Mr. Nicholas Kadysh reports

PHARMALA BIOTECH EXECUTES DEFINITIVE AGREEMENT TO FORM SPECIAL PURPOSE VEHICLE, RESTORA NEUROSCIENCES, FOR CLINICAL DEVELOPMENT OF PATENTED NOVEL MDXX MOLECULE APA-01

Pharmala Biotech Holdings Inc. has executed a definitive SPV (special-purpose vehicle) formation, shareholder and licence agreement with Aluvaris Inc. and Diteba Inc. The definitive agreement establishes a jointly owned special-purpose vehicle called Restora Neurosciences to lead the clinical and regulatory development of APA-01, the company's patented novel MDXX molecule, with the explicit objective of filing a first investigational new drug application with the U.S. Food and Drug Administration (FDA).

The definitive agreement was executed on the timeline contemplated by the binding letter of intent announced on April 27, 2026, and well in advance of the parties' agreed June 8 outside date.

A repeatable execution model

Restora is the second major partnership-based development vehicle Pharmala has structured and brought to signing. The first -- Cortexa, Pharmala's 50/50 joint venture with Australian Securities Exchange-listed Vitura Health Ltd. (symbol VIT) -- has become Pharmala's most visible commercial proof point. Cortexa is today the leading supplier of GMP-grade (good manufacturing practice) MDMA into the legal Australian clinical market and completed the world's first Australian-manufactured GMP MDMA capsule run, and is currently expanding its commercial footprint under Australia's authorized prescriber pathway.

Restora applies the same execution -- clear governance, an aligned partner with capital-raising capability, a specialist services provider and equity economics that retain meaningful upside for Pharmala shareholders -- to a United States-patented novel molecule. Pharmala retains ownership of the underlying intellectual property and a continuing economic interest in any product commercialized by the SPV through equity, licence fee, royalty and sublicence participation, while Restora's operating cash needs are met by capital raised by Aluvaris.

Diteba appointed as specialist analytical partner for IND development program

Pursuant to the definitive agreement, Diteba has been appointed as Restora's principal provider of bioanalytical and scientific project management services for the duration of the IND development program. The agreement is structured to be highly capital efficient for Restora, materially extending the development runway for each dollar of capital raised by the SPV.

Headquartered in Mississauga, Ont., Diteba is exceptionally well suited to serve as the anchor laboratory for the program, supported by a robust quality management system and a multidisciplinary scientific team with extensive experience in regulated drug development. Diteba's credentials include:

• Licensed by Health Canada as a drug establishment, conducting GMP- and GLP-compliant (good laboratory practice) activities;
• Registered as a drug establishment with the FDA and recognized by the European Medicines Agency (EMA);
• Licensed by Health Canada to handle controlled drugs and substances;
• Established CRO expertise in analytical and bioanalytical services, including formulation support, complex method development and validation, stability studies, and release testing across multiple dosage forms.

Diteba's platform is uniquely positioned to support the APA-01 program, conducting GMP- and GLP-compliant activities within a single, integrated quality management system that supports specialized analytical, bioanalytical and regulatory development activities required to advance MDXX-class molecules -- from preclinical bioanalysis through IND approval and beyond. By consolidating these capabilities within its anchor-laboratory operating model, Diteba enables sponsors such as Restora to run IND-enabling programs with optimized operational efficiency, rigorous regulatory readiness and superior project management. This combination of authorizations, technical depth and integrated research services is unique within the Canadian CRO landscape and serves as a critical enabler of a credible, regulator-ready APA-01 development pathway.

APA-01 and the regulatory tailwind

APA-01 is (R)-2-[(2H-1,3-benzodioxol-5-yl)methyl]pyrrolidine, a novel molecule covered by United States patent No. 12,042,478 and a related international patent estate. APA-01 is being developed for therapeutic applications in psychological trauma and neurological conditions, including poststroke neurorehabilitation and traumatic brain injury (TBI). APA-01 is not considered a controlled substance in either Canada or the United States.

TBI is among the indications expressly emphasized by the executive order, titled "Accelerating Medical Treatments for Serious Mental Illness," signed by President Donald J. Trump on April 18, 2026. That executive order directs the U.S. Food and Drug Administration to issue commissioner's national priority vouchers to qualifying drug programs that have received breakthrough therapy designation, and singles out posttraumatic stress and traumatic brain injury -- particularly in U.S. military veterans -- as priority targets for accelerated federal research support and expedited regulatory pathways. Restora's development plan has been structured with these federal priorities in view.

Material terms of the definitive agreement

The full definitive agreement will be filed as a material contract on Pharmala's SEDAR+ profile. The principal economic and governance terms are as follows:

• Founding equity -- 50/50: At closing, Pharmala and Aluvaris will each be issued 50 per cent of the founding common shares of the SPV on a fully diluted basis.
• Conditional global exclusive licence: At closing, Pharmala will grant Restora an exclusive, worldwide, royalty-bearing licence under the Pharmala intellectual property to research, develop, manufacture and commercialize licensed products in all therapeutic fields of human use, with the right to grant sublicences subject to Pharmala consent.
• Financing threshold -- $2.5-million (U.S.): The licence is conditional at closing and becomes final and irrevocable upon Restora receiving aggregate cash subscriptions of not less than $2.5-million (U.S.) from one or more third party investors, evidenced by executed subscription agreements and funds received in the Restora's bank account.
• Financing threshold deadline -- three months, extendable: The financing threshold must be satisfied within three months of the effective date, with a single additional three-month extension exercisable at Pharmala's sole option. Aluvaris will lead the capital raise.
• Licence fee -- $500,000 (U.S.): The SPV will pay Pharmala a one-time licence fee of $500,000 (U.S.) upon achievement of the financing threshold, in consideration for the grant of the licence.
• Royalty -- 3 per cent of net sales: Pharmala will receive a perpetual royalty equal to three per cent of net sales of all licensed products sold by or on behalf of the SPV, its affiliates or its sublicensees, on a country-by-country and product-by-product basis, payable quarterly in arrears.
• Anti-dilution floor -- 25 per cent: Pharmala benefits from a pre-emptive right on new issuances and an anti-dilution floor preventing its equity interest in Restora from being diluted below 25 per cent on a fully diluted basis through and including the first priced equity financing immediately following the round that satisfies the financing threshold.
• Governance -- equal board representation; Pharmala IP veto: Restora's initial board will consist of four directors, two nominated by Pharmala and two nominated by Aluvaris, with the chair rotating annually. Reserved matters require approval of at least one director from each side. Pharmala retains a unilateral veto over IP-related (intellectual property) matters, including any amendment, surrender or sublicensing of the licence, patent prosecution decisions, and any change in the field of use or territory.
• Diteba services -- cost-efficient structure: Diteba will enter into a services agreement with Restora at closing, under which it will provide GMP analytical, GLP bioanalytical, regulatory support and scientific project management services to Restora. Diteba service fees are structured to be highly capital efficient for Restora, materially extending the development runway for each dollar of capital raised by the SPV for the duration of the program. Restora retains audit rights and is not obligated to direct any minimum volume of services to Diteba. Diteba holds a 10-business-day right of first offer on services within its capabilities.
• Improvements assigned to Pharmala: Any improvements, modifications, derivatives or further inventions relating to APA-01 conceived during the term -- including by Diteba in the course of providing services -- are owned by Pharmala and automatically licensed back to the SPV under the licence.
• IND milestone -- 36 months: The SPV will use commercially reasonable efforts to file the first IND in respect of APA-01 within 36 months of the date the financing threshold is satisfied, subject to an available six-month remediation extension on customary terms. Failure to achieve the IND milestone is a termination/reversion trigger.
• Reversion on revocation: If the financing threshold is not satisfied by the deadline, or on uncured material breach by the SPV, Aluvaris or Diteba, Pharmala may revoke the licence and all rights in the Pharmala intellectual property revert to Pharmala free of any encumbrance.

The foregoing summary is qualified in its entirety by reference to the full definitive agreement, which will be filed by Pharmala as a material contract on SEDAR+.

Management commentary

"Closing the definitive agreement well ahead of our outside date reflects not only how this management team executes, but also how excited we are to partner with Diteba and Aluvaris to advance this transaction," said Nicholas Kadysh, founding chief executive officer of Pharmala Biotech. "Cortexa demonstrated that Pharmala can structure complex, multiparty partnerships that deliver product, generate revenue and align long-term incentives around a clear clinical thesis. Restora Neurosciences applies that same discipline to a novel, U.S. and PCT patented molecule whose target indications align squarely with the priorities articulated in the recent presidential executive order. This is precisely the kind of capital-efficient, partner-driven development model that Canadian capital markets have been asking biotech management teams to deliver."

"Programs for novel central nervous system therapeutics face a distinct and elevated risk profile on the path from preclinical development through IND," said Steven Overgaard, chief executive officer of Diteba. "These risks include heightened regulatory scrutiny, the analytical and bioanalytical complexity of stereoisomer-discriminating method development, and the need for tight integration across analytical, bioanalytical and project management work streams under a single quality system. Diteba is uniquely positioned to manage that risk for Restora as its anchor laboratory. We combine a 20-year regulatory track record, deep scientific expertise in advancing MDXX-class molecules through IND-enabling studies and a capital-efficient operating scale that helps extend the value of every dollar raised. We are proud to take on this role for the founding partners of Restora."

About Pharmala Biotech Holdings Inc.

Pharmala is a biotechnology company focused on the research, development and manufacturing of MDXX class molecules, including MDMA. 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 IP 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.

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