MYCOF - Mydecine Innovations Group Inc. Announces Restructuring Transactions and Annual General and Special Meeting
(TheNewswire)
VANCOUVER, BC – TheNewswire - (May 1, 2024) Mydecine Innovations Group Inc . (CSE: MYCO) (FSE: 0NFA), (OTC: MYCOF) (AQSE: MYIG) (the“ Company ” or “ Mydecine ”) announced that it has enteredinto certain restructuring transactions in order to improve thefinancial health of the Company.
Josh Bartch, CEO of the Company stated:" We are fully committedto the success of Mydecine and these restructuring efforts areintended to highlight that. Through these various restructuringefforts, the Company intends to clean up its balance sheet in aneffort to reduce the outstanding liabilities. The Company has gonethrough an evolution that has resulted in a lean, streamlined, drugdevelopment company with a significant IP portfolio and drugdevelopment programs. I look forward to continuing to update themarket on recent developments and progress the Company hasmade ."
Private Placement
The Company today announced a non-brokered privateplacement of common shares in the capital of the Company (each, a“ Share ”) for aggregate gross proceeds of $1,000,000.00 (the“ PrivatePlacement ”) at a price of $0.018 per Share.The sole subscriber to the Private Placement will be Josh Bartch, aninsider of the Company (the “ Insider ”).
The Company is a public company and is subject toMultilateral Instrument 61-101 (" MI 61-101 ")which governs, among other things, transactions between listed issuersand related parties of such issuers. In accordance with MI 61-101, theissuance of Shares by the Company to the Insider constitutes a"related party transaction". In accordance with MI 61-101,absent an exemption, MI 61-101 would require the Company to receive aformal valuation of the subject matter and "majority of theminority" shareholder approval to proceed with the issuance ofsuch Shares to the Insider. The Company intends to rely on theexemptions set forth in Section 5.5(c) ( Distribution for Cash ) of MI 61-101 (as it relates to formal valuations) and theexemption set forth in 5.7(1)(b) ( Fair Market Value Not More Than$2,500,000 ) of MI 61-101 (as it relates toshareholder approval).
In accordance with the Canadian Securities Exchange(the “ CSE ”) Policy 6 – Distributions & Corporate Finance , theCompany may complete a private placement at a price lower than $0.05provided that: the price must not be lower than the volumeweighted-average-price for the previous 20 trading days, as determinedby the CSE; proceeds are to be used for working capital or bona fidedebt settlement; and the price must be reserved and approved by theCSE in advance of closing. On April 10, 2023, the Company filed aprice reservation, on a confidential basis, with the CSE, which pricehas been reserved.
CSE Policy 4 requires that, if related parties areinvolved in a proposed issuance of securities, security holders mustapprove a proposed securities offering if the price is lower than themarket price less the maximum permitted discount, regardless of thenumber of shares to be issued, and any related party of the Companythat has a material interest in the transaction may not vote on anyresolution to approve the proposed Private Placement. Accordingly, anyshares currently held by the Insider will not be considered in respectof the resolution of shareholders to approve the proposed PrivatePlacement.
All securities issuable under the Private Placementwill be subject to a statutory hold period lasting four months and oneday following the closing of the Private Placement. No finders’ feesare payable under the proposed Private Placement. Proceeds are to beused for working capital. The Private Placement will be subject toshareholder approval at the Meeting.
Debt Settlement
The Company also announced that it has entered intodebt settlement agreements (the “ Settlement Agreements ”) to settle outstanding debts owed to certain directors,officers and consultants of the Company (the “ Creditors ”) foraccrued management and consulting fees. Pursuant to the SettlementAgreements, the Company has agreed to issue convertible debentures tothe Creditors (the “ Convertible Debentures ”), for an aggregateamount equal to $1,666,013.65 (the “ Debt Settlement ”).The Convertible Debentures will mature three years after issuance (the“ Maturity Date ”) and will carry an interest rate of 6.0% per annum fromthe closing date. The principal amount of the Convertible Debenturesmay be converted into Shares prior to the Maturity Date, at a price of$0.05 per Share.
In accordance with MI 61-101, the issuance ofConvertible Debentures by the Company to the Creditors constitutes a"related party transaction". Absent an exemption, MI 61-101would require the Company to receive a formal valuation of the subjectmatter and "majority of the minority" shareholder approvalto proceed with the issuance of such Convertible Debentures to theCreditors. The Company intends to rely on the exemptions set forth inSection 5.5(g) ( FinancialHardship ) of MI 61-101 (as it relates to formalvaluations) and the exemption set out in 5.7(1)(b) ( Fair Market Value Not More Than$2,500,000 ) (as it relates to shareholderapproval).
On April 10, 2023, the Company filed a pricereservation with the CSE on a confidential basis, with respect to theconversion price of the Convertible Debentures, which price has beenreserved by the CSE. The Debt Settlements will be subject toshareholder approval at the Meeting. All securities issuable under theConvertible Debentures will be subject to a statutory hold periodlasting four months and one day following the closing of theConvertible Debentures. No finders’ fees are payable under theproposed Convertible Debentures. The board of directors of the Companyhas determined that it is in the best interests of the Company tosettle the outstanding debts by the issuance of the ConvertibleDebentures in order to preserve the Company's cash for workingcapital.
Debenture Amendment
The Company also announced that it intends to amend itsconvertible secured subordinated debenture dated December 9, 2021, inthe principal amount of $5,500,000 (the “ 2021 Convertible Debenture ”), as amended, suchthat the conversion price of $0.35 will be amended to $0.05 (the“ DebentureAmendment ”). Pursuant to the policies of theCSE, if, following the amendment, for any 10 consecutive trading daysthe closing price of the Shares exceeds the amended exercise price bythe applicable private placement discount (as outlined in the CSEpolicies), the exercise price will be amended to $0.35. The DebentureAmendments will be subject to shareholder approval at the Meeting.
Debt Purchase and Conversion
The Company further announced that, pursuant toarms-length negotiations, the Insider purchased $550,000 of theincurred interest under the 2021 Convertible Debenture from the holderof the Debenture (the “ Holder ”) and $660,000 of additional bonafide debt owed by the Company to the Holder (the “ Acquired Debt ”).The Company intends on settling the Acquired Debt at a deemed price of$0.05 per Share (the “ Acquired Debt Settlement ”). The AcquiredDebt Settlement will be subject to shareholder approval at theMeeting. All securities issuable under pursuant to the Acquired DebtSettlement will be subject to a statutory hold period lasting fourmonths and one day following the closing of the Acquired DebtSettlement. No finders’ fees are payable under the proposed AcquiredDebt Settlement. The board of directors of the Company has determinedthat it is in the best interests of the Company to settle theoutstanding debts by the issuance of the Shares in order to preservethe Company's cash for working capital.
Equity Line of Credit
The Company further announced of its intention to enterinto an equity line (the “ Equity Line ”), pursuant to the terms of asubscription agreement (the “ Subscription Agreement ”) to be entered intobetween the Company and the Insider. The Subscription Agreement willallow the Company to issue and sell up to $5,000,000 Shares fromtreasury, from time to time, in a series of closings (each, a“ Draw Closing ”) at the Company’s discretion and on the terms andsubject to the conditions set out in the Subscription Agreement. TheShares issued pursuant to the Subscription Agreement will be equal tothe 20-day volume-weighted price of the Shares trading on theCSE.
In accordance with MI 61-101, the Equity Lineconstitutes a "related party transaction". Absent anexemption, MI 61-101 would require the Company to receive a formalvaluation of the subject matter and "majority of theminority" shareholder approval to proceed with the issuance ofsuch Convertible Debentures to the Creditors. The Company intends torely on the exemptions set forth in Section 5.5(g) ( Financial Hardship )of MI 61-101 (as it relates to formal valuations) and the exemptionset out in 5.7(1)(e) ( Financial Hardship ) (as it relates toshareholder approval).
CSE Policy 4 requires that, if related parties areinvolved in a proposed issuance of securities, security holders mustapprove a proposed securities offering if the price is lower than themarket price less the maximum permitted discount, regardless of thenumber of shares to be issued, and any related party of the Companythat has a material interest in the transaction may not vote on anyresolution to approve the proposed Equity Line.Accordingly, any shares currently held by the Insider will not beconsidered in respect of the resolution of shareholders to approve theproposed Equity Line.
The Equity Line will be subject to shareholder approvalat the Meeting. All securities issuable under the Equity Line will besubject to a statutory hold period lasting four months and one dayfollowing each Draw Closing. No finders’ fees or commitment fees arepayable under the proposed Draw Closing.
Annual and Special ShareholderMeeting
The Company has called an annual general and specialshareholder meeting to obtain approval, among other things, of thePrivate Placement, Debt Settlement, Debenture Amendments, AcquiredDebt Settlement and the Equity Line (collectively, the “ Restructuring Transactions”) for July 5, 2024 (the “ Meeting ”), a copyof notice of the Meeting and record date has been filed on April 26, 2024 . Subject toshareholder approval at the Meeting, the Company intends to close theRestructuring Transactions following the Meeting. Further detailsrelating to the Restructuring Transactions will be disclosed in theinformation circular provided to shareholders of the Company andposted on SEDAR+ ahead of the Meeting.
About Mydecine Innovations Group Inc.
Mydecine Innovations Group™ is abiotechnology company developing the next generation of innovativemedications and therapies to address mental health disorders such asnicotine addiction and post-traumatic stress disorder (PTSD). The corestrategy blends advanced technology with an elaborate infrastructurefor drug discovery and development. Mydecine's dedicated multinationalteam constantly develops new paths for breakthrough treatmentsolutions in areas with considerable unmet needs. By collaboratingwith some of the world's leading specialists, the Company aspires toresponsibly speed up the development of breakthrough medications toprovide patients with safer and more effective treatment solutions. Atthe same time, Mydecine's approach focuses on the next generation ofpsychedelic medicine by creating innovative compounds with unmatchedtherapeutic potential through its clinical trial efforts withworld-class scientific and regulatory expertise.
Learn more at: https://www.mydecine.com/ and follow the company on Twitter, LinkedIn, YouTube, and Instagram.
For more information, please contact:
Media Contact
investorrelations@mydecineinc.com
On behalf of the Board of Directors
Joshua Bartch, Chief Executive Officer contact@mydecineinc.com
AQSE Corporate Advisor
Novum Securities Limited Tel:+44 (0)207 399 9400
David Coffman/ George Duxberry
For further information about Mydecine, please visit the Company’s profile on SEDAR at https://sedar.com/ or visit the Company’s website at https://www.mydecine.com/ .
Certain statements in this news release constitute“forward-looking information” within the meaning of applicableCanadian securities legislation. Forward-looking statements andinformation are provided for the purpose of providinginformation about management’s expectations and plans relating to the future. All of the forward-looking information made in this news release is qualified by the cautionary statements below and those made in our other filings with the securities regulators in Canada.Forward-looking information contained in forward-looking statementscan be identified by the use of words such as “are expected,” “is forecast,” “is targeted,”“approximately,” “plans,” “anticipates,” “projects,”“anticipates,” “continue,” “estimate,” “believe” or variations of such words and phrases or statements that certain actions, events or results“may,” “could,” “would,” “might,” or “will” betaken, occur or be achieved. All statements, other thanstatements of historical fact, may be considered to be or include forward-looking information. This news release contains forward-looking information regarding the Restructuring Transactions and expectations relating to theRestructuring Transactions. Readers are cautioned that these forward-looking statements are neither promises norguarantees, and are subject to risks and uncertainties that may cause future results to differ materially from thoseexpected. Although the Company has attempted to identify importantfactors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors thatcause results not to be as anticipated, estimated or intended. Therecan be no assurance that such information will prove to be accurate,as actual results and future events could differ materially from thoseanticipated in such information.
The forward-looking information set forth hereinreflects the Company’s reasonable expectations as at the date ofthis news release and is subject to change after such date. TheCompany disclaims any intention or obligation to update or reviseany forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law. The forward-looking informationcontained in this news release is expressly qualified by thiscautionary statement.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful. The securities being offered have notbeen, nor will they be, registered under the United States SecuritiesAct of 1933, as amended, and may not be offered or sold in the UnitedStates absent registration or an applicable exemption from theregistration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws.
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