Clearmind Medicine Inc. Closes US$2.4 Million Registered Direct and Private Placement
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Insights
The closing of definitive agreements by Clearmind Medicine Inc. for the sale of Common Shares and Pre-Funded Warrants represents a strategic financial move aimed at increasing the company's working capital. With gross proceeds of approximately $2.4 million, the transaction is relatively modest in scale, but it indicates a proactive approach to capital management. The offering price per unit aligns with the typical structure of such deals, where the exercise price of Pre-Funded Warrants is nominal.
Investors should note the immediate exercisability of the Pre-Funded Warrants and the five-year expiration of PIPE Common Warrants, as these terms could potentially dilute the value of existing shares if a large number of warrants are exercised. However, this capital infusion may allow the company to advance its research and development initiatives, which could enhance its long-term growth prospects if successful treatments are developed and commercialized. The exclusive role of Aegis Capital Corp. as the Placement Agent and the involvement of specialized legal counsel suggest a well-orchestrated transaction, adhering to regulatory compliance and due diligence.
Clearmind Medicine Inc.'s focus on psychedelic-derived therapeutics places it within a niche but growing segment of the biotech industry. The funds raised are slated for general corporate purposes and working capital, which for a biotech firm typically includes research and development expenses, clinical trials and regulatory affairs. The specific mention of novel psychedelic-derived therapeutics highlights the company's commitment to innovation within an area that has seen increased interest due to potential breakthrough treatments for mental health disorders.
The fact that the offering was not available to Canadians or residents of Canada could be due to regulatory differences or strategic targeting of investors. The company's decision to utilize a shelf registration statement for the offering suggests a pre-planned capital raising strategy, allowing for a more efficient transaction process. This is a common approach in the biotech sector, where companies often need to raise funds quickly to capitalize on new research findings or to push through the next phase of clinical trials.
The legal aspects of this transaction involve a registered direct offering and a concurrent private placement, which are common methods for companies to raise capital while complying with securities regulations. The registration rights agreement obligates Clearmind Medicine Inc. to file additional registration statements for the resale of the securities, ensuring that investors have the option to liquidate their positions in the future. The distinction between the public and private offerings highlights the regulatory frameworks governing the sale of securities, with the private placement being exempt from registration under the Securities Act of 1933 due to the accredited status of the investors involved.
It is important for stakeholders to understand that such transactions are subject to stringent legal scrutiny to protect investor interests and maintain market integrity. The involvement of specialized legal counsel from multiple jurisdictions underscores the complexity of cross-border securities offerings and the need for expertise in navigating the legal landscape. The press release's disclaimer regarding the non-constitutive nature of an offer to sell or solicit securities is a standard regulatory precaution to prevent the misinterpretation of the communication as an official offering, mitigating potential legal risks.
TEL AVIV, ISRAEL / VANCOUVER, CANADA, Jan. 16, 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 the closing of its previously announced 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 were approximately
The transactions consisted 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 was not available to Canadians or residents of Canada.
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. acted as Exclusive Placement Agent for the offerings. Greenberg Traurig, P.A. served as U.S. counsel to the Company, and Daniel N. Bloch, Barrister & Solicitor served as Canadian counsel to the Company for the offerings. Kaufman & Canoles, P.C served as counsel to the Placement Agent for the offerings.
The registered direct offering was 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.
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 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
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