F-1/A: Psyence Biomedical Files for Resale of 22.5 Million Shares and Warrants After Business Combination

Psyence Biomedical seeks to register the resale of a significant number of common shares and warrants following its recent business combination, potentially impacting the market price.

Summary

• Psyence Biomedical has filed a registration statement for the potential resale of 22,496,000 common shares, 570,000 warrants, and the issuance of 13,070,000 common shares upon exercise of warrants.
• These securities are related to the business combination with Newcourt Acquisition Corp. (NCAC) which closed on January 25, 2024.
• The filing includes common shares issuable upon conversion of First Tranche Notes issued to investors, shares issued as fees to advisors, and shares issued to the Sponsor.
• The initial conversion price of the First Tranche Notes is $10.00, but can be adjusted down to a conversion floor of $0.50.
• The exercise price for the warrants is $11.50 per share.
• The company did not satisfy the Minimum Cash Condition or the PIPE Investment Condition at closing, but waived these requirements.
• The company consummated a convertible debt PIPE financing with investors for $3,125,000 in aggregate principal amount, with an original issue discount of 20%, for gross proceeds of $2,500,000.
• The investors also received 1,300,000 common shares as a structuring fee and have the option to purchase an additional 1,700,000 common shares from Tabula Rasa Limited and Launchpad Capital Opportunities Fund LP at $0.0001 per share.
• The company will not receive any proceeds from the sale of shares by the selling securityholders.
• The company will bear all costs, expenses and fees in connection with the registration of these securities.
• The selling securityholders will bear all commissions and discounts, if any, attributable to their sale of securities.
• The company's common shares trade on the Nasdaq Global Market under the symbol PBM, and certain of its warrants trade on the Nasdaq Capital Market under the symbol PBMWW.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While the company has completed a business combination and secured financing, there are concerns about dilution, market volatility, and the company's ability to meet certain financial conditions.

Positives

• The company has secured convertible debt financing of $3,125,000 to support its operations.
• The company has received full approval of a Phase IIb Study from the Australian Human Research Ethics Committees (HRECs).

Negatives

• The company did not satisfy the Minimum Cash Condition or the PIPE Investment Condition at closing.
• The securities being offered by this prospectus represent vastly more than the number of our outstanding Common Shares, and the sales of such securities, or the perception that those sales might occur, could depress the market price of our Common Shares and could impair our ability to raise capital through the sale of additional equity securities.

Risks

• Sales of a substantial number of our securities in the public market by the Selling Securityholders and/or by our existing shareholders could cause the price of our Common Shares to fall.
• The market price and trading volume of the Common Shares may be volatile and could decline significantly following the Business Combination.
• Public Warrants are exercisable for Common Shares, which would increase the number of shares eligible for future resale in the public market and result in dilution to its shareholders.

Future Outlook

The company plans to use the funds raised to advance natural psilocybin into a Phase IIb clinical trial study to be conducted under an approved protocol in Australia.

Industry Context

The document highlights the growing interest in psychedelic-assisted treatments and the competitive landscape in the biotechnology industry.

Comparison to Industry Standards

• The document mentions Compass Pathways' psilocybin study, providing a benchmark for clinical trials in the psychedelic space.
• The document references Filament Health Corp., a key player in the natural psilocybin production and licensing, indicating the importance of partnerships in this industry.

Stakeholder Impact

• Existing shareholders may experience dilution due to the potential issuance of a large number of common shares.
• The market price of the company's common shares could be negatively impacted by the potential resale of a significant number of shares and warrants.
• The company's ability to raise capital in the future could be impaired.

Next Steps

• The company intends to use the funds raised to advance natural psilocybin into a Phase IIb clinical trial study to be conducted under an approved protocol in Australia.
• The company will use its best efforts to maintain the effectiveness of the registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement.

Key Dates

Keywords

resale, common shares, warrants, business combination, convertible notes, PIPE financing, Psyence Biomedical, NCAC, registration statement, securities