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FSD Pharma Announces Share Exchange Transaction with Aura Health

April 24, 2019 Off By BusinessWire

– Intended Transaction positions FSD to establish distribution
channel in Germany & Eurozone –

TORONTO–(BUSINESS WIRE)–lt;a href="https://twitter.com/hashtag/FSDDF?src=hash" target="_blank"gt;#FSDDFlt;/agt;–FSD Pharma Inc. (CSE: HUGE) (OTCQB: FSDDF) (FRA: 0K9) announced today
that it has entered into a share exchange transaction with Aura Health
Inc. (“Aura”). Pursuant to the agreement, FSD acquired 13,562,386 Aura
shares valued at $3 million issued from treasury in exchange for
13,181,019 FSD shares issued from treasury valued at $3 million. Aura
Health is a Toronto-based cannabis company building an international
network of vertically integrated businesses in the medical cannabis
industry.

FSD and Aura shares will be placed in escrow and released to the
companies upon the Escrow Agent receiving a certificate executed by FSD
and Aura that: (i) the Offering Escrow Release Conditions have been
satisfied; (ii) the acquisition has closed; (iii) each of FSD and Aura
are satisfied with their due diligence review of the other party; (iv)
the Supply Agreement has been executed by FSD and Pharmadrug; and (v)
the Consulting Agreement has been executed by FSD and Aura.

As part of the transaction, Aura and FSD will enter into a consulting
agreement. Aura will assist FSD with obtaining euGMP certification at
the company’s existing licensed facility through Pharmadrug Production
GmbH, a company for which Aura Health is in the process of acquiring an
80% equity interest.

Aura has a pre-existing supply agreement with another producer that it
is required to honor in priority. It is anticipated that FSD will become
a preferred Canadian cannabis supplier to Pharmadrug for the German
market. Pharmadrug will enter into a supply agreement with FSD and upon
proper euGMP certification will commit to purchase 1,000 kilograms (or
such greater or lesser amount as may be agreed from time to time by the
parties) of Canadian produced cannabis product from FSD at a price of
$7.00 per gram FOB Germany (subject to downward adjustment should market
exigencies dictate), provided that the product is saleable in the German
market.

The Supply Agreement is not a “take or pay” arrangement. For greater
certainty, the Supply Agreement will not limit or restrict the ability
of Pharmadrug to freely source product from other suppliers in any other
country, provided that the Purchase Commitment is satisfied.

Zeeshan Saeed, Founder and President of FSD commented, “This agreement
with Aura Health establishes a distribution channel for FSD in Germany
and the Eurozone and allows the company to expand its footprint
internationally. As production at our Cobourg facility grows and
following receipt of our euGMP certification, we will be able to supply
our high-quality cannabis products to the medical markets in Europe.”

“This is an exciting opportunity for FSD Pharma to capitalize in the
global medicinal cannabis space. The global market is expected to grow
and remain undersupplied for some time. In collaboration with Aura
Health, we see an opportunity to increase shareholder value by
establishing channel partners in Germany and the Eurozone” stated Dr.
Raza Bokhari, Executive Co-Chairman & CEO.

About FSD Pharma

FSD Pharma is focused on the development of the highest quality indoor
grown, pharmaceutical grade cannabis and on the research and development
of novel cannabinoid-based treatments for several central nervous system
disorders, including chronic pain, fibromyalgia and irritable bowel
syndrome. The Company has 25,000 square feet available for production at
its Ontario facility.

FSD facilities sit on 70 acres of land with 40 acres primed for
development and an expansion capability of up to 3,896,000 square feet.

FSD’s wholly-owned subsidiary, FV Pharma, is a licensed producer under
the Cannabis Act and Regulations, having received its cultivation
license on October 13, 2017. FV Pharma’s vision is to transform its
current headquarters in a Kraft plant in Cobourg, Ontario into the
largest hydroponic indoor grow facility in the world. FV Pharma intends
to cover all aspects of this exciting new industry, including
cultivation, legal, processing, manufacturing, extracts and research and
development. For additional information on the company, please visit our
website at www.fsdpharma.com.

About Aura Health Inc.

Aura Health is building an international network of vertically
integrated cannabis assets. Through an established product line of
cannabis-infused edible products and oil extracts, Aura is dedicated to
building a high margin downstream business in the medical marijuana
sector. The Company holds convertible debt that converts to 54% equity
of HolyCanna, a cultivation and nursery license holder in Israel and is
focused on acquiring strategic assets across the cannabis value chain,
initially in Israel and Germany.

Forward-Looking Information

Certain statements contained in this press release constitute
forward-looking information. These statements relate to future
events or future performance. The use of any of the words “could”,
“intend”, “expect”, “believe”, “will”, “projected”, “estimated” and
similar expressions and statements relating to matters that are not
historical facts are intended to identify forward-looking information
and are based on FSD Pharma’s current belief or assumptions as to the
outcome and timing of such future events. Actual future results may
differ materially. Actual results and developments may differ materially
from those contemplated by these. The forward-looking information
contained in this press release is made as of the date hereof, and FSD
Pharma is not obligated to update or revise any forward-looking
information, whether as a result of new information, future events or
otherwise, except as required by applicable securities laws. Because of
the risks, uncertainties and assumptions contained herein, investors
should not place undue reliance on forward looking-information. The
foregoing statements expressly qualify any forward-looking information
contained herein.