Field Trip Health Ltd. (TSX: FTRP, FTRP.WT, Nasdaq: FTRP) (the
"
Company"), a global leader in the development and
delivery of psychedelic therapies, announced today that it has
received unanimous board approval to complete a reorganization that
will result in the separation of its Field Trip Discovery and Field
Trip Health divisions into two independent public companies (the
"
Transaction"). Field Trip Discovery will be
renamed Reunion Neuroscience Inc. (“
Reunion”) and
Field Trip Health will be renamed Field Trip Health and Wellness
Ltd. (“
Field Trip H&W”). Concurrent with
closing of the Transaction, Field Trip H&W is expected to
complete financings for gross proceeds of approximately C$20
million led by Oasis Management Company and the Company (the
“
Financings”).
The Transaction is the culmination of the
Company's strategic review of corporate structure announced in
November 2021.
Joseph del Moral, Chief Executive Officer of the
Company, commented "Over the course of the last three years, we
have built two leading companies in the emerging psychedelic
industry under a single roof. This strategy has enabled us to
develop practical knowledge and operational expertise in
psychedelic therapies, as well as one of the most innovative drug
development programs in the sector. The results of our strategic
review confirmed that both parts of Field Trip are ready to be
independent, standalone companies, in a separation that we believe
maximizes the long-term value of each business. Importantly, the
strategic synergy that underlies our original strategy will be
maintained through a mutually beneficial Collaboration Agreement.
We believe this is an exciting path to continue the growth of both
businesses and provides our shareholders with two distinct
investment theses."
On closing of the Transaction, it is expected
that each share of the Company will be exchanged for one common
share of Reunion and approximately 0.86 common shares of Field Trip
H&W. Following the Transaction, Reunion will remain listed on
the NASDAQ Stock Market and Toronto Stock Exchange, and Field Trip
H&W, subject to exchange approval, will list on the TSX Venture
Exchange.
The Transaction will be effected by way of a
court approved plan of arrangement under the Canada Business
Corporations Act. The Transaction will require the approval of: (i)
662/3% of the votes cast by the holders of the Company's common
shares; and (ii) a simple majority of the votes cast by holders of
the Company's common shares after excluding votes from certain
shareholders as required under MI 61-101, at a special meeting of
the Company’s shareholders to be held to consider the Transaction
(the "Meeting"). In addition to shareholder
approval, the Transaction is also subject to the receipt of court
approval and other customary closing conditions for transactions of
this nature.
Strategic Rationale for the
Transaction
The Company’s management believes that the
Transaction will establish two independent leading businesses in
their respective categories in the emerging psychedelics industry
and maximize long-term value for the Company’s shareholders.
Following the Transaction, both Field Trip H&W and Reunion
will:
- have separate
and focused management and governance best suited to each company's
operational and strategic needs;
- be able to
establish distinct capital structures and capital allocation plans
matched to the unique strategies and requirements of each
company;
- maintain
current strategic synergies through a Collaboration Agreement,
which will provide access to data, assistance in protocol
development, preferential access to clinical trial sites and other
benefits;
- provide
differentiated investment characteristics and a focused investment
thesis for long-term investors in each company.
Transaction Details
Arrangement
The Company will continue operating its drug
discovery and development business as a stand-alone business under
the name Reunion Neuroscience Inc., and remain listed on the NASDAQ
Stock Market and Toronto Stock Exchange.
A special committee comprised entirely of
independent directors of the Company (the “Special
Committee”) unanimously recommended the Transaction, and
the board of directors of the Company unanimously approved the
Transaction and recommends that the Company’s shareholders vote in
favour of the Transaction.
Additional details of the Transaction will be
included in an information circular (the
"Circular") to be mailed to shareholders of Field
Trip in May 2022 in connection with the Meeting. The Transaction is
expected to close on or about July 2022.
Concurrent Financing Transaction for Field Trip
Health & Wellness
Concurrent with the Transaction, Field Trip
H&W will complete the Financings by way of a series of separate
private placements to raise aggregate gross proceeds to Field Trip
H&W of approximately C$20 million, including a $5 million
investment from the Company directly.
Oasis Non-Brokered Private Placement
The Financings will be led by funds managed by
or affiliated with Oasis Management Company who have entered into a
binding subscription agreement to purchase such number of common
shares of Field Trip H&W (“FT H&W Common
Shares”) that together with the FT H&W Common Shares
that it will receive pursuant to the Arrangement will represent up
to 19.99% of the issued and outstanding FT H&W Common Shares at
an issue price of C$0.50 per FT H&W Common Share by way of a
non-brokered private placement.
Direct Investment from the Company
The Company will also contribute $5 million
directly to Field Trip H&W and retain the equivalent number of
FT H&W Common Shares equivalent to the issue price of C$0.50
per FT H&W Common Share as a corporate investment held by
Reunion Neuroscience.
Brokered Private Placement Offering of
Subscription Receipts
Part of the Financings will be completed by way
of a fully marketed “commercially reasonable efforts” brokered
private placement of subscription receipts of Field Trip H&W
(the “Subscription Receipts”) led by Bloom Burton
Securities Inc. (“Bloom Burton”), on behalf of a
syndicate (together with Bloom Burton, the
“Agents”), at an issue price of C$0.50 per
Subscription Receipt to raise aggregate gross proceeds of up to
C$10,000,000 (the “Subscription Receipt
Offering”). See “Subscription Receipt Offering Details”
below for additional details.
Further information regarding the Financings
will be provided in the Circular. There can be no assurance that
the Transaction or the Financings will be completed on the terms
described herein or at all, or that the FT H&W Common Shares
will be listed on the TSX Venture Exchange.
Financial and Legal Advisors
Bloom Burton Securities is acting as financial
advisor to Field Trip. Bloom Burton Securities and Cantor
Fitzgerald & Co., each provided a fairness opinion to Field
Trip’s board of directors and its Special Committee. Bennett Jones
LLP is acting as Canadian legal advisor to Field Trip. Paul, Weiss,
Rifkind, Wharton & Garrison LLP and Cohen & Buckmann, PC
are acting as US legal advisors to Field Trip. Torys LLP is acting
as legal advisor to the Special Committee.
Field Trip Health &
Wellness
As part of the Transaction, all assets related
to the operation of the Company’s clinic business, including all of
the tangible and intangible assets, employees and operations of
such business will be reorganized under the Company's wholly owned
subsidiary Field Trip Health and Wellness Ltd.
Ronan Levy will lead Field Trip H&W as Chief
Executive Officer and Mujeeb Jafferi will serve as President. Mr.
Levy currently serves as Executive Chairman, and Mr. Jafferi serves
as Chief Operating Officer, of Field Trip Health Ltd.,
respectively.
Field Trip H&W’s strategic focus
post-Transaction will include:
- operating its 12
Field Trip Health Centers offering psychedelic-assisted
psychotherapy treatment programs, including Ketamine-Assisted
Psychotherapy (KAP) in Canada and the USA and Psilocybin-Assisted
Psychotherapy (PAP) in the Netherlands;
- launching its
new offering Field Trip at Home™, a digital at-home KAP program
powered by Nue Life, allowing increased accessibility and
scalability for Field Trip H&W’s therapies without significant
capital investment;
- providing
clinical trial and site management services leveraging its network
of health centers and expertise in psychedelic therapies;
- expanded support
for the development and publication of outcome-based research on
the efficacy of psychedelic-assisted psychotherapy programs;
- training
clinicians in psychedelic-assisted psychotherapies through Field
Trip training programs;
- continued
advancement of the Field Trip’s psilocybin research at its facility
in Jamaica with an aim to execute on its intellectual property and
commercialization goals;
- expanding its
customer base with the scheduled release of a premium version of
the Company's mobile software application, Trip
("Trip"), in the second half of calendar 2022;
and
- continued
industry leadership and development in future market opportunities,
as the world moves towards the acceptance of psychedelic
therapies.
In the past quarter, the Company has instituted
various operational improvements designed to reduce costs and
increase throughput at its Field Trip Health Centers. Capacity per
therapist has increased and overhead expenses have decreased by
approximately 12%. Fiscal third quarter revenues increased by 50%
over the second quarter. The Company is pleased to announce
preliminary fiscal Q4 2022 revenues of C$1.76 million representing
over 30% growth over Q3 fiscal 2022.
Ronan Levy added, "Since the opening of our
first clinic in Toronto in 2020, we've been focused on developing
and implementing ketamine and psilocybin assisted therapy protocols
as effective treatment options for depression, anxiety and other
mental health conditions. Upon completion of the Transaction, our
focus will shift to scaling access so that anyone seeking treatment
can safely, consciously and responsibly access psychedelic
therapies. This new focus will reduce capital requirements,
maximize the impact of our existing twelve locations, support new
people through the launch of Field Trip at Home™ and better
leverage our digital tools to reach a much larger audience."
With the increased focus on reaching clients
through its digital platforms, Trip and Field Trip at Home™, as
well as ongoing streamlining of its in-person offerings, the
Company has decided to defer the opening of new clinics.
Reunion Neuroscience Inc.
Upon completion of the Transaction, Joseph del
Moral will continue as Chief Executive Officer and Dr. Nathan
Bryson will continue as Chief Scientific Officer of Reunion.
Reunion will continue to operate the drug
discovery division focused on research and the development of its
novel molecule, FT-104, and other molecules under development,
including the FT-200 series. The Company believes that FT-104 has
completed the necessary non-clinical and preclinical studies
necessary to enable Phase 1 study and has submitted documentation,
including a Phase 1 protocol for ethics review in Australia where
the Phase 1 study will be performed. Pending successful review, the
Company expects that the study will start before the end of the
first half of 2022 and may be completed before year-end. The FT-200
Group remains a burgeoning project with a platform for candidate
synthesis and evaluation, some identified candidates, and initial
intellectual property positions. Candidates in the FT-200 Group are
demonstrating interesting pharmacological differences with
classical psychedelics that may make them safer serotonin 2A
agonists with broader use potential in mental healthcare.
The name Reunion Neuroscience was selected
because of the company's focus on innovating therapeutic solutions
for underserved neurological disorders, as well as a subtle nod to
the company's origin as Field Trip.
The cash position of the Company after
completion of the Transaction is anticipated to be C$43 million
plus $5M in FT H&W Common Shares, which will allow it to:
- complete the
FT-104 Phase 1 Single Dose Pharmacokinetics and Safety study which
should inform dose selection for Phase 2;
- confirm duration of psychoactive
effect of FT-104 to be approximately 2-3h, approximately half that
of psilocybin;
- engage the U.S. Food and Drug
Administration through both the preIND and IND processes as the
FT-104 program looks to move into Phase 2 in 2023;
- complete CMC and other non-clinical
work required prior to launch of Phase 2; and
- continue
synthesis and testing within the FT-200 group as Reunion moves
toward selecting a candidate with improved cardiovascular
safety.
By the end of 2022, Reunion expects to be the
first company to have Phase 1 clinical (pharmacokinetic and
pharmacodynamic) data and a granted patent for a novel,
next-generation psychedelic compound.
Commenting on the Transaction, Nathan Bryson,
Chief Scientific Officer of the Company, stated, "Both Field Trip
businesses have benefited from the increased understanding of the
patient journey and psychedelic processes we have developed from
Discovery's research and Field Trip Health's operation of the
clinics. We are very excited to be poised to initiate clinical
research with a unique, patented, next generation molecule only 20
months after completing the selection process. I would like to
commend the entire Field Trip Health team for getting us this far
into the development process, and I look forward to continued
collaborations between the two companies."
Subscription Receipt Offering
Details
The Company is pleased to announce that it has
entered into an agreement with Bloom Burton pursuant to which Bloom
Burton, on behalf of a syndicate of agents, have agreed to act as
agents in connection with a fully marketed “commercially reasonable
efforts” brokered private placement of Subscription Receipts of
Field Trip H&W at an issue price of C$0.50 per Subscription
Receipt to raise aggregate gross proceeds of up to C$10,000,000.
The net proceeds of the Subscription Receipt Offering will be used
for clinic operating expenses, working capital, Transaction
expenses, as well as for general corporate purposes.
Upon the satisfaction of certain escrow release
conditions (the “Release Conditions”), each
Subscription Receipt shall automatically be exchanged for no
additional consideration into one FT H&W Common Share.
On closing of the Subscription Receipt Offering,
expected to occur on or about May 17, 2022, the gross proceeds from
the Subscription Receipt Offering, less 50% of the Agents’
commission and all of the Agents’ expenses (the "Escrowed
Proceeds"), will be deposited and held in escrow by an
escrow agent satisfactory to Field Trip H&W and Bloom Burton,
on behalf of the Agents, and pending satisfaction of the Release
Conditions, which include the satisfaction of all conditions
precedent to the completion of the Transaction and the receipt of
all required regulatory and third party approvals to the
Transaction. Provided the Escrow Release Conditions have been
satisfied on or prior to 4:30 p.m. (Eastern Time) on August 31,
2022, the Escrowed Proceeds will be released to Field Trip
H&W.
The Subscription Receipt Offering will be
conducted in all provinces and territories of Canada and in those
jurisdictions outside of Canada and the United States that are
agreed to by the Company and the Agents. The Subscription Receipts
will be sold In the United States only on a private placement basis
pursuant to an exemption from the registration requirements in Rule
144A or Regulation D of the United States Securities Act of 1933,
as amended.
Conference Call Details
The Company will conduct a conference call and
webcast to discuss these plans on Friday, April 29, 2022 at 8:30am
ET. To access the call, please dial 1-877-407-9716 (within the
U.S.) or 1-201-493-6779 (outside the U.S.) and provide conference
ID 13729639. A live webcast of the conference call can be accessed
via the Events and Presentations section of the Field Trip Health
Investor Relations website here or by clicking here.
For those unable to attend the live call, a
telephonic replay will be available until 11:59 pm ET on Friday,
May 6, 2022. To access the replay dial 1-844-512-2921 (within the
U.S.) or 1-412-317-6671 (outside the U.S.) and provide conference
ID 13729639. The webcast will be archived and available in the
Events and Presentations section of the Field Trip Health Investor
Relations website approximately one hour after the conclusion of
the live call.
About Field Trip Health
Ltd.
Field Trip is a global leader in the development
and delivery of psychedelic therapies. With our Field Trip
Discovery division leading the development of the next generation
of psychedelic molecules and conducting advanced research on
plant-based psychedelics and our Field Trip Health division
building centers for psychedelic therapies opening across North
America and Europe along with the digital and technological tools
that will enable massive scale, we help people in need with a
simple, evidence-based way to heal and heighten engagement with the
world.
Learn more at https://www.meetfieldtrip.com,
https://www.fieldtriphealth.com and
https://www.fieldtriphealth.nl.
Follow us on Twitter and Instagram:
@fieldtriphealth.
To receive company updates about Field Trip and
to be added to the email distribution list please sign up here.
Cautionary Note Regarding
Forward-Looking Information
This release includes forward-looking
information (within the meaning of Canadian securities laws and
within the meaning of the United States Private Securities
Litigation Reform Act of 1995) regarding Field Trip and its
business. Often but not always, forward-looking information can be
identified by the use of words such as "expect", "intends",
"anticipated", "believes" or variations (including negative
variations) of such words and phrases, or state that certain
actions, events or results "may", "could", "would" or "will" be
taken, occur or be achieved. Such statements are based on the
current expectations and views of future events of the management
of Field Trip and are based on assumptions and subject to risks and
uncertainties. Although the management of Field Trip believes that
the assumptions underlying these statements are reasonable, they
may prove to be incorrect. The forward-looking events and
circumstances discussed in this release may not occur and could
differ materially as a result of known and unknown risk factors and
uncertainties affecting the companies, including, but not limited
to, statements with respect to future events or future performance,
the completion and structure of the Transaction, anticipated
shareholder, court and regulatory approvals, the realization of the
anticipated benefits by any entity from the Transaction or from the
Company's or Field Trip H&W's assets or investments, the
general performance of the assets of the Company and Field Trip
H&W, and the realization or results of proposed business
activities as well as expansion projects relating to Field Trip at
Home, Trip and Portal and the ability of Discovery to meet its
estimated timelines, milestones and budget. Although Field Trip has
attempted to identify important factors that could cause actual
actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results to differ from those
anticipated, estimated or intended. Accordingly, readers should not
place undue reliance on any forward-looking statements or
information. No forward-looking statement can be guaranteed. Except
as required by applicable securities laws, forward-looking
statements speak only as of the date on which they are made and
Field Trip does not undertake any obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events, or otherwise. Additional information
relating to Field Trip, including its annual information form, can
be located on the SEDAR website at www.sedar.com and on the EDGAR
section of the SEC's website at www.sec.gov.
None of the securities to be issued pursuant to
the Transaction have been or will be registered under the United
States Securities Act of 1933, as amended (the "U.S.
Securities Act"), or any state securities laws, and any
securities issuable in the Transaction are anticipated to be issued
in reliance upon available exemptions from such registration
requirements pursuant to Section 3(a)(10) of the U.S. Securities
Act and applicable exemptions under state securities laws.
This press release does not constitute an offer
to sell or the solicitation of an offer to buy securities.
Neither the Toronto Stock Exchange, nor its
Regulation Services Provider, have approved the contents of this
release or accept responsibility for the adequacy or accuracy of
this release.
CONTACTS:Investor
contacts:Kathleen Heaney / Tim ReganKCSA Strategic
CommunicationsfieldtripIR@kcsa.com
Media contacts:Rachel MoskowitzAutumn
Communications202-276-7881press@fieldtriphealth.com
SOURCE Field Trip Health Ltd.
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