Pharmadrug closes acquisition of 19.9% in Canurta

Dr. David Kideckel reports PHARMADRUG COMPLETES ACQUISITION OF INITIAL 19.9% INTEREST IN CANURTA INC. AND COMPLETES DEBT RESTRUCTURING Pharmadrug Inc. has closed the previously announced (see news release dated Oct. 31, 2025) acquisition of limited partnership units of Canurta LP, the parent entity of Canurta Inc., a biotechnology company pioneering novel botanical therapeutics for inflammatory and neurodegenerative diseases. In connection with the completion of the first tranche, Akeem Gardner joined the company's board of directors. Mr. Gardner is the founder and chief executive officer of Canurta Inc. With a unique blend of entrepreneurial vision, scientific understanding and legal expertise, Mr. Gardner has led Canurta in securing more than $13-million in cumulative project financing across equity, debt and non-dilutive sources, and in building a global intellectual property portfolio comprising one issued patent and multiple pending patent applications across more than 20 jurisdictions. His leadership combines strategic capital management with innovation in biotech and emerging technologies, including AI (artificial intelligence) and blockchain integration. Recognized as a forward-thinking leader, Mr. Gardner has been honoured with awards, such as Brampton's 40 Under 40 and the MNP Future Leader Award. He holds degrees in psychology and law, and is committed to advancing breakthrough therapies that address complex inflammatory and neurodegenerative diseases. Dr. David Kideckel, executive chairman of Pharmadrug, commented, "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, added: "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." Under the transaction, Pharmadrug acquired 8,109,987 limited partner units of Canurta from a company controlled by Mr. Gardner in exchange for 25.98 million common shares of Pharmadrug. No finders' fees were payable in connection with the transaction. In connection with the transaction, Canurta advanced $85,000 to Pharmadrug by way of a forgivable promissory note bearing interest at 12 per cent per annum to support working capital requirements. The Pharmadrug shares are subject to a hold period that expires on the later of: (i) May 3, 2026; and (ii) 10 days after a business acquisition report with the audited financial statements has been filed and announced by way of a news release, all in a form acceptable to the Canadian Securities Exchange and in accordance with applicable Canadian securities laws. As previously announced, the transaction will be completed in two stages, whereby the company will acquire up to a 40-per-cent equity interest in Canurta, to be completed in two tranches through the issuance of an aggregate of 83,645,316 Pharmadrug shares at a deemed price equal to the 20-day volume-weighted average price immediately prior to each closing. The deemed issue price of the Pharmadrug shares issued on the first closing was 1.52 cents per share. At the second closing, Pharmadrug will acquire 8,191,495 LP units in exchange for 57,665,316 PHRX shares with such closing to take place on or before March 31, 2026, subject to shareholder approval pursuant to the Policy 6 of the Canadian Securities Exchange. Pharmadrug expects to hold a shareholders meeting to approve the issuance of Pharmadrug shares in connection with the second tranche in the first quarter of 2026. Details of the meeting and the matters to be voted on will be provided in a management information circular to be mailed to shareholders in accordance with the policies of the CSE and applicable securities laws. Upon completion of both tranches, Pharmadrug will hold a 40-per-cent interest in Canurta, and Canurta limited partners will hold approximately 44 per cent of Pharmadrug's issued and outstanding shares on a pro forma basis. The transaction is being completed on an arm's-length basis. The definitive agreement underlying the transaction includes a recission right that allows Canurta's limited partners to require the return of their transferred LP units if defined milestones are not met within agreed-upon timelines. In such case, the corresponding Pharmadrug shares previously issued would be returned to treasury for cancellation, restoring the preclosing ownership structure. The recission right expires no later than March 1, 2026. Debt restructuring The company is also pleased to announce that further to its news release dated Oct. 31, 2025, it has issued $445,686 principal amount of secured convertible debentures to replace indebtedness previously owing to two current holders of the company's secured convertible debentures that were past their maturity date. Each debenture matures on Oct. 13, 2026, and is convertible into common shares at a price of five cents (subject to adjustment). Each debenture will be secured by a general security agreement from the company. The debentures are being issued to replace presently outstanding secured convertible debentures and outstanding interest thereon, which debentures had previously matured (but remained unpaid). There will be no interest payable on the debentures unless the principal amount is not paid at maturity, in which case the debentures will bear interest at a rate of 22 per cent per annum. Early warning disclosure In connection with the completion of the first tranche of the transaction, Atlas365 Inc. acquired beneficial ownership of 25.98 million common shares of the company, representing approximately 19.4 per cent of the issued and outstanding common shares of the company on a non-diluted basis. As a result of the acquisition, Atlas365 has become a holder of more than 10 per cent of the issued and outstanding common shares of the company, thereby triggering the early warning reporting requirements under National Instrument 62-103 -- The Early Warning System and Related Take-Over Bid and Insider Reporting Issues. The Pharmadrug shares were acquired in connection with the transaction described herein and were issued as consideration for the acquisition by the company of limited partnership units of Canurta. The securities were acquired for investment purposes, and Atlas365 may, depending on market and other conditions, increase or decrease its ownership of the company's securities in the future. An early warning report will be filed by Atlas365 in accordance with applicable securities laws and will be available on the company's profile on SEDAR+. About Canurta Inc. Canurta is an innovative biotechnology company dedicated to pioneering botanical therapeutics for inflammatory and neurodegenerative diseases. Utilizing its proprietary Polykye platform, Canurta develops rare bioactive botanical ingredients and multitarget formulations designed to address complex disease mechanisms with clinical rigor. The company's lead candidate, CNR-401, is advancing toward phase 2 clinical trials targeting amyotrophic lateral sclerosis (ALS), with a parallel strategy incorporating real-world evidence initiatives to accelerate global regulatory approval. About Pharmadrug Inc. Pharmadrug is a specialty pharmaceutical company focused on the research, development and commercialization of controlled substances and natural medicines such as psychedelics and previously approved drugs. Pharmadrug owns 51 per cent of Sairiyo Therapeutics, a biotech company that specializes in researching and reformulating established natural medicines with a goal of bringing them through clinical trials and the associated regulatory approval process in the United States and Europe. Sairiyo is currently developing its patented reformulation of cepharanthine, a drug that has shown substantial third party validated potential for the treatment of infectious disease and rare cancers. We seek Safe Harbor.