PsyTech Inc, including the psychiatric therapeutic SaaS platform Tovana Solutions and psychiatric clinical network Tovana Clinics, to become wholly owned subsidiary of the emerging life sciences company
CHICAGO and TORONTO, July 13, 2021 (GLOBE NEWSWIRE) — Wesana Health Holdings Inc. (“Wesana” or the “Company”) (CSE: WESA), an emerging life sciences company focused on developing innovative approaches for better understanding, protecting and improving neurological health and performance, including through the advancement of psilocybin-based medicine, today announced the execution of a definitive agreement to acquire Psychedelitech Inc., also known as PsyTech Inc., for a price of approximately $21 million CAD in Wesana Health stock (the “Transaction”), as further described below.
The acquisition of PsyTech as a wholly owned subsidiary of Wesana will add three major components that will expand and enhance Wesana’s current business, including clinical software-as-a-service (SaaS) platform ‘Tovana Solutions’, the integrated mental health practice network ‘Tovana Clinics’ and PsyTech Connect, the industry’s largest professional psychedelics practitioner community, conferences, and educational courses.
“TBI is a “moonshot” – by developing diagnostics and effective treatments for a condition as complex as TBI, we are uncovering medicines, therapies and protocols that will enable us to treat a wide range of conditions with roots in the brain,” said Daniel Carcillo, CEO of Wesana Health. “The acquisition of PsyTech will greatly accelerate our ability to understand, analyze and improve neurological health and performance by providing a data platform on which to build our technical strategy, clinics in which to apply and accelerate our neuroscience research and relationships with many thousands of the practitioners who will leverage our medicines, diagnostics and technology to heal people.”
“PsyTech Inc.’s psychedelic health solutions are extremely well positioned to help the mental health industry respond to the growing demand for psychedelic therapies,” said Chad Bronstein, Executive Chairman and co-Founder of Wesana Health. “There are over 50,000 psychiatrists and 15,000 psychiatric practices in North America alone who will require solutions to adopt the novel and effective psychedelic assisted therapies that already exist and are currently in development.”
“Our mission at PsyTech has been to empower healthcare providers with tools to deliver best-practice care to patients, including the main-streaming of breakthrough psychedelic therapies,” said Hayim Raclaw, CEO of PsyTech. “Daniel and his team have shown a tremendous passion for bringing real change to patients suffering from TBI and related mental health conditions which perfectly complements our mission at PsyTech. Together with the Wesana team, we span the range from therapy development to therapy delivery and novel psychedelic modalities of care.”
Tovana Solutions, rebranding as Wesana Solutions, is a medical-grade clinical SaaS platform focused on improving mental healthcare through facilitating access to leading edge clinical protocols and tracking their efficacy including both patient and clinician adherence to protocols. In concert with EMRs and practice management systems Tovana Solutions is used in clinics delivering psychedelics and related therapies, targeting the rapidly developing international psychiatric clinic and research market. The SaaS platform includes applications for both provider and patient data collection, real time tracking, patient management and analysis both in and out of the clinic. The Wesana Solution is beginning clinical deployment this quarter. This suite of tools will help Wesana to gather and process comprehensive neurological data about patient response to compounds and protocols under investigation.
“Wesana Solutions enables us to rapidly track and integrate patient data from a wide range of diagnostic tools in-clinic to an array of wearable biometric technologies, and that data can be incorporated and visualized in real time. This accelerates our data-driven approach to treatment. This is critical for understanding the broad range of brain and body systems that are affected in the wake of traumatic brain injury, as well as in other mental health conditions,” said Carcillo. “This also enables us to rapidly arm psychiatric practitioners and clinics across the country with protocol libraries, operational best practices and support tools for managing and caring for patients via highly personalized approaches.”
Tovana Clinics, rebranding as Wesana Clinics, is a chain of psychiatrist-led integrated mental health clinics focused on profitably delivering quality psychiatric care, inclusive of ketamine therapy, while also preparing for the delivery of other psychedelic therapies as they become available. The Wesana clinical network currently includes two flagship clinics with another under construction slated to open in Q3 and two more in the acquisition process forecasted to become Wesana Clinics in Q3. The number of clinics will ramp up post-acquisition to an estimated 12 clinics within the next 12 months.
“Wesana Clinics provide us with a network that makes it possible for us to deliver care for TBI, but also for a wide range of other mental health conditions in the psychiatrist-lead integrated manner that we believe to be most effective – a dramatically different foundation for holistic treatment informed by advanced neurological diagnostics. Wesana Clinics will allow us to unify the performance and recovery-focused applied neuroscience research developed at the Brainstorm Lab we are sponsoring at the University of South Carolina with cutting edge neurological and psychiatric care to heal people of an array of conditions at scale,” said Carcillo.
PsyTech Connect is the largest psychedelic therapy community with over 8,000 actively engaged professionals and has become a respected resource for complete, current and peer-accepted psychedelic therapy protocols and clinical best practices. PsyTech Connect also features the annual PsyTech Summit, a premier psychedelic conference that averages over 2,200+ attendees. Through PsyTech Connect, Wesana will be able to develop relationships with leading edge psychiatric practitioners across the country and provide them with tools for managing, understanding, and personalizing care for their patients through its new data-driven therapeutic model informed by the latest neuroscience, diagnostic tools, and psychedelics best practices.
The Transaction will be effected by way of a three-cornered amalgamation between PsyTech, Wesana and a wholly-owned subsidiary of Wesana. The Transaction will involve the issuance of approximately 7.4 million subordinate voting shares of Wesana as the acquisition consideration (the “Consideration Shares”).
The Transaction was unanimously approved by the board of directors of Wesana and the board of directors of PsyTech. The closing of the Transaction is subject to customary closing conditions for a transaction of this nature including, among other things, PsyTech obtaining the requisite shareholder approval at a special meeting of PsyTech shareholders to be called to consider the Transaction (the “PsyTech Meeting”). The closing of the Transaction is expected to occur during the third quarter of 2021.
The Transaction will require approval by 66 2/3% of the votes cast by PsyTech shareholders at the PsyTech Meeting. PsyTech shareholders holding at least 67% of the shares of PsyTech, on a fully diluted basis, have entered into support agreements with Wesana (the “Support Agreements”) pursuant to which, among other things, they have agreed to vote all of the shares held by them in favor of the Transaction at the PsyTech Meeting, on the terms and subject to the conditions set forth in the Support Agreements.
Additionally, it is a condition to closing of the Transaction that PsyTech shareholders holding approximately 77% of the shares of PsyTech, on a fully diluted basis, shall have entered into lock-up agreements with Wesana pursuant to which: (a) 20% of the Consideration Shares received by each such locked-up shareholder will be exempt from any contractual transfer restrictions imposed by Wesana; and (b) 80% of the Consideration Shares received by each such locked-up shareholder will be subject to contractual transfer restrictions, with such Consideration Shares to be released from such transfer restrictions monthly over a one-year period from the date of closing the Transaction (i.e. in 6.66% monthly increments commencing on the date that is one month from the date of closing the Transaction).
It is anticipated that certain U.S. shareholders of PsyTech will elect and agree to receive multiple voting shares of Wesana in lieu of subordinate voting shares of Wesana (on the basis of one multiple voting share for every 50 subordinate voting shares) that they would have otherwise received as Consideration Shares.
Cassels Brock & Blackwell LLP and Dorsey & Whitney LLP are acting for Wesana in connection with the Transaction and Garfinkle Biderman LLP and McDonald Hopkins are acting for PsyTech in connection with the Transaction.
About Wesana Health
Wesana Health is an emerging life sciences company championing the development of innovative approaches for better understanding, protecting and improving neurological health and performance. Through extensive clinical research and academic partnerships, Wesana Health is developing evidence-based formulations and protocols, including psilocybin-based therapies, that empower patients to overcome neurological, psychological and mental health ailments. Learn more at www.wesanahealth.com.
About PsyTech Inc.
PsyTech combines a robust psychedelic therapeutic community with integrative mental healthcare delivery and enabling tools for novel modalities of care. A leader in the development of data-driven tools that allow physicians insight into patient well-being and clinical best practices, PsyTech is mainstreaming the adoption of psychedelic-assisted therapies through the promotion and delivery of safe and effective therapy, combating stigma, and accelerating innovation. For more information, please visit psytechglobal.com.
Forward-Looking Information and Statements
This press release contains “forward-looking information” within the meaning of applicable securities laws with respect to the Company, including, but not limited to: information concerning the completion and timing of the completion of the contemplated Transaction, expectations regarding whether the contemplated Transaction will be consummated, including whether conditions to the consummation of the proposed Transaction will be satisfied and whether the proposed Transaction will be completed on the current terms, the timing for completing the proposed Transaction, expectations for the effects of the proposed Transaction, including the potential number and location of clinics to be acquired and potential expansion of the clinic platform of the Company upon completion of the Transaction within the next 12 months, expectations regarding the markets to be entered into by the Company as a result of completing such proposed Transaction, the ability of the Company to successfully achieve its business objectives as a result of completing the contemplated Transaction, expectations regarding the method by which future revenue is generated, and any other statement that may predict, forecast, indicate or imply future plans, intentions, levels of activity, results, financial position, operational or financial performance or achievements. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, will”, “projects”, or “believes” or variations (including negative variations) of such words and phrases, or statements that certain actions, events, results or conditions “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Except for statements of historical fact, information contained herein constitutes forward-looking information.
Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including among other things assumptions about: the contemplated Transaction being completed on the current terms and current contemplated timeline; development costs remaining consistent with budgets; favorable equity and debt capital markets; the ability to raise sufficient capital to advance the business of the Company; favorable operating conditions; political and regulatory stability; obtaining and maintaining all required licenses and permits; receipt of governmental approvals and permits; sustained labor stability; stability in financial and capital goods markets; the level of demand for the Company’s products and services; the ability of the Company to be successful in its research and development initiatives; and the availability of third party service providers and other inputs for the Company’s operations. While the Company considers these assumptions to be reasonable, the assumptions are inherently subject to significant business, social, economic, political, regulatory, competitive and other risks and uncertainties, contingencies and other factors that could cause actual performance, achievements, actions, events, results or conditions to be materially different from those projected in the forward-looking information. Many assumptions are based on factors and events that are not within the control of the Company and there is no assurance they will prove to be correct.
Furthermore, such forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, financial position, performance or achievements of the Company to be materially different from any future plans, intentions, activities, results, financial position, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others: the ability to consummate the proposed Transaction; the ability to obtain requisite approvals and the satisfaction of other conditions to the consummation of the proposed Transaction on the proposed terms and schedule; the diversion of management time on the proposed Transaction; research and development of drugs targeting the central nervous system (“CNS”) being particularly difficult; failure to comply with health and data protection laws and regulations; delays in clinical testing resulting in delays in commercializing; inability to file investigational new drug applications to commence clinical trials in a timely manner; difficulty enrolling patients in clinical trials; competition from other biotechnology and pharmaceutical companies; violations of laws and regulations resulting in repercussions; psychedelic inspired drugs possibly never being approved as medicines; regulatory or political change; maintaining and enhancing reputation and brand recognition; reliance on third parties to plan, conduct and monitor preclinical studies and clinical trials; requirements of commercial scale and quality manufactured drug supply; negative results from clinical trials or studies of others; negative operating cash flow and going concern; the detrimental impact of future losses and negative cash flow from operations; requirements for additional capital; lack of product or service revenue; unfavourable publicity or consumer perception; not achieving publicly announced milestones; reliance on the capabilities and experience of key executives and scientists; disruptions due to acquisitions or collaborations; risk of product liability claims; COVID-19; litigation; conflicts of interest; limited operating history; exposure to the fluctuation of foreign exchange rates; enforcement of judgments and effecting service of process on directors and officers; ability to protect intellectual property; changes in patent law; requirements to share intellectual property with service providers; general economic, market and business conditions, other risks factors including those found in the Company’s Listing Statement dated May 6, 2021 filed on SEDAR at www.sedar.com and discussed in the Company’s other public filings available on SEDAR. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such forward-looking information will prove to be accurate as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking information is provided and made as of the date of this news release and the Company does not undertake any obligation to revise or update any forward-looking information other than as required by applicable law.