Clearmind Medicine secures up to $10 million in convertible notes

VANCOUVER - Clearmind Medicine Inc. (NASDAQ:CMND), a clinical-stage biotech company focused on psychedelic-derived therapeutics with a current market capitalization of $5.47 million, announced Friday it has entered into securities purchase agreements with institutional investors for convertible promissory notes worth up to $10 million. According to InvestingPro data, the company maintains a healthy current ratio of 1.32 and holds more cash than debt on its balance sheet.

The company initially issued notes valued at $555,556 for a purchase price of $500,000 upon execution of the agreements. Following registration with the Securities and Exchange Commission, Clearmind will issue additional notes worth $1,944,444 for $1,750,000. The company’s financial position shows a debt-to-equity ratio of just 0.03, according to InvestingPro analysis, which reveals 7 additional key insights about the company’s financial health.

Starting three months after the second closing, the company may request investors purchase additional notes up to $2,500,000 per quarter, potentially totaling an additional $7,500,000. Each note will be issued at 90% of principal value with 4% annual interest, increasing to 14% upon default.

The notes will be repaid in ten equal monthly installments beginning 18 months after issuance, with options to convert into common shares at a variable price not below $0.20.

Aegis Capital Corp. served as financial advisor for the transaction.

Clearmind plans to use proceeds for working capital, general corporate purposes, and potential acquisitions to explore strategic opportunities, according to the press release.

The Vancouver-based company focuses on developing novel psychedelic-derived therapeutics for underserved health problems, including alcohol use disorder. Clearmind’s intellectual portfolio currently includes nineteen patent families with 31 granted patents.

In other recent news, Clearmind Medicine Inc. has been actively advancing its clinical trials and patent applications. The company announced the publication of an international patent application for a combination therapy targeting metabolic syndrome and obesity. This patent, filed under the European Patent Office, involves Clearmind’s 5-methoxy-2-aminoindane (MEAI) combined with SciSparc Ltd.’s Palmitoylethanolamide (PEA). In parallel, Clearmind has made significant strides in its Phase I/IIa clinical trial for CMND-100, a treatment for Alcohol Use Disorder (AUD). The trial has expanded to include new clinical sites, such as the Tel Aviv Sourasky Medical Center and Johns Hopkins University School of Medicine. Institutional Review Board approval has been secured at Tel Aviv Sourasky Medical Center, allowing for patient enrollment. The first participant has already been dosed with CMND-100, marking a key milestone in the trial’s progress. The trial aims to assess the safety and efficacy of CMND-100, focusing on reducing alcohol cravings and consumption.

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