FSD Pharma (CSE:HUGE, NASDAQ:HUGE) Inc said its board of directors has authorized the repurchase by the company of up to 2 million of its subordinate Class B voting shares, being approximately 5% of its issued and outstanding subordinate voting shares, from time to time over the next 12 months.
The company said the share repurchase programme will allow it to use its excess cash reserves to strategically return value to shareholders.
"FSD Pharma (CSE:HUGE, NASDAQ:HUGE) is focused on the advancement of its drug candidates toward the clinic; however, with over USD $39.3 million in cash and cash equivalents on our balance sheet as of September 30, 2021, we recognize there may be a strategic opportunity to enhance shareholder value without compromising our ambitious growth plans,” commented Anthony Durkacz, interim CEO of FSD Pharma (CSE:HUGE, NASDAQ:HUGE) in a statement.
“We believe that our stock is significantly undervalued. This will allow us to continue investing in our future, while, at the same time, also investing in the exceptional value that our own shares represent," he added.
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FSD Pharma said the share repurchase program will commence on January 4, 2022, and terminate on December 30, 2022, unless terminated earlier by the company.
The share repurchase program does not obligate the company to purchase any subordinate voting shares. If management decides it has a better use for its cash reserves, it is under no obligation to continue to purchase them and share purchases may be suspended or terminated at any time at the company’s discretion.
The actual number of subordinate voting shares purchased, the timing of purchases and the purchase price will depend on market conditions.
The company said it will purchase the subordinate voting shares through the facilities of the Canadian Securities Exchange (CSE) at the prevailing market price on the CSE at the time of purchase, subject to limitations imposed by applicable securities laws.
All subordinate voting shares purchased by the company shall be cancelled, it added.
FSD Pharma is a biotechnology company with three drug candidates in different stages of development.
The company's wholly-owned subsidiary, FSD BioSciences is focused on pharmaceutical research and development of its lead compound, ultra-micronized palmitoyl ethylamine (PEA) or FSD-PEA (formerly called FSD-201).
Lucid Psycheceuticals Inc, another wholly-owned subsidiary, is focused on the research and development of its lead compounds, Lucid-PSYCH (formerly Lucid-201) and Lucid-MS (formerly Lucid-21-302). Lucid PSYCH is a molecular compound identified for the potential treatment of mental health disorders. Lucid-MS is a molecular compound identified for the potential treatment of neurodegenerative disorders.
Contact the author at jon.hopkins@proactiveinvestors.com