Mr. Robert Steen reports

PHARMADRUG INC. ENTERS DEFINITIVE AGREEMENT TO ACQUIRE SECUREDOSE SYNTHETICS

Pharmadrug Inc. has entered into a definitive agreement dated Oct. 27, 2023, pursuant to which Pharmadrug will acquire all of the issued and outstanding shares of privately held Securedose Synthetics Inc., to be effected by way of a three-cornered amalgamation between Pharmadrug, Securedose and a wholly owned subsidiary of Pharmadrug. Following completion of the proposed transaction, Securedose will become a wholly owned subsidiary of Pharmadrug. It is anticipated that the proposed transaction will be completed in early November, 2023. The proposed transaction is an arm's-length transaction.

About Securedose Synthetics Inc.

Securedose is a private pharmaceutical research and development company focused on the development of synthetic formulations of currently existing drugs for potential commercialization and distribution. Securedose currently has $750,000 in cash and no debt outstanding. The company decided to acquire Securedose in order to complement its current focus by adding the capability to develop its own formulations that could potentially reach commercialization in a shorter time frame than traditional full-cycle biotech programs.

Robert Steen, chief executive officer and chairman of Pharmadrug, commented: "We are extremely excited to sign the agreement to acquire Securedose. With the cepharanthine program now back in full swing, the company believed it made sense to acquire a company whose core competency is the development of synthetic formulations. This could give Pharmadrug the capability to develop formulations of existing drugs that don't necessarily require separate efficacy studies and potentially provide commercialization and revenue opportunities in a much shorter time frame."

Terms of the agreement

Pursuant to the terms of the acquisition agreement, each issued and outstanding share of Securedose will be exchanged for one common share in the capital of the company. It is expected that, at the time of the closing of the proposed transaction, Securedose will have 31.5 million Securedose shares issued and outstanding, together with 7.5 million common share purchase warrants and 525,100 finder warrants.

The Securedose warrants will entitle the holders thereof to acquire one Securedose share at a price of 10 cents at any time on or before the Sept. 22, 2025, and the finder warrants will entitle the holder thereof to acquire one Securedose share at a price of 10 cents at any time on or before Sept. 22, 2025. Each Securedose warrant and finder warrant will, following completion of the proposed transaction, entitle the holder thereof to acquire Pharmadrug shares in place of Securedose shares.

Prior to the completion of the proposed transaction, Pharmadrug will have 51,383,487 Pharmadrug shares outstanding, and, after the completion of the proposed transaction, it will have 82,883,487 Pharmadrug shares outstanding. Following completion of the proposed transaction, the securityholders of Securedose immediately preceding the proposed transaction will hold approximately 38 per cent of the outstanding Pharmadrug shares (43 per cent on a partially diluted basis, giving effect to the conversion of the Securedose warrants and finder warrants). The proposed transaction will not result in a change of control of Pharmadrug.

It is expected that all Pharmadrug shares (including Pharmadrug shares issued upon conversion of Securedose warrants and the finder warrants) issued pursuant to the proposed transaction, except those issued to U.S. persons, will be freely tradable under applicable Canadian securities legislation.

The acquisition agreement contains representations, warranties, covenants and conditions typical for a transaction of this nature. The proposed transaction is subject to, among other things, receipt of all applicable shareholder and regulatory approvals, the final approval of the Canadian Securities Exchange and the satisfaction of customary closing conditions, including the conditions described as follows.

A copy of the acquisition agreement will be filed by Pharmadrug with the Canadian securities regulators and will be available for viewing on the company's profile on SEDAR+. A description of the acquisition agreement will also be set forth in the material change report to be filed on SEDAR+.

Conditions to the proposed transaction

Completion of the proposed transaction is subject to certain conditions precedent, including, among other things:

• The receipt of all required approvals by the respective boards of directors of Pharmadrug and Securedose (approval of Pharmadrug shareholders will not be required);
• The receipt of approval of the proposed transaction by shareholders of Securedose;
• The receipt of all required consents, approvals and authorizations of any regulatory authorities, including, without limitation, the Canadian Securities Exchange;
• Each of the parties shall have complied with each of its obligations, covenants and agreements in the acquisition agreement;
• There shall be no material adverse effect with respect to either of Pharmadrug or Securedose;
• The receipt of all required consents and approvals of third parties.

Management and board of directors

The company does not anticipate reconstituting its board of directors in connection with the proposed transaction, nor will there be any changes to the chief executive officer or chief financial officer. Together, the CEO and CFO will continue to oversee general corporate activity as well as the integration of Securedose into the combined corporate strategy.

Unrelated to the proposed transaction, Al Quong has resigned as a director of Pharmadrug effective immediately to pursue other ventures. The company thanks him for his past contribution to Pharmadrug and wishes him well with all his future endeavours. Paul McClory will replace Mr. Quong as the chair of the company's audit committee and Nikolai Vassev will join the audit committee.

About Pharmadrug Inc.

Pharmadrug is a specialty pharmaceutical company focused on the research, development and commercialization of controlled substances and natural medicines such as psychedelics and previously approved drugs. Pharmadrug owns 51 per cent of Sairiyo Therapeutics, a biotech company that specializes in researching and reformulating established natural medicines with a goal of bringing them through clinical trials and the associated regulatory approval process in the United States and Europe. Sairiyo is currently developing its patented reformulation of cepharanthine, a drug that has shown substantial third party validated potential for the treatment of infectious disease (including COVID-19) and rare cancers. Sairiyo is also conducting R&D in the psychedelics space for the treatment of non-neuropsychiatric conditions.

We seek Safe Harbor.