MGC Pharmaceuticals Ltd.

December 2023 Quarter Activity Report and

Cash Flow Statement

31 January 2024

ASX, LSE: MXC

Key Highlights:

·      MGC completed a comprehensive corporate restructuring, completing a 1,000:1 consolidation and conditionally raising a total of US$7.9 million and US$0.5 million, totalling US$8.4 million over the quarter

·      MGC was granted FDA approval in Saudi Arabia for its proprietary product ArtemiC^TM

·      CMC Markets UK PLC (CMC) were appointed as the Company's joint UK broker with immediate effect on 1 December 2023

MGC Pharmaceuticals Ltd (MGC Pharma, MGC or the Company) a European based pharmaceutical company specialising in the production and development of plant derived medicines, is pleased to provide its Quarterly Activity Report for the three months ending 31^st December 2023.

Roby Zomer, Managing Director and CEO of MGC Pharma, commented: "We are delighted to share positive developments from the business during the December quarter. MGC successfully concluded a thorough corporate restructuring, which included a 1,000:1 consolidation. Additionally, the company conditionally raised a total of US$7.9 million and US$0.5 million, amounting to a total of US$8.4 million for the quarter. Moreover, we are pleased to announce that the Company has obtained FDA approval in Saudi Arabia for its proprietary product, ArtemiC^TM."

Key Company Activities

ArtemiC™ Receives FDA Approval in Saudi Arabia

On 19 December 2023 MGC announced it had been granted approval for its proprietary product ArtemiC™ by the Food and Drug Authority in the Kingdom of Saudi Arabia (Saudi FDA).

Following the success of Phase II clinical trials^[1] and European studies on its effectiveness in assisting with the recovery of patients from Covid and long-term Covid^[2], ArtemiC™ was approved by the Saudi FDA as an over-the-counter (OTC) dietary supplement. Capital Blossom, through its joint venture collaboration with its Saudi partner worked on obtaining the approval of the Saudi FDA for the Company. The Company is hopeful this will transition into commercial orders for MGC as we work closely with Capital Blossom Ltd who are specialists in this territory.

Capital Restructuring

During the quarter, the Company completed a comprehensive corporate restructuring. The restructuring involved a 1,000:1 capital consolidation and a US$7.9 million fundraising, allowing the Company to proceed with the execution of its pharmaceutical workplan for 2024. The restructuring now positions the Company to expand its global footprint and unlock new avenues for future growth and collaboration.

December Quarter Sales Update

December Quarter Sales Update: MGC Pharma's revenues in the December quarter were in line with the quarterly average sales.

Corporate and Commercial News

Funding and Cashflow Reporting

During the quarter, the Company conditionally raised US$7.9 million (~A$12.4million) by way of a placing through the subscription of 31,000,000 new ordinary shares of no-par value (Ordinary Shares) in the capital of the Company at a price of US$0.255 (~A$0.40) per share. The Company also agreed to issue one free attaching option exercisable at US$0.32 (~A$0.50) with an expiry date of 14 July 2026 for every two shares subscribed for under the Placement.

Additionally, the Company conducted a second, strategic placement of $US500,000. Under the Placement, the Company issued 1,480,000 fully paid ordinary shares (Shares) at an issue price of AU$0.50 per Share, representing nil discount to the 21 December 2023 closing price and approximately 5.5% to the 5-day volume weighted average price (VWAP). The placement included one (1) attaching option for every two (2) Placement Shares issued. The options are exercisable at AU$1.00 each, with an expiry of 10 January 2027. The funds were raised in order to support the Company's legal and marketing costs.

At the end of the December, the Company has ~A$6.482 million of cash on hand.

Accompanying this Activity Report is a Cash Flow Report for the Quarter ending 31 December 2023.

In accordance with ASX Listing Rule 4.7C.3 the Company advises that during the December 2023 quarter, payments to related parties totalled A$276k, which consisted of fees paid to executive and non-executive directors of the Company.

As detailed in the accompanying Appendix 4C (Quarterly Cashflow Report), cashflows during the quarter included A$238k cash outflows associated with inventory production, A$733k for Research and development costs, ~A$2.3 million for administration costs (including product registration costs), and cash inflows of ~A$12.1 million.

Results of Annual General Meeting

On 30 November 2023 the Company announced the voting results from the Annual General Meeting of shareholders. The Company announced that all motions put to the meeting were voted by poll, with all resolutions carried. Details of the results can be found in the following URL:

https://www.investi.com.au/api/announcements/mxc/79f52b83-6ac.pdf

Personnel Changes

On 1 December 2023 Dr Stephen Parker and Dr Ross Walker resigned as Directors of the Company. Mr Daniel Robinson, with over 20 years' experience in a broad range of corporate roles across stockbroking, corporate advisory, investor relations and governance, was appointed in their place. The Company thanked Dr Parker and Dr Walker for all their contributions to the Company over their many years of service and wished them the very best for the next stage of their careers.

CMC Markets UK PLC (CMC) were appointed as the Company's joint UK broker with immediate effect on 1 December 2023. CMC is headquartered in London, with hubs in Sydney and Singapore.

-ENDS-

Authorised for release by the board of directors, for further information please contact:

About MGC Pharma

MGC Pharmaceuticals Ltd (LSE: MXC, ASX: MXC) is a prominent European pharmaceutical company with a strong commitment to creating accessible and ethically produced cutting-edge medicines. Our approach combines in-house research with innovative technologies, all aimed at discovering and producing treatments for currently unmet medical conditions.

The company's founders and executives are distinguished figures in the global pharmaceutical industry. Our central business strategy revolves around the development and supply of innovative medicines, responding to the increasing demand in the medical markets of Europe, North America, and Australasia.

MGC Pharma maintains a robust development pipeline that addresses two prevalent medical conditions, with additional products currently in the developmental stages. We've established strategic partnerships with renowned institutions and academia, fostering the optimization of our medicines' development. These medicines are produced in our EU-GMP Certified manufacturing facilities, ensuring the highest quality standards.

With a growing patient base in key regions like the USA, UK, Australia, and Ireland, MGC Pharma has also built a global distribution network through a wide-reaching group of commercial partners. This extensive network places us in a prime position to supply the global market effectively.

Follow us through our social media channels:

LinkedIn: MGC Pharmaceuticals Ltd.

Twitter: @MGC_Pharma

Facebook: @mgcpharmaceuticals

Instagram: @mgc_pharma

Forward Looking Statements

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "anticipates", "targets", "aims", "continues", "expects", "intends", "hopes", "may, "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not facts. They include statements regarding the Directors' beliefs or current expectations. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Investors should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement.

Appendix 4C

Quarterly cash flow report for entities

subject to Listing Rule 4.7B

The payments in 6.1 are payments to directors of the company for their service during the quarter.

Compliance statement

1          This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

2          This statement gives a true and fair view of the matters disclosed.

                                31 January 2024

Date:                      ...................................................................................

                                    [lodge electronically without signature]

Authorised by:     ...................................................................................

                                                Roby Zomer - Managing Director

Notes

1.         This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity's activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2.         If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this report.

3.         Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4.         If this report has been authorised for release to the market by your board of directors, you can insert here: "By the board". If it has been authorised for release to the market by a committee of your board of directors, you can insert here: "By the [name of board committee - eg Audit and Risk Committee]". If it has been authorised for release to the market by a disclosure committee, you can insert here: "By the Disclosure Committee".

5.         If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.