LEQ.H Leo Acquisitions Corp

Leo Acquisitions Corp. (TSXV: LEQ.H) (“Leo” or the “Company”) and PsyBio Therapeutics, Inc. (“PsyBio”) are pleased to provide an update on their previously announced proposed qualifying transaction (the “Transaction”) on the TSX Venture Exchange (the “Exchange”).  All references to dollar amounts in this press release are to Canadian dollars.

Transaction Structure         The Transaction will be structured as a three-cornered amalgamation, business combination, share exchange, plan of arrangement, or other similarly structured transaction as may be agreed upon by the parties, and accepted by the Exchange and pursuant to the terms and conditions to be contained in a definitive agreement to be negotiated between the parties (the “Definitive Agreement”). References herein to the “Resulting Issuer” refer to Leo following the completion of the Transaction.

Immediately prior to the Transaction, each issued and outstanding common share of Leo (each, a “Leo Share”) will be consolidated at a ratio to be determined by the parties pursuant to the terms of the Definitive Agreement (the “Consolidation”). In order to facilitate the Transaction, it is also anticipated that Leo will amend its articles (the “Article Amendments”) to reclassify its common shares on a post-Consolidation basis as subordinate voting shares (the “Subordinate Voting Shares”) and to create a class of multiple voting shares (the “Multiple Voting Shares”). In connection with the Transaction, it is intended that the shareholders of PsyBio will receive Subordinate Voting Shares or Multiple Voting Shares of the Resulting Issuer, or a combination thereof, in exchange for all of the issued and outstanding shares of common stock of PsyBio (the “PsyBio Shares”), at a ratio to be determined by the parties (the “Exchange Ratio”). On the closing of the Transaction, any options, warrants or other convertible securities of PsyBio, or rights to acquire PsyBio Shares, will be exchanged in accordance with the applicable Exchange Ratio for similar securities to purchase Subordinate Voting Shares or Multiple Voting Shares, as the case may be.

It is intended that the Transaction will be an arm’s length “Qualifying Transaction” for Leo, as such term is defined in Policy 2.4 of the Corporate Finance Manual of the Exchange (the “Policy”). In connection with the Transaction, the Company intends to seek a listing of the Subordinate Voting Shares on the Exchange. The Multiple Voting Shares will not be listed for trading on any exchange. Upon completion of the Transaction, it is intended that Leo will change its name to “PsyBio Therapeutics Inc.” or such other name as may be determined by the board of directors of PsyBio (the “Name Change”) and effect a continuance to British Columbia (the “Continuance”). 

Upon successful completion of the Transaction, it is anticipated that the Resulting Issuer will be listed on the Exchange as a Tier 2 Life Sciences Issuer, operating as a biotechnology company focused on the emerging psychedelics industry.

The completion of the Transaction is subject to a number of conditions including the completion of satisfactory due diligence reviews, completion of the Financing (as defined herein), receipt of all necessary regulatory and shareholder approvals, including the approval of the Exchange as well as the execution of a Definitive Agreement and satisfaction of all other conditions precedent to closing which will be set out therein. Leo will be calling a special meeting of shareholders to approve, among other things, the Consolidation, the Article Amendments, the Name Change, the Continuance, the new board of directors of the Resulting Issuer, the new equity incentive plan of the Resulting Issuer, a new general by-law (if necessary), and such other matters as may be necessary or appropriate in connection with the Transaction.

A comprehensive news release with further particulars relating to the Transaction, financial particulars, details on the Subordinate Voting Shares and Multiple Voting Shares, and descriptions of the proposed Board Nominees and management of the Resulting Issuer will follow in accordance with the policies of the Exchange.

Brokered Financing

In connection with the Transaction, PsyBio intends to complete a brokered private placement financing (the “Financing”) of subscription receipts (the “Subscription Receipts”) of PsyBio or a special purpose British Columbia company incorporated solely for the purpose of the Financing (in either case referred to herein as, the “Issuer”) at a price of $0.35 per Subscription Receipt (the “Issue Price”) for gross proceeds of approximately $5,000,000 (or $5,750,000 if the Agents’ Option (as defined below) is exercised). Each Subscription Receipt shall entitle the holder thereof to receive, upon the satisfaction or waiver (to the extent such waiver is permitted) of certain escrow release conditions prior to the escrow release deadline, including all conditions precedent to the Transaction being satisfied, and without payment of additional consideration therefor, one common share of the Issuer (each, an “Issuer Share”). Concurrent with the completion of the Transaction, each Issuer Share underlying the Subscription Receipts will be exchanged for one Subordinate Voting Share of the Resulting Issuer in accordance with the terms of the Transaction. ‎

Eight Capital is acting as lead agent in connection with the Financing (the “Lead Agent”), on behalf of a syndicate of agents that may be formed (together with the Lead Agent, the “Agents”) to offer the Subscription Receipts for sale on a “best efforts” agency basis. The Agents have also been granted an option (the “Agents’ Option”), exercisable in whole or in part at any time prior to the closing of the Financing, to increase the size of the Financing by up to ‎15%‎.  In connection with the Financing, the Agents will receive a cash fee (the “Agents’ Commission”) equal to 7.0% of the gross proceeds of the Subscription Receipts sold in the Financing (reduced to 3.0% in respect of sales to the president’s list) and compensation warrants (the “Agents’ Warrants”) equal to 7.0% of the number of Subscription Receipts sold in the Financing (reduced to 3.0% in respect of sales to the president’s list). Each Agents’ Warrant will be exercisable to acquire one Issuer Share at the Issue Price for a period of 24 months from the satisfaction of the escrow release conditions. ‎In accordance with the terms of the Transaction, the Agents’ Warrants will be exchanged for securities of the Resulting Issuer on the same economic terms.

The gross proceeds from the Financing (less an amount equal to 50.0% of the Agents’ Commission and less all of the reasonable costs and expenses of the Agents in connection with the Financing) (the “Escrowed Proceeds”) will be held in escrow until the satisfaction of the escrow release conditions.

Upon completion of the Transaction, the proceeds of the Financing are anticipated to be used principally for research and development, manufacturing, corporate and general working capital purposes.

The Financing is anticipated to close on or about November 25, 2020, or such other date as the Lead Agent and PsyBio may agree.

About PsyBio Therapeutics 

PsyBio is a US-based biotechnology company developing a new class of drugs intended for the treatment of mental health challenges and other disorders. In collaboration with Miami University based in Oxford, Ohio, PsyBio has retained the global exclusive rights to a proprietary platform technology that biologically synthesizes psilocybin and other targeted next generation psychoactive compounds that are produced naturally in fungi and plants (the “PsyBio IP”). Management of PsyBio expects that the PsyBio IP will enable the rapid generation of these highly stable psychoactive compounds cheaper, faster and greener than other published methods.

About Leo Acquisitions 

Leo was incorporated under the Business Corporations Act (Ontario) on October 28, 2009 and is a Capital Pool Company (as defined in the policies of the TSXV) listed on the NEX board of the TSXV. Leo has no commercial operations and no assets other than cash.        Cautionary Notes

This press release contains statements that constitute “forward-looking information” (“forward-looking information”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking information and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information. In disclosing the forward-looking information contained in this press release, the Company has made certain assumptions, including that: the Financing will be completed on the terms set forth in this press release, on acceptable terms or at all; all applicable shareholder and regulatory approvals for the Transaction will be received; the Transaction will be completed on the terms set forth in this press release, on acceptable terms or at all; and the safety and efficacy of the PsyBio IP and that it will be cheaper, faster and greener than other published methods. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, it can give no assurance that the expectations of any forward-looking information will prove to be correct. Known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Such factors include, but are not limited to: availability of financing; delay or failure to receive board, shareholder or regulatory approvals; compliance with extensive government regulations; domestic and foreign laws and regulations adversely affecting PsyBio’s business and results of operations; decreases in the prevailing process for psilocybin and nutraceutical products in the markets in which PsyBio and the Resulting Issuer will operate; the impact of COVID-19; and general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking information to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking information or otherwise.

PsyBio makes no medical, treatment or health benefit claims about PsyBio’s proposed products. The U.S. Food and Drug Administration or other similar regulatory authorities have not evaluated claims regarding psilocybin and other next generation psychoactive compounds. The efficacy of such products have not been confirmed by FDA-approved research. There is no assurance that the use of psilocybin and other psychoactive compounds can diagnose, treat, cure or prevent any disease or condition. Vigorous scientific research and clinical trials are needed. PsyBio has not conducted clinical trials for the use of its proposed PsyBio IP. Any references to quality, consistency, efficacy and safety of potential products do not imply that PsyBio verified such in clinical trials or that PsyBio will complete such trials. If PsyBio cannot obtain the approvals or research necessary to commercialize its business, it may have a material adverse effect on the PsyBio’s performance and operations.

For further information contact: 

Gerry GoldbergCEO, Leo Acquisitions Corp.e: gerrygoldbergcpa@gmail.com

Evan LevineCEO, PsyBio Therapeutics, Inc. p: 513-449-9585e: evan@psybiolife.com

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. 

All information provided in this press release relating to PsyBio has been provided by management of PsyBio and has not been independently verified by management of the Company. As the date of this press release, the Company has not entered into a Definitive Agreement with PsyBio with respect to the Transaction and readers are cautioned that there can be no assurances that a Definitive Agreement will be executed. 

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and, if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all. 

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative. 

The TSXV has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.