ARCH Arch Biopartners Inc

Arch Biopartners Inc. (“Arch” or the “Company”) (TSX Venture: ARCH and OTCQB: ACHFF) announced today that the Company has arranged a transaction to settle an aggregate total of $2,600,000 of principal plus accrued interest owing on four deferred convertible notes maturing on Sept 30, 2024 (the “Notes”).

The original terms of the four Notes included settlement of the principal owing with 3,220,147 common shares priced at a weighted average of $0.81. In order to settle the principal plus accrued interest owing on the Notes and be fully compliant with TSX Venture Polices, the Company and the holder of the Notes have agreed to settle the principal amount with the issuance of 1,934,524 units (the “Units”) priced at $1.344 per unit, with each unit composed of one (1) pre-paid warrant exercisable into one common share of the Company at a date five (5) years from the closing date of the settlement of the Notes, and 1 (one) share purchase warrant exercisable into one common share of the Company at $1.68 per common share, at a date 5 (five) years from the closing date of the settlement of the Notes . The accrued interest on the Notes, totaling $130,000 up to September 30, 2024, will be settled with an additional issuance of 96,726 Units.

The final conversion terms of the Units will be finalized prior to the planned closing date of the Units for debt transaction of September 30, 2024 (the “Closing Date”)

The Units for debt settlement is subject to TSXV acceptance and pursuant to TSXV Policies, including Policy 4.3 - Shares for Debt. The holder of the Notes is an arms-length party to the Company. The Units will be issued subject to prospectus exemptions available pursuant to Canadian securities law.

Original Details of the Notes

The original details of the Notes can be found in note 7 of the Company’s 2024 third quarter interim financial statements and the audited 2023 annual financial statements.

The Company previously issued the Notes pursuant to a non-brokered, unsecured convertible note financing for which it received gross proceeds of $500,000 ("Note A"), $600,000 ("Note B"), $500,000 ("Note C"), $1,000,000 ("Note D"), and $500,000 ("Note E"), respectively. The Notes to be settled with Units include Notes A, B, C and D.

Note A ($500,000) was scheduled to mature on March 31, 2023, but the term of the Note was extended to September 30, 2024. The Note was convertible, at the option of the holder, into common shares of the Company at a price per share of $0.50, in the thirty-day period prior to maturity of the Note. The Note bears interest of 5% per annum, which was payable in kind by the Company with common shares to be issued at the then market price for the common shares and subject to TSX Venture Exchange approval in each instance.

Note B ($600,000) was scheduled to mature on February 28, 2023, but the term of the Note was extended to September 30, 2024. The Note was convertible, at the option of the holder, into common shares of the Company at a price per share of $0.60, in the thirty-day period prior to maturity of the Note. The Note bears interest of 5% per annum, which was payable in-kind by the Company with common shares to be issued at the then market price for the common shares and subject to TSX Venture Exchange approval in each instance.

Note C ($500,000) was scheduled to mature on January 24, 2024, but the term of the Note was extended to September 30, 2024, The Note was convertible, at the option of the holder, into common shares of the Company at a price per common share of $1.27, in the thirty- day period prior to the maturity of the Note. The Note bears interest at 5% per annum, which was payable in-kind by the Company with common shares to be issued at then market prices for the common shares and subject to TSX Venture Exchange approval in each instance.

Note D ($1,000,000) was scheduled to mature on March 31, 2023, but the term of the Note was extended to September 30, 2024. The Note was convertible at the option of the holder, into common shares in the Company at a price per share of $1.21, in the thirty-day period prior to maturity of the Note. The note bears simple interest at a rate of 5% per annum, which was payable in kind by the Company with common shares to be issued at then market price for the common shares, subject to TSX Venture Exchange approval.

Note E ($500,000) matures on February 1, 2025 and will be convertible, at the option of the holder, into common shares of the Company at a price per common share of $0.89, in the thirty-day period prior to the maturity of the Note. The Note bears interest at 8.5% per annum, which is payable in-kind by the Company with common shares to be issued at then market prices for the common shares and subject to TSX Venture Exchange approval in each instance. Note E will not be part of the Units for debt transaction described above.

Compliance with TSXV Policy 4.1 – Convertible Debt

The extensions of Note A, B, C and D (the “Extensions”) did not comply with the requirements under TSXV Policy 4.1 – Private Placements. In particular, the Extensions exceeded the allowable 5-year period of a Convertible Security (as defined under Policy 4.1). Thus, the original conversion prices were no longer permissible under TSXV Policies.

In order to re-establish compliance of the Notes with TSXV Policies, the Company and the holder of the Notes have accepted the TSXV’s recommendation to amend and settle Note A, B, C and D with Units as described above.

The Units for debt transaction was approved by the Company’s Board of Directors and did not require a formal valuation nor minority shareholder approval pursuant to Multilateral Instrument 61-101.

About Arch Biopartners

Arch Biopartners Inc. is a clinical stage company focused on the development of innovative technologies that have the potential to make a significant medical or commercial impact.  Arch is developing a pipeline of new drug candidates that inhibit inflammation in the lungs, liver and kidneys via the dipeptidase-1 (DPEP-1) pathway, relevant for multiple medical indications.

For more information on Arch Biopartners, its technologies and other public documents Arch has filed on SEDAR, please visit www.archbiopartners.com

The Company has 64,650,633 common shares outstanding.

For more information, please contact:

Richard MuruveChief Executive OfficerArch Biopartners Inc1 647 428 7031

Please send a message or subscribe for email alerts at the company website using the link here www.archbiopartners.com/contact-us

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of applicable Canadian securities laws regarding expectations of our future performance, liquidity and capital resources, as well as the ongoing clinical development of our drug candidates targeting the dipeptidase-1 (DPEP-1) pathway, including the outcome of our clinical trials relating to LSALT peptide (Metablok), the successful commercialization and marketing of our drug candidates, whether we will receive, and the timing and costs of obtaining, regulatory approvals in Canada, the United States, Europe and other countries, our ability to raise capital to fund our business plans, the efficacy of our drug candidates compared to the drug candidates developed by our competitors, our ability to retain and attract key management personnel, and the breadth of, and our ability to protect, our intellectual property portfolio. These statements are based on management’s current expectations and beliefs, including certain factors and assumptions, as described in our most recent annual audited financial statements and related management discussion and analysis under the heading “Business Risks and Uncertainties”. As a result of these risks and uncertainties, or other unknown risks and uncertainties, our actual results may differ materially from those contained in any forward-looking statements. The words “believe”, “may”, “plan”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “expect” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We undertake no obligation to update forward-looking statements, except as required by law. Additional information relating to Arch Biopartners Inc., including our most recent annual audited financial statements, is available by accessing the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (“SEDAR”) website at www.sedar.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release