Today, FCM MM HOLDINGS, LLC (“FCM”) notifies shareholders that it
has formally filed a complaint (the “Complaint”) with the
Securities and Exchange Commission (the “SEC”) and will file a
referral to the Department of Justice regarding allegations against
Mind Medicine (MindMed) Inc. (NASDAQ:MNMD) (“MindMed”, the
“Company”). The Complaint focuses on the following allegations:
self-dealing, lack of material disclosure, false statements/public
statement fraud, and if the allegations are true, criminal
activities, by CEO Robert Barrow, under Sarbanes-Oxley.
The Complaint presents and analyses the
allegations in the lawsuit Freeman v. Burbank et al. (the
“Lawsuit”) that MindMed’s intellectual property was mishandled due
to a one-sided deal (the “Deal”) negotiated by Mr. Stephen Hurst,
then MindMed’s CEO, and Mr. Carey Turnbull, CEO of Ceruvia
Lifesciences LLC (“Ceruvia”). Mr. Hurst founded Ceruvia’s
predecessor, purportedly in secret. If the Deal occurred, Ceruvia
has undisclosed freedom to operate on MindMed’s IP surrounding LSD
and its derivatives, and MindMed is not able to research or compete
on BOL-148. The Complaint also lists Ceruvia executives who
concurrently worked for MindMed during Messrs. Hurst and Barrow’s
tenure and the implications for MindMed’s IP and trade secrets.
Additionally, the Complaint scrutinizes whether
MindMed adequately disclosed to investors the significant risk of
MM-110’s failure in gaining full Food and Drug Administration
(“FDA”) product approval. After MindMed terminated the MM-110
program in August of 2022, FCM conducted a rigorous review of
publicly available data of MM-110, a core drug of MindMed, from
primarily both MM-110’s patent application and protocol of the
Phase I trial (the “Study”), which were available prior to the
initiation the Study. The Complaint addresses FCM’s conclusion that
it is highly unlikely the FDA would have allowed the Study to be
performed in the US as written – i.e. patients would be treated at
a dose thirty-five times higher than the comparable dose which
caused death in mice. Ultimately, MindMed instead performed the
Study in Australia, and in May 2022, reported that the Study’s
topline results (the “Results”) were favorable regarding safety and
tolerability and builds on “encouraging” results from pre-clinical
studies. The Results were then presented to the FDA, and MindMed
later disclosed that the FDA now requires MindMed to complete a
myriad of pre-clinical safety studies (the “Pre-Clinical Studies”)
prior to instituting additional clinical trials in the US. Mr.
Barrow stated that the Pre-Clinical Studies could take years, and
MindMed subsequently shuttered the program.
“The FDA is the regulatory gold standard to
ensure patient safety in clinical trials. Although it is a common
practice to ‘offshore’ clinical trials, it is not acceptable to
skirt known FDA required pre-clinical safety studies by going to
another country,” said FCM’s Chad Boulanger.
The Complaint also examines the departures of
several high-profile executives of the Company right before they
were required to sign off on MindMed’s SEC filings. Similar to
Chief Legal Officer Cynthia Hu who left one month prior to being
required to sign MindMed’s stock offering, Chief Financial Officer
David Guebert resigned from MindMed the business day before he was
obligated to make his first Sarbanes-Oxley certification of
MindMed’s financials. The Complaint further notes that MindMed’s
auditor Ernst & Young was fired shortly after reporting that
MindMed had a material weakness in its internal controls under
Sarbanes-Oxley.
FCM will continue to provide extensive
information to the SEC and a litany of supporting documents to
assist the SEC in their investigation. FCM thanks the countless
sources who have assisted in its investigation and encourages any
person with information to come forward either to FCM or directly
to the SEC.
FCM also announces that it has sent MindMed’s
Board of Directors (the “Board”) a letter (the “Letter”) that
demands MindMed immediately take action to investigate the origins
of the Medihuasca entities. Medihuasca is a recently discovered
rival company whose website, which went public in May 2021, uses
proprietary MindMed IP and lists Nico Forte, MindMed’s Chief of
Staff and associate of Mr. Hurst, as its CEO. The Letter demands an
investigation to determine if any MindMed employee was involved, if
any nefarious purpose existed, to what extent has MindMed’s IP been
compromised, and what measures need to be implemented to ensure
that MindMed adequately polices its IP going forward. FCM
calls for these investigations to be done by a third-party
independent law firm with a public report.
Moreover, the Letter calls for the immediate
termination of:
- CEO Robert
Barrow who has been employed by MindMed for twenty-eight months
during which time the mishandling of MindMed IP and alleged
transgressions occurred;
- Chief of Staff
Nico Forte who, in addition to being listed as CEO of Medihuasca,
serves on the Board of a competitor company (Savant HWP, Inc. which
founded Ceruvia); and
- Board Member
Brigid Makes, a decades long associate of Mr. Hurst, who allegedly
took compensation from Savant HWP, Inc. while the alleged
activities occurred.
“Let me be clear; we continue to see significant
value in MindMed; however, executives and complicit board members
must go immediately, so we can unleash the potential of MindMed,”
said FCM’s Chief Executive Manager Jake Freeman.
A copy of the Letter is available at:
https://mindmed.zone/board-letter-11-3-2022
To stay informed as to the latest developments,
FCM encourages MindMed stakeholders to sign up for its newsletter
at: https://mindmed.zone/signup
About FCM
FCM is managed by Mr. Jake Freeman and
represents an investment of 4.9% of MindMed's shares outstanding.
FCM seeks to implement its Value Enhancement Plan detailed in its
letter to Ms. Carol Vallone dated August 11, 2022. The Value
Enhancement Plan seeks to refocus MindMed on its core drugs,
drastically cut spending, and significantly decrease shareholder
dilution. Despite the controversy, FCM has not reduced its stake in
MindMed.
FCM additionally represents other early
investors in MindMed, who all have a strong interest in seeing the
long-term success of MindMed.
For additional disclosures relating to public
broadcast solicitations please see mindmed.zone/disclosure or
read the disclosure herein.
Media ContactJake FreemanChief Executive
ManagerFCM MM HOLDINGS, LLC30 N Gould St. Ste RSheridan, WY
82801Phone: 908-308-2381Email: jake@mindmed.zone
Disclosures
The information contained in this press release
does not and is not meant to constitute a solicitation of a proxy
within the meaning of applicable securities laws. FCM has not
requisitioned a meeting of shareholders to reconsider its
proposals, there is currently no record or meeting date set for a
shareholders’ meeting and shareholders are not being asked at this
time to execute a proxy in favour of FCM. In connection with any
future shareholders’ meeting, FCM may file a dissident information
circular in due course in compliance with applicable securities
laws. Notwithstanding the foregoing, FCM is voluntarily providing
the disclosure required under section 9.2(4) of National Instrument
51-102 – Continuous Disclosure Obligations applicable to public
broadcast solicitations. The information contained herein, and any
solicitation made by FCM in advance of a future shareholders’
meeting is, or will be, as applicable, made by FCM and not by or on
behalf of the management of the Company. All costs incurred for any
solicitation will be borne by FCM, provided that, subject to
applicable law, FCM may in certain circumstances seek reimbursement
from the Company of FCM’s out-of-pocket expenses, including proxy
solicitation expenses and legal fees, incurred in connection with a
new meeting. FCM is not soliciting proxies in connection with a
shareholders’ meeting at this time. FCM may engage the services of
one or more agents and authorize other persons to assist in
soliciting proxies on behalf of FCM. Any solicitation of proxies by
or on behalf of FCM, including by any agent, will be done primarily
by mail, supplemented by telephone, internet, electronic
communication or other means of contact, pursuant to a dissident
information circular or by way of public broadcast, including
through press releases, speeches or publications and by any other
manner permitted under corporate and securities laws. Any such
proxies may be revoked by instrument in writing executed by a
shareholder or by his or her attorney authorized in writing or, if
the shareholder is a body corporate, by an officer or attorney
thereof duly authorized or by any other manner permitted by law.
FCM will not have any material interest, direct or indirect, by way
of beneficial ownership of securities or otherwise, in any matter
to be acted upon at any future requisitioned shareholders’ meeting.
Scott Freeman is a resident of the United States Virgin Islands and
is a citizen of the United States of America. Scott Freeman’s
principal occupation is a consultant and works on behalf of Scott
Freeman Consultant LLC, a limited liability company incorporated in
the State of Nevada. Scott Freeman directly owns 11,643,949 voting
shares of MindMed. Scott Freeman additionally holds an economic
interest in several million shares of MindMed held by Savant HWP
Holdings, LLC and its affiliate entities. Scott Freeman has not
been, within 10 years, a director, chief executive officer, or
chief financial officer of any company, that meets the following
conditions: (1) was subject to an order imposed by a securities
regulator, such as a management cease trade order imposed by
Canadian securities regulators, that was issued while the proposed
director was acting in the capacity as director, chief executive
officer or chief financial officer; or (2) was subject to an order
that was issued after the proposed director ceased to be a
director, chief executive officer or chief financial officer and
which resulted from an event that occurred while that person was
acting in the capacity as director, chief executive officer or
chief financial officer. Scott Freeman has not been, within 10
years, a director or executive officer of any company (including
the company in respect of which the information circular is being
prepared) that, while that person was acting in that capacity, or
within a year of that person ceasing to act in that capacity,
became bankrupt, made a proposal under any legislation relating to
bankruptcy or insolvency or was subject to or instituted any
proceedings, arrangement or compromise with creditors or had a
receiver, receiver manager or trustee appointed to hold its assets,
state the fact. Scott Freeman has not, within 10 years, become
bankrupt, made a proposal under any legislation relating to
bankruptcy or insolvency, or become subject to or instituted any
proceedings, arrangement or compromise with creditors, or had a
receiver, receiver manager or trustee appointed to hold the assets
of the proposed director, state the fact. The registered address of
MindMed is located at 1055 West Hastings Street, Suite 1700,
Vancouver, British Columbia, Canada, V6E 2E9. A copy of this press
release may be obtained on the Company’s SEDAR profile at
www.sedar.com
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