The Company believes it has an acceptable prototype for completing IND-enabling studies with the aim of pursuing human clinical studies. In February 2023, the Company entered into a research collaboration with PharmaDrug to evaluate a product and clinical development plan to initiate regulatory discussions for future clinical studies in various indications for a DMT PharmaPatch. The Company will invest C$300,000 in Sairiyo Therapeutics, a subsidiary of PharmaDrug, for 49% ownership. In addition to developing cepharanthine for cancer and infectious diseases, Sairiyo is developing novel uses and delivery forms of DMT and other undisclosed psychedelic tryptamines as a potential treatment for ocular disease and neuropsychiatric conditions. The investment allocated to Sairiyo will be used to advance developments of cepharanthine and DMT PharmaPatch. In connection with the investment, PharmaDrug and PharmaTher will enter into a unanimous shareholders agreement with respect to their holdings of Sairiyo. The shareholders agreement provides, among other things, that so long as PharmaDrug owns a majority of the shares of Sairiyo it shall have the ability to appoint the officers of Sairiyo; the board of directors shall be comprised of three members a majority of whom are to be nominated by PharmaDrug for so long as it holds at least 50% of the outstanding shares of Sairiyo, with the initial board being comprised of Daniel Cohen and Paul McClory and Fabio Chianelli; and the Shareholders shall be entitled to subscribe for new share issuances on a pro rata basis. In the event that PharmaDrug elects not to participate in any new issuance, PharmaTher may increase its ownership from 49% to 51% with an investment of $250,000. Either side may increase its ownership by 10% for additional $100,000 investments. Neither side may be diluted beyond a 10% carried interest.
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