Psyched Wellness Ltd. (CSE:PSYC) (OTCQB:PSYCF) (FRA:5U9) said it has closed a bought deal private placement for total gross proceeds of $6,603,000 after issuing an aggregate of 21,300,000 units to subscribers at a price of $0.31 per unit.
The life sciences company, which is focused on the production and distribution of artisanal functional and psychedelic mushrooms, said the gross proceeds from the offering will be used to fully fund the pre-clinical trials of the company's Amanita Muscaria extract, AME-1 and to continue its scientific research of AME-1 and its potential benefits for people suffering from serious mental and physical health issues and for general corporate purposes.
WATCH: Psyched Wellness makes pre-clinical progress with its Amanita Muscaria-derived wellness product
Each unit in the offering consisted of one common share of the company and one common share purchase warrant. Each warrant entitles the holder to purchase one Psyched Wellness common share at an exercise price of $0.43 for a period of 36 months from the closing of the offering, subject to an acceleration right exercisable by the company if, at any time following the date that is four months and one day from the closing of the offering, the daily volume-weighted average trading price of Psyched Wellness common shares on the Canadian Securities Exchange is greater than $0.70 for the preceding five consecutive trading days.
The offering was conducted by Canaccord Genuity, as leade underwriter, and Eight Capital. In connection with the offering, the company issued to the underwriters an aggregate of 456,365 units and paid a total of $320,736.95 in cash, together representing the underwriters' fee of 7.0% of the gross proceeds of the offering.
The company also issued to the lead underwriter an aggregate of 639,000 units in settlement of the corporate finance fee of 3.0% of the units sold under the offering; and issued to the underwriters' an aggregate of 1,491,000 unit purchase warrants of the company, representing 7.0% of the units sold under the offering. Each underwriters' warrant is exercisable to acquire one unit at the issue price of the offering for a period of 36 months from the closing.
Psyched Wellness is a Canadian-based health supplements company dedicated to the distribution of mushroom-derived products and associated consumer packaged goods.
The company's objective is to create premium mushroom-derived products that have the potential to become a leading North American brand in the emerging functional food category. It is in the process of developing a line of Amanita muscaria-derived water-based extracts, teas and capsules designed to help with three health objectives: promote stress relief, relaxation and assist with restful sleeping.
Contact the author at jon.hopkins@proactiveinvestors.com