Pharmadrug enters LOI to acquire 40% of Canurta

Executive Summary

• Pharmadrug Inc. has signed a non-binding Letter of Intent (LOI) to acquire up to a 40% equity interest in Canurta Inc. (via its parent, Canurta Limited Partnership) through a two-tranche share issuance structure.
• The transaction involves the issuance of approximately 58.8 million Pharmadrug common shares, valued at the 20-day VWAP prior to closing, in exchange for Canurta units. Upon completion, Canurta will hold approximately 44% of Pharmadrug on a pro forma basis.
• Concurrently, Pharmadrug announced it is ceasing all activities at its subsidiary SecureDose to refocus on clinical and commercial development of therapeutic molecules, while Canurta’s CEO, Akeem Gardner, will join Pharmadrug’s board of directors.

Key Details

• Transaction Structure: Acquisition of up to 40% equity in Canurta Limited Partnership in two tranches:
  • Tranche 1: 19.9% interest.
  • Tranche 2: 20.1% interest.
• Consideration: Pharmadrug will issue common shares to Canurta:
  • Tranche 1: 25,980,000 shares.
  • Tranche 2: 32,827,438 shares.
  • Total Potential Issuance: 58,807,438 Pharmadrug shares.
  • Pricing: Deemed price equal to the 20-day volume-weighted average trading price (VWAP) of Pharmadrug shares immediately prior to the closing of each respective tranche.
• Pro Forma Ownership: Upon completion of both tranches, Pharmadrug holds 40% of Canurta, and Canurta holds approximately 44% of Pharmadrug’s issued and outstanding shares.
• Definitive Agreement Timeline: Parties aim to settle a definitive agreement within 30 days of the LOI.
• Clawback Provision: The definitive agreement will include a clawback allowing Canurta to repurchase its equity interest in Pharmadrug if agreed-upon operational, financial, or regulatory milestones are not met. In such cases, Canurta units held by Pharmadrug may be repurchased in exchange for the return and cancellation of the corresponding Pharmadrug shares.
• Financial Contribution: Canurta will contribute a minimum of $85,000 to Pharmadrug at the closing of each tranche via a non-interest-bearing promissory note.
• Hold Period: Pharmadrug shares issued are anticipated to be subject to a four-month hold period.
• Governance Changes: Akeem Gardner, Founder and CEO of Canurta, will be appointed to the Board of Directors of Pharmadrug upon the closing of the first tranche.
• Shareholder Approval: Pharmadrug expects to hold a shareholder meeting or seek written consent to approve the issuance of shares for the second tranche, per Canadian Securities Exchange policies.
• Conditions Precedent: Execution of definitive agreement, satisfactory due diligence, regulatory approvals, and shareholder approvals.
• Canurta Financials (as of June 30, 2025):
  • Total Assets: ~$6.6 million (including $866,454.19 in cash).
  • Total Liabilities: ~$8.0 million.
  • Net Shareholder Deficit: ~$1.4 million.
  • Note: Majority of outstanding liabilities are anticipated to convert into equity upon closing of the pending transaction.
• Canurta Treasury Assets: Holds 1.28199 BTC (valued at $190,114.70 under FASB fair value accounting) as part of a "satoshi trials" strategy for R&D financing.
• Strategic Divestment: Pharmadrug’s board decided to cease all activities at SecureDose due to shifts in political and cultural landscapes regarding drug policy reform.
• Canurta Pipeline: Lead candidate CNR-401 is advancing toward global Phase 2 clinical trials for ALS, having completed Type B and Type C FDA meetings.
• Related Canurta Activity: Canurta entered a binding LOI on June 24, 2025, for a business combination with extractX Ltd. to enhance botanical extraction capabilities.

Notable Quotes

• Dr. David Kideckel, Executive Chairman of Pharmadrug: "We are extremely excited about our investment into Canurta as it bolsters our strategy and adds significant bench strength to our cepharanthine development program by adding a high-potential natural-based drug candidate focused on ALS... Canurta has also demonstrated its ability to use AI to increase the efficiency and execution of drug development, and, lastly, the investment allows Pharmadrug to participate in the satoshi trial strategy which seeks to leverage novel financing bitcoin-backed treasury strategies."
• Akeem Gardner, CEO of Canurta: "We are excited to formalize this relationship with Pharmadrug, which offers a powerful platform to scale Canurta's therapeutic pipeline and deliver meaningful outcomes for patients and shareholders alike... We look forward to driving value for all stakeholders by implementing and scaling the satoshi trials to evolve capital deployment in the life sciences sector."