Ms. Carolyn Bonner reports

MEDICUS PHARMA LTD. ANNOUNCES PROPOSED PRIVATE PLACEMENT OF CONVERTIBLE NOTES

Medicus Pharma Ltd. intends to complete the first closing of a private placement of its 10 per cent unsecured convertible notes due 2025. Approximately $5,172,500 (U.S.) aggregate principal amount of notes will be issued at the first closing, which is expected to occur on or about May 1, 2024, subject to customary closing conditions, including the approval of the TSX Venture Exchange. The company may issue additional notes in one or more further closings, with up to $10-million (U.S.) aggregate principal amount of notes to be issued and outstanding following completion of the private placement.

The private placement has been jointly managed by the company and EF Hutton LLC.

The notes will bear interest at a rate of 10 per cent per annum, payable semi-annually in arrears in the form of either cash or common shares of the company at the election of the holder.

Prior to Jan. 1, 2025, the notes will automatically convert into common shares of the company on the following terms:

• Upon completion by the company of an initial public offering in the United States at a conversion price per common share equal to the greater of: (i) a 20-per-cent discount to the initial public offering price; and (ii) $2 (U.S.);
• Upon a change of control of the company at a conversion price equal to $2 (U.S.) per common share.

On or after Jan. 1, 2025, the notes will be convertible at the option of the holder at a conversion price of $2 (U.S.) per common share.

Upon a change of control of the company, the company will offer to repurchase the notes at a price equal to 101 per cent of the principal amount of notes to be repurchased, plus accrued and unpaid interest up to but not including the date of repurchase.

The notes will mature on Dec. 31, 2025, and may be redeemed by the company, in whole or in part, on or after Jan. 1, 2025, for a price equal to 100 per cent of the principal amount of the notes to be redeemed plus accrued and unpaid interest up to but not including the date of redemption.

The notes will be offered pursuant to applicable exemptions from the prospectus requirements of Canadian securities law. The notes will also be offered and sold in the United States pursuant to an exemption from the registration requirements of the U.S. Securities Act of 1933, as amended, and any applicable securities laws of any state of the United States.

The company intends to use the net proceeds from the private placement to finance the company's research and development programs and for working capital purposes.

The company's board of directors has approved the issuance to certain executives of the company of options to buy an aggregate of up to 125,000 of the company's common shares, with an exercise price of $2.40 per share and up to 75,000 of the company's common shares with an exercise price of $2.42 per share. The options have been issued in accordance with the company's stock option plan and are subject to vesting terms.

About Medicus Pharma Ltd.

Medicus Pharma is a biotechnology/life sciences company focused on accelerating the clinical development programs of novel and disruptive therapeutics assets.

SkinJect Inc., a wholly owned subsidiary of Medicus Pharma, is a development-stage life sciences company focused on commercializing novel, non-invasive treatment for basal cell skin cancer using patented dissolvable microneedle patch to deliver chemotherapeutic agent to eradicate tumour cells.

We seek Safe Harbor.