Leo Acquisitions Provide Update on Qualifying Transaction and Supplement to Management Information Circular
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distribution or dissemination directly, or indirectly, in whole or in part, in or into the United States.TORONTO, Jan. 08, 2021 (GLOBE NEWSWIRE) — Leo Acquisitions Corp. (NEX:LEQ.H) (“Leo” or the “Company”) is pleased to provide an update on its previously announced proposed qualifying transaction on the TSX Venture Exchange (“TSXV”).As outlined in the press releases of the Company dated December 3, 2020 and December 4, 2020, Leo entered into a business combination agreement (the “Combination Agreement“) with PsyBio Therapeutics Inc. (“PsyBio”) pursuant to which Leo and PsyBio have agreed to complete a transaction that will result in a reverse take-over of Leo by the shareholders of PsyBio (the “Qualifying Transaction”). In connection with entering into of the Combination Agreement and the contemplated Qualifying Transaction, PsyBio, through a special purpose British Columbia company, completed a subscription receipt financing for aggregate gross proceeds of CAD$14,493,394, approximately three times the original CAD$5.0 million target, with significant US and Canadian institutional investor support.The Company continues to make meaningful progress towards completing the Qualifying Transaction and is engaged with the TSXV to finalize the terms of the Qualifying Transaction. Subject to the approval of the TSXV and other closing conditions, the Qualifying Transaction is expected to close by the end of February, 2021.The Company believes that merging with PsyBio, a US-based biotechnology company developing a new class of drugs intended for the treatment of mental health challenges and other disorders, will bring value to existing shareholders and allow for further growth of the Company in this emerging industry.Leo is also announcing a supplement (the “Supplement“) to its management information circular dated December 14, 2020 (the “Circular“) which is available on the Company’s SEDAR profile.Pursuant to the Supplement, shareholders of the Company will be asked to approve an amendment to the exercise price of the Company’s issued and outstanding stock options (the “Options”) from $0.33 per common share of the Company (“Common Shares“) to $0.21 per Common Share (or $0.35 per Common Share after taking into account the proposed consolidation of the Common Shares (the “Consolidation”) at a Consolidation ratio of 1.6667:1), in order to align with the ascribed price per Common Share of $0.21 in the Qualifying Transaction (the “Amendment“). The Amendment is subject to the approval of the TSXV and requires that the Company receive disinterested shareholder approval.As set out below, all issued and outstanding Options are held by directors of the Company. * Assumes a Consolidation ratio for the Common Shares of 1.6667:1In the event that the Qualifying Transaction is completed, the directors of the Company who are not directors of the Resulting Issuer will have a period of 12 months to exercise their Options.In addition, the Company will also apply to the TSXV to extend the expiry date of the option grants expiring on February 17, 2021 to March 5, 2023.The Options are expected to represent less than 1% of the issued and outstanding shares of the resulting issuer following the Qualifying Transaction.In addition, the Supplement will add an additional approval threshold for the Continuance Resolution (as defined in the Circular) asking shareholders to approve, among other things, the reclassification of the Corporation’s existing Common Shares as subordinate voting shares (the “Subordinate Voting Shares“), and the creation of a new class of shares designated as multiple voting shares (the “Multiple Voting Shares“).The Multiple Voting Shares are being proposed in order to minimize the proportion of the outstanding voting securities of the Corporation that are held by “U.S. persons” for purposes of determining whether the Corporation is a “foreign private issuer” for purposes of United States securities laws. The Multiple Voting Shares will be entitled to one vote in respect of each Subordinate Voting Share into which such Multiple Voting Share could be converted and as such the Multiple Voting Shares do not necessarily hold voting rights that are superior to the holders of Subordinate Voting Shares, on an as converted to Subordinate Voting Shares basis.Notwithstanding the foregoing, at the request of the TSXV, the Corporation has been asked to obtain Majority of the Minority Approval (as defined in the policies of the TSXV) for the creation of the Multiple Voting Shares.About LeoLeo was incorporated under the Business Corporations Act (Ontario) on October 28, 2009 and is a Capital Pool Company (as defined in TSXV Policy 2.4 – Capital Pool Companies of the Corporate Finance Manual). Leo is listed on the NEX board of the TSXV. Leo has no commercial operations and no assets other than cash.Further InformationFor further information please contact:Gerry Goldberg
CEO, Leo Acquisitions Corp.
e: [email protected]Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, TSXV approval and disinterested shareholder approval relating to the Amendment and the Continuance Resolution as described above. The Qualifying Transaction cannot occur until such approvals are obtained. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.Investors are cautioned that, except as disclosed in the Circular or filing statement to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.The TSXV has in no way passed upon the merits of the proposed Amendment or the Qualifying Transaction and has neither approved nor disapproved the contents of this press release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.Cautionary NotesThis press release contains statements that constitute “forward-looking information” (“forward-looking information”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking information and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information. In disclosing the forward-looking information contained in this press release, the Company has made certain assumptions, including that: all applicable shareholder and regulatory approvals for the Amendment, the Continuance Resolution, and the Qualifying Transaction will be received; the Amendment will be completed on the terms set forth in this press release, on acceptable terms or at all, and the Qualifying Transaction will be completed on the terms set forth in this press release, on acceptable terms or at all. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, it can give no assurance that the expectations of any forward-looking information will prove to be correct. Known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Such factors include, but are not limited to: delay or failure to receive board, shareholder or regulatory approvals; compliance with extensive government regulations; domestic and foreign laws and regulations adversely affecting PsyBio’s business and results of operations; decreases in the prevailing process for psilocybin and nutraceutical products in the markets in which PsyBio will operate; the impact of COVID-19; and general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking information to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking information or otherwise.