Medicus Pharma Ltd. Announces Closing of Private Placement of Convertible Notes

Toronto, Ontario--(Newsfile Corp. - May 3, 2024) - Medicus Pharma Ltd. (TSXV: MDCX) (FSE: N46) (the "Company") is pleased to announce that it has completed the first closing of its previously announced private placement (the "Private Placement") of 10.00% Unsecured Convertible Notes due 2025 (the "Notes"). The Company issued US$5,172,500 aggregate principal amount of Notes in the first closing, which was unbrokered. The Company may issue additional Notes in one or more further closings, with up to US$10,000,000 aggregate principal amount of Notes to be issued and outstanding following completion of the Private Placement.

The Notes will bear interest at a rate of 10.00% per annum, payable semi-annually in arrears in the form of either cash or common shares of the Company at the election of the holder.

Prior to January 1, 2025, the Notes will automatically convert into common shares of the Company on the following terms:

• upon completion by the Company of an initial public offering in the United States, at a conversion price per common share equal to the greater of (i) a 20% discount to the initial public offering price and (ii) US$2.00; and

• upon a change of control of the Company, at a conversion price equal to US$2.00 per common share.

On or after January 1, 2025, the Notes will be convertible at the option of the holder at a conversion price of US$2.00 per common share.

Upon a change of control of the Company, the Company will offer to repurchase the Notes at a price equal to 101% of the principal amount of Notes to be repurchased, plus accrued and unpaid interest up to but not including the date of repurchase.

The Notes will mature on December 31^st, 2025 and may be redeemed by the Company, in whole or in part, on or after January 1, 2025, for a price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest up to but not including the date of redemption.

The Notes will be offered pursuant to applicable exemptions from the prospectus requirements of Canadian securities law. The Notes will also be offered and sold in the United States pursuant to an exemption from the registration requirements of the U.S. Securities Act of 1933, as amended (the "1933 Act"), and any applicable securities laws of any state of the United States.

The Company intends to use the net proceeds from the Private Placement to fund the Company's research and development programs, explore an initial public offering in the United States, and for general corporate purposes. The Private Placement is subject to final acceptance by the TSX Venture Exchange upon filing of final documentation.

Certain directors and officers of the Company participated in the first closing of the Private Placement for US$700,000 aggregate principal amount of Notes. Their participation is considered a "related-party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of related party participation in the Private Placement as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involved the related parties, exceeded 25% of the Company's market capitalization (as determined under MI 61-101).

The Company did not file a material change report more than 21 days before the expected first closing of the Private Placement as the details of the participation therein by related parties of the Company were not settled until shortly prior to the first closing of the Private Placement and the Company wished to close on an expedited basis for sound business reasons.

The Company also announced that it has filed its Audited Consolidated Annual Financial Statements for the year ended December 31^st, 2023 and related Management's Discussion and Analysis with the Canadian Securities Administrators. These documents are available for review on SEDAR+ at www.sedarplus.ca.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the Notes or the common shares of the Company issuable on their conversion (collectively, the "Securities") in the United States, nor shall there be any sale of the Securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction or an exemption therefrom. The Securities have not been and will not be registered under the 1933 Act, or the securities laws of any state and may not be offered or sold in the United States absent registration under the 1933 Act or an applicable exemption from the registration requirements thereof.

For further information contact:

Carolyn Bonner, President
(610) 636-0184
cbonner@medicuspharma.com

About Medicus Pharma Ltd:

Medicus Pharma Ltd. (TSXV: MDCX) is a biotech/life sciences company focused on accelerating the clinical development programs of novel and disruptive therapeutics assets.

SkinJect Inc. a wholly owned subsidiary of Medicus Pharma Ltd, is a development stage, life sciences company focused on commercializing novel, non-invasive treatment for basal cell skin cancer using patented dissolvable microneedle patch to deliver chemotherapeutic agent to eradicate tumors cells.

Cautionary Notice on Forward-Looking Statements

Certain information in this news release constitutes "forward-looking information" under applicable securities laws. "Forward-looking information" is defined as disclosure regarding possible events, conditions or financial performance that is based on assumptions about future economic conditions and courses of action and includes, without limitation, statements regarding the terms of the Private Placement, the satisfaction of conditions to closing of the Private Placement and the use of proceeds therefrom. Forward-looking statements are often but not always, identified by the use of such terms as "may", "might", "will", "will likely result", "would", "should", "estimate", "plan", "project", "forecast", "intend", "expect", "anticipate", "believe", "seek", "continue", "target" or the negative and/or inverse of such terms or other similar expressions.

These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements, including those risk factors described in the Company's public filings on SEDAR+, which may impact, among other things, the trading price and liquidity of the Company's common shares. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and thus are subject to change thereafter. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Readers are cautioned that the foregoing list is not exhaustive and readers are encouraged to review the Prospectus accessible on the Company's profile on SEDAR+ at www.sedarplus.ca. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.

Neither the Exchange nor its Regulation Services Provider (as that term is defined in policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

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