Stockwatch Daily

Clarmin to acquire psilocybin firm Cybin in RTO

- Mr. Mark Lawson reports

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 (

Nico Oliver Civelli, Mark Lawson, Matthew Leslie Sutcliffe

(CX) Shares: 14,200,001

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