Malachite Innovations Retains Investment Banking Firm to Assist in Implementation of Strategic Plan for Cannabinoid Drug Development Business
Malachite Innovations, Inc. (MLCT) announces a focus on its core impact investing strategy in Appalachia. The company has retained First Liberties Securities, Inc. to assist in the implementation of its strategic plan for its cannabinoid drug development business conducted by its wholly-owned subsidiary, Graphium Biosciences, Inc. The company has initiated a corporate restructuring plan to create two parallel pathways for shareholder value creation and optimize the present value of its more than $20 million of net operating losses. Malachite's impact investing strategy has grown from a concept with no revenue, assets, or employees into an early-stage venture with revenues of $15.1 million over the last 12 months, assets of $18.8 million, and more than 70 employees. The company is seeking to raise up to $4.0 million directly into Graphium to fund the advancement of its cannabinoid drug development program and for general working capital purposes.
12/07/2023 - 09:15 AM
Company will focus on core impact investing strategy in Appalachia
CLEVELAND, OHIO, Dec. 07, 2023 (GLOBE NEWSWIRE) -- MALACHITE INNOVATIONS, INC. (OTC Mkts: MLCT) (“Malachite”) announces that it has retained First Liberties Securities, Inc., d/b/a First Liberties Financial (“FLF”), a registered broker-dealer headquartered in Dallas, Texas, to assist Malachite in the implementation of its strategic plan for its cannabinoid drug development business conducted by its wholly-owned subsidiary, Graphium Biosciences, Inc. (“Graphium”), which may include converting Graphium into a separate and distinct privately held company funded with new capital.
Strategic Rationale
In 2021, Malachite initiated a corporate restructuring plan to create two parallel pathways for shareholder value creation and optimize the present value of its more than $20 million of net operating losses. As part of this corporate restructuring, Malachite changed its name from Vitality Biopharma, Inc. to Malachite Innovations, Inc., contributed all of its cannabinoid drug development assets previously held in the public parent company into a new wholly owned subsidiary named Graphium Biosciences, Inc., and launched an impact investing strategy focused on building cash flow-generating operating businesses focused on reclaiming and repurposing mine sites in economically challenged communities throughout Appalachia.
Over the past two years, Malachite’s impact investing strategy has grown from a concept with no revenue, assets or employees into an early-stage venture with revenues of $15.1 million over the last 12 months, assets of $18.8 million , and more than 70 employees. In addition, over the two most-recently completed fiscal quarters, Malachite’s impact investing strategy has generated positive net taxable income, which as a result, is enabling the utilization of its net operating losses, one of the primary objectives of our corporate restructuring plan.
Also, over the past several years, Graphium’s cannabinoid drug development program has been advanced with the successful completion of additional animal studies showing favorable efficacy of our novel drug, the FDA’s award of an Orphan Drug Designation for the treatment of pediatric ulcerative colitis, and the filing and prosecution of additional patents to strengthen and expand its intellectual property portfolio. Additionally, Graphium has expanded its drug development partnerships with advisors and manufacturers in Australia, and created a detailed and executable drug development plan to advance its leading cannabinoid compound, VBX-100, through Phase II clinical trials over the next three years, subject to securing the necessary funding.
Given the recent growth of Malachite’s impact investing business and the substantial funding needs of Graphium’s drug development assets, Malachite’s board of directors believes it is in the best interest of its shareholders to create a pure-play cannabinoid-biotech venture and secure the necessary funding directly into Graphium from cannabinoid and biotech-focused investors. In this way, Malachite’s future capital needs are anticipated to be met by investors interested in our impact investing business, and Graphium’s future capital needs are anticipated to be met by investors interested in our drug development business, thereby providing better alignment with new investors and the assets that meet their investment preferences.
Capital Raise
Malachite is seeking to raise up to $4.0 million directly into Graphium (“Capital Raise”) to fund the advancement of its cannabinoid drug development program and for general working capital purposes. The structure, terms and conditions of the Capital Raise are to be determined by Malachite management and participating investors; however, it is anticipated that Malachite would retain some residual economic rights in Graphium in order to preserve upside opportunity in Graphium for Malachite’s shareholders.
Michael Cavanaugh, Malachite’s Chief Executive Officer, stated, “This is an exciting value inflection point for our impact investing and drug development strategies with both asset classes well positioned to be decoupled to create two separate value creation opportunities for our shareholders.” Cavanaugh added, “Graphium’s broad platform of organically developed, patent protected novel drug assets has received over $20 million of investment capital over the past decade and, with that financial support, has made significant advancements that differentiate our therapeutic offerings from others in the large IBD and IBS markets. Our entire team is excited about converting Graphium into a private company and securing cannabinoid and biotech-focused funding to advance our novel drug assets to the next significant value inflection point.”
Dr. Brandon Zipp, Graphium’s Chief Science Officer, added, “We have always been focused on long-term value creation and assuming we raise this additional funding, Graphium plans to further advance its drug candidates and capitalize on the extensive patent portfolio that our researchers have developed.” Dr. Zipp continued, “Graphium remains committed to helping patients suffering from chronic inflammatory conditions who desperately need new treatment options. We will initially continue our focus on advancing VBX-100, a uniquely non-psychoactive cannabinoid therapeutic, but also continue innovating and developing the hundreds of additional small molecules in our broad portfolio of cannabinoid drug assets.”
About Malachite Innovations, Inc.
Headquartered in Cleveland, Ohio, Malachite Innovations, Inc. is dedicated to improving the health and wellness of people and the planet through a novel and innovative approach to impact investing. Malachite’s operating businesses focus on developing long-term solutions to environmental, social and health challenges, with a particular focus on economically disadvantaged communities. Malachite takes an opportunistic approach to impact investing by leveraging its competitive advantages and looking at solving old problems in new ways. Malachite seeks to thoughtfully allocate its capital into ventures that are expected to make a positive impact on the people-planet ecosystem and generate strong investment returns for its shareholders.
About First Liberties Securities, Inc.
Headquartered in Dallas, Texas, First Liberties Securities, Inc., d/b/a First Liberties Financial, is a registered broker-dealer that provides investment banking, capital raising and institutional trading services to institutions, corporations, alternative asset managers and high net worth individuals. First Liberties Securities’ goal is to meet each client’s needs and expectations to create comprehensive solutions for corporate and individual clients. First Liberties Securities is a member of FINRA, SIPC and MSRB and a correspondent firm of RBC Clearing and Custody, a division of RBC Capital Markets, LLC.
Notice Regarding Forward-Looking Statements
This press release contains “forward-looking statements” as that term is defined in Section 27(a) of the Securities Act of 1933, as amended and Section 21(e) of the Securities Exchange Act of 1934, as amended. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Although we believe that these statements are based on reasonable assumptions, they are subject to numerous factors that could cause actual outcomes and results to be materially different from those indicated in such statements. Such factors include, among others, the inherent uncertainties associated with new projects and development stage companies, timing of clinical trials and product development, business strategy and new lines of business. These forward-looking statements are made as of the date of this press release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K for the most recent fiscal year, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission.
Malachite Innovations, Inc. ir@malachiteinnovations.com www.malachiteinnovations.com
What is the strategic plan for Malachite Innovations, Inc. (MLCT)?
Malachite has initiated a corporate restructuring plan to create two parallel pathways for shareholder value creation and optimize the present value of its net operating losses. The company has also launched an impact investing strategy focused on building cash flow-generating operating businesses focused on reclaiming and repurposing mine sites in economically challenged communities throughout Appalachia.
What are the financial figures related to Malachite's impact investing strategy?
Malachite's impact investing strategy has grown from a concept with no revenue, assets, or employees into an early-stage venture with revenues of $15.1 million over the last 12 months, assets of $18.8 million, and more than 70 employees. Over the two most-recently completed fiscal quarters, Malachite’s impact investing strategy has generated positive net taxable income.
What is the purpose of the Capital Raise for Graphium?
Malachite is seeking to raise up to $4.0 million directly into Graphium to fund the advancement of its cannabinoid drug development program and for general working capital purposes.
Who has Malachite retained to assist in the implementation of its strategic plan?
Malachite has retained First Liberties Securities, Inc., d/b/a First Liberties Financial, a registered broker-dealer headquartered in Dallas, Texas, to assist in the implementation of its strategic plan.
