Algernon Pharmaceuticals to acquire NoBrainer Imaging Centers

Algernon Pharmaceuticals (AGNPF) has entered into share exchange agreements to acquire 100% of the issued and outstanding shares of NoBrainer Imaging Centers. The Transaction moves Algernon into the Alzheimer’s Disease diagnostic and treatment market, expanding on the Company’s neurological research programs, and provides Algernon exclusive master franchise and licensing rights to open AD screening, diagnostic, and treatment centers across Canada and in multiple U.S. markets.Algernon plans to both establish company-owned clinics and sell individual franchise licenses, allowing for rapid expansion throughout Canada, Florida and Los Angeles as well as in five strategic cities in other American states. Algernon is planning to open its first company-owned comprehensive AD medical clinic location in Florida in Q4 of this calendar year. After completing an initial startup phase, the Company plans to scale up its operations to open 10 additional corporately owned sites in 2026, as well as 10 additional franchise locations, in cities and states to be announced. The Positrigo NeuroLF PET system is not currently approved for commercial use in Canada and will only be available for clinical trials, subject to Health Canada oversight. Because the two antibody therapy treatments from Eli Lily, and Eisai and Biogen, are also not yet approved in Canada, the first Canadian AD clinics will focus on providing Alzheimer’s cognitive screening, genetic testing and blood testing, as well as provide health, wellness and nutritional counselling, as introductory services and lead generation vehicles. Canadian patients identified as having a higher risk of having AD, by way of the APOE genetic test and suspected of having AD as a result of testing positive for the Tau proteins found in the blood, will also be given the opportunity to travel to Algernon’s U.S. clinic locationto undergo PET scan imaging and receive the new drug therapy if the presence of amyloid plaque is confirmed. Final diagnosis and treatment decisions will be made on an individual patient basis under the care of neurologists. On May 12, 2025, the Company entered into share exchange agreements with NIC and each of the common shareholders of NIC to acquire 100% of the issued and outstanding common and preferred shares of NIC. NIC is a Canadian company which has the exclusive master franchise rights from NoBrainer Alzheimer’s Treatment Centers for the entire Canadian market, and for Florida, excluding Miami, as well as additional franchise rights for Los Angeles and five more major U.S. cities in other U.S. states. As the flagship master franchisee, NIC has no initial franchise fees owing on its franchise territories. NIC has C$250,000 of working capital, including a deposit on a Positrigo NeuroLF brain-specific PET scanner, the latter of which is targeted for delivery to the first Company owned U.S. clinic in the Q4, 2025. Algernon will work to enhance and further develop the AD medical clinic concept directly with the NATC management team, which brings deep experience in medical facility operations, dietary, cognitive, physical intervention, and international franchise development. NATC has plans to franchise the AD diagnostic and treatment clinic concept globally, which Algernon may come to participate in as well. Pursuant to the terms and conditions of the Agreements, the Company will issue to the NIC Shareholders: 4,500,000 common shares in the capital of the Company and 9,000,000 Common Share purchase warrants to be issued on the closing date; and 450,000 preferred shares to be issued on or before the date that is six months from the Closing Date following approval of the creation of the Preferred Share class by the Company’s shareholders. Each Warrant entitles the holder thereof to purchase one Common Share at an exercise price of $0.15 per Common Share for a period of twelve months from the issuance date, after which on the first anniversary of the Issuance Date, the Exercise Price will increase to $0.25 per Common Share for a period of twelve months from the First Anniversary, and on the second anniversary of the Issuance Date, the Exercise Price will increase to $0.50 per Common Share for a period of thirty-six months from the Second Anniversary. If, prior to the First Anniversary, the Common Shares trade on the Canadian Securities Exchange at a price of $0.20 or greater for a period of twenty consecutive trading days, and following thirty days written notice to the Common Warrant holders, the Exercise Price will increase to $0.25 per Common Share until the date of the Second Anniversary, and on the Second Anniversary, the Exercise Price will increase to $0.50 per Common Share for a period of thirty-six months from the Second Anniversary. The Warrants shall vest and become exercisable by the holders thereof on the date that is four months and one day from the date of issuance. Assuming the Company receives shareholder approval, the Preferred Shares are convertible into, without payment of any consideration and without further action on the part of the holder thereoften Common Shares. The Preferred Shares will include a ten percent annual dividend payable in Common Shares or Preferred Shares at the discretion of the Company’s board of directors. Algernon has agreed to expedite its annual meeting and seek shareholder approval for the Preferred Share issuance within six months of the Closing Date. Algernon will also seek approval from the CSE to trade both the higher priced Preferred Shares and the Warrants. AGN will further seek approval for a preferred stock unit dividend and/or a rights offering to current Common Share shareholders in order to achieve the appropriate board lot holders as well as a minimum float. If shareholder approval is not obtained, the Preferred Shares will be adjusted to Common Shares on a one for ten basis. All NIC Shareholders shall enter into a voting support agreement in favour of the Company in respect of the consideration securities received in connection with the Transaction. The Transaction is subject to approval of the CSE and expects to close within five business days. The Company has also received an option to acquire 20% of the issued and outstanding shares of NATC for additional equity in the Company, subject to CSE approval.