The raise was an upsized round from the initial prospectus of C$25,000,500.
The company raised the money from institutional investors by issuing 27,381,500 units at a price per unit of $1.05. As we have previously discussed, the unit consisted of one common share plus one-half of one warrant. The warrant will entitle the investor to purchase one share at an exercise price of $1.40 until October 30, 2023.
In the announcement, MindMed also stated that its cash reserves now totaled C$50.1M (USD $37.8M).
So, now that MindMed has closed its financing and its coffers are filled with cash, the obvious question is, “What will the company do with all that money?”
Per the press release, CEO JR Rahn states that the financing will “enable continued progress of its clinical trial pipeline of psychedelic inspired medicines and experiential therapies.”
A Breakdown of MindMed’s Use of Proceeds
According to the prospectus provided by MindMed during the offering, the company will use the proceeds as follows:
Drug Discovery
MindMed is currently using funds for its discovery phase in collaboration with the UHB Liechti Lab. The agreement first covered LSD, but has since been expanded to incorporate MDMA, DMT, LSD, MDMA-LSD, and psilocybin.
| Use of Proceeds | Amount Allocated (CAD) | Amount Allocated (USD) |
| License Fees | $1,150,100 | $868,000 |
| R&D | $1,886,800 | $1,424,000 |
| Total | $3,036,900 | $2,292,000 |
Drug Development
MindMed’s current development phase consists of the commercial development of 18-MC (psychedelic ibogaine) and LSD. MindMed is focusing on these substances to address the opioid crisis and ADHD/anxiety, respectively.
Money from this raise has been allocated to development in the following ways:
- Addiction: 18-MC’s impact on opioid withdrawal treatment
- Microdose LSD Program
- Project Lucy: MindMed’s research into experiential therapy for anxiety disorders and cluster headaches with LSD
| Use of Proceeds | Amount Allocated (CAD) | Amount Allocated (USD) |
| Addiction (18-MC) | $4,372,500 | $3,300,000 |
| Microdose LSD | $1,722,500 | $1,300,000 |
| Project Lucy (Experiential LSD) | $4,028,000 | $3,040,000 |
| Chemistry, manufacturing and control (LSD & 18-MC) | $8,930,500 | $6,740,000 |
| Total | $19,053,500 | $14,380,000 |
Corporate Expenses
| Use of Proceeds | Amount Allocated (CAD) | Amount Allocated (USD) |
| Management & Contractors | $3,111,100 | $2,348,000 |
| Professional Fees | $344,500 | $260,000 |
| Marketing/PR/IR | $927,500 | $700,000 |
| Total | $4,383,100 | $3,308,000 |
As MindMed is pursuing a NASDAQ uplisting, this funding will allow the company to further research and develop a diverse psychedelic substance pipeline.
As we have discussed before, MindMed, along with other psychedelic companies, are unprofitable as money is spent on R&D. They will continue to need to go to the capital markets to raise money.
At this stage in the game, investors shouldn’t be worried as long as the money is legitimately being spent on R&D.
This is a race to drug deployment by psychedelic companies, and the only way to get there is to spend on R&D. This recent funding puts MindMed much closer to deployment and much further ahead of its competition.