Canadian psychedelics firm Psyence Group Inc. (CSE: PSYG) received regulatory approval from U.S. stock regulators for a “business combination” with the special purpose acquisition corporation Newcourt Acquisition Corp. (Nasdaq: NCAC) to form a new psychedelics venture, Psyence Biomed.
The companies said in a press release that the new company is valued at US$50 million.
After the close of the merger, which was first announced in January, the new entity is expected to trade on the Nasdaq under the ticker symbol PBM.
“The significant milestone of receiving effectiveness is one step closer to a listing on a U.S. national security exchange and enhancing our corporate profile in the U.S., as we aim to commence our phase IIb clinical trial using nature-derived psilocybin in palliative care,” Psyence CEO Dr. Neil Maresky said in a statement.
Psyence also reported its second-quarter financials for its current fiscal year. The company lost C$488,848 in the quarter that ended Sept. 30, a significant decline from the C$1 million loss from the same period a year ago.
For the first six months of the fiscal year, the company’s losses stand at C$2.7 million, slightly higher than last year’s $2.2 million loss.
Psyence is still in the pre-revenue stage, though it owns a psilocybin mushroom cultivation facility in the African nation of Lesotho and is focused on research and development for psilocybin-based medical treatments, including with clinical trials in Australia.
So far in its fiscal year, Psyence has spent C$3.5 million on operating activities, but only C$43,000 on research and development in the most recent quarter. Most expenditures were allotted to “professional fees and consulting fees,” on which Psyence spent C$365,000 in the second quarter.
At the end of September, Psyence “had not yet achieved profitable operations,” and had accrued total financial losses of C$24.6 million. The company “expects to incur further losses in the development of its business, all of which indicate that a material uncertainty exists that casts significant doubt about the Company’s ability to continue as a going concern,” it reported.
That, however, was just days before the U.S. Securities and Exchange Commission declared the F-4 filed by Psyence and Newcourt as “effective,” which opens the door for the uplisting to the Nasdaq from the Canadian Securities Exchange.
At the close of September, Pysence had C$2.1 million in total assets, including C$856,000 in cash, against C$2.4 million in total liabilities.