Adaptogenics Health Corp. Signs Letter of Intent with Pulmonem Inc. for Proposed Reverse Takeover Transaction

Vancouver, British Columbia--(Newsfile Corp. - November 8, 2024) - Adaptogenics Health Corp. (CSE: ADPT) ("Adaptogenics", the "Company" or the "Issuer") is pleased to announce it has entered into a non-binding letter of intent (the "LOI"), dated November 7, 2024, to acquire all of the issued and outstanding shares of Pulmonem Inc. (the "Target"), which is arm's length to the Company, resulting in a proposed reverse takeover of the Issuer (the "Transaction").

On closing of the Transaction (the "Closing"), the shareholders of Adaptogenics will hold approximately 5.96% of the Issuer, the shareholders of Pulmonem Inc. will hold approximately 81.50% of the Issuer, subscribers to the Concurrent Financing will hold approximately 10.91% of the Issuer and a consultant of the Target for the Transaction will hold approximately 1.63% of the Issuer, on a non-diluted basis. Upon the Closing, the Target will become a wholly-owned subsidiary of the Issuer. The Company has 16,397,701 issued and outstanding common shares as of the date of this news release. On Closing of the Transaction, it is anticipated that the resulting issuer will have 27,492,870 issued and outstanding common shares.

About Pulmonem Inc.

Pulmonem Inc. is a Phase III ready clinical-stage biotechnology company with a granted IND from the FDA and a CTA approval from Health Canada. The company recently shifted its primary focus from COVID-19 to Acute Respiratory Distress Syndrome (ARDS) in response to evolving market demands and scientific advancements. This strategic decision is driven by promising research and the substantial unmet medical need in ARDS¹, presenting a significant opportunity for Pulmonem to make a meaningful impact. COVID-19 infection is only one of the multiple causes of ARDS, which is a severe condition characterized by the rapid onset of widespread inflammation in the lungs, often leading to respiratory failure. The current treatment options for ARDS are limited and primarily supportive, such as mechanical ventilation and oxygen therapy. This underscores the urgent need for innovative therapeutic interventions.

Proposed Transaction

Pursuant to the terms of the LOI and the upcoming formal agreement (the "Formal Agreement"), the Issuer will acquire all of the Target's common shares (the "Target Shares") outstanding as at the Closing from the shareholders of the Target (the "Vendors"), including all of the Financing Shares (as defined below) upon conversion of the Target Subscription Receipts (as defined herein), in exchange for the issuance to the Vendors of such number of Issuer's common shares (the "Issuer Shares") as is equal to the number of Target Shares then outstanding (each, a "Consideration Share") on a pro rata basis at a deemed price of $1.00 per Consideration Share. The Transaction will be completed pursuant to, and in strict accordance with, available exemptions under applicable securities legislation. The Transaction will qualify as a Fundamental Change (as such term is defined in the policies of the Canadian Securities Exchange (the "Exchange")) of the Issuer.