Pharmadrug closes acquisition of 19.9% in Canurta

Executive Summary

• Pharmadrug Inc. has completed the first tranche of its acquisition of a 19.9% interest in Canurta Inc. (via Canurta LP), acquiring 8,109,987 limited partnership units in exchange for 25.98 million common shares of Pharmadrug.
• The transaction includes a debt restructuring where Pharmadrug issued $445,686 in secured convertible debentures to replace matured indebtedness.
• Akeem Gardner, CEO of Canurta, joined Pharmadrug’s board of directors, and Atlas365 Inc. triggered early warning reporting requirements by acquiring a 19.4% stake in Pharmadrug through the share issuance.

Key Details

• Transaction Structure (Tranche 1):
  • Pharmadrug acquired 8,109,987 limited partner units of Canurta LP.
  • Consideration: 25,980,000 common shares of Pharmadrug.
  • Deemed issue price: 1.52 cents per share.
  • Hold period: Expires on the later of May 3, 2026, or 10 days after filing a business acquisition report with audited financials.
  • No finders' fees were payable.
• Debt Restructuring:
  • Issued $445,686 principal amount of secured convertible debentures.
  • Purpose: To replace indebtedness previously owing to two current holders of secured convertible debentures that were past their maturity date.
  • Terms: Matures Oct 13, 2026; convertible at 5 cents per share (subject to adjustment); secured by a general security agreement.
  • Interest: 0% unless unpaid at maturity, in which case 22% per annum applies.
• Working Capital Advance:
  • Canurta advanced $85,000 to Pharmadrug via a forgivable promissory note bearing 12% annual interest to support working capital.
• Future Tranche (Tranche 2):
  • Pharmadrug will acquire an additional 8,191,495 LP units (bringing total interest to 40%).
  • Consideration: 57,665,316 PHRX shares.
  • Deadline: On or before March 31, 2026.
  • Condition: Subject to shareholder approval via Policy 6 of the Canadian Securities Exchange.
  • Shareholder Meeting: Expected in Q1 2026.
• Post-Transaction Ownership:
  • Pharmadrug will hold 40% of Canurta.
  • Canurta limited partners will hold approximately 44% of Pharmadrug’s issued and outstanding shares on a pro forma basis.
• Recission Right:
  • Canurta’s limited partners have a right to require the return of transferred LP units if defined milestones are not met within agreed timelines.
  • If triggered, corresponding Pharmadrug shares are returned to treasury for cancellation.
  • Expiration: No later than March 1, 2026.
• Board Appointment:
  • Akeem Gardner (Founder and CEO of Canurta) joined Pharmadrug’s board of directors.
• Early Warning Disclosure:
  • Atlas365 Inc. acquired beneficial ownership of 25.98 million common shares of Pharmadrug (approx. 19.4% on a non-diluted basis).
  • Triggered early warning reporting under National Instrument 62-103.

Notable Quotes

• Dr. David Kideckel, Executive Chairman of Pharmadrug: "We are excited to execute on the first stage of our investment in Canurta with the intention to begin a substantial collaboration that will enable us to finally push forward with our cepharanthine development strategy and the already approved phase 1 clinical trial in Australia."
• Mr. Gardner, Founder and CEO of Canurta: "This transaction represents an important alignment between Canurta and Pharmadrug at a time when disciplined execution matters most. Pharmadrug brings public market experience and a shared commitment to advancing credible, clinically grounded programs. We look forward to working together to unlock the value of our botanical IP portfolio, and to accelerate development in a manner that is both capital efficient and scientifically rigorous."