LSL Pharma to acquire Juno OTC for $5-million

Executive Summary

• LSL Pharma Group Inc. has entered into a letter of intent to acquire Juno OTC Inc., a Toronto-based subsidiary of Juno Pharmaceuticals LP, for a total consideration of $5 million.
• To fund the acquisition, LSL Pharma is conducting a brokered private placement of unsecured convertible debentures raising $11 million in gross proceeds.
• The acquisition adds over 40 Health Canada-approved OTC products and medical devices to LSL Pharma’s portfolio, with Juno OTC anticipated to generate approximately $25 million in revenue for 2026.

Key Details

• Acquisition Structure:
  • Target: Juno OTC Inc. (wholly owned subsidiary of Juno Pharmaceuticals LP).
  • Total Purchase Price: $5,000,000.
  • Payment Terms:
    • $2,500,000 in cash on the closing date. $2,000,000 paid via Class A common shares (calculated based on the volume-weighted average price of common shares for the 20 consecutive trading days preceding the execution of the definitive share purchase agreement).
    • $500,000 in cash payable on January 1, 2027 (subject to working capital adjustments).
• Financing Details (Brokered Private Placement):
  • Instrument: Unsecured convertible debentures.
  • Gross Proceeds: $11,000,000.
  • Issue Price: $1,000 per debenture.
  • Interest Rate: 10.0% per annum.
  • Maturity Date: December 31, 2029.
  • Conversion Price: 45 cents per common share.
  • Use of Proceeds: Acquisition of Juno OTC, working capital, and general corporate purposes.
• Brokerage Terms:
  • Lead Agent: Bloom Burton Securities Inc. (along with Research Capital Corp. and Leede Financial Inc.).
  • Cash Commission: 6.0% of aggregate gross proceeds paid upon closing.
  • Broker Warrants: Issued equal to 3.0% of the aggregate number of common shares issuable upon conversion of the debentures.
  • Warrant Terms: Exercisable for 24 months following closing at the conversion price (45 cents).
  • President’s List Investors: Agents receive a reduced cash fee of 2.0% for proceeds raised from specific investors on a president's list; no broker warrants are issued for these proceeds.
• Strategic Impact:
  • LSL Pharma becomes a key supplier to major Canadian pharmacy banners.
  • Acquisition includes a pipeline of over 40 Health Canada-approved OTC drugs, natural health products, and medical devices.
  • Expansion into leading pharmacy, grocery, mass market, and discount retailers.
  • Access to new contract manufacturers across a global network.
• Conditions Precedent:
  • Execution of definitive share purchase agreement.
  • Completion of the $11M debenture offering.
  • Regulatory approvals, including TSX Venture Exchange acceptance.
• Timeline:
  • Closing of the debenture offering expected on or about December 23, 2025.
  • Statutory hold period of four months plus one day for all securities issued.

Notable Quotes

• "This acquisition marks a new milestone for LSL Pharma by significantly increasing our overall revenue, adding a large and integrated product portfolio in the health care market and supporting our commitment to create sustainable growth for our shareholders while maintaining the highest standards of quality and compliance." — Francois Roberge, President and CEO.
• "OTC consumer health care is a growing and reliable business segment with very favourable long-term trends, and Juno OTC is a well-positioned and recognized player." — Francois Roberge.