ZYUS Life Sciences Closes Unsecured Loan and Amends Previous Loans
ZYUS Life Sciences Corporation (“ZYUS” or the “Company”) (TSX-V: ZYUS), a Canadian-based life sciences company focused on the research, development, and commercialization of innovative cannabinoid-based pharmaceutical drug candidates for pain management, has announced the successful closing of a CAD$1,500,000 unsecured loan (the “Loan”) from an independent director of the Company (the “Lender”). The Loan transaction was finalized on March 7, 2025, pending the filing of the notice of the Loan with the TSX Venture Exchange.
Key Loan Terms and Purpose
The Loan carries an annual interest rate of 12%, with interest payments due upon maturity. The Company has the flexibility to prepay the Loan at any time without incurring any penalties or premiums. The maturity date for the Loan is set for March 28, 2027. The proceeds from the Loan will be directed towards general working capital, enabling the Company to continue its operational and strategic initiatives.
Amendment of Prior Unsecured Loans
In addition to securing the new Loan, ZYUS has successfully negotiated amendments to its prior unsecured loans (the “Prior Unsecured Loans”). These loans, originally executed on October 1, November 5, and December 20, 2024, collectively represent an outstanding principal balance of CAD$5.0 million. The maturity dates for these loans, which were originally set for April 1, May 5, and June 20, 2025, respectively, have now been extended to March 28, 2027. The amendments provide the Company with extended financial flexibility as it continues to advance its pipeline of cannabinoid-based pharmaceutical products.
Terms and Consideration for Loan Extension
As part of the agreement for both the new Loan and the extension of the Prior Unsecured Loans, the Lender has been granted 4,875,000 common share purchase warrants (the “Warrants”). These Warrants have a two-year expiry period from the date of issuance, subject to acceleration under certain conditions. Each Warrant grants the Lender the right to purchase one common share of the Company at an exercise price of CAD$0.80 per share until the expiry date.
The issuance of the Warrants remains subject to approval by the TSX Venture Exchange. Furthermore, should any portion of the outstanding principal from either the new Loan or the Prior Unsecured Loans be repaid before the first anniversary of the Warrant issuance date, the expiry date of the corresponding Warrants will be accelerated to one year from the original issuance date.
Regulatory and Compliance Considerations
The Loan and the Unsecured Loan Amendments fall under the category of “related party transactions” as defined by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). This classification arises from the fact that the Lender is a director of the Company. As a result, the Lender abstained from voting during the audit committee and board of directors’ approval process regarding the Loan and the associated amendments.
The Company has relied on exemptions outlined in MI 61-101 to proceed with the transaction without requiring a formal valuation or minority shareholder approval. Specifically, ZYUS utilized:
- Section 5.5(b) (Issuer Not Listed on Specified Markets) to waive the valuation requirement.
- Section 5.7(1)(a) (Fair Market Value Not More Than 25 Percent of Market Capitalization) to waive the minority shareholder approval requirement.
Due to the timing and nature of these transactions, ZYUS did not file a material change report more than 21 days prior to the issuance of the Loan and the amendments to the Prior Unsecured Loans. This decision was made as the final details of the agreements had not been settled until recently.
Corporate Outlook and Strategic Implications
The successful securing of the new Loan and the extension of the Prior Unsecured Loans represent a significant step forward for ZYUS as it continues its mission to develop and commercialize novel cannabinoid-based therapies for pain management and related conditions. The additional financial resources provided by the Loan will support the Company’s ongoing research and development activities, regulatory filings, and potential expansion opportunities.
Zachary Stadnyk, CEO of ZYUS Life Sciences, stated: “We are pleased to secure this funding, which not only reinforces confidence in our strategic vision but also strengthens our financial position as we continue advancing our cannabinoid-based drug candidates. The extension of our prior loans demonstrates the commitment of our investors and stakeholders in supporting our long-term objectives.
