Dr. Madi Madiyalakan reports

QUEST PHARMATECH PROVIDES CORPORATE UPDATE

Quest Pharmatech Inc. has provided a corporate update.

OQP Bio Inc. debentures

The company announces that it has entered into a non-binding agreement in principle with OQP Bio Inc. which contemplates a series of transactions that would result in the receipt of cash proceeds for a portion of the bonds held by the company in OQP Bio and the exchange of the balance of the company's OQP Bio bonds for convertible debentures of Korea-based Canaria Bio M Co. Ltd. (CABM). The OQP Bio bonds were received by the company in connection with the sale of the immunotherapy technology assets of investee company OncoQuest Inc. in April, 2020.

The agreement in principle is subject to the execution of a definitive agreement among the parties and a definitive agreement has not yet been signed. If the transaction is completed as proposed, the company would receive aggregate gross cash proceeds of 77.5 billion South Korean won (approximately $83,855,000 at current exchange rates) from sales to third parties arranged by OQP Bio in respect of a portion of the company's OQP Bio bonds and payable in three tranches: (i) 21.6 billion South Korean won (approximately $23,371,200) following the signing of the definitive agreement; (ii) 25.9 billion South Korean won (approximately $28,023,800) at the end of December, 2023; and (iii) 30.0 billion South Korean won (approximately $32.46-million) at the end of June, 2024. The first tranche is specified as payable in the agreement in principle on May 31, 2023, and contemplated the execution of a definitive agreement prior to that date however, as a definitive agreement has not yet been entered into this payment has not yet been paid and would be anticipated to be payable shortly following the execution of a definitive agreement. The company would also receive convertible debentures of CABM with a face principal amount of 64.6 billion South Korean won ($69,897,200 at current exchange rates) and convertible into an aggregate of 20.5 million CABM shares. The agreement in principle also contemplates the receipt by the company of 2.51 million shares of Canaria Bio Co. Ltd. (CAB), a KOSDAQ traded company, following a merger between CABM and CAB in exchange for the company's CABM shares. CAB is currently conducting a phase 3 clinical trial for the treatment of ovarian cancer with the lead product candidate oregovomab. The closing price of CAB shares on June 2, 2023, was 33,700 South Korean won (approximately $35).

The company is still working on signing the definitive agreement. There can be no assurance that a definitive agreement will be signed or that the transaction will be completed as proposed or at all.

Completion of annual filings

The company has recently filed its audited financial statements for the year ending Jan. 31, 2023, and related MD&A (management's discussion and analysis) on SEDAR which are available for viewing and download under the company's SEDAR profile.

Annual meeting

The company also announces that it will be holding its annual general meeting of shareholders on Thursday, July 13, 2023, at 11 a.m. (Edmonton time). The meeting will be an in-person meeting held at the company's new corporate office, 4342 -- 97 St. NW, Edmonton, Alta. Shareholders can also participate in the meeting via teleconference.

About Quest Pharmatech Inc.

Quest Pharmatech is a publicly traded, Canadian-based biopharmaceutical company developing products to improve the quality of life. The company has a 42.5-per-cent ownership interest in OncoQuest Inc., which sold its immunotherapy technology to OncoQuest Pharmaceuticals Inc. Quest also has an equity interest in OncoVent, a Chinese joint venture developing antibody-based immunotherapeutic products for cancer for the Greater China territory. Quest is also developing an antibody licensed from University of Nebraska, AR 9.6 mAb against truncated O-glycan on MUC16, for targeted cancer therapy applications.

We seek Safe Harbor.