Timeless Capital Corp. and Renaissance Bioscience Corp. Announce Refinancing of Secured Convertible Debentures and Reduction of Minimum Concurrent Financing

Calgary, Alberta–(Newsfile Corp. – June 30, 2023) – Timeless Capital Corp. (TSXV: TLC.P) (“Timeless“) and Renaissance BioScience Corp. (“Renaissance” or the “Company“) are pleased to announce the close of the non-brokered refinancing (“Refinancing“) of the Company’s existing $5,000,000 principal amount of 12% secured convertible debentures maturing on June 30, 2023 (“Existing Debentures“). Pursuant to the Refinancing, the Company issued a first tranche of $5,560,000 principal amount of 15% secured convertible debentures maturing on June 30, 2025 (“New Debentures“). Holders of the Existing Debentures either exchanged their Existing Debentures for New Debentures or they were repaid with the proceeds from the sale of New Debentures to other subscribers.

Completion of the Refinancing of Existing Debentures is to satisfy a requirement of the TSX Venture Exchange (“TSXV” or the “Exchange“) that the Resulting Issuer (as defined below) have sufficient working capital and financial resources to execute its business plan for a period of 12 months following listing and was therefore a necessary step in order to receive final approval of the Company’s previously announced business combination with Timeless (the “Transaction“). Completion of the Transaction remains subject to the Company completing its previously announced brokered private placement of units for minimum gross proceeds of $2,700,000 (the “Concurrent Financing“). For further details relating to the Transaction and the Concurrent Financing, please refer to Timeless’ news release dated April 24, 2023 and further details in this press release below.

Refinancing Summary

In connection with the Refinancing, the holders of Existing Debentures (“Existing Debentureholders“) were offered the Refinancing terms, and any Existing Debentureholders which elected for repayment at June 30, 2023, were replaced by new subscribers (“New Debentureholders“), all being existing shareholders of the Company who wished to increase their investment in the Company. In addition, the Company’s board of directors approved an increase to the principal amount of the outstanding convertible debentures to $5,750,000 to provide the Company with additional working capital.

Under the terms of the Refinancing, Existing Debentureholders exchanged their Existing Debentures and New Debentureholders subscribed for an aggregate of $5,560,000 principal amount of New Debentures. Interest accrues on the New Debentures at a rate of 15% per annum, payable quarterly up to and including the maturity date of June 30, 2025 (the “Extended Maturity Date“). In addition, each $1,000 principal amount of New Debentures entitles the holder to 740 common share purchase warrants of the Company (the “Warrants“) for a total of 4,114,400 Warrants. After giving effect to a three (3) for one (1) share split which is to become effective prior to completion of the Transaction (the “Share Split“), each $1,000 principal amount of New Debentures would entitle the holder to 2,220 Warrants for a total of 12,343,200 Warrants. The remaining principal amount of New Debentures available to be subscribed totals $190,000, which, if closed, would result in the issuance of an additional 140,600 Warrants of the Company pre-Share Split (421,800 Warrants post-Share Split).

The principal amount of the New Debentures is convertible into common shares of the Company at the option of the holder for $1.35 per common share pre-Share Split ($0.45 post-Share Split) if converted before the Extended Maturity Date and the Warrants are exercisable into one common share of the Company at $1.35 per common share pre-Share Split ($0.45 post-Share Split) for up to 24 months after the Company completes a go public event such as the Transaction. The New Debentures would be convertible into an equivalent number of common shares of Timeless after giving effect to the Transaction (the “Resulting Issuer“) and the Warrants would be exchanged for warrants of the Resulting Issuer having equivalent terms.

The New Debentures are secured by all the issued and pending patents for the Company’s acrylamide-reducing yeast (“ARY“) technologies, and the revenues generated by the Company, or its subsidiaries, from commercial agreements using ARY technologies. The New Debentures include a provision which allows for the Company to repay all or a portion of the New Debentures before maturity, at which point it shall pay the holder an early redemption premium on the principal amount equal to 10% for redemptions occurring from July 1, 2023 to June 30, 2024 and 5% for redemptions occurring from July 1, 2024 to the Extended Maturity Date.

Concurrent Financing

The Company is in the process of completing its Concurrent Financing of a private placement of units prior to finalization of the Transaction with each unit entitling the holder to one Renaissance Class B share and one Renaissance Class B Warrant exercisable at a price of $0.65 per share for a term of 24 months from the closing of the Transaction as more particularly described in the Filing Statement (as defined below).

Subsequent to the issuance of the Filing Statement, the Company determined to reduce the minimum amount of the Concurrent Financing from $3,600,000 to $2,700,000, based on a review of the total estimated available funds and expenditures required to achieve near term business objectives. Should the Company close on the new minimum Concurrent Financing, it is anticipated that the Company would have to operate at a lower burn rate, which may impact the timing of the achievement of certain projected Milestones (as defined below).

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The maximum Concurrent Financing amount remains at $5,000,000 or any other such amount as agreed between the Company and the agent, pursuant to the terms of the agency agreement. Each RBSC Class B Share and RBSC Class B Warrant issued pursuant to the Concurrent Financing will be exchanged for one Timeless common share and one warrant of Timeless pursuant to the terms of the Transaction.

Filing Statement

On May 12, 2023, in connection with the Transaction and pursuant to the requirements of the Exchange, Timeless filed a filing statement (the “Filing Statement“) on its issuer profile on SEDAR (www.sedar.com), which contains relevant details regarding the Transaction, Timeless, Renaissance and the Resulting Issuer upon completion of the Transaction. The following information is intended to update the information previously disclosed in the Filing Statement from the Refinancing and reduced minimum Concurrent Financing. Capitalized terms not otherwise defined herein will have the definition ascribed thereto in the Filing Statement.

Pro Forma Consolidated Capitalization

The following table outlines the expected pro forma share capital and loan capital of the Resulting Issuer as at December 31, 2022 on a consolidated basis, after giving effect to all steps contemplated in the Transaction, including the Share Split and Refinancing, based on the pro forma financial statements contained in the Filing Statement:

Notes:

1. After giving effect to the Transaction, including the Share Split and Refinancing, it is anticipated that an aggregate of 42,902,177 Resulting Issuer Shares will be reserved for issuance upon the exercise of the Resulting Issuer Options and Resulting Issuer Warrants in the event of the minimum Concurrent Financing (48,013,288 Resulting Issuer Shares in the event of the maximum Concurrent Financing). Pursuant to Policy 2.4 – Capital Pool Companies (“CPC“) of the TSXV, certain securities of the Resulting Issuer will be subject to escrow requirements as set out in more detail in the Filing Statement.
2. The Resulting Issuer Debentures are convertible into Resulting Issuer Shares at $0.45 per share post-Share Split pursuant to the Refinancing. Up to an additional $190,000 principal amount of New Debentures are authorized to be issued pursuant to the Refinancing and accordingly up to an additional 421,800 Resulting Issuer Warrants may be issued in connection with the issuance of additional New Debentures.
3. For information relating to the Transaction and Concurrent Financing, refer to the Filing Statement.

Fully Diluted Share Capital

The following table sets forth the fully-diluted share capital of the Resulting Issuer after giving effect to all steps contemplated in the Transaction:

Notes:

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1. Comprised of 4,485,658 warrants currently outstanding and an additional 466,730 warrants to be issued pursuant to an adjustment provision in certain warrants based on the terms of the Concurrent Financing for an aggregate of 4,952,388 warrants (pre-Share Split) or 14,857,164 (post-Share Split).
2. Assuming the maximum amount of the Concurrent Financing of $5,000,000, Resulting Issuer Broker Warrants to acquire an aggregate of 888,889 units at a price of $0.45 per unit would be issued with each unit being comprised of one Resulting Issuer Share and one Resulting Issuer Warrant exercisable at a price of $0.65 per share.
3. Assuming the aggregate principal amount of up to $5,750,000 New Debentures convert into Resulting Issuer Shares at a price (adjusted for the Share Split and Refinancing) of $0.45 per Resulting Issuer Share.
4. Comprised of the issuance of up to 4,255,000 Warrants pre-Share Split pursuant to the Refinancing (12,765,000 post-Share Split).

Estimated Available Funds

Upon completion of the Transaction, assuming the minimum gross proceeds from the Concurrent Financing and after giving effect to the Refinancing, the Resulting Issuer is expected to have available funds as follows:

Notes:

1. Assuming the minimum amount of the Concurrent Financing of $2,700,000, which was reduced from the previous minimum of $3,600,000.
2. Funds estimated to be received and not included in working capital as at May 31, 2023 during the 12 month period following the Transaction from: (a) refundable Scientific Research and Development tax credit to be claimed for periods up to the Transaction in the amount of $182,000; (b) cash royalty revenue to be received from ARY licenses to be received in the amount of $187,000; and (c) cash to be received from joint development agreement (“JDAs“) contracts in the amount of $154,000.
3. Additional gross proceeds raised during the Refinancing in excess of amounts paid to repay Existing Debentures.
4. As at May 31, 2023, considering completion of the Refinancing which extends the maturity date to June 30, 2025, and therefore no repayment of principal required in the 12 months following May 31, 2023.

Principal Purposes

The principal purposes of the total estimated available funds of the Resulting Issuer at May 31, 2023 are as follows:

Notes:

1. Includes legal fees, auditor review fees, TSXV filing fees, transfer agent fees and other expenses incurred or expected to be incurred in connection with the Transaction.
2. Expenses include broker commissions based on the minimum amount of Concurrent Financing.
3. Advancing RBSC’s yeast-RNAi production and delivery platform technology. The current focus is advancing RBSC’s biopesticide program for multiple targets in the field trial and investigative stages.
4. Combination of (a) annual patent fees for patents issued in various jurisdictions worldwide and responses to patent applications submitted for the Company’s technologies, (b) capital expenditures for R&D programs, (c) office and laboratory leases.
5. Funds for (a) general corporate purposes, including legal, audit, insurance, investor relations, administrative and senior management staff expenses, travel, consulting, and other general administrative expenses, and (b) continuing partnership activities for licensing/ co-development agreements.
6. Interest on New Debentures charged at a rate of 15% per annum and payable quarterly up to and including the maturity date of June 30, 2025.

Milestones

Within 12 months following the Completion of the reduced minimum Concurrent Financing, the Company anticipates working towards several milestones (“Milestones“), including:

Notes:

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1. The Company’s Generation 1 portfolios are not expected to be impacted materially by a reduction in the Concurrent Financing. Commercial licenses have been entered into for both the beverage yeast portfolio and the acrylamide-reducing yeast, therefore there are minimal expenditures required to realize on the royalty-based revenues from these agreements. The New Product Release Milestones for both the Arylamide Reducing Yeast global License and Beverage Yeast global License are projected to occur irrespective of any change in the proceeds from the Concurrent Financing.
2. The reduction in the minimum amount of the Concurrent Financing is not expected to impact the core projects to further develop and commercialize the Company’s RNAi-based biopesticide technologies, including the completion of field studies on the Company’s first biopesticide target, the Colorado Potato Beetle (“CPB“) scheduled for the summer of 2023, as well as application for further CPB confirmatory trials.
3. Should the Company raise the new minimum Concurrent Financing, it may lead to the delay or discontinuation of certain Milestones relating to academic collaborations and JDAs below, and as included in the 12 month Milestones in the Filing Statement, due to a reduced amount of available funds post Concurrent Financing. The investigation and acceptance of additional JDAs in RNAi-based biopesticides or other opportunistic JDAs across a variety of industries such as food, beverage, and biofuels would only be pursued should contracts provide the financial means to ensure that the Company has sufficient resources to complete the JDA. A reduction in available funds largely impacting R&D expenditures and general corporate expenditures, could result in a slow of current negotiations for JDAs and discussions for collaborations and could also hinder the Company’s ability to identify, negotiate, and complete the JDAs:

For more information on the various risk factors which may cause the future development and operating results to differ from those expected, please refer to the Filing Statement.

Prior Sales

Since the date of the information recently disclosed in the Filing Statement, certain shares, or securities convertible into shares, have been issued by Renaissance or RBSC Holdco as set out in the following table:

Notes:

1. RBSC New Debentures issued pursuant to the Refinancing for an aggregate principal amount of $5,560,000 convert into Resulting Issuer Shares at a price of $1.35 per RBSC Share pre-Share Split ($0.45 post-Share Split).
2. Issued pursuant to a private placement of units of RBSC Holdco (“RBSC Holdco Units“), where each RBSC Holdco Unit consisted of one RBSC Holdco Share and one RBSC Holdco Warrant, with each RBSC Holdco Warrant being exercisable into a RBSC Holdco Share at a price of $0.65 per RBSC Holdco Share. The RBSC Holdco Warrants expire 24 months after the date the RBSC Holdco Shares (or securities for which they are exchanged) are listed on a Recognized Exchange.
3. Issued pursuant to a SR&ED loan, with each RBSC Warrant being exercisable into a RBSC Share at a price of $1.35 per RBSC Share pre-Share Split ($0.45 post-Share Split). The RBSC Warrants expire 24 months after the date the RBSC Shares (or securities for which they are exchanged) are listed on a Recognized Exchange.
4. Issued pursuant to a consulting agreement, with each RBSC Option being exercisable into a RBSC Share at a price of $1.35 per RBSC Share pre-Share Split ($0.45 post-Share Split) upon vesting.

Options to Purchase Securities

The following table sets out certain information in respect of options to purchase securities of the Resulting Issuer that will be held upon completion of the Transaction:

Notes:

1. Consists of three executive officers of the Resulting Issuer, being Maurice Boucher (750,000 options), John Husnik (750,000 options) and Davona Walton (750,000 options).
2. Consists of three non-executive directors of the Resulting Issuer, being Blair Jordan (465,576 options), Victor Dusik (450,000 options) and Peter Lutwyche (450,000 options) and three past non-executive directors of RBSC and Timeless, being Morris Chen (300,000 options), Shane Shircliff (15,576 options) and Daniel Lanskey (93,458 options).
3. Consists of 24 employees.
4. Consists of 5 consultants.
5. Weighted average post-Share Split and Consolidation.
6. Weighted average remaining life in years from March 31, 2023. RBSC Options expiry is 10 years from date of grant. Timeless Options expire October 29, 2023.

About Renaissance

Renaissance is a leading bioengineering company based in Vancouver, British Columbia whose platform technologies are used to develop innovative, market-ready, functional microorganisms that provide cost effective solutions to a broad range of environmental, health and industrial efficiency problems. Renaissance technologies create products for multiple end-use industries, including food & beverage, agriculture crop protection, animal and human health and energy.

About Timeless Capital Corp.

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Timeless is a CPC that completed its initial public offering and obtained a listing on the Exchange in October, 2018 (trading symbol: “TLC.P”). It does not own any assets, other than cash or cash equivalents. The principal business of Timeless is to identify and evaluate opportunities for the acquisition of an interest in assets or businesses and, once identified and evaluated, to negotiate an acquisition or participation subject to acceptance by the Exchange so as to complete a qualifying transaction in accordance with the policies of the Exchange.

For further information, please contact:

Renaissance BioScience Corp. Davona Walton, CFO
Phone: (604) 822-6499 ext. 3102
Email: dwalton@renaissancebioscience.com

Cautionary Notes

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the New Debentures in the United States. The New Debentures 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 may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws, unless an exemption from such registration is available.

Completion of the Transaction remains subject to a number of conditions, including without limitation, Exchange acceptance and completion of the Concurrent Financing. 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 Filing Statement filed in connection with the Transaction and the supplemental information set forth herein, 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.

All information contained in this press release with respect to Renaissance and Timeless 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.

Forward-Looking Information

This press release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this press release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected” “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”. “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this press release, forward-looking statements relate, among other things, to: the Transaction and certain terms and conditions thereof; the anticipated completion of the Concurrent Financing; the use of proceeds of the Refinancing and Concurrent Financing; pro forma consolidated capitalization; fully diluted share capital; estimated available funds and principal purposes; the development of the business of Renaissance. 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: future demand for Renaissance’s products; the results of research and development activities; access to capital; general business, economic, competitive, political and social uncertainties; the delay or failure to receive third party 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 the forward-looking statements and information contained in this press release. Except as required by law, Renaissance assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

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