Calgary, Alberta--(Newsfile Corp. - August 13, 2021) - Michichi Capital Corp. (TSXV: MCCP.P) ("Michichi"), a "Capital Pool Company" under TSX Venture Exchange (the "TSXV" or the "Exchange") Policy 2.4 (the "CPC Policy") and PsiloTec Health Solutions Inc. ("PsiloTec") are pleased to announce that they have entered into a non-binding letter of intent dated August 12, 2021 (the "LOI"), pursuant to which Michichi and PsiloTec intend to complete a business combination or other similarly structured transaction (the "Proposed Transaction") which will constitute a reverse take-over of Michichi (the combined entity hereinafter referred to as the "Resulting Issuer"). It is intended that the Proposed Transaction will be an arm's length "Qualifying Transaction" for Michichi, as such term is defined in the CPC Policy. It is anticipated that, upon completion of the Proposed Transaction, the Resulting Issuer will meet the Tier 2 listing requirements of the TSXV for a life sciences issuer.
About Michichi Capital Corp.
Michichi was incorporated under the Business Corporations Act (British Columbia) on March 16, 2021 and its head office is located in Calgary, Alberta and its registered office is located in Vancouver, British Columbia. The common shares of Michichi ("Michichi Shares") are listed for trading on the TSXV under the stock symbol MCCP.P and Michichi is a reporting issuer in Alberta, British Columbia, Saskatchewan, Manitoba and Ontario.
Michichi currently has 2,100,000 Michichi Shares issued and outstanding and securities exercisable or exchangeable into 360,000 Michichi Shares, being: (i) 210,000 stock options issued under Michichi's stock option plan; and (ii) 150,000 agent warrants. There are no other securities of Michichi issued and outstanding and Michichi has not commenced commercial operations and has no assets other than cash.
About PsiloTec Health Solutions Inc.
PsiloTec is a biopharmaceutical company engaged in the development and delivery of integrated mental health therapies to address psychological and neurological mental health illnesses. PsiloTec is focused on the genomic sequencing, organic cultivation, drug research, development and commercialization of psychedelic-based compounds coupled with therapeutic treatment programs targeting a continuum of mental health conditions, such as MDD (major depressive disorder), TRD (treatment resistant depression), PTSD (post-traumatic stress disorder), general depression, anxiety and a number of addictive tendencies. PsiloTec aims to leverage leading patent protected technologies to support its proprietary treatment protocols and drug product candidates. PsiloTec was incorporated under the Business Corporations Act (Alberta) on December 9, 2020.
Since inception, PsiloTec has issued and sold $5,754,500 of units ("Units") on a private placement basis at a price of $0.50 per Unit. Each Unit consisted of one common share in the capital of PsiloTec (a "PsiloTec Share") and one half of one PsiloTec Share purchase warrant (each whole warrant, a "Warrant"). Each whole Warrant entitles the holder thereof to acquire one PsiloTec Share at an exercise price of $1.00 per PsiloTec Share, until April 14, 2023; provided, however, that if the PsiloTec Shares (or any securities into which the PsiloTec Shares are exchanged or converted) trade on a recognized stock exchange at a volume-weighted average price of $1.40 or more per PsiloTec Share for a period of at least ten consecutive trading days, PsiloTec may accelerate the expiration of the Warrants to a period ending 30 days from the date that notice of such acceleration is provided to the holders of Warrants. Since inception, PsiloTec has raised $6,255,700.
For more information about PsiloTec, visit www.psilotec.com.
Summary of the Proposed Transaction
It is currently anticipated that the Proposed Transaction will be effected by way of a three-cornered amalgamation under the provisions of the Business Corporations Act (Alberta) pursuant to which Michichi will acquire all of the issued and outstanding PsiloTec Shares, with the final structure being subject to receipt of tax, corporate and securities law advice for both Michichi and PsiloTec.
It is intended that, upon closing of the Proposed Transaction ("Closing"), holders of PsiloTec Shares ("PsiloTec Shareholders") will receive one Michichi Share in exchange for each PsiloTec Share held immediately prior to Closing, based upon a deemed price per Michichi Share of $0.50. In addition, all outstanding Warrants and stock options of PsiloTec will be exchanged for warrants and stock options of the Resulting Issuer, respectively, on equivalent terms. PsiloTec has no current intention of undertaking a financing concurrently with the Proposed Transaction. Upon Closing, it is intended that the Resulting Issuer will carry on the business as previously carried on by PsiloTec prior to the completion of the Proposed Transaction and will continue under the name of "PsiloTech Health Solutions Inc.", or such other name as is determined by PsiloTec, the PsiloTec Shareholders and the TSXV.
Upon Closing, it is intended that the Resulting Issuer will have outstanding approximately 30,609,000 common shares ("Resulting Issuer Shares"), 5,754,500 Resulting Issuer Share purchase warrants exercisable into the equivalent number of Resulting Issuer Shares at a price of $1.00 per Resulting Issuer Share, 200,000 Resulting Issuer Share purchase warrants exercisable into the equivalent number of Resulting Issuer Shares at a price of $0.50 per Resulting Issuer Share, 150,000 agent warrants exercisable into the equivalent number of Resulting Issuer Shares at a price of $0.50 per Resulting Issuer Share and up to 3,060,900 stock options exercisable at a price of not less than $0.50 per Resulting Issuer Share. Existing PsiloTec Shareholders will hold approximately 28,509,000 Resulting Issuer Shares, representing approximately 93% of the outstanding Resulting Issuer Shares and existing holders of Michichi Shares ("Michichi Shareholders") will hold approximately 2,100,000 Resulting Issuer Shares, representing approximately 7% of the outstanding Resulting Issuer Shares. Each of the PsiloTec Shares issued to the principals of PsiloTec, who will become management of the Resulting Issuer, will be subject to escrow in accordance with the policies of the Exchange.
Pursuant to the terms of the LOI, completion of the Proposed Transaction is subject to the satisfaction of various conditions as are standard for a transaction of this nature, including, but not limited to: (a) approval by the boards of directors and shareholders, to the extent required, of each of PsiloTec and Michichi in respect of the Proposed Transaction; (b) receipt of all required regulatory and third party approvals, including TSXV approval, and compliance with all applicable regulatory requirements and conditions necessary to complete the Proposed Transaction; (c) the satisfactory completion of due diligence by both Michichi and PsiloTec; (d) the Proposed Transaction being structured in a manner that is satisfactory to PsiloTec and Michichi; (e) the absence of any change in the affairs of PsiloTec or Michichi that would have a material adverse effect; and (f) the negotiation and execution of a definitive agreement in respect of the Proposed Transaction. There can be no assurance that the Proposed Transaction will be completed on the terms proposed or at all.
Trading in Michichi Shares has been halted in compliance with the policies of the TSXV. Trading in Michichi Shares will remain halted pending the review of the Proposed Transaction by the TSXV and satisfaction of the conditions of the TSXV for resumption of trading.
https://www.newsfilecorp.com/release/93160/Michichi-Capital-Corp.-Enters-into-Letter-of-Intent-for-Qualifying-Transaction-with-PsiloTec-Health-Solutions-Inc.