Clarmin to acquire psilocybin firm Cybin in RTO

CLARMIN EXPLORATIONS Inc. has entered into an amalgamation agreement dated June 26, 2020, with Cybin Corp., a private psilocybin and nutraceutical company, and 2762898 Ontario Inc., a wholly owned subsidiary of Clarmin. The completion of the transactions will result in the reverse takeover of Clarmin by Cybin.

Cybin is a mushroom life sciences company focused on psychedelic medicines and nutraceutical products, and led by an experienced team. The Journey nutraceutical line includes non-psychedelic medical mushroom extracts to optimize overall health, while the Serenity Life Sciences line of psychedelic medicines targets multiple indications, such as depression, eating disorders and addiction. Cybin’s intellectual property strategy revolves around psychedelic delivery mechanisms, synthetic compounds, extraction methods, isolation of chemical compounds, new drug formulations and protocol regimens.

Summary of the proposed transaction

Clarmin and Cybin will complete an arm’s-length business combination by way of a three-cornered amalgamation. The shareholders of Cybin, other than the Cybin shareholders who exercise their dissent rights, will receive, subject to adjustment, one common share in the capital of Clarmin (on a post-Clarmin consolidation basis) for each Cybin share held. In addition, all outstanding warrants and incentive stock options of Cybin will be exchanged for warrants and incentive stock options of the resulting issuer, respectively, on equivalent terms after having given effect to all of the transactions contemplated by the proposed transaction. Clarmin and Cybin intend to apply to delist the common shares in the cap i tal of Clarmin from the TSX Venture Exchange and apply to the Canadian Securities Exchange for the listing of the common shares in the capital of the resulting issuer, and to close the proposed transaction on the CSE.

As a condition precedent of the proposed transaction, Clarmin’s board of directors will approve a consolidation of Clarmin’s issued and outstanding share capital. For illustrative purposes, this press release assumes the Clarmin shares will be consolidated on a 8.875:1 basis. Upon completion of the proposed transaction, assuming completion of the consolidation and the minimum offering, former Cybin shareholders will hold, in the aggregate, approximately 85,950,236 common shares in the capital of the issuer resulting from the proposed transaction, representing approximately 98 per cent of the outstanding resulting issuer shares, and existing holders of Clarmin shares will hold, in the aggregate, approximately 1.6 million resulting issuer shares, representing approximately 2 per cent of the outstanding resulting issuer shares.

In connection with the proposed transaction, Clarmin intends to change its name to Cybin Corp. and to replace all directors and officers of Clarmin on the effective date of the proposed transaction with nominees of Cybin.

Summary of the concurrent financing

Cybin plans to complete a best efforts brokered private placement of subscription receipts of Cybin to raise a minimum of $14-million ($10-million (U.S.)) and a maximum of $21-million ($15-million (U.S.)), with a 15-per-cent agents’ option.

The gross proceeds of the concurrent financing, less 50 per cent of the agents’ cash commission and certain expenses of the agents, will be deposited in escrow on the closing date of the concurrent financing until the satisfaction of certain release conditions, including that all conditions precedent to the proposed transaction have been met.

Upon the satisfaction of the release conditions, each subscription receipt will be converted into one common share in the capital of Cybin without payment of any additional consideration or further action on the part of the holder thereof. At the effective time of the proposed transaction, each Cybin share will be exchanged for one resulting issuer share (on a post-Clarmin consolidation basis).

It is expected that the net proceeds from the concurrent financing will be used for working capital and general corporate purposes.

To date, Cybin has raised approximately $10.4-million through both Cybin’s initial financing round and its Series A financing round.

“We are delighted by the varying strategic biotech and investment funds, merchant bankers, pharmaceutical and

CPG executives, and strategic individual investors who have invested in Cybin to date,” said Paul Glavine, chief executive officer of Cybin. “This is the beginning of a transformational moment in Cybin’s history, and we expect to be well positioned to accelerate our strategic growth initiatives. We’re thrilled to receive the support of Stifel GMP and Eight Capital, a strong show of confidence in the long-term potential of the psychedelic sector.”

Proposed management team and board of directors of the resulting issuer

On completion of the proposed transaction, the current directors and officers of Clarmin will resign, and it is currently expected that the proposed executive officers of the resulting issuer will include: Mr. Glavine (chief executive officer); Eric So (president); John Kanakis (senior vice-president of business development); Greg Cavers (chief financial officer); and Jukka Karjalainen (chief medical officer). The resulting issuer’s board of directors will be nominated by Cybin.

We seek Safe Harbor.

Erika Flores condensed this news release (erikaf@stockwatch.com).

Nico Oliver Civelli, Mark Lawson, Matthew Leslie Sutcliffe

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