Newton Energy Corporation (“
Newton”) (TSXV: NTN.H)
is pleased to announce that it has entered into a letter of intent
dated June 18, 2020 with Field Trip Psychedelics Inc.
(www.fieldtriphealth.com) (“
Field Trip”) to
complete a going-public transaction in Canada for Field Trip (the
“
Proposed Transaction”). For convenience, Newton,
as it will exist after completion of the Proposed Transaction, is
sometimes referred to herein as the “Resulting Issuer”.
Field Trip is redefining mental health and
wellness with ground-breaking work in psychedelics and psychedelic
therapies. Through its Field Trip Health centres that provide
best-in-class psychedelic-therapies opening across North America,
and drug development and advanced research on plant-based
psychedelics through Field Trip Discovery, the company's newly
formed drug development division, Field Trip helps people, from
those in treatment to those seeking accelerated personal growth,
with a simple, evidence-based way to heal and heighten engagement
with the world.
If the Proposed Transaction is completed, it is
anticipated that the board of directors of the Resulting Issuer
(the “New Directors”) will consist of no fewer
than five (5) directors, each of whom will be nominated by Field
Trip. The executive officers of the Resulting Issuer will be
appointed by Field Trip and are expected to include Field Trip’s
current CEO, Joseph del Moral, Executive Chairman, Ronan Levy,
President of Field Trip Health, Hannan Fleiman, President of Field
Trip Natural Products Ltd., Mujeeb Jafferi, and Chief Clinical
Officer, Dr. Ryan Yermus. The New Directors will be put forth and
nominated at a meeting of Newton’s shareholders to be held prior to
the completion of the Proposed Transaction.
In conjunction with, and prior to the closing of
the Proposed Transaction, Field Trip intends to complete a brokered
private placement of common shares at a price of $2.00 per common
share for gross proceeds of up to $14.0 million, with an option to
be granted to the agents to increase the size of the private
placement by up to $1.0 million for total gross proceeds of up to
$15 million, co-led by Canaccord Genuity Corp. and Stifel Nicolaus
Canada Inc. (the “Private Placement”). Common
shares issued in the Private Placement will be exchanged for common
shares of the Resulting Issuer at the Exchange Ratio (as defined
herein) upon completion of the Proposed Transaction.
For the purposes of the Proposed Transaction,
the deemed value of each outstanding common share of Newton will be
$0.25 (on a pre-consolidation basis). Pursuant to the Proposed
Transaction it is currently intended that: (i) the outstanding
common shares of Newton will be consolidated at a consolidation
ratio to be determined by the parties based on the price per share
of the Private Placement (the “Consolidation”);
and (ii) the holders of Field Trip shares (including those
investors in the Private Placement) will receive one (1) common
share of the Resulting Issuer in exchange for each outstanding
Field Trip common share (on a post-Consolidation basis) (the
“Exchange Ratio”). The outstanding options of
Newton will be adjusted accordingly to reflect the Consolidation
and Exchange Ratio. Following the completion of the Proposed
Transaction, the securityholders of Field Trip (including those
investors under the Private Placement) will hold a significant
majority of the outstanding common shares of the Resulting
Issuer.
It is intended that the Proposed Transaction
will proceed by way of a “three-cornered” amalgamation of Field
Trip with a wholly-owned subsidiary of Newton (“Newton
Subco”) pursuant to the terms of a definitive agreement to
be entered into by Newton, Newton Subco and Field Trip (the
“Definitive Agreement”). The Proposed Transaction
will be an arm’s length transaction.
In connection with the Proposed Transaction and
subject to any requisite shareholder approval, Newton intends to
voluntarily de-list the common shares of Newton from the facilities
of the NEX board of the TSXV prior to the completion of the
Proposed Transaction. It will be a condition of closing that the
Resulting Issuer obtains a listing of its common shares on the
facilities of the Canadian Securities Exchange
(“CSE”). Subject to meeting the CSE listing
requirements, it is anticipated that the Proposed Transaction will
be governed by the policies of the CSE.
Completion of the Proposed Transaction is
subject to a number of conditions including, but not limited to:
completion of satisfactory due diligence; execution of the
Definitive Agreement; receipt of regulatory approvals; meeting all
CSE listing requirements, majority of minority shareholders’
approval from Newton for the delisting of the common shares of
Newton from the NEX board of the TSXV, as applicable, approval of
the TSXV to delist the common shares of Newton from its facilities,
receipt of approval for the listing of the common shares of the
Resulting Issuer on the CSE; shareholders of Field Trip approving
the Proposed Transaction and such other matters necessary to
complete the Proposed Transaction; and shareholders of Newton
approving certain matters ancillary to the Proposed Transaction,
including the appointment of the New Directors, subject to the
completion of the Proposed Transaction. Subject to the foregoing
conditions, the parties intend to enter into a definitive agreement
by July 31, 2020 and complete the Proposed Transaction by September
15, 2020. There can, however, be no assurance that the Proposed
Transaction will be completed as proposed or at all.
Investors are cautioned that, except as
disclosed in the listing statement to be prepared in connection
with the Proposed Transaction, any information released or received
with respect to the Proposed Transaction may not be accurate or
complete and should not be relied upon. Trading in the securities
of Newton should be considered highly speculative. Shares of
Newton are currently halted from trading on NEX, and trading is not
expected to resume on NEX or the TSXV.
The TSXV has in no way passed upon the merits of
the Proposed Transaction and has neither approved nor disapproved
the contents of this press release. Neither the TSXV nor its
Regulation Services Provider (as that term is defined in the
policies of the TSXV) accepts responsibility for the adequacy or
accuracy of this press release. THIS PRESS RELEASE DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
ANY SECURITIES IN ANY JURISDICTION, NOR SHALL THERE BE ANY OFFER,
SALE, OR SOLICITATION OF SECURITIES IN ANY STATE IN THE UNITED
STATES IN WHICH SUCH OFFER, SALE, OR SOLICITATION WOULD BE
UNLAWFUL.
ANY SECURITIES REFERRED TO HEREIN WILL NOT BE
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE “1933
ACT”) AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
OR TO A U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.
Notice on forward-looking statements:
This press release includes forward-looking
information within the meaning of Canadian securities laws
regarding Newton, Field Trip and their respective businesses, which
may include, but are not limited to, statements with respect to the
completion of the Proposed Transaction, the terms on which the
Proposed Transaction is intended to be completed, the ability to
obtain regulatory and shareholder approvals and other factors.
Often but not always, forward-looking information can be identified
by the use of words such as “expect”, “intends”, “anticipated”,
“believes” or variations (including negative variations) of such
words and phrases, or state that certain actions, events or results
“may”, “could”, “would” or “will” be taken, occur or be achieved.
Such statements are based on the current expectations and views of
future events of the management of each entity, and are based on
assumptions and subject to risks and uncertainties. Although the
management of each entity believes that the assumptions underlying
these statements are reasonable, they may prove to be incorrect.
The forward-looking events and circumstances discussed in this
press release, including completion of the Proposed Transaction
(and the proposed terms upon which the Proposed Transaction is
proposed to be completed), may not occur and could differ
materially as a result of known and unknown risk factors and
uncertainties affecting the companies, including risks regarding
the industry, market conditions, economic factors, management’s
ability to manage and to operate the business of the Resulting
Issuer and the equity markets generally. Although Newton and Field
Trip have attempted to identify important factors that could cause
actual actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results to differ from those
anticipated, estimated or intended. Accordingly, readers should not
place undue reliance on any forward-looking statements or
information. No forward-looking statement can be guaranteed. Except
as required by applicable securities laws, forward-looking
statements speak only as of the date on which they are made and
neither Newton nor Field Trip undertake any obligation to publicly
update or revise any forward-looking statement, whether as a result
of new information, future events, or otherwise.
For further information:
Newton Energy Corporation: Aaron Wolfe, (416)
972-6323
Field Trip Psychedelics Inc.: Joseph del Moral,
Chief Executive Officer, (437) 688-6148,
www.fieldtriphealth.com
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