Clearmind Medicine Inc. Announces Pricing of $2.4 Million Registered Direct and Private Placement
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Insights
Clearmind Medicine Inc.'s recent financing through a registered direct offering and concurrent private placement signals a strategic move to secure funding, crucial for advancing its pipeline of psychedelic-derived therapeutics. The raise of approximately $2.4 million, though modest, is significant for a biotech firm at this stage, indicating investor confidence in its potential. The structure, involving both Common Shares and pre-funded warrants, offers investors immediate and future equity participation opportunities. The exercise price of $1.60 for both the Common Units and PIPE Common Warrants suggests a calculated approach to pricing, aimed at balancing dilution with capital needs.
The immediate exercisability of the Pre-Funded Warrants provides Clearmind with a potential additional capital infusion if investors choose to exercise these warrants. However, the impact on current shareholders must be considered, as the exercise of warrants could lead to dilution of their holdings. The five-year expiration of PIPE Common Warrants offers a long-term perspective for investors, aligning with the typical development timeline of biotech projects that require extensive research and regulatory approvals.
It is also noteworthy that the exclusion of Canadian investors indicates a targeted investment strategy, possibly due to regulatory or strategic reasons. The overall financial maneuvering by Clearmind Medicine Inc. reflects a forward-looking approach to fund its research endeavors while managing investor relations and stock market implications.
The psychedelic-derived therapeutics sector is an emerging niche within the biotech industry, characterized by high innovation and significant regulatory hurdles. Clearmind Medicine Inc.'s focus on this area suggests a high-risk, high-reward strategy that could disrupt traditional mental health treatments if successful. The capital raised will likely support ongoing clinical trials, R&D and potential partnerships, which are critical for a company at this developmental stage.
Investor appetite for such niche biotech ventures often hinges on clinical trial outcomes and regulatory milestones, which can be binary events for the company's valuation. The modest capital raise, in comparison to the industry's larger funding rounds, indicates a conservative approach or reflects the company's current valuation. The market's response to this offering will provide insight into investor sentiment towards both Clearmind Medicine Inc. and the broader psychedelic therapeutics market.
Furthermore, the pricing of the offering at $1.60, in line with market norms, suggests a careful calibration to attract investment without undervaluing the company's potential. Investors will be closely monitoring the utilization of these funds and the subsequent impact on the company's drug development timeline and stock performance.
The legal structure of the offering, consisting of Common Shares and pre-funded warrants, along with PIPE Common Warrants, is a sophisticated financial instrument designed to provide the company with flexibility in capital management. It adheres to NASDAQ's regulatory framework for registered direct offerings and private placements, ensuring compliance and transparency for investors.
The exclusion of Canadians or residents of Canada from the sale of securities may be due to the specific legal and regulatory complexities associated with cross-border securities transactions. Such exclusions are common to simplify the offering process and to adhere to the securities laws of different jurisdictions. The immediate exercisability of the Pre-Funded Warrants and PIPE Common Warrants, along with their respective expiration terms, are structured to provide incentives for early investment while mitigating legal risks associated with longer-term securities.
Stakeholders should be aware of the implications of such transactions, as they could affect the company's governance structure and shareholder rights. The legal framework of this offering sets a precedent for future transactions within the biotech sector, particularly for companies seeking alternative financing routes to traditional venture capital or public offerings.
TEL AVIV, ISRAEL / VANCOUVER, CANADA, Jan. 11, 2024 (GLOBE NEWSWIRE) -- Clearmind Medicine Inc. (NASDAQ: CMND) (the “Company”), a biotech company focused on discovery and development of novel psychedelic-derived therapeutics to solve major under-treated health problems, today announced that it has entered into definitive agreements with institutional investors for the purchase and sale of Common Shares and pre-funded warrants in a registered direct offering. In a concurrent private placement, the Company also agreed to sell to the same investors Common Warrants. Aggregate gross proceeds to the Company from both transactions are expected to be approximately
The transactions consist of the sale of an aggregate of 1,500,000 Common Units (or Pre-Funded Units), each consisting of one Common Share or Pre-Funded Warrant and one (1) PIPE Common Warrant to purchase one (1) Common Share per warrant at an exercise price of
The sale of securities is not available to Canadians or residents of Canada and the transactions are expected to close on or about January 16, 2024, subject to the satisfaction of customary closing conditions. The Company expects to use the net proceeds from the offerings, together with its existing cash, for general corporate purposes and working capital.
Aegis Capital Corp. is acting as Exclusive Placement Agent for the offerings. Greenberg Traurig, P.A. is serving as U.S. counsel to the Company, and Daniel Bloch, Barrister & Solicitor is serving as Canadian counsel to the Company for the offerings. Kaufman & Canoles, P.C. is serving as counsel to the Placement Agent for the offerings.
The registered direct offering is being made pursuant to an effective shelf registration statement on (No. 333-275991) previously filed with the U.S. Securities and Exchange Commission (SEC) and declared effective by the SEC on December 26, 2023. A final prospectus supplement and accompanying prospectus describing the terms of the proposed offering will be filed with the SEC and will be available on the SEC’s website located at www.sec.gov. Electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, by contacting Aegis Capital Corp., Attention: Syndicate Department, 1345 Avenue of the Americas, 27th floor, New York, NY 10105, by email at syndicate@aegiscap.com, or by telephone at +1 (212) 813-1010.
The offer and sale of the securities in the private placement are being made in a transaction not involving a public offering and have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws. Accordingly, the securities may not be reoffered or resold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. The securities were offered only to accredited investors. Pursuant to a registration rights agreement with the investors, the Company has agreed to file one or more registration statements with the SEC covering the resale of the Common Shares and the Shares issuable upon exercise of the pre-funded warrants and warrants.
Before investing in this offering, interested parties should read in their entirety the prospectus supplement and the accompanying prospectus and the other documents that the Company has filed with the SEC that are incorporated by reference in such prospectus supplement and the accompanying prospectus, which provide more information about the Company and such offering.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Clearmind Medicine Inc.
Clearmind is a psychedelic pharmaceutical biotech company focused on the discovery and development of novel psychedelic-derived therapeutics to solve widespread and underserved health problems, including alcohol use disorder. Its primary objective is to research and develop psychedelic-based compounds and attempt to commercialize them as regulated medicines, foods or supplements.
The Company’s intellectual portfolio currently consists of fourteen patent families. The Company intends to seek additional patents for its compounds whenever warranted and will remain opportunistic regarding the acquisition of additional intellectual property to build its portfolio.
Shares of Clearmind are listed for trading on Nasdaq and the Canadian Securities Exchange under the symbol “CMND” and the Frankfurt Stock Exchange under the symbol “CWY.”
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act and other securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements. For example, the Company is using forward-looking statements when it discusses the expected timing and the planned use of the net proceeds from the offerings. Forward-looking statements are not historical facts, and are based upon management’s current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements. For a more detailed description of the risks and uncertainties affecting the Company, reference is made to the Company’s reports filed from time to time with the Securities and Exchange Commission (“SEC”), including, but not limited to, the risks detailed in the Company’s annual report on Form 20-F filed with the SEC on February 6, 2023 and the Company's preliminary prospectus (Registration No. 333-273293), filed with the SEC on September 13, 2023. Forward-looking statements speak only as of the date the statements are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release. Clearmind is not responsible for the contents of third-party websites.
For further information visit: https://www.clearmindmedicine.com or contact:
Investor Relations
invest@clearmindmedicine.com
Telephone: (604) 260-1566
US: CMND@crescendo-ir.com
General Inquiries
Info@Clearmindmedicine.com
www.Clearmindmedicine.com
FAQ
What is the company name and ticker symbol of the biotech company focused on discovery and development of novel psychedelic-derived therapeutics?
What did the company announce regarding the purchase and sale of Common Shares and pre-funded warrants?
What are the expected aggregate gross proceeds to the Company from the transactions?
What is the public offering price per Common Unit?
When are the transactions expected to close?
