Toronto, Ontario– May 27, 2022 – PharmaDrug Inc. (CSE: PHRX) (OTCQB: LMLLF) (“PharmaDrug” or the “Company“), a specialty pharmaceutical company focused on the research, development and commercialization of controlled-substances and natural medicines such as psychedelics, cannabis and naturally-derived approved drugs, is pleased to announce the closing of the first tranche (the “First Tranche“) of a non-brokered private placement (the “Offering“) of units in the capital of the Company (the “Units“). Pursuant to the closing of the First Tranche, the Company issued 7,000,000 Units at a price of $0.04 for aggregate gross proceeds of $280,000.
Each Unit consists of one common share (a “Common Share”) and one Common Share purchase warrant (a “Warrant”). Each Warrant entitles the holder to acquire one Common Share at a price of $0.05 for a period of 24 months from the closing of the Offering.
In connection with the closing of the First Tranche, the Company paid a finder (the “Finder”) a cash commission of $1,600 and issued an aggregate of 40,000 broker warrants (“Broker Warrants”). Each Broker Warrant entitles the Finder to purchase one Common Share of the Company at a price of $0.04 for a period of twenty-four (24) months from the closing of the First Tranche.
PharmaDrug intends to use the net proceeds from the Offering to assist the Company in production of pharmaceutical grade cepharanthine intended to be used in Phase I and Phase II clinical trials and general working capital.
The securities issued via the Offering are subject to a statutory four month and one day hold period.
Daniel Cohen, Chairman and Chief Executive Officer of the Company (the “Interested Person”) purchased or acquired direction and control over an aggregate of 1,250,000 Units under the First Tranche. The Interested Person is considered a “related party” of PharmaDrug and the sale of Units under the Offering to the Interested Person constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Interested Person will now beneficially own or control 5,246,045 Common Shares (23,255,798 Common Shares assuming conversion of all convertible debentures and securities held by the Interested Person). The “related party” portion of the Offering was exempt from the minority approval requirement of Section 5.6 and the formal valuation requirement of Section 5.4 of MI 61-101 as neither the fair market value of the “related party” portion of the Offering, nor the fair market value of the consideration of the “related party” portion of the Offering, exceeded 25% of Pharmadrugs’s market capitalization. A material change report will be filed in connection with the related party participation in the Offering less than 21 days in advance of closing of the First Tranche as approval of the Offering occurred less than 21 days prior to closing. This shorter period was reasonable and necessary in the circumstances as the Company wished to complete the First Tranche in a timely manner.
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, cannabis and naturally-derived approved drugs. PharmaDrug owns 100% of Pharmadrug Production GmbH (“Pharmadrug Production”), a German medical cannabis distributor, with a Schedule I European Union narcotics license and German EuGMP certification allowing for the importation and distribution of medical cannabis to pharmacies in Germany and throughout the European Union. PharmaDrug owns 100% Sairiyo Therapeutics (“Sairiyo”), 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 US 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 psychedelics space for the treatment of non-neuropsychiatric conditions. The Company also owns 100% of Super Smart, a company building a vertically integrated retail business with the goal to elevate the use of functional mushrooms as natural based medicines.