FSD Pharma Closes CAD$16.4 Million Sale of Non-Core Assets
10 May 2022 - 5:00PM
Business Wire
- Nets CAD$15,480,780 cash in non-dilutive capital
- Current cash position of approximately CAD$50 million or
approximately CAD $1.30 per share with only 38.4 million shares
issued
- Profit realized on the sale of the non-core asset which was
acquired by FSD Pharma in 2017 for CAD$5.5 million
- FSD continues to enhance shareholder value via the sale of the
non-core asset, as well as via the share repurchase plan, which has
so far in 2022 has reduced the number of shares issued/outstanding
by 1.52 million shares.
FSD Pharma Inc. (NASDAQ: HUGE) (CSE: HUGE) (FRE: 0K9A) (“FSD
Pharma” or the “Company”), a life sciences holding
company dedicated to building a portfolio of assets and biotech
solutions, is pleased to announce today the closing of the sale of
the Company’s former cannabis processing facility located in
Cobourg, Ontario, Canada (the “Facility”) for gross proceeds of
CAD$16,400,000 in cash.
The sale, completed on May 6, 2022, included a 26.1-hectacre
parcel of land and 50,800 square-meter building, which FSD Pharma
acquired in November 2017 for $5,500,000. Net of commissions and
fees, the sale netted approximately $15,480,780 in non-dilutive
cash that has been added to the Company’s balance sheet. The
Facility was non-essential to the Company’s business model upon the
decision in early 2020 to exit the crowded cannabis production
market to focus as a biotech company, advancing novel drug
candidates targeting lucrative areas of unmet medical needs like
Muscular Sclerosis, Depression Disorders, and Inflammatory
Disorders.
“This is a major accomplishment and puts us in a good position
going forward especially considering the current state of the
capital markets. While most companies have taken huge write-downs
on dispositions of cannabis-related assets, we were able to net
significant profit from selling the facility,” stated Anthony
Durkacz, Interim CEO and Co-Executive Chairman of FSD Pharma.
“Combined with our existing cash on hand, we are sufficiently
capitalized for operations through 2025, inclusive of budget
allocations for planned clinical trials and without having to look
to the capital markets for any additional funds. Our cash position
now exceeds our market capitalization, as we continue to work
toward building value for our shareholders.”
About FSD Pharma
FSD Pharma Inc. is a biotechnology company with three drug
candidates in different stages of development. FSD BioSciences,
Inc. (“FSD BioSciences”), a wholly owned subsidiary, 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.
(“Lucid”), a 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.
Forward Looking Information
Certain statements contained herein are “forward-looking
statements.” Often, but not always, forward-looking statement can
be identified by the use of words such as “plans”, “expects”,
“expected”, “scheduled”, “estimates”, “intends”, “anticipates”,
“hopes”, “planned” or “believes”, or variations of such words and
phrases, or states that certain actions, events or results “may”,
“could”, “would”, “might”, “potentially” or “will” be taken, occur
or be achieved. Forward-looking statements contained in this press
release include the comments made with respect to the Company’s
capitalization and budgeted financial needs, proposed clinical
trials and contemplated financing activities. FSD cannot give any
assurance that such forward-looking statements will prove to have
been correct. The reader is cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the
date of this press release.
Since forward-looking statements relate to future events and
conditions, by their very nature they require making assumptions
and involve inherent risks and uncertainties. The Company cautions
that although it is believed that the assumptions are reasonable in
the circumstances, these risks and uncertainties give rise to the
possibility that actual results may differ materially from the
expectations set out in the forward-looking statements. Factors
that may cause such material differences include without
limitation: the fact that the drug development efforts of both
Lucid and FSD BioSciences are at a very early stage; the fact that
preclinical drug development is uncertain, and the drug product
candidates of Lucid and FSD BioSciences may never advance to
clinical trials; the fact that results of preclinical studies and
early-stage clinical trials may not be predictive of the results of
later stage clinical trials; the uncertain outcome, cost, and
timing of product development activities, preclinical studies and
clinical trials of Lucid and FSD BioSciences; the uncertain
clinical development process, including the risk that clinical
trials may not have an effective design or generate positive
results; the potential inability to obtain or maintain regulatory
approval of the drug product candidates of Lucid and FSD
BioSciences; the introduction of competing drugs that are safer,
more effective or less expensive than, or otherwise superior to,
the drug product candidates of Lucid and FSD BioSciences; the
initiation, conduct, and completion of preclinical studies and
clinical trials may be delayed, adversely affected, or impacted by
COVID-19 related issues; the potential inability to obtain adequate
financing; the potential inability to obtain or maintain
intellectual property protection for the drug product candidates of
Lucid and FSD BioSciences; and other risks. Further information
regarding factors that may cause actual results to differ
materially are included in the Company’s annual and other reports
filed from time to time with the Canadian Securities Administrators
on SEDAR (www.sedar.com) and with the U.S. Securities and Exchange
Commission on EDGAR (www.sec.gov) under the heading “Risk Factors.”
Any forward-looking statement contained in this release speaks only
as of its date. The Company does not undertake to update any
forward-looking statements, except to the extent required by
applicable securities laws.
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version on businesswire.com: https://www.businesswire.com/news/home/20220510005660/en/
Zeeshan Saeed, Founder, President and Executive Co-Chairman of
the Board, FSD Pharma Inc. Email: Zsaeed@fsdpharma.com Telephone:
(416) 854-8884
Investor Relations: Email: ir@fsdpharma.com, info@fsdpharma.com
Website: www.fsdpharma.com
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