SCHEDULE: KAOS Capital Cuts Psyence Biomedical Stake Below 5%

KAOS Capital Ltd. and Adam Arviv have reduced their beneficial ownership in Psyence Biomedical Ltd. to 4.91% due to an increase in outstanding shares, while expressing significant concerns about current management.

Summary

• KAOS Capital Ltd. and Adam Arviv (Reporting Persons) filed an Amendment No. 1 to their Schedule 13D for Psyence Biomedical Ltd.
• Their beneficial ownership in Psyence Biomedical Ltd. has decreased to 313,876 shares, representing 4.91% of the outstanding Common Stock.
• This reduction below the 5% threshold is solely due to an increase in the Issuer's total outstanding shares to 6,388,604 as of January 2, 2026, not due to any sales by the Reporting Persons.
• The Reporting Persons consider Psyence Biomedical Ltd. an attractive investment but have significant concerns regarding the current management of the company's assets.
• They intend to engage with the Issuer's management and Board on operational, management, corporate, and strategic matters, including corporate governance and strategic alternatives.
• The Reporting Persons believe the Issuer would benefit from the addition of alternative directors and a change in strategy.
• This Amendment No. 1 is the final amendment to their Schedule 13D.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive from the Reporting Persons' perspective, as they view the company as an 'attractive investment opportunity.' However, this is tempered by 'significant concerns about current management' and the intent to push for 'alternative directors and a change in strategy,' indicating dissatisfaction with the current state. The filing itself is a routine update due to a change in outstanding shares, but the activist language adds a layer of potential future positive change if their proposals are adopted.

Positives

• Reporting Persons view Psyence Biomedical Ltd. as an attractive investment opportunity.
• The Reporting Persons are actively engaged and intend to communicate with management and the Board to address concerns and propose strategic improvements.

Negatives

• Reporting Persons have significant concerns about the current management of Psyence Biomedical Ltd.'s assets.
• Reporting Persons believe the Issuer would benefit from the addition of alternative directors and a change in strategy.

Risks

• Current management's asset management practices are a significant concern for a major investor.
• Potential for strategic misalignment between current management/Board and significant shareholders.
• Risk of underperformance if current management and strategy are not optimized.

Future Outlook

The Reporting Persons intend to actively engage with Psyence Biomedical Ltd.'s management and Board to discuss operational, management, corporate, and strategic matters, including corporate governance and strategic alternatives. They may also seek the addition of alternative directors and a change in strategy, and will continuously review their investment, potentially adjusting their position based on various factors.

Management Comments

• Reporting Persons believe the securities of the Issuer represent an attractive investment opportunity.
• Reporting Persons have significant concerns about the current management of the Company's assets.
• Reporting Persons believe that the Issuer would benefit from the addition of alternative directors and a change in strategy.

Industry Context

This filing highlights an activist investor's engagement with a biomedical company, a common occurrence in industries where innovation and strategic direction are critical for value creation. The concerns raised about management and strategy suggest potential underperformance or a perceived lack of optimal direction within the competitive biomedical landscape, prompting investor intervention to unlock value.

Comparison to Industry Standards

• NA. This filing does not provide sufficient data for a direct comparison of Psyence Biomedical Ltd.'s performance against industry benchmarks or specific comparable companies/projects.

Legal Proceedings

• None of the Reporting Persons or other identified persons have been convicted in a criminal proceeding (excluding traffic violations) or been a party to a civil proceeding resulting in a judgment related to Federal or State securities laws during the last five years.

Related Party Transactions

• Adam Arviv is the founder and chief executive officer of KAOS Capital Ltd. and manages its business, affairs, and investments, including the ownership of Psyence Biomedical Ltd. Common Stock.

Stakeholder Impact

• Shareholders: May benefit from potential improvements in corporate governance and strategic direction if the Reporting Persons' proposals are adopted. Increased scrutiny on management could lead to better performance.
• Management/Board: Will face pressure from a significant investor to address concerns regarding asset management and potentially consider changes in strategy and board composition.

Next Steps

• Reporting Persons intend to communicate with Psyence Biomedical Ltd.'s management and Board regarding operational, management, corporate, and strategic matters.
• Reporting Persons may communicate with other shareholders or third-parties about these matters.
• Reporting Persons may seek the addition of alternative directors and a change in strategy for the Issuer.
• Reporting Persons will continue to review their investment and may increase or decrease their position in the Issuer.

Key Dates

Recommendation

While the Reporting Persons view Psyence Biomedical Ltd. as an 'attractive investment opportunity,' their 'significant concerns about current management' and intent to push for 'alternative directors and a change in strategy' introduce uncertainty and potential for future volatility. An investor should 'hold' to observe the outcome of these activist engagements and any subsequent changes in management or strategy before making a more definitive investment decision. The current filing does not provide sufficient positive catalysts or negative financial data to warrant a strong buy or sell recommendation.

Keywords

Psyence Biomedical, KAOS Capital, Adam Arviv, Schedule 13D, Beneficial Ownership, Activist Investor, Corporate Governance, Strategic Alternatives, Management Concerns, Biomedical