Functional mushroom company Psyched Wellness Ltd. (CSE: PSYC) (OTCQB: PSYCF) following the company’s release of its unaudited financials for the quarter ending May 2023, announced that it has closed a second tranche of its previously announced non-brokered private placement effective August 31, 2023, for gross proceeds of $4.5 million. The company said it worked with Gotham Green on the deal and it intends to use the money for working capital and general corporate purposes.
Psyched Wellness is currently producing and developing a line of Amanita Muscaria-derived water-based extracts, teas, and capsules designed to help with three health objectives: (i) promote stress relief, (ii) relaxation and (iii) assist with restful sleeping. The company did state that it has paused its research and development projects and will only focus on using products related to Amanita since it has fewer regulatory restrictions.
The company reported revenue of $106,731 versus zero revenue for the same time period in 2022. The cost of goods sold was ($189,362). All figures are in Canadian dollars.
The company also reported a net loss of $790,028 in the quarter. Psyched Wellness also reported expenses in the quarter totaled $583,413, of which $203,046 went to management salaries and consulting fees. The company ended the quarter with $830,079 in cash.
Psyched Wellness is now reporting as a going concern. During the six months ending May 31, 2023, the company reported it incurred a net loss of $1,802,990 (2022 – $2,519,935) and negative cash flow from operations of $1,676,370 (2022 – $1,533,394), and as of that date,
the company’s accumulated deficit was $24,329,210 (November 30, 2022 – $23,679,183).
The new deal to raise funds follows the initial tranche that closed in June 2023 of a non-brokered private placement that netted the company US$500,000.
CEO Jeffrey Stevens said, “I appreciate the support and patience of our Shareholders as we have been working behind the scenes with Gotham Green Partners to close this tranche of financing. This is a transformative investment that will allow the Company to maintain its first-mover advantage in bringing legal and safe products derived from the Amanita Muscaria mushroom to consumers in the United States. I am pleased to also share that both sides have been working together on additional product development, while working to close the financing, to ensure we can hit the ground running post-closing.”
As a result of the deal, Gotham Green was allowed to add another board member, bringing its representation on the seven-member board to two. Terry Booth has resigned as a director of the company, effective August 31, 2023, to accommodate Gotham’s nominee, Lauren Spikes being appointed to the Board. Gotham also has an exclusive deal for any additional financing deals for the company until Nov. 8, 2023.
Psyched Wellness also stated that it had entered into an amended independent contractor agreement with The Shisel, pursuant to which David Shisel, as principal of The Shisel, shall be re-engaged to perform Chief Operating Officer services for the company.