Spin-out Completed and DTC Eligibility Received; SERFOR Permit is Expected Shortly; Advisory Board Expanded; Rights Offering Underway
Toronto, Ontario--(Newsfile Corp. - June 20, 2023) - Neural Therapeutics Inc. ("Neural" or the "Company") is pleased to provide the following corporate update, describing the progress made with the execution of the corporate strategy towards developing a mescaline-based psychedelic for mental health treatment.
Spin-Out Completed and DTC Eligibility Received
On May 23, 2023, Neural completed its spin-out from Vertical Peak Holdings Inc. (formerly High Fusion Inc.), as a result of which, Neural became a stand-alone reporting issuer and is now working towards securing a public listing. This action permits Vertical Peak and Neural to operate as separate public companies focused on growth in their respective sectors, allowing them to better match investor interest with their core value propositions.
As a result of the spin-out, Neural now has over 10,000 shareholders, which the Company anticipates being sufficient to satisfy the distribution requirements for a public listing. Neural Therapeutics is currently in the process of preparing a submission to the Canadian Securities Exchange ("CSE") to become a listed company, which will be contingent on completing a minimum capital raise (as discussed below) and satisfying other requirements of the CSE.
Ian Campbell, CEO for Neural, commented, "We are very pleased to report Neural's progress towards Neural becoming publicly traded company. With the spin-out completed, we are one step closer to providing the wider public with the ability to come on board as shareholders and join our journey towards becoming a leading provider of psychedelic treatment for mental health issues."
Neural is also pleased to report that its common shares are now eligible for electronic clearing and settlement through the Depository Trust Company ("DTC") in the United States. DTC is a subsidiary of the Depository Trust & Clearing Corporation, a U.S. company that manages the electronic clearing and settlement of publicly traded companies. Securities that are eligible to be electronically cleared and settled through DTC are considered to be "DTC eligible." DTC eligibility is expected to simplify the process of trading and enhance liquidity of the Company's common shares in the United States, once Neural completes such listing.
Ian Campbell, CEO for Neural, continued: "We believe that with DTC eligibility, existing investors benefit from potentially greater liquidity and execution speeds when the company becomes listed on a US-based exchange. This also opens the door to new investors that may otherwise be restricted from investing in our common shares, while simplifying the process of trading our common shares in the United States."
New Advisory Board Member Appointed
The Company has appointed Dr. Mara Bilibajkich, MD, CCFP to its Scientific and Impact Advisory Board. Dr. Bilibajkich is based in Windsor, Ontario where she practices medicine and is an expert in drug development of controlled substances with deep clinical experience and front-line experience. Her patient-focused approach is an invaluable asset to Neural, as we look to progress towards conducting the clinical trials on the efficacy of mescaline. Dr. Bilibajkich furthermore bolsters the Company's regulatory pathway knowledge and capabilities, while at the same time incorporating the voice-of-the-patient into our corporate strategy.
Dr. Bilibajkich has been a practicing family physician since 1995. A serial healthcare entrepreneur who founded multiple clinic operations, both multi-disciplinary and cannabis focused, has a strong focus on mental health and wellbeing. With over 1,000 articles on cannabis written, Dr. Bilibajkich is a highly recognized thought leader in the controlled substance space, supporting the advancement of new treatments that promise much greater efficacy than the status quo. She also owns RxLeaf, the largest online patient focused medical cannabis media site, with online ecommerce sales in the United States and Canada where patients learn to make their own products with guidance. Dr. Bilibajkich studied organic chemistry at Western University, received her medical degree from Queen's University in Kingston, Ontario, where she also completed her medical residency. Currently Dr. Bilibajkich is enrolled in a Psychedelic Psychiatry Fellowship with Integrative Psychiatric Program (IPI) that is affiliated with MAPS (Multidisciplinary Association For Psychedelic Studies).
Dr. Bilibajkich commented, "I am thrilled to join the Neural scientific advisory board. I am a strong believer in the groundbreaking advances we can make in mental health treatment by using psychedelics. Mescaline has a number of characteristics that, we believe, make it an exceptional psychedelic with the potential to dramatically improve the efficacy of mental health treatment for issues such as anxiety, depression, addiction and others. I have been impressed with Ian and the Neural team and believe that together we can make a positive to the lives of individuals while reducing the stress on society."
Operational Updates & Milestone Achievements
Federal Peruvian Permit Application Update
As the San Pedro plant is native to Peru and scientific literature refers to the highest mescaline producing varieties coming from Peru, Neural applied for a permit ("SERFOR Permit") to sample wild plants as a means towards identifying the most suitable cultivars for cultivation purposes. The Company is pleased to report that the Company's staff has received notifications from SERFOR that neither by the Ministry of Agriculture nor the Ministry of Environment have any objections to granting of the SERFOR Permit to Neural. The Company expects to receive the SERFOR Permit in the next few weeks.
Mr. Campbell added, "The SERFOR Permit is a key permit that would allow Neural to carry out our genetic studies in Peru with a plant that is protected by the United Nations Convention on International Trade in Endangered Species of Wild Fauna and Flora ("CITES") agreement and where SERFOR acts on behalf of CITES. It is unusual for foreign entities to get such permission and we believe that our ability to obtain this permit, as well as a cooperation agreement with a nationally recognized partner (Cayetano University), reflect both the importance of our R&D work on mescaline and the recognition of Neural Therapeutics as a leading science-based organization in mescaline research."
Mr. Campbell continued: "Our plan includes an ecofriendly planting and live sample donation to a government sanctioned herbarium. The Ministries of Agriculture and Environment have both reviewed and our environmentally safe plan."
Cultivar Update
Neural's research and development plans include a wide range of initiatives, ranging from plant extraction (full spectrum) to synthetic complex mixtures of mescaline. Neural's current focus is plant extraction only and at Cayetano University in Lima, Peru we are nearing completion of our first research project, a validated chemical quantification and DNA plant identification program.
Within Q2 2023, we expect to deliver on a significant scientific milestone where the results from a nursery experiment using three species of Echinopsis (San Pedro) will be completed. To our knowledge, Neural will be the first to identify these plants by their DNA profiles and produce a reliable quantification of their mescaline content. This is an important strategic step in preparation for our upcoming discussions with regulators such as the FDA in the United States as we move towards pre-clinical and clinical trials.
Scaling Up of Patent Pending Extraction Process
Neural has been engaging with its partner Caribbean Gold Standard Labs (with offices in Florida, US and Saint Vincent and the Grenadines) to conduct optimization studies on Neural's patent-pending extraction process. This is critical step towards securing the capability to produce sufficient quantities of mescaline to supply commercial operations.
Based on its preliminary studies, Neural continues to discover that the San Pedro cactus contains a host of non-psychoactive compounds that may be used in developing new nutraceutical products that may potentially offer certain health and wellness benefits.
Florida State Initiative
In April, Neural Therapeutics participated in a successful joint educational effort to gain support from Florida lawmakers, following an invitation from Toby Oberdorff, State House Representative at Florida House of Representatives.
The initiative was spearheaded on behalf of and with veterans, and is non-psychedelic-specific. The objective was to contribute something of immediate value (i.e. reducing veteran suicide) and explore opportunities for future non-dilutive research funding from various government-funded institutions and agencies. More on this successful initiative can be found here: https://www.linkedin.com/feed/update/urn:li:activity:7055169859734683648/
Neural Therapeutics App/Magazine
Over the past few months, the Company has worked on the development of a new on-line Neural Therapeutics Magazine. The purpose of this initiative is to drive deeper eco-system engagement, both with investors and scientists. Development of the magazine is nearing completion, with launch anticipated shortly.
The magazine is a publication of developments in alternative neural therapeutic space (psychedelics in general but with a strong focus on Mescaline). The Company intends for the magazine to make scientific information on the benefits of psychedelics more accessible to all stakeholders and will cover significant scientific events, filtering out the entertainment side of psychedelics.
Financing Activities
While the climate on the capital markets has been challenging for most sectors these past few months, Neural Therapeutics has been able to secure funding commitments from a growing number of investors. While progress has been promising, in order to meet the minimum funding requirement to effect its targeted public listing, the Company has decided to augment the ongoing financing efforts with a rights offering ("Rights Offering"). The Rights Offering will enable all existing Canadian shareholders to acquire additional shares in Neural at a price that represents a significant discount to the last financing. Concurrently, the Company is continuing with its private placement ("Private Placement") under the same terms, which is targeted towards accredited investors.
Pursuant to the terms of the Rights Offering, each existing Canadian shareholder of Neural has the right to acquire new shares at $0.03 per share (pre-money valuation of approximately $1.2m). The basic amount that any Canadian shareholders may acquire is 1 time the number of their current shareholding. The Company intends to raise up to an aggregate maximum of $2.1 million between the Private Placement and the Rights Offering. There is no minimum amount of investment that the shareholders may subscribe to, and shareholders may elect to purchase more than their pro-rata share.
John Durfy, Chairman of the Company, stated, "We are pleased with the progress made to date with our funding efforts, with each day getting us closer to our goal of securing a public listing. These funds will allow Ian and the team to accelerate our initiatives towards conducting clinical trials on mescaline. We continue to meet with positive responses to our mescaline-based initiatives as especially those in the know recognize the value of mescaline as a differentiated psychedelic with over 5,700 years of human use history. We look forward to completing our current round, securing a public listing company and continue making strides towards improving the efficacy in the treatment of debilitating mental health conditions."
About Neural Therapeutics
Neural is a drug-discovery company focusing on plant based active substances with the goal of delivering beneficial over-the-counter dietary-supplements and psychedelic-based therapeutic-medicines to treat serious mental ailments where no significant treatment is available today. Neural key ingredient is mescaline derived from cacti. Neural has established a supply chain in Peru to source certain specimen of mescaline containing cacti, such as San Pedro cactus and has applied for requisite permits with National Service for Forest and Wildlife or Servicio Nacional Forestal y de Fauna Silvestre ("SERFOR"), to permit it to collect wild species of cacti within Peru for research purposes.
Neural Therapeutics is an unlisted reporting issuer in the Provinces of British Columbia, Alberta and Quebec.
No securities regulatory authority has reviewed nor accepts responsibility for the adequacy or accuracy of the content of this news release. This news release contains forward-looking statements relating to the Rights Offering and the Private Placement, closing of such offerings, use of proceeds from such offerings, the outlook for the psychedelic products and related industries; the achievement, and the timing of, certain development milestones and the successful execution of Neural Therapeutics' business strategy (including its business model and mission); anticipated capitalization, projected milestones and the go-forward management of Neural; timing and ability to complete any financing or listing on the CSE; timing of grant of SERFOR Permit; and other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance, expected regulatory filings, review and approval dates, and start-up timelines and schedules, and statements related to the continued overall advancement of Neural's business and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects" and similar expressions. All statements other than statements of historical fact, included in this release are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include the inability to raise sufficient funds to conduct the Company's business plan; failure to satisfy the conditions of the relevant securities regulators(s) and other risks detailed from time to time in the filings made by the Company with securities regulations. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking information contained in this press release represents the expectations of the Company as of the date of this press release and, accordingly, are subject to change after such date. However, the Company expressly disclaims any intention or obligation to update or revise such statements.
The Company's securities have not been registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or applicable state securities laws, and may not be offered or sold to, or for the account or benefit of, persons in the United States or "U.S. Persons", as such term is defined in Regulation S under the U.S. Securities Act, absent registration or an applicable exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in the United States or any jurisdiction in which such offer, solicitation or sale would be unlawful.
Additionally, there are known and unknown risk factors which could cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. A description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in the Company's disclosure documents on the SEDAR website at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.
A description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in the Company's disclosure documents on the SEDAR website at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.
Forward-looking information contained in this press release is expressly qualified by this cautionary statement. The forward-looking information contained in this press release represents the expectations of the Company as of the date of this press release and, accordingly, are subject to change after such date. However, the Company expressly disclaims any intention or obligation to update or revise any forward-looking information.
