MindMed Raises $30 Million, Stock Plummets

Co-founder was against the offering and suggested it would hurt the share price.

Mind Medicine Inc. (“MindMed”) (NASDAQ: MNMD) (NEO: MMED) has priced its underwritten public offering of 7,058,823 common shares at $4.25. The shares come with warrants and the price includes both. The gross proceeds from the offering are expected to be approximately $30 million, before deducting underwriting discounts and commissions and offering expenses.

The accompanying warrant will be immediately exercisable and has an exercise price of $4.25 per common share and expires five years from the date of issuance. The offering is expected to close on or about September 30, 2022.

MindMed shares were falling by almost 50% in pre-market trading on the news. The stock was selling at roughly $3.10 a drop from yesterday’s close of $6.12. Twitter posts suggested that MindMed might have been motivated to release the offering by a move from Freeman Capital Management.

In August, Co-founder Dr. Scott Freeman through his company Freeman Capital Management sent a letter to the board of directors asking them to adopt a new strategic plan that would include refocusing on MindMed‘s core drugs, cutting cash burn, and terminating MindMed’s at-the-money equity offering. The letter is posted below.

The letter detailed steps that could cut the cash burn by almost 50% and have a marketable drug within four years. The letter also requested that Dr. Freeman be added to the board.

The letter also asked that the executives take a salary cut noting that they have received over $2 million in compensation as the stock price dropped 60%. The letter asked that the company divest the recently acquired digital medicine company HealthMode at almost half the price paid for it. MindMed paid $27 million for HealthMode but would likely only be able to sell it for $10-$15 million.

The letter also specifically said it did not want MindMed to pursue a $100 million equity offering and that the company didn’t need the money and that such an offering would hurt that company’s share price, which seems to be the case. MindMed has $120 million on hand.

 

MNMD Board Letter-0001

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.


Agrify

Leave a Reply

Your email address will not be published. Required fields are marked *

Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.

 Subscribe

By continuing I agree to your Privacy Policy and consent to receive relevant newsletters and other email communications on events, editorial features, and special partner offers from Green Market Report. I can unsubscribe or change my email preferences at any time.


About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


READ MORE



Recent Tweets

@GreenMarketRpt – 4 days

Thanksgiving is the day do their best work. How else can you eat all day unless you can maximize the munchies?

@GreenMarketRpt – 4 days

The Daily Hit: November 23, 2022

@GreenMarketRpt – 5 days

New York Cannabis Regulators Request Lifting of Retail Injunction

Back to Top

Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.

 Subscribe

By continuing I agree to your Privacy Policy and consent to receive relevant newsletters and other email communications on events, editorial features, and special partner offers from Green Market Report. I can unsubscribe or change my email preferences at any time.