Company: MDCXW
Filing Date: 2025-03-07
Form Type: 253G1
Source: 0001062993-25-004966
Chunk: 232

Company: Medicus Pharma Ltd.
Filing Date: 2025-03-07
Form: 253G1
Chunk 232
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000 could be converted into preferred shares at a price determined by dividing $25,000,000 by the fully diluted outstanding shares at the time of conversion, excluding convertible debt securities, convertible promissory notes and any SAFEs outstanding.

In the event of a financing greater than $3,000,000 prior to maturity, the outstanding principal of the convertible debentures of $2,500,000 and any unpaid accrued interest automatically converted into preferred shares at the lesser of 80% of the price per share paid by other purchasers or the base conversion rate. This conversion results in a potential variable number of shares being issued on conversion, and as such the conversion options were accounted for as an embedded derivative liability, since they did not meet the criteria for equity classification. The conversion options were accounted for at fair value and were revalued at each reporting period end. The residual value was accounted for at amortized cost using the effective interest rate after adjusting for transaction costs.

The promissory notes were converted immediately prior to the RTO transaction for 647,224 common shares of SkinJect.

The changes to the derivative and convertible note liabilities for the years ended December 31, 2023, are as follows:

|                              |     | Derivative Liability |   |     | Convertible Note 
        Liability |   |     |      Total |   |
|:-----------------------------|:----|---------------------:|:--|:----|-----------------:|:--|:----|-----------:|:--|
|                              |     |                    $ |   |     |                $ |   |     |          $ |   |
| Balance at December 31, 2022 |     |              774,074 |   |     |        1,381,499 |   |     |  2,155,573 |   |
| Initial recognition          |     |              110,809 |   |     |          389,191 |   |     |    500,000 |   |
| Accretion                    |     |                    - |   |     |          739,096 |   |     |    739,096 |   |
| Fair value adjustment        |     |             (670,103 | ) |     |                - |   |     |   (670,103 | ) |
| Conversion                   |     |             (214,780 | ) |     |       (2,509,786 | ) |     | (2,724,