FSD Pharma Closes First Private Placement at $4.58M, Extends Offering

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FSD Pharma

TORONTOFSD Pharma Inc. (CSE: HUGE) (OTCQB: FSDDF) (FRA: 0K9) (“FSD” or the “Company”) is pleased to provide an update on its previously announced private placement of its class B subordinate voting shares (“Shares”) at a price of CAD$0.10 per Share (the “Private Placement”). On September 30, 2019, the Company closed an initial tranche of the Private Placement, raising gross proceeds of CAD $4,583,085 from investors, including members of senior management and board of directors, and issuing an aggregate of 45,830,850 Shares. The Shares issued to purchasers in Canada will be subject to a four-month hold period, in accordance with applicable Canadian securities laws. The Company initially expected to close the Private Placement by September 30, 2019; however, it has elected to extend the Private Placement to accommodate potential additional interest from institutional grade investors. The Company now expects to close a second and final tranche of the Private Placement by October 31, 2019.

The net proceeds from the Private Placement will be used for the expansion of the Company’s biosciences division, including the research and development of PP-101 (micro-palmitoylethanolamide (micro-PEA) plus pregabalin) – the Company’s pre-clinical drug candidate for the treatment of symptoms related to fibromyalgia – and for general corporate purposes, including working capital, potential investments and acquisitions.

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Given that members of senior management and board of directors participated in the Private Placement, that portion of the Private Placement constituted a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). In its consideration and approval of the Private Placement, the board of directors of the Company determined that the Private Placement was exempt from the formal valuation and minority approval requirements of MI 61- 101 on the basis that the fair market value of the Private Placement to related parties did not exceed 25% of the market capitalization of the Company, in accordance with Sections 5.5 and 5.7 of MI 61-101. The Company did not file a material change report more than 21 days before the expected closing of the Private Placement as the details of the participation therein by related parties of the Company were not settled until shortly prior to closing and the Company wished to close on an expedited basis for sound business reasons.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the Shares in the United States. The Shares have not been and will not be registered under the U.S. 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 unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.


About FSD Pharma
FSD Pharma is focused on the research and development of novel cannabinoid-based treatments for several central nervous system disorders including chronic pain, fibromyalgia and irritable bowel syndrome, and on the development of the highest quality indoor grown, pharmaceutical-grade cannabis. The Company is licensed to cultivate cannabis in approximately 25,000 square feet.

FSD’s wholly-owned subsidiary, FV Pharma, is a licensed producer under the Cannabis Act and Regulations, having received its cultivation license on October 13, 2017 and its full Sale for Medical Purposes license on June 21, 2019. FV Pharma intends to cover all aspects of the cannabis industry, including cultivation, legal, processing, manufacturing, extracts and research and development.

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