Psyched Wellness Closes Final US$2.5M Tranche of Its Non-Brokered Private Placement for a Total of US$7.5M with Gotham Green Partners and Provides Corporate Update
Toronto, Ontario--(Newsfile Corp. - May 1, 2024) - Psyched Wellness Ltd. (CSE: PSYC) (OTCQB: PSYCF) (FSE: 5U9) (the "Company" or "Psyched Wellness"), a life sciences company focused on the production and distribution of health and wellness products derived from the Amanita Muscaria mushroom, is pleased to announce that, further to its press releases dated May 30, 2023 (the "May 30 Release") and June 12, 2023 (the "June 12 Release"), September 1, 2023 (the "September 1 Release"), September 5, 2023, January 17, 2024 and April 19, 2024 (the "April 19 Release"), it has closed the final tranche of its previously announced non-brokered private placement (the "Offering") effective April 30, 2024 (the "Tranche 2B Closing Date") for gross proceeds of US$2,500,000 ("Tranche 2B") upon satisfying the Tranche 2B closing conditions and receiving a closing notice. Capitalized terms not otherwise defined herein have the meanings attributed to them in the May 30 Release.
"Through the completion of Tranche 2B alongside Gotham and our newfound partnership with Justin and Douglas, we are embarking on an exciting chapter for our Company," said David Shisel, Chief Operating Officer of the Company.
Pursuant to Tranche 2B, the Company has issued 48,889,284 Units at a price of C$0.07 per Unit for gross proceeds of US$2,500,000, approximately C$3,422,250, based on an exchange rate of US$1.00 = C$1.3689 as at April 25, 2024, as published on the website of the Bank of Canada.
Each Unit consists of one (1) Common Share and one (1) Warrant. Each Warrant entitles the holder thereof to acquire one (1) Additional Share at a price of C$0.10 per Additional Share at any time for a period of sixty (60) months from the date of issuance, exercisable on a cashless basis, subject to acceleration and compliance with the policies of the CSE, as further outlined in the May 30 Release.
All securities issued under Tranche 2B are subject to: (i) a four (4) month and one (1) day hold period from the date of issuance and (ii) applicable legends as required pursuant to the U.S. Securities Act. The Company intends to use the net proceeds from the Offering for working capital and general corporate purposes.
In connection with closing Tranche 2B, pursuant to the Amended and Restated Investor Rights Agreement (as defined in the September 1 Release):
Gotham (as defined in the June 12 Release) is entitled to designate up to one (1) additional individual to become a member of the Board, replacing one existing member of the Board (who shall not be the First Nominee (as defined in the June 12 Release) or Second Nominee (as defined in the September 1 Release)), bringing the total Board representation of Gotham to three (3) members, and maintaining the board size at seven (7), provided that no more than three (3) Board members, at any time, will be employees or partners of the Investors (as defined in the June 12 Release) or their affiliates; and
the Tranche 2B investors entered into lock-up agreements with the Company to refrain from selling any Units acquired in Tranche 2B (and any securities underlying such Units acquired in Tranche 2B) for a period of twelve (12) months following the Tranche 2B Closing Date.
Corporate Update
Further to April 19 Release and pursuant to the terms and conditions of the Transaction Documents (as defined in the April 19 Release), the Company has issued Zerkalo (as defined in the April 19 Release) an aggregate of 35,066,632 Advisory Warrants (as defined in the April 19 Release).
Each Advisory Warrant entitles Zerkalo to acquire one Common Share at a price of C$0.10 per Common Share at any time for a period of sixty months from the date of issuance, subject to certain vesting conditions. Subject to the Transaction Documents not being terminated prior to the applicable vesting date, 23,377,755 Advisory Warrants shall vest in quarterly installments over the span of ten quarters and the remaining 11,688,877 Advisory Warrants shall vest only upon the completion of the Product's (as defined in the April 19 Release) launch.
The Advisory Warrants and the Common Shares underlying their exercise are subject to: (i) a four (4) month and one (1) day hold period from the date of issuance and (ii) applicable legends as required pursuant to the U.S. Securities Act.