New York City, NY (March 30, 2020): Mind Medicine (MindMed) Inc. (NEO: MMED OTC: MMEDF), the leading neuro-pharmaceutical company for psychedelic inspired medicines, today announced the release of its audited consolidated financial statements (the “Financial Statements”) and accompanying management’s discussion and analysis (the “MD&A”) for the period from May 30, 2019, date of incorporation, to December 31, 2019 (the “period ended December 31, 2019”). All financial figures contained herein are expressed in U.S. dollars (“USD”) unless otherwise noted.
For readers of the Financial Statements and MD&A, it is important to note that on February 27, 2020, Mind Medicine, Inc. (“MindMed Delaware”), a private Delaware corporation and now a wholly-owned subsidiary of MindMed, completed a reverse takeover transaction with Broadway Gold Mining Ltd. (“Broadway”) to form Mind Medicine (MindMed) Inc. MindMed Delaware is deemed to be the acquirer in the reverse takeover transaction and therefore MindMed Delaware’s audited consolidated financial statements for the period ended December 31, 2019 are deemed to be those of MindMed and are the Financial Statements released today. Please see Note 16 “Subsequent Events” of the Financial Statements for more information.
Fourth Quarter and 2019 Highlights and Subsequent Events
- MindMed was founded in May 2019, and completed a number of capital raises for aggregate proceeds of US$30,377,027, including US$19,573,441 after period end, making it very well capitalized in the psychedelic medicine industry.
- MindMed acquired the rights to 18-MC drug development program in the period ended December 31, 2019 and established an addiction drug development program focused on addressing the U.S. opioid crisis.
- MindMed secured a leading team of pharmaceutical industry veterans and advisors with deep experience of psychedelics over the course of 2019, solidifying its position as a leader in the psychedelic medicines industry.
- MindMed further assembled the infrastructure in the period for its unique drug development platform to discover, develop and deploy psychedelic inspired medicines. As part of this process, the Company actively pursued its strategy to further grow its clinical trial collaborations and intellectual property (IP) acquisitions during this period.
- The Company established a psychedelics microdosing division and began preparing a Phase 2 trial for microdosing of LSD for the treatment of adult ADHD.
Outlook and Update
- MindMed continues advancing the development of its 18-MC drug development program through further human safety studies and is targeting to begin its Phase 2 trial of 18-MC by the end of the year.
- MindMed is actively pursuing new collaborations, acquisitions of IP and clinical trials to build the most compelling pipeline and portfolio of psychedelic inspired medicines.
Financial Results
Overview
Since inception, we have incurred losses while advancing the research and development of our products. Net loss for the period ended December 31, 2019 was US$5,474,214. The net loss was due primarily to compensation paid to management of US$1,173,538 and legal fees of US$1,045,048.
Research and Development
Research and development expenses by program for the period ended December 31, 2019 were as follows (all amounts in U.S. dollars)(1):
| 18-MC program(1) | $645,192 |
| LSD program (Note 1) | 863,414 |
| Non-program specific (Note 1) | 540,438 |
| Total | $2,049,044 |
Note:
(1) Research and development expenditures in the above table include all direct and indirect costs for the programs, personnel costs, intellectual property.
General and Administrative
General and administrative expenses for the period ended December 31, 2019 were US$3,105,170 and consisted of consulting fees, short-term benefits and other compensation, legal fees, accounting and audit, marketing, travel and other, and primarily related to the establishment of MindMed and its operations, the acquisition of 18-MC and related activities.
Cash and Working Capital
Our cash and working capital at December 31, 2019 were US$3,016,445 and US$4,775,341 respectively. The increase in cash was due mainly to the US$9,902,052 of net financings, net of the cash used in operations of US$3,199,710 and the funds held in trust of US$3,685,897. The increase in working capital was due mainly to the net financings of US$9,902,052, net of the loss of US$5,474,214.
Cash flows from operating activities
Cash used in operating activities of $3,199,710 for the period ended December 31, 2019 was due mainly to the net loss of US$5,474,214 partially offset by an increase in accounts payable and accrued liabilities of US$1,961,199.
Cash flows from financing activities
Cash provided by financing activities totaled US$9,902,052 for the period ended December 31, 2019. The funds arose from:
· In July 2019, we issued 35,000,000 Class B common shares at a price of US$0.0001 per share for gross proceeds of US$3,500.
· In September 2019, we completed a non-brokered private placement financing of common shares, selling 45,972,630 Class C common shares (“Class C Shares”) at a price of US$0.10 per share for gross proceeds of US$4,597,263. Additionally, we settled an outstanding loan of US$100,000 and interest owing of US$2,104 through the issuance of 1,021,041 Class C Shares to a member of the board of directors.
· In September 2019, we sold 10,000,000 Class D common shares (“Class D Shares”) to two members of the board of directors, at a price of US$0.10 per share yielding gross proceeds of US$1,000,000.
· In December 2019, we completed the first tranche of a brokered private placement as well as a concurrent non-brokered private placement, issuing a total of 18,771,897 Class D Shares at a price of CAD$0.33 ($0.25) per share for gross proceeds of US$4,727,106, before deducting cash share issuance costs of US$442,921. On closing of the first tranche, we issued the agent 313,472 broker warrants (“Broker Warrants”) and paid a cash advisory fee of CAD$178,295 and issued 1,000,561 advisory warrants (together with the Broker Warrants, the “Compensation Warrants”) to the agent. Each Compensation Warrant is exercisable to acquire one Class D Share at a price of CAD$0.33 per share expiring March 3, 2021.
Appointment of Interim Chief Financial Officer
MindMed also announced the retirement of Paul Van Damme as Chief Financial Officer effective April 1, 2020 and the appointment of David Guebert as interim Chief Financial Officer, subject to regulatory approval.
Mr. Guebert is a CPA, qualified in both Alberta and Pennsylvania, and a Member of the Institute of Corporate Directors. He currently sits as a board member and Audit Committee Chair for Legend Power Systems, RMMI Inc. and Quisitive Technology Solutions, Inc. From 2010 to 2017, he was board member and Audit Committee Chair of Merus Labs International Inc., a specialty pharmaceutical company. He started his career in 1979 at Deloitte and since then has taken on increasing senior roles, acting as Chief Financial Officer for a number of companies, including most recently Mount Logan Capital Inc.
Mr. Guebert has signed a six-month contract to serve as the Chief Financial Officer while the Company completes a comprehensive search for a permanent replacement for Mr. Van Damme. The board of directors of MindMed thanks Mr. Van Damme for his service to MindMed and his invaluable contributions in establishing the company and completing its financings and listing on the Neo Exchange, and wishes him well in his future endeavours.
Fourth Quarter and Year End 2019 Results Webcast
MindMed will be hosting a conference call and webcast on Wednesday, April 1, 2020 at 11:00 a.m. Eastern Time to discuss these results.
Webcast and call-in details are as follows:
Topic: MindMed Year-End Results and Corporate Update
Date of call: Wednesday, April 1, 2020
Time of call: 11:00a.m. ET
Conference ID: 2176839
Participant Toll Free Dial-In Number: (866) 497-6293
Participant International Dial-In Number: (825) 312-2348
Webcast URL: https://event.on24.com/wcc/r/2253341/3F84DD7CA57EC079F5387A5D2E5101DD
A replay of the webcast will be available at www.mindmed.co.
About MindMed
Mind Medicine (MindMed) Inc. is a neuro-pharmaceutical company that discovers, develops and deploys psychedelic inspired medicines to improve health, promote wellness and alleviate suffering. The company’s immediate priority is to address the opioid crisis by developing a non-hallucinogenic version of the psychedelic ibogaine. In addition, the company has established a microdosing division to conduct clinical trials of LSD microdosing for Adult ADHD. The MindMed executive team brings extensive biopharmaceutical industry experience to this groundbreaking approach to the development of next-generation psychedelic medicines. For more information: www.mindmed.co.
MindMed trades on the NEO Exchange under the symbol MMED. MindMed can also be traded in the US under the symbol OTC: MMEDF and in Germany under the symbol DE:BGHM.
Cautionary Statements and Disclaimer: This news release contains “forward-looking information”, which may include, but is not limited to, statements with respect to anticipated business plans or strategies of MindMed, the anticipated date of completion of micro-dosing studies, the timing of any drug trials, the success of its clinical trials and the ability to enter into acquisitions or collaborations to enhance its drug development platform. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of MindMed to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and MindMed disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management’s estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
Neither the Neo Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Neo Exchange) accepts responsibility for the adequacy or accuracy of this news release.