Phoenix Canada Oil Company Limited and ZYUS Life Sciences Inc. - Proposed Transaction Update

Not for Distribution to U.S. Newswire Services or for Dissemination in the United States

TORONTO, ON / ACCESSWIRE / July 13, 2022 / Phoenix Canada Oil Company Limited (TSX-V:PCO) ("Phoenix" or the "Company") is pleased to provide an update to the Company's previously announced non-binding letter of intent (the "LOI") dated May 27, 2022 with ZYUS Life Sciences Inc. ("ZYUS"), a private Canadian life sciences company. The LOI outlines the general terms and conditions of a proposed business combination by way of plan of arrangement (the "Arrangement"), which would result in ZYUS becoming a wholly-owned subsidiary of Phoenix and constitute a reverse takeover of Phoenix by ZYUS as defined in the policies of the TSX Venture Exchange.

The LOI included a commitment by Phoenix, subject to regulatory approvals, whereby Phoenix would acquire 17 units of ZYUS with each unit consisting of one secured promissory note in the principal amount of C$100,000 (the "Promissory Notes") and 40,000 common share purchase warrants (the "Warrants"). Accordingly, on July 7, 2022, Phoenix paid C$1.7M to ZYUS in exchange for Promissory Notes aggregating C$1.7M and 680,000 Warrants.

The Promissory Notes earn interest, payable quarterly, at a rate of 12% per annum and will mature January 7, 2025. They are subject to mandatory conversion requirements whereby the Promissory Notes plus accrued and unpaid interest (the "Principal and Interest") will be converted into common shares of ZYUS on certain triggering events, which include, but are limited to, closing of the Arrangement. Immediately prior to the completion of the Arrangement, and as a condition thereof, the Principal and Interest will be automatically converted into common shares of ZYUS at a price equal to 85% of the deemed price of ZYUS common shares in the Arrangement. If the Arrangement is terminated Phoenix will be entitled to demand immediate repayment of its Principal and Interest. The Warrants, subject to certain acceleration events, entitle Phoenix, to acquire one common share of ZYUS at a price of C$2.50 per common share at any time until January 7, 2025. The exercise of these warrants may be subject to regulatory approvals.

Phoenix and ZYUS are working diligently to satisfy all of the terms and conditions to which this Arrangement remains subject including, but not limited to: the satisfactory completion of due diligence; the successful negotiation and execution of a definitive agreement for the Arrangement (the "Definitive Agreement"); shareholder and Exchange approvals; the performance of any closing conditions; and other conditions typical for similar transactions.

Forward-Looking Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the Arrangement including statements regarding the terms and conditions of the Arrangement and the LOI, as well as information relating to ZYUS. Information about ZYUS contained in this press release has not been independently verified by the Company. Although the Company believes, in light of the experience of its officers and directors, current conditions and expected future developments, and other factors that have been considered appropriate, that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Arrangement; that the ultimate terms of the Arrangement will differ from those that currently are contemplated; and that the Arrangement will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The terms and conditions of the Arrangement may change based on the Company's due diligence and the receipt of tax, corporate and securities law advice for both the Company and ZYUS. The statements in this press release are made as of the date of this release. The Company undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Company, ZYUS, their securities, or their respective financial or operating results (as applicable).

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) has in any way passed upon the merits of the Arrangement and associated transactions and neither of the foregoing entities has in any way approved or disapproved of the contents of this press release.

Phoenix Canada Oil Company Limited

(416) 368-4440
mike@kindy.com

SOURCE: Phoenix Canada Oil Company Limited