News Column

CanAsia Provides Update With Respect to the Acquisition of Global Neuro Technologies Inc. and Proposed Offering

August 29, 2014

CALGARY, ALBERTA--(Marketwired - Aug. 29, 2014) - CanAsia Financial Inc. ("CanAsia" or the "Company") (TSX VENTURE:CNA) announces that further to its press releases dated October 9, 2013 and February 10, 2014 whereby the Company announced it will acquire pursuant to an arm's length transaction all of the outstanding shares (the "Proposed Acquisition") of Global Neuro Technologies Inc., a private company registered in the British Virgin Islands ("GNTI"), it has entered into an amended letter of intent (the "Amended LOI") dated August 27, 2014 with GNTI. The parties have agreed that CanAsia will acquire all of the issued and outstanding shares of GNTI in exchange for 50,000,000 units of CanAsia (the "Units") at a deemed value of $1.00 per Unit for aggregate consideration of $50,000,000. The Units will be comprised of one (1) non-voting series D preferred share of CanAsia ("Preferred Share") and/or one common share of CanAsia ("Common Share") in a ratio to be determined by CanAsia acting reasonably in order to meet the listing requirements of the TSX Venture Exchange Inc. (the "TSXV"), and one-fifth (1/5) of one Common Share purchase warrant of CanAsia ("Warrant"). Subject to certain conditions, each Preferred Share may be converted by the holder thereof into one Common Share at no additional cost to the holder for a period of five (5) years from the date of issuance. Each whole Warrant entitles the holder thereof to purchase one Common Share for $1.00 per share expiring three (3) years from the date of issuance. Concurrently with the Proposed Acquisition, CanAsia will complete a consolidation of 40 existing Common Shares to one (1) new Common Share. The references to Common Shares in this press release are all on a post consolidated basis.

CanAsia paid to GNTI an initial deposit of $500,000 (the "Initial Deposit"). Pursuant to the Amended LOI, CanAsia has paid an additional deposit of $100,000 (the "Additional Deposit") with respect to the Proposed Acquisition. The Initial Deposit and Additional Deposit are collectively referred to herein as the "Deposit". The repayment of the Deposit has been guaranteed by the GNT Group (as defined herein). The Deposit will be fully refundable to CanAsia if: (a) the Proposed Acquisition cannot be completed on or before December 15, 2014, or such later date as the parties may agree for any reason; or (b) GNTI discontinues the Proposed Acquisition at any time. In order to provide the Additional Deposit, an executive officer and director and a shareholder of the Company have each agreed to advance the Company $50,000 (totalling $100,000) pursuant to loan agreements (the "Loans"). The Loans are unsecured, payable in six months from the date of the Loans, or upon completion or termination of the Proposed Acquisition, bear interest at 1% per month payable quarterly and are not convertible into Common Shares or other securities of CanAsia.

The Loans are considered a "related party transaction" pursuant to Multilateral Instrument 61-101 ("MI 61-101"). The Loans are exempt from the related party transaction requirements of MI 61-101 as the size of the Loans is less than 25% of the market capitalization of the Company pursuant to sections 5.5 (a) and 5.7 (a) of MI 61-101. The material change report in respect of this related party transaction was not able to be filed a minimum of 21 days before the advance of the funds with respect to the Loans, as stipulated in MI 61-101. However, due to the uncertainty of current market conditions, the Company considers the shortened timeframe reasonable and necessary in the present circumstances.

The Additional Deposit and Loans have been approved by the TSXV.

CanAsia also announces that the Company has entered into an engagement agreement among the Company, GNTI and Raymond James Ltd. (the "Agent"), wherein the Agent has agreed to act as agent for GNTI in connection with a brokered offering of subscription receipts of GNTI (the "Receipts") priced at $1.00 per Receipt for total gross proceeds of a minimum of $500,000 (the "Brokered Offering").

The Agent will be paid a corporate finance fee of $30,000, a cash commission of 10% of the gross proceeds of the Brokered Offering and will be granted compensation options entitling the Agent to purchase 10% of the number of Receipts sold under the Brokered Offering at an exercise price of $1.00 per Receipt for a period of two years from the closing date.

Upon the successful completion of the Proposed Acquisition, each Receipt will immediately, without further action or consideration from the holders thereof, convert into units of the resulting issuer (the "Brokered Units"). For the Brokered Offering, each Brokered Unit will be comprised of one common share of the resulting issuer (a "Share") and (1/2) half of one share purchase warrant (each whole warrant, a "Brokered Warrant"). Subject to TSXV acceptance, each Brokered Warrant shall entitle the holder thereof to purchase an additional Share for a period of two years at $1.50 per Share.

GNTI will also complete a non-brokered offering (the "Non-Brokered Offering") of Receipts priced at $1.00 per Receipt. Upon the successful completion of the Proposed Acquisition, each Receipt will immediately, without further action or consideration from the holders thereof, convert into units of the resulting issuer (the "Non-Brokered Units"). For the Non-Brokered Offering, each Non-Brokered Unit will be comprised of one Share and (1/2) half of one share purchase warrant (each whole warrant, a "Non-Brokered Warrant"). Subject to TSXV acceptance, each Non-Brokered Warrant shall entitle the holder thereof to purchase an additional Share for a period of two years at $1.00 per Share. The Brokered Offering and Non-Brokered Offering are referred to herein collectively as the "Offering".

The total gross proceeds of the Offering will be a minimum of $3,500,000 to a maximum of $10,000,000.

The net proceeds of the Offering will be used to fund the Proposed Acquisition, repay the Loans, working capital and costs for the research and development of the Neu2000 for stroke indication ("R&D Proceeds"). The securities to be issued pursuant to the Offering will be issued pursuant to exemptions from prospectus requirements set out in National Instrument 45-106 and, assuming the completion of the Proposed Acquisition and satisfaction of the applicable resale conditions set out in National Instrument 45-102, will be free trading.

If the Proposed Acquisition is not completed, the Receipts will be cancelled and the gross proceeds from the Offering together with any accrued interest will be returned to subscribers.

The completion of the Proposed Acquisition is subject to the following conditions:

1. GNTI shall complete the Offering for a minimum gross proceeds of $3.5 million prior to or concurrent with the closing of the Proposed Acquisition; 2. Each Preferred Share is convertible to one Common Share only if GNTI: i. completes the Phase II study (Proof of Concept) in drug development of Neu2000 drug candidate for stroke; and ii. licenses out Neu2000 to arm's length third parties for revenue on or before 36 months from the date that GNTI receives the R&D Proceeds (the satisfaction of paragraphs (i) and (ii) above shall be referred to as a "Success"); 3. CanAsia may, in its discretion, cancel all the issued and outstanding Preferred Shares, Common Shares, Warrants and other securities issued in exchange for the shares of GNTI if GNTI fails to reach Success. Upon such cancellation, CanAsia will return all the rights and patents to Neu2000 ("Patents") to GNT Holdings Co. Ltd. ("GNTH") at no cost; 4. In addition to the requirements of the TSXV, all securities issued by CanAsia in exchange for the shares of GNTI will be held in a voluntary escrow agreement until Success; and 5. Concurrent or prior to the closing of the Proposed Acquisition, the Patents will be transferred to GNTI.



In addition to the closing of the Offering for a minimum of $3.5 million, the completion of the Proposed Acquisition is also subject to several other conditions set out in the Amended LOI, including approval by the directors of the Company and GNTI, entering into a definitive agreement, the consolidation, satisfactory completion of due diligence, submission of a sponsor report, if required, shareholder approval, applicable corporate and securities laws and regulatory approval.

Currently, Jay Leung is the sole shareholder of GNTI. He is also a founder and significant shareholder of GNTH, the parent company of GNT Pharma Co. Ltd. ("GNTP") which owns and controls AmKor Pharma Co. Ltd. ("AmKor"). GNTI, GNTH, GNTP and AmKor are collectively referred to herein as the "GNT Group". The GNT Group holds the rights to the Patents and the ownership of the Patents will be transferred to GNTI concurrently or prior to the completion of the Proposed Acquisition, and after the completion of the Proposed Acquisition the Company will be the sole shareholder of GNTI. The Preferred Shares, Common Shares and Warrants issued pursuant to the Proposed Acquisition will be distributed to the GNT Group.

The GNT Group is engaged in the research and development of safe and efficacious drugs for unmet human medical needs, holds 14 patents for new chemical entities, has patent applications registered in more than 14 jurisdictions including the U.S., Canada, Europe, China, Japan, and South Korea, and has a portfolio of drugs under development.

GNTI is currently a shell company with no debt and no material assets. The Company plans to issue a future press release which will include financial information about GNTI.

The business of the resulting issuer will be the business of GNTI if the Proposed Acquisition is completed. It is expected upon completion of the Proposed Acquisition, the resulting issuer will be a Life Sciences Issuer.

It is intended that the board of directors of the resulting issuer will be comprised of Jay Leung, James Louie, Dr. Thomas Feasby, Jacob Sung Kyung Kim and Dale Burstall. Further, it is intended that the officers of the resulting issuer will include Jay Leung (Chairman and Chief Executive Officer) and Jacob Sung Kyung Kim (Chief Financial Officer and Corporate Secretary). Set forth below is information on each individual that is currently anticipated to be a director, officer or insider (i.e. an owner of more than 10% of the outstanding Shares) of the resulting issuer upon closing of the Proposed Acquisition.

Jay Leung - Proposed Director, Chairman and Chief Executive Officer; Hong Kong: Mr. Leung is a founder and Chairman of GNTH and GNT. He started his career with Richardson Greenshields in Calgary and later become a partner of Inter-Asia Venture Management Ltd., an established early stage venture capital fund which incubated and built a number of business ventures in Asia. Mr. Leung is also the president of IMC Capital Corp., a private investment management company specializing in direct and secondary equity investment in Asia, a role he has held since 2003. Mr. Leung holds Canadian university degrees in Economics and Business Management. He is a Canadian citizen residing in Hong Kong.

Jacob Sung Kyung Kim - Proposed Director, Chief Financial Officer and Corporate Secretary; Oakville, Ontario: Mr. Kim was Senior Vice President of Hyundai Securities (America) Inc. based in New York, and worked at Hyundai Securities (Europe) Ltd. And Hyundai Securities Co. Ltd. (Seoul) for a number of years before he became President of Kingdom Capital Management, a private investment company, Director of Waterstreet Family Capital Counsel Inc., a private investment counsel and portfolio management company, Genbridge Family Offices Inc., a private family governance business and Farami Inc., a private hedge fund company based in Barbados. Mr. Kim specializes in financial asset management and international investments. He is familiar with Asian, North American and European investment environments. He received his MBA from Boston University in 1992, Bachelor of Accounting from University of Southern California (USA) in 1989. He also received his CFA (Chartered Financial Analyst) in 2000 and CGA (Certified General Accountant of Ontario) in 2010. He also received a number of industry designations from Eurex (2003), FSA-UK (2001), FINRA-USA (1999-2001) and KSDA of South Korea (1996).

Dr. Thomas Feasby - Proposed Director; Calgary, Alberta: Dr. Thomas E. Feasby received his MD degree from the University of Manitoba, trained in Neurology at the University of Western Ontario, completed a research fellowship at the Institute of Neurology in London, UK, and trained in health services research at the RAND Corporation in Santa Monica, California and UCLA. He founded Canada's stroke program in Calgary and the Calgary Neuromuscular and ALS Clinics. His current research is in health services, specifically the quality, appropriateness and overuse of medical interventions. Dr. Feasby has published over 100 scientific research papers as well as op-ed articles in leading Canadian newspapers. He was Vice-President of Academic Affairs at Capital Health in Edmonton and Associate Dean in the Faculty of Medicine at the University of Alberta from 2003-2007. He served as Dean of the Faculty of Medicine at the University of Calgary from 2007-2012. Dr. Feasby currently serves on the Boards of the Michael Smith Foundation for Health Research and the Multiple Sclerosis Society of Canada, and the Strategic Advisory Board of the Institute for Public Health. In 2013, he received an honorary Doctor of Science degree from Western University.

Dale Burstall - Proposed Director; Calgary, Alberta: Mr. Burstall received a Bachelor of Commerce Degree from the University of Calgary and a Law Degree from the University of British Columbia, and has been a Member of the Law Society of Alberta since 1986. Mr. Burstall has practiced as a securities and corporate lawyer dealing with both public and private companies for over 25 years, and has acted as an officer or director of several companies listed on either the TSX Venture Exchange Inc. or the Toronto Stock Exchange.

James Louie - Proposed Director, Calgary, Alberta: Mr. Louie is the President of Dynamax Engineering Ltd., a company that offers oil and gas engineering services, a role he has held since 1976. He was a Director of Torch River Resources Ltd. (TSXV) and previously Tael Capital Inc. (TSXV), a capital pool company, from July 1999 until its amalgamation with Torch River Resources Ltd. in April 2004. Mr. Louie obtained a P.Eng certification from the Association of Professional Engineers, Geologists, and Geoscientists of Alberta in May 1971. Mr. Louie was granted a Bachelor of Science Degree in Chemical Engineering from the University of Calgary in May 1969 and obtained a graduate diploma from the University of Calgary in November 1978.

The trading of the Common Shares was halted and, pursuant to the rules of the TSXV, the halt in trading is expected to continue until the completion of the Proposed Acquisition and the minimum listing requirements of the TSXV are met or such earlier time as may be allowed by the TSXV. The Agent, subject to completion of satisfactory due diligence, has agreed to act as sponsor, if required, to CanAsia in connection with the Proposed Acquisition. An agreement to sponsor should not be construed as any assurance with respect to the merits of the Proposed Acquisition or the likelihood of completion.

Completion of the Proposed Acquisition is subject to a number of conditions, including TSXV acceptance and disinterested shareholder approval. The Proposed Acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Acquisition will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Proposed Acquisition, any information released or received with respect to the Proposed Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

The TSXV has in no way passed upon the merits of the Proposed Acquisition and has neither approved nor disapproved the contents of this press release.

About CanAsia

CanAsia is an Alberta based company listed on the TSXV. It is engaged in the business of developing unique new business opportunities in the Pacific Rim countries. The Company is located in Calgary, Alberta, Canada.

Advisory

This news release may contain certain forward-looking information and statements, including without limitation, statements pertaining to the Proposed Acquisition, the Offering and the necessary approvals, including regulatory approvals. Statements containing the words: 'believes', 'intends', 'expects', 'plans', 'seeks' and 'anticipates' and any other words of similar meaning are forward-looking. All statements included herein involve various risks and uncertainties because they relate to future events and circumstances beyond the Company's control. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in CanAsia's disclosure documents on the SEDAR website at www.sedar.com. Any forward-looking statements are made as of the date of this press release and CanAsia does not undertake to update any forward-looking information except in accordance with applicable securities laws.

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 release.

FOR FURTHER INFORMATION PLEASE CONTACT: CanAsia Financial Inc.James G. Louie Chief Executive Officer (403) 870-7383 louiejd@shaw.ca Source: CanAsia Financial Inc.


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