Pharmadrug enters LOI to acquire 40% of Canurta

Dr. David Kideckel reports PHARMADRUG SIGNS LOI TO ACQUIRE EQUITY INTEREST IN CANURTA INC. Pharmadrug Inc. entered into a non-binding letter of intent on July 23, 2025, to acquire an up-to-40-per-cent equity interest in Canurta Limited Partnership, the parent entity of Canurta Inc., a biotechnology company pioneering novel botanical drugs that target inflammation and address unmet needs in neurodegenerative diseases. Deal structure Under the terms of the LOI, Pharmadrug would acquire the Canurta units in two tranches, representing 19.9 per cent and 20.1 per cent, respectively, of the issued and outstanding units of Canurta. In consideration for the first tranche, Pharmadrug will issue 25.98 million common shares in the capital of Pharmadrug to Canurta, and, in consideration for the second tranche, Pharmadrug will issue 32,827,438 Pharmadrug shares, in each case at a deemed price equal to the 20-day volume-weighted average trading price of the Pharmadrug shares immediately prior to closing of the applicable tranche (for a potential total issuance of 58,807,438 Pharmadrug shares). Upon completion of both tranches, Pharmadrug will hold a 40-per-cent interest in Canurta, and Canurta will hold approximately 44 per cent of the issued and outstanding Pharmadrug shares on a pro forma basis. The parties will work on settling a definitive agreement relating to the transaction within 30 days. The proposed transaction was negotiated on an arm's-length basis, and, as a result, the company did not obtain a fairness opinion and does not expect to do so. No finders' fees will be payable in connection with the proposed transaction. If completed, it is anticipated that the Pharmadrug shares to be issued will be subject to a four-month hold period. The definitive agreement is expected to include a clawback provision allowing Canurta to repurchase its equity interest in the event that agreed-upon operational, financial or regulatory milestones (to be defined in the definitive agreement) are not met. In such case, any Canurta units held by Pharmadrug may be repurchased in exchange for the return and cancellation of the corresponding Pharmadrug shares. As part of the transaction, Canurta will contribute a minimum of $85,000 to Pharmadrug at the closing of each tranche by way of a non-interest-bearing promissory note. In connection with the transaction, Canurta's founder and chief executive officer Akeem Gardner will be appointed to the board of directors of Pharmadrug. Mr. Gardner's leadership and vision are expected to play a pivotal role in advancing Pharmadrug's biotechnology pipeline and developing creative capital market initiatives. The appointment is intended to take place upon closing of the first tranche. Pharmadrug expects to hold a shareholder meeting (or seek a written shareholder consent) to approve the issuance of Pharmadrug shares in connection with the closing of the second tranche pursuant to the policies of the Canadian Securities Exchange. Completion of the transaction is subject to various conditions, including execution of the definitive agreement, satisfactory completion of mutual due diligence, receipt of all required regulatory and shareholder approvals, and absence of material adverse changes. There can be no assurance that the transaction will be completed as proposed or at all. About Canurta Inc. Canurta Therapeutics is a prerevenue Canadian biotechnology company dedicated to pioneering botanical therapeutics for inflammatory and neurodegenerative diseases. Leveraging its proprietary Polykye platform, Canurta discovers and develops rare bioactive botanical ingredients and multitarget formulations designed to address complex disease mechanisms with clinical rigour. The company's lead candidate, CNR-401, is advancing toward global phase 2 clinical trials in amyotrophic lateral sclerosis, having completed both Type B (end of phase 1) and Type C (preinvestigational new drug) meetings with the U.S. Food and Drug Administration. To broaden patient access and accelerate regulatory pathways, Canurta has entered into distribution-in-development and compassionate-use agreements in select international markets, including a product order and supply agreement in Brazil. This parallel real-world evidence initiative is expected to support global approval strategies and reinforce the safety and efficacy profile of CNR-401. As of June 30, 2025, based on unaudited internal financial statements, Canurta reported total assets of approximately $6.6-million, including $866,454.19 in cash and cash equivalents. Canurta's total liabilities as of that date were approximately $8.0-million, resulting in a net shareholder deficit of approximately $1.4-million. It is anticipated that the majority of Canurta's outstanding liabilities will convert into equity upon the closing of its currently pending transaction. The company will provide further update on the debt conversion upon the parties entering into the definitive agreement. Canurta has no revenues to date and continues to operate as a prerevenue biotechnology company. Revenue generation is contingent on the successful development, clinical validation and regulatory approval of its drug candidates, which are currently in preclinical and early clinical development stages. No assurance can be given that these products will receive approval from the U.S. Food and Drug Administration or other regulators, or that they will ever be commercialized. Accordingly, there remains a material risk that Canurta may never generate commercial revenues, and its continuing operations will depend on its ability to raise capital through equity, debt or strategic partnerships. As part of its long-term growth strategy, Canurta has developed an internal bitcoin treasury initiative, referred to as the satoshi trials, which aims to explore the use of bitcoin as a potential long-term financing mechanism for research and development activities. As of June 30, 2025, Canurta holds 1.28199 BTC in its corporate treasury, recorded under FASB fair value accounting at $190,114.70. Canurta views this holding as a long-term, alternative treasury asset that may support R&D and clinical development. Canurta is evaluating the potential to increase its bitcoin holdings using available cash resources and may consider equity financing for further acquisitions. Canurta is also exploring alternative financing mechanisms, including the potential use of digital assets, as a complement to traditional equity-based financing for its clinical development programs. These considerations remain at a preliminary stage and are subject to market conditions and regulatory review. Recent strategic initiatives include entering into a binding letter of intent to effect a business combination with extractX Ltd., a leader in advanced mobile extraction laboratories, which -- when completed -- will enhance Canurta's scalable good manufacturing practice grade botanical extraction capabilities and support supply chain integration (see Canurta's press release dated June 24, 20251). While the extractX LOI is binding, there is no guarantee that the transactions underlying the extractX LOI will be completed. Together with the proposed transaction with Pharmadrug, these transformative steps are expected to strengthen Canurta's market presence and deliver long-term shareholder value. Deal rationale If completed, the transaction will combine Pharmadrug's public market platform and resources with Canurta's research and proprietary technologies, fostering new opportunities to accelerate growth and shareholder value. Canurta's innovative platform includes the development of CNR-401, a lead therapeutic candidate targeting amyotrophic lateral sclerosis, an area of significant unmet medical need. Dr. David Kideckel, executive chairman of Pharmadrug, commented: "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 that also seeks to begin earlier phases in Australia with a target to move over to FDA-based clinical trials in later phases. 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." "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," said Mr. Gardner. "Joining Pharmadrug's board will allow me to directly contribute to the strategic direction and execution of this transformative partnership. 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." About Akeem Gardner Mr. Gardner is the founder and chief executive officer of Canurta, a biotechnology company dedicated to developing innovative botanical therapeutics for inflammatory and neurological diseases. With a unique blend of entrepreneurial vision, scientific understanding and legal expertise, he has led Canurta to raise over $13-million in financing and secure more than 20 global patents. His leadership combines strategic capital management with innovation in biotech and emerging technologies, including artificial intelligence and blockchain integration. Recognized as a forward-thinking leader, he 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. Strategic review: SecureDose The company's board of directors has come to the decision that it will cease all activities at SecureDose given the shift in the political and cultural landscape that has resulted in a move away from third-wave drug policy reform. Pharmadrug's focus from this point onward will be on clinical and commercial development of therapeutic molecules and medical products. 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. Sairiyo is also conducting R&D in the psychedelic space for the treatment of non-neuropsychiatric conditions. We seek Safe Harbor.