Zelira Therapeutics Limited provided an update to the enhanced distillate capture and dissolution matrix (EDCDM) Technology licence agreement with DRCN Holdings LLC (DRCN) (Agreement), announced on 3 November 2021. On 10 January 2022, Zelira announced it had received $250,000 of the $1,000,000 upfront, non-refundable, non-contingent licensing fee from DRCN. Zelira had been advised the balance of the $750,000 would be paid in third quarter of fiscal year 2022. To date this fee has not been received, despite repeated assurances, both written and verbal, from DRCN and their legal counsel. While Zelira remains in ongoing discussions with DRCN regarding settlement of the outstanding balance, all legal options with respect to the Agreement are being considered by Zelira, including termination. Should the Agreement be terminated and not proceed, the $250,000 partial fee
received from DRCN will not be refunded. Zelira successfully demonstrated enhanced dissolution of cannabinoids using its EDCDM technology and signed a foundation licensing deal for this proprietary technology. Zelira confirms it has not, and will not, provide DRCN with access to its EDCDM technology until the $750,000 balance is received.