ZCC AGM 10 Year Celebration Aug 17 2023 Thoughts

The ZCC AGM on Oct 26th gives us reason to celebrate the 10th anniversary of the founding of Zenith Capital Corp.

ZCC History

Zenith was spun out of RVX in the spring 2013 with an initial infusion of $10,000,000 cash from RVX.

In 2014 Eastern and NGN Biomed invested $6MUSD and $5.3MUSD at $1USD/share respectively.

Eastern then followed up with a $4MUSD in 2015 followed by a large investment in 2016 of $24.6MUSD both at $1USD/share. These purchases included warrants.

Through to mid 2016 a total initial start up of $40.9M USD. Seemed like a pretty enthusiastic kick off. Looked like a reasonably well-funded start for a tiny Canadian biotech.

Funding activity fell dramatically in 2018 and 2019 with total investment from Eastern (1.5m shares) and private placements (1.8M shares) at $2USD for a total of $6.6MUSD. This offering had a total of 1.65M warrants priced at $3USD until Aug 2021.

Subsequently Newsoara entered and invested 10.5M USD between 2020 and 2022. The initial upfront contract with Newsoara included $15MUSD so it appears that $4.5MUSD remains outstanding (unless I have missed that payment). The Newsoara deal also includes $63MUSD in milestones for which I do not know the details. Seems like a strong commitment.

In 2023 the investment landscape declined significantly with a series of small private placements, with funds coming from the USA, Germany, Hong Kong, Alberta and British Columbia. Total raised through Mar 2023 was $.97MUSD, a dramatic decline in funding levels. Two of the warrants were priced at $.80USD through Feb. of 2028. March warrants were priced at $1.36USD, one with an expiry on Nov 13, 2023. (go figure that one???).

It appears that the total amount raised is around $70M USD with the vast bulk of funds coming prior to 2019.

I believe there are still some milestone funds payable by Newsoara at some point but it appears that ZCC has moved to an RVX style of funding recently with dribs and drabs coming from convertible notes and exempt distributions.

That being said it seems that ZE has many active trials that seem sufficiently funded.

Drug Combinations

Zen3694 is being testedin combinations with numerous cancer drugs.

• SOC Drugs Partnered with zen3694 - XTANDI (enzalutamide), TALZENNA (talazoparib), KEYTRUDA (pembrolizumab), ABRAXANE (Nab-Paclitaxel), OPDIVO (nivolumab), YERVOY (ipilimumab), Entinostat, MEKTOVI (binimetinib), Entinostat, Capecitabine

Corporate Collaborations

The team at ZE has been successful in establishing relationships with numerous leading pharmacies. This would seem to suggest potential for value creation.

• Partnering Companies - Pfizer, Merck, University of California, San Francisco, University of Michigan, NCI, Syndax, Astellas Pharma, University of Pittsburgh, Memorial Sloan Kettering Cancer Centre, BMS (Bristol, Myers, Squibb),

Multiple Indications

Zen3694 is being tested across a wide range of cancers. A hit on at least 1 cancer would represent a breakthrough.

• Indications Being Treated - mCRPC, Triple Negative Breast Cancer (TNBC), NUT cancer, solid tumours and ovarian cancer, pancreatic cancers, advanced and refractory solid tumours and lymphomas, squamous cell lung cancer, metastatic unresectable colorectal cancer.

Newsoara

Newsoara was established in 2018 to in-license innovative drug candidates for development and commercialization with a focus in China and/or the Asia Pacific region. Founder and CEO Dr. Benny Li has more than 20 years of extensive drug research, development and regulatory experience with leading global pharmaceutical companies including Takeda and Alcon.

Hangzhou TigerMed Consulting Co., Ltd. (stock symbol 300347:CH), is a significant investor in Newsoara.

Overall Perceptions of ZCC and ZE

Value Creation

Rating – Solid progress

• Rational - Significant value created in the science, gaining scientific recognition, understanding the MOA of zen3694, value created in the relationships with BPs, NCI, UCLA, Sloan Kettering, etc.

Shareholder Value Creation

Rating - Pathetic

• Rational - No stock market listing, no liquidity, stock trades OTC for $0.00 to $0.21 Cdn.
• Typically the CEO along with the finance team and their advisors would be responsible for shareholder value creation. It is abundantly clear that this team has not lived up to even the worst levels of shareholder expectations with shares trading at virtually $0.10 OTC with small volumes and high variability.

It seems that both the ZCC and RVX strategies require taking a drug to FDA approval, market entry and sales before shareholder equity will be created. With this management team of duds success seems remote at best.

I offer my congratulations to Dr Sanjay Lakhotia and the science teams for remarkable progress in progressing the science and creating such promising relationships within the biotech community.

My only final thought is that I hope the dribs and drabs financings and convertible notes are not a harbinger of the creeping involvement of Don in ZCC.

ZCC is such an incredible asset and I hope that Dr Lakhotia is made CEO with a clear mandate from the BOD to create shareholder value.

Happy 10th anniversary!

GLTA

Toinv