Algernon arranges $500,000 private placement

Executive Summary

• Algernon Health Inc. has arranged a non-brokered private placement for gross proceeds of $500,000, consisting of units priced at $0.07 each.
• The company also announced the conversion of subscription receipts into Series 1 preferred shares and the issuance of preferred shares related to a prior acquisition.
• Proceeds from the new financing will be used to advance the Alzheimer's disease program, specifically for opening the first U.S. brain-specific neuroimaging clinic, as well as for general and administrative expenses and working capital.

Key Details

• Financing Structure: Non-brokered private placement of units at an issue price of $0.07 per unit.
• Gross Proceeds: $500,000.
• Unit Composition: Each unit consists of one Class A common share and one-half common share purchase warrant.
• Warrant Terms:
  • Each full warrant entitles the holder to acquire one common share.
  • Initial Exercise Price: $0.15 per share for 12 months from issuance.
  • Year 1 Anniversary: Price increases to $0.25 per share for 12 months.
  • Year 2 Anniversary: Price increases to $0.50 per share for 36 months.
  • Acceleration Clause: If common shares trade at $0.20 or greater on the Canadian Securities Exchange for 20 consecutive trading days prior to the first anniversary, the exercise price increases to $0.25 (until the second anniversary) and then to $0.50 (for 36 months from the second anniversary) following 30 days' written notice.
• Closing Date: Expected to close in tranches on or before November 30, 2025.
• Finder’s Fees: The company may pay cash finders' fees and finders' warrants up to 8% of the proceeds raised and units issued for investors introduced by eligible finders.
• Use of Proceeds: Advancing the Alzheimer's disease program toward the opening of the first U.S. brain-specific neuroimaging clinic, general and administrative expenses, and working capital.
• Statutory Hold: Securities are subject to a statutory hold period of four months plus one day from the date of issuance.
• Prior Transaction Conversions:
  • Conversion of 1,268,334 subscription receipts into 1,268,334 Series 1 preferred shares and 634,167 Series 1 preferred share warrants (related to a private placement closed July 24, 2025).
  • Issuance of 28,000 finders' warrants to purchase Series 1 preferred shares in connection with the above private placement.
  • Issuance of 450,000 preferred shares and 450,000 preferred warrants pertaining to an acquisition completed on May 22, 2025.
• Share Structure Alteration:
  • Shareholders approved an alteration to the authorized share structure on September 19, 2025, including an unlimited number of preferred shares, with unlimited Series 1 preferred shares to be designated.
• Series 1 Preferred Share Terms:
  • Dividend: 10% annual dividend payable in common or preferred shares at the Board's discretion.
  • Conversion: Each Series 1 preferred share converts into 10 Class A common shares without payment of consideration or further action by the holder.
  • Voting: Voting shares carrying one vote each.