Mr. Robert Steen reports

PHARMADRUG INC. CLOSES ACQUISITION OF SECUREDOSE SYNTHETICS

Pharmadrug Inc. has closed the previously announced acquisition (see press release dated Oct. 27, 2023) of Securedose Synthetics Inc. Pharmadrug acquired all of the issued and outstanding shares of Securedose by way of a three-cornered amalgamation between Pharmadrug, Securedose and a wholly owned subsidiary of Pharmadrug. Following completion of the transaction Securedose became a wholly owned subsidiary of Pharmadrug. The transaction was an arm's-length transaction for the purposes of applicable securities laws.

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. On closing Securedose had $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 close on the Securedose acquisition. Our priority will be to continue Securedose's strategy to develop synthetic formulations for the potential third wave of drug policy reform. With some formulations already in hand, the company will now focus on developing an economic and scalable process of these synthetic formulations which could lead to both intellectual property and commercialization opportunities as markets possibly open up domestically or internationally."

Terms of the transaction

Pursuant to the terms of the transaction, each issued and outstanding share of Securedose was exchanged for one common share in the capital of the company, resulting in the issuance of 31.5 million Pharmadrug shares. In addition, Securedose had 7.5 million common share purchase warrants and 525,100 finder warrants outstanding that were replaced with Pharmadrug warrants and Pharmadrug finder warrants.

The Pharmadrug warrants entitle the holders thereof to acquire one Pharmadrug share at a price of 10 cents at any time on or before the Sept. 22, 2025, and the Pharmadrug finder warrants entitle the holder thereof to acquire one Pharmadrug share at a price of 10 cents at any time on or before Sept. 22, 2025.

Prior to the completion of the transaction Pharmadrug had 51,383,487 Pharmadrug shares outstanding and after the completion of the transaction it has 82,883,487 Pharmadrug shares outstanding. Following completion of the transaction the security holders of Securedose immediately preceding the transaction 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 Pharmadrug warrants and Pharmadrug finder warrants). The transaction did not result in a change of control of Pharmadrug.

All Pharmadrug shares (including Pharmadrug shares issued upon conversion of Pharmadrug warrants and the Pharmadrug finder warrants) issued pursuant to the transaction, except those issued to U.S. persons, are freely tradable under applicable Canadian securities legislation.

Management and board of directors

The company does not anticipate reconstituting its board of directors in connection with the 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.

Debt restructuring, debt settlement, debenture amendment and warrant amendment

The company also announced today that it has reached an agreement with the holders of its $609,000 principal amount of secured convertible debentures to amend the conversion price of such debentures to five cents (from 35 cents). The 2,142,856 common share purchase warrants issued to such holders will also be amended such that their exercise prices will be five cents (reduced from 35 cents) and, subject to receipt of applicable regulatory approval, the number of warrants will be increased to 15 million, the number that were outstanding prior to the company's seven-for-one consolidation that became effective on Oct. 24, 2023.

The company has also agreed with the holders of its unsecured convertible debentures that matured without payment earlier this year to restructure such indebtedness. Pursuant to the terms of the restructuring the outstanding $1,219,768 of indebtedness will be exchanged for new unsecured convertible debentures with an aggregate principal amount of $1,280,756. The debentures will mature one year from the date of issuance. The company may extend the maturity date up to two times for one-year extensions each time. If such option to extend is exercised then at the extension time the principal of the debenture will be increased to reflect both any accrued and unpaid interest as well as a 5-per-cent renewal fee. The debentures will bear interest at a rate of 12 per cent per annum payable quarterly. If the interest is not paid when due then interest will be charged on such outstanding interest at a rate of 15 per cent per annum. The debentures may be converted into units at a price of five cents per unit with each unit comprising one common share in the capital of the company and one common share purchase warrant with each such warrant entitling the holder to acquire one common share in the capital of the company at a price of five cents per share at any time on or before the three-year anniversary of the issuance of the debentures. The conversion feature will not be exercisable by the holder if it would take their holdings of the company above 10 per cent of the outstanding common shares of the company. The debentures and underlying securities will be subject to a hold period that will expire four months and one day from the date of issuance of the debentures.

Finally, the company has agreed to settle $227,658.03 of indebtedness with certain service providers through the issuance of an aggregate of 4,553,160 common shares at a deemed issue price of five cents. The common shares will be subject to a hold period that will expire four months and one day from the date of issuance.

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.