reasonably. It is currently anticipated that the following individuals will be directors and officers of the Resulting Issuer:

Richard Collins – CEO
Mr. Collins is a graduate of Northampton University, and brings over 25 years of experience of media and the content industries. He has previously worked in major international businesses including Telegraph Group, Informa PLC, MSM, Emap and Quantum; and served at board level since 2007. Mr Collins joined Tellyo as CEO in 2016 and worked with the team to pivot the business into the B2B video SaaS market., growing the initial concept into a technology leading platform, and the team with it.

Patrick O’Flaherty – CFO, Corporate Secretary and Director
Mr. O’Flaherty is a Chartered Accountant and a CFA Charterholder. He qualified as a Chartered Accountant in Canada with Deloitte. He has over 15 years of experience in financial services, including public accounting and wealth management, and has worked with some of the largest companies in Canada, including Shaw Communications, RBC Royal Bank, and CIBC Wood Gundy. He currently is CFO of Castlebar, and is also CFO and a director for several public and private Canadian corporations.

Jakub Majkowski – Director
Mr. Majkowski is a computer scientist, who leads product development and client supports functions for the business. Previously he was a senior researcher for Nokia in the field of wireless communications with focus on short range technologies WLAN, Bluetooth, and NFC. He holds a Ph.D. in telecommunications and computer science from Technical University of Catalunya (UPC), Spain and M.Sc. in telecommunications and computer science from Technical University of Lodz in Poland. He has number of scientific publications, patents, and patent applications. He co-founded Tellyo in 2012.

Mariusz Ostoja-Swierczynski – Director
Mr. Ostoja-Swierczynski holds M.Sc’s in both computer science and project management, received from Technical University of Lodz in Poland and Coventry University in United Kingdom, respectively. He has 15 years’ commercial experience in software design and development and architecture. At Tellyo he leads the technical teams for research and development, and platform administration. Previously he spent five years at Cybercom Group IT consultancy, managing a wide variety of teams and development projects. He co-founded Tellyo in 2012

Matthew Carr – Director
Mr. Carr is a Chartered Accountant with 20 years of finance and tech experience for listed companies including Cisco Systems, Martello. Matthew is Financial Director for Tellyo and has been a board member for six months.

Andrew Spriggs – Director
Mr. Spriggs qualified as a chartered Accountant in the UK with Price Waterhouse Coopers. He has over 25 years of international finance and management experience in the technology media and technology sector, having worked in major multinationals such as Motorola as well as Private Equity and VC backed start-ups licensing technology across the globe. He is CFO of the major investor in Tellyo and has sat on Tellyo’s board since 2017. He also sits on the boards of other tech and media companies within the Opleving Group and supervises the group’s subsidiaries across Europe.

On closing of the Transaction, and assuming that Castlebar raises $5,000,000 under the Private Placement on the terms described above and issues the 1,000,000 common shares to Ansacha, the Resulting Issuer will have 69,966,667 common shares issued and outstanding. The current shareholders of Castlebar would hold approximately 3.29% of the shares of the Resulting Issuer, participants in the Private Placement would hold approximately 23.82% of the shares of the Resulting Issuer, Ansacha would hold approximately 1.43% of the shares of the Resulting Issuer, and the current Tellyo shareholders would hold approximately 71.46% of the shares of the Resulting Issuer (including Exset holding approximately 56.68% of the shares of the Resulting Issuer).

About Castlebar

Castlebar is a capital pool company in accordance with Exchange Policy 2.4 and its principal business is the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction.

For additional information, please refer to the Company’s disclosure record on SEDAR (www.sedar.com) or contact the Company as follows: Lucas Birdsall, CEO, at (778) 549-6714.

Cautionary Note

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, 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.

Investors are cautioned that, except as disclosed in the management information circular or filing statement 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 a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Forward-Looking Information

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described in this press release in the United States. Such securities 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, or to or for the account or benefit of persons in the United States or “U.S. Persons”, as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from such registration requirements.

Certain statements contained in this press release constitute “forward-looking information” as such term is defined in applicable Canadian securities legislation. The words “may”, “would”, “could”, “should”, “potential”, “will”, “seek”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions as they relate to Castlebar , including, the completion of the Transaction and the Private Placement and pro forma information regarding the Resulting Issuer, are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect Castlebar’s current views and intentions with respect to future events, and current information available to them, and are subject to certain risks, uncertainties and assumptions, including, without limitation: the ability to obtain all requisite approvals (and otherwise satisfy all closing conditions) for the Transaction; the estimation of capital requirements; the estimation of operating costs; the timing and amount of future business expenditures; and the availability of necessary financing. Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of these risks or uncertainties materialize. Such factors include but are not limited to: changes in economic conditions or financial markets; an escalation of the current COVID-19 pandemic; increases in costs; litigation; legislative, environmental and other judicial, regulatory, political and competitive developments; and exploration or operational difficulties. This list is not exhaustive of the factors that may affect forward-looking information. These and other factors should be considered carefully, and readers should not place undue reliance on such forward-looking information. Should any factor affect Castlebar in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, Castlebar does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and Castlebar undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.

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 press release.

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