Psyence Biomedical Ltd F-3, filed Mar 4, 2025
Psyence Biomedical Ltd. (PBM)
As filed with the Securities and Exchange Commission on March 4, 2025
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Psyence Biomedical Ltd.
(Exact name of Registrant as specified in its charter)
| Ontario, Canada | Not Applicable | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
121 Richmond Street West
Penthouse Suite 1300
Toronto, Ontario M5H 2K1
Telephone: + 1 (416) 346-7764
(Address and telephone number of Registrant’s principal executive offices)
Puglisi & Associates
850 Library Avenue
Newark, Delaware 19711
(302) 738-6680
(Name, address, and telephone number for agent for service)
Copies of all communications, including communications sent to agent for service, should be sent to:
Ari Edelman
Edelman Legal Advisory PLLC
400 Rella Boulevard, Suite 165
Suffern, New York 10901
(845) 533-3435
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement.
If only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☒
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
EXPLANATORY NOTE
On January 24, 2025, Psyence Biomedical Ltd. (“we,” “us,” “our,” or the “Company”), filed a Registration Statement on Form F-1with the Securities and Exchange Commission, or the SEC, (Registration No. 333-284444) (the “January 2025 F-1”), to register for resale by the selling shareholders identified in the prospectus contained therein an aggregate of up to 380,000 Common Shares, of which 0 remains unsold, and 2,695,000 Common Shares underlying warrants, of which 2,075,000 remain unsold. On December 20, 2024, the Company filed a Registration Statement on Form F-1 (Registration No. 333-283980) (the “December 2024 F-1”), which registered 10,882,355 Common Shares, of which 10,882,355 remain unsold. The December 2024 F-1 was declared effective on December 31, 2024. The Company also filed a Registration Statement on Form F-1 on October 2, 2024 (Registration No. 333-282468) (the “First October 2024 F-1”), which registered 145,333 Common Shares, including 6,666 Common Shares underlying warrants, of which 6,666 remain unsold. The First October 2025 F-1 was declared effective on October 10, 2024. The Company also filed a Registration Statement on Form F-1 on October 30, 2024 (Registration No. 333-282904) (the “Second October 2024 F-1”), which registered 1,398,951 Common Shares, of which 298,951 remain unsold, which was declared effective on November 6, 2024. The Company also filed a Registration Statement on Form F-1 on August 19, 2024 (Registration No. 333-281644) (the “August 2024 F-1”), which registered 674,334 Common Shares, of which 2,667 remain unsold, which was declared effective on August 28, 2024. The Company also filed a Registration Statement on Form F-1 on May 10, 2024 (Registration No. 333-276973) (the “May 2024 F-1”)), which registered 299,946 Common Shares, 7,600 warrants, and 174,266 Common Shares underlying warrants, of which, 5,947 Common Shares, 7,600 Warrants and 165,466 Common Shares underlying warrants remain unsold, and which was declared effective on May 14, 2024. In addition, the Company filed a Registration Statement on Form F-4 on November 13, 2023 (File No. 333-273553) (as thereafter amended and/or supplemented from time to time, the “F-4 Registration Statement” and together with the May 2024 F-1, January 2025 F-1, the December 2024 F-1, the first October 2024 F-1, the Second October 2024 F-1, and the August 2024 F-1 the “Prior Registration Statements” and such securities registered thereunder, the “Registered Securities”) of which 61,893 Common Shares remain unsold.
Effective November 26, 2024, the Company implemented a 75-to-1 share consolidation (reverse stock split) of its Common Shares, which was approved by the Company’s shareholders and its board of directors. The Common Shares presented herein are on a post-consolidated, or post-reverse split basis, unless otherwise indicated.
This Registration Statement on Form F-3 (this “Amendment” or this “registration statement”), which is a new registration statement, is being filed by the Company to convert the previously filed Registration Statements into a single registration statement on Form F-3, pursuant to Rule 429 under the Securities Act, and therefor constitutes as post-effective to each of the prior Registration Statements, and such post-effective amendment shall hereafter become effective concurrently with the effectiveness of this registration statement in accordance with Section 8(c) of the Securities Act. This registration statement contains a combined prospectus that incorporates and updates the information from the Prior Registration Statements. This registration statement also acts a primary registration statement and contains two prospectuses: (i) a base prospectus that covers the offering, issuance and sale by us of up to $75,000,000 in the aggregate of common shares, preferred shares, debt securities, warrants, and/or units, in each case from time to time in one or more offerings, and (ii) a sales agreement prospectus covering the offering, issuance and sale by us of up to a maximum aggregate offering price of $2,591,260 of our Common Shares that may be issued and sold under a sales agreement (the “Sales Agreement”), with H.C. Wainwright & Co., LLC (“Wainwright”), as sales agent. In addition, this registration statement, of which this prospectus forms a part, relates to the potential offer and resale from time to time of an aggregate of 311,374 Common Shares by the Selling Securityholders.
The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until this Registration Statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed or supplemented. No securities described in this prospectus can be sold until the registration statement that we filed to cover the securities has become effective under the rules of the Securities and Exchange Commission. This prospectus is not an offer to sell the securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MARCH 4, 2025
PRELIMINARY PROSPECTUS
Psyence Biomedical Ltd.
Up to $75,000,000 of Common Shares, Preferred Shares, Debt Securities, Warrants, Rights and Units
and
11,563,187 Common Shares
2,247,132 Common Shares Underlying Warrants
7,600 Warrants
This prospectus relates to the offer and sale, from time to time, of up to 13,810,319 of our common shares, no par value (“Common Shares”), of Psyence Biomedical Ltd., a corporation organized under the laws of Ontario, Canada (“Psyence,” the “Company,” “we,” “us,” or “our”), by the selling securityholders named in this prospectus (each a “Selling Securityholder”), and up to 7,600 warrants to purchase Common Shares at an exercise price of $862.50 per Common Share. The offer and sale of 13,810,319 of the Common Shares, including 2,247,132 Common Shares underlying warrants, were previously registered pursuant to our registration statements on Form F-1 (File Nos. 333-276973, 333-281644, 333-282468, 333-282904, 333-283980, and 333-284444), which were declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on May 14, 2024, August 28, 2024, October 10, 2024, November 6, 2024, December 31, 2024, and January 30, 2025, respectively (the “F-1 Registration Statements”) and F-4 (File No. 333-273553) which was declared effective by the SEC on November 13, 2023 (the “F-4 Registration Statement, and together with the F-1 Registration Statement, the “Prior Registration Statements”). Pursuant to Rule 429 under the Securities Act of 1933, as amended (the “Securities Act”), this prospectus updates the Prior Registration Statements and includes the Common Shares, Warrants and Common Shares underlying warrants previously registered and unsold by us (such securities, the “Registered Securities”) pursuant to such Prior Registration Statements.
This Registration Statement on Form F-3 (this “registration statement”) also acts a primary registration statement and contains two prospectuses: (i) a base prospectus that covers the offering, issuance and sale by us of up to $75,000,000 in the aggregate of our common shares, no par value (the “Common Shares”), preferred shares, debt securities, warrants, and/or units, in each case from time to time in one or more offerings, and (ii) a sales agreement prospectus covering the offering, issuance and sale by us of up to a maximum aggregate offering price of $2,591,260 of our Common Shares that may be issued and sold under a sales agreement (the “Sales Agreement”), with H.C. Wainwright & Co., LLC (“Wainwright”), as sales agent. In addition, this registration statement, of which this prospectus forms a part, relates to the potential offer and resale from time to time of an aggregate of 311,374 Common Shares by the Selling Securityholders.
On November 26, 2024, we effected a 75-to-1 reverse stock split. All Common Share amounts presented herein have been adjusted on a post-split basis unless otherwise indicated.
The Common Shares underlying existing warrants relate to Series A Warrants, Series B Warrants, Pre-Funded Warrants, Placement Agent Warrants, and other commitments, with varying exercise prices and expiration terms. The Series A Warrants and Series B Warrants have an exercise price of $2.00 per Warrant Share and expire five years and two years from the date of issuance, respectively. The Placement Agent Warrants have an exercise price of $2.50 per Warrant Share and expire five years from issuance. The Pre-Funded Warrants have an exercise price of $0.00001 per Warrant Share and do not expire. Each Warrant may be exercised on a cash or cashless basis, subject to beneficial ownership limitations.
Sales of the Common Shares being offered by this prospectus could depress the market price of our Common Shares and could impair our ability to raise capital through the sale of additional equity securities.
The aggregate market value of the voting and non-voting Common Shares held by non-affiliates, or our public float, as of March 4, 2025, is $7,773,780 based on 4,527,128 issued and outstanding Common Shares, of which 3,848,406 were held by non-affiliates as of such date, at a price of $2.02 per Common Share on January 3, 2025, which was the highest closing sale price of our Common Shares on the Nasdaq Capital Market within 60 days of the filing date of this registration statement. We have not offered any securities pursuant to General Instruction I.B.5 of Form F-3 during the prior 12 calendar month period that ends on and includes the date of this prospectus. Pursuant to General Instruction I.B.5 of Form F-3, in no event will we sell securities registered on this registration statement in a public primary offering with a value exceeding more than one-third of our public float in any 12-month calendar period so long as our public float remains below $75.0 million.
The Selling Securityholders may sell or otherwise dispose of the Common Shares described in this prospectus in a number of different ways and at varying prices. See “Plan of Distribution” for more information about how the Selling Securityholders may sell or otherwise dispose of the Common Shares being registered pursuant to this prospectus. Each of the Selling Securityholders may be deemed an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act. We will not receive any proceeds from the resale of the securities by the Selling Securityholders, though we may receive up to $147,152,500 upon the exercise of the warrants.
The Selling Securityholders will pay all brokerage fees and commissions and similar expenses attributable to the sales of Common Shares. We will pay the expenses (except brokerage fees and commissions and similar expenses) incurred in registering the Common Shares offered hereby, including legal and accounting fees. See “Plan of Distribution.”
We may add, update or change information contained in this prospectus from time to time by incorporating by reference any document or filing a prospectus supplement, as required. You should read this entire prospectus, together with the documents we incorporate by reference, and any applicable prospectus supplement carefully before you make your investment decision. Our Common Shares trade on the Nasdaq Capital Market under the symbol “PBM,” and certain of our warrants (the “Public Warrants”) trade on the Nasdaq Capital Market under the symbol “PBMWW.” On February 28, 2025, the Nasdaq official closing price of our Common Shares was $1.24 per share and the Nasdaq official closing price of our Public Warrants was $0.0211 per Public Warrant.
We are a “foreign private issuer,” and an “emerging growth company” each as defined under the federal securities laws, and, as such, we are subject to reduced public company reporting requirements. See the section entitled “Prospectus Summary — Implications of Being an Emerging Growth Company and a Foreign Private Issuer” for additional information.
Investing in our securities involves a high degree of risk. For a discussion of information that should be considered in connection with an investment in our securities, see “Risk Factors” beginning on page 25 of this prospectus and the risk factors contained in any document incorporated by reference in this prospectus and any applicable prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this Prospectus is , 2025
TABLE OF CONTENTS
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential” or the negative of these terms or other similar expressions. Forward-looking statements include, without limitation, the company’s expectations concerning the outlook for its business, productivity, plans and goals for future operational improvements and capital investments, operational performance, future market conditions or economic performance and developments in the capital and credit markets and expected future financial performance, as well as any information concerning possible or assumed future results of operations of the Company as set forth in this prospectus.
Forward-looking statements involve a number of risks, uncertainties and assumptions, and actual results or events may differ materially from those projected or implied in those statements. Important factors that could cause such differences include, but are not limited to:
| ● | the ability of Psyence Biomedical to realize the benefits expected from the Business Combination and to maintain the listing of the Common Shares or the Warrants on Nasdaq; |
| ● | volatility in the price of the securities of the Company due to a variety of factors, including the issuance and sale of Common Shares pursuant to the White Lion Purchase Agreement, changes in the competitive and highly regulated industries in which the Company operates, variations in performance across competitors, changes in laws and regulations affecting the Company’s business and changes in the Company’s capital structure; |
| ● | Psyence Biomedical’s success in retaining or recruiting, or changes required in, its officers, key employees or directors; |
| ● | factors relating to the business, operations and financial performance of the Company, including, but not limited to: |
| ● | the Company’s ability to achieve successful clinical results; |
| ● | the Company currently has no products approved for commercial sale; |
| ● | the Company’s ability to obtain regulatory approval for its product candidates, and any related restrictions or limitations of any approved products; |
| ● | the Company’s ability to obtain licensing of third-party intellectual property rights for future discovery and development of the Company’s product candidates; |
| ● | the Company’s ability to commercialize product candidates and achieve market acceptance of such product candidates; |
| ● | the Company’s success is dependent on product candidates which it licenses from third parties; |
| ● | the Company’s success is dependent on the supply of materials necessary to perform its clinical trials; and |
| ● | the ability to respond to general economic conditions; |
| ● | the Company has incurred significant losses since inception, and it expects to incur significant losses for the foreseeable future and may not be able to achieve or sustain profitability in the future; |
| ● | the Company requires substantial additional capital to finance its operations, and if it is unable to raise such capital when needed or on acceptable terms, it may be forced to delay, reduce, and/or eliminate one or more of its development programs or future commercialization efforts; |
| ● | the Company’s ability to develop and maintain effective internal controls; |
| ● | assumptions regarding interest rates and inflation; |
| ● | competition and competitive pressures from other companies worldwide in the industries in which the Company operates; and |
| ● | litigation and the ability to adequately protect the Company’s intellectual property rights. |
The foregoing list of factors is not exhaustive. Forward-looking statements are not guarantees of future performance. You should carefully consider the foregoing factors and the other risks and uncertainties described in the Company’s Reports on Form 20-F, Current Reports on Form 6-K and other documents filed by the Company from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. The forward-looking statements in this document represent the views of the Company as of the date of this document. Subsequent events and developments may cause that view to change. Readers are cautioned not to put undue reliance on forward-looking statements, and all forward-looking statements in this document are qualified by these cautionary statements. The Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. The Company does not give any assurance that it will achieve its expectations. The inclusion of any statement in this document does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.
ii
This prospectus is part of a registration statement on Form F-3 filed with the SEC using a “shelf” registration process for the delayed offering and sale of securities pursuant to Rule 415 under the Securities Act. Under this shelf registration process, we may sell any of our securities to the extent permitted in this prospectus and the applicable prospectus supplement, from time to time in one or more offerings on a continuous or delayed basis. In addition, this prospectus is a combined prospectus pursuant to Rule 429 under the Securities Act, which relates to:
| 1. | The January 2025 F-1 (File No. 333-284444): Registered 380,000 Common Shares, of which 0 remain unsold, and 2,695,000 Common Shares underlying warrants, of which 2,490,000 remain unsold. Declared effective January 30, 2025. |
| 2. | The December 2024 F-1 (File No. 333-283980): Registered 10,882,355 Common Shares, of which 10,882,355 remain unsold, declared effective on December 31, 2024. |
| 3. | The First October 2024 F-1 (File No. 333-282468): Registered 145,333 Common Shares, including 6,666 Common Shares underlying warrants, of which 6,666 remain unsold. Declared effective on October 10, 2024. | |
| 4. | The Second October 2024 F-1 (File No. 333-282904): Registered 1,398,951 Common Shares, of which 298,951 remain unsold. Declared effective on November 6, 2024. |
| 5. | The August 2024 F-1 (File No. 333-281644): Registered 674,334 Common Shares, of which 2,667 remain unsold. Declared effective on August 28, 2024. |
| 6. | The May 2024 F-1 (File No. 333-276973): Registered 299,946 Common Shares of which 5,947 remain unsold, 7,600 warrants, and 174,266 Common Shares underlying warrants, declared effective on May 14, 2024. |
| 7. | The F-4 Registration Statement (File No. 333-273553). |
The registration statement of which this prospectus forms a part converts the Prior Registration Statements into a registration statement on Form F-3. Pursuant to Rule 429, this registration statement constitutes:
| (a) | Post-effective amendment no. 2 to the May 2024 F-1 (File No. 333-276973); |
| (b) | Post-effective amendment no. 1 to the August 2024 F-1 (File No. 333-281644); | |
| (c) | Post-effective amendment no. 1 to the First October 2024 F-1 (File No. 333-282468); |
| (d) | Post-effective amendment no. 1 to the Second October 2024 F-1 (File No. 333-282904); |
| (e) | Post-effective amendment no. 1 to the December 2024 F-1 (File No. 333-283980); |
| (f) | Post-effective amendment no. 1 to the January 2025 F-1 (File No. 333-284444); and |
| (g) | Post-effective amendment no. 1 to the F-4 Registration Statement (File No. 333-273553). |
iii
The Selling Securityholders named in this prospectus may, from time to time, sell the securities described in this prospectus in one or more offerings. This prospectus includes important information about us, the Common Shares and warrants issued by us, the securities being offered by the Selling Securityholders, and other information you should know before investing. Any document incorporated by reference in this prospectus and any prospectus supplement may also add, update, or change information in this prospectus. If there is any inconsistency between the information contained or incorporated by reference in this prospectus and any prospectus supplement, you should rely on the information contained in that particular prospectus supplement.
This prospectus does not contain all of the information provided in the registration statement that we filed with the SEC. You should read this prospectus together with the additional information about us described in the section below entitled “Where You Can Find More Information.” You should rely only on information contained or incorporated by reference in this prospectus and any applicable prospectus supplement. We have not, and the Selling Securityholders have not, authorized anyone to provide you with information different from that contained or incorporated by reference in this prospectus, any prospectus supplement, or any free writing prospectus that we or the Selling Securityholders may authorize to be delivered or made available to you.
The information contained in this prospectus, any document incorporated by reference in this prospectus, and any applicable prospectus supplement is accurate only as of their respective dates, regardless of the time of delivery of this prospectus or any applicable document or supplement, or the sale of any securities offered hereby. You should not assume that the information contained in these documents is accurate as of any other date. Our business, financial condition, results of operations, and prospects may have changed since those dates.
We and the Selling Securityholders may offer and sell the securities directly to purchasers, through agents selected by us and/or the Selling Securityholders, or to or through underwriters or dealers. A prospectus supplement, if required, may describe the terms of the plan of distribution and set forth the names of any agents, underwriters, or dealers involved in the sale of securities. See “Plan of Distribution.”
This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the securities described in this prospectus. The securities offered by this prospectus are being offered only in jurisdictions where the offer is permitted.
Except as otherwise set forth in this prospectus, neither we nor the Selling Securityholders have taken any action to permit a public offering of these securities outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to the offering of these securities and the distribution of this prospectus outside the United States.
iv
FUNCTIONAL AND REPORTING CURRENCY
Psyence’s management believes that the U.S. dollar is the currency of the primary economic environment in which it operates. Thus, the functional and reporting currency for Psyence is the U.S. dollar.
In this prospectus, we present industry data, information and statistics regarding Psyence’s industry, business and the markets in which Psyence competes as well as publicly available information, industry and general publications and research and studies conducted by third parties. This information is supplemented where necessary with Psyence’s own internal estimates and information obtained from discussions with its customers, taking into account publicly available information about other industry participants and Psyence’s management’s judgment where information is not publicly available. This information appears in “Prospectus Summary,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and other sections of this prospectus.
Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry and general publications, government data and similar sources that we believe to be reliable. In some cases, we do not expressly refer to the sources from which this data is derived. In that regard, when we refer to one or more sources of this type of data in any paragraph, you should assume that other data of this type appearing in the same paragraph is derived from the same sources, unless otherwise expressly stated or the context otherwise requires. While we have compiled, extracted and reproduced industry data from these sources, we have not independently verified the data. Industry publications, research, studies and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this prospectus. These forecasts and forward-looking information are subject to uncertainty and risk due to a variety of factors, including those described under “Risk Factors.” These and other factors could cause results to differ materially from those expressed in any forecasts or estimates.
TRADEMARKS, TRADE NAMES AND SERVICE MARKS
This prospectus includes trademarks, tradenames and service marks, certain of which belong to Psyence and others that are the property of other organizations. Solely for convenience, trademarks, tradenames and service marks referred to in this prospectus appear without the ®, TM and SM symbols, but the absence of those symbols is not intended to indicate, in any way, that we will not assert our or their rights or that the applicable owner will not assert its rights to these trademarks, tradenames and service marks to the fullest extent under applicable law. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply a relationship with, or endorsement or sponsorship of us by, these other parties.
v
Unless otherwise stated or unless the context otherwise requires in this document:
“Articles of Incorporation” means the Company’s Articles of Incorporation, as registered on June 29, 2023.
“Board” means the board of directors of the Company.
“Biomed II” means Psyence Biomed II Corp., a corporation organized under the laws of Ontario, Canada.
“Business Combination” means the business combination transaction pursuant to which, among other things, (i) Parent contributed Biomed II to the Company in a share for share exchange and (ii) immediately thereafter, Merger Sub merged with and into NCAC, with NCAC being the surviving company in the merger and each outstanding NCAC Ordinary Share being converted into the right to receive one Common Share.
“Business Combination Agreement” means the Amended and Restated Business Combination Agreement, dated as of July 31, 2023, as amended on November 9, 2023, by and among NCAC, Sponsor, Parent, the Company, Merger Sub, Psyence Biomed Corp. and Biomed II.
“Cantor” means Cantor Fitzgerald & Co.
“CCM” means Cohen & Company Capital Markets, a division of J.V.B. Financial Group LLC, an affiliate of a passive member of the Sponsor.
“Closing” means the consummation of the Business Combination.
“Closing Date” means January 25, 2024.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company Exchange” means the exchange in which Parent contributed Biomed II to the Company in a share for share exchange.
“Continental” means Continental Stock Transfer & Trust Company, our transfer agent and warrant agent.
“Effective Time” means the effective time of the Merger.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Merger” means the merger in which Merger Sub merged with and into NCAC, with NCAC being the surviving company in the merger and each outstanding NCAC Ordinary Share being converted into the right to receive one Common Share.
“Merger Sub” means Psyence (Cayman) Merger Sub, a Cayman Islands exempted company and a direct and wholly owned subsidiary of the Company.
“NCAC” means Newcourt Acquisition Corp, a Cayman Islands exempted company.
“Parent” or “PGI” means Psyence Group Inc., a corporation organized under the laws of Ontario, Canada.
“Private Warrants” means the former NCAC Private Placement Warrants, which were converted at the Effective Time into a right to acquire one Common Share on substantially the same terms as were in effect immediately prior to the Effective Time under the terms of the Warrant Agreement.
vi
“Psyence” or the “Company” means Psyence Biomedical, Ltd., a corporation organized under the laws of Ontario, Canada, and where context warrants, including its subsidiaries.
“Public Warrants” means the former NCAC Public Warrants, which were converted at the Effective Time into a right to acquire one Common Share on substantially the same terms as were in effect immediately prior to the Effective Time under the terms of the Warrant Agreement.
“Securities Act” means the Securities Act of 1933, as amended.
“Sponsor” means Newcourt SPAC Sponsor LLC, a Delaware limited liability company.
“Structuring Shares” means the 40,000 Common Shares that were payable to certain investors (the “Investors”) as a structuring fee pursuant the Securities Purchase Agreement.
“Trading Market” means any of the following markets or exchanges on which the Common Shares are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTCQB, or the OTCQX (or any successors to any of the foregoing).
“U.S. GAAP” means generally accepted accounting principles in the United States of America.
“VWAP” means for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)); provided, however, that if the Common Shares are then listed or quoted on more than one Trading Market, then the Trading Market for purposes of any calculations to be made pursuant to the terms of the First Tranche Notes shall be the Trading Market selected by the Investors in their sole discretion, (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported in the “Pink Sheets” published by OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Shares so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected in good faith by the Investors and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Warrant Agreement” means the warrant agreement, dated October 19, 2021, by and between NCAC and Continental Stock Transfer & Trust Company, as warrant agent, governing NCAC’s warrants.
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This summary highlights selected information that is presented in greater detail elsewhere in this prospectus or incorporated by reference in this prospectus. This summary does not contain all of the information you should consider before investing in our securities. You should read this entire prospectus (as supplemented or amended) carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus (as supplemented or amended), before making an investment decision.
The securities being offered by this prospectus represent vastly more than the number of our outstanding Common Shares, and the sales of such securities, or the perception that those sales might occur, could depress the market price of our Common Shares and could impair our ability to raise capital through the sale of additional equity securities.
This prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission, or the SEC, using a “shelf” registration process. By using this shelf registration statement, we may, at any time and from time to time, offer the securities described in this prospectus in one or more offerings. This prospectus provides you with a general description of the securities offered. We may also add, update or change information contained in this prospectus by means of a prospectus supplement or by incorporating by reference information that we file or furnish to the SEC. If there is any inconsistency between the information in this prospectus and any related prospectus supplement, you should rely on the information in the applicable prospectus supplement. As allowed by the SEC rules, this prospectus and any accompanying prospectus supplement do not contain all of the information included in the registration statement. For further information, we refer you to the registration statement, including its exhibits. Statements contained in this prospectus or any prospectus supplement about the provisions or contents of any agreement or other document are not necessarily complete. If the SEC’s rules and regulations require that an agreement or document be filed as an exhibit to the registration statement, please see that agreement or document for a complete description of these matters. This prospectus also combines and updates the Prior Registration Statements previously filed by the Company and described elsewhere in this prospectus, and acts as a post-effective amendment of the Prior Registration Statements, pursuant to Rule 429.
Business
Overview
We are a life science biotechnology company that, through our operating subsidiary, Biomed II, is developing natural psilocybin products for the healing of psychological trauma and its mental health consequences in the context of palliative care. We have commenced the clinical trial process to evaluate the safety and efficacy of its product candidates.
We strive to set the global standard for excellence and consistency in drug development using nature-based psilocybin products. Psyence’s priority is developing pharmaceutical grade psilocybin to help heal psychological trauma and the diagnosable disorders that can result therefrom, including Adjustment Disorder (“AjD”), alcohol use disorder (“AUD”), other substance use disorders (“SUDs”), anxiety, depression, post-traumatic stress disorder (“PTSD”), and grief and bereavement, especially in the context of palliative care. Our focus includes therapeutic protocols for medical and scientific research including observational studies.
Our lead product candidate is PEX010, a capsule containing 25mg naturally sourced psilocybin and which is being used in our Phase IIb Study. Psyence has entered into a license agreement (the “Research IP Agreement”) with Filament Health Corp., a Canadian company that produces natural psilocybin capsules and the proprietary owner of PEX010 (“Filament”), for the licensing of PEX010 with respect to Psyence’s designated fields of use: anxiety and depression, including associated ailments, such as PTSD, stress, grief, and adjustment disorder within the context of palliative care. See “— Licensing of PEX010” below.
We have contracted iNGENū; Pty Ltd (“iNGENū”), a contract research organization (“CRO”) in Australia that specializes in the study of psychedelics, to conduct a Phase IIb double-blind, randomized, placebo (1mg low dose) controlled clinical trial to assess the efficacy and safety of PEX010 in psilocybin-assisted psychotherapy for the treatment of AjD due to incurable cancer (the “Phase IIb Study”). Outsourcing the study to a CRO assists the company in operating in a more capital efficient manner without the overhead of in-house resources.
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Phase IIb Study - Palliative Care Clinical Trial
On January 9, 2023, Psyence and iNGENū signed a letter of intent to further develop Psyence’s licensed natural psilocybin drug product, starting with a Phase IIb Study in order to conduct a pre-IND meeting with the FDA. The product to be used in this Phase IIb Study will be the proprietary botanical drug candidate PEX010 (25mg), which Psyence sources from Filament. The planned randomized double-blind study will evaluate the use of psilocybin-assisted psychotherapy versus psychotherapy alone and will test 87 patients utilizing the HAM-A scale as the primary endpoint, which is an FDA validated endpoint, and safety data will be collected throughout the study.
For safety, there are no specific endpoints as all safety findings are captured as adverse events. The primary and secondary efficacy endpoints were established in the protocol prior to its review and approval by the Ethics Committee, before the study could start.
The HAM-A is a rating scale developed to measure the severity of anxiety symptoms and is widely used in both clinical and research settings. The scale consists of 14 items, each defined by a series of symptoms, and measures both psychic anxiety (mental agitation and psychological distress) and somatic anxiety (physical complaints related to anxiety). During the Phase IIb Study, the HAM-A scale will be used to measure change in anxiety levels over time as the primary endpoint.
The 87 - patient Phase IIb Study being conducted by the CRO, iNGENū in Australia is the one that has been referred to in discussions with the FDA in the pre-IND process. The study has received ethics approval, and first patient enrollment is expected in Q1 2025.
The estimated costs of this Phase IIb Study were initially $5,575,000 made on the basis of milestones completed. Included in this original estimate were costs for 75 participants; an end of Phase II meeting preparation and attendance after the completion of the Phase IIb Study with the FDA as well as psychotherapy training, psychotherapy sessions and therapist fees for participants. Subsequently, the Phase IIb Study was increased to 87 patients, and we anticipate the estimated cost of this study to be increased by approximately 5%.
On September 15, 2022, we received full approval of a study (the “UK Trial”) in the United Kingdom from the UK Medicines and Healthcare products Regulatory Agency (“MHRA”) using natural psilocybin in the field of palliative care with oncology patients. For this study, we had partnered with Clerkenwell Clinics Limited (“Clerkenwell Health”), which would have been responsible for jointly designing and delivering the UK Trial. Following such approval, we opted to forego proceeding with the UK Trial in order to pursue the opportunity to conduct the Phase IIb Study in Australia, as Psyence could benefit from the Australian Federal Government’s Research & Development tax incentive program, which could provide up to a 43.5% rebate on Psyence’s R&D expenses in Australia, making it a more cost-effective endeavor. In addition, the Phase IIb Study adds a dose-finding arm, which allowed us to accelerate our development strategy, after seeking input from the FDA with our pre-IND application. On March 5, 2024, Psyence received full approval of the Phase IIb Study from to the Australian Human Research Ethics Committees (HRECs), the body responsible for the review of research proposals involving human participants to ensure that they are ethically acceptable. A major amendment was subsequently submitted to HREC, and approved in Q4 2024. If the outcome of the Phase IIb Study is positive, we believe we may be able to proceed directly to a Phase III trial in the United States, subject to FDA review and the opening of an IND; however, there is no guarantee that the FDA will accept data from trials conducted outside of the United States.
Licensing of PEX010
In April 2022, Psyence entered into the Research IP Agreement with Filament for the licensing of PEX010 and its associated intellectual property, as well as for the supply of PEX010 for the specific intention of the clinical development of the product, and ultimately, for the marketing authorization for PEX010’s use in palliative care patients. Pursuant to the Research IP Agreement, Filament grants to Psyence an irrevocable, royalty free, worldwide license (with the right to sub-license, subject to certain restrictions) to use and distribute PEX010 and certain related intellectual property (such as delivery mechanism, preparation methods and know-how) solely for use in connection with pre-clinical and clinical studies and trials to be conducted in Canada, the UK and world-wide in the treatment of anxiety and depression, including associated ailments, such as PTSD, stress, grief, and adjustment disorder within the context of palliative care. This license is granted in respect of the clinical trial phase of Psyence’s activities, specifically phase II clinical trials which, at present, consists of the Phase IIb Study. The license is granted on an exclusive basis solely within the territory of the UK with respect to the designated fields of use, and Psyence has a right of first refusal to extend its exclusive license beyond the territory of the UK. Psyence does not have any rights to use PEX010 for any profit-making or commercial purposes under the Research IP Agreement. Any results of testing, research, conduct of and any information derived from the clinical studies and trials using PEX010 shall be the sole property of Psyence. Under the Research IP Agreement, Filament is entitled to receive milestone payments of up to CAD$250,000 in aggregate based on four distinct phase II clinical trial milestones to be achieved by Psyence. Should Psyence pursue a second or multiple indications, such aggregate milestone payments will increase accordingly. For the year ended March 31, 2024, Psyence incurred $167,306 costs under the Research IP Agreement related to milestone payments, which was accounted for as research and development costs.
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In addition to the licensing rights described above, per the terms of the Research IP Agreement, Filament has undertaken to support Psyence’s clinical trial efforts through the supply of the required quantities of PEX010 to Psyence, for no additional charge, based on Psyence’s good faith forecasts of its needs. Filament will also create and provide such information, assistance and support for the execution of the dossiers, IMBP and other documents required to conduct Psyence’s clinical trials in accordance with the trial schedules. The license term is 5 years, expiring in April 2027, however the license may be terminated early (a) by either party upon notice to the other party, where Psyence notifies Filament in writing that all of its clinical trials have been completed or abandoned; (b) by a party upon notice to the other party, if the other party becomes subject to bankruptcy proceedings; (c) by a party if the other party commits a breach of a material term of the Research IP Agreement and fails to remedy such breach; or (d) by a party upon notice to the other party, if the other party has a licence, permit or approval revoked by competent authorities which compromises its ability to grant the licenses contemplated in the Research IP Agreement or its ability to perform under the Research IP Agreement. On July 22, 2024, the parties concluded an addendum to the Research IP Agreement (“Filament Addendum”) whereby Filament undertook to provide a sufficient supply of PEX010 to Psyence in order to facilitate the substitution of an alternative drug candidate for use in Phase III trials and for commercialization purposes following the conclusion of the Phase IIb Study (“Proposed End Product”).
In December 2022, Psyence entered into a royalty-bearing, binding term sheet for the commercial licensing of intellectual property (with the right to sub-license) from Filament, which was subject to the terms of a definitive license agreement, and granted Psyence the worldwide right to commercialize PEX010 within the designated fields of use, being anxiety and depression, including associated ailments, such as PTSD, stress, grief, and adjustment disorder within the context of palliative care. The term sheet remained subject to further negotiations between the parties and the execution of a subsequent definitive agreement within a predefined time period. Following further discussions, Psyence and Filament mutually agreed to terminate the term sheet by way of the Filament Addendum. Psyence is engaging two alternative suppliers of drug product for its pivotal Phase III studies as well as for future studies in other indications. Filament agreed to continue to support the supply PEX010 for the upcoming Phase IIb Study.
Psyence has successfully negotiated and executed supply agreements and licensing agreements for the use of third - party intellectual property with two licensed suppliers operating in the United Kingdom and North America within the indications of AUD and other SUDs, and anxiety, depression, PTSD, and grief and bereavement, especially in the context of palliative care, respectively. See “Recent Developments—Psylabs License Agreement and Recent Developments—Optimi License Agreement” below.
Psyence has not performed any pre-clinical or clinical trials on PEX010. PEX010 is owned and has undergone clinical trials directed by Filament. PEX010 has received regulatory approval to proceed into Phase I and II clinical trials in several jurisdictions worldwide. The FDA, Health Canada, MHRA, and the EMA have reviewed the chemistry, manufacturing, and controls and quality information of PEX010 through its associated filed DMFs/ IMPDs. The DMF for PEX010 is also on file with the Therapeutic Goods Administration (the “TGA”) in Australia. In addition to clinical trials, PEX010 is also already being administered to real-world patients via the Health Canada Special Access Program (“SAP”). Through the SAP, PEX010 is being prescribed for end of life distress as well as Major Depressive Disorder.
As of July 17, 2024, 156 doses of PEX010 have been administered to 132 patients. Despite the serious condition of many of these patients, no serious adverse events or unexpected adverse events have been reported in any SAP administration.
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Relationships with Third Parties
Psyence’s Australian-based research and development will be conducted by its CRO partner, iNGENū, in Australia. As stated above, Filament’s PEX010 will serve as the product candidate under investigation during the Phase IIb Study.
Psyence’s R&D capabilities
Psyence’s CEO (Dr. Neil Maresky) and Medical Director (Dr. Clive Ward-Able) are both medically trained physicians with close to 60 years of experience between them within the pharmaceutical industry related to R&D and the commercialization of new products. This experience provides the foundations for an excellent understanding of the clinical development, regulatory and commercialization needs of various pharmaceutical markets to design the optimal development program.
Psyence plans on working with various CROs and consultancy agencies to prepare and operationalize their protocols for the various phases of the clinical development program.
Competitive Environment
There are currently no pharmaceutical agents with regulatory approval for the treatment of AjD within palliative care or any other arena. The current treatment of AjD is empirical, with either psychotherapy or off- label pharmacological agents, such as anti-depressants or anxiolytics, or a combination of both.
We believe that the competitive landscape analysis of other commercial psychedelic-assisted treatments in clinical trials strongly suggests that Psyence’s clinical asset has a first-mover advantage in both the palliative care and cancer-related AjD market upon approval. PEX010 and its associated IP has been licensed to Psyence, giving it exclusivity for the indications of anxiety and depression within the context of palliative care in the UK and exclusive commercialization rights in the same indications and fields of use in the UK, EU and US. Psyence plans to expand their targeted indication of cancer-related AjD to address different types of AjD and other secondary indications both in a palliative and non-palliative context.
Recent Developments
December 2024 Private Placement
On December 23, 2024, in connection with a private placement of the Company’s securities pursuant to a Securities Purchase Agreement (the “December 2024 Purchase Agreement” and the transactions contemplated thereby, the “December 2024 PIPE Transaction”), dated December 23, 2024, entered into between the Company and each purchaser identified therein (the “December 2024 PIPE Purchasers”) the Company issued and sold to the December 2024 PIPE Purchasers for an aggregate of $2 million, 380,000 Common Shares (the “December 2024 PIPE Issued Shares”), Series A Warrants to purchase up to 1 million Common Shares (the “Series A Warrant Shares”), Series B Warrants to purchase up to 1 million Common Shares (the “Series B Warrant Shares”) and Pre-Funded Warrants to purchase up to 620,000 Common Shares (the “Pre-Funded Warrant Shares” and together with the Series A Warrant Shares and the Series B Warrant Shares, the “December 2024 PIPE Warrant Shares”). Each of the Series A Warrants and Series B Warrants have an exercise price of $2.00 per share and are immediately exercisable. The Series A Warrants expire 5 years from the date of issuance and the Series B Warrants expire 2 years from the date of issuance. The Pre-Funded Warrants have an exercise price of $0.0001 per share and do not expire. Each of the Series A Warrants, Series B Warrants and Pre-Funded Warrants may be exercised cashlessly at the discretion of the warrant holder. In addition, the warrants contain beneficial ownership limitations that may be waived at the option of each holder upon 61 days’ notice to the Company, but in no event may such beneficial ownership limitation exceed 19.99% of the number of outstanding Common Shares.
In connection with the December 2024 PIPE Transaction the Company also entered into a Registration Rights Agreement (the “December 2024 PIPE RRA”) pursuant to which the Company agreed to register for resale the December 2024 PIPE Warrant Shares and December 2024 PIPE Issued Shares by January 10, 2025 and to use its best efforts to have such registration statement declared effective within 45 days following the date of the Registration Statement, or 75 days in the event of a “full review” by the SEC. Each of the Purchase Agreement and December 2024 PIPE RRA contain customary representations, warranties, covenants, and indemnification provisions, including assurances regarding regulatory compliance, intellectual property ownership, and liability limitations. The Purchasers consist of qualified institutional buyers, institutional accredited investors or accredited investors.
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Placement Agent Agreement
On July 25, 2024, Psyence entered into a Placement Agent Agreement with the Placement Agent to serve as its exclusive underwriter, agent, or advisor for securities offerings (the “Offerings”) during the term of the agreement. The Offerings exclude equity lines of credit (ELOC). The Placement Agent’s role is conducted on a reasonable best-efforts basis, with terms of each Offering subject to mutual agreement. Compensation includes a cash fee of 7.5% of the gross proceeds raised in each Offering (3.0% for ATM offerings) and warrants to purchase 7.5% of the securities placed in an Offering, excluding ATMs. These warrants have a five-year term and an exercise price of 125% of the Offering price. Psyence also agreed to reimburse the Placement Agent for expenses, including a 1.0% management fee, non-accountable expenses of $35,000 (or $50,000 for public offerings), and legal fees up to $50,000 (or $100,000 for public offerings).
We have also granted the Placement Agent, subject to certain exceptions and FINRA Rule 5110(g)(6)(A), a right of first refusal for a period of twelve months following the consummation of an Offering (in the event that an Offering is consummated during the term of the Placement Agent Agreement) to act as the sole book-running manager, sole underwriter, or sole placement agent for any public offering (including ATMs) or private placement, or any other capital raising financing of equity or equity-linked securities.
A tail provision entitles the Placement Agent to compensation for any transactions completed within 12 months after termination of the Agreement if the Placement Agent introduced the investor to Psyence during the term. During the engagement, Psyence is prohibited from engaging other agents or soliciting investors outside the Placement Agent’s coordination. The Placement Agent Agreement contains customary representations, warranties, covenants, and indemnification provisions.
On December 9, 2024, Psyence and the Placement Agent entered into an amendment to the Placement Agent Agreement, extending the term of the agreement to provide that it would remain in effect through 90 days following the date of the December 9th amendment.
In connection with the Placement Agent Agreement, as amended, and the PIPE Transaction, the Company issued to the Placement Agent or its designees, the Placement Agent Warrants to purchase up to 75,000 Common Shares (the “Placement Agent Warrants”).
The Placement Agent Warrants have an exercise price of $2.50 per Warrant Share and expire five years from the date of issuance and may be exercised cashlessly at the discretion of the warrant holder.
This registration statement of which this prospectus forms a part, is being filed, in part, to register for resale the Issuable Shares and the Warrant Shares issued in connection with the PIPE Transaction.
Each of the above descriptions of the Purchase Agreement, December 2024 PIPE RRA, the Placement Agent Agreement, as amended, and each of the Warrants are summaries only and do not reflect all of the material terms of such agreements and is therefore qualified in it is entirety by reference to such agreements, each of which is filed as an exhibit to this registration statement, of which this prospectus forms a part, and is incorporated herein by reference.
Nasdaq Compliance
On March 11, 2024, the Company received two letters from the listing qualifications department staff of The Nasdaq Stock Market (“Nasdaq”), one notifying the Company (the “MVLS Notice”) that for the previous 30 consecutive business days, the Company’s Market Value of Listed Securities (“MVLS”) had been below the minimum of $50 million required for continued listing on the Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(b)(2)(A) (the “Market Value Standard”), and the other notifying the Company (the “MVPHS Notice”) that for the same period, the Company’s Market Value of Publicly Held Shares (“MVPHS”) had been below the minimum of $15 million required for continued listing on the Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(b)(2)(C) (the “MVPHS Standard”).
The MVLS Notice and the MVPHS Notice were notifications of deficiencies and had no immediate effect on the listing of the Company’s securities. The Company’s securities continued to trade on Nasdaq.
In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company had until September 9, 2024, to regain compliance with the Market Value Standard and the MVPHS Standard. However, on September 12, 2024, the Company received a staff determination letter from Nasdaq notifying it that compliance had not been regained by the deadline. Subsequently, the Company requested a hearing before the Nasdaq Hearings Panel (the “Panel”), which automatically stayed any suspension or delisting action pending the hearing and any additional extension period granted by the Panel.
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On November 20, 2024, the Company announced a favorable outcome from the Nasdaq Listing Qualifications Hearing held on October 31, 2024. The Nasdaq Hearings Panel had granted an extension until December 31, 2024, for the Company to demonstrate compliance with all Nasdaq continued listing rules.
On December 23, 2024, Psyence Biomed announced that it had regained compliance with all applicable Nasdaq continued listing requirements.
As part of its compliance program, the Company had requested a transfer from The Nasdaq Global Market to The Nasdaq Capital Market, which became effective on November 15, 2024. This transfer enabled compliance with listing rules 5550(a)(5), the $1.0 million minimum market value of publicly held shares requirement, and 5550(b)(1), the $2.5 million minimum stockholders’ equity requirement.
Additionally, the Company effected a 75-for-1 share consolidation approved at its Annual General Meeting on November 12, 2024. This consolidation, which became effective on November 26, 2024, addressed the $1 minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2). By trading above $1 for 18 consecutive trading days post-consolidation, the minimum bid price requirement was satisfied.
Annual and Special Meeting of Shareholders and Share Consolidation
On November 12, 2024, the Company held its Annual General and Special Meeting of Shareholders (the “Annual Meeting”) at which the board recommended and Company’s shareholders approved four resolutions: to approve the appointment of the Company’s independent public accounting firm, MNP LLP for fiscal year 2024, a share consolidation of the Common Shares at a ratio of up to 75:1, to increase the pool of available Common Shares under the Company’s 2023 Equity Incentive Plan and the nomination of the directors of the Board. On November 12, 2024, pursuant to the resolutions adopted by the shareholders at the Annual Meeting, the Board authorized a share consolidation at a ratio of 75:1. On November 26, 2024, the share consolidation was effective and the Common Shares began trading on Nasdaq on a post-share consolidation, or post-reverse split, basis.
Clairvoyant Term Sheet
The Company entered into a conditional binding term sheet with privately-held Clairvoyant Therapeutics Inc (“Clairvoyant”), a clinical-stage developer of psilocybin-based therapeutics based in Canada, for the proposed acquisition by Psyence of 100% of the shareholdings of Clairvoyant (the “Proposed Acquisition”). As consideration for the Proposed Acquisition, Psyence will issue US$500,000 of the Company’s Common Shares upon closing to Clairvoyant’s disposing shareholders, followed by potentially up to two share-based payments of US$250,000 each (payable in cash or Common Shares, at the Company’s election) upon the achievement of pre-specified milestones by December 2026. In addition, Psyence will advance funds in tranches of up to US$1,800,000 in aggregate to Clairvoyant in order to settle its liabilities, which consist primarily of clinical trial costs.
Clairvoyant was executing a Phase IIb clinical trial (CLA-PSY-201) of a synthetic psilocybin-based candidate as a potential treatment for Alcohol Use Disorder (AUD). The company has completed the enrollment and treatment of 154 randomized double blinded subjects and topline results were initially anticipated in early 2025.
Following the completion of the necessary due diligence and other pre-closing activities specified in the conditional binding term sheet, the Company decided not to proceed with the Proposed Acquisition.
Psylabs License Agreement
On September 3, 2024, the Company entered into a licence agreement for alcohol use disorder and substance use disorder (the “License Agreement”) with Psyence UK Group Ltd. (“Psylabs”), a private company focused on the production of psychedelic active pharmaceutical ingredients and extracts. Pursuant to the License Agreement, Psylabs has granted the Company exclusive, world-wide, royalty-bearing licenses to conduct clinical trials, and commercialize development, relating to the extraction, formulation and licensing of proprietary active pharmaceutical ingredients consisting of a psilocybin standardized extract (“API”), as well as a final dosage format for the API, which is suitable for human consumption, with respect to alcohol use disorder and substance use disorder (the “Fields of Use”). The Company has the right to sub-license the licensed products, subject to certain restrictions, as set forth in the License Agreement.
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The Company shall pay Psylabs the following development milestone payments upon the achievement of one or more of the following milestones with respect to each of the Fields of Use:
| ● | $73,000 in respect of each of the Fields of Use on (i) July 31, 2026 or (ii) upon the approval to commence a trial within that Field of Use by the authorized government authority in the jurisdiction of the Company’s choosing, whichever date is earlier; and |
| ● | $75,000 in respect of each of the Fields of Use, upon Psylabs being able to deliver to the Company a fully formulated licensed product which is suitable and approved for use by the government authority, agency or body responsible for the review and approval of research proposals in the Company’s elected trials in the jurisdictions of its choice. |
In addition, the Company shall pay Psylabs the following commercial milestone payments in respect of each Field of Use:
| ● | $292,000 upon submission and approval of a Phase III clinical trial application, or an equivalent, and provision of the licensed product from such duly licensed facility as may be agreed between the parties, in respect of each Phase III trial; and |
| ● | (i) $584,000 upon first marketing approval permitting commercial sales and (ii) $292,000 for each subsequent marketing approval permitting commercial sales in respect of each Field of Use. |
Furthermore, the Company shall pay Psylabs a royalty of 10% of net sales commencing upon first commercial sale of product and payable during the term of the License Agreement (the “Royalty Fee”). The Royalty Fee shall be calculated on a calendar quarterly basis and payable in arrears within 30 days of the end of each successive calendar quarter. The Company shall also pay Psylabs $146,000 per year for each Field of Use beginning on the date of the Company’s Phase II clinical trial study report (as per the date on the clinical trial study report). Such fee shall be creditable against the Royalty Fee.
The exclusivity of each of the licenses in respect of each of the Fields of Use independently within the Exclusive Territories shall expire on the occurrence of any of the events listed below:
| ● | if the Company has not made any commercially reasonable efforts to commence any trials within that Field of Use prior to December 31, 2026; or |
| ● | the Company has failed to pay Psylabs a minimum of $73,000 in Royalty Fees per calendar year, calculated from January 1, 2030 onward. |
The License Agreement contains customary representations, warranties, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.
The foregoing description of the License Agreement is qualified in its entirety by the full text of the License Agreement, which is attached as Exhibit 10.23 to the registration statement of which this prospectus is a part, and is incorporated herein by reference.
PsyLabs Investment
On September 17, 2024, the Company entered into a Share Purchase and Sale Agreement (“Psylabs Purchase Agreement”) with Parent (as seller) for the acquisition of an erstwhile 11.13% stake in PsyLabs (“Proposed Psylabs Acquisition”). Per the terms of the Proposed Psylabs Acquisition, Psyence will issue, to Parent, Common Shares valued at $1.1 million, at $41.25 per share, in exchange for Parent’s stake in PsyLabs. The completion of the Proposed Psylabs Acquisition is subject to the fulfilment, or waiver, of suspensive certain conditions, including board approvals, regulatory approvals, a satisfactory due diligence process, and the achievement of a pre-defined product development milestone by Psylabs by no later than October 31, 2024.
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On September 27, 2024, the Company and PGI entered into the Psylabs Purchase Agreement Addendum, pursuant to which the parties agreed that (i) in the event that the average VWAP for the ten trading days prior to January 15, 2025 is lower than $41.25, the Company is also required to make a “make whole payment” in cash or Common Shares, as set forth in the Purchase Agreement and (ii) the Company will register the resale of the Common Shares, as set forth in the Purchase Agreement. In addition, the parties agreed to extend the date by which the conditions precedent need to be met, from October 31, 2024 to November 30, 2024. The transactions contemplated by the Psylabs Purchase Agreement are subject to the approval of PGI shareholders. On October 28, 2024, the transactions contemplated by the Psylabs Purchase Agreement, as amended, was closed and the Company issued to Psylabs 26,667 Common Shares (the “Psylabs PA Shares”) pursuant to the terms of the Psylabs Purchase Agreement. On December 17, 2024, the Company issued 257,021 Common Shares to PGI pursuant to its make-whole obligations under the Psylabs Purchase Agreement Addendum. On December 20, 2024 the Company filed a Registration Statement on Form F-1 (Registration No. 333-283980) to register for resale the shares issued pursuant to the Company’s make-whole obligations. The registration statement was declared effective by the SEC on December 31, 2024.
The foregoing description of the Psylabs Purchase Agreement and the Psylabs Purchase Agreement Addendum, and is each qualified in its entirety by the full text of the agreements, which are attached as exhibits to this registration statement of which this prospectus is a part, and is incorporated herein by reference.
Optimi License Agreement
On December 5, 2024 the Company executed three definitive agreements with Optimi Health Corp. (together with their affiliates, “Optimi”): an IP and Mutual Exclusivity Agreement (the “MEA”), a Quality Agreement (the “Quality Agreement”), and a Supply Agreement (the “Supply Agreement,” and collectively with the MEA and Quality Agreement, the “Optimi Agreements”). Pursuant to the Optimi Agreements, Optimi shall be the exclusive supplier of GMP-certified, nature-derived (non-synthetic) psilocybin extract for Psyence’s global drug development and commercialization initiatives for FDA-approved uses in the palliative care context (“Optimi Agreements”). Optimi will provide comprehensive chemistry, manufacturing, and control support for regulatory submissions related to Psyence’s clinical trials in palliative care and any future Investigational New Drug applications. Psyence will obtain exclusive rights to Optimi’s drug candidate for treatment use in the palliative care context.
The Optimi Agreements will include a mutually exclusive IP licensing agreement in terms of which Optimi will license their drug candidate (the “Optimi Product”) OPTI-PSIE Psilocybin, a 5mg, encapsulated drug candidate and placebos of such product. Psyence will pay Optimi exclusivity fees over a one-year period, milestone payments in respect of the submission and approval of Phase III Clinical Trial Approval (CTA) and the first marketing approval permitting commercial sales, as well as a single-digit royalty on commercial sales of the Optimi Product in palliative care. The exclusivity of Psyence’s rights may terminate if Psyence fails to maintain its Common Shares listed from Nasdaq prior to the commencement of its phase III clinical trial. The agreements contain customary representations, warranties, covenants, and indemnification provisions, including assurances regarding regulatory compliance, intellectual property ownership, and liability limitations. The above description of the MEA, Quality Agreement, and Supply Agreement are summaries only and is qualified in its entirety by reference to the full text of such agreements, filed as exhibits to this registration statement and is incorporated herein by reference.
White Lion Transaction
On July 25, 2024, the Company entered into a Common Shares Purchase Agreement (the “White Lion Purchase Agreement”) with White Lion Capital, LLC (“White Lion”) and a related Registration Rights Agreement (the “RRA”). Pursuant to the White Lion Purchase Agreement, the Company has the right, but not the obligation, to require White Lion to purchase, from time to time, up to $25,000,000 in aggregate gross purchase price of newly issued Common Shares, subject to certain limitations and conditions set forth in the White Lion Purchase Agreement.
Subject to the satisfaction of certain customary conditions including, without limitation, the effectiveness of a registration statement registering the resale of the shares issuable pursuant to the White Lion Purchase Agreement, the Company’s right to sell shares to White Lion commenced on the date of the execution of White Lion Purchase Agreement and extends until the earlier of (i) White Lion having purchased Common Shares equal to $25,000,000 and (ii) two years from the date of execution of the White Lion Purchase Agreement (the “Commitment Period”).
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During the Commitment Period, subject to the terms and conditions of the White Lion Purchase Agreement, the Company may exercise its right to sell its Common Shares. The Company may deliver a Fixed Purchase Notice (as such term is defined in the White Lion Purchase Agreement), pursuant to which the Company can require White Lion to purchase up to a number of Common Shares equal to the lesser of (i) $250,000 or (ii) 50% of Average Daily Trading Volume (as such term is defined in the White Lion Purchase Agreement). The Company may also deliver a Rapid Purchase Notice (as such term is defined in the White Lion Purchase Agreement), pursuant to which the Company may require White Lion to purchase up to a number of Common Shares equal to the lesser of (i) 30% of the Average Daily Trading Volume and (ii) $4,000,000 divided by the highest closing price of the Common Shares over the most recent five business days immediately prior to the receipt of the notice. White Lion may waive such limits under any notice at its discretion and purchase additional shares.
The price to be paid by White Lion for any shares that the Company requires White Lion to purchase will depend on the type of purchase notice that the Company delivers. For shares being issued pursuant to a Fixed Purchase Notice, the purchase price per share will be equal to 90% of the lowest VWAP (as defined in the White Lion Purchase Agreement) of the Common Shares that occurs during the five consecutive business days prior to the purchase notice. For shares being issued pursuant to a Rapid Purchase Notice, the purchase price per share will be equal to the lowest traded price on the date that the notice is delivered.
No purchase notice shall result in White Lion beneficially owning (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3 thereunder) more than 4.99% (subject to increase, in the sole discretion of White Lion, to 9.99%) of the number of Common Shares outstanding immediately prior to the issuance of Common Shares issuable pursuant to a purchase notice.
The Company has the right to terminate the White Lion Purchase Agreement in the event of a material breach of the White Lion Purchase Agreement by White Lion. The White Lion Purchase Agreement also automatically terminates upon the earlier of (i) the end of the Commitment Period and (ii) the date that the Company commences a voluntary bankruptcy proceeding, a custodian is appointed for the Company or for all or substantially all of its property, or the Company makes a general assignment for the benefit of its creditors.
In consideration for the commitments of White Lion, as described above, the Company has agreed that it will issue to White Lion Common Shares (“Commitment Shares”) in an amount equal to (i) $187,500 divided by (ii) the closing price of the Common Shares on, (A) with respect to half of the Commitment Shares, the business day prior to the filing of the registration statement pursuant to the RRA and (B) with respect to the other half of the Commitment Shares, the business day prior to the 90th day following the filing of the registration statement pursuant to the RRA. The Commitment Shares will be fully earned by White Lion regardless of termination of the White Lion Purchase Agreement.
Concurrently with the Common Shares Purchase Agreement, the Company entered into the RRA with White Lion, pursuant to which the Company agreed to file, within 30 days following the execution of the White Lion Purchase Agreement, a resale registration statement with the SEC covering the resale by White Lion of the maximum number of shares permitted to be included therein in accordance with applicable SEC rules, regulations and interpretations and the Commitment Shares. The RRA also contains usual and customary damages provisions for failure to file and failure to have the registration statement declared effective by the SEC within the time periods specified therein.
The White Lion Purchase Agreement and the RRA contain customary representations, warranties, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.
On August 19, 2024 we filed the Initial White Lion Registration Statement, which was declared effective by the SEC on August 28, 2024, pursuant to which we registered for resale up to 50,000,000 Common Shares on a pre-consolidation (or pre-split) basis, or 666,667 on a post-consolidation (or post-split) basis. On October 30, 2024, we filed the Second White Lion Registration Statement, registering an additional 100,000,000 Common Shares on a pre-consolidation, (or pre-split) basis, or 1,333,333 on a post-consolidation (or post-split) basis, which was declared effective by the SEC on November 8, 2024. As of the date hereof, White Lion has resold approximately 1,671,667 Common Shares on a post share consolidation basis which we issued and sold to White Lion pursuant to the Initial White Lion Registration Statement and the Second White Lion Registration Statement and may continue to rely on the Second White Lion Registration Statement for up to an additional 333,333 Common Shares. White Lion has previously sold all the Common Shares registered for resale under the Initial White Lion Registration Statement and the Second White Lion Registration Statement. To date, we have sold 1,744,635 Common Shares to White Lion pursuant to the White Lion Purchase Agreement at a weighted average price of $ 3.82.
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The foregoing description of the White Lion Purchase Agreement and the RRA is qualified in its entirety by the full text of such agreements, which are each filed as exhibits to this registration statement of which this prospectus is a part, and are hereby incorporated herein by reference.
Swap Agreements
On January 25, 2024, the Corporation issued an unsecured convertible promissory note to PGI (the “PGI Note”), in the principal amount of $1,610,657, which is equal to the total amount owed to PGI in connection with loans PGI had previously made to the Corporation. The PGI Note bears no interest, and (i) $150,000 of the principal balance of the PGI Note was payable on the date of the Closing and (ii) $1,460,657 of the principal balance of the PGI Note will be payable on the date that is the one-year anniversary after the Business Combination, or January 25, 2025. On or prior to the maturity date, at the option of PGI, any amounts outstanding under the PGI Note may be converted into securities of the Corporation or securities of its affiliate, at a conversion price and with terms to be mutually agreed; provided however, such conversion price and terms shall not be less favorable to the conversion price and terms agreed by the parties to the NCAC Replacement Note (as described below).
On January 25, 2024, NCAC issued an unsecured convertible promissory note to the Sponsor (the “NCAC Replacement Note”), in the principal amount of $1,615,501, which is equal to the total amount owed to Sponsor under certain existing promissory notes previously issued by NCAC to the Sponsor (the “Existing Notes”). The NCAC Replacement Note bears no interest, and (i) $100,000 of the principal balance of the NCAC Replacement Note was payable on the date of the Closing and (ii) $1,515,501 of the principal balance of the NCAC Replacement Note will be payable on the date that is the one-year anniversary after the Business Combination, or January 25, 2025. On or prior to the maturity date, at the option of Sponsor, any amounts outstanding under the NCAC Replacement Note may be converted into securities of the Corporation or securities of its affiliate, at a conversion price and with terms to be mutually agreed; provided however, such conversion price and terms shall not be less favorable to the conversion price and terms agreed by the parties to the PGI Note. Upon receipt by Sponsor of the NCAC Replacement Note, any and all obligations owing by NCAC under the Existing Notes was satisfied and discharged in full and the respective Existing Notes immediately and automatically terminated and will be of no further effect.
Effective September 30, 2024, the Corporation entered into a swap agreement with the Sponsor and effective September 30, 2024 and October 25, 2024 respectively, the Corporation entered into two swap agreements with PGI (the “Swap Agreements”). Pursuant to the Swap Agreements, the Company has agreed to issue to the Sponsor and PGI 43,080 Common Shares and 38,951 Common Shares, respectively, at a price of $37.50 per Common Share. In exchange therefor, the Sponsor has agreed to discharge the entire obligation of $1,615,501 due under Existing Notes and PGI has agreed to discharge the balance of the obligation due under the PGI Note. In the event that the average volume-weighted average price, or VWAP, for the ten trading days prior to January 15, 2025 is lower than $37.50, the Corporation is also required to make a “make whole payment” in cash or Common Shares, as set forth in the respective Swap Agreements. On November 26, 2024, the Company entered into an addendum to each of the Swap Agreements, pursuant to which the Company agreed to accelerate the make payment to December 2024. On December 17, 2024, the Company issued the 337,750 Common Shares to PGI, and 373,555 Common Shares to Sponsor pursuant to its make-whole obligations under the PGI Swap Agreement, as amended, and has agreed to register the resale of the make-whole Common Shares, as set forth in the Swap Agreements. On December 20, 2024 the Company filed a Registration Statement on Form F-1 (Registration No. 333-283980) to register for resale the shares issued pursuant to the Company’s make-whole obligations. The registration statement was declared effective by the SEC on December 31, 2024. The remaining make-whole Common Shares issued to the Sponsor will be registered in due course.
The foregoing description of the Swap Agreements and the Notes does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Swap Agreements.
Issuances of Shares to Vendors
On May 29, 2024, the Company issued 40 Common Shares issued to Donohoe Advisory Associates LLC in full and final settlement of accrued service and advisory fees. On May 29, 2024, the Company issued 333 Common Shares issued to Outside The Box Capital Inc. in respect of past service delivery. On August 12, 2024, the Company issued an additional 2,294 Common Shares issued to Outside The Box Capital Inc. in respect of past service delivery.
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Addendum to Securities Purchase Agreement
On August 15, 2024, the Company entered into a first addendum (the “Harraden SPA Addendum”) to the Harraden SPA, dated January 15, 2024, and related agreements, with the Harraden Funds. Pursuant to the Harraden SPA Addendum, the Harraden Funds agreed to convert a specified portion of the outstanding First Tranche Notes and Second Tranche Notes at the applicable conversion price. The Harraden Funds waived their respective rights to call an event of default with respect to certain deficiencies or to pursue any rights in connection therewith. Pursuant to the Harraden SPA Addendum, the conversion price of the portion of the Second Tranche Note not drawn down prior to August 13, 2024, and Third Tranche Note and Fourth Tranche Note, shall, at all times, be subject to a conversion floor of $37.50. In addition, (i) the Company is no longer restricted from issuing securities pursuant to the White Lion Purchase Agreement or pursuant to any future issuance at no less than $37.50 per share and (ii) the Company is no longer restricted from registering for resale any shares issued pursuant to the White Lion Purchase Agreement or pursuant to any future issuance of Common Shares at no less than $37.50 per share.
In consideration for entering into the Harraden SPA Addendum, the Company agreed to pay the Harraden Funds a fee in connection with future offerings as summarized below. As discussed below, the Company’s obligations under the Harraden SPA and the Harraden SPA Addendum were terminated upon the effectiveness of the Harraden Termination Agreement.
| ● | a cash fee equal to 50% of the aggregate gross proceeds raised at each closing of any future offering until $655,625.00 has been paid to the Harraden Funds; provided, however, that 50% of such fee may be paid in the form of Common Shares, in lieu of cash, at a price of $37.50 per share, in the event that within two months from the effective date of the Harraden SPA Addendum the aggregate gross amount raised in any future offerings is less than $5,000,000; |
| ● | the Company shall issue to the Harraden Funds or their respective designees 13,333 Common Shares; and |
| ● | the Company shall issue to the Harraden Funds or their respective designees warrants to purchase 6,667 Common Shares, with an exercise price of $37.50 per share. For more information regarding the warrants, see the section titled “Description of Securities—Investor Private Warrants.” |
Such shares and the shares underlying such warrants shall be subject to the registration rights agreement previously entered into between the parties.
In addition, effective as of the effective date of the Harraden SPA Addendum, the Harraden Funds consented to the release from lock-up of 6,667 Common Shares held by Parent. In addition, effective as of five days following the Harraden Funds’ conversion of outstanding Notes, the Harraden Funds have consented to the release from lock-up of an additional 6,667 Common Shares held by Parent.
Effective December 4, 2024, the Company entered into the Harraden Termination Agreement pursuant to which, the Company agreed to issue an aggregate of 333,333 Common Shares as consideration for the termination of the Harraden Transaction Documents (the “Termination Shares”). 89,906 of the Termination Shares were issued pursuant to the Company’s obligations under the Harraden First Tranche Notes and 61,104 Common Shares were issued pursuant to the Company’s obligations under the Harraden Second Tranche Notes. The Harraden First Tranche Note Shares were registered for resale pursuant to a Registration Statement on Form F-1 (File No. 333-276973) filed by the Company with the SEC on February 9, 2024. The Harraden Second Tranche Note Shares were registered for resale pursuant to a Registration Statement on Form F-1 (File No. 333-282468) filed by the Company with the SEC on October 2, 2024. The remaining 182,323 Termination Shares were issued pursuant to warrants issued by the Company to the Harraden Funds, which were exercised on December 6, 2024. On December 20, 2024 the Company filed a Registration Statement on Form F-1 (Registration No. 333-283980) to register for resale the Termination Shares. The registration statement was declared effective by the SEC on December 31, 2024.
The foregoing description of the Harraden SPA, the Harraden SPA Addendum, the Harraden Termination Agreement and the Harraden Notes, is qualified in its entirety by the full text of such agreements, which are filed as Exhibits to this registration statement of which this prospectus is a part, and is incorporated herein by reference.
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Consummation of the Business Combination
On January 25, 2024, we consummated the transactions contemplated by the Business Combination Agreement, pursuant to which (i) Parent contributed Biomed II to the Company in a share for share exchange, (ii) following the Company Exchange, Merger Sub merged with and into NCAC, with NCAC being the surviving company in the Merger, and each outstanding ordinary share of NCAC was converted into the right to receive one Common Share of the Company, and (iii) each outstanding warrant to purchase NCAC Class A Ordinary Shares was converted into a warrant to acquire one Common Share on substantially the same terms as were in effect immediately prior to the Effective Time under their terms. The figures in this section are presented on a pre-split basis.
Securities Purchase Agreement
On January 15, 2024, in connection with the Business Combination, the Company and Biomed II entered into the Securities Purchase Agreement with the Investors and the Sponsor, relating to up to four senior secured convertible notes obligations under which are guaranteed by certain assets of the Company and Biomed II, issuable to the Investors at or after the Closing, as the case may be, for the aggregate principal amount of up to $12,500,000 in exchange for up to $10,000,000 in subscription amounts.
The two First Tranche Notes, for an aggregate of $3,125,000, were delivered by the Company to the Investors on January 25, 2024, in exchange for an aggregate of $2,500,000 in financing, which occurred substantially concurrently with, and was contingent upon, the consummation of the Business Combination. On the original issuance date of the First Tranche Notes, interest began accruing at 8.0% per annum based on the outstanding principal amount of the First Tranche Notes, and is payable monthly in arrears in cash or in Common Shares (at the Conversion Price). The initial Conversion Price of the First Tranche Notes was $750.00; provided, however, that such Conversion Price is subject to certain adjustments according to the terms and reset dates included in the First Tranche Notes and may be reduced to a Conversion Floor of $75.00, until the First Reset Date (as such term is defined in the First Tranche Notes), then to $37.50 on the Second Reset Date (as such term is defined in the First Tranche Notes) (the “Conversion Floor”). The provisions relating to the reset dates are as follows: Downward adjustments in the conversion price occur on five reset dates. The First Reset Date occurs five days prior to the date on which the Registration statement of which this prospectus is a part is declared effective. The Second Reset Date occurs on April 25, 2024, which is the three-month anniversary of the closing of the Business Combination. The third reset date (the “Third Reset Date”) occurs on July 25, 2024, which is the six-month anniversary of the closing of the Business Combination. The fourth reset date (the “Fourth Reset Date”) occurs on October 25, 2024, which is the nine-month anniversary of the closing of the Business Combination. The fifth reset date (the “Fifth Reset Date” and collectively with the First Reset Date, the Second Reset Date, the Third Reset Date and the Fourth Reset Date, the “Reset Dates”) occurs on January 25, 2025, which is the 12-month anniversary of the closing of the Business Combination. On each of the Reset Dates, the conversion price of the First Tranche Notes will be reset to the lower of (i) the $750.00 initial conversion price of the First Tranche Notes and (ii) the average daily VWAP for the previous ten Trading Days prior to such applicable Reset Date, but in no event less than the Conversion Floor.
In addition to the downward adjustments made to the conversion price on each of the Reset Dates, the conversion price of the First Tranche Notes will also be adjusted in connection with the conversion of the First Tranche Notes, or the determination of the payment of interest in Common Shares, upon a conversion or a payment of interest, at any time after the date of the closing of the Business Combination and prior to the First Reset Date, in the event that at such date the Investors have not recouped at least an aggregate of $5,000,000 of their investments, to the lower of (i) $750.00 and (ii) the lowest daily VWAP of the Common Shares, during the period from the date of the closing of the Business Combination until the earlier of (a) the date of conversion or payment of interest or (b) the First Reset Date.
Furthermore, if the average VWAP for the 30 Trading Days (the “30-day VWAP”) after a conversion is lower than the conversion price on the date of conversion, the Company is also required make a “make whole payment” in cash or Common Shares, at its election but subject to certain limitations, as described in the First Tranche Notes, determined as follows: The “make whole payment” equals the difference between (i) the principal amount converted on the date of conversion divided by 30-day VWAP and (ii) the principal amount converted divided by the conversion price on the date of conversion. The “make whole payment” is due no later than 35 Trading Days after the applicable date of conversion.
On May 31, 2024, the Notes (the “Initial Second Tranche Notes”) for the initial portion of the second tranche of the Financing (the “Second Tranche”), for a total of $312,500 of principal in exchange for a total of $250,000 in subscription amounts, were issued to the Investors.
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On June 14, 2024, the Company issued two additional Notes (the “First Subsequent Second Tranche Notes”, and together with the Initial Second Tranche Notes and the Second Subsequent Second Tranche Notes (as defined below), the “Second Tranche Notes”) for an additional portion of the Second Tranche, for an aggregate total of $312,500 principal in exchange for $250,000 provided by the Investors. The Investors were not obligated to fund any of the Second Tranche because the Company was not in compliance with all of the covenants under the Securities Purchase Agreement. Notwithstanding the foregoing, the Investors agreed to fund an additional portion of the Second Tranche on such date and may continue to do so at its discretion.
In July 2024, the Company issued two additional Notes (the “Second Subsequent Second Tranche Notes”) for an additional portion of the Second Tranche, for an aggregate total of $625,000 principal in exchange for $500,000 provided by the Investors. The Investors were not obligated to fund any of the Second Tranche because the Company was not in compliance with all of the covenants under the Securities Purchase Agreement. Notwithstanding the foregoing, the Investors agreed to fund an additional portion of the Second Tranche on such date and may continue to do so at its discretion.
The Second Tranche Notes are substantially the same as the First Tranche Notes, except that the first and second reset dates have been removed, as these applicable dates have passed. Interest on the Subsequent Second Tranche Notes accrues at 8.0% per annum, based on the outstanding principal amount of the Subsequent Second Tranche Notes, and is payable monthly in arrears in cash or in the Common Shares (at the applicable conversion price).
The initial conversion price for the Second Tranche Notes is the lowest daily VWAP during the period commencing on January 25, 2024 until the earlier of (i) the date of conversion of the Second Tranche Notes and (ii) the date on which the registration statement for the shares underlying the First Tranche Note is declared effective (or May 14, 2024) and is subject to reset on July 25, 2024, October 25, 2024, January 25, 2025 in respect of the Initial Second Tranche Note and the First Subsequent Second Tranche Note and July 25, 2024, October 25, 2024, January 25, 2025, July 25, 2025, October 25, 2025 in respect of the Second Subsequent Second Tranche Note, at which time the conversion price will be reset to the lower of (i) the initial conversion price and (ii) the average daily VWAP for the previous ten (10) trading days prior to such reset. The current conversion price floor for the Second Tranche Notes is $28.1325.
Providing any financing with respect to the Third Tranche Notes and the Fourth Tranche Notes is at the sole discretion of the Investors. With respect to any financing relating to the Third Tranche Notes, the Investors may issue a commitment letter to the Company on or before the 30th day following the last funding of the Second Tranche Financing, assuming that the Second Tranche Financing has been provided. With respect to the Fourth Tranche Notes, the Investors may issue a commitment letter to the Company on or before the 90th day after the last funding of the Second Tranche Financing, assuming that the Second Tranche Financing is provided. The Third Tranche Notes would be in an aggregate principal amount of $3,125,000 and would be delivered in exchange for an additional $2,500,000 in financing. This would be the same for the Fourth Tranche Notes. Additionally, in consideration of the willingness of the Investors to enter into the transactions that are the subject of the Securities Purchase Agreement and the Notes, including providing the financing, Psyence Biomedical agreed that it or certain of its shareholders would pay the Investors a structuring fee by delivering to the Investors an aggregate of 40,000 Structuring Shares. At the initial closing of the financing under the terms of the Securities Purchase Agreement, and concurrent with the closing of the Business Combination, 1,300,000 of the Structuring Shares were delivered to the Investors. The remaining 22,666 Structuring Shares are subject to the terms of Call Option Agreements, by and among the Investors and certain members of the Sponsor, pursuant to which such Common Shares are deliverable to the Investors no later than two business days after requested by the Investors; provided that no amounts shall be requested at any time that the Investors own in excess of 9.9% of the Company. Pursuant to the provisions of the Call Option Agreements, the Investors have been granted the option to require Tabula and Launchpad to each sell to the Investors such remaining 22,666 Structuring Shares they own at a price of $0.0075 per Common Share. The number of Common Shares which the Investors may purchase pursuant to the terms of the Call Option Agreements are subject to adjustments for share dividends and split ups. As of the date of this prospectus, the Investors have purchased all of the 22,666 Structuring Shares.
In order to secure the repayment of the Notes by the Company and Biomed II, pursuant to the terms and conditions of a General Security Agreement, dated January 25, 2024 (the “Security Agreement”), each agreed to grant to the Investors a security interest, subject to certain exceptions, in all of the Collateral (as such term is defined in the Security Agreement) in each of their possessions, including a pledge of all equity securities owned by either of them, provided that no Common Shares are pledged equity securities.
Pursuant to a Guaranty, dated January 25, 2024. Biomed II also agreed to guaranty all of the Company’s obligations to the Investors under the Notes including, without limitation, payment of all installments of principal and interest thereunder.
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In connection with the foregoing, on January 25, 2024, the Company and the Investors entered into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which the Company has agreed to file a registration statement covering the resale of the Common Shares issuable upon conversion of the First Tranche Notes (the “Initial Resale Registration Statement”) and any additional registration statements required to be filed to register the resale of the Common Shares issuable upon any of the other Notes, as applicable, and to use its best efforts to have the Initial Resale Registration Statement and such registration statement(s), as applicable, declared effective by the SEC as soon as practicable, but in no event later than the applicable Effectiveness Deadline (as defined in the Registration Rights Agreement for such applicable registration statement). The Registration Rights Agreement contains certain penalty provisions, subject to certain conditions and cure periods, for the Company failing to (i) file a registration statement by certain deadlines set forth in the Registration Rights Agreement, (ii) cause a registration statement to be declared effective by certain deadlines set forth in the Registration Rights Agreement, (iii) maintain certain circumstances and conditions allowing the resale of certain securities or (iv) satisfy the requirements of Rule 144(c)(1) under the Exchange Act if a registration statement is not effective. The Registration Rights Agreement also provides the Investors with customary piggyback registration rights under certain circumstances.
In connection with the foregoing, on January 25, 2024, NCAC and the Company entered into a lock-up agreement with certain shareholders of the Company (the “Lock-Up Agreement”), pursuant to which such shareholders agreed not to, during the period (the “Lock-Up Period”) commencing from the Closing and ending on the earliest of (x) one hundred eighty (180) days after the Closing; provided, however, that in the event that the Investors delay investment of the Subscription Amounts (as defined in the Securities Purchase Agreement) with respect to the Second Tranche Note (as defined in the Securities Purchase Agreement) due to the occurrence of an event outlined in Section 2.1(b) of the Securities Purchase Agreement, such period shall be extended by 60 days or such earlier date as the deficiency is resolved, and (y) subsequent to the Closing, the date on which the Company consummates a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party that results in all of Psyence Biomedical’s shareholders having the right to exchange the Common Shares for cash, securities or other property, (i) lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares issued or issuable to the applicable shareholder pursuant to their respective agreements (“Restricted Securities”), (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Restricted Securities, or (iii) publicly disclose the intention to do any of the foregoing, whether any such transaction described in clauses (i), (ii) or (iii) above is to be settled by delivery of Restricted Securities or other securities, in cash or otherwise (any of the foregoing described in clauses (i), (ii) or (iii), a “Prohibited Transfer”). The lock-up provisions provide for certain exemptions for transfers to permitted transferees.
The foregoing descriptions of the Securities Purchase Agreement, the Guaranty, the Registration Rights Agreement, the General Security Agreement, the Lock-Up Agreement and the Note are qualified in their entirety by the full text of such agreements (or their forms), which are incorporated by reference as Exhibit 2.3, Exhibit 10.1, Exhibit 10.12, Exhibit 10.13, Exhibit 10.14 and Exhibit 10.15 to the registration statement of which this prospectus is a part, respectively, and are incorporated herein by reference. Furthermore, as described above under “Addendum to Securities Purchase Agreement,” certain provisions of such agreements were amended.
Amendment to CCM Engagement Letter
On January 25, 2024, NCAC and CCM entered into an amendment to engagement letter (the “CCM Amendment”), which amended that certain Engagement Letter dated as of February 9, 2023, by and among NCAC and CCM (the “Initial Engagement Letter”). Pursuant to the CCM Amendment, NCAC agreed to pay CCM a revised transaction fee, in lieu of (i) $982,500 owed to CCM as deferred underwriting commission and (ii) fees outstanding under the Initial Engagement Letter, in connection with the Business Combination in an amount equal to 150,000 CCM Fee Shares, plus reimbursable expenses incurred as of the Closing Date, which was paid from NCAC’s trust account at the Closing of the Business Combination.
In addition to the obligation to deliver the CCM Fee Shares to CCM, the terms of the CCM Amendment also include registration rights obligations on the part of the Company, which include obligations to use reasonable best efforts to file a resale registration statement covering the CCM Fee Shares and to maintain the effectiveness thereof while CCM continues to hold the CCM Fee Shares, in accordance with the terms of the CCM Amendment.
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The foregoing description of the CCM Amendment is qualified in its entirety by the full text of the CCM Amendment, which is incorporated by reference as Exhibit 10.9 to the registration statement of which this prospectus is a part, and is incorporated herein by reference.
Modified Cantor Deferred Underwriting Fee Payment Obligations
Pursuant to the Underwriting Agreement, dated as of October 19, 2021 (as amended or modified, the “Underwriting Agreement”), entered into in connection with NCAC’s initial public offering (IPO), NCAC previously agreed to pay to Cantor, in Cantor’s capacity as representative of the underwriters, deferred underwriting commissions in an aggregate amount of $5,567,500 (reflecting Cantor’s portion of the $6,550,000 deferred underwriting commission, after giving effect to the waiver of 50% of the original $13,100,000 deferred underwriting fee) (the “Cantor Deferred Fee”).
On January 25, 2024, NCAC and Cantor, in consideration of redemption levels by NCAC public shareholders, among other factors, entered into that certain fee modification agreement (the “Cantor Fee Modification Agreement”), pursuant to which, among other things, Cantor agreed to accept, in lieu of payment of the Cantor Deferred Fee in cash at the Closing, an aggregate of 2,000 Cantor Fee Shares, payable and delivered, at Closing at an effective price of $750.00 resulting from a waiver of a portion of the Cantor Deferred Fee.
In addition to the Company’s obligation to deliver the Cantor Fee Shares to Cantor, free and clear of specified restrictions, the terms of the Cantor Fee Modification Agreement also include registration rights obligations on the part of the Company, which include obligations to use commercially reasonable efforts to file a resale registration statement covering the Cantor Fee Shares and to maintain the effectiveness thereof while Cantor continues to hold the Cantor Fee Shares, in each case in accordance with the terms of the Cantor Fee Modification Agreement. The Cantor Fee Modification Agreement also includes a penalty provision that will require the Company to deliver to Cantor $5,567,500 in cash in the event that Cantor is unable to timely sell or transfer Cantor Fee Shares or the shares and warrants purchased in the private placement by Cantor in connection with NCAC’s IPO, due to continuing restrictions thereunder resulting from a failure by the Company to satisfy certain post-closing registration-related covenants and agreements in accordance with terms of the Cantor Fee Modification Agreement, following notice and reasonable opportunity to cure on the part of the Company.
The foregoing description of the Cantor Fee Modification Agreement is qualified in its entirety by the full text of the Cantor Fee Modification Agreement, which is incorporated by reference as Exhibit 10.10 to the registration statement of which this prospectus is a part, and is incorporated herein by reference.
MWE Fee Agreement
On January 25, 2024, NCAC and MWE entered into that certain fee agreement (the “MWE Fee Agreement”). Pursuant to the MWE Fee Agreement, NCAC agreed to pay MWE a fee (the “MWE Amended Fee”) for the legal services provided by MWE to NCAC, in lieu of outstanding legal fees due to MWE. The MWE Fee Agreement provides that the MWE Amended Fee is comprised of (i) $100,000 due upon the Closing, (ii) an additional $100,000, payable on or prior to the 90th day after the Closing and (iii) 1,666 MWE Fee Shares, payable and delivered, at Closing.
In addition to the obligation to deliver the MWE Amended Fee, the terms of the MWE Fee Agreement also include registration rights obligations on the part of the Company, which include obligations to use commercially reasonable efforts to file a resale registration statement covering the MWE Fee Shares and to maintain the effectiveness thereof while MWE continues to hold the MWE Fee Shares, in accordance with the terms of the MWE Fee Agreement.
EGS Fee Modification Agreement
On January 26, 2024, the Company and EGS entered into that certain fee modification agreement (the “EGS Fee Modification Agreement”), pursuant to which the Company paid to EGS, for services provided prior to the Closing, (i) $50,000 upon the Closing, (ii) $50,000 payable to EGS within ninety (90) days following the Closing, and (iii) 1,333 Common Shares, which were issued promptly following the date upon which the SEC declared the Initial Registration Statement effective (the “Issuance Date”). Additionally, the Company paid EGS (i) $25,000 in connection with the filing of the Initial Registration Statement and (ii) 666 Common Shares, to be issued upon the Issuance Date.
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Amendments to RNA Engagement Letter
On January 25, 2024, NCAC and RNA Advisors, LLC, entered into that certain amendment to engagement letter (the “RNA Amendment”), which amended that certain Engagement Letter dated as of February 2, 2023, by and among NCAC and RNA. Pursuant to the RNA Amendment, NCAC agreed to pay RNA a revised transaction fee (the “RNA Amended Fee”) in connection with the Business Combination, comprised of (i) $25,000 due upon the Closing, (ii) an additional $25,000, payable on or prior to the 90th day after the Closing and (iii) 280 RNA Fee Shares, payable and delivered, at Closing.
In addition to the obligation to deliver the RNA Amended Fee, the terms of the RNA Amendment also include registration rights obligations on the part of the Company, which include obligations to use reasonable best efforts to file a resale registration statement covering the RNA Fee Shares and to maintain the effectiveness thereof while RNA continues to hold the RNA Fee Shares, in accordance with the terms of the RNA Amendment.
Amendments to Maxim Engagement Letter
On January 25, 2024, NCAC and Maxim entered into that certain amendment to engagement letter (the “Maxim Amendment”), which amended that certain Engagement Letter dated as of April 28, 2023, by and among Parent and Maxim. Pursuant to the Maxim Amendment, Parent agreed to pay Maxim a revised transaction fee in connection with the Business Combination in an amount equal to 2,000 Maxim Fee Shares.
In addition to the obligation to deliver the Maxim Fee Shares to Maxim, the terms of the Maxim Amendment also include registration rights obligations on the part of the Company, which include obligations to use reasonable best efforts to file a resale registration statement covering the Maxim Fee Shares and to maintain the effectiveness thereof while Maxim continues to hold the Maxim Fee Shares, in accordance with the terms of the Maxim Amendment.
The foregoing description of the Maxim Amendment is qualified in its entirety by the full text of the Maxim Amendment, which is filed as Exhibit 10.11 to the registration statement of which this prospectus is a part, and is incorporated herein by reference.
Lock-Ups
In connection with the Closing, the following parties are subject to lock-ups as set forth below: the Sponsor, MWE, NCAC, J.V.B., Cantor, Maxim, EGS and RNA (each, a “Lock-Up Party”) entered into lock-up arrangements which are substantially identical to each other, pursuant to which the applicable Lock-Up Party agreed not to, during the period (the “Lock-Up Period”) commencing from the Closing and ending on the earliest of (x) one hundred eighty (180) days after the Closing; provided, however, that in the event that the Investors delay investment of the Subscription Amounts (as defined in the Securities Purchase Agreement) with respect to the Second Tranche Note (as defined in the Securities Purchase Agreement) due to the occurrence of an event outlined in Section 2.1(b) of the Securities Purchase Agreement, such period shall be extended by 60 days or such earlier date as the deficiency is resolved, and (y) subsequent to the Closing, the date on which the Company consummates a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party that results in all of the Company’s shareholders having the right to exchange the Common Shares for cash, securities or other property, (i) lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares issued or issuable to the applicable Lock-Up Party pursuant to their respective agreements (“Restricted Securities”), (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Restricted Securities, or (iii) publicly disclose the intention to do any of the foregoing, whether any such transaction described in clauses (i), (ii) or (iii) above is to be settled by delivery of Restricted Securities or other securities, in cash or otherwise (any of the foregoing described in clauses (i), (ii) or (iii), a “Prohibited Transfer”). The lock-up provisions provide for certain exemptions for transfers to permitted transferees.
Warrant Exchange
On May 16, 2024, Psyence entered into a Warrant Exchange Agreement (the “Warrant Exchange Agreement”) with an unaffiliated third-party investor (the “Holder”) of Public Warrants. Pursuant to the Warrant Exchange Agreement, the Company issued to the Holder 8,800 Common Shares (the “Exchange Shares”) in exchange for the surrender and cancellation of 8,800 Public Warrants held by the Holder (the “Holder’s Warrants”) (such transactions, collectively, the “Exchange”).
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The foregoing description of the Warrant Exchange Agreement does not purport to be complete and is qualified in its entirety by reference to the Warrant Exchange Agreement, which is incorporated by reference as Exhibit 10.18 to the registration statement of which this prospectus is a part, and incorporated by reference herein.
The issuance by the Company of the Exchange Shares in the Exchange was made in reliance upon the exemption from the registration requirements provided by Section 3(a)(9) of the Securities Act. The Company did not receive any cash proceeds from the issuance of the Exchange Shares pursuant to the Exchange.
Headquarters and Operational Office
Psyence’s headquarters address is 121 Richmond Street West, Penthouse Suite 1300, Toronto, Ontario, M5H 2K1, Canada. The Company has an operational office in South Africa at Unit A210 The Old Biscuit Mill, 373-375 Albert Road, Woodstock, Cape Town, 7925. The Company was incorporated on June 29, 2023. Our website address is www.psyencebiomed.com. The information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our securities.
Foreign Private Issuer Status
We are a foreign private issuer within the meaning of the rules under the Exchange Act. As such, we are exempt from certain provisions applicable to United States domestic public companies. For example:
| ● | we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company; |
| ● | for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies; |
| ● | we are not required to provide the same level of disclosure on certain issues, such as executive compensation; |
| ● | we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; |
| ● | we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; and |
| ● | we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any “short-swing” trading transaction. |
We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a semi-annual basis as press releases, distributed pursuant to the rules and regulations of the Nasdaq. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.
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The Nasdaq listing rules provide that a foreign private issuer may follow the practices of its home country, which for us is Canada, rather than the Nasdaq rules as to certain corporate governance requirements, including the requirement that the issuer have a majority of independent directors and certain audit committee, compensation committee and nominating and corporate governance committee requirements, the requirement to disclose third party director and nominee compensation and the requirement to distribute annual and interim reports. A foreign private issuer that follows a home country practice in lieu of one or more of the listing rules shall disclose in its annual reports filed with the SEC each requirement that it does not follow and describe the home country practice followed by the issuer in lieu of such requirements. Currently, the Company does not plan to rely on the home country practice exemption with respect to its corporate governance other than the quorum requirement for shareholder meetings and with respect to Nasdaq shareholder approval rules. Our bylaws provide that two shareholders holding 25% of the voting shares constitutes a quorum, as contrasted with the Nasdaq requirement of one-third of a company’s outstanding voting securities. If the Company chooses to take advantage of other home country practice in the future, its shareholders may be afforded less protection than they otherwise would enjoy under Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.
Implications of Being an Emerging Growth Company
As a company with less than US$1.235 billion in revenue for the last fiscal year, we qualify as an “emerging growth company” pursuant to the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”). An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, in the assessment of the emerging growth company’s internal control over financial reporting. The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We intend to take advantage of certain of these exemptions.
We will remain an emerging growth company until the earliest of (i) the last day of our fiscal year during which we have total annual gross revenues of at least US$1.235 billion; (ii) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act; (iii) the date on which we have, during the previous three year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act, which would occur if the market value of our Common Shares that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter and we have been publicly reporting for at least 12 months. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.
Risk Factor Summary
Our business is subject to numerous risks and uncertainties, including those highlighted in the section entitled “Risk Factors,” in this prospectus and in our Annual Report on Form 20-F for the year ended March 31 2024, that represent challenges that we face in connection with the successful implementation of our strategy and the growth of our business. In particular, the following considerations, among others, may offset our competitive strengths or have a negative effect on our business strategy, which could cause a decline in the price of shares of our securities and result in a loss of all or a portion of your investment:
| ● | We are a clinical-stage biotechnology company and have incurred significant losses since our inception. We anticipate that we will incur significant losses for the foreseeable future. |
| ● | Psyence has a limited operating history and expects a number of factors to cause its operating results to fluctuate on an annual basis, which may make it difficult to predict the future performance of Psyence. |
| ● | Psyence has never generated revenue and may never be profitable. |
| ● | The Company will require substantial additional funding to achieve its business goals, and if it is unable to obtain this funding when needed and on acceptable terms, it could be forced to delay, limit or terminate its product development efforts. |
| ● | The psychedelic therapy and biotechnology industries are undergoing rapid growth and substantial change, which has resulted in an increase in competitors, consolidation and formation of strategic relationships. Acquisitions or other consolidating transactions could harm Psyence in a number of ways, including by losing strategic partners if they are acquired by or enter into relationships with a competitor, losing customers, revenue and market share, or forcing Psyence to expend greater resources to meet new or additional competitive threats, all of which could harm Psyence’s operating results. |
| ● | Current and future preclinical and clinical studies will be conducted outside the United States, and the FDA may not accept data from such studies to support any NDAs submitted after completing the applicable developmental and regulatory prerequisites (absent an IND). |
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| ● | There is a high rate of failure for product candidates proceeding through clinical trials. |
| ● | Because the results of preclinical studies and earlier clinical trials are not necessarily predictive of future results, Psyence may not have favorable results in its planned and future clinical trials. |
| ● | Negative results from clinical trials or studies of others and adverse safety events involving Psyence’s psychedelic analogs could have a material adverse effect on Psyence’s business. |
| ● | Supply chain interruptions could delay Psyence in the process of developing its product candidates. |
| ● | We rely on third parties to conduct our clinical trials. If these third parties do not properly and successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of, or commercialize, our product candidates. |
| ● | We are dependent on licensed intellectual property. If we were to lose our rights to licensed intellectual property, we may not be able to continue developing or commercializing our product candidates, if approved. If we breach any of the agreements under which we license the use, development and commercialization rights to our product candidates or technology from third parties or, in certain cases, we fail to meet certain development deadlines, we could lose license rights that are important to our business. |
| ● | We (or iNGENū in conducting our clinical trials) will depend on enrollment of patients in our clinical trials for our product candidates. If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected. |
| ● | If we fail to comply with healthcare regulations, we could face substantial enforcement actions, including civil and criminal penalties and our business, operations and financial condition could be adversely affected. |
| ● | Our prospective products will be subject to the various federal and state laws and regulations relating to health and safety and failure to comply with, or changes in, these laws or regulations could have an adverse impact on our business. |
| ● | Clinical trials are expensive, time-consuming, uncertain and susceptible to change, delay or termination. The results of clinical trials are open to differing interpretations. |
| ● | Psyence may be subject to federal, state and foreign healthcare laws and regulations and implementation of or changes to such healthcare laws and regulations could adversely affect Psyence’s business and results of operations. |
| ● | Serious adverse events or other safety risks could require Psyence to abandon development and preclude, delay or limit approval of its current or future product candidates, limit the scope of any approved label or market acceptance, or cause the recall or loss of marketing approval of products that are already marketed. |
| ● | Psyence may voluntarily suspend or terminate a clinical trial if at any time its believes that any of its product candidates presents an unacceptable risk to participants, if preliminary data demonstrates that the product candidate is unlikely to receive regulatory approval or unlikely to be successfully commercialized, or if sufficient funds to proceed to the next phases of clinical trials are not raised. |
| ● | The success of Psyence’s product candidates and future approved products, if any, is subject to a number of constantly-evolving state and federal laws, regulations, and enforcement policies pertaining to psilocybin containing products. |
| ● | We may seek fast track and breakthrough therapy designations or priority review for one or more of our product candidates, but we might not receive such designation or priority review, and even if we do, such designation or priority review may not lead to a faster development or regulatory review or approval process, and does not assure FDA approval of our product candidates. Even if a product qualifies for such designation or priority review, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. |
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| ● | We may seek approval of our product candidates, where applicable, under the FDA’s accelerated approval pathway. This pathway may not lead to a faster development, regulatory review or approval process and does not increase the likelihood that our product candidates will receive marketing approval. |
| ● | The psychedelic therapy industry and market are relatively new, and this industry and market may not continue to exist or grow as anticipated. |
| ● | Negative public opinion and perception of the psychedelic industry could adversely impact Psyence’s ability to operate and Psyence’s growth strategy. |
| ● | The expansion of the use of psychedelics in the medical industry may require new clinical research into effective medical therapies. |
| ● | The psychedelic therapy industry is difficult to quantify and investors will be reliant on their own estimates of the accuracy of market data. |
| ● | Psyence may not be able to adequately protect or enforce its intellectual property rights, which could harm its competitive position. |
| ● | If third parties claim that intellectual property owned or used by Psyence infringes upon their intellectual property, Psyence’s operating profits could be adversely affected. |
| ● | We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or increase the costs of commercializing our product candidates. |
| ● | If Psyence is not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of its products could be significantly diminished. |
| ● | The securities being offered in this prospectus represent a significant percentage of the number of our outstanding Common Shares, and the sales of such shares, or the perception that these sales could occur, could cause the market price of our Common Shares to decline significantly, which could impair our ability to raise capital through the sale of additional equity securities. |
| ● | Certain of our shareholders purchased their respective Common Shares at prices lower than the current market price for our Common Shares and may therefore experience a positive rate of return on their investment, even if our public shareholders, who invested approximately $10.00 per Common Share, would experience a negative rate of return on their investment. |
| ● | If we fail to meet applicable continued listing requirements, Nasdaq may delist our Common Shares from trading, in which case the liquidity and market price of our Common Shares could decline. |
| ● | The market price and trading volume of the Common Shares may be volatile and could decline significantly. |
| ● | Public Warrants are exercisable for Common Shares, which would increase the number of shares eligible for future resale in the public market and result in dilution to its shareholders. |
| ● | The requirements of being a public company may strain the Company’s resources, divert the Company management’s attention and affect the Company’s ability to attract and retain qualified board members. |
| ● | The Company qualifies as a foreign private issuer within the meaning of the rules under the Exchange Act, and as such the Company is exempt from certain provisions applicable to United States domestic public companies. |
| ● | Psyence currently reports financial results under International Financial Reporting Standards (IFRS), which differs in certain significant respects from U.S. GAAP. |
| ● | You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because the Company is incorporated under the laws of Canada, the Company conducts substantially all of its operations and a majority of its directors and executive officers reside outside of the United States. |
| ● | It is not expected that the Company will pay dividends in the foreseeable future. |
Reverse Stock Split
Effective November 26, 2024, the Company implemented a 75-to-1 share consolidation (reverse stock split) of its Common Shares, which was approved by the Company’s shareholders and its board of directors. After the reverse stock split, the Common Shares retained the same proportional voting rights and is identical in all other respects to the Common Shares prior to the effectiveness of the reverse stock split. The exercise price of the then outstanding Public Warrants and Private Warrants were likewise proportionally adjusted pursuant to the terms of such warrants.
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The Offering
| Securities offered by the Selling Securityholders | Up to 13,810,319 Common Shares and up to 7,600 Warrants to purchase Common Shares. Does not include up to $75,000,000 of our Common Shares, preferred shares, debt securities, warrants, and/or units, in each case from time to time in one or more offerings. | |
| Common Shares outstanding prior to this offering | 4,527,128 (as of February 28, 2025) | |
| Common Shares outstanding following this offering | 6,774,260 (includes 2,247,132 Common Shares underlying Warrants and excludes up to $75,000,000 of our Common Shares, preferred shares, debt securities, warrants, and/or units, in each case from time to time in one or more offerings). | |
| Terms of the offering | Each Selling Securityholder will determine when and how it will dispose of the Common Shares registered for resale under this prospectus. See “Plan of Distribution”. | |
| Use of proceeds | We will not receive any of the proceeds from the resale of the Common Shares by the Selling Securityholders. However, we may receive up to $147,152,500 upon exercise of our public and private warrants. In addition, the use of net proceeds from the sale of the securities in any primary offering will be set forth in the applicable prospectus supplement. | |
| Risk factors | You should read the “Risk Factors” section of this prospectus and in the documents incorporated by reference in this prospectus for a discussion of factors to consider before deciding to purchase any of our securities. | |
| Nasdaq ticker symbols | “PBM” and “PBMWW” |
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PRICE RANGE OF SECURITIES AND DIVIDENDS
Price Range of Securities
Our Common Shares and Public Warrants each trade on the Nasdaq Capital Market under the symbols “PBM,” and “PBMWW,” respectively.
The Nasdaq official closing price of our Common Shares and Public Warrants as reported by Nasdaq on February 28, 2025, was $1.24 and $0.0221, respectively.
Dividends
Psyence has not paid any cash dividends on its shares to date and does not intend to pay cash dividends in the foreseeable future. The payment of cash dividends in the future will be dependent upon the Company’s revenue and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends is within the discretion of the Board. Further, our ability to declare dividends may be limited by the terms of financing or other agreements entered into by us or our subsidiaries from time to time.
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The following table sets forth our cash and equivalents and capitalization as of September 30, 2024:
| ● | on an actual basis; |
| ● | on a pro-forma basis, giving effect to the issuance of (a) 1,557,035 Common Shares for aggregate gross proceeds of $4,786,568 from October 2024 to December 2024 pursuant to an equity line of credit and (b) 1,000,000 Common Shares for aggregate gross proceeds of $2,000,000 in December 2024 pursuant to a private placement. |
| Actual | Pro-Forma | |||||||
| (unaudited) | (unaudited) | |||||||
| Cash and cash equivalents | 1,932,519 | 6,810,731 | ||||||
| Stockholders’ equity | ||||||||
| Share Capital (611,122 issued and outstanding as of September 30, 2024; 4,527,128 issued and outstanding pro-forma) | 52,940,688 | 61,258,586 | ||||||
| Accumulated Deficit | (54,498,339 | ) | (56,359,376 | ) | ||||
| Warrant Reserve | 42,528 | 1,559,712 | ||||||
| Reserves | 260,017 | 703,286 | ||||||
| Total stockholder’s equity | (1,255,016 | ) | 7,162,208 | |||||
| Total capitalization | (1,255,016 | ) | 7,162,208 | |||||
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We are registering for resale up to 13,810,319 Common Shares, consisting of (i) 11,563,187 issued and outstanding Common Shares, (ii) 2,247,132 Common Shares issuable upon exercise of outstanding warrants and (iii) 7,600 Warrants to purchase Common Shares. Sales of substantial amounts of Common Shares in the public market, or the perception that such sales might occur, could adversely affect the market price of our Common Shares and the market value of our other securities. We cannot predict if and when the Selling Securityholders may sell such Common Shares in the public markets. Furthermore, in the future, we may issue up to $75,000,000 in additional Common Shares or other equity or debt securities convertible into Common Shares. Any such issuance could result in substantial dilution to our existing shareholders and could cause our share price to decline.
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Investing in our securities involves a high degree of risk. You should carefully consider the following information about these risks and those risks set forth in the “Risk Factors” section in our Annual Report on Form 20-F for the year ended March 31, 2024 filed with the SEC on July 29, 2024, together with the other information appearing elsewhere or incorporated by reference in this prospectus, including our financial statements, the notes thereto and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding to invest in our securities. The occurrence of any of the following risks could have a material adverse effect on our business, reputation, financial condition, results of operations and future growth prospects, as well as our ability to accomplish our strategic objectives. As a result, the trading price of our securities could decline and you could lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations and the market price of our securities.
Risks Related to Our Business and Industry
We are a clinical-stage biotechnology company and have incurred significant losses since our inception. We anticipate that we will incur significant losses for the foreseeable future.
Investment in biotechnology product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate effectiveness or an acceptable safety profile, gain regulatory approval and become commercially viable. All of Psyence’s product candidates will require substantial additional capital expenditures and development time, including extensive clinical research and resources, before it would be able to apply for and then receive marketing authorization and begin generating revenue from product sales.
Since its inception, Psyence has invested most of its resources in establishing strategic partnerships, securing intellectual property licensing rights, advancing its clinical trial program, raising capital, building its management team and providing general and administrative support for these operations. Psyence has incurred losses in each year since its inception and expects to incur significant losses for the foreseeable future. Psyence’s net loss for the years ended March 31, 2023 and March 31, 2024 was $3.12 million and $50.96 million, respectively. The March 31, 2024 net loss was driven by the deemed listing expense of $41.48 million which consisted of a deemed consideration amount of $37.3 million for the 103,929 shares issued to NCAC shareholders at a fair value of $359.25 per share and $4.1 million for the net liabilities acquired. To date, no products have been approved for commercial sale and Psyence has not generated any revenue. Psyence has financed operations solely through the sale of equity securities and convertible debt financings. Psyence continues to incur significant research and development and other expenses related to ongoing operations and expects to incur losses for the foreseeable future.
Due to the numerous risks and uncertainties associated with the development of its product candidates, Psyence is unable to predict the timing or amount of its expenses, or when it will be able to generate any meaningful revenue or achieve or maintain profitability, if ever. In addition, its expenses could increase beyond current expectations if Psyence is required by the Therapeutic Goods Administration in Australia (“TGA”), the U.S. Food and Drug Administration (“FDA”), the European Medicines Agency (“EMA”), Medicines and Healthcare products Regulatory Agency in the UK (“MHRA”), or other comparable foreign regulatory authorities, to perform preclinical studies or clinical trials in addition to those that Psyence currently anticipates, or if there are any delays in any of Psyence’s or its future collaborators’ clinical trials or the development of the existing product candidates and any other product candidates that Psyence may identify. Even if Psyence’s existing product candidates or any future product candidates that Psyence may identify are approved for commercial sale, Psyence anticipates incurring significant costs associated with commercializing any approved product and ongoing compliance efforts.
The Company will require substantial additional funding to achieve its business goals, and if it is unable to obtain this funding when needed and on acceptable terms, it could be forced to delay, limit or terminate its product development efforts.
Psyence’s clinical trial and product development pipeline currently consists of an approved Phase IIb Study in Australia. We have also obtained approval from the MHRA to conduct a Phase IIa study in the UK, which was not initiated due to certain cost-effective incentives provided by Australia. Once the Phase IIb Study in Australia is completed, a Phase III pivotal study program will begin, of which the size and number of trials will depend on the results of the Phase IIb Study, the advice given to Psyence from the regulatory authorities and whether the FDA will assess the program as being fast-tracked or eligible as a breakthrough therapy. If the assessment is the latter, the Phase III program could be smaller than anticipated and less than the usual required two pivotal studies to support market authorization.
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Psyence intends to submit the NDA requesting assessment via the 505(b)(2) pathway. A 505(b)(2) application is an NDA that contains full reports of investigations of safety and effectiveness, where at least some of the information required for approval comes from studies not conducted by or for the applicant, and for which the applicant has not obtained a right of reference or use, including, for example, the agency’s finding of safety and/or effectiveness for a listed drug or published literature. This could potentially allow for a shorter development program along with less data that is developed by Psyence, as compared to a regular NDA submission. Despite the usage of psilocybin for decades, there have been relatively few studies pertaining to psilocybin products due to the ban on the research into psychedelics. However, recently, academic institutions have been allowed to conduct such studies.
Conducting clinical trials and developing biopharmaceutical products is expensive and time consuming, and we expect to require substantial additional capital to conduct research, preclinical studies and clinical trials for the current and future trials, seek regulatory approvals for our product candidates and launch and commercialize any products for which Psyence may receive regulatory approval, including building our own commercial sales, marketing and distribution organization. Our management and strategic decision makers have not made decisions regarding the future allocation of certain resources among Psyence’s pipeline of trials, but continue to evaluate the needs and opportunities with respect to each of these trials routinely and on a case-by-case basis. Because the outcome of any preclinical or clinical development and regulatory approval process is highly uncertain (including the size and quantum of the Phase III registrational program), Psyence cannot reasonably estimate the actual amounts necessary to successfully complete the development, regulatory approval process and potential commercialization of its product candidates and any future product candidates it may identify.
Psyence expects that the existing available cash will be sufficient to fund operations beyond 12 months from the date of this filing. However, Psyence’s operating plan may change as a result of many factors currently unknown, and Psyence may need to seek additional funds sooner than planned, through public or private equity or debt financings, sales of assets or programs, other sources, such as strategic collaborations or license and development agreements, or a combination of these approaches. Even if Psyence believes that its funds are sufficient for its current or future operating plans, it may, subject to obtaining the necessary contractual consents, opportunistically seek additional capital if market conditions are favorable or for specific strategic considerations. Psyence’s spending will vary based on new and ongoing product development and business development activities. Any such additional fundraising efforts for Psyence may divert management from their day-to-day activities, which may adversely affect Psyence’s ability to develop and commercialize product candidates that Psyence may identify and pursue. Moreover, such financing may result in dilution to shareholders, imposition of debt covenants and repayment obligations, or other restrictions that may affect Psyence’s business. Changing circumstances, some of which may be beyond Psyence’s control, could cause Psyence to consume capital significantly faster than currently anticipated, and Psyence may need to seek additional funds sooner than planned. Psyence’s future funding requirements, both short-term and long-term, will depend on many factors, including, but not limited:
| ● | the time and cost necessary to complete ongoing and planned clinical trials; |
| ● | the outcome, timing and cost of meeting regulatory requirements established by the TGA, FDA, the EMA, the MHRA and other comparable foreign regulatory authorities; |
| ● | the progress, timing, scope and costs of preclinical studies, clinical trials and other related activities for ongoing and planned clinical trials, and potential future clinical trials; |
| ● | the costs of obtaining clinical and commercial supplies of raw materials and drug products for Psyence’s product candidates, as applicable, and any other product candidates Psyence may identify and develop; |
| ● | Psyence’s ability to successfully identify and negotiate acceptable terms for third-party supply and contract manufacturing agreements with contract manufacturing organizations (“CMOs”); |
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| ● | the costs of commercialization activities for any of Psyence’s product candidates that receive marketing approval, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities, or entering into strategic collaborations with third parties to leverage or access these capabilities; |
| ● | the amount and timing of sales and other revenues from Psyence’s product candidates, if approved, including the sales price and the availability of coverage and adequate third-party reimbursement; |
| ● | the cash requirements of developing Psyence’s programs and Psyence’s ability and willingness to finance their continued development; |
| ● | the cash requirements of any future acquisitions or discovery of product candidates; |
| ● | the time and cost necessary to respond to technological and market developments, including other products that may compete with one or more of Psyence’s product candidates; |
| ● | supply chain interruptions, which could delay Psyence in the process of developing its product candidates; |
| ● | the costs of acquiring, licensing or investing in intellectual property rights, products, product candidates and businesses; |
| ● | the costs of maintaining, expanding and protecting Psyence’s intellectual property portfolio; |
| ● | its ability to attract, hire and retain qualified personnel as Psyence expands research and development and establishes a commercial infrastructure; and |
| ● | the costs of operating as a public company in the United States and maintaining a listing on Nasdaq. |
Psyence cannot be certain that additional funding will be available on acceptable terms, or at all. Market volatility resulting from the COVID-19 pandemic and the related U.S. and global economic impact or other factors could also adversely impact the ability to access funds as and when needed. If adequate funds are not available to Psyence on a timely basis, Psyence may be required to delay, limit or terminate one or more research or development programs or trials or the potential commercialization of any approved products or be unable to expand operations or otherwise capitalize on business opportunities, as desired, which could materially affect Psyence’s business, prospects, financial condition and results of operations.
We will need substantial additional financing to develop our product candidates and implement our operating plans. If we fail to obtain additional financing, we may be unable to complete the development and commercialization of our product candidates.
We expect to spend a substantial amount of capital in the development and manufacturing of our product candidates, and we will need substantial additional financing to do so. In particular, we will require substantial additional financing to enable commercial production of our product candidates and initiate and complete registrational trials for multiple products in multiple regions. Further, if approved, we will require significant additional capital in order to launch and commercialize our product candidates.
As of September 30, 2024, we had USD$1,962,130 in cash and cash equivalents and restricted cash. Changing circumstances may cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control. We may also need to raise additional capital sooner than we currently anticipate if we choose to expand more rapidly than we presently plan. In any event, we will require additional capital for the further development and commercialization of our product candidates.
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We cannot be certain that additional funding will be available on acceptable terms, or at all. We have no committed source of additional capital. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of our product candidates or other research and development initiatives. We could be required to seek collaborators for our product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to our product candidates in markets where we otherwise would seek to pursue development or commercialization ourselves.
Any of the above events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our securities to decline.
In addition, future changes in regulations, changes in legal status of psilocybin-containing products, more vigorous enforcement thereof or other unanticipated events could require extensive changes to Psyence’s operations, increased compliance costs or give rise to material liabilities, which could have a material adverse effect on the business, results of operations and financial condition of Psyence.
Risks Related to Ownership of Our Securities
The securities being offered in this prospectus represent a substantial percentage of the number of our outstanding Common Shares, and the sales of such shares, or the perception that these sales could occur, could cause the market price of our Common Shares to decline significantly could impair our ability to raise capital through the sale of additional equity securities.
This prospectus relates to the offer and sale from time to time by the Selling Securityholders named in this prospectus, or their permitted transferees, from time to time. The sale of Common Shares by the Selling Securityholders, or the perception that these sales could occur, could depress the market price of our Common Shares could impair our ability to raise capital through the sale of additional equity securities. A Selling Securityholder may still have an incentive to sell our Common Shares because it may still experience a positive rate of return on the securities it purchased, or was issued, due to the differences in the purchase prices it paid for our Common Shares and the public trading price of our Common Shares. While a Selling Securityholder may, on average, experience a positive rate of return based on the current market price of the Common Shares it purchased, public securityholders may not experience a similar rate of return on the Common Shares they purchased if there is such a decline in price and due to differences in the purchase prices and the current market price.
If we fail to meet applicable continued listing requirements, Nasdaq may delist our Common Shares from trading, in which case the liquidity and market price of our Common Shares could decline.
We cannot assure you that we will be able to meet the continued listing standards of Nasdaq in the future. On March 11, 2024, we received two letters from the Nasdaq staff, one notifying the Company that for the last 30 consecutive business days, the Company’s Market Value of Listed Securities was below the minimum of $50 million required for continued listing on the Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(b)(2)(A), and the other notifying the Company that for the last 30 consecutive business days, the Company’s Market Value of Publicly Held Shares was below the minimum of $15 million required for continued listing on the Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(b)(2)(C). Additionally, on June 27, 2024, we received a notification letter from the Nasdaq staff notifying the Company that the Company’s closing bid price per share was below $1.00 for a period of 30 consecutive business days and that the Company did not meet the minimum bid price requirement set forth in Nasdaq Listing Rule 5450(a)(1). On November 20, 2024, we announced the favorable outcome of the Nasdaq Listing Qualifications Hearing that was held on October 31st, 2024. The Nasdaq Hearings Panel granted the Company an extension until December 31st, 2024, to demonstrate compliance with all Nasdaq continued listing rules. During the Company’s Nasdaq Listing Qualifications Hearing, we presented a comprehensive plan to regain and maintain compliance with Nasdaq’s continued listing requirements, including 5550(a)(2), the $1 minimum bid price requirement, 5550(a)(5), the $1.0 million minimum market value of publicly held shares requirement, and 5550(b)(1), the $2.5 million minimum stockholders’ equity requirement.
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As part of its plan, we requested to be transferred from The Nasdaq Global Market to The Nasdaq Capital Market pursuant to a panel exception, effective November 15th, 2024. Furthermore, as previously announced, we obtained shareholder approval during the Annual Meeting held on November 12th, 2024, to effect a 75-for-1 share consolidation, which became effective on November 26, 2024, to satisfy Nasdaq’s $1 minimum bid price requirement. The Company expects to demonstrate compliance with all the applicable requirements for continued listing on The Nasdaq Capital Market within the extension period.
If we fail to comply with the applicable listing standards and Nasdaq delists our Common Shares, we and our shareholders could face significant material adverse consequences, including:
| ● | a limited availability of market quotations for our Common Shares; |
| ● | reduced liquidity for our Common Shares; |
| ● | a determination that our Common Shares are “penny stock”, which would require brokers trading in our Common Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Common Shares; |
| ● | a limited amount of news about us and analyst coverage of us; and |
| ● | a decreased ability for us to issue additional equity securities or obtain additional equity or debt financing in the future. |
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Common Shares and Public Warrants are listed on Nasdaq, such securities are covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulations in each state in which we offer our securities.
Our Warrants are exercisable for Common Shares, which would increase the number of shares eligible for future resale in the public market and result in dilution to our shareholders.
An aggregate of 2,247,134 Common Shares are issuable upon exercise of warrants, including 157,867 Common Shares issuable upon exercise of Public Warrants,14,266 Common shares issuable upon exercise of Private Warrants, 1 million Common Shares issuable upon exercise of Series A Warrants, 1 million Common Shares issuable upon exercise of Series B Warrants, and 75,000 Common Shares Issuable upon exercise of the Placement Agent Warrants. These Public Warrants and Private Warrants are currently exercisable at an exercise price of $862.50 per share, the Series A Warrants and Series B Warrants at $2.00 per Common Share, and the Placement Agent Warrants at $2.50 per Common Share and each contain 4.99% beneficial ownership limitations that may be waived at the option of each holder upon 61 days’ notice to the Company, but in no event may such beneficial ownership limitation exceed 19.99% of the number of outstanding Common Shares. To the extent such warrants are exercised, 2,247,134 additional Common Shares will be issued, representing approximately 64.7% of our current outstanding Common Shares and could result in dilution to the holders of Common Shares and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such Warrants may be exercised could adversely affect the market price of Common Shares. Notwithstanding the foregoing, because the Nasdaq official closing price of our Common Shares was $1.57 on January 31, 2025, the Private Warrants and Public Warrants are currently “out-of-the-money” and it is unlikely that any of the Warrants will be exercised by holders anytime in the near future.
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All of the Common Shares offered by the Selling Securityholders pursuant to this prospectus will be sold by the Selling Securityholders for their own accounts. We will not receive any proceeds from the resale of the securities by the Selling Securityholders, though we may receive up to $147,152,500 upon the exercise of the warrants. We may also receive an aggregate of up to $25 million in gross proceeds under the White Lion Purchase Agreement from sales of Common Shares registered under the registration statement of which this prospectus forms a part, that we may elect to make to White Lion pursuant to the White Lion Purchase Agreement, if any, from time to time in our sole discretion, during the Commitment Period. We intend to use the net proceeds from the sale of the securities in the primary offering as set forth in the applicable prospectus supplement.
The proceeds from White Lion that we receive under the White Lion Purchase Agreement, if any, are currently expected to be used for general corporate purposes, including working capital. Accordingly, we retain broad discretion over the use of the net proceeds from the sale of our Common Shares under the White Lion Purchase Agreement. The precise amount and timing of the application of such proceeds will depend upon our liquidity needs and the availability and cost of other capital over which we have little or no control. As of the date hereof, we cannot specify with certainty the particular uses for the net proceeds from the sales of Common Shares, if any to White Lion under the White Lion Purchase Agreement.
We will incur all costs associated with this prospectus and the registration statement of which it is a part.
All of the Common Shares offered by the Selling Securityholders pursuant to this prospectus will be sold by the Selling Securityholders for their own accounts.
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This prospectus relates, among other things, to the resale, from time to time, by the Selling Securityholders of up to 13,810,320 Common Shares, consisting of (i) 11,563,187 issued and outstanding Common Shares, (ii) 2,247,133 Common Shares issuable upon exercise of outstanding warrants and (iii) 7,600 warrants to purchase Common Shares. Except as otherwise disclosed in this prospectus, or in the documents incorporate by reference in this prospectus, the Selling Securityholders have not had any material relationship with us within the past three years. The following table sets forth the names of the Selling Securityholders, the number of Common Shares and Warrants beneficially owned by each Selling Securityholder as of the date of this prospectus, the number of Common Shares being offered for sale by each Selling Shareholder, the number of Common Shares beneficially owned upon completion of the offering by each Selling Securityholder and the percentage beneficial ownership upon completion of the offering. The table and the other information contained under the captions “Selling Securityholders” and “Plan of Distribution” has been prepared based upon information furnished to us by or on behalf of the Selling Securityholders.
The Selling Securityholders may from time to time offer and sell any or all of the securities set forth below pursuant to this prospectus. When we refer to the “Selling Securityholders” in this prospectus, we mean the persons listed in the tables below, and the pledgees, donees, transferees, assignees, successors and others who later come to hold any of the Selling Securityholders’ interest in our securities after the date of this prospectus.
The table below presents information regarding each Selling Securityholder and the Common Shares that it may offer from time to time under this prospectus. This table is prepared based on information supplied to us by the Selling Securityholders. The number of shares in the column “Maximum Number of Common Shares to be Offered Pursuant to this Prospectus” represents all of the Common Shares that the Selling Securityholders may offer under this prospectus. The Selling Securityholders may sell some, all or none of its shares in this offering. We do not know how long the Selling Securityholders will hold the shares before selling them, and we currently have no agreements, arrangements or understandings with the Selling Securityholders regarding the sale of any of the shares.
Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Exchange Act, and includes Common Shares with respect to which a Selling Securityholder has voting and investment power and Common Shares underlying warrants held by such Selling Securityholder that are currently exercisable within sixty (60) days. The percentage of Common Shares beneficially owned by each Selling Securityholder prior to the offering shown in the table below is based on an aggregate of 4,527,128 Common Shares outstanding on February 28, 2025 plus, for each Selling Securityholder, the number of Common Shares underlying securities they own that are being offered for sale pursuant to this prospectus, if any. The fourth column assumes the sale of all of the shares offered by the Selling Securityholders pursuant to this prospectus.
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| Number of Shares of Common Shares Owned Prior to Offering | Maximum Number of Common Shares to be Offered Pursuant to | Number of Shares of Common Shares Owned After Offering | ||||||||||||||||||
| Name of Selling Securityholder | Number | Percent(1) | this Prospectus | Number(2) | Percent(1) | |||||||||||||||
| Aegis Lockwood Holding Inc. | 866 | * | % | 866 | - | * | % | |||||||||||||
| Ananda OM LLC | 16,604 | * | % | 16,604 | - | * | % | |||||||||||||
| Andrew Drake | 38 | * | % | 38 | - | * | % | |||||||||||||
| Blind 1212, LLC | 33,209 | * | % | 33,209 | - | * | % | |||||||||||||
| Cantor Fitzgerald & Co | 5,740 | * | % | 5,740 | - | * | % | |||||||||||||
| Chris Ehrlich | 400 | * | % | 400 | - | * | % | |||||||||||||
| Charles Worthman | 750 | * | % | 750 | - | * | % | |||||||||||||
| Clark Huang | 1,660 | * | % | 1,660 | - | * | % | |||||||||||||
| Craig Schwabe | 2,531 | * | % | 2,531 | - | * | % | |||||||||||||
| Curiosum | 400 | * | % | 400 | - | * | % | |||||||||||||
| Daniel Rogers | 200 | * | % | 200 | - | * | % | |||||||||||||
| Donohoe Advisory Associates Llc | 40 | * | % | 40 | - | * | % | |||||||||||||
| Driss Benamour | 4,151 | * | % | 4,151 | - | * | % | |||||||||||||
| Ellenoff Grossman & Schole LLP | 2,000 | * | % | 2,000 | - | * | % | |||||||||||||
| Emerson & Ashton | 1,660 | * | % | 1,660 | - | * | % | |||||||||||||
| Evo Investment Holdings LLC | 83,022 | 1.83 | % | 83,022 | - | * | % | |||||||||||||
| FM Capital Sponsor, LLC | 1,667 | * | % | 1,667 | - | * | % | |||||||||||||
| Harraden Circle Investors LP | 94,495 | 2.09 | % | 94,495 | - | * | % | |||||||||||||
| Harraden Circle Special Opportunities LP | 94,494 | 2.09 | % | 94,494 | - | * | % | |||||||||||||
| Hudson Bay Master Fund | 1,212,000 | 28.16 | % | 1,212,000 | - | * | % | |||||||||||||
| Jane Selena Shim | 1,660 | * | % | 1,660 | - | * | % | |||||||||||||
| Jason Beccaris and Sally Burtle JWROS | 434 | * | % | 434 | - | * | % | |||||||||||||
| John and Maria Abbott Revocable Trust | 434 | * | % | 434 | - | * | % | |||||||||||||
| Johnson Danz Living Trust | 1,084 | * | % | 1,084 | - | * | % | |||||||||||||
| Jurgen van Vyver | 200 | * | % | 200 | - | * | % | |||||||||||||
| J.V.B. Financial Group, LLC | 220 | * | % | 220 | - | * | % | |||||||||||||
| Lapus Family Trust | 434 | * | % | 434 | - | * | % | |||||||||||||
| Launchpad Capital Fund I LP | 1,548 | * | % | 1,548 | - | * | % | |||||||||||||
| Launchpad Capital Fund I-B LP | 402 | * | % | 402 | - | * | % | |||||||||||||
| Launchpad Capital Opportunities Fund | 3,034 | * | % | 3,034 | - | * | % | |||||||||||||
| Launchpad Ignition Holdings LLC | 15,919 | * | % | 15,919 | - | * | % | |||||||||||||
| LWB Roth 1 LLC | 2,158 | * | % | 2,158 | - | * | % | |||||||||||||
| LWB Sspac 1, LLC | 6,144 | * | % | 6,144 | - | * | % | |||||||||||||
| Makan Family Trust DTD 10/10/2005 | 33,209 | * | % | 33,209 | - | * | % | |||||||||||||
| McDermott Will & Emery LLP | 1,667 | * | % | 1,667 | - | * | % | |||||||||||||
| Michael Vasinkevich | 48,094 | 1.05 | % | 48,094 | - | * | % | |||||||||||||
| Nicole Farb | 100 | * | % | 100 | - | * | % | |||||||||||||
| Noam Rubinstein | 23,625 | * | % | 23,625 | - | * | % | |||||||||||||
| Olana Holdings, LLC | 1,660 | * | % | 1,660 | - | * | % | |||||||||||||
| Outside The Box Capital Inc. | 2,627 | * | % | 2,627 | - | * | % | |||||||||||||
| Parsec Ventures, LP | 4,151 | * | % | 4,151 | - | * | % | |||||||||||||
| Psyence Group Inc. | 678,722 | 14.99 | % | 678,722 | - | * | % | |||||||||||||
| Randall-Palumbo Family Revocable Trust | 4,151 | * | % | 4,151 | - | * | % | |||||||||||||
| Red Dawn Capital, LLC | 66,418 | 1.47 | % | 66,418 | - | * | % | |||||||||||||
| Reluco Financial LLC | 1,084 | * | % | 1,084 | - | * | % | |||||||||||||
| Ricardo L. Elias 2017 Revocable | 33,209 | * | % | 33,209 | - | * | % | |||||||||||||
| Rohit Bodas | 100 | * | % | 100 | - | * | % | |||||||||||||
| Ronald and Caryn Suber Revocable | 4,151 | * | % | 4,151 | - | * | % | |||||||||||||
| RNA Advisors, LLC | 280 | * | % | 280 | - | * | % | |||||||||||||
| Sabby Volatility Warrant Master Fund, Ltd. | 1,424,193 | 26.34 | % | 1,500,000 | - | * | % | |||||||||||||
| Shanti Family Trust Non Exempt LLC | 16,604 | * | % | 16,604 | - | * | % | |||||||||||||
| Simran Aggarawal | 100 | * | % | 100 | - | * | % | |||||||||||||
| Steven C. Pierson | 4,151 | * | % | 4,151 | - | * | % | |||||||||||||
| Tabula Rasa Ltd. | 81,790 | 1.81 | % | 81,790 | - | * | % | |||||||||||||
| The Griffith Family 2004 Trust | 33,209 | * | % | 33,209 | - | * | % | |||||||||||||
| The Shamdasani Revocable Trust | 4,151 | * | % | 4,151 | - | * | % | |||||||||||||
| White Lion Capital, LLC | - | * | % | 10,233,333 | - | * | % | |||||||||||||
| William B. Douglas | 16,605 | * | % | 16,605 | - | * | % | |||||||||||||
| * | Represents beneficial ownership of less than 1% of the outstanding shares of our Common Shares. |
| (1) | Applicable percentage ownership is based on 4,527,128 Common Shares outstanding as of February 28, 2025. |
| (2) | Assumes the exercise of all warrants and sale of all shares and warrant shares being offered pursuant to this prospectus, without regard to beneficial ownership limitations that may exist. |
(PGI FN) The business address of Psyence Group Inc. is 121 Richmond Street West, Penthouse Suite 1300, Toronto, Ontario M5H 2K1, c/o Psyence Biomedical Ltd.
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(White Lion FN) In accordance with Rule 13d-3(d) under the Exchange Act, we have excluded from the number of shares beneficially owned prior to the offering all of the Common Shares that White Lion may be required to purchase under the White Lion Purchase Agreement, because the issuance of such shares is solely at our discretion and is subject to conditions contained in the White Lion Purchase Agreement, the satisfaction of which are entirely outside of White Lion’s control, including this registration statement that includes this prospectus becoming and remaining effective. Furthermore, the purchase of Common Shares is subject to certain agreed upon maximum amount limitations set forth in the White Lion Purchase Agreement. Also, the White Lion Purchase Agreement prohibits us from issuing and selling any Common Shares to White Lion to the extent such shares, when aggregated with all other Common Shares then beneficially owned by White Lion, would cause White Lion’s beneficial ownership of our Common Shares to exceed the 4.99% Beneficial Ownership Limitation. The White Lion Purchase Agreement also prohibits us from issuing or selling our Common Shares under the White Lion Purchase Agreement in excess of the 19.99% Exchange Cap, unless we obtain shareholder approval to do so, or unless the Exchange Cap limitation would not apply under applicable Nasdaq rules. Neither the Beneficial Ownership Limitation nor the Exchange Cap (to the extent applicable under Nasdaq rules) may be amended or waived under the White Lion Purchase Agreement. The business address of White Lion is 17631 Ventura Blvd., Suite 1008, Encino, CA 91316. White Lion’s principal business is that of a private investor. Dmitriy Slobodskiy Jr., Yash Thukral, Sam Yaffa, and Nathan Yee are the managing principals of White Lion. Therefore, each of Slobodskiy Jr., Thukral, Yaffa, and Yee may be deemed to have sole voting control and investment discretion over securities beneficially owned directly by White Lion and, indirectly, by White Lion. We have been advised that White Lion is not a member of the Financial Industry Regulatory Authority, or FINRA, or an independent broker-dealer. The foregoing should not be construed in and of itself as an admission by Slobodskiy Jr., Thukral, Yaffa, and Yee as to beneficial ownership of the securities beneficially owned directly by White Lion and, indirectly, by White Lion.
(Harraden FN) Harraden Circle Investors GP, LP (“Harraden GP”) is the general partner to each of the Harraden Funds, and Harraden Circle Investors GP, LLC (“Harraden LLC”) is the general partner of Harraden GP. Harraden Circle Investments, LLC (“Harraden Adviser”) is investment manager to the Harraden Funds and other high net worth individuals. Frederick V. Fortmiller, Jr. is the managing member of each of Harraden LLC and Harraden Adviser. In such capacities, each of Harraden GP, Harraden LLC, Harraden Adviser and Mr. Fortmiller may be deemed to indirectly beneficially own the securities reported herein directly beneficially owned by Harraden Funds. The principal business address of each of the Harraden Funds, Harraden GP, Harraden LLC, Harraden Adviser and Mr. Fortmiller is 299 Park Avenue, 21st Floor, New York, NY 10171.
(Hudson Bay FN) Consists of (i) 32,000 December 2024 PIPE Issued Shares , (ii) 120,000 Common Shares issuable upon exercise of the Pre-Funded Warrants, (iii) 500,000 Common Shares issuable upon exercise of the Series A Warrants, and (iv) 500,000 Common Shares issuable upon exercise of the Series B Warrants. Hudson Bay Capital Management LP, the investment manager of Hudson Bay Master Fund Ltd., has voting and investment power over these securities. Sander Gerber is the managing member of Hudson Bay Capital GP LLC, which is the general partner of Hudson Bay Capital Management LP. Each of Hudson Bay Master Fund Ltd. and Sander Gerber disclaims beneficial ownership over these securities.
(Sabby FN) Consists of (i) 129,193 Common Shares (ii) 295,000 Common Shares issuable upon exercise of Pre-Funded Warrants, (iii) 500,000 Common Shares issuable upon exercise of Series A Warrants, and (iv) 500,000 Common Shares issuable upon exercise of the Series B Warrants. Sabby Management, LLC is the investment manager of Sabby Volatility Warrant Master Fund, Ltd. and shares voting and investment power with respect to these shares in this capacity. As manager of Sabby Management, LLC, Hal Mintz also shares voting and investment power on behalf of Sabby Volatility Warrant Master Fund, Ltd. Each of Sabby Management, LLC and Hal Mintz disclaims beneficial ownership over the securities listed except to the extent of their pecuniary interest therein.
(Noam, Craig, Michael C. and Charles W. FN). Each of the Selling Securityholders is affiliated with H.C. Wainwright & Co., LLC, a registered broker dealer and has a registered address of c/o H.C. Wainwright & Co., 430 Park Ave, 3rd Floor, New York, NY 10022, and has sole voting and dispositive power over the securities held. The selling stockholder acquired the Placement Agent Warrants in the ordinary course of business and, at the time the Placement Agent Warrants were acquired, the selling stockholder had no agreement or understanding, directly or indirectly, with any person to distribute such securities. Represents a portion of the Placement Agent Warrant Shares issuable upon exercise of the Placement Agent Warrants issued to such Selling Securityholder by the Placement Agent as compensation in connection with our December 2024 PIPE Transaction. Each Placement Agent Warrant is immediately exercisable at an exercise price of $2.50 per share.
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Each Selling Securityholder of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the principal trading market or any other stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Securityholder may use any one or more of the following methods when selling securities:
| ● | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| ● | block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| ● | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| ● | an exchange distribution in accordance with the rules of the applicable exchange; |
| ● | privately negotiated transactions; |
| ● | settlement of short sales; |
| ● | in transactions through broker-dealers that agree with the Selling Securityholder to sell a specified number of such securities at a stipulated price per security; |
| ● | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
| ● | a combination of any such methods of sale; or |
| ● | any other method permitted pursuant to applicable law. |
The Selling Securityholders may also sell securities under Rule 144 or any other exemption from registration under the Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Securityholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Securityholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in compliance with FINRA Rule 2121.
In connection with the sale of the securities or interests therein, the Selling Securityholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Securityholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Securityholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The Selling Securityholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Securityholders has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.
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The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed to indemnify the Selling Securityholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Securityholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common shares for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Securityholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common shares by the Selling Securityholders or any other person. We will make copies of this prospectus available to the Selling Securityholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).
We may sell or distribute the securities described in this prospectus from time to time in one or more of the following ways:
| ● | To or through underwriters or dealers; |
| ● | Directly to one or more purchasers; |
| ● | Through agents; |
| ● | In “at-the-market offerings,” within the meaning of Rule 415(a)(4) of the Securities Act, to or through a market maker or into an existing trading market, on an exchange or otherwise; |
| ● | Through a combination of any of these methods of sale; or |
| ● | Through any other method permitted by applicable law and described in the applicable prospectus supplement. |
The prospectus supplement with respect to the offered securities will describe the terms of the offering, including the following, if applicable:
| ● | The name or names of any underwriters or agents; |
| ● | Any public offering price; |
| ● | The proceeds from such sale; |
| ● | Any underwriting discounts or agency fees and other items constituting underwriters’ or agents’ compensation; |
| ● | Any over-allotment options under which underwriters may purchase additional securities from us; |
| ● | Any discounts or concessions allowed or reallowed or paid to dealers; and |
| ● | Any securities exchanges on which the securities may be listed. |
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We may distribute the securities from time to time in one or more of the following ways:
| ● | At a fixed price or prices, which may be changed; |
| ● | At prices relating to prevailing market prices at the time of sale; |
| ● | At varying prices determined at the time of sale; or |
| ● | At negotiated prices. |
By Agents
We may designate agents who agree to use their reasonable efforts to solicit purchases for the period of their appointment or to sell securities on a continuing basis. Any agent involved will be named, and any commissions payable by us to such agent will be set forth in the applicable prospectus supplement.
By Underwriters or Dealers
If we use underwriters for the sale of securities, they will acquire securities for their own account, including through underwriting, purchase, security lending, or repurchase agreements with us. The underwriters may resell the securities from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale.
Unless otherwise stated in the applicable prospectus supplement, various conditions will apply to the underwriters’ obligation to purchase securities, and the underwriters will be obligated to purchase all of the securities contemplated in an offering if they purchase any of such securities. Any initial public offering price and any discounts or concessions allowed, reallowed, or paid to dealers may be changed from time to time. The underwriter or underwriters with respect to a particular underwritten offering of securities, or, if an underwriting syndicate is used, the managing underwriter or underwriters, will be set forth on the cover of the applicable prospectus supplement.
If we use dealers in the sale, unless we otherwise indicate in the applicable prospectus supplement, we will sell securities to the dealers as principals. The dealers may then resell the securities to the public at varying prices that the dealers may determine at the time of resale.
Direct Sales
We may also sell securities directly without using agents, underwriters, or dealers, as would be the case in the event of public warrant holders exercising their warrants in cash.
General Information
We may enter into agreements with underwriters, dealers, and agents that entitle them to indemnification against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which the underwriters, dealers, or agents may be required to make. Underwriters, dealers, and agents may be customers of, may engage in transactions with, or perform services for us or our subsidiaries in the ordinary course of business.
Underwriters, dealers, and agents that participate in the distribution of the securities may be underwriters as defined in the Securities Act, and any discounts or commissions received by them from us and any profit on the resale of the securities by them may be treated as underwriting discounts and commissions under the Securities Act. Any underwriters, dealers, or agents used in the offer or sale of securities will be identified and their compensation described in an applicable prospectus supplement.
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The following description of the material terms of the securities of the Company includes a summary of specified provisions of the Articles of Incorporation and amended and restated by-laws (“bylaws”) of the Company. This description is qualified by reference to the Articles of Incorporation and by-laws, copies of which are attached as exhibits to the registration statement of which this prospectus is a part and incorporated in this prospectus by reference. In this section, the terms “we,” “our” or “us” refer to the Company, and all capitalized terms used in this section are as defined in the Articles of Incorporation and bylaws, unless elsewhere defined herein.
General
The following is a summary of the rights of our Common Shares as set forth in our Articles of Incorporation and bylaws and certain related sections of the Business Corporations Act (Ontario) (the “OBCA”). This summary does not purport to be complete and is qualified in its entirety by the full text of the Articles of Incorporation.
Our authorized share capital consists of an unlimited number of Common Shares, each without par value. As of February 28, 2025 we have 4,527,128 issued and outstanding Common Shares.
The following description of our share capital and provisions of our Articles of Incorporation and bylaws are summaries of material terms and provisions and are qualified by reference to our Articles of Incorporation and bylaws, copies of which have been filed with the SEC as exhibits to the registration statement of which this prospectus is a part. The description of our Common Shares reflects amendments to our Articles of Incorporation and bylaws.
Common Shares
The holders of our Common Shares are entitled to one vote for each share held at any meeting of shareholders. The holders of our Common Shares are entitled to receive dividends as and when declared by our Board. In the event of our liquidation, dissolution or winding-up or other distribution of our assets among our shareholders, the holders of our Common Shares are entitled to share pro rata in the distribution of the balance of our assets. There are no preemptive, redemption, purchase or conversion rights attaching to our Common Shares. There are no sinking fund provisions applicable to our Common Shares. Our Common Shares are issued in fully registered form.
Warrants
Public Warrants
Each the Public Warrant shall entitle the registered holder thereof to purchase one whole Common Share at a price of $862.50 per share, subject to adjustment as discussed below, at any time commencing on February 24, 2024 and will expire on January 25, 2029, at 5:00 p.m., New York City time.
The Company will not be obligated to deliver any Common Shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Common Shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations described below with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue Common Shares upon exercise of a warrant unless Common Shares issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless.
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The Public Warrants and the Common Shares issuable upon exercise of the Public Warrants have been registered on the Form F-4 filed in connection with the Business Combination. The Company will use its best efforts to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Common Shares are at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, but the Company will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Once the warrants become exercisable, we may call the warrants for redemption:
| ● | in whole and not in part; |
| ● | at a price of US$0.01 per warrant; |
| ● | upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and |
| ● | if, and only if, the reported last sale price of Common Shares equals or exceeds US$1,350.00 per share for any 20 trading days within a 30-trading day period ending three business days before we send the notice of redemption to the warrant holders. |
If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
We have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants, each warrant holder will be entitled to exercise its warrant prior to the scheduled redemption date. However, the price of Common Shares may fall below the US$1,350.00 redemption trigger price as well as the US$862.50 warrant exercise price after the redemption notice is issued.
If we call the warrants for redemption as described above, our management will have the option to require any holder that wishes to exercise its warrant to do so on a “cashless basis.” This redemption feature may differ from the warrant redemption features used by other blank check companies. In determining whether to require all holders to exercise their warrants on a “cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our shareholders of issuing the maximum number of Common Shares issuable upon the exercise of our warrants. If our management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering their warrants for that number of Common Shares equal to the quotient obtained by dividing (x) the product of the number of Common Shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Common Shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. As an example, if we elect to call the warrants for redemption on a “cashless basis” in accordance with the redemption criteria described above and the “fair market value” is determined to be US$1,350.00 per share, then a holder of warrants for the purchase of 100 shares of our Common Shares would receive 36 shares of our Common Shares upon such exercise. The “fair market value” for these purposes may be higher or lower than the US$1,350.00 redemption trigger price and will only be determinable when we elect to send a notice of redemption to holders of the warrants. If a holder does not exercise his or her warrants within the redemption period, then he or she will be forced to accept the nominal redemption price of US$0.01 per warrant which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of such warrants. If we call our warrants for redemption and our Private Warrants and their permitted transferees would still be entitled to exercise their Private Warrants for cash or on a cashless basis using the same formula described above that other warrant holders would have been required to use had all warrant holders been required to exercise their warrants on a cashless basis, as described in more detail below.
A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the Common Shares outstanding immediately after giving effect to such exercise.
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If the number of outstanding Common Shares is increased by a share dividend payable in Common Shares, or by a split-up of Common Shares or other similar event, then, on the effective date of such share dividend, sub-division or similar event, the number of Common Shares issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding Common Shares. A rights offering to holders of Common Shares entitling holders to purchase Common Shares at a price less than the fair market value will be deemed a share dividend of a number of Common Shares equal to the product of (i) the number of Common Shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Common Shares) multiplied by (ii) one (1) minus the quotient of (x) the price per share of Common Shares paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for Common Shares, in determining the price payable for Common Shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of Common Shares as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the Common Shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if the Company, at any time while the warrants are outstanding and unexpired, pays a dividend or make a distribution in cash, securities or other assets to the holders of Common Shares on account of such Common Shares (or other shares of the Company’s capital stock into which the warrants are convertible), other than (a) as described above, (b) certain ordinary cash dividends, or (c) to satisfy the redemption rights of the holders of Common Shares in connection with a proposed initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of Common Shares in respect of such event.
If the number of outstanding Common Shares is decreased by a consolidation, combination, reverse stock split or reclassification of Common Shares or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of Common Shares issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding Common Shares.
Whenever the number of Common Shares purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of Common Shares purchasable upon the exercise of the warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of Common Shares so purchasable immediately thereafter.
In case of any reclassification or reorganization of the outstanding Common Shares (other than those described above or that solely affects the par value of such Common Shares), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of outstanding Common Shares), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the shares of its Common Shares immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event. If less than 70% of the consideration receivable by the holders of Common Shares in such a transaction is payable in the form of Common Shares in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the Black-Scholes value (as defined in the warrant agreement) of the warrant.
The warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and the Company. You should review a copy of the warrant agreement, which is filed as an exhibit to the registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the warrants. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding Public Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants.
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The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to the Company, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of Common Shares and any voting rights until they exercise their warrants and receive Common Shares. After the issuance of Common Shares upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by shareholders.
No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number of Common Shares to be issued to the warrant holder.
Private Warrants
The Private Warrants were assumed by the Company upon the consummation of the Business Combination, and after the Business Combination, each warrant is exercisable for one Common Share and will expire on January 25, 2029, at 5:00 p.m., New York City time.
The Private Warrants may be exercised on a cashless basis and will not be redeemable by the Company so long as they are held by the initial holders thereof or their permitted transferees. Otherwise, the Private Warrants have terms and provisions that are identical to those of the Public Warrants. If the Private Warrants are held by holders other than the initial holders thereof or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants. If holders of the Private Warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants for that number of Common Shares equal to the quotient obtained by dividing (x) the product of the number of Common Shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Common Shares for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent.
Investor Private Warrants
On January 15, 2024, the Company issued warrants in connection with the Harraden SPA Addendum. The holders of such warrants are entitled to purchase Common Shares for cash at an exercise price of $37.50 per Warrant Share, subject to adjustment. Such warrants are exercisable at any time from the issuance date to the date that is the two year anniversary of the issuance date. Adjustments may occur if the company undergoes share dividends, splits, or fundamental transactions. The warrant can be exercised in part, and no fractional shares will be issued. Additionally, there are beneficial ownership limitations and provisions for buy-in compensation in case of a failure to deliver shares. The warrant holders do not have the rights or privileges of holders of Common Shares and any voting rights until they exercise their warrants and receive Common Shares. After the issuance of Common Shares upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by shareholders. The foregoing description of such warrants is qualified in its entirety by the full text of the warrants, which is attached as Exhibit 4.3 to this registration statement of which this prospectus is a part, and is incorporated herein by reference.
Series A Warrants
On December 27, 2024, in connection with the closing of the PIPE Transaction, the Company issued the Series A Warrants to purchase up to 1,000,000 Common Shares at an exercise price of $2.00 per share to certain of the Selling Securityholders. Such warrants are exercisable at any time from the issuance date to the date that is the five year anniversary of the issuance date. Adjustments may occur if the Company undergoes share dividends, splits, or fundamental transactions. The warrant can be exercised in part, and no fractional shares will be issued. Additionally, there are beneficial ownership limitations that may be waived at the option of each holder upon 61 days’ notice to the Company, but in no event may such beneficial ownership limitation exceed 19.99% of the number of Common Shares outstanding. The warrant holders do not have the rights or privileges of holders of Common Shares and any voting rights until they exercise their warrants and receive Common Shares. After the issuance of Common Shares upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by shareholders. If holders of the warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants for that number of Common Shares equal to the quotient obtained by dividing (x) the product of the number of Common Shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Common Shares for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent.
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The foregoing description of the Series A Warrants is qualified in its entirety by the full text of the warrants, which is attached as Exhibit 4.5 to this registration statement of which this prospectus is a part, and is incorporated herein by reference.
Series B Warrants
On December 27, 2024, in connection with the closing of the PIPE Transaction, the Company issued the Series B Warrants to purchase up to 1,000,000 Common Shares at an exercise price of $2.00 per share to certain of the Selling Securityholders. Such warrants are exercisable at any time from the issuance date to the date that is the two year anniversary of the issuance date. Adjustments may occur if the Company undergoes share dividends, splits, or fundamental transactions. The warrant can be exercised in part, and no fractional shares will be issued. Additionally, there are beneficial ownership limitations that may be waived at the option of each holder upon 61 days’ notice to the Company, but in no event may such beneficial ownership limitation exceed 19.99% of the number of Common Shares outstanding. The warrant holders do not have the rights or privileges of holders of Common Shares and any voting rights until they exercise their warrants and receive Common Shares. After the issuance of Common Shares upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by shareholders. If holders of the warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants for that number of Common Shares equal to the quotient obtained by dividing (x) the product of the number of Common Shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Common Shares for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent.
The foregoing description of the Series B Warrants is qualified in its entirety by the full text of the warrants, which is attached as Exhibit 4.6 to this registration statement of which this prospectus is a part, and is incorporated herein by reference.
Placement Agent Warrants
On December 27, 2024, in connection with the closing of the PIPE Transaction, the Company issued the Placement Agent Warrants to purchase up to 75,000 Common Shares at an exercise price of $2.50 per share to the Placement Agent or its designees. Such warrants are exercisable at any time from the issuance date to the date that is the five year anniversary of the issuance date. Adjustments may occur if the company undergoes share dividends, splits, or fundamental transactions. The warrant can be exercised in part, and no fractional shares will be issued. Additionally, there are beneficial ownership limitations that may be waived at the option of each holder upon 61 days’ notice to the Company, but in no event may such beneficial ownership limitation exceed 19.99% of the number of Common Shares outstanding. The warrant holders do not have the rights or privileges of holders of Common Shares and any voting rights until they exercise their warrants and receive Common Shares. After the issuance of Common Shares upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by shareholders. If holders of the warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants for that number of Common Shares equal to the quotient obtained by dividing (x) the product of the number of Common Shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Common Shares for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent.
The foregoing description of the Placement Agent Warrants is qualified in its entirety by the full text of the warrants, which is attached as Exhibit 4.7 to this registration statement of which this prospectus is a part, and is incorporated herein by reference.
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Pre-Funded Warrants
On December 27, 2024, in connection with the closing of the PIPE Transaction, the Company issued Pre-Funded Warrants to purchase up to 620,000 Common Shares at an exercise price of $0.0001 per share to certain of the Selling Securityholders. Such warrants are exercisable at any time from the issuance date. Adjustments may occur if the Company undergoes share dividends, splits, or fundamental transactions. The warrant can be exercised in part, and no fractional shares will be issued. Additionally, there are beneficial ownership limitations that may be waived at the option of each holder upon 61 days’ notice to the Company, but in no event may such beneficial ownership limitation exceed 19.99% of the number of Common Shares outstanding. The warrant holders do not have the rights or privileges of holders of Common Shares and any voting rights until they exercise their warrants and receive Common Shares. After the issuance of Common Shares upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by shareholders. If holders of the warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants for that number of Common Shares equal to the quotient obtained by dividing (x) the product of the number of Common Shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Common Shares for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent.
The foregoing description of the Pre-Funded Warrants is qualified in its entirety by the full text of the warrants, which is attached as Exhibit 4.4 to this registration statement of which this prospectus is a part, and is incorporated herein by reference.
DESCRIPTION OF OUR PREFERRED SHARES
Our board of directors has the authority, without action by our shareholders, to issue preferred shares in one or more series out of our authorized but unissued share capital. Our board of directors may establish the number of shares to be included in each such series and may set the designations, preferences, powers, and other rights of the shares of a series of preferred shares.
Accordingly, our board of directors is empowered, without shareholder approval, to issue preferred shares with dividend, liquidation, conversion, redemption, voting, or other rights that could adversely affect the voting power or other rights of the holders of Common Shares. The preferred shares could be utilized as a method of discouraging, delaying, or preventing a change in control of MicroCloud Hologram Inc. The material terms of any series of preferred shares that we offer, together with any material U.S. federal income tax considerations relating to such preferred shares, will be described in a prospectus supplement.
DESCRIPTION OF DEBT SECURITIES
General
We may issue debt securities that may or may not be converted into our Common Shares or preferred shares. We may issue the debt securities independently or together with any underlying securities, and debt securities may be attached to or separate from the underlying securities. In connection with the issuance of any debt securities, we do not intend to issue them pursuant to a trust indenture upon reliance on Section 304(a)(8) of the Trust Indenture Act and Rule 4a-1 promulgated thereunder.
The following description is a summary of selected provisions relating to the debt securities that we may issue. The summary is not complete. When debt securities are offered in the future, a prospectus supplement, information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular terms of those securities and the extent to which these general provisions may apply. The specific terms of the debt securities described in a prospectus supplement, information incorporated by reference, or free writing prospectus will supplement and, if applicable, may modify or replace the general terms described in this section.
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This summary and any description of debt securities in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus are subject to and qualified in their entirety by reference to all the provisions of any specific debt securities document or agreement. We will file each of these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which this prospectus is a part on or before the time we issue a series of warrants. See “Where You Can Find Additional Information” and “Incorporation of Documents by Reference” below for information on how to obtain a copy of a debt securities document when it is filed.
When we refer to a series of debt securities, we mean all debt securities issued as part of the same series under the applicable indenture.
Terms
The applicable prospectus supplement, information incorporated by reference, or free writing prospectus may describe the terms of any debt securities that we may offer, including, but not limited to, the following:
| ● | The title of the debt securities; |
| ● | The total amount of the debt securities; |
| ● | The amount or amounts of the debt securities to be issued and the interest rate; |
| ● | The conversion price at which the debt securities may be converted; |
| ● | The date on which the right to convert the debt securities will commence and the date on which the right will expire; |
| ● | If applicable, the minimum or maximum amount of debt securities that may be converted at any one time; |
| ● | If applicable, a discussion of material U.S. federal income tax considerations; |
| ● | If applicable, the terms of the payoff of the debt securities; |
| ● | The identity of the indenture agent, if any; |
| ● | The procedures and conditions relating to the conversion of the debt securities; and |
| ● | Any other terms of the debt securities, including terms, procedures, and limitations relating to the exchange or conversion of the debt securities. |
Form, Exchange, and Transfer
We may issue the debt securities in registered form or bearer form. Debt securities issued in registered form, i.e., book-entry form, will be represented by a global security registered in the name of a depository, which will be the holder of all the debt securities represented by the global security. Those investors who own beneficial interests in global debt securities will do so through participants in the depository’s system, and the rights of these indirect owners will be governed solely by the applicable procedures of the depository and its participants.
We may also issue debt securities in non-global form, i.e., bearer form. If any debt securities are issued in non-global form, debt securities certificates may be exchanged for new debt securities certificates of different denominations, and holders may exchange, transfer, or convert their debt securities at the debt securities agent’s office or any other office indicated in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus.
Prior to the conversion of their debt securities, holders of debt securities convertible for Common Shares or preferred shares will not have any rights of holders of Common Shares or preferred shares and will not be entitled to dividend payments, if any, or voting rights of the Common Shares or preferred shares.
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Conversion of Debt Securities
A debt security may entitle the holder to purchase, in exchange for the extinguishment of debt, an amount of securities at a conversion price that will be stated in the debt security. Debt securities may be converted at any time up to the close of business on the expiration date set forth in the terms of such debt security. After the close of business on the expiration date, debt securities not exercised will be paid in accordance with their terms.
Debt securities may be converted as set forth in the applicable offering material. Upon receipt of a notice of conversion properly completed and duly executed at the corporate trust office of the indenture agent, if any, or to us, we will forward, as soon as practicable, the securities purchasable upon such exercise. If less than all of the debt security represented by such security is converted, a new debt security will be issued for the remaining debt security.
DESCRIPTION OF WARRANTS
We may issue warrants to purchase our securities. We may issue the warrants independently or together with any underlying securities, and the warrants may be attached to or separate from the underlying securities. We may also issue a series of warrants under a separate warrant agreement to be entered into between us and a warrant agent. The warrant agent will act solely as our agent in connection with the warrants of such series and will not assume any obligation or relationship of agency for or with holders or beneficial owners of warrants.
The following description is a summary of selected provisions relating to the warrants that we may issue. The summary is not complete. When warrants are offered in the future, a prospectus supplement, information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular terms of those securities and the extent to which these general provisions may apply. The specific terms of the warrants described in a prospectus supplement, information incorporated by reference, or free writing prospectus will supplement and, if applicable, may modify or replace the general terms described in this section.
This summary and any description of warrants in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus are subject to and qualified in their entirety by reference to all the provisions of any specific warrant document or agreement, if applicable. We will file each of these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which this prospectus is a part on or before the time we issue a series of warrants. See “Where You Can Find Additional Information” and “Incorporation of Documents by Reference” below for information on how to obtain a copy of a warrant document when it is filed.
When we refer to a series of warrants, we mean all warrants issued as part of the same series under the applicable warrant agreement.
Terms
The applicable prospectus supplement, information incorporated by reference, or free writing prospectus may describe the terms of any warrants that we may offer, including, but not limited to, the following:
| ● | The title of the warrants; |
| ● | The total number of warrants; |
| ● | The price or prices at which the warrants will be issued; |
| ● | The price or prices at which the warrants may be exercised; |
| ● | The currency or currencies that investors may use to pay for the warrants; |
| ● | The date on which the right to exercise the warrants will commence and the date on which the right will expire; |
| ● | Whether the warrants will be issued in registered form or bearer form; |
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| ● | Information with respect to book-entry procedures, if any; |
| ● | If applicable, the minimum or maximum amount of warrants that may be exercised at any one time; |
| ● | If applicable, the designation and terms of the underlying securities with which the warrants are issued and the number of warrants issued with each underlying security; |
| ● | If applicable, the date on and after which the warrants and the related underlying securities will be separately transferable; |
| ● | If applicable, a discussion of material U.S. federal income tax considerations; |
| ● | If applicable, the terms of redemption of the warrants; |
| ● | The identity of the warrant agent, if any; |
| ● | The procedures and conditions relating to the exercise of the warrants; and |
| ● | Any other terms of the warrants, including terms, procedures, and limitations relating to the exchange and exercise of the warrants. |
Warrant Agreement
We may issue the warrants in one or more series under one or more warrant agreements, each to be entered into between us and a bank, trust company, or other financial institution as warrant agent. We may add, replace, or terminate warrant agents from time to time. We may also choose to act as our own warrant agent or may choose one of our subsidiaries to do so.
The warrant agent under a warrant agreement will act solely as our agent in connection with the warrants issued under that agreement. Any holder of warrants may, without the consent of any other person, enforce by appropriate legal action, on its own behalf, its right to exercise those warrants in accordance with their terms.
Form, Exchange, and Transfer
We may issue the warrants in registered form or bearer form. Warrants issued in registered form, i.e., book-entry form, will be represented by a global security registered in the name of a depository, which will be the holder of all the warrants represented by the global security. Those investors who own beneficial interests in a global warrant will do so through participants in the depository’s system, and the rights of these indirect owners will be governed solely by the applicable procedures of the depository and its participants.
We may also issue warrants in non-global form, i.e., bearer form. If any warrants are issued in non-global form, warrant certificates may be exchanged for new warrant certificates of different denominations, and holders may exchange, transfer, or exercise their warrants at the warrant agent’s office or any other office indicated in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus.
Prior to the exercise of their warrants, holders of warrants exercisable for Common Shares or preferred shares will not have any rights of holders of Common Shares or preferred shares and will not be entitled to dividend payments, if any, or voting rights of the Common Shares or preferred shares.
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Exercise of Warrants
A warrant will entitle the holder to purchase for cash an amount of securities at an exercise price that will be stated in, or that will be determinable as described in, the applicable prospectus supplement, information incorporated by reference, or free writing prospectus. Warrants may be exercised at any time up to the close of business on the expiration date set forth in the applicable offering material. After the close of business on the expiration date, unexercised warrants will become void. Warrants may be redeemed as set forth in the applicable offering material.
Warrants may be exercised as set forth in the applicable offering material. Upon receipt of payment and the warrant certificate properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable offering material, we will forward, as soon as practicable, the securities purchasable upon such exercise. If less than all of the warrants represented by such warrant certificate are exercised, a new warrant certificate will be issued for the remaining warrants.
DESCRIPTION OF RIGHTS
We may issue rights to purchase our securities. The rights may or may not be transferable by the persons purchasing or receiving the rights. In connection with any rights offering, we may enter into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which such underwriters or other persons would purchase any offered securities remaining unsubscribed for after such rights offering. Each series of rights will be issued under a separate rights agent agreement to be entered into between us and one or more banks, trust companies, or other financial institutions, as rights agent, which we will name in the applicable prospectus supplement. The rights agent will act solely as our agent in connection with the rights and will not assume any obligation or relationship of agency or trust for or with any holders of rights certificates or beneficial owners of rights.
The prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, but not limited to, the following:
| ● | The date of determining the security holders entitled to the rights distribution; |
| ● | The aggregate number of rights issued and the aggregate amount of securities purchasable upon exercise of the rights; |
| ● | The exercise price; |
| ● | The conditions to completion of the rights offering; |
| ● | The date on which the right to exercise the rights will commence and the date on which the rights will expire; and |
| ● | Any applicable federal income tax considerations. |
Each right would entitle the holder of the rights to purchase for cash the principal amount of securities at the exercise price set forth in the applicable prospectus supplement. Rights may be exercised at any time up to the close of business on the expiration date for the rights provided in the applicable prospectus supplement. After the close of business on the expiration date, all unexercised rights will become void.
If less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons other than our security holders, to or through agents, underwriters, or dealers, or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable prospectus supplement.
DESCRIPTION OF UNITS
We may issue units composed of any combination of our Common Shares, preferred shares, debt securities, or warrants, or any combination thereof. We will issue each unit so that the holder of the unit is also the holder of each security included in the unit. As a result, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or before a specified date.
The following description is a summary of selected provisions relating to units that we may offer. The summary is not complete. When units are offered in the future, a prospectus supplement, information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular terms of those securities and the extent to which these general provisions may apply. The specific terms of the units described in a prospectus supplement, information incorporated by reference, or free writing prospectus will supplement and, if applicable, may modify or replace the general terms described in this section.
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This summary and any description of units in the supplement, information incorporated by reference, or free writing prospectus are subject to and qualified in their entirety by reference to the unit agreement, collateral arrangements, and depositary arrangements, if applicable. We will file each of these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which this prospectus is a part on or before we issue a series of units. See “Where You Can Find Additional Information” and “Incorporation of Certain Information by Reference” above for information on how to obtain a copy of a document when it is filed.
The applicable prospectus supplement, information incorporated by reference, or free writing prospectus may describe:
| ● | The designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately; |
| ● | Any provisions for the issuance, payment, settlement, transfer, or exchange of the units or of the securities composing the units; |
| ● | Whether the units will be issued in fully registered or global form; and |
| ● | Any other terms of the units. |
The applicable provisions described in this section, as well as those described under “Description of Share Capital,” “Description of Preferred Shares,” “Description of Debt Securities,” and “Description of Warrants” above, will apply to each unit and to each security included in each unit, respectively.
CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of certain material United States federal income tax considerations relating to the acquisition, ownership, and disposition of our Common Shares by a U.S. Holder, as defined below, that acquires our Common Shares in this offering and holds our Common Shares as “capital assets” (generally, property held for investment) under the Code. This discussion is based on existing United States federal income tax law, which is subject to differing interpretations or change, possibly with retroactive effect. No ruling has been sought from the Internal Revenue Service (the “IRS”) with respect to any United States federal income tax consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. This discussion does not address all aspects of United States federal income taxation that may be important to particular investors in light of their individual circumstances, including investors subject to special tax rules (such as, for example, certain financial institutions, insurance companies, regulated investment companies, real estate investment trusts, broker-dealers, traders in securities that elect mark-to-market treatment, partnerships (or other entities treated as partnerships for United States federal income tax purposes) and their partners, tax-exempt organizations (including private foundations)), investors who are not U.S. Holders, investors that own (directly, indirectly, or constructively) 5% or more of our voting shares, investors that hold their Common Shares as part of a straddle, hedge, conversion, constructive sale or other integrated transaction), investors that are subject to the applicable financial statement accounting rules under Section 451 of the Code, or investors that have a functional currency other than the U.S. dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this discussion does not address any tax laws other than the United States federal income tax laws, including any state, local, alternative minimum tax or non-United States tax considerations, or the Medicare tax on unearned income. Each potential investor is urged to consult its tax advisor regarding the United States federal, state, local and non-United States income and other tax considerations of an investment in our Common Shares.
General
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of our Common Shares that is, for United States federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes) created in, or organized under the laws of, the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise elected to be treated as a United States person under the Code.
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If a partnership (or other entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of our Common Shares, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships and partners of a partnership holding our Common Shares are urged to consult their tax advisors regarding an investment in our Common Shares.
The discussion set forth below is addressed only to U.S. Holders that purchase Common Shares in this offering. Prospective purchasers are urged to consult their own tax advisors about the application of U.S. federal income tax law to their particular circumstances as well as the state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our Common Shares.
Taxation of Dividends and Other Distributions on our Common Shares
Subject to the passive foreign investment company rules discussed below, distributions of cash or other property made by us to you with respect to the Common Shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.
With respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that (1) the Common Shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our Common Shares, including the effects of any change in law after the date of this prospectus.
To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as a tax-free return of your tax basis in your Common Shares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.
Taxation of Dispositions of Common Shares
Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the Common Shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the Common Shares for more than one year, you may be eligible for reduced tax rates on any such capital gains. The deductibility of capital losses is subject to limitations.
Passive Foreign Investment Company
A non-U.S. corporation is considered a PFIC for any taxable year if either:
| ● | at least 75% of its gross income for such taxable year is passive income; or |
| ● | at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the “asset test”). |
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Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets. We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the shares. In determining the value and composition of our assets for purposes of the PFIC asset test, the value of our assets must be determined based on the market value of our Common Shares from time to time, which could cause the value of our non-passive assets to be less than 50% of the value of all of our assets on any particular quarterly testing date for purposes of the asset test.
We must make a separate determination each year as to whether we are a PFIC. Depending on the amount of our cash and other assets held for the production of passive income, it is possible that, for our current taxable year or for any subsequent taxable year, more than 50% of our assets may be assets held for the production of passive income. We will make this determination following the end of any particular tax year. Although the law in this regard is unclear, we treat our consolidated affiliated entities as being owned by us for United States federal income tax purposes, not only because we exercise effective control over the operation of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we consolidate their operating results in our consolidated financial statements. In particular, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our Common Shares and because cash is generally considered to be an asset held for the production of passive income, our PFIC status will depend in large part on the market price of our Common Shares and the amount of our cash and other assets held for the production of passive income. Accordingly, fluctuations in the market price of the Common Shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in several respects. We are under no obligation to take steps to reduce the risk of our being classified as a PFIC. As stated above, the determination of the value of our assets will depend upon material facts (including the market price of our Common Shares from time to time) that may not be within our control, and no opinion of counsel has or will be provided regarding our classification as a PFIC. If we are a PFIC for any year during which you hold Common Shares, we will continue to be treated as a PFIC for all succeeding years during which you hold Common Shares. However, if we cease to be a PFIC and you did not previously make a timely “mark-to-market” election as described below, you may avoid some of the adverse effects of the PFIC regime by making a “purging election” (as described below) with respect to the Common Shares.
If we are a PFIC for your taxable year(s) during which you hold Common Shares, you will be subject to special tax rules with respect to any “excess distribution” that you receive and any gain you realize from a sale or other disposition (including a pledge) of the Common Shares, unless you make a “mark-to-market” election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the Common Shares will be treated as an excess distribution. Under these special tax rules:
| ● | the excess distribution or gain will be allocated ratably over your holding period for the Common Shares; |
| ● | the amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and |
| ● | the amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. |
The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Common Shares cannot be treated as capital, even if you hold the Common Shares as capital assets.
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A U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for the first taxable year during which you hold (or are deemed to hold) Common Shares and for which we are determined to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the fair market value of the Common Shares as of the close of such taxable year over your adjusted basis in such Common Shares, which excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted basis of the Common Shares over their fair market value as of the close of the taxable year. However, such ordinary loss is allowable only to the extent of any net mark-to-market gains on the Common Shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Common Shares, are treated as ordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the Common Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Common Shares. Your basis in the Common Shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under “— Taxation of Dividends and Other Distributions on our Common Shares” generally would not apply.
The mark-to-market election is available only for “marketable stock”, which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations), including Nasdaq. U.S. holders should consult their own tax advisors regarding the availability and tax consequences of a mark-to-market election in respect to our Common Shares under their particular circumstances.
Alternatively, a U.S. Holder of stock in a PFIC may make a “qualified electing fund” election with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable year such holder’s pro rata share of the corporation’s earnings and profits for the taxable year. However, the qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. If you hold Common Shares in any taxable year in which we are a PFIC, you will be required to file IRS Form 8621 in each such year and provide certain annual information regarding such Common Shares, including regarding distributions received on the Common Shares and any gain realized on the disposition of the Common Shares.
If you do not make a timely “mark-to-market” election (as described above), and if we were a PFIC at any time during the period you hold our Common Shares, then such Common Shares will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in a future year, unless you make a “purging election” for the year we cease to be a PFIC. A “purging election” creates a deemed sale of such Common Shares at their fair market value on the last day of the last year in which we are treated as a PFIC. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, you will have a new basis (equal to the fair market value of the Common Shares on the last day of the last year in which we are treated as a PFIC) and holding period (which new holding period will begin the day after such last day) in your Common Shares for tax purposes.
You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our Common Shares and the elections discussed above.
Information Reporting and Backup Withholding
Dividend payments with respect to our Common Shares and proceeds from the sale, exchange or redemption of our Common Shares may be subject to information reporting to the IRS and possible U.S. backup withholding. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on IRS Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on IRS Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS and furnishing any required information. We do not intend to withhold taxes for individual shareholders. However, transactions effected through certain brokers or other intermediaries may be subject to withholding taxes (including backup withholding), and such brokers or intermediaries may be required by law to withhold such taxes.
Under the Hiring Incentives to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our Common Shares, subject to certain exceptions (including an exception for Common Shares held in accounts maintained by certain financial institutions), by attaching a complete IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold Common Shares.
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MATERIAL CANADIAN TAX CONSIDERATIONS
The following summary describes the principal Canadian federal income tax considerations under the Income Tax Act (Canada) and the regulations thereunder (collectively, the “Tax Act”), as of the date hereof, that are generally applicable to an investor who acquires, as beneficial owner, Common Shares from a Selling Shareholder pursuant to this statement and who, at all relevant times, for the purposes of the Tax Act and any applicable tax treaty or convention: (i) is not, and is not deemed to be, resident in Canada; (ii) deals at arm’s length with each of the Company and the Selling Shareholder; (iii) is not affiliated with either of the Company or the Selling Shareholder; (iv) has not entered into, with respect to the Common Shares, a “derivative forward agreement” or “dividend rental arrangement” each as defined in the Tax Act; (v) does not have a “permanent establishment” or “fixed base” in Canada; and (vi) does not use or hold, and is not deemed to use or hold, the Common Shares in connection with, or in the course of carrying on, a business in Canada (each a “Non-Canadian Holder”).
Special rules, which are not discussed in this summary, may apply to a Non-Canadian Holder that is an insurer carrying on business in Canada and elsewhere. Such Non-Canadian Holders should consult their own tax advisors.
This summary does not address any income tax considerations relevant to the acquisition, holding, disposition or conversion of First Tranche Notes into Common Shares or the payment of any amount of principal or interest on First Tranche Notes. This summary also does not address any income tax considerations that may arise as a result of a Non-Canadian Holder being an employee of the Company or its affiliates. All such persons should consult their own tax advisors with respect to the Canadian federal income tax consequences to them, which may differ materially from the discussion provided in this summary.
This summary is based upon the current provisions of the Tax Act and the Canada-United States Tax Convention (1980) in force as of the date hereof and an understanding of the current administrative policies and assessing practices published in writing by the Canada Revenue Agency (“CRA”) prior to the date hereof. This summary also takes into account all specific proposals to amend the Tax Act and the Canada-United States Tax Convention (1980) publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Proposed Amendments”) and assumes that all Proposed Amendments will be enacted in the form proposed. However, no assurances can be given that the Proposed Amendments will be enacted as proposed, or at all. Except for the Proposed Amendments, this summary does not take into account or anticipate any changes in law or administrative policies, whether by legislative, regulatory, administrative or judicial action or decision, nor does it take into account other federal or any provincial, territorial or foreign tax legislation or considerations, which may be different from those discussed in this summary.
This summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Non-Canadian Holder. Accordingly, Non-Canadian Holders should consult their own tax advisors with respect to their particular circumstances.
Currency
Generally, for purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of Common Shares must be expressed in Canadian dollars. Amounts denominated in another currency must be converted into Canadian dollars using the exchange rate quoted by the Bank of Canada on the date such amounts first arose, or such other rate of exchange as is acceptable to the CRA.
Adjusted cost base of Common Shares
The adjusted cost base of a Common Share to a Non-Canadian Holder will generally include all amounts paid by the Non-Canadian Holder for the Common Share. When Common Shares are acquired by a Non-Canadian Holder who already owns Common Shares, the cost of newly acquired Common Shares will generally be averaged with the adjusted cost base of all Common Shares held by the Non-Canadian Holder as capital property immediately prior to the acquisition for the purpose of determining the Non-Canadian Holder’s adjusted cost base of each Common Share held by such Non-Canadian Holder.
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Dividends
Dividends paid or credited, or deemed to be paid or credited, on Common Shares to a Non-Canadian Holder generally will be subject to Canadian withholding tax. Under the Tax Act, the rate of withholding tax is 25% of the gross amount of such dividends, which rate may be subject to reduction under the provisions of an applicable income tax treaty. For example, a Non-Canadian Holder who is resident in the United States for the purposes of the Canada-United States Tax Convention (1980), fully entitled to the benefits of such convention and the beneficial owner of the dividends, will generally be subject to Canadian withholding tax at a rate of 15% of the amount of such dividends.
Disposition of Common Shares
A Non-Canadian Holder who disposes or is deemed to dispose of a Common Share in a taxation year will not be subject to tax in Canada, unless the Common Share is, or is deemed to be, “taxable Canadian property” to the Non-Canadian Holder at the time of disposition and the Non-Canadian Holder is not entitled to relief under an applicable income tax treaty between Canada and the country in which the Non-Canadian Holder is resident.
Provided the Common Shares are listed on a “designated stock exchange”, as defined in the Tax Act (which currently includes the Nasdaq), at the time of disposition, the Common Shares generally will not constitute taxable Canadian property of a Non-Canadian Holder at that time, unless at any time during the 60-month period immediately preceding the disposition the following two conditions are met concurrently: (i) one or any combination of (a) the Non-Canadian Holder, (b) persons with whom the Non-Canadian Holder did not deal at arm’s length, and (c) partnerships in which the Non-Canadian Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships owned 25% or more of the issued shares of any class or series of shares of the Company; and (ii) more than 50% of the fair market value of the Common Shares was derived directly or indirectly from one or any combination of (a) real or immovable property situated in Canada, (b) “Canadian resource property”(as defined in the Tax Act), (c) “timber resource property”(as defined in the Tax Act), or (d) an option in respect of, an interest in, or for civil law rights in, property described in any of (a) through (c), whether or not such property exists.
Non-Resident Holders who dispose of Common Shares that are taxable Canadian property should consult their own tax advisors with respect to the requirement to file a Canadian income tax return in respect of the disposition in their particular circumstances.
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EXPENSES RELATING TO THIS OFFERING
Set forth below is an itemization of the total expenses, excluding underwriting discounts and commissions, that we expect to incur in connection with this offering. With the exception of the SEC registration fee, all amounts are estimates.
| SEC registration fee | $ | 11,500 | ||
| Legal fees and expenses | 70,000 | |||
| Accounting fees and expenses | 5,000 | |||
| Printing fees | 10,000 | |||
| Miscellaneous expenses | 5,000 | |||
| Total | 101,500 |
The validity of the Common Shares offered by this prospectus and certain other Canadian legal matters will be passed upon by WeirFoulds LLP. Edelman Legal Advisory PLLC, has passed upon the validity of the securities offered by this prospectus with respect to the warrants and debt securities under U.S. federal securities law and New York law.
The consolidated financial statements of Psyence Biomedical Ltd. for the years ended March 31, 2024 and 2023 included in this prospectus have been audited by MNP LLP, independent registered public accounting firm, as set forth in their report thereon, appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
FINANCIAL INFORMATION
The financial statements for the fiscal years ended March 31, 2024 and 2023 are included in our Annual Report on Form 20-F for the year ended March 31, 2024, filed on July 29, 2024, which are incorporated by reference into this prospectus, as updated by the financial statements for the fiscal years ended March 31, 2024 and 2023 filed as Exhibit 99.3 to the Current Report on Form 6-K filed by the Company with the SEC on January 23, 2025 which are incorporated by reference into this prospectus. In addition, our Unaudited Condensed Consolidated Financial Statements for the Three and Six Months ended September 30, 2024 and 2023, filed by the Company as Exhibit 99.1 to the Current Report on Form 6-K filed on January 23, 2025, is also incorporated by reference into this prospectus.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
Psyence has filed with the SEC a registration statement on Form F-1 and F-4, as the case may be, under the Securities Act with respect to the securities being sold by the Selling Securityholders. This prospectus does not contain all of the information included in the registration statement. For further information about us and our securities, you should refer to the registration statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.
We also file periodic reports and other information with the SEC. These reports and other information will be available at the website of the SEC at www.sec.gov. We also maintain a website at www.psyencebiomed.com, by which you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information that is contained on, or that may be accessed through, our website is not a part of this prospectus. We have included our website in this prospectus solely as an inactive textual reference.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to incorporate by reference much of the information that we file with the SEC, which means that we can disclose important information to you by referring you to those publicly available documents. The information that we incorporate by reference in this prospectus is considered to be part of this prospectus. Because we are incorporating by reference future filings with the SEC, this prospectus is continually updated and those future filings may modify or supersede some of the information included or incorporated by reference in this prospectus. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus or in any document previously incorporated by reference have been modified or superseded.
This prospectus incorporates by reference the documents listed below and any future filings we make with the SEC until the offering of the securities under the registration statement of which this prospectus forms a part is terminated or completed:
| ● | our annual report on Form 20-F for the year ended March 31, 2024 filed with the SEC on July 29, 2024 (the “20-F”); |
| ● | our Current Reports on Form 6-K filed with the SEC on August 20, 2024, September 5, 2024, September 20, 2024 (other than the Press Release attached thereto as Exhibit 99.2), October 8, 2024, October 23, 2024, November 22, 2024 (other than the press releases and Investor Presentation attached thereto as Exhibits 99.1, 99.2 and 99.3), December 4, 2024, December 4, 2024, December 19, 2024 (other than the press release attached thereto as Exhibit 99.1), December 31, 2024 (other than the press releases filed as Exhibits 99.1 and 99.2 attached thereto), and January 23, 2025 (including the Company’s Unaudited Condensed Consolidated Financial Statements for the Three and Six Months Ended September 30, 2024 and 2023, the relevant Management Discussion and Analysis and the Update Audited Consolidated Financial Statements for the Years Ended March 31, 2024 and 2023 filed as exhibits 99.1, 99.2 and 99.3, respectively); and |
| ● | the description of our Common Shares contained in Exhibit 2.3 to our 2024 20-F, including any further amendment or reports filed for the purpose of updating such description. |
We are also incorporating by reference all subsequent annual reports on Form 20-F that we file with the SEC and certain reports on Form 6-K that we furnish to the SEC after the date of this prospectus (if such reports on Form 6-K expressly state that they are incorporated in whole or in part by reference into the registration statement of which this prospectus forms a part) prior to the termination of this offering. In all cases, you should rely on the later information over different information included in this prospectus or any applicable prospectus supplement.
Any statement contained in a document filed before the date of this prospectus and incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. Any information that we file after the date of this prospectus with the SEC and incorporated by reference herein will automatically update and supersede the information contained in this prospectus and in any document previously incorporated by reference in this prospectus.
Unless expressly incorporated by reference, nothing in this prospectus shall be deemed to incorporate by reference information furnished to, but not filed with, the SEC. Copies of all documents incorporated by reference in this prospectus, other than exhibits to those documents unless such exhibits are specifically incorporated by reference in this prospectus, will be provided at no cost to each person, including any beneficial owner, who receives a copy of this prospectus on the written or oral request of that person made to:
Psyence Biomedical Ltd.
121 Richmond Street West
Penthouse Suite 1300
Toronto, Ontario M5H 2K1
Attn: General Counsel
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The information in this prospectus is not complete and may be changed or supplemented. No securities described in this prospectus can be sold until the registration statement that we filed to cover the securities has become effective under the rules of the Securities and Exchange Commission. This prospectus is not an offer to sell the securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MARCH 4, 2025
PROSPECTUS
Psyence Biomedical Ltd.
Up to $2,591,260
Common Shares
We have entered into an At The Market Offering Agreement, or the “ATM Agreement,” with H.C. Wainwright & Co., LLC, or “HCW” acting as sales agent, dated March 4, 2025, relating to the sale of our common shares, no par value (the “Common Shares”), offered by this prospectus. In accordance with the terms of the ATM Agreement, under this prospectus, we may offer and sell our Common Shares having an aggregate offering price of up to $2,591,260 from time to time through HCW.
We are subject to the offering limits in General Instruction I.B.5 of Form F-3. As of March 4, 2025, the aggregate market value of our Common Shares held by non-affiliates, or public float, calculated for purposes of General Instruction I.B.5 of Form F-3 is $7,773,780, which was calculated based on 3,848,406 Common Shares outstanding held by non-affiliates and a price of $2.02 per Common Share, the closing price of our Common Shares on January 3, 2025, which is the highest closing sale price of our Common Shares on the Nasdaq Capital Market within the prior 60 days. As of the date of this prospectus, we have not sold any securities pursuant to General Instruction I.B.5 of Form F-3 during the 12 calendar months prior to, and including, the date of this prospectus. Pursuant to General Instruction I.B.5 of Form F-3, in no event will we sell securities in public primary offerings on Form F-3 with a value exceeding one-third of our public float (as defined by General Instruction I.B.5) in any 12-calendar month period so long as our public float remains below $75.0 million.
As a result of the limitations on the maximum amount of shares that we are eligible to offer and sell under General Instruction I.B.5 of Form F-3, we may currently only offer and sell our Common Shares having an aggregate offering price of up to $2,591,260 pursuant to the ATM Agreement. If our public float increases such that we may sell additional amounts under the ATM Agreement and the registration statement of which this prospectus is a part, we will file a prospectus supplement prior to making additional sales. In the event that our public float increases above $75.0 million, we will no longer be subject to the limits in General Instruction I.B.5 of Form F-3.
Our Common Shares trade on the Nasdaq Capital Market under the symbol “PBM,” and certain of our warrants (the “Public Warrants”) trade on the Nasdaq Capital Market under the symbol “PBMWW.” On February 28, 2025, the last reported sale price of our Common Shares was $1.24 per share and the last reported sale price of our Public Warrants was $0.0221 per Public Warrant.
We are an “emerging growth company” under the federal securities laws and, as such, are subject to reduced public company disclosure standards for this prospectus and future filings. See the section entitled “Prospectus Summary—Implications of Being an Emerging Growth Company” for additional information.
Sales of our Common Shares, if any, under this prospectus will be made by any method permitted that is deemed an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, or the Securities Act. HCW is not required to sell any specific amount, but will act as our sales agent using commercially reasonable efforts consistent with its normal trading and sales practices to sell on our behalf all of the Common Shares requested to be sold by us, on mutually agreed terms between HCW and us. There is no arrangement for funds to be received in any escrow, trust or similar arrangement.
The compensation to HCW for sales of Common Shares sold pursuant to the ATM Agreement will equal 3.0% of the gross proceeds of any Common Shares sold under the ATM Agreement. In connection with the sale of the Common Shares on our behalf, HCW may be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of HCW may be deemed to be underwriting commissions or discounts. See “Plan of Distribution” beginning on page S-8 for additional information regarding the compensation to be paid to HCW. We have also agreed to provide indemnification and contribution to HCW with respect to certain liabilities, including liabilities under the Securities Act.
INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE THE “RISK FACTORS” BEGINNING ON PAGE S-3 OF THIS PROSPECTUS AND IN THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS CONCERNING FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN OUR COMMON SHARES.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
H.C. Wainwright & Co.
The date of this prospectus is , 2025.
TABLE OF CONTENTS
S-i
This prospectus is part of a registration statement on Form F-3 that we have filed with the U.S. Securities and Exchange Commission (the “SEC”), utilizing a “shelf” registration process. By using a shelf registration statement, we may offer shares of our Common Shares having an aggregate offering price of up to $2,591,260 from time to time under this prospectus at prices and on terms to be determined by market conditions at the time of offering.
We have not, and HCW has not, authorized anyone to provide you with information other than that contained, or incorporated by reference, in this prospectus and any prospectus supplement and your reliance on any unauthorized information or representation is at your own risk. We are not, and HCW is not, making an offer to sell or soliciting any offer to buy our Common Shares in any jurisdiction where the offer or sale is not permitted or in which the person making that offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make an offer or solicitation. You should assume that the information appearing in this prospectus, the accompanying base prospectus, the documents incorporated by reference herein and therein and any prospectus supplement or free writing prospectus that we have authorized for use in connection with this offering is accurate only as of the date of those respective documents. Our business, financial condition, results of operations and prospects may have changed since those dates. You should read this prospectus, the documents incorporated by reference herein and therein and any free writing prospectus that we have authorized for use in connection with this offering in their entirety before making an investment decision.
Before buying any of the Common Shares we are offering, we urge you to carefully read this prospectus and all of the information incorporated by reference herein and therein, as well as the additional information described under the heading “Where You Can Find More Information; Incorporation by Reference.” These documents contain important information that you should consider when making your investment decision.
We are offering to sell, and seeking offers to buy, Common Shares only in jurisdictions where offers and sales are permitted. The distribution of this prospectus and the offering of the Common Shares in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the Common Shares and the distribution of this prospectus outside the United States. This prospectus does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.
When we refer to “Psyence,” “we,” “our,” “us” and the “Company” in this prospectus, we mean Psyence Biomedical Ltd. and its consolidated subsidiaries, unless otherwise specified. When we refer to “you,” we mean the potential holders of the Common Shares being offered and sold pursuant to this prospectus.
S-ii
This summary highlights selected information that is presented in greater detail elsewhere in this prospectus or incorporated by reference in this prospectus. This summary does not contain all of the information you should consider before investing in our securities. You should read this entire prospectus (as supplemented or amended) carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes thereto, which are incorporated by reference herein, before making an investment decision.
Business
Overview
We are a life science biotechnology company that, through our operating subsidiary, Biomed II, is developing natural psilocybin products for the healing of psychological trauma and its mental health consequences in the context of palliative care. We have commenced the clinical trial process to evaluate the safety and efficacy of its product candidates.
We strive to set the global standard for excellence and consistency in drug development using nature-based psilocybin products. Psyence’s priority is developing pharmaceutical grade psilocybin to help heal psychological trauma and the diagnosable disorders that can result therefrom, including Adjustment Disorder (“AjD”), alcohol use disorder (“AUD”), other substance use disorders (“SUDs”), anxiety, depression, post-traumatic stress disorder (“PTSD”), and grief and bereavement, especially in the context of palliative care. Our focus includes therapeutic protocols for medical and scientific research including observational studies.
Our lead product candidate is PEX010, a capsule containing 25mg naturally sourced psilocybin and which is being used in our Phase IIb Study. Psyence has entered into a license agreement (the “Research IP Agreement”) with Filament Health Corp., a Canadian company that produces natural psilocybin capsules and the proprietary owner of PEX010 (“Filament”), for the licensing of PEX010 with respect to Psyence’s designated fields of use: anxiety and depression, including associated ailments, such as PTSD, stress, grief, and adjustment disorder within the context of palliative care.
Implications of Being an Emerging Growth Company
We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012. We will remain an emerging growth company until the earliest to occur of: (i) the last day of the fiscal year in which we have more than $1.235 billion in annual revenues; (ii) the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates; (iii) the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending after the fifth anniversary of our first sale of common equity securities pursuant to a U.S. registration.
As an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other publicly traded entities that are not emerging growth companies. These exemptions include: (i) the option to present only two years of audited financial statements and related discussion in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our filings with the SEC; (ii) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended; (iii) not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board, or PCAOB, regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; (iv) not being required to submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency,” and “say-on-golden parachutes”; and (v) not being required to disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.
Corporate Information
Psyence’s headquarters address is 121 Richmond Street West, Penthouse Suite 1300, Toronto, Ontario, M5H 2K1, Canada. The Company has an operational office in South Africa at Unit A210 The Old Biscuit Mill, 373-375 Albert Road, Woodstock, Cape Town, 7925. The Company was incorporated on June 29, 2023. Our website address is www.psyencebiomed.com. The information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our securities.
S-1
| Common Shares offered by us | Common Shares having an aggregate offering price of up to $2,591,260. |
| Common Shares outstanding following this offering(1) | Up to 6,616,853 Common Shares, assuming 2,089,725 Common Shares are sold in this offering at an offering price of $1.24 per share, which was the last reported sale price of our Common Shares on the Nasdaq Capital Market on February 28, 2025. The actual number of Common Shares issued will vary depending on how many Common Shares we choose to sell and the prices at which such sales occur. |
| Plan of Distribution | Sales of our Common Shares, if any, under this prospectus will be made by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities Act, including, without limitation, sales made directly on or through the Nasdaq Capital Market, or any other existing trading market in the United States for our Common Shares. HCW is not required to sell any specific number or dollar amount of shares, but will act as our sales agent and use commercially reasonable efforts consistent with its normal trading and sales practices to sell on our behalf all of the Common Shares requested to be sold by us on mutually agreed terms between HCW and us. See the section titled “Plan of Distribution” on page S-8 of this prospectus. |
| Use of Proceeds | We intend to use the net proceeds of this offering for working capital and other general corporate purposes. See the section titled “Use of Proceeds” on page S-6 of this prospectus. |
| Risk Factors | See “Risk Factors” beginning on page S-3 of this prospectus and the other information included in, or incorporated by reference into, this prospectus for a discussion of certain factors you should carefully consider before deciding to invest in our securities. |
| Nasdaq Capital Market symbol | “PBM” |
| (1) | The number of Common Shares to be outstanding following this offering as shown above is based on 4,527,128 Common Shares outstanding as of February 28, 2025, and excludes 2,247,132 Common Shares issuable upon the exercise of warrants outstanding as of February 28, 2025, having a weighted average exercise price of $55.26 per share, and an aggregate of 108,670 Common Shares reserved for issuance under our equity incentive plans as of February 28, 2025. |
S-2
Investing in our securities involves a high degree of risk. You should carefully consider the following information about these risks and those risks set forth in the “Risk Factors” section in our Annual Report on Form 20-F for the year ended March 31, 2024 filed with the SEC on July 29, 2024, together with the other information appearing elsewhere or incorporated by reference in this prospectus, including our financial statements, the notes thereto and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding to invest in our securities. The occurrence of any of the following risks could have a material adverse effect on our business, reputation, financial condition, results of operations and future growth prospects, as well as our ability to accomplish our strategic objectives. As a result, the trading price of our securities could decline and you could lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations and the market price of our securities.
Risks Relating our Common Shares and this Offering
Purchasers in this offering will experience immediate and substantial dilution in the pro forma net tangible book value per Common Share purchased.
The price per Common Share in this offering may be significantly higher than the net tangible book value per share of our outstanding Common Shares prior to this offering. As a result, investors purchasing our Common Shares in this offering will experience immediate and substantial dilution in the net tangible book value of their investment. Based on an assumed offering price of $1.24 per share, which was the last reported sale price of our Common Shares on the Nasdaq Capital Market on February 28, 2025, and assuming we sell the entire amount offered pursuant to this prospectus and the accompanying prospectus, if you purchase Common Shares in this offering, you will suffer immediate and substantial dilution of approximately $0.42 per share in the pro forma as adjusted net tangible book value of the Common Shares. For a more detailed discussion, see the section titled “Dilution” below.
Future issuances of securities may result in additional dilution.
In addition to the dilution investors will experience in this offering, our existing stockholders may experience further dilution if we issue additional Common Shares or securities convertible or exchangeable for our Common Shares in the future. This could occur through the exercise of outstanding stock options or warrants, or if we undertake future equity financings to raise additional capital. Any such issuances may dilute the ownership interests of our existing stockholders, and the new securities may have rights, preferences, or privileges senior to those of the Common Shares issued in this offering.
We have broad discretion to determine how to use the funds raised in this offering, and may use them in ways that may not enhance our operating results or the price of our Common Shares.
Our management will have broad discretion over the use of proceeds from this offering, and we could spend the proceeds from this offering in ways our stockholders may not agree with or that do not yield a favorable return, if at all. Because of the number and variability of factors that will determine our use of the proceeds from this offering, their ultimate use may vary substantially from their currently intended use. We expect to use the proceeds from this offering for working capital and other general corporate purposes, which may include funding commercialization efforts and research and development activities. If we do not invest or apply the proceeds from this offering in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.
The trading price of our Common Shares has been volatile and may be volatile in the future.
The trading price of our Common Shares could fluctuate significantly, as it has in the past, and you may not be able to resell your shares at or above the purchase price. We cannot assure you that the trading price of our Common Shares will not fluctuate or decline significantly in the future. The trading price for our Common Shares may be affected by a number of factors, including:
| ● | our ability to accomplish clinical, regulatory and other drug development milestones; |
| ● | the ability of our product candidates to achieve market success; |
| ● | the performance of third-party manufacturers and suppliers; |
| ● | sales of Common Shares or other securities by us or our stockholders in the future; |
| ● | trading volume of our Common Shares; |
| ● | investor perceptions about us and our industry; |
| ● | public reaction to our press releases, other public announcements and SEC and other filings; |
| ● | the failure of analysts to cover us, or changes in analysts’ estimates or recommendations; |
| ● | the failure by us to meet analysts’ projections or guidance; |
| ● | the denial or delay of regulatory approvals of our product candidates or receipt of regulatory approval of competing products; and |
| ● | other risk factors described elsewhere in our public filings. |
S-3
In addition, the stock markets in general, and the markets for biopharmaceutical and biotechnology stocks in particular, have experienced extreme volatility that may have been unrelated to the operating performance of the issuer. These broad market fluctuations may adversely affect the trading price or liquidity of our Common Shares. In the past, when the trading price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the issuer. If any of our stockholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the attention of our management would be diverted from the operation of our business.
Future sales or issuances of our Common Shares in the public markets, or the perception of such sales, could depress the trading price of our Common Shares.
The sale of a substantial number of Common Shares or other equity-related securities in the public markets, or the perception that such sales could occur, could depress the market price of our Common Shares and impair our ability to raise capital through the sale of additional equity securities. We may sell large quantities of our Common Shares at any time pursuant to this prospectus or in one or more separate offerings. We cannot predict the effect that future sales of Common Shares or other equity-related securities would have on the market price of our Common Shares.
The actual number of shares we will issue under the ATM Agreement and the gross proceeds resulting from those sales, at any one time or in total, is uncertain.
Subject to certain limitations in the ATM Agreement and compliance with applicable law, we have the discretion to deliver a placement notice to HCW at any time throughout the term of the ATM Agreement. The number of shares that are sold by HCW after delivering a placement notice will fluctuate based on the market price and trading volume of our Common Shares during the sales period and limits we set. Because the price per share of each share sold will fluctuate based on the market price of our Common Shares during the sales period, it is not possible at this stage to predict the number of shares that will be ultimately issued, the price per share or the gross proceeds to be raised in connection with those sales.
The Common Shares offered hereby will be sold in “at the market offerings,” and investors who buy shares at different times will likely pay different prices.
Investors who purchase shares in this offering at different times will likely pay different prices, and so may experience different outcomes in their investment results. We will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold, and there is no minimum or maximum sales price. Investors may experience a decline in the value of their shares as a result of share sales made at prices lower than the prices they paid.
Because we do not intend to declare cash dividends on our Common Shares in the foreseeable future, shareholders must rely on appreciation of the value of our common Shares for any return on their investment.
As stated above, we have never declared or paid cash dividends on our Common Shares. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends in the foreseeable future. As a result, we expect that only appreciation of the price of our common Shares, if any, will provide a return to investors in this offering for the foreseeable future.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The information in this prospectus, the accompanying prospectus and the documents incorporated by reference herein and therein and any prospectus supplement that we have authorized for use in connection with this offering contain forward-looking statements and information within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements regarding our future results of operations and financial position, business strategy, prospective products and product candidates, their expected performance and impact on healthcare costs, marketing clearance from the U.S. Food and Drug Administration, or the FDA, regulatory clearance, reimbursement for our product candidates, research and development costs, timing of regulatory filings, timing and likelihood of success, plans and objectives of management for future operations and future results of anticipated products. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “forecast,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. All such forward-looking statements involve significant risks and uncertainties, including, but not limited to, statements regarding:
| ● | the ability of Psyence Biomedical to realize the benefits expected from the Business Combination and to maintain the listing of the Common Shares or the Warrants on Nasdaq; |
| ● | volatility in the price of the securities of the Company due to a variety of factors, including the issuance and sale of Common Shares pursuant to the White Lion Purchase Agreement, changes in the competitive and highly regulated industries in which the Company operates, variations in performance across competitors, changes in laws and regulations affecting the Company’s business and changes in the Company’s capital structure; |
| ● | Psyence Biomedical’s success in retaining or recruiting, or changes required in, its officers, key employees or directors; |
| ● | factors relating to the business, operations and financial performance of the Company, including, but not limited to: |
| o | the Company’s ability to achieve successful clinical results; |
| o | the Company currently has no products approved for commercial sale; |
| o | the Company’s ability to obtain regulatory approval for its product candidates, and any related restrictions or limitations of any approved products; |
| o | the Company’s ability to obtain licensing of third-party intellectual property rights for future discovery and development of the Company’s product candidates; |
| o | the Company’s ability to commercialize product candidates and achieve market acceptance of such product candidates; |
| o | the Company’s success is dependent on product candidates which it licenses from third parties; |
| o | the Company’s success is dependent on the supply of materials necessary to perform its clinical trials; and |
| o | the ability to respond to general economic conditions; |
| ● | the Company has incurred significant losses since inception, and it expects to incur significant losses for the foreseeable future and may not be able to achieve or sustain profitability in the future; |
| ● | the Company requires substantial additional capital to finance its operations, and if it is unable to raise such capital when needed or on acceptable terms, it may be forced to delay, reduce, and/or eliminate one or more of its development programs or future commercialization efforts; |
| ● | the Company’s ability to develop and maintain effective internal controls; |
| ● | assumptions regarding interest rates and inflation; |
| ● | competition and competitive pressures from other companies worldwide in the industries in which the Company operates; and |
| ● | litigation and the ability to adequately protect the Company’s intellectual property rights. |
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The foregoing list of factors is not exhaustive. Forward-looking statements are not guarantees of future performance. You should carefully consider the foregoing factors and the other risks and uncertainties described in the Company’s Reports on Form 20-F, Current Reports on Form 6-K and other documents filed by the Company from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. The forward-looking statements in this document represent the views of the Company as of the date of this document. Subsequent events and developments may cause that view to change. Readers are cautioned not to put undue reliance on forward-looking statements, and all forward-looking statements in this document are qualified by these cautionary statements. The Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. The Company does not give any assurance that it will achieve its expectations. The inclusion of any statement in this document does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.
You should read this prospectus, the accompanying prospectus and the documents incorporated by reference herein and therein and prospectus supplements that we have authorized for use in this offering with the understanding that our actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
We may issue and sell Common Shares having aggregate sales proceeds of up to $2,591,260 from time to time under this prospectus. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time.
We intend to use the net proceeds, if any, from this offering for working capital and other general corporate purposes, which may include funding commercialization efforts and research and development activities.
The amounts and timing of our actual expenditures will depend on numerous factors, including the progress of our clinical trials and other development efforts and other factors described under “Risk Factors” in this prospectus, the accompanying prospectus and the documents incorporated by reference herein and therein, as well as the amount of cash used in our operations. We may find it necessary or advisable to use the net proceeds for other purposes, and we will have broad discretion in the application of the net proceeds. Pending the use of the net proceeds described above, we plan to invest the net proceeds from this offering in a variety of capital preservation investments, including short- and intermediate-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.
We have never declared or paid any cash dividends on our capital stock. We intend to retain future earnings, if any, to finance the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions contained in any future financing instruments.
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CAPITALIZATION
The following table sets forth our cash and equivalents and capitalization as of September 30, 2024:
| ● | on an actual basis; |
| ● | on a pro-forma basis, giving effect to the issuance of (a) 1,557,035 Common Shares for aggregate gross proceeds of $4,786,568 from October 2024 to December 2024 pursuant to an equity line of credit and (b) 1,000,000 Common Shares for aggregate gross proceeds of $2,000,000 in December 2024 pursuant to a private placement; and | |
| ● | on a pro-forma as adjusted basis, giving further effect to the sale of our Common Shares in this offering in the aggregate amount of $2,591,260 at an assumed offering price of $1.24 per share, the last reported sale price of our Common Shares on the Nasdaq Capital Market on February 28, 2025, and after deducting commissions and estimated offering expenses payable by us. |
| Actual | Pro-Forma | Pro-Forma as adjusted | ||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||
| Cash and cash equivalents | 1,932,519 | 6,810,731 | 9,274,253 | |||||||||
| Stockholders’ equity | ||||||||||||
| Share Capital (611,122 issued and outstanding as of September 30, 2024; 6,616,853 issued and outstanding pro-forma as adjusted) | 52,940,688 | 61,258,586 | 63,722,108 | |||||||||
| Accumulated Deficit | (54,498,339 | ) | (56,359,376 | ) | (56,359,376 | ) | ||||||
| Warrant Reserve | 42,528 | 1,559,712 | 1,559,712 | |||||||||
| Reserves | 260,017 | 703,286 | 703,286 | |||||||||
| Total stockholder’s equity | (1,255,016 | ) | 7,162,208 | 9,625,730 | ||||||||
| Total capitalization | (1,255,016 | ) | 7,162,208 | 9,625,730 | ||||||||
If you invest in this offering, your ownership interest will be diluted to the extent of the difference between the price per share you pay in this offering and the as adjusted net tangible book value per Common Share after this offering.
As of September 30, 2024, we had a net tangible book value of approximately $(1,255,106), or approximately $(2.05) per Common Share, based upon 611,122 shares outstanding. Our net tangible book value per share represents total tangible assets less total liabilities, divided by the number of Common Shares outstanding at September 30, 2024.
After giving effect to the issuance of (a) 1,557,035 Common Shares for aggregate gross proceeds of $4,786,568 from October 2024 to December 2024 pursuant to an equity line of credit and (b) 1,000,000 Common Shares for aggregate gross proceeds of $2,000,000 in December 2024 pursuant to a private placement, our pro forma net tangible book value as of September 30, 2024, would have been approximately $7,162,208, or approximately $1.58 per Common Share.
After giving further effect to the sale of our Common Shares in the aggregate amount of $2,591,260 at an assumed offering price of $1.24 per share, the last reported sale price of our Common Shares on the Nasdaq Capital Market on February 28, 2025, and after deducting commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of September 30, 2024 would have been approximately $9,625,730, or approximately $1.66 per Common Share. This represents an immediate increase in net tangible book value of $0.07 per share to our existing shareholders and an immediate dilution of $0.42 per share to new investors in this offering.
The following table illustrates this calculation on a per share basis.
| Assumed public offering price per share | $ | 1.24 | ||||||
| Net tangible book value per share as of September 30, 2024 | $ | (2.05 | ) | |||||
| Increase in net tangible book value per share attributable to pro forma events | $ | 3.63 | ||||||
| Pro forma net tangible book value per share as of September 30, 2024 | $ | 1.58 | ||||||
| Increase in net tangible book value per share attributable to the offering | $ | 0.07 | ||||||
| Pro forma as adjusted net tangible book value per share as of September 30, 2024, after giving effect to the offering | $ | 1.66 | ||||||
| Dilution per share to new investors participating in the offering | $ | 0.42 |
The above discussion and table are based on 611,122 Common Shares outstanding as of September 30, 2024, excluding 172,132 warrants to purchase Common Shares outstanding as of such date with a weighted average exercise price of $830.55 per share.
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We have entered into the ATM Agreement with HCW under which we may issue and sell our Common Shares from time to time having an aggregate gross sales price of up to the amount set forth on the cover page of this prospectus, as supplemented from time to time, through or to HCW acting as sales agent or principal.
Upon delivery of a placement notice and subject to the terms and conditions of the ATM Agreement, HCW may offer and sell our Common Shares by any method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415(a)(4) promulgated under the Securities Act, including sales made directly on or through the Nasdaq Capital Market, any other existing trading market of our Common Shares, sales made to or through a market maker other than on an exchange or otherwise, directly to HCW as principal, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or in any other method permitted by law. We may instruct HCW not to sell Common Shares if the sales cannot be effected at or above the price designated by us from time to time. We or HCW may suspend the offering of Common Shares upon notice and subject to other conditions.
We will pay HCW commissions, in cash, for its services in acting as agent in the sale of our Common Shares. HCW will be entitled to compensation at a commission rate equal to 3.0% of the gross sales price per share sold pursuant to the ATM Agreement. Because there is no minimum offering amount required as a condition of this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. We have also agreed to reimburse HCW for certain specified expenses in an amount up to $50,000, in addition to up to $5,000 per due diligence update session conducted in connection with each date the Company files its Annual Report on Form 20-F and $2,500 per due diligence update session, if any, for the three, six and nine months ended on and as of the last day of the first, second and third fiscal quarters, respectively. We estimate that the total expenses for the offering, excluding compensation and reimbursements payable to HCW under the terms of the ATM Agreement, will be approximately $101,500.
We have also granted HCW, subject to certain exceptions and FINRA Rule 5110(g)(6)(A), a right of first refusal for a period of twelve months following the date of this prospectus to act as the sole book-running manager, sole underwriter, or sole placement agent for any public offering (including ATMs) or private placement, or any other capital raising financing of equity or equity-linked securities.
Settlement for sales of Common Shares will generally occur on the first trading day following the date on which any sales are made (or any such shorter settlement cycle as may be in effect under Exchange Act Rule 15c6-1 from time to time), or on some other date that is agreed upon by us and HCW in connection with a particular transaction, in return for payment of the net proceeds to us. Sales of our Common Shares as contemplated in this prospectus will be settled through the facilities of The Depository Trust Company or by such other means as we and HCW may agree upon. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
HCW will use its commercially reasonable efforts, consistent with its sales and trading practices, to solicit offers to purchase Common Shares under the terms and subject to the conditions set forth in the ATM Agreement. In connection with the sale of the Common Shares on our behalf, HCW will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of HCW will be deemed to be underwriting commissions or discounts. We have agreed to provide indemnification and contribution to HCW against certain civil liabilities, including liabilities under the Securities Act.
The offering of our Common Shares pursuant to the ATM Agreement will terminate upon termination of the ATM Agreement or as otherwise permitted therein. We and HCW may each terminate the ATM Agreement at any time in accordance with the applicable provisions of the ATM Agreement.
To the extent required by Regulation M, HCW will not engage in any market making activities involving our Common Shares while the offering is ongoing under this prospectus. HCW and its affiliates have in the past and may in the future provide various investment banking, commercial banking and other financial services for us and our affiliates, for which services they have and may in the future receive customary fees. HCW acted as our placement agent in connection with our private offering that was consummated in December 2024, for which it received compensation.
This summary of the material provisions of the ATM Agreement does not purport to be a complete statement of its terms and conditions. A copy of the ATM Agreement is filed with the SEC and is incorporated by reference into the registration statement of which this prospectus is a part. See “Where You Can Find More Information; Incorporation by Reference” below.
This prospectus in electronic format may be made available on a website maintained by HCW and HCW may distribute this prospectus electronically.
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ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES
The Company is governed by the laws of Canada and its principal place of business is outside the United States. Certain of the directors and officers of the Company are resident outside of the United States and certain of the Company’s assets and the assets of such persons are located outside of the United States. Consequently, it may be difficult for United States investors to effect service of process within the United States on the Company, its directors or officers, or to realize in the United States on judgments of courts of the United States predicated on civil liabilities under the U.S. Securities Act. Investors should not assume that Canadian courts would enforce judgments of United States courts obtained in actions against the Company or such persons predicated on the civil liability provisions of the United States federal securities laws or the securities or “blue sky” laws of any state within the United States or would enforce, in original actions, liabilities against the Company or such persons predicated on the United States federal securities or any such state securities or “blue sky” laws. A final judgment for a liquidated sum in favor of a private litigant granted by a United States court and predicated solely upon civil liability under United States federal securities laws would, subject to certain exceptions identified in the law of individual provinces of Canada, likely be enforceable in Canada if the United States court in which the judgment was obtained had a basis for jurisdiction in the matter that would be recognized by the domestic Canadian court for the same purposes. There is a significant risk that a given Canadian court may not have jurisdiction or may decline jurisdiction over a claim based solely upon United States federal securities law on application of the conflict of laws principles of the province in Canada in which the claim is brought.
The validity of the Common Shares offered by this prospectus and certain other Canadian legal matters will be passed upon by WeirFoulds LLP. Edelman Legal Advisory PLLC, will pass upon certain legal matters regarding the securities offered hereby under U.S. federal securities law. Haynes and Boone, LLP, New York, New York is acting as counsel for the sales agent in connection with this offering.
The consolidated financial statements of Psyence Biomedical Ltd. for the years ended March 31, 2024 and 2023 included in this prospectus have been audited by MNP LLP, independent registered public accounting firm, as set forth in their report thereon, appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
Available Information
We file periodic reports and other information with the SEC. These reports and other information will be available at the website of the SEC at www.sec.gov. We also maintain a website at www.psyencebiomed.com, by which you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information that is contained on, or that may be accessed through, our website is not a part of this prospectus. We have included our website in this prospectus solely as an inactive textual reference.
This prospectus is part of a registration statement that we filed with the SEC and does not contain all of the information in the registration statement. The full registration statement may be obtained from the SEC or us as provided below. Documents establishing the terms of the offered securities are or may be filed as exhibits to the registration statement. Statements in this prospectus about these documents are summaries, and each statement is qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters. You may inspect a copy of the registration statement through the SEC’s website, as provided above.
Incorporation by Reference
The SEC allows us to incorporate by reference much of the information that we file with the SEC, which means that we can disclose important information to you by referring you to those publicly available documents. The information that we incorporate by reference in this prospectus is considered to be part of this prospectus. Because we are incorporating by reference future filings with the SEC, this prospectus is continually updated and those future filings may modify or supersede some of the information included or incorporated by reference in this prospectus. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus or in any document previously incorporated by reference have been modified or superseded.
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This prospectus incorporates by reference the documents listed below and any future filings we make with the SEC until the offering of the securities under the registration statement of which this prospectus forms a part is terminated or completed:
| ● | our annual report on Form 20-F for the year ended March 31, 2024 filed with the SEC on July 29, 2024 (the “20-F”); |
| ● | our Current Reports on Form 6-K filed with the SEC on August 20, 2024, September 5, 2024, September 20, 2024 (other than the Press Release attached thereto as Exhibit 99.2), October 8, 2024, October 23, 2024, November 22, 2024 (other than the press releases and Investor Presentation attached thereto as Exhibits 99.1, 99.2 and 99.3), December 4, 2024, December 4, 2024, December 19, 2024 (other than the press release attached thereto as Exhibit 99.1), December 31, 2024 (other than the press releases filed as Exhibits 99.1 and 99.2 attached thereto), and January 23, 2025 (including the Company’s Unaudited Condensed Consolidated Financial Statements for the Three and Six Months Ended September 30, 2024 and 2023, the relevant Management Discussion and Analysis and the Update Audited Consolidated Financial Statements for the Years Ended March 31, 2024 and 2023 filed as exhibits 99.1, 99.2 and 99.3, respectively); and |
| ● | the description of our Common Shares contained in Exhibit 2.3 to our 2024 20-F, including any further amendment or reports filed for the purpose of updating such description. |
We are also incorporating by reference all subsequent annual reports on Form 20-F that we file with the SEC and certain reports on Form 6-K that we furnish to the SEC after the date of this prospectus (if such reports on Form 6-K expressly state that they are incorporated in whole or in part by reference into the registration statement of which this prospectus forms a part) prior to the termination of this offering. In all cases, you should rely on the later information over different information included in this prospectus or any applicable prospectus supplement.
Any statement contained in a document filed before the date of this prospectus and incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. Any information that we file after the date of this prospectus with the SEC and incorporated by reference herein will automatically update and supersede the information contained in this prospectus and in any document previously incorporated by reference in this prospectus.
Unless expressly incorporated by reference, nothing in this prospectus shall be deemed to incorporate by reference information furnished to, but not filed with, the SEC. Copies of all documents incorporated by reference in this prospectus, other than exhibits to those documents unless such exhibits are specifically incorporated by reference in this prospectus, will be provided at no cost to each person, including any beneficial owner, who receives a copy of this prospectus on the written or oral request of that person made to:
Psyence Biomedical Ltd.
121 Richmond Street West
Penthouse Suite 1300
Toronto, Ontario M5H 2K1
Attn: General Counsel
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PSYENCE BIOMEDICAL LTD.
Up to $2,591,260 Common Shares
Prospectus
H.C. Wainwright & Co.
, 2025
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers
Under the Ontario Business Corporations Act (“OBCA”), we may indemnify our current or former directors or officers or another individual who acts or acted at our request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of his or her association with us or another entity. The OBCA also provides that we may also advance moneys to a director, officer or other individual for costs, charges and expenses incurred in connection with such a proceeding.
However, indemnification is prohibited under the OBCA unless the individual:
| ● | acted honestly and in good faith with a view to our best interests, or the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at our request; and |
| ● | in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that his or her conduct was lawful. |
Our bylaws require us to indemnify each of our current or former directors or officers and each individual who acts or acted at our request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of his or her association with us or another entity.
Under the OBCA, we are permitted to purchase and maintain insurance for the benefit of each of our current or former directors or officers and each person who acts or acted at our request as a director or officer, or an individual acting in a similar capacity, of another entity.
Prior to the completion of the transaction we intend to enter into indemnity agreements with our directors and certain officers which provide, among other things, that we will indemnify, including but not limited to the indemnity permitted under the OBCA, him or her for losses reasonably incurred by reason of being or having been a director or officer; provided that, we shall not indemnify such individual if, among other things, he or she did not act honestly and in good faith with a view to our best interests and, in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual did not have reasonable grounds for believing that his or her conduct was lawful, and in so acting was in breach of the obligations under the indemnity agreement.
At present, we are not aware of any pending or threatened litigation or proceeding involving any of our directors, officers, employees or agents in which indemnification would be required or permitted.
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Item 9. Exhibits
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| # | The exhibits and schedules to this Exhibit have been omitted in accordance with Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplementally to the SEC a copy of all omitted exhibits and schedules upon its request. |
| † | Indicates a management contract or compensation plan. |
| * | Filed herewith. |
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Item 10. Undertakings
| (a) | The undersigned registrant hereby undertakes: |
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii), and (a)(1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is a part of the registration statement.
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (4) | To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act or Item 8.A of Form 20-F if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934that are incorporated by reference in the Form F-3. |
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| (5) | That for purposes of determining liability under the Securities Act to any purchaser: |
| (i) | each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
| (ii) | each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
| (6) | That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
| (i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| (iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
| (7) | That, for the purpose of determining any liability under the Securities Act of 1933 to any purchaser, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (b) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
II-6
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Toronto, Ontario, Canada on the 4th day of March, 2025.
| Psyence Biomedical Ltd. | ||
| By: | /s/ Neil Maresky | |
| Neil Maresky | ||
| Chief Executive Officer | ||
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below does hereby constitute and appoint Neil Maresky and Warwick Corden-Lloyd, each acting alone, as his true and lawful attorneys-in-fact and agents, each with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| Name | Title | Date | ||
| /s/ Neil Maresky | Chief Executive Officer and Director | March 4, 2025 | ||
| Neil Maresky | (Principal Executive Officer) | |||
| /s/ Warwick Corden-Lloyd | Chief Financial Officer | March 4, 2025 | ||
| Warwick Corden-Lloyd | (Principal Financial and Accounting Officer) | |||
| /s/ Jody Aufrichtig | Chairman of the Board and Strategic Business Development Officer | March 4, 2025 | ||
| Jody Aufrichtig | ||||
| /s/ Marc Balkin | Director | March 4, 2025 | ||
| Marc Balkin | ||||
| /s/ Christopher Bull | Director | March 4, 2025 | ||
| Christopher (Chris) Bull | ||||
| /s/ Seth Feuerstein | Director | March 4, 2025 | ||
| Seth Feuerstein |
II-7
AUTHORIZED U.S. REPRESENTATIVE
Pursuant to the Securities Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of Psyence Biomedical Ltd. has signed this registration statement in the city of Newark, Delaware on the 4th day of March, 2025.
| Puglisi & Associates | ||
| By: | /s/ Donald J. Puglisi | |
| Name: | Donald J. Puglisi | |
| Title: | Authorized Representative | |
II-8
Exhibit 5.1
Barristers & Solicitors |
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March 4, 2025
Psyence Biomedical Ltd.
121 Richmond Street West
Penthouse Suite 1300
Toronto, Ontario, M5H 2K1
Dear Mesdames/Messrs:
| Re: | Registration Statement on Form F-3 |
We have acted as Canadian corporate counsel to Psyence Biomedical Ltd. (the “Corporation”), a corporation incorporated under the laws of Ontario, Canada, in connection with the registration by the Corporation for resale by certain selling shareholders, as detailed in the prospectus constituting part of the Corporation’s registration statement (the “Registration Statement”) on a Form F-3 filed today by the Corporation with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), of common shares of the Corporation (the “Common Shares”) consisting of:
| (i) | 311,374 Common Shares issued in connection with the performance by the Corporation of its obligations pursuant to certain agreements between the Corporation, Newcourt SPAC Sponsor LLC (the “Sponsor”) and Newcourt Acquisition Corp. effective September 30, 2024 (such Common Shares, the “Sponsor Make-Whole Shares”); |
| (ii) | Up to such aggregate number of Common Shares as may be offered and sold by the Corporation pursuant to an at-the-market offering of Common Shares in the capital of the Corporation (the “ATM Shares”) pursuant to an At The Market Offering Agreement with H.C. Wainwright & Co., LLC (the “ATM Agreement”), provided that the number of ATM Shares issued multiplied by the applicable issue price per ATM Share may not exceed $2,591,260 in the aggregate. |
| 4100 - 66 Wellington Street West, PO Box 35, TD Bank Tower, Toronto, Ontario, Canada. M5K 1B7 | T: 416-365-1110 F: 416-365-1876 |
| www.weirfoulds.com |
Barristers & Solicitors |
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| (iii) | Certain Common Shares previously registered on previous Form F-1 registrations statements for which the Registration Statement is acting as a post-effective amendment, namely: |
| (A) | 2,210,000 Common Shares comprised of: |
| (1) | 1,000,000 Common Shares (the “Series A Warrant Shares”) issuable upon exercise of Series A common warrants of the Corporation, |
| (2) | 1,000,000 Common Shares issuable upon exercise of Series B common warrants (the “Series B Warrant Shares”), |
| (3) | 75,000 Common Shares (the “Placement Agent Warrant Shares”) issuable upon the exercise of warrants issued to a placement agent, |
| (4) | 135,000 Common Shares (the “Pre-Funded Warrant Shares”) issuable upon exercise of certain pre-funded warrants |
(the “Series A Warrant Shares, the Series B Warrant Shares, the Placement Agent Warrant Shares, and the Pre-Funded Warrant Shares are, collectively, the “Warrant Shares”);
| (B) | 10,882,355 Common Shares comprised of: |
| (1) | 10,000,000 Common Shares issuable pursuant to a share purchase agreement with White Lion Capital LLC (“White Lion”) dated July 25, 2024 (the “White Lion Purchase Agreement”) (such Common Shares, the “White Lion Shares”); |
| (2) | 182,323 Common Shares issued to Harraden Circle Investors, LP and Harraden Circle Special Opportunities Fund, LP (the “Harraden Funds”) pursuant to the warrants previously issued by the Corporation to the Harraden Funds, which were exercised on December 6, 2024 (such Common Shares, the “Harraden Termination Warrant Shares”); |
| (3) | 337,750 Common Shares issued to Psyence Group Inc (“PGI”) pursuant to the Corporation’s make-whole obligations under a swap agreement between the Corporation and PGI effective September 30, 2024 and a second swap agreement between the Corporation and PGI effective October 25, 2024 (such Common Shares, the “PGI Make-Whole Shares”); |
| (4) | 257,021 Common Shares issued to PGI pursuant to the Corporation’s make-whole obligations under a September 17, 2024 purchase agreement between the Corporation and PGI concerning the purchase of shares of Psyence Labs Ltd. (such Common Shares, the “Psylabs Make-Whole Shares”); |
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| (5) | 43,080 Common Shares issued to the Sponsor pursuant to the Corporation’s debt settlement obligations under a swap agreement between the Corporation and the Sponsor effective September 30, 2024 (such Common Shares, the “Sponsor Swap Shares”); |
| (6) | 62,181 Common Shares issued as directed by the Sponsor pursuant to the Corporation’s make-whole obligations under a swap agreement between the Corporation and Sponsor effective September 30, 2024 (such Common Shares, the “Additional Sponsor Make-Whole Shares”). |
| (C) | an aggregate of up to 6,666 Common Shares (the “Noteholder Warrant Shares”) issuable pursuant to the exercise of those certain Common Share purchase warrants issued to certain noteholders by the Corporation on August 20, 2024 (“Noteholder Warrants”); |
| (D) | 298,951 Common Shares comprised of: |
| (1) | an aggregate of up to 233,333 Common Shares (the “Additional White Lion Shares”) issuable pursuant to the White Lion Purchase Agreement; |
| (2) | 65,618 Common Shares issued pursuant to debt settlement agreements effective September 30, 2024 and October 25, 2024 entered into with PGI (the “PGI Swap Shares”); |
| (3) | 40 Common Shares issued to Donohoe (the “Donohoe Shares”) that were issued on May 29, 2024 in payment of accrued service and advisory fees; |
| (E) | 2,627 Common Shares that were issued as payment to Outside The Box Capital Inc. for past services rendered (the “OTBC Shares”); |
| (F) | 5,947 Common Shares comprised of: |
| (1) | 2,000 Common Shares issued to Cantor Fitgerald & Co. as compensation for financing services (the “Cantor Fee Shares”); |
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| (2) | 1,667 Common Shares issued as payment to a legal service provider (“MWE Fee Shares”); |
| (3) | 2,000 Common Shares issued as payment to a legal service provider (“Additional Legal Provider Shares”); |
| (4) | 280 Common Shares issued to a consultant (“Consultant Shares”); |
| (G) | 165,466 Common Shares issuable pursuant to warrants issued to the Sponsor (“de-SPAC Warrants”) pursuant to the de-SPAC transaction (“de-SPAC Warrant Shares”); and |
| (H) | 61,893 Common Shares comprised of: |
| (1) | 2,493 Common Shares issued to Cantor Fitzgerald & CO. as compensation for financing services (“Additional Cantor Shares”; |
| (2) | 27,534 Common Shares issued to members of the Sponsor pursuant to the de-SPAC transaction (“Sponsor Member de-SPAC Shares”); |
| (3) | 31,866 Common Shares issued to Sponsor pursuant to the de-SPAC transaction (“Sponsor de-SPAC Shares”). |
Examination of Documents
In giving the opinions expressed below we have examined:
| (b) | a Certificate of Status issued under the Business Corporations Act (Ontario) dated March 3, 2025; |
| (c) | the certificate of incorporation, articles and by-laws of the Corporation (the “Articles”); and |
| (d) | certain resolutions of the Corporation’s directors. |
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Assumptions and Reliances
As to certain matters of fact, we have relied on a certificate of an officer of the Corporation of even date (the “Officer’s Certificate”).
In preparation for the delivery of this opinion, we have examined the above-mentioned documents and we have examined all such other documents and made such other investigations as we consider relevant and necessary in order to give this opinion. In particular, we have not reviewed, and express no opinion on, any document that is referred to or incorporated by reference into the documents reviewed by us. As to various questions of fact material to this opinion which we have not independently established, we have examined and relied upon, without independent verification, certificates of public officials and officers of the Corporation including, without limitation, the Officer’s Certificate.
For purposes of this opinion letter, we have also assumed:
| (e) | the legal capacity of all individuals; |
| (f) | the genuineness of all signatures on, and the authenticity and completeness of all documents submitted to us as originals and the conformity to authentic or original documents of all documents submitted to us as certified, conformed, telecopied, photostatic, electronically transmitted copies (including commercial reproductions); |
| (g) | the identity and capacity of any person acting or purporting to act as a corporate or public official; |
| (h) | the accuracy and completeness of all information provided to us by public officials or offices of public record; |
| (i) | the accuracy and completeness of all representations and statements of fact contained in all documents, instruments and certificates (including the Officer’s Certificate); |
| (j) | the accuracy and completeness of the minute books and all other corporate records of the Corporation reviewed by us; |
| (k) | the facts stated in the Certificate of Status continue to be true as of the date hereof; |
| (l) | all securities referred to herein have been offered, issued and sold in compliance with applicable United States federal and state securities laws, and in the manner stated in the Registration Statement; and |
| (m) | that the facts stated in the Certificate of Status and the Officer’s Certificate shall continue to be true and correct as at the date of completion of the share issuances contemplated hereby. |
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We have not undertaken any independent investigation to verify the accuracy of any of the foregoing assumptions.
When our opinion refers to Common Shares to be issued or having been issued as being “fully paid and non-assessable”, such opinion indicates that the holder of such Common Shares cannot be required to contribute any further amounts to the Corporation by virtue of his, her or its status as holder of such Common Shares, either in order to complete payment for the Common Shares, to satisfy claims of creditors or otherwise. We rely on the Corporation’s confirmation that it has received, or will receive prior to issuance, full consideration for the Common Shares and no opinion is expressed as to the adequacy of any consideration received for such Common Shares.
We are qualified to practice law only in the Province of Ontario. Our opinion below is limited to the existing laws of the Province of Ontario and the federal laws of Canada applicable therein as of the date of this opinion and should not be relied upon, nor are they given, in respect of the laws of any other jurisdiction. In particular, we express no opinion as to United States federal or state securities laws or any other laws, rule or regulation, federal or state, applicable to the Corporation. We disclaim any obligation or duty to update this opinion to reflect any changes in such laws or other circumstances after the date hereof.
The opinions given below are given as of the date of this letter and are not prospective.
Opinions
Based upon and subject to the foregoing, we are of the opinion that:
| 1. | The Sponsor Make-Whole Shares have been validly issued as fully paid and non-assessable common shares in the capital of the Corporation. |
| 2. | The ATM Shares have been duly authorized for issuance by all necessary corporate action by the Corporation, and upon their issuance pursuant to the terms of the ATM Agreement, the ATM Shares will be validly issued, fully paid and non-assessable common shares in the capital of the Corporation. |
| 3. | The Warrant Shares to be issued upon due exercise of the Warrants will be, upon due exercise of such Warrants, in accordance with the terms and conditions of the certificates representing such Warrants, including payment of the full exercise price by the purchasers thereof in accordance with the provisions thereof, validly issued as fully paid and non-assessable common shares in the capital of the Corporation. |
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| 4. | The White Lion Shares have been duly authorized for issuance by all necessary corporate action by the Corporation, and upon their issuance pursuant to the terms of the White Lion Purchase Agreement, including payment in full of the subscription price therefor, the White Lion Shares will be validly issued, fully paid and non-assessable common shares in the capital of the Corporation. |
| 5. | The Harraden Termination Warrant Shares have been validly issued as fully paid and non-assessable common shares in the capital of the Corporation. |
| 6. | The PGI Make-Whole Shares have been validly issued as fully-paid and non-assessable common shares in the capital of the Corporation. |
| 7. | The Psylabs Make-Whole Shares have been validly issued as fully-paid and non-assessable common shares in the capital of the Corporation. |
| 8. | The Sponsor Swap Shares have been validly issued as fully-paid and non-assessable common shares in the capital of the Corporation. |
| 9. | The Additional Sponsor Make-Whole Shares have been validly issued as fully paid and non-assessable common shares in the capital of the Corporation. |
| 10. | The Noteholder Warrant Shares have been duly authorized for issuance by all necessary corporate action by the Corporation, and upon the due exercise of the Noteholder Warrants in accordance with their terms, including payment to the Corporation of the full exercise consideration per applicable Noteholder Warrant Share, such Noteholder Warrant Shares will be validly issued, fully paid and non-assessable common shares in the capital of the Corporation. |
| 11. | The Additional White Lion Shares have been duly authorized for issuance by all necessary corporate action by the Corporation, and upon their issuance pursuant to the terms of the White Lion Purchase Agreement, including payment in full of the subscription price therefor, the Additional White Lion Shares will be validly issued, fully paid and non-assessable common shares in the capital of the Corporation. |
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| 12. | The PGI Swap Shares have been validly issued as fully paid and non-assessable common shares in the capital of the Corporation. |
| 13. | The Donohoe Shares have been validly issued as fully paid and non-assessable common shares in the capital of the Corporation. |
| 14. | The OTBC Shares have been validly issued as fully paid and non-assessable common shares in the capital of the Corporation. |
| 15. | The Cantor Fee Shares have been validly issued as fully paid and non-assessable common shares in the capital of the Corporation. |
| 16. | The MWE Fee Shares have been validly issued as fully paid and non-assessable common shares in the capital of the Corporation. |
| 17. | The Additional Legal Provider Shares have been validly issued as fully paid and non-assessable common shares in the capital of the Corporation. |
| 18. | The Consultant Shares have been validly issued as fully paid and non-assessable common shares in the capital of the Corporation. |
| 19. | The de-SPAC Warrant Shares have been duly authorized for issuance by all necessary corporate action by the Corporation, and upon the due exercise of the de-SPAC Warrants in accordance with their terms, including payment to the Corporation of the full exercise consideration per applicable de-SPAC Warrant Share, such de-SPAC Warrant Shares will be validly issued, fully paid and non-assessable common shares in the capital of the Corporation. |
| 20. | The Additional Cantor Shares have been validly issued as fully paid and non-assessable common shares in the capital of the Corporation. |
| 21. | The Sponsor Member de-SPAC Shares have been validly issued as fully paid and non-assessable common shares in the capital of the Corporation. |
| 22. | The Sponsor de-SPAC Shares have been validly issued as fully paid and non-assessable common shares in the capital of the Corporation. |
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This opinion letter is rendered as of the date hereof, and is opining upon and is limited to the laws of the Province of Ontario and the federal laws of Canada applicable therein, as such laws presently exist as of the date hereof. We express no opinion with respect to the effect or applicability of the laws of any other jurisdiction. We assume no obligation to revise or supplement this opinion letter should applicable laws be changed after the date hereof by legislative action, judicial decision or otherwise, or if we become aware of any facts that might change the opinions expressed herein after the date hereof. The opinions expressed in this letter are limited to the matters set forth herein and no other opinions should be inferred beyond the matters expressly stated.
We consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the caption “Legal Matters” in the prospectus constituting part of the Registration Statement. In giving this consent, we do not thereby imply or admit that we are an “expert” within the meaning of Section 11 of the Securities Act or the rules and regulations promulgated thereunder or that we come within the categories of persons whose consent is required by Section 7 of the Securities Act.
Yours truly,
/s/ WeirFoulds LLP
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Exhibit 5.2
EDELMAN LEGAL ADVISORY PLLC
400 Rella Boulevard, Suite 165
Suffern, New York 10901
March 4, 2025
Psyence Biomedical Ltd.
121 Richmond Street West
Penthouse Suite 1300
Toronto, Ontario M5H 2K1
Re: Psyence Biomedical Ltd. –Registration Statement on Form F-3
Ladies and Gentlemen:
We have acted as United States counsel to Psyence Biomedical Ltd., a corporation existing under the laws of the Province of Ontario, Canada (the “Company”), in connection with the Registration Statement on Form F-3 (as amended or supplemented from time to time, the “Registration Statement”), initially filed by the Company on or about the date hereof with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act of 1933, as amended (the “Securities Act”). The Registration Statement relates to the resale by the selling securityholders listed in the prospectus included as a part of the Registration Statement (the “Selling Securityholders”) of up to an aggregate of up to 11,563,187 common shares, no par value (the “Common Shares”) of the Company (the “Selling Securityholder Shares”), which includes up to 2,662,132 Common Shares issuable upon the exercise of 2,662,132 warrants, (ii) up to 7,600 warrants (the “Selling Securityholder Warrants”) to purchase Common Shares, and (iii) up to $75,000,000 worth of Common Shares, preferred shares, debt securities, warrants, rights and units.
This opinion letter is furnished to you at your request to enable you to fulfill the requirements, in connection with the Registration Statement, of Item 601(b)(5) of Regulation S-K promulgated by the Commission.
We have examined such documents and considered such legal matters as we have deemed necessary and relevant as the basis for the opinion set forth below including, without limitation: (i) the Registration Statement, as amended to date; (ii) the Certificate of Incorporation and Amended and Restated Bylaws of the Company, each as amended to date; (iii) the Warrant Agreement, dated as of October 19, 2021, by and between NCAC and Continental Stock Transfer & Trust Company (the “Warrant Agreement”); and (iv) records of meetings and consents of the Board of Directors of the Company provided to us by the Company. With respect to such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as reproduced or certified copies, and the authenticity of the originals of those latter documents. As to questions of fact material to this opinion, we have, to the extent deemed appropriate, relied upon certain representations of certain officers of the Company.
Based upon and subject to the foregoing, we are of the opinion that the Selling Securityholder Warrants are legally binding obligations of the Company enforceable in accordance with their terms except: (a) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law); (b) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws; and (c) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
Notwithstanding anything in this letter which might be construed to the contrary, our opinion herein is expressed solely with respect to the laws of the State of New York. Our opinion is based on these laws as in effect on the date hereof and as of the effective date of the Registration Statement, and we assume no obligation to revise or supplement this opinion after the effective date of the Registration Statement should the laws be changed by legislative action, judicial decision or otherwise. Where our opinions expressed herein refer to events to occur at a future date, we have assumed that there will have been no changes in the relevant law or facts between the date hereof and such future date. We are not rendering any opinion as to the compliance with any other federal or state law, rule or regulation relating to securities, or to the sale or issuance thereof.
We hereby consent to the filing of this opinion as Exhibit 5.2 to the Registration Statement and to the reference to our firm under the caption “Legal Matters” in the prospectus constituting a part of the Registration Statement. In giving such consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder. We assume no obligation to update or supplement any of the opinion set forth herein to reflect any changes of law or fact that may occur following the date hereof.
| Sincerely | |
| /s/ Edelman Legal Advisory PLLC |
Exhibit 10.39
AT THE MARKET OFFERING AGREEMENT
March 4, 2025
H.C. Wainwright & Co., LLC
430 Park Avenue, 3rd Floor
New York, New York 10022
Ladies and Gentlemen:
Psyence Biomedical Ltd., a corporation existing under the laws of Ontario, Canada (the “Company”), confirms its agreement (this “Agreement”) with H.C. Wainwright & Co., LLC (the “Manager”) as follows:
1. Definitions. The terms that follow, when used in this Agreement and any Terms Agreement, shall have the meanings indicated.
“Accountants” shall have the meaning ascribed to such term in Section 4(m).
“Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Action” shall have the meaning ascribed to such term in Section 3(p).
“Affiliate” shall have the meaning ascribed to such term in Section 3(o).
“Applicable Time” shall mean, with respect to any Shares, the time of sale of such Shares pursuant to this Agreement or any relevant Terms Agreement.
“Base Prospectus” shall mean the base prospectus contained in the Registration Statement at the Execution Time.
“BHCA” shall have the meaning ascribed to such term in Section 3(qq).
“Board” shall have the meaning ascribed to such term in Section 2(b)(iii).
“Broker Fee” shall have the meaning ascribed to such term in Section 2(b)(v).
“Business Day” shall mean any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, that, for purposes of clarity, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
“Commission” shall mean the United States Securities and Exchange Commission.
“Common Shares” shall have the meaning ascribed to such term in Section 2.
“Common Share Equivalents” shall have the meaning ascribed to such term in Section 3(g).
“Company Canadian Counsel” shall have the meaning ascribed to such term in Section 4(l).
“Company U.S. Counsel” shall have the meaning ascribed to such term in Section 4(l).
“Distribution” shall have the meaning ascribed to such term in Section 2(b)(ix).
“DTC” shall have the meaning ascribed to such term in Section 2(b)(vii).
“Effective Date” shall mean each date and time that the Registration Statement and any post-effective amendment or amendments thereto became or becomes effective.
“Environmental Laws” shall have the meaning ascribed to such term in Section 3(s).
“Evaluation Date” shall have the meaning ascribed to such term in Section 3(y).
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Execution Time” shall mean the date and time that this Agreement is executed and delivered by the parties hereto.
“FDA” shall have the meaning ascribed to such term in Section 3(jj).
“FDCA” shall have the meaning ascribed to such term in Section 3(jj).
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“Federal Reserve” shall have the meaning ascribed to such term in Section 3(qq).
“FINRA” shall have the meaning ascribed to such term in Section 3(e).
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405.
“Hazardous Materials” shall have the meaning ascribed to such term in Section 3(s).
“IFRS” shall have the meaning ascribed to such term in Section 3(m).
“Incorporated Documents” shall mean the documents or portions thereof filed with the Commission on or prior to the Effective Date that are incorporated by reference in the Registration Statement or the Prospectus and any documents or portions thereof filed with the Commission after the Effective Date that are deemed to be incorporated by reference in the Registration Statement or the Prospectus.
“Indebtedness” shall have the meaning ascribed to such term in Section 3(ee).
“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3(v).
“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as defined in Rule 433.
“IT Systems and Data” shall have the meaning ascribed to such term in Section 3(mm).
“Liens” shall have the meaning ascribed to such term in Section 3(a).
“Losses” shall have the meaning ascribed to such term in Section 7(d).
“Material Adverse Effect” shall have the meaning ascribed to such term in Section 3(b).
“Material Permits” shall have the meaning ascribed to such term in Section 3(t).
“Maximum Amount” shall have the meaning ascribed to such term in Section 2.
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“Money Laundering Laws” shall have the meaning ascribed to such term in Section 3(rr).
“Net Proceeds” shall have the meaning ascribed to such term in Section 2(b)(v).
“Permitted Free Writing Prospectus” shall have the meaning ascribed to such term in Section 4(g).
“Person” shall have the meaning ascribed to such term in Section 3(e).
“Pharmaceutical Product” shall have the meaning ascribed to such term in Section 3(jj).
“Placement” shall have the meaning ascribed to such term in Section 2(c).
“Proceeding” shall have the meaning ascribed to such term in Section 3(b).
“Prospectus” shall mean the Base Prospectus, as supplemented by the most recently filed Prospectus Supplement (if any).
“Prospectus Supplement” shall mean each prospectus supplement relating to the Shares prepared and filed pursuant to Rule 424(b) from time to time.
“Record Date” shall have the meaning ascribed to such term in Section 2(b)(ix).
“Registration Statement” shall mean the shelf registration statement on Form F-3, including the Base Prospectus, registering $75,000,000 of securities of the Company to be filed on or immediately following the Execution Time, including exhibits and financial statements filed with or incorporated by reference into such registration statement, the Prospectus Supplement relating to the Shares and any prospectus supplement relating to the Shares that is subsequently filed with the Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430B, as amended on each Effective Date and, in the event any post-effective amendment thereto becomes effective, shall also mean such registration statement as so amended.
“Representation Date” shall have the meaning ascribed to such term in Section 4(k).
“Required Approvals” shall have the meaning ascribed to such term in Section 3(e).
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“Rule 158”, “Rule 164”, “Rule 172”, “Rule 173”, “Rule 405”, “Rule 415”, “Rule 424”, “Rule 430B” and “Rule 433” refer to such rules under the Act.
“Sales Notice” shall have the meaning ascribed to such term in Section 2(b)(i).
“SEC Reports” shall have the meaning ascribed to such term in Section 3(m).
“Settlement Date” shall have the meaning ascribed to such term in Section 2(b)(vii).
“Shares” shall have the meaning ascribed to such term in Section 2.
“Subsidiary” shall have the meaning ascribed to such term in Section 3(a).
“Terms Agreement” shall have the meaning ascribed to such term in Section 2(a).
“Time of Delivery” shall have the meaning ascribed to such term in Section 2(c).
“Trading Day” means a day on which the Trading Market is open for trading.
“Trading Market” means any of the following markets or exchanges on which the Common Shares are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
All references in this Agreement to financial statements and schedules and other information that is “contained,” “included” or “stated” in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is or is deemed to be incorporated by reference in or otherwise deemed under the Act to be a part of or included in the Registration Statement or the Prospectus, as the case may be, as of any specified date; and all references in this Agreement to amendments or supplements to the Registration Statement or the Prospectus shall be deemed to mean and include, without limitation, the filing of any Incorporated Document to be a part of or included in the Registration Statement or the Prospectus, as the case may be, as of any specified date.
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2. Sale and Delivery of Shares. The Company proposes to issue and sell through or to the Manager, as sales agent and/or principal, from time to time during the term of this Agreement and on the terms set forth herein, up to the lesser of such number of common shares (the “Shares”) of the Company, no par value (“Common Shares”), that does not exceed (a) the number or dollar amount of Common Shares registered on the Prospectus Supplement, pursuant to which the offering is being made, (b) the number of authorized but unissued Common Shares (less the number of Common Shares issuable upon exercise, conversion or exchange of any outstanding securities of the Company or otherwise reserved from the Company’s authorized share capital), or (c) the number or dollar amount of Common Shares that would cause the Company or the offering of the Shares to not satisfy the eligibility and transaction requirements for use of Form F-3, including, if applicable, General Instruction I.B.5 of Registration Statement on Form F-3 (the lesser of (a), (b) and (c), the “Maximum Amount”). Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitations set forth in this Section 2 on the number and aggregate sales price of Shares issued and sold under this Agreement shall be the sole responsibility of the Company and that the Manager shall have no obligation in connection with such compliance.
(a) Appointment of Manager as Selling Agent; Terms Agreement. For purposes of selling the Shares through the Manager, the Company hereby appoints the Manager as exclusive agent of the Company for the purpose of selling the Shares of the Company pursuant to this Agreement and the Manager agrees to use its commercially reasonable efforts to sell the Shares on the terms and subject to the conditions stated herein. The Company agrees that, whenever it determines to sell the Shares directly to the Manager as principal, it will enter into a separate agreement (each, a “Terms Agreement”) in substantially the form of Annex I hereto, relating to such sale in accordance with Section 2 of this Agreement.
(b) Agent Sales. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company will issue and agrees to sell Shares from time to time through the Manager, acting as sales agent, and the Manager agrees to use its commercially reasonable efforts to sell, as sales agent for the Company, on the following terms:
(i) The Shares are to be sold on a daily basis or otherwise as shall be agreed to by the Company and the Manager on any day that (A) is a Trading Day, (B) the Company has instructed the Manager by telephone (confirmed promptly by electronic mail) to make such sales (“Sales Notice”) and (C) the Company has satisfied its obligations under Section 6 of this Agreement. The Company will designate the maximum amount of the Shares to be sold by the Manager daily (subject to the limitations set forth in Section 2(d)) and the minimum price per Share at which such Shares may be sold. Subject to the terms and conditions hereof, the Manager shall use its commercially reasonable efforts to sell on a particular day all of the Shares designated for the sale by the Company on such day. The gross sales price of the Shares sold under this Section 2(b) shall be the market price for the Common Shares sold by the Manager under this Section 2(b) on the Trading Market at the time of sale of such Shares.
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(ii) The Company acknowledges and agrees that (A) there can be no assurance that the Manager will be successful in selling the Shares, (B) the Manager will incur no liability or obligation to the Company or any other Person if it does not sell the Shares for any reason other than a failure by the Manager to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Shares as required under this Agreement, and (C) the Manager shall be under no obligation to purchase Shares on a principal basis pursuant to this Agreement, except as otherwise specifically agreed by the Manager and the Company pursuant to a Terms Agreement.
(iii) The Company shall not authorize the issuance and sale of, and the Manager shall not be obligated to use its commercially reasonable efforts to sell, any Share at a price lower than the minimum price therefor designated from time to time by the Company’s Board of Directors (the “Board”), or a duly authorized committee thereof, or such duly authorized officers of the Company, and notified to the Manager in writing. The Company or the Manager may, upon notice to the other party hereto by telephone (confirmed promptly by electronic mail), terminate or suspend the offering of the Shares for any reason and at any time; provided, however, that such suspension or termination shall not affect or impair the parties’ respective obligations with respect to the Shares sold hereunder prior to the giving of such notice.
(iv) The Manager may sell Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 under the Act, including without limitation sales made directly on the Trading Market, on any other existing trading market for the Common Shares or to or through a market maker. The Manager may also sell Shares in privately negotiated transactions, provided that the Manager receives the Company’s prior written approval for any sales in privately negotiated transactions and if so provided in the “Plan of Distribution” section of the Prospectus or a Prospectus Supplement disclosing the terms of such privately negotiated transaction.
(v) The compensation to the Manager for sales of the Shares under this Section 2(b) shall be a placement fee of 3.0% of the gross sales price of the Shares sold pursuant to this Section 2(b) (“Broker Fee”). The foregoing rate of compensation shall not apply when the Manager acts as principal, in which case the Company may sell Shares to the Manager as principal at a price agreed upon at the relevant Applicable Time pursuant to a Terms Agreement. The remaining proceeds, after deduction of the Broker Fee and deduction of any transaction fees imposed by any clearing firm, execution broker, or governmental or self-regulatory organization in respect of such sales, shall constitute the net proceeds to the Company for such Shares (the “Net Proceeds”).
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(vi) The Manager shall provide written confirmation (which may be by electronic mail) to the Company following the close of trading on the Trading Market each day in which the Shares are sold under this Section 2(b) setting forth the number of the Shares sold on such day, the aggregate gross sales proceeds and the Net Proceeds to the Company, and the compensation payable by the Company to the Manager with respect to such sales.
(vii) Unless otherwise agreed between the Company and the Manager, settlement for sales of the Shares will occur at 10:00 a.m. (New York City time) on the first (1st) Trading Day (or any other settlement cycle as may be in effect pursuant to Rule 15c6-1 under the Exchange Act from time to time) following the date on which such sales are made (each, a “Settlement Date”). On or before the Trading Day prior to each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Shares being sold by crediting the Manager’s or its designee’s account (provided that the Manager shall have given the Company written notice of such designee at least one Trading Day prior to the Settlement Date) at The Depository Trust Company (“DTC”) through its Deposit and Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto which Shares in all cases shall be freely tradable, transferable, registered shares in good deliverable form. On each Settlement Date, the Manager will deliver the related Net Proceeds in same day funds to an account designated by the Company. The Company agrees that, if the Company, or its transfer agent (if applicable), defaults in its obligation to deliver duly authorized Shares on a Settlement Date, in addition to and in no way limiting the rights and obligations set forth in Section 7 hereto, the Company will (i) hold the Manager harmless against any loss, claim, damage, or reasonable, documented expense (including reasonable and documented legal fees and expenses), as incurred, arising out of or in connection with such default by the Company, and (ii) pay to the Manager any commission, discount or other compensation to which the Manager would otherwise have been entitled absent such default.
(viii) At each Applicable Time, Settlement Date, and Representation Date, the Company shall be deemed to have affirmed each representation and warranty contained in this Agreement as if such representation and warranty were made as of such date, modified as necessary to relate to the Registration Statement and the Prospectus as amended as of such date. Any obligation of the Manager to use its commercially reasonable efforts to sell the Shares on behalf of the Company shall be subject to the continuing accuracy of the representations and warranties of the Company herein, to the performance by the Company of its obligations hereunder and to the continuing satisfaction of the additional conditions specified in Section 6 of this Agreement.
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(ix) If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Shares, by way of return of capital or otherwise (including, without limitation, any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution” and the record date for the determination of shareholders entitled to receive the Distribution, the “Record Date”), the Company hereby covenants that, in connection with any sales of Shares pursuant to a Sales Notice on the Record Date, the Company shall issue and deliver such Shares to the Manager on the Record Date and the Record Date shall be the Settlement Date and the Company shall cover any additional costs of the Manager in connection with the delivery of Shares on the Record Date.
(c) Term Sales. If the Company wishes to sell the Shares pursuant to this Agreement in a manner other than as set forth in Section 2(b) of this Agreement (each, a “Placement”), the Company will notify the Manager of the proposed terms of such Placement. If the Manager, acting as principal, wishes to accept such proposed terms (which it may decline to do for any reason in its sole discretion) or, following discussions with the Company wishes to accept amended terms, the Manager and the Company will enter into a Terms Agreement setting forth the terms of such Placement. The terms set forth in a Terms Agreement will not be binding on the Company or the Manager unless and until the Company and the Manager have each executed such Terms Agreement accepting all of the terms of such Terms Agreement. In the event of a conflict between the terms of this Agreement and the terms of a Terms Agreement, the terms of such Terms Agreement will control. A Terms Agreement may also specify certain provisions relating to the reoffering of such Shares by the Manager. The commitment of the Manager to purchase the Shares pursuant to any Terms Agreement shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each Terms Agreement shall specify the number of the Shares to be purchased by the Manager pursuant thereto, the price to be paid to the Company for such Shares, any provisions relating to rights of, and default by, underwriters acting together with the Manager in the reoffering of the Shares, and the time and date (each such time and date being referred to herein as a “Time of Delivery”) and place of delivery of and payment for such Shares. Such Terms Agreement shall also specify any requirements for opinions of counsel, accountants’ letters and officers’ certificates pursuant to Section 6 of this Agreement and any other information or documents required by the Manager.
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(d) Maximum Number of Shares. Under no circumstances shall the Company cause or request the offer or sale of any Shares if, after giving effect to the sale of such Shares, the aggregate amount of Shares sold pursuant to this Agreement would exceed the lesser of (A) together with all sales of Shares under this Agreement, the Maximum Amount, (B) the amount available for offer and sale under the currently effective Registration Statement and (C) the amount authorized from time to time to be issued and sold under this Agreement by the Board, a duly authorized committee thereof or a duly authorized executive officer, and notified to the Manager in writing. Under no circumstances shall the Company cause or request the offer or sale of any Shares pursuant to this Agreement at a price lower than the minimum price authorized from time to time by the Board, a duly authorized committee thereof or a duly authorized executive officer, and notified to the Manager in writing. Further, under no circumstances shall the Company cause or permit the aggregate offering amount of Shares sold pursuant to this Agreement to exceed the Maximum Amount.
(e) Regulation M Notice. Unless the exceptive provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act are satisfied with respect to the Shares, the Company shall give the Manager at least one (1) Business Day’s prior notice of its intent to sell any Shares in order to allow the Manager time to comply with Regulation M.
(f) Notwithstanding anything in this Agreement to the contrary and subject to any other provisions included in this Agreement and compliance with any applicable law and regulation, the Company may enter into and/or effectuate sales under an equity line of credit facility or similar financing arrangement with White Lion Capital, LLC (or any other third-party) during the term of this Agreement.
3. Representations and Warranties. The Company represents and warrants to, and agrees with, the Manager at the Execution Time and on each such time that the following representations and warranties are repeated or deemed to be made pursuant to this Agreement, as set forth below, except as set forth in the SEC Reports, Registration Statement, the Prospectus or the Incorporated Documents.
(a) Subsidiaries. All of the direct and indirect subsidiaries (individually, a “Subsidiary”) of the Company are set forth on Exhibit 8 to the Company’s most recent Annual Report on Form 20-F filed with the Commission. The Company owns, directly or indirectly, all of the share capital or other equity interests of each Subsidiary free and clear of any “Liens” (which for purposes of this Agreement shall mean a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction), and all of the issued and outstanding share capital and other equity interests of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
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(b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation or in default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, from that set forth in the Registration Statement, the Base Prospectus, any Prospectus Supplement, the Prospectus or the Incorporated Documents, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no “Proceeding” (which for purposes of this Agreement shall mean any action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened) has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(c) Authorization and Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board or the Company’s shareholders in connection herewith other than in connection with the Required Approvals. This Agreement has been duly executed and delivered by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
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(d) No Conflicts. The execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Shares and the consummation by it of the transactions contemplated hereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other “Person” (defined as an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind, including the Trading Market) in connection with the execution, delivery and performance by the Company of this Agreement, other than (i) the filings required by this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii) the filing of application(s) to and approval by the Trading Market for the listing of the Shares for trading thereon in the time and manner required thereby, and (iv) such filings as are required to be made under applicable state securities laws and the rules and regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”) (collectively, the “Required Approvals”).
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(f) Issuance of Shares. The Shares are duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized share capital the maximum number of Common Shares issuable pursuant to this Agreement. On or after the Effective Date, the issuance by the Company of the Shares has been registered under the Act and all of the Shares are freely transferable and tradable by the purchasers thereof without restriction (other than any restrictions arising solely from an act or omission of such a purchaser). On or after the Effective Date, the Shares will be issued pursuant to the Registration Statement and the issuance of the Shares shall have been registered by the Company under the Act. The “Plan of Distribution” section within the Registration Statement permits the issuance and sale of the Shares as contemplated by this Agreement. Upon receipt of the Shares, the purchasers of such Shares will have good and marketable title to such Shares and the Shares will be freely tradable on the Trading Market.
(g) Capitalization. The capitalization of the Company is as set forth in the SEC Reports. The Company has not issued any share capital since its most recently filed periodic report under the Exchange Act, other than as disclosed in subsequent SEC Reports or pursuant to the exercise of employee equity awards under the Company’s equity award plans, the issuance of Common Shares to employees pursuant to the Company’s equity award plans and pursuant to the conversion and/or exercise of securities exercisable, exchangeable or convertible into Common Shares (“Common Share Equivalents”) outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement. Except as set forth in the SEC Reports, and as otherwise previously disclosed to the Manager relating to granted but unissued securities pursuant to the Company’s equity incentive plan as of the date hereof, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any Common Shares or the share capital of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional Common Shares or Common Share Equivalents or share capital of any Subsidiary. The issuance and sale of the Shares will not obligate the Company or any Subsidiary to issue Common Shares or other securities to any Person. Other than as disclosed in the SEC Reports, there are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any share appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding share capital of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any shareholder, the Board or others is required for the issuance and sale of the Shares. There are no shareholders agreements, voting agreements or other similar agreements with respect to the Company’s share capital to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s shareholders.
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(h) Registration Statement. The Company meets the requirements for use of Form F-3 under the Act and has prepared and filed (or will file concurrently with the execution of this Agreement) with the Commission the Registration Statement, including the Base Prospectus and Prospectus Supplement, for registration under the Act of the offering and sale of the Shares. On or after the Effective Date, such Registration Statement will be effective and available for the offer and sale of the Shares. As filed, the Base Prospectus contains all information required by the Act and the rules thereunder, and, except to the extent the Manager shall agree in writing to a modification, shall be in all substantive respects in the form furnished to the Manager prior to the Execution Time or prior to any such time this representation is repeated or deemed to be made. The Registration Statement, at the Execution Time, each such time this representation is repeated or deemed to be made, and at all times during which a prospectus is required by the Act to be delivered (whether physically or through compliance with Rule 172, 173 or any similar rule) in connection with any offer or sale of the Shares, meets the requirements set forth in Rule 415(a)(1)(x). The initial Effective Date of the Registration Statement was not earlier than the date three years before the Execution Time. The Company meets the transaction requirements as set forth in General Instruction I.B.1 of Form F-3 or, if applicable, as set forth in General Instruction I.B.5 of Form F-3 with respect to the aggregate market value of securities being sold pursuant to this offering and during the twelve (12) months prior to this offering.
(i) Accuracy of Incorporated Documents. The Incorporated Documents, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the rules thereunder, and none of the Incorporated Documents, when they were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made not misleading; and any further documents so filed and incorporated by reference in the Registration Statement, the Base Prospectus, the Prospectus Supplement or the Prospectus, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the rules thereunder, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
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(j) Ineligible Issuer. (i) At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Shares and (ii) as of the Execution Time and on each such time this representation is repeated or deemed to be made (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is not an Ineligible Issuer (as defined in Rule 405), without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an Ineligible Issuer.
(k) Free Writing Prospectus. The Company is eligible to use Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus does not include any information the substance of which conflicts with the information contained in the Registration Statement, including any Incorporated Documents and any prospectus supplement deemed to be a part thereof that has not been superseded or modified; and each Issuer Free Writing Prospectus does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Manager specifically for use therein. Any Issuer Free Writing Prospectus that the Company is required to file pursuant to Rule 433(d) has been, or will be, filed with the Commission in accordance with the requirements of the Act and the rules thereunder. Each Issuer Free Writing Prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) or that was prepared by or behalf of or used by the Company complies or will comply in all material respects with the requirements of the Act and the rules thereunder. The Company will not, without the prior consent of the Manager, prepare, use or refer to, any Issuer Free Writing Prospectuses.
(l) Proceedings Related to Registration Statement. The Registration Statement is not the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the Act, and the Company is not the subject of a pending proceeding under Section 8A of the Act in connection with the offering of the Shares. The Company has not received any notice that the Commission has issued or intends to issue a stop-order with respect to the Registration Statement or that the Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or intends or has threatened in writing to do so.
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(m) SEC Reports. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto. No other financial statements or supporting schedules are required to be included in the Registration Statement, the Base Prospectus, any Prospectus Supplement or the Prospectus. Such financial statements have been prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, applied on a consistent basis during the periods involved (“IFRS”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by IFRS, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
(n) Statistical and Market-Related Data. All statistical, demographic and market-related data included in the Registration Statement or the Prospectus are based on or derived from sources that the Company believes, after reasonable inquiry, to be reliable and accurate. To the extent required, the Company has obtained the written consent for the use of such data from such sources.
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(o) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date on which this representation is being made, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to IFRS or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its share capital, (v) the Company has not issued any equity securities to any officer, director or “Affiliate” (defined as any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144 under the Act), except pursuant to existing Company equity award plans, and (vi) no executive officer of the Company or member of the Board has resigned from any position with the Company. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Shares contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.
(p) Litigation. Except as set forth in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”). None of the Actions set forth in the SEC Reports, (i) adversely affects or challenges the legality, validity or enforceability of this Agreement or the Shares or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Act.
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(q) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(r) Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.
(s) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
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(t) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.
(u) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with IFRS and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.
(v) Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has no knowledge of any facts that would preclude it from having valid license rights or clear title to the Intellectual Property Rights. The Company has no knowledge that it lacks or will be unable to obtain any rights or licenses to use all Intellectual Property Rights that are necessary to conduct its business.
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(w) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
(x) Affiliate Transactions. Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, shareholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including equity award agreements under any equity award plan of the Company.
(y) Sarbanes Oxley Compliance. The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”), and the disclosure controls and procedures are effective in all material respects to perform the functions for which they were established. The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant deficiencies or material weaknesses in the Company’s internal control over financial reporting (whether or not remediated) and no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.
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(z) Certain Fees. Other than payments to be made to the Manager, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. The Manager shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement.
(aa) No Other Sales Agency Agreement. The Company has not entered into any other sales agency agreements or other similar arrangements with any agent or any other representative in respect of at the market offerings of the Shares.
(bb) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares from the Manager pursuant to this Agreement, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so as to reasonably ensure that it or its Subsidiaries will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.
(cc) Listing and Maintenance Requirements. The Common Shares are listed on the Trading Market and the issuance of the Shares as contemplated by this Agreement does not contravene the rules and regulations of the Trading Market. The Common Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Shares under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Shares are or have been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except with regards to the Minimum Bid Price Requirement of the Nasdaq Stock Market LLC, the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Shares are currently eligible for electronic transfer through DTC or another established clearing corporation and the Company is current in payment of the fees to DTC (or such other established clearing corporation) in connection with such electronic transfer.
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(dd) Application of Takeover Protections. The Company and the Board have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Shares.
(ee) Solvency. Based on the consolidated financial condition of the Company as of the date hereof, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt) within one year from the date hereof. The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the date hereof. The SEC Reports set forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with IFRS. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(ff) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.
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(gg) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.
(hh) Accountants. The Company’s accounting firm is set forth in the SEC Reports. To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending March 31, 2025.
(ii) Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Manager in connection with the Shares.
(jj) FDA. As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed by the Company.
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(kk) ERISA Compliance. Except as otherwise disclosed in the Registration Statement and the Prospectus, the Company and its Subsidiaries and any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company, its Subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance in all material respects with ERISA. “ERISA Affiliate” means, with respect to the Company or any of its Subsidiaries, any member of any group of organizations described in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the “Code”) of which the Company or such Subsidiary is a member. No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company, its Subsidiaries or any of their ERISA Affiliates. No “employee benefit plan” established or maintained by the Company, its Subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined under ERISA). Neither the Company, its Subsidiaries nor any of their ERISA Affiliates has incurred or reasonably expects to incur any liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established or maintained by the Company, its Subsidiaries or any of their ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification.
(ll) Equity Award Plans. Each equity award granted by the Company under the Company’s equity award plan was granted (i) in accordance with the terms of the Company’s equity award plan and (ii) with an exercise price at least equal to the fair market value of the Common Shares on the date such equity award would be considered granted under IFRS and applicable law. No equity award granted under the Company’s equity award plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, equity awards prior to, or otherwise knowingly coordinate the grant of equity awards with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
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(mm) Cybersecurity. Other than as disclosed in the SEC Reports, (i)(x) There has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s information technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”) and (y) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except as would not, individually or in the aggregate, have a Material Adverse Effect; (iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and (iv) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and practices.
(nn) Compliance with Data Privacy Laws. (i) The Company and the Subsidiaries are, and at all times during the past three years were, in compliance with all applicable data privacy and security laws and regulations, including, as applicable, the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679) (collectively, “Privacy Laws”); (ii) the Company and the Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling and analysis of Personal Data (the “Policies”); (iii) the Company provides accurate notice of its applicable Policies to its customers, employees, third party vendors and representatives as required by Privacy Laws; and (iv) applicable Policies provide accurate and sufficient notice of the Company’s then-current privacy practices relating to its subject matter, and do not contain any material omissions of the Company’s then-current privacy practices, as required by Privacy Laws. “Personal Data” means (i) a natural person’s name, street address, telephone number, email address, photograph, social security number, bank information, or customer or account number; (ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended; (iii) “personal data” as defined by GDPR; and (iv) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis of any identifiable data related to an identified person’s health or sexual orientation. (i) None of such disclosures made or contained in any of the Policies have been inaccurate, misleading, or deceptive in violation of any Privacy Laws and (ii) the execution, delivery and performance of this Agreement will not result in a breach of any Privacy Laws or Policies. Neither the Company nor the Subsidiaries, (i) has, to the knowledge of the Company, received written notice of any actual or potential liability of the Company or the Subsidiaries under, or actual or potential violation by the Company or the Subsidiaries of, any of the Privacy Laws; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation or other corrective action pursuant to any regulatory request or demand pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement by or with any court or arbitrator or governmental or regulatory authority that imposed any obligation or liability under any Privacy Law.
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(oo) Office of Foreign Assets Control. Neither the Company nor any of its Subsidiaries, nor to the knowledge of the Company, any of the directors, officers or employees of the Company or its Subsidiaries, is an individual or entity that is, or is owned or controlled by an individual or entity that is: (i) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union, His Majesty’s Treasury, or other relevant sanctions authority (collectively, the “Sanctions”), nor (ii) located, organized or resident in a country or territory that is the subject of Sanctions. Neither the Company nor any of its Subsidiaries will, directly or indirectly, use the proceeds of the transactions contemplated hereby, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person: (i) to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions or (ii) in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the transactions contemplated hereby, whether as underwriter, advisor, investor or otherwise). For the past five years, neither the Company nor any of its Subsidiaries has knowingly engaged in, and is not now knowingly engaged in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.
(pp) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Manager’s request.
(qq) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
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(rr) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(ss) FINRA Member Shareholders. There are no affiliations with any FINRA member firm among the Company’s officers, directors or, to the knowledge of the Company, any five percent (5%) or greater shareholder of the Company, except as set forth in the SEC Reports.
(tt) Forward-Looking Statements. To the knowledge of the Company, each financial or operational projection or other “forward-looking statement” (as defined by Section 27A of the Act or Section 21E of the Exchange Act) contained in the Registration Statement or the Prospectus (i) was so included by the Company in good faith and with reasonable basis after due consideration by the Company of the underlying assumptions, estimates and other applicable facts and circumstances and (ii) as required, is accompanied by meaningful cautionary statements identifying those factors that could cause actual results to differ materially from those in such forward-looking statement. No such statement was made that was false or misleading with the knowledge of a director or senior manager of the Company that it was false or misleading.
4. Agreements. The Company agrees with the Manager that:
(a) Right to Review Amendments and Supplements to Registration Statement and Prospectus. During any period when the delivery of a prospectus relating to the Shares is required (including in circumstances where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under the Act in connection with the offering or the sale of Shares, the Company will not file any amendment to the Registration Statement or supplement (including any Prospectus Supplement) to the Base Prospectus unless the Company has furnished to the Manager a copy for its review prior to filing and will not file any such proposed amendment or supplement to which the Manager reasonably objects. The Company has properly completed the Prospectus, in a form reasonably approved by the Manager, and filed such Prospectus, as amended at the Execution Time, with the Commission pursuant to the applicable paragraph of Rule 424(b) by the Execution Time and will cause any supplement to the Prospectus to be properly completed, in a form approved by the Manager, and will file such supplement with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed thereby and will provide evidence reasonably satisfactory to the Manager of such timely filing. The Company will promptly advise the Manager (i) when the Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b), (ii) when, during any period when the delivery of a prospectus (whether physically or through compliance with Rule 172, 173 or any similar rule) is required under the Act in connection with the offering or sale of the Shares, any amendment to the Registration Statement shall have been filed or become effective (other than any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act), (iii) of any request by the Commission or its staff for any amendment of the Registration Statement, or for any supplement to the Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any notice objecting to its use or the institution or threatening of any proceeding for that purpose and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Company will use its best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its best efforts to have such amendment or new registration statement declared effective as soon as practicable.
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(b) Subsequent Events. If, at any time on or after an Applicable Time but prior to the related Settlement Date, any event occurs as a result of which the Registration Statement or Prospectus would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made or the circumstances then prevailing not misleading, the Company will (i) notify promptly the Manager so that any use of the Registration Statement or Prospectus may cease until such are amended or supplemented; (ii) amend or supplement the Registration Statement or Prospectus to correct such statement or omission; and (iii) supply any such amendment or supplement to the Manager in such quantities as the Manager may reasonably request.
(c) Notification of Subsequent Filings. During any period when the delivery of a prospectus relating to the Shares is required (including in circumstances where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under the Act, any event occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or if it shall be necessary to amend the Registration Statement, file a new registration statement or supplement the Prospectus to comply with the Act or the Exchange Act or the respective rules thereunder, including in connection with use or delivery of the Prospectus, the Company promptly will (i) notify the Manager of any such event, (ii) subject to Section 4(a), prepare and file with the Commission an amendment or supplement or new registration statement which will correct such statement or omission or effect such compliance, (iii) use its best efforts to have any amendment to the Registration Statement or new registration statement declared effective as soon as practicable in order to avoid any disruption in use of the Prospectus and (iv) supply any supplemented Prospectus to the Manager in such quantities as the Manager may reasonably request.
(d) Earnings Statements. As soon as practicable, the Company will make generally available to its security holders and to the Manager an earnings statement or statements of the Company and its Subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158. For the avoidance of doubt, the Company’s compliance with the reporting requirements of the Exchange Act shall be deemed to satisfy the requirements of this Section 4(d).
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(e) Delivery of Registration Statement. Upon the request of the Manager, the Company will furnish to the Manager and counsel for the Manager, without charge, signed copies of the Registration Statement (including exhibits thereto) and, so long as delivery of a prospectus by the Manager or dealer may be required by the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule), as many copies of the Prospectus and each Issuer Free Writing Prospectus and any supplement thereto as the Manager may reasonably request. The Company will pay the expenses of printing or other production of all documents relating to the offering.
(f) Qualification of Shares. The Company will arrange, if necessary, for the qualification of the Shares for sale under the laws of such jurisdictions as the Manager may designate and will maintain such qualifications in effect so long as required for the distribution of the Shares; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the offering or sale of the Shares, in any jurisdiction where it is not now so subject.
(g) Free Writing Prospectus. The Company agrees that, unless it has or shall have obtained the prior written consent of the Manager, and the Manager agrees with the Company that, unless it has or shall have obtained, as the case may be, the prior written consent of the Company, it has not made and will not make any offer relating to the Shares that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405) required to be filed by the Company with the Commission or retained by the Company under Rule 433. Any such free writing prospectus consented to by the Manager or the Company is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (ii) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.
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(h) Subsequent Equity Issuances. The Company shall not deliver any Sales Notice hereunder (and any Sales Notice previously delivered shall not apply during such two (2) Business Days) for at least two (2) Business Days prior to any date on which the Company or any Subsidiary offers, sells, issues, contracts to sell, contracts to issue or otherwise disposes of, directly or indirectly, any other Common Shares or any Common Share Equivalents (other than the Shares), subject to Manager’s right to waive this obligation, provided that, without compliance with the foregoing obligation, the Company may issue and sell Common Shares pursuant to any employee equity plan, share ownership plan or dividend reinvestment plan of the Company in effect at the Execution Time and the Company may issue Common Shares issuable upon the conversion or exercise of Common Share Equivalents outstanding at the Execution Time.
(i) Market Manipulation. Until the termination of this Agreement, the Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation in violation of the Act, Exchange Act or the rules and regulations thereunder of the price of any security of the Company to facilitate the sale or resale of the Shares or otherwise violate any provision of Regulation M under the Exchange Act.
(j) Notification of Incorrect Certificate. The Company will, at any time during the term of this Agreement, as supplemented from time to time, advise the Manager immediately after it shall have received notice or obtained knowledge thereof, of any information or fact that would alter or affect any opinion, certificate, letter and other document provided to the Manager pursuant to Section 6 herein.
(k) Certification of Accuracy of Disclosure. Upon commencement of the offering of the Shares under this Agreement (and upon the recommencement of the offering of the Shares under this Agreement following the termination of a suspension of sales hereunder lasting more than thirty (30) Trading Days), and each time that (i) the Registration Statement or Prospectus shall be amended or supplemented, other than by means of Incorporated Documents, (ii) the Company files its Annual Report on Form 20-F under the Exchange Act, (iii) the Company files a Report of Foreign Private Issuer on Form 6-K under the Exchange Act containing financial information for the six months ended and as of September 30 (or the six months ended on and as of the last day of the second fiscal quarter, as applicable), (iv) the Company voluntarily furnishes or files a Report of Foreign Private Issuer on Form 6-K under the Exchange Act containing financial information for the three months ended and as of June 30 or the nine months ended and as of December 31 (or for the three or nine months ended on and as of the last day of the first and third fiscal quarters, respectively, as applicable), (v) the Company files or furnishes a Report of Foreign Private Issuer on Form 6-K containing amended financial information, if the Manager reasonably determines that the information in such Form 6-K is material, or (vi) the Shares are delivered to the Manager as principal at the Time of Delivery pursuant to a Terms Agreement (such commencement or recommencement date and each such date referred to in (i), (ii), (iii), (iv), (v) and (vi) above, a “Representation Date”), unless waived by the Manager, the Company shall furnish or cause to be furnished to the Manager forthwith a certificate dated and delivered on the Representation Date, in form reasonably satisfactory to the Manager to the effect that the statements contained in the certificate referred to in Section 6 of this Agreement which were last furnished to the Manager are true and correct at the Representation Date, as though made at and as of such date (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such date) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in said Section 6, modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the date of delivery of such certificate. Notwithstanding the foregoing, the requirement to furnish or cause to be furnished a certificate under this Section 4(k) shall be waived for any Representation Date occurring at a time at which no instruction to the Manager to sell Shares pursuant to this Agreement has been delivered by the Company or is pending. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following any Representation Date when the Company relied on such waiver and did not provide the Manager a certificate pursuant to this Section 4(k), then before the Company instructs the Manager to sell Shares pursuant to this Agreement, the Company shall provide the Manager such certificate to the extent required under this Section 4(k) and not previously delivered.
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(l) Bring Down Opinions; Negative Assurance. At each Representation Date, unless waived by the Manager, the Company shall furnish or cause to be furnished forthwith to the Manager and to counsel to the Manager (i) a written opinion of United States counsel to the Company (“Company U.S. Counsel”) and (ii) a written opinion of Canadian counsel to the Company (“Company Canadian Counsel”), each addressed to the Manager and dated and delivered on such Representation Date, in form and substance reasonably satisfactory to the Manager, including a negative assurance representation from Company U.S. Counsel. Notwithstanding the foregoing, the requirement to furnish or cause to be furnished an opinion or negative assurance representation under this Section 4(l) shall be waived for any Representation Date occurring at a time at which no instruction to the Manager to sell Shares pursuant to this Agreement has been delivered by the Company or is pending. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following any Representation Date when the Company relied on such waiver and did not provide the Manager an opinion or negative assurance representation pursuant to this Section 4(l), then before the Company instructs the Manager to sell Shares pursuant to this Agreement, the Company shall provide the Manager such opinion or negative assurance representation to the extent required under this Section 4(l) and not previously delivered.
(m) Auditor Bring Down “Comfort” Letter. At each Representation Date, unless waived by the Manager, the Company shall cause (1) the Company’s auditors (the “Accountants”), or other independent accountants satisfactory to the Manager forthwith to furnish the Manager a letter, and (2) the Chief Financial Officer of the Company forthwith to furnish the Manager a certificate, in each case dated on such Representation Date, in form satisfactory to the Manager, of the same tenor as the letters and certificate referred to in Section 6 of this Agreement but modified to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letters and certificate. Notwithstanding the foregoing, the requirement to furnish or cause to be furnished one or more letters or certificates under this Section 4(m) shall be waived for any Representation Date occurring at a time at which no instruction to the Manager to sell Shares pursuant to this Agreement has been delivered by the Company or is pending. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following any Representation Date when the Company relied on such waiver and did not provide the Manager one or more letters or certificates pursuant to this Section 4(m), then before the Company instructs the Manager to sell Shares pursuant to this Agreement, the Company shall provide the Manager such letter or certificate to the extent required under this Section 4(m) and not previously delivered.
(n) Due Diligence Session. Upon commencement of the offering of the Shares under this Agreement (and upon the recommencement of the offering of the Shares under this Agreement following the termination of a suspension of sales hereunder lasting more than thirty (30) Trading Days), and at each Representation Date, the Company will conduct a due diligence session, in form and substance, reasonably satisfactory to the Manager, which shall include representatives of management and Accountants. The Company shall cooperate timely with any reasonable due diligence request from or review conducted by the Manager or its agents from time to time in connection with the transactions contemplated by this Agreement, including, without limitation, providing information and available documents and access to appropriate corporate officers and the Company’s agents during regular business hours, and timely furnishing or causing to be furnished such certificates, letters and opinions from the Company, its officers and its agents, as the Manager may reasonably request. The Company shall reimburse the Manager for Manager’s counsel’s fees in each such due diligence update session, up to a maximum of $5,000 and $2,500 per update for which the Company is obligated to deliver a certification pursuant to clause (ii) of Section 4(k) and clause (iii) of Section 4(k), respectively, for which no waiver is applicable, plus any reasonable incidental expense incurred by the Manager in connection therewith.
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(o) Acknowledgment of Trading. The Company consents to the Manager trading in the Common Shares for the Manager’s own account and for the account of its clients at the same time as sales of the Shares occur pursuant to this Agreement or pursuant to a Terms Agreement.
(p) Disclosure of Shares Sold. The Company will disclose in its Annual Reports on Form 20-F the number of Shares sold through the Manager under this Agreement, the Net Proceeds to the Company and the compensation paid by the Company with respect to sales of Shares pursuant to this Agreement during the relevant period covered by the report; and, if required by any subsequent change in Commission policy or request, more frequently by means of a Report of Foreign Private Issuer on Form 6-K or a further Prospectus Supplement.
(q) Rescission Right. If to the knowledge of the Company, the conditions set forth in Section 6 shall not have been satisfied as of the applicable Settlement Date, the Company will offer to any Person who has agreed to purchase Shares from the Company as the result of an offer to purchase solicited by the Manager the right to refuse to purchase and pay for such Shares.
(r) Bring Down of Representations and Warranties. Each acceptance by the Company of an offer to purchase the Shares hereunder, and each execution and delivery by the Company of a Terms Agreement, shall be deemed to be an affirmation to the Manager that the representations and warranties of the Company contained in or made pursuant to this Agreement are true and correct as of the date of such acceptance or of such Terms Agreement as though made at and as of such date, and an undertaking that such representations and warranties will be true and correct as of the Settlement Date for the Shares relating to such acceptance or as of the Time of Delivery relating to such sale, as the case may be, as though made at and as of such date (except that such representations and warranties shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented relating to such Shares).
(s) Reservation of Shares. The Company shall ensure that there are at all times sufficient Common Shares to provide for the issuance, free of any preemptive rights, out of its authorized but unissued Common Shares or Common Shares held in treasury, of the maximum aggregate number of Shares authorized for issuance by the Board pursuant to the terms of this Agreement. The Company will use its commercially reasonable efforts to cause the Shares to be listed for trading on the Trading Market and to maintain such listing.
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(t) Obligation Under Exchange Act. During any period when the delivery of a prospectus relating to the Shares is required (including in circumstances where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under the Act, the Company will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and the regulations thereunder.
(u) DTC Facility. The Company shall cooperate with the Manager and use its reasonable efforts to permit the Shares to be eligible for clearance and settlement through the facilities of DTC.
(v) Use of Proceeds. The Company will apply the Net Proceeds from the sale of the Shares in the manner set forth in the Prospectus.
(w) Filing of Prospectus Supplement. If any sales are made pursuant to this Agreement which are not made in “at the market” offerings as defined in Rule 415, including, without limitation, any Placement pursuant to a Terms Agreement, the Company shall file a Prospectus Supplement describing the terms of such transaction, the amount of Shares sold, the price thereof, the Manager’s compensation, and such other information as may be required pursuant to Rule 424 and Rule 430B, as applicable, within the time required by Rule 424.
(x) Additional Registration Statement. To the extent that the Registration Statement is not available for the sales of the Shares as contemplated by this Agreement, the Company shall file a new registration statement with respect to any additional Common Shares necessary to complete such sales of the Shares and shall cause such registration statement to become effective as promptly as practicable. After the effectiveness of any such registration statement, all references to “Registration Statement” included in this Agreement shall be deemed to include such new registration statement, including all documents incorporated by reference therein pursuant to Item 6 of Form F-3, and all references to “Base Prospectus” included in this Agreement shall be deemed to include the final form of prospectus, including all documents incorporated therein by reference, included in any such registration statement at the time such registration statement became effective.
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5. Payment of Expenses. The Company agrees to pay the costs and expenses incident to the performance of its obligations under this Agreement, whether or not the transactions contemplated hereby are consummated, including without limitation: (i) the preparation, printing or reproduction and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), the Prospectus and each Issuer Free Writing Prospectus, and each amendment or supplement to any of them; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, the Prospectus, and each Issuer Free Writing Prospectus, and all amendments or supplements to any of them, as may, in each case, be reasonably requested for use in connection with the offering and sale of the Shares; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Shares, including any stamp or transfer taxes in connection with the original issuance and sale of the Shares; (iv) the printing (or reproduction) and delivery of this Agreement, any blue sky memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Shares; (v) the registration of the Shares under the Exchange Act, if applicable, and the listing of the Shares on the Trading Market; (vi) any registration or qualification of the Shares for offer and sale under the securities or blue sky laws of the several states (including filing fees and the reasonable fees and expenses of counsel for the Manager relating to such registration and qualification); (vii) the transportation and other expenses incurred by or on behalf of Company representatives in connection with presentations to prospective purchasers of the Shares; (viii) the fees and expenses of the Company’s accountants and the fees and expenses of counsel (including local and special counsel) for the Company; (ix) the filing fee under FINRA Rule 5110; (x) the reasonable fees and expenses of the Manager’s counsel, not to exceed $50,000 (excluding any periodic due diligence fees provided for under Section 4(n)), which shall be paid upon the Execution Time; and (xi) all other costs and expenses incident to the performance by the Company of its obligations hereunder.
6. Conditions to the Obligations of the Manager. The obligations of the Manager under this Agreement and any Terms Agreement shall be subject to (i) the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time, each Representation Date, and as of each Applicable Time, Settlement Date and Time of Delivery, (ii) the performance by the Company of its obligations hereunder and (iii) the following additional conditions:
(a) Filing of Prospectus Supplement. The Prospectus, and any supplement thereto, required by Rule 424 to be filed with the Commission have been filed in the manner and within the time period required by Rule 424(b) with respect to any sale of Shares; each Prospectus Supplement shall have been filed in the manner required by Rule 424(b) within the time period required hereunder and under the Act; any other material required to be filed by the Company pursuant to Rule 433(d) under the Act, shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433; and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been issued and no proceedings for that purpose shall have been instituted or threatened.
(b) Delivery of Opinion. The Company shall have caused the Company U.S. Counsel and the Company Canadian Counsel to furnish to the Manager their opinions and negative assurance statements, as applicable, each dated as of such date and addressed to the Manager in form and substance reasonably acceptable to the Manager.
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(c) Delivery of Officer’s Certificate. The Company shall have furnished or caused to be furnished to the Manager a certificate of the Company signed by the Chief Executive Officer or the President and the principal financial or accounting officer of the Company, dated as of such date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Prospectus, any Prospectus Supplement and any documents incorporated by reference therein and any supplements or amendments thereto and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true and correct on and as of such date with the same effect as if made on such date and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to such date;
(ii) no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued and no proceedings for that purpose have been instituted or, to the Company’s knowledge, threatened; and
(iii) since the date of the most recent financial statements included in the Registration Statement, the Prospectus and the Incorporated Documents, there has been no Material Adverse Effect on the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Registration Statement and the Prospectus.
(d) Delivery of Accountants’ “Comfort” Letter. The Company shall have requested and caused the Accountants to have furnished to the Manager letters (which may refer to letters previously delivered to the Manager), dated as of such date, in form and substance satisfactory to the Manager, confirming that they are independent accountants within the meaning of the Act and the Exchange Act and the respective applicable rules and regulations adopted by the Commission thereunder and that they have performed a review of any unaudited interim financial information of the Company included or incorporated by reference in the Registration Statement and the Prospectus and provide customary “comfort” as to such review in form and substance satisfactory to the Manager.
(e) No Material Adverse Event. Since the respective dates as of which information is disclosed in the Registration Statement, the Prospectus and the Incorporated Documents, except as otherwise stated therein, there shall not have been (i) any change or decrease in previously reported results specified in the letter or letters referred to in paragraph (d) of this Section 6 or (ii) any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Registration Statement, the Prospectus and the Incorporated Documents (exclusive of any amendment or supplement thereto) the effect of which, in any case referred to in clause (i) or (ii) above, is, in the sole judgment of the Manager, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Shares as contemplated by the Registration Statement (exclusive of any amendment thereof), the Incorporated Documents and the Prospectus (exclusive of any amendment or supplement thereto).
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(f) Payment of All Fees. The Company shall have paid the required Commission filing fees relating to the Shares within the time period required by Rule 456(b)(1)(i) of the Act without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of the Act and, if applicable, shall have updated the “Calculation of Registration Fee” table in accordance with Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration Statement or on the cover page of a prospectus filed pursuant to Rule 424(b).
(g) No FINRA Objections. FINRA shall not have raised any objection with respect to the fairness and reasonableness of the terms and arrangements under this Agreement.
(h) Shares Listed on Trading Market. The Shares shall have been listed and admitted and authorized for trading on the Trading Market, and satisfactory evidence of such actions shall have been provided to the Manager.
(i) Other Assurances. Prior to each Settlement Date and Time of Delivery, as applicable, the Company shall have furnished to the Manager such further information, certificates and documents as the Manager may reasonably request.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Manager and counsel for the Manager, this Agreement and all obligations of the Manager hereunder may be canceled at, or at any time prior to, any Settlement Date or Time of Delivery, as applicable, by the Manager. Notice of such cancellation shall be given to the Company in writing or by telephone and confirmed in writing by email.
The documents required to be delivered by this Section 6 shall be delivered to the office of Haynes and Boone, LLP, counsel for the Manager, at 30 Rockefeller Plaza, 26th Floor, New York, New York 10112, email: rick.werner@haynesboone.com, on each such date as provided in this Agreement.
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7. Indemnification and Contribution.
(a) Indemnification by Company. The Company agrees to indemnify and hold harmless the Manager, the directors, officers, employees and agents of the Manager and each person who controls the Manager within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in the Base Prospectus, any Prospectus Supplement, the Prospectus, any Issuer Free Writing Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or arise out of or are based upon any Proceeding, commenced or threatened (whether or not the Manager is a target of or party to such Proceeding) or result from or relate to any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement, and agrees to reimburse each such indemnified party for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by the Manager specifically for inclusion therein. This indemnity agreement will be in addition to any liability that the Company may otherwise have.
(b) Indemnification by Manager. The Manager agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement, and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to the Manager, but only with reference to written information relating to the Manager furnished to the Company by the Manager specifically for inclusion in the documents referred to in the foregoing indemnity; provided, however, that in no case shall the Manager be responsible for any amount in excess of the Broker Fee applicable to the Shares and paid hereunder. This indemnity agreement will be in addition to any liability which the Manager may otherwise have.
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(c) Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding.
(d) Contribution. In the event that the indemnity provided in paragraph (a), (b) or (c) of this Section 7 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Manager agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same) (collectively “Losses”) to which the Company and the Manager may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by the Manager on the other from the offering of the Shares; provided, however, that in no case shall the Manager be responsible for any amount in excess of the Broker Fee applicable to the Shares and paid hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Manager severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and of the Manager on the other in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by it, and benefits received by the Manager shall be deemed to be equal to the Broker Fee applicable to the Shares and paid hereunder as determined by this Agreement. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company on the one hand or the Manager on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Manager agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person who controls the Manager within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of the Manager shall have the same rights to contribution as the Manager, and each person who controls the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).
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8. Termination.
(a) The Company shall have the right, by giving written notice as hereinafter specified, to terminate the provisions of this Agreement relating to the solicitation of offers to purchase the Shares in its sole discretion at any time upon five (5) Business Days’ prior written notice. Any such termination shall be without liability of any party to any other party except that (i) with respect to any pending sale, through the Manager for the Company, the obligations of the Company, including in respect of compensation of the Manager, shall remain in full force and effect notwithstanding the termination and (ii) the provisions of Sections 5, 6, 7, 8, 9, 10, 12, the second sentence of 13, 14 and 15 of this Agreement shall remain in full force and effect notwithstanding such termination.
(b) The Manager shall have the right, by giving written notice as hereinafter specified, to terminate the provisions of this Agreement relating to the solicitation of offers to purchase the Shares in its sole discretion at any time. Any such termination shall be without liability of any party to any other party except that the provisions of Sections 5, 6, 7, 8, 9, 10, 12, the second sentence of 13, 14 and 15 of this Agreement shall remain in full force and effect notwithstanding such termination.
(c) This Agreement shall remain in full force and effect until such date that this Agreement is terminated pursuant to Sections 8(a) or (b) above or otherwise by mutual agreement of the parties, provided that any such termination by mutual agreement shall in all cases be deemed to provide that Sections 5, 6, 7, 8, 9, 10, 12, the second sentence of 13, 14 and 15 of this Agreement shall remain in full force and effect.
(d) Any termination of this Agreement shall be effective on the date specified in such notice of termination, provided that such termination shall not be effective until the close of business on the date of receipt of such notice by the Manager or the Company, as the case may be. If such termination shall occur prior to the Settlement Date or Time of Delivery for any sale of the Shares, such sale of the Shares shall settle in accordance with the provisions of Section 2(b) of this Agreement.
(e) In the case of any purchase of Shares by the Manager pursuant to a Terms Agreement, the obligations of the Manager pursuant to such Terms Agreement shall be subject to termination, in the absolute discretion of the Manager, by prompt oral notice given to the Company prior to the Time of Delivery relating to such Shares, if any, and confirmed promptly by electronic mail, if since the time of execution of the Terms Agreement and prior to such delivery and payment, (i) trading in the Common Shares shall have been suspended by the Commission or the Trading Market or trading in securities generally on the Trading Market shall have been suspended or limited or minimum prices shall have been established on such exchange, (ii) a banking moratorium shall have been declared either by Federal or New York State authorities or (iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Manager, impractical or inadvisable to proceed with the offering or delivery of the Shares as contemplated by the Prospectus (exclusive of any amendment or supplement thereto).
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9. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Manager set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by the Manager or the Company or any of the officers, directors, employees, agents or controlling persons referred to in Section 7, and will survive delivery of and payment for the Shares.
10. Notices. All communications hereunder will be in writing and effective only on receipt, and will be mailed, delivered, or e-mailed to the addresses of the Company and the Manager, respectively, set forth on the signature page hereto.
11. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Section 7, and no other person will have any right or obligation hereunder.
12. No Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and sale of the Shares pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the Manager and any affiliate through which it may be acting, on the other, (b) the Manager is acting solely as sales agent and/or principal in connection with the purchase and sale of the Company’s securities and not as a fiduciary of the Company and (c) the Company’s engagement of the Manager in connection with the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether the Manager has advised or is currently advising the Company on related or other matters). The Company agrees that it will not claim that the Manager has rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.
13. Integration. This Agreement and any Terms Agreement supersede all prior agreements and understandings (whether written or oral) between the Company and the Manager with respect to the subject matter hereof. Notwithstanding anything herein to the contrary, the letter agreement, dated July 25, 2024, as amended on December 9, 2024, December 22, 2024, and February 28, 2025, by and between the Company and the Manager shall continue to be effective and the terms therein shall continue to survive and be enforceable by the Manager in accordance with its terms, provided that, in the event of a conflict between the terms of such letter agreement and this Agreement (other than with respect to Section 5(x) hereof), the terms of such letter agreement shall prevail.
14. Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Manager. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
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15. Applicable Law. This Agreement and any Terms Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York. Each of the Company and the Manager: (i) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted exclusively in New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, (ii) waives any objection which it may have or hereafter to the venue of any such suit, action or proceeding, and (iii) irrevocably consents to the exclusive jurisdiction of the New York Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding. Each of the Company and the Manager further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York and agrees that service of process upon the Company mailed by certified mail to the Company’s address shall be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding, and service of process upon the Manager mailed by certified mail to the Manager’s address shall be deemed in every respect effective service process upon the Manager, in any such suit, action or proceeding. If either party shall commence an action or proceeding to enforce any provision of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
16. Waiver of Jury Trial. The Company hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement, any Terms Agreement or the transactions contemplated hereby or thereby.
17. Counterparts. This Agreement and any Terms Agreement may be executed in one or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon one and the same agreement. Counterparts may be delivered via electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
18. Headings. The section headings used in this Agreement and any Terms Agreement are for convenience only and shall not affect the construction hereof.
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If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the Manager.
Very truly yours,
Psyence Biomedical Ltd.
| By: | /s/ Neil Maresky | |
| Name: | Dr. Neil Maresky | |
| Title: | Chief Executive Officer |
Address for Notice:
121 Richmond Street West
Penthouse Suite 1300
Toronto, Ontario M5H 2K1
Attn: Taryn Vos
Email: taryn@psyencebiomed.com
With a copy to (which shall not constitute notice):
Edelman Legal Advisory PLLC
400 Rella Boulevard, Suite 165
Suffern, New York 10901
Attn: Ari Edelman
Email: ari@edelmanlegal.com
The foregoing Agreement is hereby confirmed and accepted as of the date first written above.
H.C. WAINWRIGHT & CO., LLC
| By: | /s/ Edward Silvera | |
| Name: | Edward Silvera | |
| Title: | Chief Operating Officer |
Address for Notice:
430 Park Avenue, 3rd Floor
New York, New York 10022
Attention: Chief Executive Officer
Email: notices@hcwco.com
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Form of Terms Agreement
ANNEX I
Psyence Biomedical Ltd.
TERMS AGREEMENT
Dear Sirs:
Psyence Biomedical Ltd. (the “Company”) proposes, subject to the terms and conditions stated herein and in the At The Market Offering Agreement, dated March 4, 2025 (the “At The Market Offering Agreement”), between the Company and H.C. Wainwright & Co., LLC (“Manager”), to issue and sell to Manager the securities specified in the Schedule I hereto (the “Purchased Shares”).
Each of the provisions of the At The Market Offering Agreement not specifically related to the solicitation by the Manager, as agent of the Company, of offers to purchase securities is incorporated herein by reference in its entirety, and shall be deemed to be part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Terms Agreement and the Time of Delivery, except that each representation and warranty in Section 3 of the At The Market Offering Agreement which makes reference to the Prospectus (as therein defined) shall be deemed to be a representation and warranty as of the date of the At The Market Offering Agreement in relation to the Prospectus, and also a representation and warranty as of the date of this Terms Agreement and the Time of Delivery in relation to the Prospectus as amended and supplemented to relate to the Purchased Shares.
An amendment to the Registration Statement (as defined in the At The Market Offering Agreement), or a supplement to the Prospectus, as the case may be, relating to the Purchased Shares, in the form heretofore delivered to the Manager is now proposed to be filed with the Securities and Exchange Commission.
Subject to the terms and conditions set forth herein and in the At The Market Offering Agreement which are incorporated herein by reference, the Company agrees to issue and sell to the Manager and the latter agrees to purchase from the Company the number of shares of the Purchased Shares at the time and place and at the purchase price set forth in the Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and return to us a counterpart hereof, whereupon this Terms Agreement, including those provisions of the At The Market Offering Agreement incorporated herein by reference, shall constitute a binding agreement between the Manager and the Company.
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Psyence Biomedical Ltd.
| By: | ||
| Name: | ||
| Title: |
ACCEPTED as of the date first written above.
H.C. WAINWRIGHT & CO., LLC
| By: | ||
| Name: | ||
| Title: |
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Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the inclusion by reference in the Registration Statement on Form F-3 (the “Form F-3”), of our auditor’s report dated July 25, 2024 (except for the reverse share split described in Note 1, 4, 5, 9, 10, 12 and the subsequent events described in Note 19, as to which the date is January 23, 2025) relating to the consolidated financial statements of Psyence Biomedical Ltd. as at March 31, 2024 and 2023, and for each of the years in the two-year period ended March 31, 2024, as filed with the United States Securities and Exchange Commission.
We also consent to the reference to our firm under the heading “Experts” in the Form F-3.
Chartered Professional Accountants
Licensed Public Accountants
Burlington, Canada
March 4, 2025
