CAG Capital Completes QT: Becomes Stellar Biotechnologies
Port Hueneme, CA – April 14, 2010, CAG Capital Inc. (now Stellar Biotechnologies, Inc.) (OTC: SBOTF, TSX-V: KLH) (the “Company”) is pleased to announce the closing of the acquisition of Stellar Biotechnologies, Inc. ("Stellar") a private California biotechnology company, which acquisition constitutes its Qualifying Transaction in accordance with the policies of the TSX Venture Exchange (the “Acquisition”). Concurrent with the completion of the Acquisition the Company’s name has changed from CAG Capital Inc. to “Stellar Biotechnologies, Inc.”
The Company has been informed by the Exchange that its shares will resume trading Monday morning, April 19, 2010.
In conjunction with the Acquisition the Company completed a brokered and non-brokered private placement (the “Private Placement”) of 11,397,732 Units at a price of $0.28 per Unit for total proceeds of $3,191,364.96. Each Unit is comprised of one common share and one 1/2 warrant, each warrant for the further purchase of a common share at $0.40 until October 9, 2011. The brokered portion of the private placement was completed through Bolder Investment Partners Ltd.
In connection with the Private Placement the Company issued 1,210,155 agents and finders warrants, each such warrant entitling the holder to acquire a common share of the Company at a price of $0.28 until October 9, 2011. The Company also paid cash commissions totaling $208,174.40 and issued 35,000 corporate finance units, such units having the same terms as the Units sold in the Private Placement.
The securities issued in connection with the Private Placement are subject to a 4 month hold period expiring August 9, 2010.
As more particularly detailed in the Company’s filing statement dated December 22, 2009 as filed on SEDAR (the “Filing Statement”) the Acquisition consists of the acquisition of all the issued and outstanding shares of Stellar, in consideration of the issuance of a total of 10,000,000 shares of the Company. As set out in the Filing Statement, certain of such shares will be subject to escrow, in accordance with the policies of the TSX Venture Exchange. A further 10,000,000 shares of the Company have also been reserved for issuance over time to key individuals upon the achievement of certain milestones, as more particularly described in the Filing Statement.
Concurrent with the completion of the Acquisition, Martin Woodward and Alan Ji have resigned from the board of the Company and been replaced by Frank R. Oakes, Daniel E. Morse, Ph.D. and Harvey Wright as nominees of Stellar. Darrell Brookstein and Benjamin Catalano continue on as directors. Management of the Company now consists of Frank R. Oakes, President and CEO, Kerry Beamish, CFO, Daniel E. Morse, Ph.D., Executive V.P. – Science and Technology and Darrell Brookstein, Executive V.P. – Financial and Business Development.
As a consequence of the Acquisition, the Company is continuing the business of Stellar, and now owns a revenue generating company with biotech and pharmaceutical customers and research partners, $6 million in research having been conducted with US government NIH and NSF grants, with a portfolio of intellectual property involving new aquaculture and marine culture processes as well as technology for producing pharmaceutical formulations of KLH (Keyhole Limpet Hemocyanin) sell for from $5,000 - $200,000 per gram into the medical, academic and research markets. KLH is an essential component for in many cancer vaccines and highly anticipated therapeutic vaccines, including those for rheumatoid arthritis, lupus, Post Traumatic Stress Disorder and chemical dependencies.
Stellar’s proprietary intellectual property includes patent, patent pending and key trade secrets related to sourcing and purifying KLH for medical markets by spawning and maintaining the rare keyhole limpet which is found only in the slender strip of ocean off the coast of northern Baja to central California; non-lethal hemolymph extraction technology for environmentally sustainable production of KLH and highly efficient manufacturing methods for the purification of various formulations of the KLH molecule for use in dynamic pharmaceutical and veterinary markets as a powerful immune stimulant and vaccine carrier protein with a long history of efficacy, safety and low toxicity.
Stellar’s Business Model
The business model is to: 1). Produce, maintain and develop Keyhole Limpets through key Intellectual Property (IP) 2.) Continuously advance key IP to extract, purify and formulate KLH profitably, while increasing the number and maintaining the good health of the essential source animals 3.) Market and sell Stellar’s formulations of KLH and use consistent efforts to expand markets, promote the use of KLH within the academic, research, pharmaceutical, biotech and medical diagnostic markets 4.) Alone and in partnership with others sell proprietary KLH-based products for the medical diagnostic and therapeutic markets.
Stellar’s Key Employees
Frank R. Oakes, President and Chief Executive Officer. Mr. Oakes has 30 years of management experience in aquaculture including a decade as CEO of The Abalone Farm, Inc., during which he led that company through the R&D, capitalization, and commercialization phases of development to become the first profitable and largest abalone producer in the U.S.. He is the inventor of the company’s patented method for non-lethal extraction of hemolymph from the keyhole limpet. He was the Principal Investigator on the company’s Phase I and II SBIR grants from the NIH’s Center for Research Resources, a California Technology Investment Partnership (CalTIP) grant from the Department of Commerce. He has consulted and lectured for the aquaculture industry around the world. Frank received his Bachelor of Science degree from California State Polytechnic University, San Luis Obispo and is a graduate of the Los Angeles Regional Technology Alliance (LARTA) University’s management-training program.
Daniel E. Morse, Ph.D., is Executive VP, Science & Technology. He is Professor of Molecular Genetics and Biochemistry at the University of California, Santa Barbara, and Director of the UCSB-MIT- Caltech Institute of Collaborative Biotechnologies. Dr. Morse is an internationally recognized expert in protein chemistry, molecular biology, molluscan reproductive biology, and aquaculture. Dr Morse’s laboratory at the University of California, Santa Barbara is currently working under a seed grant from the Defense Advanced Research Projects Agency (DARPA) to begin investigations into the fundamental disassociation & assembly dynamics of the company’s KLH subunit product.
Darrell Brookstein is Executive VP, Business Development & Finance, was Managing Director of The Nanotech Company, LLC and a director of CAG Capital, Inc. He has founded and been CEO of multiple investment firms in diverse fields and has published books and newsletters on investing in cutting-edge technology and natural resource finance. He is a graduate of Duke University.
On behalf of the Board of Directors, “Frank Oakes” President & Chief Executive Officer
Darrell Brookstein, Executive VP
858 449 2523 - DBrookstein@StellarBiotech.com
Statements in this press release other than purely historical factual information, including statements relating to revenues or profits, or the Company’s future plans and objectives, or expected sales, cash flows, and capital expenditures constitute forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company’s business, including risks inherent in the technology history. There can be no assurance that such forward-looking 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 such statements. Except in accordance with applicable securities laws, the Company expressly disclaims any obligation to update any forward-looking statements or forward-looking statements that are incorporated by reference herein. This news release does not constitute an offer to sell, or a solicitation of an offer to buy any of the Company’s securities set out herein in the United States, or to, or for the benefit or account of, a U.S. Person or person in the United States.
Neither 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 release.