Psyence Biomed Announces Closing of $2.0 Million Private Placement

Rhea-AI Summary

Psyence Biomed (Nasdaq: PBM) has completed a $2.0 million private placement through the sale of 1,000,000 common shares with accompanying warrants. The offering included series A common warrants and short-term series B common warrants, both with an exercise price of $2.00 per share. Series A warrants expire in five years while series B warrants expire in two years.

The transaction was facilitated by H.C. Wainwright & Co. as the exclusive placement agent. The company plans to use the net proceeds for working capital and general corporate purposes. The securities were offered under Section 4(a)(2) of the Securities Act and Regulation D, and the company has agreed to file a resale registration statement.

Positive

• Secured $2.0 million in immediate funding
• Potential for additional $4.0 million if all warrants are exercised ($2.0M from Series A and $2.0M from Series B)

Negative

• Dilutive effect on existing shareholders through issuance of new shares
• Additional potential dilution if warrants are exercised
• Shares sold at relatively low price point of $2.00

Insights

Financial Analyst

This $2.0 million private placement represents a strategic but dilutive capital raise for Psyence Biomed. The structure includes both common shares and two types of warrants at $2.00 per share, effectively creating potential future dilution of up to 3 million shares if all warrants are exercised. The warrant exercise price matching the offering price suggests premium expectations in the near term.

The dual-warrant structure, combining 5-year Series A and 2-year Series B warrants, provides flexibility but also indicates the company's need to incentivize investors with multiple upside opportunities. The pre-funded warrant option suggests institutional interest seeking immediate economic exposure while deferring share issuance. With H.C. Wainwright as placement agent, expect significant fees to reduce the net proceeds available for operations.

For a company with a $1.79 million market cap, this financing is substantial but raises concerns about share price pressure and future capital needs. The registration rights agreement signals potential near-term selling pressure once the resale registration becomes effective.

Legal Expert

The private placement's structure under Section 4(a)(2) and Regulation D of the Securities Act provides important regulatory compliance while avoiding the more extensive requirements of a public offering. The registration rights agreement creates a contractual obligation to file a resale registration statement, balancing investor liquidity needs with the company's interest in an expedited closing.

The comprehensive warrant coverage and pre-funded warrant alternative demonstrate sophisticated security structuring aimed at institutional investors. The immediate exercisability of warrants coupled with staggered expiration periods creates a complex capital structure that will require careful management of dilution risks and securities law compliance.

NEW YORK, Dec. 27, 2024 (GLOBE NEWSWIRE) -- Psyence Biomedical Ltd. (Nasdaq: PBM) (“Psyence Biomed” or the “Company”) today announced that it has closed its previously announced private placement for the purchase and sale of an aggregate of 1,000,000 common shares (or pre-funded warrants in lieu thereof), series A common warrants to purchase up to 1,000,000 common shares and short-term series B common warrants to purchase up to 1,000,000 common shares at a purchase price of $2.00 per common share (or per pre-funded warrant in lieu thereof) and accompanying series A common warrant and short-term series B common warrant. The series A common warrants and short-term series B common warrants have an exercise price of $2.00 per share and are exercisable immediately upon issuance. The series A common warrants expire five years from the date of issuance and the short-term series B common warrants expire two years from the date of issuance.

H.C. Wainwright & Co. acted as the exclusive placement agent for the offering.

The gross proceeds from the offering were approximately $2.0 million, prior to deducting placement agent’s fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from the offering for working capital and other general corporate purposes.

The securities described above were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Regulation D promulgated thereunder and, along with the common shares underlying the warrants, have not been registered under the Securities Act, or applicable state securities laws. Accordingly, such securities may not be offered or sold 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. Pursuant to a registration rights agreement with investors, the Company has agreed to file a resale registration statement covering the securities described above.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Psyence Biomed

Psyence Biomedical Ltd. (Nasdaq: PBM) is the world’s first life science biotechnology company developing nature-derived (non-synthetic) psilocybin-based psychedelic medicines to be listed on Nasdaq. Psyence is initially working to address the unmet needs of patients who suffer from mental health disorders in the context of Palliative Care. The name “Psyence” combines the words “psychedelics” and “science” to affirm Psyence Biomed’s commitment to an evidence-based approach to innovation as it works to develop safe and effective, regulatory-approved, nature-derived psychedelic therapeutics to treat a broad range of mental health disorders.

Learn more at www.psyencebiomed.com and on LinkedIn. 

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 regarding the intended use of proceeds from the private placement; 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. These forward-looking statements are based on a number of assumptions.

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) market and other conditions; (ii) the ability of Psyence Biomed to maintain the listing of its common shares and warrants on Nasdaq; and (iii) volatility in the price of the securities of Psyence Biomed due to a variety of factors, including the recent share consolidation, changes in the competitive and highly regulated industries in which Psyence Biomed operates, variations in performance across competitors, changes in laws and regulations affecting Psyence Biomed’s business and changes in Psyence Biomed’s capital structure. 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 final prospectus (File No. 333-282468) filed with the Securities and Exchange Commission on October 10, 2024 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 information. 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 approved 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 has not conducted clinical trials for the use of the proposed products. 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.

Contact Information

Email: ir@psyencebiomed.com
Media Inquiries: media@psyencebiomed.com
General Information: info@psyencebiomed.com
Phone: +1 416-477-1708

Investor Contact:
Jeremy Feffer
Managing Director
LifeSci Advisors
jfeffer@lifesciadvisors.com

FAQ

How much did Psyence Biomed (PBM) raise in its December 2024 private placement?

Psyence Biomed raised $2.0 million in gross proceeds through the private placement of common shares and warrants.

What is the exercise price of PBM's newly issued warrants?

Both the Series A and Series B warrants have an exercise price of $2.00 per share.

When do PBM's Series A and Series B warrants expire?

Series A warrants expire five years from issuance, while Series B warrants expire two years from issuance.

How many common shares and warrants did PBM issue in the December 2024 placement?

PBM issued 1,000,000 common shares along with 1,000,000 Series A warrants and 1,000,000 Series B warrants.

What will PBM use the private placement proceeds for?

The company intends to use the net proceeds for working capital and other general corporate purposes.