Gleneagle Gold Ltd (ASX: GLN), which is in the business of identifying & evaluating potential mineral exploration & mining projects, is in the final stages of a reverse takeover of Zelda Therapeutics Pvt Ltd (a California based Biotechnology Company). Gleneagle is presently listed on the Australian Stock Exchange (ASX).
Zelda on the other hand was a spin-off from
Aunt Zelda, which is a medicinal cannabis firm located in the US.
Gleneagle is looking to acquire 100% of the issued share capital in Zelda Therapeutics Pvt Ltd, based on the agreement signed by the two companies in 2015. In return, Gleneagle has lodged a prospectus for capital raising, which entails a public offer for up to 160,000,000 shares at an issue price of $0.025 per share to raise a minimum of $3,000,000 and a maximum of $4,000,000. The offer opened on July 12, 2016 and is closing on October 04, 2016, and the funds would be used partially to complete the acquisition and for other activities. In addition, the prospectus contains offer of 320,000,000 consideration shares to the Zelda Shareholders with 52,500,000 conversion shares to Zelda noteholders.
Gleneagle is looking to reposition itself as Zelda Therapeutics Ltd for the reasons listed below-
Zeldahas extensive worldwide licence to human data, related systems and treatment protocols to cannabis based formulations, provided by Aunt Zelda, which it intends to use and design a series of Phase-2 ready clinical trials on humans. Based on the outcome of the treatment and experiences of existing patients, the company expects the trials to be highly successful.
Global business opportunityfor the treatment of numerous medical conditions with the use of cannabis continues to grow. The Australian Parliament passed the
“Narcotics drug amendment bill” in February 2016, which provides legislative framework for licencing, cultivation and production of cannabis resins for medicinal & scientific purposes. In addition, the legislative changes proposed by a number of jurisdictions around the world offer large scale business opportunities for the medicinal cannabis industry.
Zelda has established strategic partnershipswith pioneers in cannabis medicine. Some of them are: AusCann in Australia, New Frontier based in the US, Complutense University of Madrid and CDRMed. The strategy of the company is to develop existing products and expand trials to cover new diseases & regions through partnerships.
For the quarter ending June 2016, Zelda has successfully managed to raise $ 1.05 million, by issuing convertible notes which will automatically be converted to ordinary shares at a discount of 20% to the prospectus capital raising price. The funds are to be used for pre-clinical and clinical activities.
On successful completion of the acquisition and prior to listing on ASX, Zelda will be a wholly owned subsidiary of Gleneagle and the company would be renamed
“Zelda Therapeutics Ltd.” As per the ASX market release of July 2016, the securities of Gleneagle remain suspended, pending compliance with the requisite listing rules.
However, the investment related prospects look speculative as the same are subject to risks mainly related to meeting ASX requirements on acquisition for re-quotation, dilution of shareholders’ interests given any future raisings for business development, and risks associated with clinical trials.
Funds overview (Source: Company Prospectus)
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