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Universal Ibogaine completes first closing of $2.3 million under its current private placement offering of units

Published: 09:40 26 Nov 2020 EST

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Shayne Nyquvest, Universal Ibogaine chairman and founder commented: “We are excited by the level of interest we have received for the Offering"

Universal Ibogaine Inc. said it has completed the first closing of $2.3 million under its current private placement offering of units.‍

The company said a total of 9,369,392 units have been issued at a price of $0.25 with a total value of $2,342,348. The units issued under the offering consist of one Universal Ibogaine (UI) common share and one warrant to purchase an additional UI common share.

The warrants will have a 5-year term to expiry, and an escalating annual exercise price (increasing by $0.25 per year, starting at $0.50 if exercised in year 1, to $1.50 if exercised in year 5).

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‍The initial closing includes units issued for cash received to November 20, 2020, and units issued in settlement of services received and certain obligations owing by the company. In addition, UI will issue a minimum of $500,000 of units as partial consideration payable on closing of its pending acquisition of the Kelburn Clinic.‍ The total of $774,499 includes units valued at $306,667 which were issued for the value of past services received from members of UI’s board of directors.  

‍Additional subscription agreements have been received under the offering, and UI said it will process a further closing in the next two weeks for additional cash proceeds which are in the process of being received.

In a statement, Shayne Nyquvest, UI chairman and founder commented: “We are excited by the level of interest we have received for the Offering – this financing gives us financial flexibility to achieve our short-term objectives, and build on our momentum heading into our Prospectus offering and RTO go-public transaction.”

Following issuance of the 9,369,392 offering units, UI will have approximately 92.5 million common shares issued and outstanding. In addition, UI is obligated to issue i) a total of 30 million common shares for issuance under a 2019 Licensing Agreement with Clear Sky Recovery Cancun SA de CV;  ii) 2 million common shares for the Kelburn Clinic acquisition and iii) approximately 10 million common shares to be issued to certain UI shareholders on completion of the upcoming reverse takeover “liquidity event”. 

Kelburn Clinic acquisition

UI noted that it has previously entered into a letter of intent with an arms-length party to acquire the operations of an addiction treatment facility near Winnipeg, Manitoba, the Kelburn Mental Health & Addiction Recovery Centre. The Kelburn Clinic is privately-owned and has been in operation for 6 years.

It is intended that consideration payable for the Kelburn Clinic acquisition will consist of $1 million cash and a minimum of $500,000 equity requested by the owners of the property, payable in the form of 2,000,000 UI Units (which will have the same terms as those being issued under the current offering).

The Kelburn Clinic site is operated under a long-term lease of the premises from certain of its related party shareholders. UI intends to initially acquire solely the operations of the KelburnClinic, and lease the related land and building (with a two-year option to subsequently acquire those assets). Further, UI intends to expand the operations and optimize and improve Kelburn’shistorical occupancy.

PSQ reverse takeover

On October 7, 2020, UI finalized an Amalgamation Agreement for a proposed business combination/merger with P Squared Renewables Inc. (CVE:PSQ.P)), a capital pool company listed on the TSX Venture Exchange (TSX-V).

The merger with UI, the related prospectus financing, and UI’s pending acquisition of the Kelburn Clinic are intended to constitute PSQ’s “Qualifying Transaction” (QT) under TSX-V requirements.

PSQ plans to conduct a prospectus offering of units closing concurrently with the QT, for gross proceeds of a minimum of $3 million and a maximum of up to $5 million. It is intended that the units issued under the prospectus offering will be comprised of one common share and one-half of one common share purchase warrant.

PSQ and UI have submitted a preliminary prospectus to the TSX-V for review, and are in process of forming a syndicate of investment bankers who will market this financing.

PSQ was incorporated in 2017 and listed on the TSX-V on June 21, 2017.  Since its formation, PSQ has been searching for and evaluating suitable business combinations to constitute its QT under the policies of the TSX-V.

Completion of the QT is subject to a number of conditions, including but not limited to: (i) the ‎conditions stipulated in the Amalgamation Agreement (including completion of the Prospectus Offering); (ii) closing conditions customary to‎ transactions of the nature of the QT; (iii) the approval of UI's shareholders; and (iv) the ‎approval of applicable regulatory bodies in connection with the QT, including but not limited to ‎the TSX-V.‍

Universal Ibogaine Inc. is a privately held company formed in 2018 and based in Vancouver, British Columbia. It is in the initial stages of implementing and financing its business plan, which is to develop a network of global ibogaine assisted psycho-therapy clinics for the treatment and ideally the cure of addictions to primarily opioids, as well as alcohol, cocaine, heroin, fentanyl and other stimulants.

UI plans to submit a Clinical Trial Application to Health Canada to undertake clinical trials in Canada to prove the efficacy of the use of ibogaine, a natural substance, in the treatment of polysubstance addictions including opioids.  In the longer term, UI plans to introduce ibogaine into the addiction treatment protocols to be used in its future facilities.

The company also holds a 20-acre property on an island near San Pedro, Belize, and is reviewing the concept of having a joint venture partner finance and develop a potential future resort or after-care facility on this site.

Contact the author at jon.hopkins@proactiveinvestors.com

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