Searchlight Pharma Inc. entered into a definitive agreement to acquire Nuvo Pharmaceuticals Inc. (TSX:MRV) from Red Oak Partners, LLC and other shareholders for CAD 15.4 million on December 22, 2022. Under the terms of agreement, Searchlight Pharma has agreed to acquire all of the issued and outstanding common shares of the Company (the “Company Shares”) in exchange for cash consideration of CAD 1.35 per Company Share, representing a 79.8% premium to the 90-day volume-weighted average trading price of the Company Shares on the Toronto Stock Exchange for the period ended December 22, 2022 and the transaction will be completed by way of an arrangement under Section 182 of the Business Corporations Act (Ontario) (the “Arrangement”). The purchase price of CAD 1.35 per Company Share represents a total equity value of the Company, on a fully diluted basis, of approximately CAD 15.8 million and a total enterprise value of the Company of approximately CAD 91.4 million. In connection with the closing of the Arrangement, all of the indebtedness (including convertible debt) owed to funds affiliated with Deerfield Management Company, in the aggregate principal amount of approximately $78.1 million (CAD 106.3 million), will be repaid in full and the Company's outstanding warrants will be cancelled for no consideration. As a part of acquisition, each of the directors and executive officers of the Company who are Shareholders, as well as one of the Company's significant Shareholders, Red Oak Partners, LLC, who collectively own or control, directly or indirectly, approximately 23.16% of the Company Shares, have entered into voting support agreements with the Purchaser to, among other things, vote their Company Shares in favour of the Arrangement. Miravo to remain a Canadian controlled and operated company following closing of the transaction. The Arrangement is to be funded in part with equity commitments from investors of the Purchaser and committed debt financing by certain Canadian lenders. The Company has agreed to pay a termination fee to the Purchaser an amount of CAD 1.53 million, if the Arrangement Agreement is terminated in certain circumstances, including if the Company enters into an agreement with respect to a superior proposal or if the Board withdraws its recommendation with respect to the Arrangement. The Purchaser has agreed to pay a reverse termination fee of CAD 3.07 million to the Company if the Arrangement Agreement is terminated in certain circumstances, including if the Purchaser materially breaches a representation or warranty or fails to materially perform a covenant, which breach is not cured, and if after all other conditions to the closing of the Arrangement have been satisfied or waived, the Purchaser is not in a position to fund the closing of the Arrangement.

The transaction is subject to court approval and must be approved by: (i) at least two-thirds of the votes cast by Shareholders, and (ii) a simple majority of the votes cast by Shareholders, excluding for this purpose votes attached to Company Shares held by persons described in items (a) through (d) of Section 8.1(2) of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transaction. In addition to court and shareholder approval, the Arrangement is subject to, among other things, the satisfaction or waiver of certain closing conditions customary in transactions of this nature. The Board of Directors of the Company (the “Board”), after receiving legal and financial advice, has unanimously determined that the Arrangement is in the best interests of the Company and is fair to the holders of Company Shares (the “Shareholders”). Accordingly, the Board approved the Arrangement Agreement and recommends that Shareholders vote in favour of the Arrangement at the special meeting of Shareholders to be called and held to approve the Arrangement. As of February 6, 2023, the Ontario Superior Court of Justice has approved the deal. The special meeting of Nuvo Pharmaceuticals is scheduled on March 7, 2023. As of March 7, 2023, the shareholders of Nuvo has approved the deal. It is expected that Nuvo will apply for a final order of the Ontario Superior Court of Justice approving the Arrangement on March 10, 2023. As of March 10, 2023, Nuvo received final approval from the Ontario Superior Court of Justice. The arrangement is expected to close in the first quarter of 2023. The deal is expected to complete on or around March 14, 2023.

Bloom Burton Securities Inc. has acted as fairness opinion provider and as financial advisor to the Board and Jamie van Diepen and Chris Sunstrum of Goodmans LLP is serving as legal advisor to the Nuvo Pharmaceuticals. PricewaterhouseCoopers Corporate Finance Inc. is acting as financial advisor to Searchlight, with transaction support and tax advisory services provided by PricewaterhouseCoopers LLP, and Clemens Mayr and Deandra Schubert of McCarthy Tétrault LLP is serving as legal advisor to Searchlight. TSX Trust Company acted as depository bank to Nuvo Pharmaceuticals.