Mr. Jeffrey Stevens reports

PSYCHED WELLNESS ANNOUNCES PRIVATE PLACEMENT FOR PROCEEDS OF UP TO C$1,719,306.94

Psyched Wellness Ltd. has entered into a non-binding memorandum of terms with Gotham Green Fund III LP and Gotham Green Fund III (Q) LP, pursuant to which the company shall complete a non-brokered private placement of common shares and common share purchase warrants for aggregate gross proceeds of up to $1,719,306.94 (Canadian) in two tranches of up to $859,653.47 (Canadian) each, subject to closing conditions. The offering will be led by Gotham Green, and it may include affiliates and/or co-investors of Gotham Green.

Offering details

The offering will consist of issuances of common shares at a price of 1.01 Canadian cents per common share and warrants at a price of 0.5 Canadian cent per warrant. Each warrant will entitle the holder thereof to acquire one additional common share at a price of 0.51 Canadian cent per additional share at any time on or before the warrant expiry date, set 60 months following the applicable closing date.

The company has obtained approval from the Canadian Securities Exchange to issue the common shares and warrants at a price lower than five Canadian cents as the offering price is above the volume-weighted average trading price of the common shares on the CSE for the 20-trading-day period ending March 10, 2026. The company has determined that the offering is in the best interests of the company and that it is reasonable based on the company's current financial circumstances.

The offering will be offered for purchase and sale to investors in the United States on a private placement basis pursuant to available exemptions from the registration requirements under the United States Securities Act of 1933, as amended, provided that no prospectus, registration statement or similar document is required to be filed.

The initial tranche is scheduled to close on or about March 18, 2026, for aggregate gross proceeds of $859,653.47 (Canadian). Subject to the policies of the CSE, closing of the second and final tranche could be for up to $859,653.47 (Canadian). The investor group has no obligation to finance tranche 2, and may elect to complete tranche 2 in whole or in part or not at all in the investor group's sole discretion. Additionally, the closing of tranche 2 shall be subject to satisfactory completion of due diligence in the investor group's sole discretion.

All securities issued under the offering will be subject to: (i) a four-month-and-one-day hold period from the applicable closing date; and (ii) applicable legends as required pursuant to the U.S. Securities Act.

The company intends to use the net proceeds from the offering for working capital purposes or as otherwise permitted under the policies of the CSE.

Closing of the offering is subject to customary closing conditions, including the approval of the CSE.

Investor rights agreement

On or about the tranche 1 closing date, the company is expected to enter into an investor rights agreement with the investor group. Pursuant to the investor rights agreement, one current independent director of the company shall resign from the board of directors of the company effective as of the tranche 1 closing date (or such other time as the company and the investor group may mutually agree). Following the tranche 1 closing date, the investor group shall have the right to nominate two directors for appointment to the board, as well as to nominate two additional individuals for appointment to the board as independent directors. Following the appointment of the investor independent directors (and assuming the continuing tenure of the existing investor directors), the board shall consist of no more than seven directors, with a majority remaining independent under the policies of the CSE.

Pursuant to the investor rights agreement, for a period of 18 months following the tranche 1 closing date, the company has granted the investor group a right of first refusal (ROFR) on any proposed equity, debt or convertible financing, or other capital raising transaction (other than issuances pursuant to equity compensation plans or the exercise of outstanding options, warrants or other awards).

Related party transaction

The offering constitutes a related party transaction pursuant to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions, as the investor group jointly controls over 10 per cent of the outstanding common shares.

The company relied on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(b) and 5.7(1)(b) as the company does not have securities listed on a specified stock exchange, neither the fair market value of, nor the consideration to be paid for, the securities issued under the offering exceeds $2.5-million and each of the independent directors of the company has approved the offering.

Shares for debt

The company is also pleased to announce that it has agreed to settle the amount of $450,000 (U.S.) (approximately $615,780 (Canadian)) in debt, which the company owes to Zerkalo LLC, through the issuance of an aggregate of 60,968,317 common shares at a deemed price of 1.01 Canadian cents per common share.

The debt being settled represents fees payable to Zerkalo for certain consultation services related to product development, marketing, distribution and supply chain provided by Zerkalo to the company under a master service agreement dated April 1, 2024.

Closing of the share-for-debt transaction is subject to customary closing conditions, including the approval of the CSE. The common shares to be issued pursuant to the share-for-debt transaction will be subject to a hold period of four months and one day following the date of issuance, in accordance with applicable securities laws and the policies of the CSE.

About Psyched Wellness Ltd.

Psyched Wellness is a Canadian-based health supplements company dedicated to the distribution of mushroom-derived products and associated consumer packaged goods. The company's objective is to create premium mushroom-derived products that have the potential to become a leading North American brand in the emerging functional food category.

We seek Safe Harbor.