LSL Pharma to acquire Juno OTC for $5-million

Mr. Francois Roberge reports LSL PHARMA GROUP ANNOUNCES ACQUISITION OF JUNO OTC INC. AND A BROKERED PRIVATE PLACEMENT OF CONVERTIBLE DEBENTURES OF $11M LSL Pharma Group Inc. has entered into an arm's-length letter of intent dated Dec. 16, 2025, with Juno Pharmaceuticals LP (the seller), to acquire all of the outstanding shares of Juno OTC Inc., a Toronto-based wholly owned subsidiary of the seller, for a total purchase price of $5-million to be paid to the seller. As set forth in the agreement, the purchase price will be paid as follows: (i) $2.5-million in cash on the closing date of the acquisition; (ii) such number of Class A common shares of the corporation on the acquisition closing date as is equal to $2-million divided by the volume-weighted average price of the common shares for the 20 consecutive trading days preceding the execution of the definitive share purchase agreement; and (iii) $500,000 in cash on Jan. 1, 2027. The purchase price balance of $500,000 payable on Jan. 1, 2027, will be adjusted to reflect variations in working capital, if any. Overview of the acquisition Through this acquisition, LSL Pharma becomes a key supplier to most Canadian pharmacy banners, and its revenues will immediately benefit from the existing Juno OTC business. Juno OTC adds a pipeline of innovative products to LSL Pharma, including over 40 Health Canada-approved over-the-counter drugs, natural health products and medical devices to the LSL Pharma business. The integration of Juno OTC will enable the corporation to expand its customer base by adding all leading pharmacy, grocery, mass market and discount retailers participating in the growing Canadian consumer health care market. Juno OTC also provides expanded access to new contract manufacturers across a global network of key suppliers offering strategic and innovative product opportunities. Juno OTC anticipates revenues of approximately $25-million for 2026. "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. 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," said Francois Roberge, president and chief executive officer of LSL Pharma. "Additionally, the Juno OTC capabilities will help leverage our existing capacity for manufacturing consumer health care products. We look forward to working with the new and existing customers and manufacturers this acquisition will bring along. We are proud to welcome the Juno OTC team to LSL Pharma Group," he added. Completion of the acquisition is subject to a number of conditions, including, but not limited to, the execution of a definitive share purchase agreement, the corporation's completion of the offering (as defined below) and regulatory approvals, including approval by the TSX Venture Exchange. There can be no assurance that the acquisition will be completed as proposed or at all. The offering As a condition to the completion of the acquisition and pursuant to the agreement, the corporation intends to complete a best effort brokered private placement offering of unsecured convertible debentures, led by Bloom Burton Securities Inc., along with Research Capital Corp. and Leede Financial Inc., at an issue price of $1,000 per debenture, for $11-million in aggregate gross proceeds. The debentures will bear interest at 10.0 per cent per annum and will mature on Dec. 31, 2029, at which time the aggregate principal amount of the debentures will be repayable in cash. The principal amount of each debenture will be convertible into common shares at the conversion price of 45 cents per common share at the option of the holder thereof. The corporation has agreed to pay the agents, upon closing of the offering, a cash commission equal to 6.0 per cent of the aggregate gross proceeds of the offering and to issue such amount of broker warrants equal to 3.0 per cent of the aggregate number of common shares issuable upon the conversion of the debentures issued pursuant to the offering. The broker warrants will be exercisable for 24 months following the offering closing date (as defined below) entitling the holder thereof to acquire one common share at the conversion price. The agents will not receive broker warrants with respect to gross proceeds raised in the offering from certain purchasers noted on a president's list to be agreed between the agents and the corporation, and the agent cash fee will be equal to 2.0 per cent of the aggregate gross proceeds raised from such investors on the president's list in connection with the offering. Closing of the offering is expected to occur on or about Dec. 23, 2025, and is subject to certain customary conditions, including, but not limited to, the receipt of all necessary regulatory approvals and acceptance of the TSX Venture Exchange. All securities issued pursuant to the offering will be subject to a statutory hold period of four months plus a day from the offering closing date in accordance with applicable securities legislation. The net proceeds of the offering will be used for the acquisition, working capital and general corporate purposes. Insiders and related parties of the corporation may acquire debentures under the offering. Such participation may be considered to be related-party transactions within the meaning of Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions. The corporation intends to rely on the exemptions from the formal valuation and minority shareholder approval requirements of Regulation 61-101 in respect of related-party participation in the offering as neither the fair market value (as determined under Regulation 61-101) of the subject matter of, nor the fair market value of the consideration for, the offering, insofar as it involves interested parties, is expected to exceed 25 per cent of the corporation's market capitalization. In the event of participation of any director of the corporation, such director shall disclose such participation and shall abstain from voting on the approval by the board of directors of the corporation. The corporation will not file a material change report 21 days prior to the offering closing date because details will not be settled until shortly prior to the offering closing date and the corporation intends to complete the offering as soon as commercially possible. About LSL Pharma Group Inc. LSL Pharma is a Canadian integrated pharmaceutical company specializing in the development, manufacturing and commercialization of high-quality sterile ophthalmic pharmaceutical products, as well as pharmaceutical, cosmetic and natural health products in solid, semi-solid and liquid dosage forms. Leveraging its technical expertise, certified facilities and experienced team, LSL Pharma delivers high-quality solutions that meet the highest industry standards. The companies that are part of the LSL Pharma Group are Steri-Med Pharma Inc., LSL Laboratory Inc., Virage Sante Inc., Dermolab Pharma Ltd. and Du-Var Laboratory Inc. We seek Safe Harbor.