Psyence BioMed Announces Settlement of Shareholder Litigation
Rhea-AI Summary
Psyence BioMed (Nasdaq: PBM) announced a settlement resolving a direct shareholder claim by KAOS Capital dated Jan 14 and Jan 26, 2026. The Ontario Superior Court dismissed KAOS's application and awarded costs of CDN $75,000. Under the settlement the company will pay US $1,500,000 and KAOS will sell all its shares at US $5 per share, include a full retraction and mutual release, and KAOS is released from the Costs Award. The company expects to fund the payment from cash on hand and record it under applicable accounting standards.
Positive
- Settlement removes ongoing shareholder litigation risk
- KAOS to sell all shares at a fixed price of US $5 per share
- Company retains control over purchaser designation for KAOS stake
Negative
- Cash outflow of US $1,500,000 will be funded from cash on hand
- Waived recovery of CDN $75,000 costs award in exchange for settlement
Key Figures
Market Reality Check
Peers on Argus
PBM showed a modest 0.95% gain pre-news with light volume, while key biotech peers were mixed: SLRX up 18.98%, GTBP up 5.92%, SCNI up 1.16%, VRAX up 0.39%, and PTIX down 25.49%. Momentum scanner only flagged CDT moving down, suggesting PBM’s setup looked stock-specific rather than a sector-wide move.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Jan 28 | Reverse split timing | Neutral | +22.0% | Confirmed effective date for previously approved 1-for-6.25 reverse stock split. |
| Jan 22 | Meeting adjournment | Neutral | -12.7% | Adjourned shareholder meeting after failing to reach requisite quorum. |
| Jan 20 | Split postponement | Neutral | -79.2% | Postponed previously announced effective date for 1-for-6.25 reverse stock split. |
| Jan 14 | Reverse split plan | Neutral | -0.5% | Announced planned 1-for-6.25 reverse split and expected trading on post-split basis. |
| Jan 12 | Buyback framework | Positive | -0.7% | Approved 2026 financial strategy including potential share repurchase program. |
Recent news has focused on capital structure and governance (reverse split, meeting adjournment, buyback authorization), with mixed price reactions and one large selloff on postponing the reverse split.
Over the last month, Psyence BioMed’s key events have centered on capital structure, governance and capital management. A Board-authorized share buyback framework on Jan 12, 2026 was followed by multiple announcements around a 1-for-6.25 reverse stock split, including initial approval, postponement, and a new effective date on Feb 2, 2026. The shareholder meeting was adjourned on Jan 22, 2026 due to lack of quorum. Today’s litigation settlement with KAOS fits into this broader governance and shareholder-relations backdrop.
Market Pulse Summary
This announcement resolves a direct shareholder claim by KAOS through a settlement totaling US $1,500,000 and waiving a prior CDN $75,000 costs award, alongside a full mutual release and retraction of allegations. It follows weeks of governance and capital-structure news, including reverse split plans and a buyback framework. Investors may track how this affects future shareholder engagement, board dynamics, and cash deployment decisions disclosed in regulatory filings.
AI-generated analysis. Not financial advice.
NEW YORK, Feb. 11, 2026 (GLOBE NEWSWIRE) -- Psyence Biomedical Ltd. (Nasdaq: PBM) ("Psyence BioMed" or the "Company") today announced that it has entered into a settlement agreement to resolve a direct shareholder claim made by KAOS Capital Ltd ("KAOS"). The claim, originally made on January 14, 2026, and amplified on January 26, 2026, alleged, among other things, improper and oppressive actions on the part of the Company against KAOS, resulting in KAOS suffering alleged damages (the "KAOS Allegations"). The Company, its board of directors ("Board") and officers have denied the allegations and believe they are unsubstantiated and meritless.
Application Hearing
On January 16, 2026, KAOS issued a notice of application (the "Application") in the Ontario Superior Court (the "Court") with respect to the KAOS Allegations and sought, among other remedies, to adjourn the shareholders' meeting of the Company originally scheduled for January 22, 2026. On January 21, 2026, the Court dismissed the Application and ordered KAOS to pay the Company's costs fixed in the amount of CDN
Terms of the Settlement
Under the terms of the settlement, the Company will pay an aggregate amount of US
Financial Impact
The Company expects that the settlement will be funded by cash on hand and will be recorded in accordance with applicable accounting standards. Although the Company, the Board and its officers deny any wrongdoing, they have opted for a settlement to avoid further litigation, disruption to the Company's business, and the significant costs related thereto.
About Psyence BioMed
Psyence Biomedical Ltd. (Nasdaq: PBM) is one of the few multi-asset, vertically integrated biopharmaceutical companies specializing in psychedelic-based therapeutics. It is the first life sciences biotechnology company focused on developing nature-derived (non-synthetic) psilocybin and ibogaine-based psychedelic medicine to be listed on Nasdaq. We are dedicated to addressing unmet mental health needs. We are committed to an evidence-based approach in developing safe, effective, and FDA-approved nature-derived psychedelic treatments for a broad range of mental health disorders.
Contact Information for Psyence Biomedical Ltd.
Email: ir@psyencebiomed.com
Media Inquiries: media@psyencebiomed.com
General Information: info@psyencebiomed.com
Investor Contact:
Michael Kydd
Investor Relations Advisor
michael@psyencebiomed.com
Forward Looking Statements
This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations, and intentions with respect to future operations, products and services; and other statements identified by words such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "believe," "intend," "plan," "projection," "outlook" or words of similar meaning.
Forward-looking statements in this communication include statements regarding the implementation of the settlement terms. These statements are based on current assumptions and expectations, including that the settlement terms will not be challenged, the parties shall fulfil their respective obligations, and the Company will receive all such regulatory approvals to implement the settlement as may be required. These assumptions may prove incorrect. There can be no assurance that the Company will continue to maintain compliance with Nasdaq's continued listing requirements. There are numerous risks and uncertainties that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.
These risks and uncertainties include, among others: (i) delays or challenges in implementing the settlement terms; (ii) the Company's ability to maintain compliance with Nasdaq's continued listing standards; (iii) potential volatility in the Company's share price following the implementation of the settlement terms; (iv) changes in the regulatory, competitive, and economic landscape; and (v) risks associated with the Company's development plans and clinical trials. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the "Risk Factors" section of the Company's final prospectus (File No. 333-298285) filed with the Securities and Exchange Commission (the "SEC") on November 3, 2025 and other documents filed by Psyence BioMed from time to time with the SEC.
These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Actual results and future events could differ materially from those anticipated in such statements. Nothing in this communication should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Except as required by law, Psyence BioMed does not intend to update these forward-looking statements.
The Company does not make any medical, treatment or health benefit claims about its proposed products. The U.S. Food and Drug Administration, Health Canada or other similar regulatory authorities have not evaluated claims regarding psilocybin, psilocybin analogues, or other psychedelic compounds or nutraceutical products. The efficacy of such products has not been confirmed by authorized clinical research. There is no assurance that the use of psilocybin, psilocybin analogues, or other psychedelic compounds or nutraceuticals can diagnose, treat, cure or prevent any disease or condition. Vigorous scientific research and clinical trials are needed. The Company's product candidates are investigational and have not been approved by any regulatory authority for use in the treatment of any disease or condition, and clinical results (if any) may not be indicative of future results. Any references to quality, consistency, efficacy, and safety of potential products do not imply that the Company has verified such in clinical trials or that the Company will complete such trials. If the Company cannot obtain the approvals or research necessary to commercialize its business, it may have a material adverse effect on the Company's performance and operations.
FAQ
What did Psyence BioMed (PBM) agree to in the Feb 11, 2026 settlement with KAOS Capital?
How will Psyence BioMed fund the US $1.5 million settlement announced Feb 11, 2026?
Did the Ontario Superior Court issue any orders in the KAOS Capital dispute involving PBM?
What does KAOS selling its Psyence BioMed shares at US $5 per share mean for PBM shareholders?
Does the PBM settlement with KAOS constitute an admission of liability by the company?
