FSD Pharma to Acquire Prismic Pharmaceuticals
FSD Pharma Inc. (CSE: HUGE) (OTCQB: FSDDF) (FRA: 0K9) (“FSD Pharma” or the “Company”) and Prismic Pharmaceuticals Inc. (“Prismic”), a US-based specialty R&D pharmaceutical company, announced today that they have entered into a securities exchange agreement dated April 22, 2019 (the “Agreement”) pursuant to which FSD Pharma has agreed to acquire all of the outstanding securities of Prismic (the “Transaction”). Prismic is developing novel non-addictive prescription drugs with unique safety profiles with the goal of addressing the opioid crisis based on formulations utilizing micro-palmitoylethanolamide’s (“PEA”) “entourage” effect on certain drugs impacting the endocannabinoid system.
Pursuant to the terms of the Agreement, FSD Pharma will acquire all outstanding common and preferred shares of Prismic for an aggregate purchase price of US$17.5 million (CAD$23.4 million based on an exchange rate of US$1 to CAD$1.3349), to be satisfied by the issuance of an aggregate of 102.7 million Class B subordinate voting shares in the capital of FSD Pharma (each, an “FSD Share”) at a deemed price of CAD$0.2275 (US$0.1704) per FSD Share representing the volume weighted average price of the FSD Shares on the Canadian Securities Exchange (the “CSE”) for the ten trading days prior to the execution of the Agreement. In addition, FSD Pharma has agreed to assume up to US$4.0 million of outstanding Prismic liabilities on terms to be mutually agreed by the two companies, some of which may, potentially, be settled by the issuance of additional FSD Shares. Additionally, all of the outstanding Prismic stock options and warrants will become exercisable into FSD Shares, with the number and exercise price of such securities to be adjusted in accordance with the Transaction’s exchange ratio.
The FSD Shares to be issued to the Prismic shareholders will be deposited into escrow at the closing of the Transaction, and be subject to an 18-month staggered time escrow release.
“This transaction symbolizes FSD Pharma’s vision of acquiring a platform company to advance research and development of FDA-approved applications of synthetic cannabinoids and other synergistic molecules,” said FSD Pharma Executive Co-Chairman & CEO, Dr. Raza Bokhari. “Led by Peter Moriarty, one of the founders of Shire Pharmaceuticals, Prismic’s management team has built a solid foundation for a specialty pharmaceutical company, and we look forward to providing them with milestone-based support in order to advance proprietary drug candidates through the various development stages. This is a very exciting day for FSD Pharma that we believe represents a paradigm shift in the development and outlook of our company.”