Filament Health Corp. To List on Nasdaq Through Business Combination With Jupiter Acquisition Corporation

 Filament Health Corp. (OTCQB: FLHLF / NEO: FH / FSE: 7QS), a clinical‐stage natural psychedelic drug development company, and Jupiter Acquisition Corporation (NASDAQ:JAQC) (“Jupiter“), a special purpose acquisition company formed for the purpose of acquiring or merging with one of more businesses, today announced they have entered into a definitive agreement, dated July 18, 2023, for a proposed business combination (the “Business Combination“) to create a new public holding company representing the combined business (“Pubco”) that is expected to be listed on Nasdaq.

“Today’s announcement is an important milestone for Filament as we gain access to the broader capital markets needed to advance our drug development platform,” said Mr. Lightburn. “Filament was founded on the belief that standardized, naturally-derived psychedelic medicines can improve the lives of millions of people suffering from treatable conditions. Partnering with Jupiter brings us a step closer to making this a reality. I would like to thank all those involved in achieving this milestone, including Jupiter, our existing and new investors, and the entire Filament team.”

The Business Combination

The proposed Business Combination reflects a pro forma enterprise valuation of approximately US$210 million, based on certain assumptions. Consideration will be 100% in the form of shares in Pubco, and the proposed Business Combination is expected to provide at least US$5 million of net proceeds to Pubco. The proposed Business Combination reflects a pre-money equity value of US$176 million for Filament and provides the Filament shareholders and certain other parties a contingent right to receive additional Pubco shares based upon post-closing stock performance. At the closing of the proposed Business Combination, the holders of outstanding Filament shares will receive equity in Pubco valued at US$0.85 per share (subject to adjustments).

Under the terms of the proposed Business Combination, Jupiter will merge with and into a wholly-owned subsidiary of Pubco, and Filament will, pursuant to a statutory plan of arrangement (the “Plan of Arrangement“) under the Business Corporations Act (British Columbia), amalgamate with another wholly-owned subsidiary of Pubco. In addition, pursuant to the proposed Business Combination, the holders of Filament convertible securities will have their convertible securities assumed by Pubco at closing in accordance with the terms of the Plan of Arrangement.

The Board of Directors of Jupiter has unanimously approved the proposed Business Combination.

The Board of Directors of Filament, having received a unanimous recommendation from the special committee of the Board of Directors (the “Filament Special Committee“) in favour of the proposed Business Combination, has determined that the proposed Business Combination is in the best interests of Filament, and resolved to recommend that Filament securityholders vote in favour of the proposed Business Combination (with Mr. Lightburn declaring his interest in the Business Combination and abstaining from the vote of the Board of Directors of Filament).

Evans & Evans, Inc. was appointed as an independent financial advisor to the Filament Special Committee, and provided a fairness opinion to the Filament Special Committee stating that, as of the date of such opinion, and based upon and subject to the assumptions, limitations, and qualifications stated in such opinion, the Business Combination and the consideration payable thereunder is fair from a financial point of view to Filament shareholders.

The proposed Business Combination is subject to customary closing conditions, including receipt of all regulatory approvals, court orders from the Supreme Court of British Columbia with respect to the Plan of Arrangement, and the approval of the proposed Business Combination by Filament’s securityholders and Jupiter’s stockholders. The consummation of the proposed Business Combination is anticipated to occur in the 4th quarter of 2023.

Maxim Group LLC is acting as exclusive financial advisor to Filament. Fasken Martineau DuMoulin LLP is acting as Canadian legal advisor and Ellenoff Grossman & Schole LLP is acting as U.S. legal advisor to Filament. Harper Grey LLP is acting as Canadian legal advisor and Greenberg Traurig, LLP is acting as U.S. legal advisor to Jupiter.

Filament directors and management (the “Supporting Securityholders“) have entered into agreements pursuant to which they have committed to vote their respective shares in favour of the proposed Business Combination. The Supporting Securityholders represent in aggregate approximately 42.8% of the outstanding common shares.

The Pubco shares to be issued under the Plan of Arrangement component of the proposed Business Combination to holders resident in the United States have not been registered under the U.S. Securities Act of 1933 (the “Securities Act“) and may not be offered or sold in the United States absent registration or applicable exemption from registration requirements. It is anticipated that any securities to be issued under the Plan of Arrangement component of the proposed Business Combination either will be offered and issued in reliance upon the exemption from the registration requirements of the Securities Act provided by Section 3(a)(10) thereof or will be registered under the Securities Act on Form F-4 (the “Registration Statement“) to be filed by Pubco with the U.S. Securities and Exchange Commission (the “SEC“).

Filament is a natural psychedelic drug development company focused on the treatment of substance use disorders. Filament’s proprietary technology platform enables the discovery and delivery of botanical psychedelic medicines for clinical development. The Company is currently generating revenue by out-licensing its lead drug candidate, PEX010, to commercial partners. PEX010 is standardized to provide a precise dose of botanical psilocybin per oral capsule, and is currently being administered in phase 1 and 2 human clinical trials approved by U.S. Food and Drug Administration (“FDA“) and Health Canada. It is currently being studied in 15 clinical trials in North America and Europe via Filament’s network of academic and research institutions for conditions including alcohol use disorder, treatment resistant depression, opioid tapering, and chronic pain. All of the trials are being conducted under the authorization of the applicable governing authority, including, but not limited to, the FDA, Health Canada and European Medicines Agency. The Company believes that, as a botanical drug, PEX010 offers intellectual property benefits versus synthetic drugs due to its complex active pharmaceutical ingredient, as well as a more rapid path into clinical development. Filament is actively pursuing early access schemes around the world and has supplied dozens of Canadian patients via the Health Canada Special Access Program.

Jupiter operates as a blank check company. Jupiter aims to acquire one or more businesses and assets, via a merger, capital stock exchange, asset acquisition, stock purchase, and reorganization.