Dr. Kah Meng Lim reports

COMPASS VENTURE ANNOUNCES PROPOSED QUALIFYING TRANSACTION TO ACQUIRE CANNIOASIS PTE. LTD.

Compass Venture Inc., a capital pool company, has entered into a binding letter of intent (LOI) dated Sept. 22, 2023, to acquire all of the issued and outstanding shares of CanniOasis Pte. Ltd., a Singapore-based biopharmaceutical company focused on cannabinoid medicine to develop effective personalized and targeted treatment regimens for neurological diseases. Compass proposed to acquire all of the issued and outstanding ordinary shares of CanniOasis in exchange for the issuance of common shares of Compass to the shareholders of CanniOasis. The transaction may be structured as a plan of arrangement, amalgamation or other form of business combination, determined in consultation with the legal and tax advisers to the parties. The letter of intent is to be replaced by a definitive agreement, including standard representations, warranties and covenants for an agreement of this nature. Upon closing of the transaction, Compass will become the parent company of CanniOasis, the business of CanniOasis will become the business of the company, the shareholders of CanniOasis will have a controlling interest in the company, and CanniOasis will appoint new directors and officers to manage the resulting issuer and its business.

The transaction constitutes the company's qualifying transaction (as defined by Policy 2.4 -- Capital Pool Companies of the TSX Venture Exchange) and is not a non-arm's-length qualifying transaction (within the meaning of the exchange's policies). The transaction is subject to the approval of the exchange and the minority shareholders of the company, among other conditions of closing.

In accordance with exchange policy, the company's shares are currently halted from trading and will remain so until such time as the exchange determines, which may not occur until the completion of the transaction.

The transaction

Pursuant to the transaction, the company will acquire 100 per cent of the issued and outstanding ordinary shares of CanniOasis by way of a share exchange of one common share of Compass for every 1.22 shares of CanniOasis (the share exchange ratio) held by the existing shareholders of CanniOasis. Compass will issue 90 million common shares at a deemed price of 20 cents per share (deemed total consideration of $18-million) to the existing CanniOasis shareholders on the date of closing.

The shares of the resulting issuer issued to principals (within the meaning of the exchange's policies) of the resulting issuer will be subject to escrow restrictions in accordance with the exchange's polices. In addition, the shares of the resulting issuer issued to other shareholders of CanniOasis may be subject to resale restrictions as required by the exchange's policies.

In connection with the transaction, the requisite number of common shares of the resulting issuer will be reserved for issuance upon the exercise of outstanding stock options of CanniOasis, pursuant to the terms of the definitive agreement. The requisite number of resulting issuer shares will be calculated based on the share exchange ratio with adjustments to the exercise price of the stock options as may be necessary. In the alternative, the parties may agree that all outstanding stock options of CanniOasis that have not been exercised before the date of closing will be cancelled effective at closing.

On closing, the name of the resulting issuer will include the name CanniOasis, or such other name as determined by CanniOasis's management, and acceptable to the exchange.

Related-party transaction and minority shareholder approval

Dr. Kah Meng Lim, director and chief executive officer of the company, is also the controlling shareholder, director and chairman of the board of CanniOasis. Dr. Lim owns 104,377,941 CanniOasis shares, which represent 94.9 per cent of the current total issued shares of CanniOasis prior to the concurrent financing described below. Dr. Lim owns 400,000 Compass shares, which represent 3.8 per cent of the current total issued shares of Compass and are subject to escrow restrictions in accordance with the exchange's policies. The transaction is therefore considered a related-party transaction for the purposes of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions (MI 61-101). As required by MI 61-101, the company will call a special meeting of shareholders to seek approval of the transaction by the company's minority shareholders (excluding Dr. Lim) by majority vote. In connection with the requirement for minority shareholder approval, Compass will file an information circular on its issuer profile on SEDAR+, which will contain prospectus-level disclosure regarding the transaction, CanniOasis and the resulting issuer.

The company is relying on the exemption from the formal valuation requirement provided in Section 5.5(b) of MI 61-101, which is available because the company's common shares are listed on the exchange.

Overview of business of CanniOasis

CanniOasis is a personalized and targeted cannabinoid-based biopharmaceutical company based in Singapore. CanniOasis aims to be leader in innovation-driven cannabinoid medicine to develop effective personalized treatment regimens for neurological diseases. As background, neurological diseases include a broad range of disorders such as autism, cerebral palsy, Parkinson's, Alzheimer's and epilepsy. These disorders affect the brain, as well as neurological pathways throughout the human body. While some neurological diseases are congenital, others are thought to develop due to autoimmune reactions or environmental conditions. It is believed that one in seven individuals will develop a neurological disorder in their lifetime.

CanniOasis has created a therapeutic and diagnostic platform for the development of precision cannabinoid-based drugs that includes state-of-the-art prognostic clinical testing and molecular mapping to guide the personalized treatment of neurological disorders. A key differentiator and competitive advantage for CanniOasis is its mid-brain organoid model. This organoid model will substantially derisk and shorten the drug development process for neurological disorders.

CanniOasis's product development strategy consists of three components:

1. A microRNA (MiRNA) and epigenetic testing platform to map out a patient's suitability for individualized cannabinoid therapies.
2. Cutting-edge brain organoid screening to confirm and validate the personal treatment regimen developed for each individual patient.
3. A cannabinoid drug development segment utilizing pharmaceutical technologies to create therapeutics to treat specific neurological diseases.

The company's intent is to use its product development approach to develop cannabinoid-based therapeutics to treat neurological diseases. Leveraging its proprietary MiRNA and epigenetic database, CanniOasis will screen cannabinoid-based compounds that are most likely to positively benefit patients. Once such compounds are selected, the company will utilize its patented organoid platform to confirm and validate the efficacy of its new medications.

CanniOasis has an international partner, WuXi AppTec, to support its preclinical data needs to help accelerate its drug screening and formulation process. WuXi is a global pharmaceutical, biopharmaceutical and medical device company. It trades on the Shanghai Stock Exchange with a market cap of $31-billion (U.S.).

The work of CanniOasis will take place in a fully functional laboratory in Singapore with state-of-the-art clinical trial technology. CanniOasis expects to establish a brain organoid platform, drug screening protocols and formulation development to be completed by the end of 2024, and the company expects to initiate a phase 1 clinical study in Parkinson's disease by the middle of 2025. The ultimate business objective of CanniOasis is develop and commercialize drug products derived from the intellectual property rights held, or to be held, by CanniOasis as described in more detail below.

Financial information respecting CanniOasis will be included in a future news release.

Intellectual property licences held by CanniOasis

Licence granted by Dr. Lim

Dr. Lim, through his private company GeneOasis Bioscientific Pte. Ltd., has agreed to grant CanniOasis an exclusive worldwide royalty-bearing licence to use, exploit and commercialize certain intellectual property GeneOasis has developed for the purpose of manufacture, market, distribution and sale of products derived from the intellectual property and related services, including RNA mapping. The intellectual property includes a patent application and know-how relating to proprietary platforms and processes.

GeneOasis is a business group located in Singapore specializing in the production of natural bioactive ingredients, innovative products and efficient delivery systems based on a portfolio of proprietary technologies/intellectual properties (IPs). GeneOasis is repositioning itself as a technology incubator, developer and technology investor. GeneOasis aims to commercialize biotechnological and biopharmaceutical inventions and innovation, to create unmet values in the precision fields of food sustainability, predictive health care, epigenetic programs, preventive medicine and prescriptive biotherapeutics.

The GeneOasis licence will have a term in perpetuity, unless earlier terminated. In consideration of the GeneOasis licence, CanniOasis will pay to GeneOasis:

1. An establishment licence fee of $135,000 (Singaporean) payable in instalments of $45,000 (Singaporean) as follows:
   1. $45,000 (Singaporean) on the date of signing of the GeneOasis licence agreement;
   2. $45,000 (Singaporean) on the date that is one month following the signing date; and
   3. $45,000 (Singaporean) on the date that is two months following the signing date.
2. Reimbursement of maintenance fees incurred by GeneOasis to maintain the intellectual property, up to a maximum of $18,000 (Singaporean) every 12 months;
3. A 2-per-cent royalty fee based on revenue earned by CannaOasis from the sale of products and provisions of services; and
4. Success fees based on achievement of targets for net revenue sales by certain due dates.

The exclusive GeneOasis licence may become non-exclusive if certain milestones are not met by CanniOasis within a defined time frame.

GeneOasis will retain the right to use and licence the intellectual property to not-for-profit organizations worldwide for non-commercial purposes (including for research, education and scholarly purposes), to enhance the intellectual property and obtain research and development (R&D) results. Any such research results would be disclosed to CannaOasis which it may exploit for commercial purposes under the GeneOasis licence.

Either party may terminate the GeneOasis licence agreement for breach by the other party, which breach has not been cured within 14 days of the date of notice of breach. GeneOasis may terminate the licence agreement if, among other events, CanniOasis becomes bankrupt, commits fraud or ceases to carry on business. The GeneOasis licence agreement will, however, contain a prohibition against termination of the GeneOasis licence agreement so long as Dr. Lim is a control person of the resulting issuer, owning 20 per cent or more of the issued and outstanding shares of the resulting issuer at any time.

Licence granted by Accelerate Technologies and National University of Singapore

Accelerate Technologies Pte. Ltd., a Singaporean company, and the National University of Singapore (together, the licensors) entered into a licence agreement with CanniOasis, dated April 10, 2023, pursuant to which the licensors granted to CanniOasis a non-exclusive licence to use patents, patent applications and know-how for customized preclinical to clinical studies, primarily drug screening and toxicology services, including the sale of licensed products for preclinical to clinical purposes. The licensed technology relates to the generation of mid-brain-specific organoids from human pluripotent stem cells. Accelerate is the commercialization arm of the Agency for Science, Technology and Research (A-STAR) and is based in Singapore. A-STAR provides acceleration and incubation services to start-ups in the technology sector. A-STAR provides a bridge of the gap between academia and industry in terms of research and development.

The term of the Accelerate licence is five years and is worldwide for know-how, and is limited to Singapore, China, the United States and European patent convention countries for patents or patent applications. In consideration of the Accelerate licence, CanniOasis paid a licence fee of $18,000 (Singaporean) and will pay royalties to the licensors of 2 per cent of net revenue plus GST, for revenue not exceeding $2-million (Singaporean) and 4 per cent of net revenue plus GST for revenue of $2-million (Singaporean) and above. CanniOasis will also make annual minimum royalty payments of $3,500 (Singaporean) plus GST per year. The value of the Singapore dollar is roughly equivalent to the Canadian dollar.

Under the Accelerate licence agreement, CanniOasis must do the following:

• Obtain at least $2-million (Singaporean) of financing during the first two years of the term of the Accelerate licence;
• Use best efforts to commercialize the technology and to market licensed products, and achieve sales of at least $750,000 (Singaporean) within 18 months from the effective date;
• Use best efforts to establish three co-development/marketing partnerships with strategic partners within two years from the effective date.

CanniOasis has the right to terminate the Accelerate licence agreement at any time by giving 30 days of written notice to the licensors. The licensors have the right to terminate the Accelerate licence agreement for various reasons, including, among others: failure to make royalty payments; other material breaches by CanniOasis, subject to a cure period; insolvency; and ceasing to carry on business.

Concurrent financing

The transaction is subject to completion by CanniOasis of a non-brokered private placement financing (the concurrent financing) for aggregate gross proceeds of a minimum of $3-million to close prior to closing of the transaction, following receipt of conditional exchange acceptance of the transaction. The concurrent financing is expected to be carried out by way of subscription receipts of CanniOasis at 20 cents per subscription receipt, and the subscription receipts will be immediately exchanged on closing for resulting issuer shares on a one-to-one (1:1) basis. The proceeds raised in the concurrent financing will be used to finance preclinical and clinical trials, licensing agreements, and scientists. The remainder of the proceeds will be sufficient to cover the general and operating expenses of the resulting issuer for a minimum of one year and provide a minimum of $100,000 in unallocated working capital. Finder's fees or commissions may be paid in cash or shares of the resulting issuer in connection with the concurrent financing.

There is no assurance that the concurrent financing will be completed. The concurrent financing will be subject to approvals, including, but not limited to, the approval of the exchange and, if applicable, may be subject to the prior approval of the shareholders of either or both of CanniOasis and/or Compass.

Overview of management and the board of directors of the resulting issuer

Dr. Lim, founder, director and chairman of the board of CanniOasis. For more than 20 years, Dr. Lim has pursued his scientific interests in bioactive molecules that govern and regulate cellular pathways leading to cellular homeostasis and well-being. Dr. Lim has continually maintained his passion for finding innovative and commercially viable solutions for molecular medicine for cancers, where he has also published at least three international peer-reviewed scientific papers. He has filed for at least five patents related to cannabinoids, specifically on medical cannabis, but not exclusive to just neurological usage.

Commercially, Dr. Lim has been involved in the following start-up companies:

1. GeneOasis BioScientific (since 2013) -- food supplies and processing, diagnostics, wellness management, and cell and gene therapies;
2. Green Oasis Therapeutics Pte Ltd. (since 2017) -- prenatal and postnatal extract-based supplements, and 3-D tissue engineering.

Dr. Lim is currently involved with several companies in an executive position. He is the chief executive officer of Zenzic Labs (since 2019) and the chief executive officer of NGF BioEnterprise (since 2017).

Dr. Lim obtained a PhD in biomedicine at the National University of Singapore School of Medicine in 2001. He has held the following positions: Nanyang Technological University, school of chemical and biomedical engineering, adjunct assistant professor (2012 to 2013), and Tianjin University, associate professor (2014 to 2017).

Mita Natarajan, chief executive officer of CanniOasis. Ms. Natarajan brings with her a wealth of experience in the Asian finance industry, being a former senior vice-president at the Singapore Stock Exchange (SGX). During her 14 years at SGX, Ms. Natarajan headed up several divisions, and was responsible for the ownership and management of post listings services offered to SGX's listed companies, retail and institutional investors, and the management of the organization's strategy, business development and M&A (mergers and acquisition) portfolios. Prior to SGX, Ms. Natarajan was part of the founding management team at a technology start-up in Silicon Valley, California. Her career also includes sales and marketing roles with global corporations in Asia and the United States, and functional responsibilities for the development and launch of new products and services. Ms. Natarajan holds a master's degree from Harvard University, U.S.

The other directors and the chief financial officer of the resulting issuer will be appointed on closing, and will possess relevant knowledge and experience in the industry in which the resulting issuer will operate, the capital markets and management of a listed company. The names and backgrounds respecting the additional directors and the chief financial officer of the resulting issuer will be provided in a future news release.

Conditions of closing

Closing of the transaction will be subject to satisfaction or waiver of the following conditions:

• Completion of satisfactory due diligence by Compass related to CanniOasis;
• Execution of the definitive agreement by the parties by Feb. 29, 2024;
• Receipt of all required approvals and consents for the transaction and related matters, including, among others, conditional approval by the exchange, approval by the disinterested directors of Compass, approval by the minority shareholders of Compass and, if required, approval by the shareholders of CanniOasis;
• If required by the exchange, receipt of a valuation opinion acceptable to the disinterested directors of Compass and the exchange as sufficient support for the consideration shares;
• Completion of the concurrent financing;
• Resignation of the current directors and officers of Compass, and appointment of nominees of CanniOasis as directors and officers of the resulting issuer;
• No material adverse change having occurred in the business, operations, assets, financial condition or affairs of CanniOasis or Compass;
• No order having been issued by any regulatory authority preventing the transaction from completing, or prohibiting the trading of any securities of Compass or CanniOasis;
• Each of the parties having performed and complied, in all material respects, with its respective covenants and obligations in the definitive agreement;
• The representations and warranties of each party contained in the definitive agreement being true and accurate, in all material respects, as if they had been made at closing.

The conditions of closing in favour of Compass may be waived in whole or in part by Compass, and the conditions of closing in favour of CanniOasis may be waived in whole or in part by CanniOasis.

The transaction is expected to complete within five business days of the satisfaction or waiver of the conditions of closing (other than those conditions to be completed concurrent with the closing), or such other date as mutually agreed to by the parties.

There can be no assurance that the transaction will be completed on the terms proposed above or at all.

Deposits paid by CanniOasis

Each of Compass and CanniOasis will generally bear their own respective costs and expenses associated with the transaction and related transactions, except that CanniOasis has paid to Compass: (i) $50,000 as a refundable deposit to be used by Compass toward payment of legal costs and other professional fees associated with the transaction; and (ii) an additional $50,000 as a non-refundable deposit to be used by Compass for payment of the cost of a valuation opinion and sponsorship. The refundable deposit must be refunded to CanniOasis if the letter of intent or the definitive agreement, as applicable, is terminated for any reason, provided that the refund will be limited to the balance of the deposit, if any, remaining after payment of legal costs and other professional fees.

Sponsorship

Sponsorship of the transaction is required in accordance with the sponsorship policy of the exchange. The company is in the process of seeking a sponsor. Information respecting the engagement of a sponsor will be provided in a future news release.

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 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.

About Compass Venture Inc.

The company is a capital pool company within the meaning of Policy 2.4 of the exchange. Except as specifically contemplated in such policy, until the completion of its qualifying transaction, the company will not carry on business, other than the identification and evaluation of companies, businesses or assets with a view to completing a proposed qualifying transaction. Investors are cautioned that trading in the securities of a capital pool company is considered highly speculative.

We seek Safe Harbor.