Mr. Nicholas Kadysh reports

PHARMALA CLOSES PRIVATE PLACEMENT AND CONCURRENT DEBT SETTLEMENT

Pharmala Biotech Holdings Inc., further to its press release dated April 10, 2024, has closed its previously announced non-brokered private placement offering effective today through the issuance of 4,166,665 units for gross proceed of $750,000. Terms not otherwise defined herein have the meanings attributed to them in the April 10 news release.

Each unit was sold at a price of 18 cents per unit, and consisted of one common share and one-half of one warrant. Each whole warrant entitles the holder thereof to acquire one additional share at a price of 27 cents per additional share at any time prior to 4:30 p.m. (Toronto time) on the date that is 36 months following the closing date, provided that, if the closing price of the common shares on the Canadian Securities Exchange is 38 cents or greater per common share for a period of 10 consecutive trading days at any time after the completion of the offering, the company may accelerate the warrant term, in compliance with the policies of the CSE, such that the warrants shall expire on the date which is 30 days following the date a press release is issued by the company announcing the reduced warrant term in accordance with the terms and conditions of the certificate representing such warrants, as further outlined in the April 10 news release.

The company intends to use the net proceeds of the offering for the securing of global patent rights for its portfolio of novel intellectual property assets, manufacture of products for sale, clinical trials into the company's novel patented drug candidates, sales, and general corporate and working capital purposes.

All securities issued under the offering are subject to: (i) a four-month-and-one-day hold period from the date of issuance; and (ii) applicable legends as required pursuant to the United States Securities Act of 1933, as amended.

Debt settlement

The company also announces that the company has completed a debt settlement in the amount of $108,000 with a third party consultant of the company to preserve the company's cash for working capital through the issuance of 600,000 common shares at a price of 18 cents per common share.

The common shares issued in connection with the debt settlement are subject to a statutory hold period of four months and one day from the date of issuance.

Related-party transaction

NKO Consulting Corp., a company controlled by Nicholas Kadysh, a director and officer of the company participated in the offering and acquired an aggregate of 277,778 units. The participation of the participating insider in the offering constitutes a related-party transaction, as such term is defined in Multilateral Instrument 61-101. In completing the offering, the company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101, on the basis that the fair market value of the participating insider's participation in the offering does not exceed 25 per cent of the market capitalization of the company, as determined in accordance with MI 61-101.

Further details will be included in a material change report to be filed by the company. The company did not file a material change report more than 21 days before the closing date of the offering. In the company's view, the shorter period was necessary to permit the company to close the offering in a time frame consistent with usual market practice for a transaction of this nature, and was reasonable and necessary to improve the company's financial position in a timely manner.

About Pharmala Biotech Holdings Inc.

Pharmala Biotech Holdings is a biotechnology company focused on the research, development and manufacturing of MDXX-class molecules, including MDMA (3,4-methylenedioxy-N-methamphetamine). Pharmala was founded with a dual focus: alleviating the global backlog of generic, clinical-grade MDMA to enable clinical trials as well as commercial sales in selected jurisdictions, and to develop novel drugs in the same class. Pharmala is the only company currently provisioning clinical-grade MDMA for patient treatments outside of clinical trials. Pharmala's research and development unit has completed proof-of-concept research into several intellectual property families, including ALA-002, its lead drug candidate. Pharmala is a regulatory first organization, formed under the principle that true success in the psychedelics industry will only be achieved through excellent relationships with regulators.

We seek Safe Harbor.