PharmAla Biotech announces Non-Brokered Private Placement Offering of up to an Aggregate of $5,000,000

PharmAla Biotech Holdings Inc. (CSE: MDMA / OTC: PMBHF), a biotechnology company focused on the research, development and manufacturing MDXX class molecules (including MDMA), is pleased to announce a non-brokered private placement of a minimum 3,333,333 units and a maximum 16,666,666 units of the Company (each a “Unit”) at a price of $0.30 per Unit for aggregate gross proceeds of a minimum of $1,000,000 and a maximum of $5,000,000 which will be offered for sale to purchasers resident in Canada (except Quebec) and/or other qualifying jurisdictions pursuant to the listed issuer financing exemption under Part 5A of National Instrument 45-106 – Prospectus Exemptions (the “LIFE Offering”).

Each Unit consists of one common share of the Company (each a “Common Share”) and one-half Common Share purchase warrant (“Warrant”). Each whole Warrant entitles its holder to acquire one Common Share for a period of 24 months following the closing of the Offering (“Closing Date”).

In the event that, during the period following 24 months from the Closing Date, the volume-weighted average trading price of the Common Shares exceeds $0.675 per Common Share for any period of 20 consecutive trading days, the Company may, at its option, following such 20-day period, accelerate the expiry date of the Warrants by issuing a press release (a “Warrant Acceleration Press Release”), and, in such case, the expiry date of the Warrants shall be deemed to be 5:00 p.m. (Toronto time) on the 30^th day following the date of issuance of the Warrant Acceleration Press Release.

The Company intends to use the net proceeds from the LIFE Offering to (i) increase in increase its inventory of MDMA and psilocybin for the future sales in Australia and outside Australia, (ii) phase 2 clinical trials of the Company’s patented ALA series of molecules, and (iii) general working capital purposes. The Company may compensate certain eligible finders under the LIFE Offering and may pay a cash commission of up to 7% of the gross proceeds of the LIFE Offering and issue such number of finder’s warrants equal to 7% of the total number of Units issued under the LIFE Offering.

The LIFE Offering is expected to be completed in multiple closings, with the final closing to occur no later than July 27, 2023. The securities issued pursuant to the LIFE Offering will not be subject to any statutory hold period in accordance with applicable Canadian securities laws.

There is an offering document related to the LIFE Offering that can be accessed under the Company’s profile at www.sedar.com and on the Company’s website at www.pharmala.ca. Prospective investors should read this offering document before making an investment decision.

As a result of the expected participation by insiders of the Company, the LIFE Offering may be considered a “related party transaction” pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company expects that the LIFE Offering will be exempt from the requirements to obtain a formal valuation and minority shareholder approval, respectively, because the fair market value of the insiders’ participation in each case will be below 25% of the Company’s market capitalization for the purposes of Sections 5.5(a) and 5.7(1)(a) of MI 61-101.

None of the securities have been registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws. Accordingly, the Units may not be offered or sold within the United States, its territories or possessions, any state of the United States or the District of Columbia (collectively, the “United States”) or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and all applicable state securities laws or an exemption from such registration requirements is available. This press release does not constitute an offer to sell or a solicitation of an offer to buy any Units within the United States or to, or for the account or benefit of, U.S. persons.

PharmAla Biotech Holdings Inc. is a biotechnology company focused on the research, development, and manufacturing of MDXX class molecules, including MDMA. PharmAla was founded with a dual focus: alleviating the global backlog of generic, clinical-grade MDMA to enable clinical trials, and to develop novel drugs in the same class. PharmaAla is the first publicly-traded company to manufacture clinical-grade MDMA. PharmAla’s research and development unit has completed proof-of-concept research into ALA-002, PharmAla’s lead drug candidate. PharmAla is a “regulatory first” organization, formed under the principle that true success in the psychedelics industry will only be achieved through excellent relationships with regulations.