Vancouver-based Filament Health Corp. (OTCQB: FLHLF) (NEO: FH) (FSE: 7QS) will soon be listed on the Nasdaq exchange through a new business arrangement expected to accelerate the progression of its psychedelic drug development capabilities.
The company announced the transaction on Wednesday which is expected to close in Q4 this year. The upcoming Nasdaq listing will be possible through the formation of a separate combined company with Jupiter Acquisition Corporation (NASDAQ: JAQC), a publicly listed entity created solely for acquisitions and mergers with other businesses.
Filament says the business combination provides it with US$176 million in equity value, representing US$0.85 per company share. The new company will have an estimated total value/pro forma enterprise valuation of US$210 million.
“Today’s announcement is an important milestone for Filament as we gain access to the broader capital markets needed to advance our drug development platform,” said Filament’s CEO Benjamin Lightburn.
“We are thrilled to have the opportunity to impact the advancement of psychedelic medicines that will support the treatment of mental health conditions through this combination with Filament,” said Jupiter’s CEO James Hauslein, adding that the deal was expected to be a value driver for Jupiter shareholders.
Filament Health $FLHLF trades at $0.06 per share
Jupiter Acquisition announced a merger with the OTC-listed company, valuing it at $0.85 per share
That's a 1,200% premium
Would be interesting to read that fairness opinion pic.twitter.com/H7h1Ar2MNV
— Julian Klymochko (@JulianKlymochko) July 19, 2023
Filament also announced Wednesday that it will be receiving a $2 million non-brokered private placement from Negev Capital, a financial firm that describes itself as a psychedelic medical intervention investment fund.
The funds will be utilized by Filament for general corporate expenses and an FDA-approved Phase II clinical trial aimed at treating methamphetamine use disorder with psilocybin.
“With vertically integrated manufacturing capabilities creating standardized, botanical drug candidates, Filament is poised to succeed,” said Negev’s Partner Ken Belotsky, adding that Filament was one of the most compelling early-stage companies in the psychedelics industry and that its treatments could help millions of people.
Earlier this month, Filament licensed its patented psilocybin drug PEX010 to Burnaby’s NeoLumina Bioscience to be used as a potential treatment for eating disorders. Filament will be receiving milestone payments and commercial royalties for providing NeoLumina with intellectual property rights through the deal.
The company will also be supplying psilocybin to the Canadian government for a series of upcoming clinical trials valued at $3 million. The trials will study the psychedelic’s potential for the treatment of mental health and substance use disorders.
Filament’s cash position decreased significantly year-over-year at the end of 2022, dropping by approximately $1.8 million or 38.5 per cent to $2.85 million.
The company’s stock rose significantly by 46.83 per cent Wednesday to US$0.095 on the OTC markets.
Jupiter shares stayed flat at US$10.22 on the Nasdaq stock exchange.