LSL Pharma Group Inc. announced a best-efforts brokered private placement of minimum of 200,000 unsecured convertible debentures of the company at a price of $10 per convertible debenture, for aggregate minimum gross proceeds $2,000,000 and maximum of 400,000 unsecured convertible debentures of the company at a price of $10 per convertible debenture for maximum gross proceeds of $4,000,000 on September 21, 2023. The debentures will be convertible into Class A shares of the capital stock of the company at the option of the holder at any time prior to the close of business on the earlier of the last business day immediately preceding the maturity date, and the date fixed for redemption, at a conversion price of $0.70 per Class A share, subject to adjustment in certain events. The debentures will mature 5 years from the closing date and accrue interest from the closing date at a rate of 11% per annum, compounded semi-annually on the last day of April and October of each year.

Interest will be payable in cash semi-annually on the last day of April and October, with payments commencing April 30, 2025. The annual interest rate will be recalculated on April 30 of every year, starting April 30, 2025 and will be equal to the base rate. If, at any time following the date that is 24 months from the closing date, for the preceding 20 consecutive trading days the daily volume weighted average trading price of the Class A shares on the TSX Venture Exchange is greater than 175% of the conversion price and the average daily volume of the Class A shares traded on the TSXV is no less than the number obtained when dividing the number of shares issued upon conversion of the total amount of debentures outstanding by 20, the company shall have the option to convert all of the principal amount outstanding of the debentures at the conversion price with at least 30 days prior written notice.

The Agent further shall have the option, exercisable at any time up to two days prior to the closing of the offering, to increase the size of the offering by up to $1 million. Assuming the full exercise of the Agent's option, the aggregate gross proceeds of the offering will be $5 million. In connection with the offering, the company will pay to the Agent a cash commission equal to 7% of all gross proceeds raised in connection with the offering from purchasers not included on the President?s list, a cash fee equal to 1% of all gross proceeds raised in connection with the offering from purchasers identified by the company and broker warrants of the company equal to 7% of the gross proceeds of the offering from purchasers not included on the President?s List and 1% of the gross proceeds of the offering from purchasers on the President?s List divided by the conversion price, at an exercise price equal to the conversion price.

The broker warrants will be exercisable to acquire one Class A Share of the company for a period of 24 months from the date of issuance of the broker warrants. The closing of the offering is subject to the company obtaining conditional approval to list the debentures on the TSXV in addition to customary closing conditions and the receipt of all required regulatory approvals, including but not limited to the approval of the TSXV. The securities issuable pursuant to this offering will be subject to a hold period.

The company and the Agent are dealing at arm?s length. The securities issued in connection with the offering will not be registered under the United States Securities Act of 1933, as amended.