MindMed Upsizes Previously Announced Bought Deal Public Offering to C$30,020,000
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Psychedelic pharmaceutical company MindMed recently announced an update to their bought deal financing agreement with Canaccord Genuity Corp. Initially, a C$25 million bought deal public offering (13,158,000 units at C$1.90 per unit) was announced. Later, this announcement was updated to a C$30 million bought deal public offering (15,800,000 units at C$1.90 per unit). The group at Canaccord has also provided favorable price targets for other psychedelic firms, such as Compass Pathways, highlighting their optimism and confidence in the space.
This 6 and 6 deal speaks to the great interest the market is taking in MindMed. It is no wonder Shark Tank’s Kevin O’Leary is going all in on MindMed. Psychedelic medicine is taking off in a big way and investors everywhere are paying closer attention than ever before.
Breaking Down This Agreement
The lead underwriter from Canaccord Genuity Group (an investment bank), along with a syndicate of underwriters, are agreeing to buy 15,800,000 units of MindMed to sell to investors. The upsize from 13,158,000 units to 15,800,000 units shows a huge appetite amongst investors to buy MindMed stock. The “bought deal” arrangement also demonstrates significant confidence in MMED by the investment bank. Each unit consists of one subordinate voting share and one half of a purchase warrant of the Company. Each warrant is exercisable to obtain MMED shares at a price of C$2.45 for a period of three years from the closing of the Offering. The company is allowed to exercise a “Warrant acceleration right” if the share price is greater than C$4.00 for the preceding 10 consecutive trading days.
In terms of gross proceeds, MindMed is expected to gain C$30,020,000 from this deal. After paying the bankers, MindMed will be using the net proceeds for “digital medicine division, additional microdosing R&D as well as general working capital.”
What Happens Now?
MindMed is expected to shortly file a prospectus as the next step in this process. Upon close, which is expected in a few weeks, the underwriters will have an additional 30 days to purchase an additional 2,370,000 units to sell for others. This would result in additional proceeds of C$4,503,000.
Readers are encouraged to read the press release themselves for more information on this deal. We look forward to covering this story as it progresses.
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