- Management director nominees bring superior experience and
expertise to drive positive growth, represent ALL shareholders interests and create value
for ALL shareholders.
- FSD's COVID-19 FDA trials gaining momentum. Management
actively pursuing multiple applications of its lead compound, PEA,
and other clinical-stage investment opportunities.
- Dissident shareholders have NO plan for the Company and seek control via
nomination of a conflicted and
inexperienced slate of directors in order to acquire a
start-up in which certain dissidents have substantial interests
that are NOT properly
disclosed.
- Start-up, notionally in the psychedelics sector but with
NO meaningful track record,
R&D or cash, is the wrong investment at the wrong time.
Conflicted dissident shareholders stand to benefit above all
others.
- Management proposing to collapse dual-class share structure and
eliminate A shares in order to strengthen shareholder
democracy.
- Shareholders urged to vote FOR management director nominees using only
the BLUE proxy well in advance
of the May 12, 2021, 9:00 a.m. EDT deadline.
- Contact the Company's proxy solicitor, Gryphon Advisors Inc. at
1-833-490-0586 or by email at inquiries@gryphonadvisors.ca for more
information or assistance voting the BLUE Proxy.
FSD Pharma Inc. (Nasdaq:HUGE) (CSE:HUGE) (the "Company"
or "FSD Pharma") announces the filing of its
Management Information Circular (the "Circular") and an
accompanying letter to shareholders related to the Annual &
Special Meeting scheduled for May 14, 2021, copies of which are
available under the Company's SEDAR profile.
FSD Pharma is at a critical turning point, and the outcome of
this proxy contest will greatly affect the future of shareholders'
investments in the Company. The Board of Directors recommend that
shareholders vote FOR the
Company's highly capable and experienced director nominees using
only the BLUE proxy. The letter
to shareholders follows in its entirety:
Dear fellow FSD Pharma Shareholder,
Your investment in FSD Pharma Inc. (the "Company") is at
a crossroad. At the upcoming Annual and Special Meeting (the
"Meeting") of the shareholders of the Company (the
"Shareholders"), it will be up to you to determine the best
path forward for the Company. Shareholders have two distinct
options:
- Choose a strategy that moves the Company forward with a
continuing plan to create significant value and to "level the
playing field" with respect to ALL Shareholders being treated equally. This
will ultimately strengthen the voting power of all Shareholders and
is being advocated by the director nominees proposed by management
of the Company (the "Management Director Nominees");
or
- Choose a self-serving plan that pulls the Company backwards by
entering into speculative transactions with promises that are
highly unlikely to materialize into actions or any real shareholder
value and acquiring a start-up notionally in the psychedelics
sector (the "Start-Up") that has no track record, cash, or
research and development activities, as championed by Anthony
Durkacz, Zeeshan Saeed and the other dissident shareholders'
(collectively, the "Dissidents"). The Dissidents have put
forward this plan despite Mr. Durkacz and certain other Dissidents
failing to properly disclose their financial interests in the
Start-Up.
After a review of the facts, it should be clear to Shareholders
that the best – and only – way to protect Shareholder interests and
to support value creation is to vote FOR all Management
Director Nominees and resolutions using only the BLUE proxy.
Vote Using the BLUE Proxy FOR the Right Strategy, Stronger
Shareholder Democracy and the Right Board of Directors
The current strategy continues to build positive momentum and
offers a number of avenues to significant value creation for
ALL Shareholders such as:
- The Company is pursuing multiple applications of its lead
compound, FSD-201 ultra-micronized palmitoylethanolamide
("PEA");
- In June 2020, the United States Food and Drug Administration
(the "FDA") approved the submission of an Investigational
New Drug Application for the use of FSD-201 to treat COVID-19;
- In September 2020, a randomized, controlled, double-blind,
multicenter Phase 2 clinical study was approved by the FDA and is
currently underway and expected to cover 352 hospitalized COVID-19
patients, with patient enrollment steadily increasing;
- In March 2021, the Company announced a licensing agreement to
develop FDA approved Veterinary drugs for the treatment of
gastro-intestinal diseases in dogs and cats.
- With more cash on its balance than in May 2018, when the
Company commenced trading on CSE, management is actively exploring
other merger and acquisition (M&A) and licensing opportunities
that could expand the drug development pipeline and generate new
opportunities to create significant value for Shareholders;
and
- The Company has a letter of intent in place to acquire a
controlling interest in a late-stage asset that is expected to
receive approval for commercialization from the FDA either in Q4
2021 or Q1 2022. The Dissidents, led by Anthony Durkacz and Zeeshan
Saeed, are blocking this potential transformational acquisition
that has been in the works for several months.
While executing on the optimal strategy, the Management Director
Nominees are also taking action to strengthen shareholder
democracy. The first step in strengthening shareholder democracy is
for management to collapse the Company's dual-share structure,
comprising of class A multiple voting shares (the "Class A
Shares") and class B subordinate voting shares (the "Class B
Shares"). The Company’s 72 Class A Shares are controlled by Mr.
Anthony. Durkacz, Mr. Zeeshan Saeed and Dr. Raza Bokhari (the
current Executive Chairman & CEO). These three individuals
collectively exercise voting power of 19,919,520 Class B Shares,
which offers a disproportionate advantage to such individuals in
determining the future of the Company, over and above the holders
of Class B Shares, who have invested money into the Company. The
Management Director Nominees led by Dr. Raza Bokhari seeks your
support to eliminate the Class A Shares, and in doing so,
strengthen Shareholders' voting power at no cost to Shareholders.
This would result in – among many other benefits – each Shareholder
receiving a voting interest that is proportionate to their equity
ownership interest. One share will equal one vote.
Finally, the Company has put forward five seasoned and two new
Management Director Nominees for election to the Board who all have
the requisite skills, experience and track records to represent the
interests of ALL
Shareholders.
PROTECT YOUR INVESTMENT
WITHHOLD FROM VOTING For Any of the
Dissident Director Nominees
The Dissidents are led by a Dissident Director and former
employees of the Company. The Dissidents are not being forthcoming
as to why they have commenced this proxy fight. Mr. Durkacz, a
Director of the Company, with the support of former President and
Director Mr. Saeed, first proposed that the Company acquire the
Start-Up in November 2020 (a proposal that runs 180 degrees counter
to the Company's stated strategy of acquiring mature,
clinical-stage assets like PEA). At that time, Mr. Durkacz did not
properly disclose that he and certain other Dissidents and/or their
affiliates had material financial interests in the Start-Up and
stood to benefit from the Company acquiring the Start-Up. This is a
clear conflict-of-interest, and efforts to conceal a conflict of
interest are viewed as a serious transgression in the capital
markets.
The Start-Up in question has no track record. It does not have
access to any psychedelics or patents, nor does it have a record of
spending on research and development or meaningful cash on its
balance sheet. Even if it had some of the critical missing
attributes noted above, the Start-Up does not fit with the
Company’s strategy of focusing on clinical stage, rather than
exploratory, drug development assets.
None of this appears to concern the Dissidents who are seeking
100% control of your Board of Directors, while purporting to hold
only 2.7% of the Class B Shares. Nor do they offer an alternative
strategic plan, something a Shareholder should expect when someone
asks you to take control of your investment. Also, undermining the
Dissidents' fake concern for the Company, is the fact that the
Dissidents' hand-picked director nominees (the "Dissident
Director Nominees") have significant independence,
conflict of interest and competency concerns, as set out in the
accompanying Management Information Circular (the
"Circular"). At the centre of these concerns is Mr. Durkacz,
First Republic Capital Corporation ("FRCC") and
pre-existing, interlocking and questionable relationships amongst
the Dissident Director Nominees. One of the directors the
Dissidents have put forward as "independent" is Lawrence Latowsky,
current CEO of Canntab Therapeutics Ltd. ("Canntab"). He is
not independent from Mr. Durkacz and may not be independent from
the Company. Canntab had previously engaged and paid commission to
Mr. Durkacz and his company FRCC. Mr. Durkacz and Mr. Saeed, along
with Mr. Latowsky, wish to control the majority vote of their
reduced number of Dissident Director Nominees so that they become
the controlling minds of the Company, without proper independent
review. To the extent that there are fewer than three independent
Dissident Director Nominees, the Company may be in violation of
applicable securities laws, including the policies of NASDAQ and
the CSE, which may place the Company's NASDAQ listing in
jeopardy.
The Dissidents have also not presented any names or credentials
of proposed Company management that they will put in place if the
Dissident Director Nominees are elected. The Dissidents have also
not offered a comprehensive strategic business plan that they will
follow to create shareholder value. Their sole interest is to take
control of your Company so that they can roll back the progress it
has made and use the Company to advance their own financial
interests by entering into speculative transactions with promises
that are highly unlikely to materialize into actions or any real
shareholder value.
Vote FOR the Management Director Nominees
and Resolutions on the BLUE Proxy
Today
As Shareholders you control the Company's future, so it is
essential that you vote FOR all Management Director Nominees
and all resolutions in the Circular, using only the BLUE proxy. Time is of the essence. To ensure
that your vote is counted at the Meeting please vote immediately
and no later than 9:00 a.m. (Toronto/New York time) on May 12,
2021. For questions or assistance in voting your proxy, please
contact the Company's proxy solicitation agent, Gryphon Advisors
Inc. by telephone at 1.833.292.5847 toll-free in North America
(1.416.902.5565 by collect call) or by email at
inquiries@gryphonadvisors.ca. For up-to-date information and
convenience in voting please visit www.fsdfuture.com.
Pharmaceutical R&D require time, capital and qualified
management. The Company is making progress and our better days are
ahead of us.
I thank you for your continued support as we take the right path
forward to value creation for ALL Shareholders.
Sincerely,
(signed) "Raza Bokhari" Dr. Raza
Bokhari Chief Executive Officer & Executive Chairman
About FSD Pharma
FSD Pharma Inc. (www.fsdpharma.com) is a publicly-traded holding
company.
FSD BioSciences, Inc., a wholly-owned subsidiary, is a specialty
biotech pharmaceutical R&D company focused on developing over
time multiple applications of its lead compound, ultra-micro PEA by
down-regulating the cytokines to effectuate an anti-inflammatory
response.
The Company filed an IND with the FDA on August 28, 2020 and was
approved on September 25, 2020 to initiate a phase 2 clinical trial
for the use of FSD201 to treat COVID-19, the disease caused by the
SARS-CoV-2 virus. The trial is currently underway and is expected
to randomize 352 patients in a controlled, double-blind multicenter
study.
Severe COVID-19 is characterized by an over-exuberant
inflammatory response that may lead to a cytokine storm and
ultimately death. The Company is focused on developing ultra-micro
PEA for its anti-inflammatory properties to avoid the cytokine
storm associated with acute lung injury in hospitalized COVID-19
patients.
The Company is not making any express or implied claim that its
product has the ability to eliminate, cure or contain the COVID-19
(or SARS-2 Coronavirus) infection at this time.
Forward-Looking Statements
Neither the Canadian Securities Exchange nor its regulation
services provider accept responsibility for the adequacy or
accuracy of this press release.
Certain statements contained in this press release constitute
"forward-looking information" and "forward-looking statements"
within the meaning of applicable Canadian and U.S. securities laws
(collectively, "Forward-Looking Information"). Forward-Looking
Information includes, but is not limited to, information with
respect to FSD Pharma’s strategy, plans or future financial or
operating performance, the solicitation of proxies and voting in
respect of the Meeting, the Dissidents, the intentions of the
Dissidents or the Dissident Director Nominees, the impact of the
Dissident Director Nominees or the Management Director Nominees, if
elected, on the financial condition, operations, business and
strategies of the Company and its shareholder value, future plans
or prospects of the Company, receipt of any FDA or other regulatory
approvals, the completion of any trials regarding the use of
FSD-201 to treat COVID-19 or to treat canine and feline
gastro-intestinal diseases, the safety of FSD-201 or whether
FSD-201 may be effective in treating COVID-19 or to treat canine
and feline gastro-intestinal diseases. The use of words such as
"budget", "intend", "anticipate", "believe", "expect", "plan",
"forecast", "future", "target", "project", "capacity", "could",
"should", "focus", "proposed", "scheduled", "outlook", "potential",
"estimate" and other similar words, and similar expressions and
statements relating to matters that are not historical facts, or
statements that certain events or conditions "may" or "will" occur,
are intended to identify
Forward-Looking Information is based on FSD Pharma’s current
beliefs or assumptions as to the outcome and timing of such future
events. Such beliefs or assumptions necessarily involve known and
unknown risks and uncertainties that could cause actual results to
differ materially from those expressed or implied in such
Forward-Looking Information. Certain of these risks and
uncertainties are described in the Circular and the Company’s
continuous disclosure filings available under the Company's SEDAR
profile at www.sedar.com and under the Company’s EDGAR profile at
www.sec.gov. Forward-Looking Information is not a guarantee of
performance. The Forward-Looking Information contained in this
press release is made as of the date hereof, and FSD Pharma is not
obligated to update or revise any Forward- Looking Information,
whether as a result of new information, future events or otherwise,
except as required by law. Because of the risks, uncertainties and
assumptions contained herein, investors should not place undue
reliance on Forward Looking-Information. The foregoing statements
expressly qualify any Forward-Looking Information contained
herein.
For up-to-date information and convenience in voting please
visit www.fsdfuture.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210423005140/en/
Shareholder Contacts:
Gryphon Advisors Inc. 1.833.292.5847 toll-free in North America
(1.416.902.5565 by collect call) inquiries@gryphonadvisors.ca
Donal Carroll, Chief Financial Officer, FSD Pharma Inc.
dcarroll@fsdpharma.com
Media Contact:
Joel Shaffer Longview Communications and Public Affairs
jshaffer@longviewcomms.ca
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