Today, FCM MM Holdings, LLC (“FCM”) condemns Mind Medicine
(MindMed) Inc.’s (NASDAQ: MNMD) (“MindMed”, the “Company”)
announced apparent plan to manipulate its corporate machinery to
follow through with its 2023 annual general meeting (the “AGM”) and
election of directors without earning the substantive support of
its shareholders.
At today’s AGM, MindMed failed to satisfy the
basic legal requirement for shareholders to take action at the
meeting – the presence of 1/3 of its shares at the AGM. FCM
contends this extraordinarily low level of shareholder
participation reflects deep shareholder dissatisfaction and
MindMed’s persistent refusal to meaningfully engage with
shareholders.
Despite not achieving quorum at the AGM, MindMed
has announced its intention to hold an adjourned meeting on June
21, 2023, regardless of the level of shareholder participation.
This flies in the face of MindMed’s own public disclosures in its
regulatory filings that 12,863,281 shares must be voted at the AGM
for it to be valid. Now, MindMed says that whoever shows up at its
adjourned AGM – even a single share – will be enough!
“MindMed’s inability to meet quorum is
illustrative of the Company’s failure to engage shareholders and a
symptom that the shareholder base is frustrated with current
management. It is unfortunate, but not surprising, that the board
would take inappropriate actions which imperil MindMed’s future to
protect the entrenched board,” says Mr. Vivek Jain, FCM
nominee.
Moreover, FCM believes that MindMed is acting in
clear contravention of NASDAQ Listing Rule 5620(c) which states
that:
“Each Company … shall provide for a quorum as
specified in its by-laws for any meeting of the holders of common
stock; provided, however, that in no case shall such quorum
be less than 33 1/3 % of the outstanding shares of the
Company's common voting stock.”
In addition to threating to breach NASDAQ rules,
Canadian securities law requires the record date for a meeting of
shareholders to be within 60 days of the meeting. The purpose of
this requirement is to ensure that current
shareholders are voting at the meeting. By holding the
adjourned meeting on June 21, 2023, we believe MindMed is ignoring
this requirement and is relying on a stale roster of
shareholders.
The consequences for these courses of
action are dire and likely disastrous for the Company’s share
price: if MindMed is found to be in violation of NASDAQ
rules and is not able to remediate that breach, MindMed could be
delisted from NASDAQ and its access to the US capital markets
severed. Separately, MindMed may face crippling class action
lawsuits and serious regulatory sanctions from this conduct.
Further, MindMed may be required to re-schedule the AGM at a
significant additional expense to shareholders.
MindMed, through its intended actions,
will systemically disenfranchise shareholders, who acquired
MindMed’s shares with an understanding that MindMed would follow
NASDAQ listing rules, its own public disclosures, and applicable
law.
“MindMed has a seemingly tenuous relationship
with the duties of a public company and the law, from issuing
misleading press releases on the MM-110 FDA regulatory
requirements, to giving patients 35x the dose of MM-110 that the
FDA deemed safe, to failing to make public disclosures about the
alleged related-party transaction with Ceruvia Lifesciences
involving MindMed’s intellectual property surrounding LSD,” says
Dr. Scott Freeman, MindMed co-founder and FCM Nominee.
“It is laughable that the board would blame FCM
for the Company’s failure to achieve quorum, despite FCM’s numerous
public exhortations for shareholders to vote at the AGM. FCM
attended the meeting, and its shares were present for quorum
purposes,” added Dr. Freeman.
Vote the BLUE Proxy to Support FCM’s
Plan to Restore Value for All Shareholders
FCM urges MindMed shareholders to join the fight
against the current Board and management team and
vote FOR all four of its highly
qualified nominees at the 2023 annual general meeting of
shareholders on the BLUE proxy card.
Shareholders who have questions or
require any assistance with their vote, please contact Okapi
Partners LLC, at (855) 305-0856 or
info@okapipartners.com.
About FCM
FCM MM Holdings, LLC is a special purpose
vehicle set-up to represent nine early investors in MindMed,
including Dr. Scott Freeman and Mr. Chad Boulanger. FCM and the
other participants in its solicitation hold a 3.5% beneficial
ownership of MindMed's outstanding shares and represents additional
interests in MindMed shares through holdings in Savant Addiction
Medicine LLC, Savant HWP, Inc., and Savant HWP Holdings, LLC. FCM
is managed by Mr. Jake Freeman and each of FCM’s stakeholders are
deeply invested in MindMed's long-term success.
Shareholder Contact:
Okapi Partners LLCinfo@okapipartners.com (855)
305-0856
Media:
Riyaz Lalani & Dan Gagnier Gagnier
Communications fcmmm@gagnierfc.com
Additional Information
FCM and its nominees (Dr. Scott Freeman, Dr.
Farzin Farzaneh, Mr. Vivek Jain, and Mr. Alexander Wodka)
beneficially own, own, control or exercise direction over an
aggregate of 1,009,181 common shares of MindMed (the “Shares”). FCM
may be deemed to control an additional 359,357 Shares pursuant to a
proxy coordination agreement. Information in Support of Public
Broadcast Solicitation
Shareholders are being asked at this time to
execute a proxy in favour of FCM’s nominees for
election to the Board at the AGM or any other
resolutions at the AGM, which was scheduled for
June 15, 2023, and has been adjourned until June
21, 2023. In connection with the AGM, FCM
has filed definitive proxy materials with the
Securities and Exchange Commission (the “Final
FCM Circular”) containing further disclosure
concerning FCM’s nominees for election to the
Board at the AGM, together with additional
details concerning the completion and return of
forms of proxy and voting information forms
(“VIFs”) for use at the AGM. Shareholders of
MindMed are urged to read the Final FCM Circular
because it contains important information.
The below disclosure is provided pursuant to
section 9.2(4) of National Instrument 51-102 –
Continuous Disclosure Obligations in
accordance with securities laws applicable to public
broadcast solicitations.
This press release and any solicitation made by
FCM in advance of the AGM or any adjournment
thereof, is, or will be, as applicable, made by
FCM and not by or on behalf of the management of
MindMed.
Shareholders of MindMed are being asked at this
time to execute proxies in favour of FCM’s
nominees for election to the Board at the AGM or
any adjournment thereof or any other matters
to be considered at the AGM or any adjournment
thereof. FCM has issued the Final FCM
Circular and FCM intends to make its
solicitation primarily by mail, but proxies may also be
solicited personally by telephone, email or
other electronic means, as well as by newspaper or
other media advertising or in person, by FCM,
certain of its members, partners, directors,
officers and employees, FCM’s nominees or FCM’s
agents, including Okapi Partners LLC
(“Okapi”), which has been retained by FCM as its
strategic shareholder advisor and proxy
solicitation agent. Pursuant to the agreement
between Okapi and FCM, Okapi will receive a fee
of up to $75,000, plus customary fees for each
call to or from shareholders of MindMed, and will
be reimbursed for certain out-of-pocket
expenses, with all such costs to be borne by FCM. In
addition, FCM may solicit proxies in reliance
upon the public broadcast exemption to the
solicitation requirements under applicable
Canadian corporate and securities laws, by way of
public broadcast, including press release,
speech or publication, and in any other manner
permitted under applicable Canadian laws. Any
members, partners, directors, officers or
employees of FCM and their affiliates or other
persons who solicit proxies on behalf of FCM
will do so for no additional compensation. The
anticipated cost of FCM’s solicitation is
estimated to be $400,000 plus disbursements. The
costs incurred in the preparation and mailing
of the Materials and the Final FCM Circular, and
the solicitation of proxies by FCM will be
borne by FCM, provided that, subject to
applicable law, FCM may seek reimbursement from
MindMed of FCM’s out-of-pocket expenses,
including proxy solicitation expenses and legal
fees, incurred in connection with a successful
reconstitution of the Board.
A registered shareholder of MindMed who has
given a proxy may revoke the proxy at any time
prior to use by:
(a) depositing an instrument in writing revoking
the proxy, if the shareholder is an individual
signed by the shareholder or his or her legal
personal representative or trustee in bankruptcy, and
if the shareholder is a corporation signed by
the corporation or by a representative appointed for
the corporation, either: (i) at the registered
office of MindMed at any time up to and including
the last business day preceding the day of the
AGM or any adjournment(s) thereof, at One World
Trade Center, Suite 8500, New York, New York
10007; or (ii) with the chairman of the AGM on
the day of the AGM or any adjournment(s) thereof
before any vote in respect of which the proxy
has been given has been taken; or
(b) revoking the proxy in any other manner
permitted by law.
A non-registered shareholder may revoke a form
of proxy or VIF given to an intermediary or
Broadridge Investor Communications (or any such
other service company) at any time by
submitting another properly completed form of
proxy or VIF, as the latest form of proxy or VIF
will automatically revoke any previous one
already submitted, or by written notice to the
intermediary in accordance with the instructions
given to the non-registered shareholder by its
intermediary.
Neither FCM, nor any of its directors or
officers, or any associates or affiliates of the foregoing,
nor any of FCM’s nominees for election to the
Board at the AGM, or their respective associates
or affiliates, has: (i) any material interest,
direct or indirect, in any transaction since the
beginning of MindMed’s most recently completed
financial year or in any proposed transaction
that has materially affected or would materially
affect MindMed or any of its subsidiaries; or (ii)
any material interest, direct or indirect, by
way of beneficial ownership of securities or
otherwise, in any matter currently known to be
acted on at the upcoming meeting of MindMed
shareholders, other than the election of
directors; except (a) as disclosed herein; and (b) that on
August 31, 2020, Dr. Scott Freeman entered into
a consulting agreement with MindMed, which,
among other things, granted Dr. Scott Freeman
26,389 vested options with a strike price of
CAD$4.95 per share and 16,667 unvested options
with a strike price of CAD$4.95 per share.
The registered address of MindMed is located at
One World Trade Center, Suite 8500, New
York, New York, 10007. Copies of this press
release and the Final FCM Circular may be
obtained on MindMed’s SEDAR profile
at www.sedar.com.
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