20-F: Psyence Biomedical Completes Business Combination with Newcourt Acquisition Corp, Secures Nasdaq Listing

Psyence Biomedical finalized its merger with Newcourt Acquisition Corp on January 25, 2024, resulting in a Nasdaq listing under the ticker PBM.

Summary

• Psyence Biomedical Ltd. completed its business combination with Newcourt Acquisition Corp. on January 25, 2024.
• The transaction involved a share exchange where Parent contributed Psyence II to Psyence Biomedical.
• Merger Sub merged with NCAC, converting NCAC ordinary shares into Psyence Biomedical common shares.
• The Company Common Shares and Company Warrants are traded on The Nasdaq Stock Market LLC (Nasdaq) under the symbols PBM and PBMWW, respectively.
• Psyence Biomedical waived the Minimum Cash Condition and the PIPE Investment Condition for closing.
• A securities purchase agreement was entered into for up to $12.5 million in senior secured convertible notes.
• The first tranche of the financing, $3.125 million, closed concurrently with the business combination.
• The company has 13,390,659 common shares and 13,070,000 warrants outstanding.

Sentiment

Score: 6

Explanation: The sentiment is neutral. The business combination is a positive step, but the company's financial situation and dependence on future capital raises introduce uncertainty.

Positives

• Successful completion of the business combination allows Psyence Biomedical to access public markets and raise capital.
• The Nasdaq listing provides increased visibility and potential for greater investor interest.
• The $12.5 million financing agreement provides capital to advance clinical trials.
• The company has commenced the clinical trial process to evaluate the safety and efficacy of its product candidates.

Negatives

• The company waived the Minimum Cash Condition and the PIPE Investment Condition for closing.
• The company has experienced operating losses and cash outflows from operations since incorporation and by nature of its business, will require ongoing financing to continue its research and development operations.
• There are uncertainties regarding the Compays ability to continue as a going concern.

Risks

• The ability of Psyence Biomedical to realize the benefits expected from the Business Combination and to maintain the listing of the Company Common Shares or the Company Warrants on Nasdaq.
• Risks that the Business Combination disrupts current plans of Psyence Biomedical or diverts managements attention from Psyence Biomedicals ongoing business operations and potential difficulties in Psyence Biomedicals employee retention as a result of the Business Combination.
• Volatility in the price of the securities of the Company due to a variety of factors, including changes in the competitive and highly regulated industries in which the Company operates, variations in performance across competitors, changes in laws and regulations affecting the Companys business and changes in the Companys capital structure.
• Psyence Biomedicals success in retaining or recruiting, or changes required in, its officers, key employees or directors.
• The Companys ability to achieve successful clinical results.
• The Company currently has no products approved for commercial sale.
• The Companys ability to obtain regulatory approval for its product candidates, and any related restrictions or limitations of any approved products.
• The Companys ability to obtain licensing of third-party intellectual property rights for future discovery and development of the Companys product candidates.
• The Companys ability to commercialize product candidates and achieve market acceptance of such product candidates.
• The Companys success is dependent on product candidates which it licenses from third parties.
• The ability to respond to general economic conditions.
• The Company has incurred significant losses since inception, and it expects to incur significant losses for the foreseeable future and may not be able to achieve or sustain profitability in the future.
• The Company requires substantial additional capital to finance its operations, and if it is unable to raise such capital when needed or on acceptable terms, it may be forced to delay, reduce, and/or eliminate one or more of its development programs or future commercialization efforts.
• The Companys ability to develop and maintain effective internal controls.
• Assumptions regarding interest rates and inflation.
• Competition and competitive pressures from other companies worldwide in the industries in which the Company operates.
• Litigation and the ability to adequately protect the Companys intellectual property rights.

Future Outlook

The Company intends to utilize the funds raised in the Business Combination to provide us with the capital to advance natural psilocybin into a Phase IIb clinical trial study to be conducted under an approved protocol in Australia (the Phase IIb Study).

Industry Context

The announcement positions Psyence Biomedical within the growing sector of biotechnology companies focused on psychedelic-assisted therapies, particularly for mental health conditions. This sector has seen increasing investor interest and regulatory developments.

Comparison to Industry Standards

• It's difficult to provide a direct comparison to industry standards without specific financial details and clinical trial data. However, similar companies in the psychedelic medicine space include:
• * **COMPASS Pathways (CMPS):** Focused on psilocybin therapy for treatment-resistant depression. Market cap and clinical trial stage are relevant benchmarks.
• * **Atai Life Sciences (ATAI):** A platform company with multiple subsidiaries exploring various psychedelic and non-psychedelic compounds. Its diversified approach can be compared to Psyence's broader strategy.
• * **Mind Medicine (MNMD):** Developing psychedelic-inspired medicines and therapies. Clinical trial progress and cash runway are key comparison points.
• Key metrics to compare include cash runway, clinical trial progress (Phase IIb study), and market capitalization relative to peers.

Stakeholder Impact

• Shareholders: Benefit from the Nasdaq listing and potential for increased value, but face risks related to volatility and future performance.
• Employees: May experience changes due to the business combination, with potential impacts on retention and recruitment.
• Customers: No immediate impact, as the company is still in the clinical trial phase.
• Suppliers: Potential for increased business as the company advances its research and development efforts.
• Creditors: Impacted by the new financing arrangements and the company's overall financial stability.

Next Steps

• Advance natural psilocybin into a Phase IIb clinical trial study to be conducted under an approved protocol in Australia.
• The Company will need to file a registration statement covering the resale of the Company Common Shares issuable upon conversion of the First Tranche Notes (the Initial Resale Registration Statement) and any additional registration statements required to be filed to register the resale of the Company Common Shares issuable upon any of the other Notes, as applicable, and to use its best efforts to have the Initial Resale Registration Statement and such registration statement(s), as applicable, declared effective by the SEC as soon as practicable.

Key Dates

Keywords

Psyence Biomedical, business combination, Nasdaq, clinical trials, psilocybin, biotechnology, PBM, PBMWW, Newcourt Acquisition Corp