Mr. Zeeshan Saeed reports

FSD PHARMA ANNOUNCES SHARE CONSOLIDATION AND NAME CHANGE

FSD Pharma Inc. has proposed a consolidation of its issued and outstanding Class A multiple voting shares and Class B subordinate voting shares of the company on the basis of one postconsolidation Class A multiple voting share and Class B subordinate voting share for every 65 preconsolidation Class A multiple voting shares and Class B subordinate voting shares. This ratio is within the ratio range approved by the company's stockholders at its annual general and special meeting held on July 22, 2024.

The company will also change its name to Quantum BioPharma Ltd. and, subject to approval by the Nasdaq Capital Market, the Class B subordinate voting shares will commence trading on the Canadian Securities Exchange and Nasdaq under the new trading symbol QNTM on both the CSE and Nasdaq at the market open on Aug. 15, 2024.

The consolidation is expected to be effective at 12:01 a.m. Eastern Time on Aug. 15, 2024, and the company's Class B subordinate voting shares will begin trading on a postconsolidation basis at the market open on the Nasdaq and CSE on Aug. 15, 2024, under the trading symbol QNTM. The consolidation is part of the company's plan to regain compliance with the minimum bid price requirement for continued listing on the Nasdaq.

As a result of the consolidation, the 72 Class A multiple voting shares currently issued and outstanding will be reduced to two Class A multiple voting shares. As a result of the consolidation, the 77,649,332 Class B subordinate voting shares currently issued and outstanding will be reduced to approximately 1,194,852 Class B subordinate voting shares. No fractional Class A multiple voting shares and Class B subordinate voting shares will be issued as a result of the consolidation. If the consolidation would otherwise result in the issuance of a fractional Class A multiple voting shares or Class B subordinate voting shares, no fractional Class A multiple voting shares or Class B subordinate voting shares shall be issued, and such fraction will be rounded up to the nearest whole number.

The exercise price or conversion price and the number of Class B subordinate voting shares issuable under any of the company's outstanding convertible securities will be proportionately adjusted upon consolidation.

Upon completion of the consolidation and the name change, the Cusip number and ISIN of the Class B subordinate voting shares will be changed to 74764Y 20 5 and CA 74764Y 20 5 0, respectively, and the Cusip number and ISIN of the Class A multiple voting shares will be changed to 74764Y 10 6 and CA 74764Y 10 6 0, respectively.

In accordance with the company's governing corporate legislation, the Business Corporations Act (Ontario) (OBCA), and the company's constating documents, the name change and consolidation were approved by the shareholders of the company at the annual general and special meeting of shareholders held on July 22, 2024.

Letter of transmittals with respect to the name change and consolidation will be mailed to registered shareholders after the effective day. All registered shareholders will be required to deposit their share certificate(s) or DRS statements, together with the duly completed letter of transmittal, with Marrelli Trust Co. Ltd., the company's registrar and transfer agent, in accordance with the instructions provided in the letter of transmittal. Until surrendered, each certificate or DRS statements formerly representing Class A multiple voting shares or Class B subordinate voting shares will be deemed for all purposes to represent the number of Class A multiple voting shares or Class B subordinate voting shares to which the holder thereof is entitled as a result of the consolidation. Shareholders who hold their Class A multiple voting shares or Class B subordinate voting shares through a broker, investment dealer, bank or trust company should contact that nominee or intermediary for assistance in depositing their Class A multiple voting shares or Class B subordinate voting shares in connection with the name change and consolidation. A copy of the letter of transmittal will be posted on the company's SEDAR+ profile.

In addition, as approved by the shareholders of the company at the annual general and special meeting of shareholders held on July 22, 2024, the company is also pleased to announce a non-brokered private placement of postconsolidation Class A multiple voting shares. The company expects to offer up to four Class A multiple voting shares at a price of $18 per Class A multiple voting share, and expects that the entirety of the offering will be subscribed for by entities beneficially owned or controlled by Zeeshan Saeed and Anthony Durkacz, being the existing holders of Class A multiple voting shares. When the company initially went public in 2018, the voting rights attached to the Class A multiple voting shares equalled 75.87 per cent of the aggregate voting rights attached to the Class A multiple voting shares and Class B subordinate voting rights. As a result of issuances of Class B subordinate voting shares over the intervening six years, that percentage has declined to 20.42 per cent. The company has determined that it would be in its best interests to proceed with the offering, which, if fully subscribed, would result in the voting rights attached to the Class A multiple voting shares increasing to 58.15 per cent, which returns those voting rights to nearly the same percentage as when the company initially went public. The board of directors of the company determined that the offering was in the best interests of the company and executed a board resolution approving the same on Aug. 6, 2024. In its decision-making process, the board of directors had informal discussions excluding Mr. Saeed and Mr. Durkacz to discuss the offering; it reviewed the company's articles and it reviewed the implications of issuing additional Class A multiple voting shares. Mr. Saeed and Mr. Durkacz abstained from this vote with respect to their interest in the resolution, in accordance with Section 132(5) of the OBCA. In accordance with the OBCA, all the directors were required to sign the authorizing resolution in order for the offering to be valid as if passed at a meeting of the directors of the company, however, the signatures of each of Mr. Saeed and Mr. Durkacz do not constitute a vote by the insider as a director to approve the offering. The offering was unanimously approved by the directors of the company entitled to vote thereon. All Class A multiple voting shares issued pursuant to the offering will be subject to hold periods of four months and a day from the date of closing.

The company expects Mr. Saeed and Mr. Durkacz, being related parties as defined in Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions, to participate in the offering. The company expects that any such resulting related party transaction will be exempt from the formal valuation requirement and minority shareholder approval requirements of MI 61-101 based on the exemptions under sections 5.5(a) and 5.7(1)(a) of MI 61-101 as the fair market value of the Class A multiple voting shares being purchased will not exceed 25 per cent of the company's market capitalization. The company expects that the closing of the offering will occur within 21 days of this announcement and that it will not file a material change report in respect of the related party transaction at least 21 days before the closing date. The company deems this circumstance reasonable and necessary in order to complete the offering in an expeditious manner.

About FSD Pharma Inc.

FSD Pharma is a biopharmaceutical company dedicated to building a portfolio of innovative assets and biotech solutions for the treatment of challenging neurodegenerative and metabolic disorders, and alcohol misuse disorders, with drug candidates in different stages of development. Through its wholly owned subsidiary, Lucid Psycheceuticals Inc., FSD Pharma is focused on the research and development of its lead compound, Lucid-MS (formerly Lucid-21-302). Lucid-MS is a patented new chemical entity shown to prevent and reverse myelin degradation, the underlying mechanism of multiple sclerosis, in preclinical models. FSD Pharma invented unbuzzd and spun it out its OTC (over-the-counter) version to a company, Celly Nutrition, led by industry veterans. FSD Pharma retains ownership of 25.71 per cent (March 31, 2024) of Celly Nutrition Corp. The agreement with Celly Nutrition also includes royalty payments of 7 per cent of sales from unbuzzd until payments to FSD Pharma total $250-million. Once $250-million is reached, the royalty drops to 3 per cent in perpetuity. Additionally, FSD Pharma retains a large tax loss carryforward of approximately $130-million and could be utilized in the future to offset tax payable obligations against future profits. FSD Pharma retains 100 per cent of the rights to develop similar product or alternative formulations specifically for pharmaceutical/medical uses. FSD Pharma maintains a portfolio of strategic investments through its wholly owned subsidiary, FSD Strategic Investments Inc., which represent loans secured by residential or commercial property.

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