REG-Mydecine Innovations Group Inc: Restructuring transactions and annual general and special meeting

Mydecine InnovationsAnnouncement

03/05/2024 07:15

MYDECINE INNOVATIONS GROUP INC.

ANNOUNCES RESTRUCTURING TRANSACTIONS

AND ANNUAL GENERAL AND SPECIAL MEETING

VANCOUVER, BC - (3 May 2024) Mydecine Innovations Group Inc. (CSE: MYCO) (FSE:
0NFA), (OTC: MYCOF) (AQSE: MYIG) (the "Company" or "Mydecine") announced that
it has entered into certain restructuring transactions in order to improve the
financial health of the Company.

Josh Bartch, CEO of the Company stated: "We are fully committed to the success
of Mydecine and these restructuring efforts are intended to highlight that.
Through these various restructuring efforts, the Company intends to clean up
its balance sheet in an effort to reduce the outstanding liabilities.  The
Company has gone through an evolution that has resulted in a lean,
streamlined, drug development company with a significant IP portfolio and drug
development programs.  I look forward to continuing to update the market on
recent developments and progress the Company has made."

Private Placement

The Company today announced a non-brokered private placement of common shares
in the capital of the Company (each, a "Share") for aggregate gross proceeds
of $1,000,000.00 (the "Private Placement") at a price of $0.018 per Share. The
sole subscriber to the Private Placement will be Josh Bartch, an insider of
the Company (the "Insider").

The Company is a public company and is subject to Multilateral Instrument
61-101 ("MI 61-101") which governs, among other things, transactions between
listed issuers and related parties of such issuers. In accordance with MI
61-101, the issuance of Shares by the Company to the Insider constitutes a
"related party transaction". In accordance with MI 61-101, absent an
exemption, MI 61-101 would require the Company to receive a formal valuation
of the subject matter and "majority of the minority" shareholder approval to
proceed with the issuance of such Shares to the Insider. The Company intends
to rely on the exemptions set forth in Section 5.5(c) (Distribution for Cash)
of MI 61-101 (as it relates to formal valuations) and the exemption set forth
in 5.7(1)(b) (Fair Market Value Not More Than $2,500,000) of MI 61-101 (as it
relates to shareholder approval).

In accordance with the Canadian Securities Exchange (the "CSE") Policy 6 -
Distributions & Corporate Finance, the Company may complete a private
placement at a price lower than $0.05 provided that: the price must not be
lower than the volume weighted-average-price for the previous 20 trading days,
as determined by the CSE; proceeds are to be used for working capital or bona
fide debt settlement; and the price must be reserved and approved by the CSE
in advance of closing. On April 10, 2023, the Company filed a price
reservation, on a confidential basis, with the CSE, which price has been
reserved.

CSE Policy 4 requires that, if related parties are involved in a proposed
issuance of securities, security holders must approve a proposed securities
offering if the price is lower than the market price less the maximum
permitted discount, regardless of the number of shares to be issued, and any
related party of the Company that has a material interest in the transaction
may not vote on any resolution to approve the proposed Private Placement.
Accordingly, any shares currently held by the Insider will not be considered
in respect of the resolution of shareholders to approve the proposed Private
Placement.

All securities issuable under the Private Placement will be subject to a
statutory hold period lasting four months and one day following the closing of
the Private Placement. No finders' fees are payable under the proposed Private
Placement. Proceeds are to be used for working capital. The Private Placement
will be subject to shareholder approval at the Meeting.

Debt Settlement

The Company also announced that it has entered into debt settlement agreements
(the "Settlement Agreements") to settle outstanding debts owed to certain
directors, officers and consultants of the Company (the "Creditors") for
accrued management and consulting fees. Pursuant to the Settlement Agreements,
the Company has agreed to issue convertible debentures to the Creditors (the
"Convertible Debentures"), for an aggregate amount equal to $1,666,013.65 (the
"Debt Settlement"). The Convertible Debentures will mature three years after
issuance (the "Maturity Date") and will carry an interest rate of 6.0% per
annum from the closing date. The principal amount of the Convertible
Debentures may be converted into Shares prior to the Maturity Date, at a price
of $0.05 per Share.

In accordance with MI 61-101, the issuance of Convertible Debentures by the
Company to the Creditors constitutes a "related party transaction". Absent an
exemption, MI 61-101 would require the Company to receive a formal valuation
of the subject matter and "majority of the minority" shareholder approval to
proceed with the issuance of such Convertible Debentures to the Creditors. The
Company intends to rely on the exemptions set forth in Section 5.5(g)
(Financial Hardship) of MI 61-101 (as it relates to formal valuations) and the
exemption set out in 5.7(1)(b) (Fair Market Value Not More Than $2,500,000)
(as it relates to shareholder approval).

On April 10, 2023, the Company filed a price reservation with the CSE on a
confidential basis, with respect to the conversion price of the Convertible
Debentures, which price has been reserved by the CSE. The Debt Settlements
will be subject to shareholder approval at the Meeting. All securities
issuable under the Convertible Debentures will be subject to a statutory hold
period lasting four months and one day following the closing of the
Convertible Debentures. No finders' fees are payable under the proposed
Convertible Debentures. The board of directors of the Company has determined
that it is in the best interests of the Company to settle the outstanding
debts by the issuance of the Convertible Debentures in order to preserve the
Company's cash for working capital.

Debenture Amendment

The Company also announced that it intends to amend its convertible secured
subordinated debenture dated December 9, 2021, in the principal amount of
$5,500,000 (the "2021 Convertible Debenture"), as amended, such that the
conversion price of $0.35 will be amended to $0.05 (the "Debenture
Amendment"). Pursuant to the policies of the CSE, if, following the amendment,
for any 10 consecutive trading days the closing price of the Shares exceeds
the amended exercise price by the applicable private placement discount (as
outlined in the CSE policies), the exercise price will be amended to $0.35.
The Debenture Amendments will be subject to shareholder approval at the
Meeting.

Debt Purchase and Conversion

The Company further announced that, pursuant to arms-length negotiations, the
Insider purchased $550,000 of the incurred interest under the 2021 Convertible
Debenture from the holder of the Debenture (the "Holder") and $660,000 of
additional bona fide debt owed by the Company to the Holder (the "Acquired
Debt"). The Company intends on settling the Acquired Debt at a deemed price of
$0.05 per Share (the "Acquired Debt Settlement"). The Acquired Debt Settlement
will be subject to shareholder approval at the Meeting. All securities
issuable under pursuant to the Acquired Debt Settlement will be subject to a
statutory hold period lasting four months and one day following the closing of
the Acquired Debt Settlement. No finders' fees are payable under the proposed
Acquired Debt Settlement. The board of directors of the Company has determined
that it is in the best interests of the Company to settle the outstanding
debts by the issuance of the Shares in order to preserve the Company's cash
for working capital.

Equity Line of Credit

The Company further announced of its intention to enter into an equity line
(the "Equity Line"), pursuant to the terms of a subscription agreement (the
"Subscription Agreement") to be entered into between the Company and the
Insider. The Subscription Agreement will allow the Company to issue and sell
up to $5,000,000 Shares from treasury, from time to time, in a series of
closings (each, a "Draw Closing") at the Company's discretion and on the terms
and subject to the conditions set out in the Subscription Agreement. The
Shares issued pursuant to the Subscription Agreement will be equal to the
20-day volume-weighted price of the Shares trading on the CSE.

In accordance with MI 61-101, the Equity Line constitutes a "related party
transaction". Absent an exemption, MI 61-101 would require the Company to
receive a formal valuation of the subject matter and "majority of the
minority" shareholder approval to proceed with the issuance of such
Convertible Debentures to the Creditors. The Company intends to rely on the
exemptions set forth in Section 5.5(g) (Financial Hardship) of MI 61-101 (as
it relates to formal valuations) and the exemption set out in 5.7(1)(e)
(Financial Hardship) (as it relates to shareholder approval).

CSE Policy 4 requires that, if related parties are involved in a proposed
issuance of securities, security holders must approve a proposed securities
offering if the price is lower than the market price less the maximum
permitted discount, regardless of the number of shares to be issued, and any
related party of the Company that has a material interest in the transaction
may not vote on any resolution to approve the proposed Equity Line.
Accordingly, any shares currently held by the Insider will not be considered
in respect of the resolution of shareholders to approve the proposed Equity
Line.

The Equity Line will be subject to shareholder approval at the Meeting. All
securities issuable under the Equity Line will be subject to a statutory hold
period lasting four months and one day following each Draw Closing. No
finders' fees or commitment fees are payable under the proposed Draw Closing.

Annual and Special Shareholder Meeting

The Company has called an annual general and special shareholder meeting to
obtain approval, among other things, of the Private Placement, Debt
Settlement, Debenture Amendments, Acquired Debt Settlement and the Equity Line
(collectively, the "Restructuring Transactions") for July 5, 2024 (the
"Meeting"), a copy of notice of the Meeting and record date has been filed on
April 26, 2024
(https://www.sedarplus.ca/csa-party/viewInstance/resource.html?node=W2305&drmKey=ae8fad363a427ad1&drr=ss7937ce970c82c8072de5ea3dd4db8dc99b0e78e55a43c9ca73ba6981fa41e98796f9c73b71e86286a1ae22dc2273dcb6ux&id=0c11f8b7998bcd96f03bb0456e2dbfa6ebd9d5f6bc9894b5).
Subject to shareholder approval at the Meeting, the Company intends to close
the Restructuring Transactions following the Meeting. Further details relating
to the Restructuring Transactions will be disclosed in the information
circular provided to shareholders of the Company and posted on SEDAR+ ahead of
the Meeting.

 

The transactions above constitute related party transactions under Rule 4.6 of
the AQSE Growth Market Access Rulebook. The Directors who are independent of
these transactions, consider that having exercised reasonable care, skill and
diligence, the related party transaction is fair and reasonable as far as the
shareholders of the Company are concerned.

The Directors of Mydecine take responsibility for this announcement.

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.
 
Learn more at: https://www.mydecine.com/ and follow the company on Twitter,
LinkedIn, YouTube, and Instagram.

Media Contact

pr@mydecineinc.com

Investor Relations

investorrelations@mydecineinc.com


On behalf of the Board of Directors
Joshua Bartch, Chief Executive Officer contact@mydecineinc.com 
AQSE Corporate Advisor

Novum Securities Limited  Tel: +44 (0)207 399 9400

David Coffman/ George Duxberry
  
For further information about Mydecine, please visit the Company's profile on
SEDAR at https://sedar.com/ or visit the Company's website at
https://www.mydecine.com/.

About Mydecine Innovations Group Inc.

Mydecine Innovations Group™ is a biotechnology company developing the next
generation of innovative medications and therapies to address mental health
disorders such as nicotine addiction and post-traumatic stress disorder
(PTSD). The core strategy blends advanced technology with an elaborate
infrastructure for drug discovery and development. Mydecine's dedicated
multinational team constantly develops new paths for breakthrough treatment
solutions in areas with considerable unmet needs. By collaborating with some
of the world's leading specialists, the Company aspires to responsibly speed
up the development of breakthrough medications to provide patients with safer
and more effective treatment solutions. At the same time, Mydecine's approach
focuses on the next generation of psychedelic medicine by creating innovative
compounds with unmatched therapeutic potential through its clinical trial
efforts with world-class scientific and regulatory expertise.

Forward-Looking Statements

 

Certain statements in this news release constitute "forward-looking
information" within the meaning of applicable Canadian securities legislation.
Forward-looking statements and information are provided for the purpose of
providing information about management's expectations and plans relating to
the future. All of the forward-looking information made in this news release
is qualified by the cautionary statements below and those made in our other
filings with the securities regulators in Canada. Forward-looking information
contained in forward-looking statements can be identified by the use of words
such as "are expected," "is forecast," "is targeted," "approximately,"
"plans," "anticipates," "projects," "anticipates," "continue," "estimate,"
"believe" or variations of such words and phrases or statements that certain
actions, events or results "may," "could," "would," "might," or "will" be
taken, occur or be achieved. All statements, other than statements of
historical fact, may be considered to be or include forward-looking
information. This news release contains forward-looking information regarding
the Restructuring Transactions and expectations relating to the Restructuring
Transactions. Readers are cautioned that these forward-looking statements are
neither promises nor guarantees, and are subject to risks and uncertainties
that may cause future results to differ materially from those expected.
Although the Company has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause results not
to be as anticipated, estimated or intended. There can be no assurance that
such information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such information.

 

The forward-looking information set forth herein reflects the Company's
reasonable expectations as at the date of this news release and is subject to
change after such date. The Company disclaims any intention or obligation to
update or revise any forward-looking information, whether as a result of new
information, future events or otherwise, other than as required by law. The
forward-looking information contained in this news release is expressly
qualified by this cautionary statement.

 

This news release shall not constitute an offer to sell or the solicitation of
an offer to buy nor shall there be any sale of the securities in any State in
which such offer, solicitation or sale would be unlawful. The securities being
offered have not been, nor will they be, registered under the United States
Securities Act of 1933, as amended, and may not be offered or sold in the
United States absent registration or an applicable exemption from the
registration requirements of the United States Securities Act of 1933, as
amended, and applicable state securities laws.

 

 



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