TORONTO (February 20, 2020) – PRESS RELEASE – FSD Pharma Inc. has announced the sale of its 12% equity interest in Cannara Biotech Inc. to a consortium of buyers for cash proceeds of more than $7.7 million.
The terms of the share sale transaction were negotiated at arm's length with a group of buyers that included entities controlled by members of the Cannara board and senior management. A substantial portion of FSD Pharma's shareholdings in Cannara were subject to a statutory escrow expiring December 2021. Under the terms of the share sale transaction, the buyers agreed to acquire FSD Pharma's interest subject to escrow and, as such, assumed all of the associated market risk. The share sale transaction represents a 670% return on the company's stake in Cannara.
"This is a very positive milestone for the shareholders and stakeholders of FSD Pharma to recognize a 7x return in less than two years," stated Raza Bokhari, MD, executive co-chairman and CEO. "This transaction represents, which I hope is the first of others that will follow to strengthen our cash position on the balance sheet. Our aim is to scale up to $50 million in disposable cash through monetizing our non-cash assets and raising new capital from institutional and institutional grade investors in the United States and elsewhere."
For further details on the share sale transaction, please refer to FSD Pharma's Early Warning Report, which will be available under Cannara's SEDAR profile at www.sedar.com.