PSYB Psybio Therapeutics Corp

PsyBio Therapeutics Corp. (formerly Leo Acquisitions Corp.) (the “Company”), announces that it has completed its previously announced reverse takeover of PsyBio Therapeutics, Inc. (“PsyBio”), a biotechnology company developing a new class of drugs intended for the treatment of mental health challenges and other disorders (the “Reverse Takeover”). The Reverse Takeover constitutes the Company's Qualifying Transaction (as defined by Policy 2.4 of the TSX Venture Exchange (the “TSXV”) and was completed pursuant to the terms of a business combination agreement dated December 2, 2020, as amended on February 18, 2021 (the “Business Combination Agreement”), among the Company, 1276949 B.C. Ltd., a wholly owned subsidiary of the Company (“BC Sub”), Eluss, Inc. a wholly owned subsidiary of the Company (“US Sub”), PsyBio and PsyBio Therapeutics Financing Inc. (“Finco”).

“We are delighted to have completed the Reverse Takeover and to have received conditional approval to list PsyBio’s shares on the TSXV. This is an important milestone for PsyBio as we enter the public market with the goal of enhancing our visibility within the investment community and broadening our investor base to build long-term shareholder value. Given our platform’s ability to efficiently develop next generation psychoactive compounds, we envision building a company with the potential to help transform the treatment of mental health challenges and other disorders,” said Evan Levine, PsyBio’s Chief Executive Officer. “We believe in the application of psychedelic therapies and look forward to advancing them and our other product candidates.”

Prior to the Reverse Takeover taking effect:

1. the Company: (a) continued out of the jurisdiction of the Business Corporations Act (Ontario) and into the jurisdiction of the Business Corporations Act (British Columbia) (the “Continuance”), (b) re-designated its common shares (“Common Shares”) as subordinate voting shares (the “Subordinate Voting Shares”), (c) created a new class of multiple voting shares (the “Multiple Voting Shares”), (d) changed its name to PsyBio Therapeutics Corp., and (e) consolidated the Subordinate Voting Shares on the basis of 1.6667 old Subordinate Voting Shares into one new Subordinate Voting Share (the “Consolidation”) ((a)-(e) being collectively referred to as the “Company Amendments”); and
2. PsyBio effected a share-split whereby each common share of PsyBio was exchanged for 1.1529 common shares of PsyBio (the “PsyBio Shares”).

On December 4, 2020, Finco completed a brokered private placement (“Private Placement”) of 41,409,698 subscription receipts (“Subscription Receipts”) at a price of $0.35 per Subscription Receipt (the “Issue Price”) for aggregate gross proceeds of $14,493,394. Eight Capital acted as lead agent in connection with the financing, together with Canaccord Genuity Corp. Immediately prior to closing the Reverse Takeover, each Subscription Receipt was converted into one common share of Finco (each a “Finco Share”).

The Reverse Takeover was completed by way of a “three-cornered” amalgamation pursuant to the provisions of the Business Corporations Act (British Columbia) (the “Amalgamation”) and a “three-cornered” merger, under the laws of the State of Delaware (the “Merger”). Pursuant to the Amalgamation, all Finco Shares were exchanged for Subordinate Voting Shares on a one-for-one basis and Finco and BC Sub amalgamated, with the resulting entity (“Amalco”) to continue as a wholly-owned subsidiary of the Company. It is anticipated that Amalco will be wound-up and dissolved, pursuant to which all of the assets of Amalco will then distributed to the Company. Pursuant to the Merger, all PsyBio Shares were exchanged for 1/1,000 of one Multiple Voting Share (on the basis of one PsyBio Share for every one underlying Subordinate Voting Share) and PsyBio and US Sub amalgamated, with the resulting entity to continue as a wholly-owned subsidiary of the Company.

The Company Amendments were approved at the annual and special meeting of the shareholders of the Company held on January 13, 2021 (the “ASM”). In conjunction with the closing of the Reverse Takeover, RSM Canada LLP will resign from its role as auditor of the Company and the auditor of PsyBio, MNP LLP, will be appointed as auditor of the Company. In the opinion of the Company, no “reportable event” (as such term is defined in National Instrument 51-102 Continuous Disclosure Obligations) has occurred.

The reclassification of the Common Shares into Subordinate Voting Shares and the creation of the Multiple Voting Shares in connection with the Reverse Takeover is for the purpose of allowing the Company to maintain its status as a “foreign private issuer” as determined in accordance with Rule 3b-4(c) under the U.S. Exchange Act. The Multiple Voting Shares are intended to minimize the proportion of the outstanding voting securities of the Company that are held by “U.S. persons” for purposes of determining whether the Company is a “foreign private issuer". The holders of Multiple Voting Shares are 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. The rights of holders of Multiple Voting Shares to convert such shares into Subordinate Voting Shares will be subject to the Company preserving “foreign private issuer” status. The Multiple Voting Shares will not be listed for trading in any market and, as such, holders of Multiple Voting Shares will not be able to trade their shares without conversion.

The Company’s Subordinate Voting Shares are expected to commence trading on the TSXV, upon satisfaction of certain TSXV conditions to listing, under the symbol “PSYB.” A further press release will be issued once trading has commenced.

Following the Reverse Takeover, the leadership team of the Company is as follows:

• Evan Levine — Chief Executive Officer and Director
• Noah Davis — Chief Financial Officer, Secretary and Director
• Ross Carmel — Chief Legal Officer and Director
• Gerry Goldberg — Director
• Nitin Kaushal — Director

Each of the directors other than Nitin Kaushal were elected to the board of the Company at the ASM, subject to completion of the Reverse Takeover. Upon closing of the Reverse Takeover, the board increased its size by one and appointed Nitin Kaushal as a director, pursuant to its limited authority under the Business Corporations Act (British Columbia).

As described in the Company's filing statement dated February 17, 2021 available under the Company's profile on SEDAR at www.sedar.com (the “Filing Statement”), certain of the Subordinate Voting Shares and Multiple Voting Shares are subject to escrow requirements or seed share resale restrictions in accordance with TSXV Policy 5.4 – Escrow, Vendor Considerations and Resale Restrictions. Additional information related to the Company's business and the Reverse Takeover (including the members of the management team and board of directors listed above) is available in the Filing Statement.

Option Grants

On closing of the Reverse Takeover, options (“Options”) to purchase up to an aggregate of 6,036,156 Subordinate Voting Shares were granted to certain directors and officers of the Company and Options to purchase up to an aggregate of 2,129,985 Subordinate Voting Shares were granted to certain consultants and advisors of the Company. Each Option is exercisable into one Subordinate Voting Share at an exercise price equal to the Issue Price. The Options will expire five years from the date of grant and are subject to vesting conditions. All Options were granted in accordance with Company’s stock option plan approved by shareholders on January 13, 2021 and adopted by the board of directors of the Company on closing (the “Plan”). A copy of the Plan is available under the Company's SEDAR profile at www.sedar.com.

About PsyBio

PsyBio is a US-based biotechnology company developing a new class of drugs intended for the potential treatment of mental health challenges and other disorders. In collaboration with Miami University based in Oxford, Ohio, PsyBio has retained the global exclusive rights to a proprietary platform technology that biologically synthesizes psilocybin and other targeted next generation psychoactive compounds that are produced naturally in fungi and plants. Management of PsyBio expects that the technology will enable the rapid generation of these highly stable psychoactive compounds cheaper, faster and greener than other published methods.

Cautionary Note Regarding Forward-Looking Statements

The TSXV has in no way passed upon the merits of the Reverse Takeover 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 contains statements that constitute “forward-looking statements.” Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements, or developments to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “potential” and similar expressions, or that events or conditions “will,” “would,” “may,” “could,” or “should” occur.

Forward-looking statements in this document include, among others, statements relating to expectations regarding the increase to the Company’s shareholder base, increased shareholder value, expansion of the Company’s product offerings and the effectiveness of such products, the use of proceeds of the Private Placement, timing of listing on the TSXV, the business plans of the Company and other statements that are not historical facts. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors and risks include, among others: (a) following completion of the Reverse Takeover, the Company may require additional financing from time to time in order to continue its operations which may not be available when needed or on acceptable terms and conditions acceptable; (b) compliance with extensive government regulation; (c) domestic and foreign laws and regulations could adversely affect the Company’s business and results of operations; (d) the stock markets have experienced volatility that often has been unrelated to the performance of companies and these fluctuations may adversely affect the price of the Company’s securities, regardless of its operating performance; (e) adverse changes in the public perception of psilocybin; and (f) the impact of COVID-19.

PsyBio makes no medical, treatment or health benefit claims about PsyBio’s proposed products. The U.S. Food and Drug Administration (the “FDA”) or other similar regulatory authorities have not evaluated claims regarding psilocybin and other next generation psychoactive compounds. The efficacy of such products have not been confirmed by FDA-approved research. There is no assurance that the use of psilocybin and other psychoactive compounds can diagnose, treat, cure or prevent any disease or condition. Vigorous scientific research and clinical trials are needed. PsyBio has not conducted clinical trials for the use of its proposed PsyBio IP. Any references to quality, consistency, efficacy and safety of potential products do not imply that PsyBio verified such in clinical trials or that PsyBio will complete such trials. If PsyBio cannot obtain the approvals or research necessary to commercialize its business, it may have a material adverse effect on the PsyBio’s performance and operations.

The forward-looking information contained in this news release represents the expectations of the Company as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. The Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.

This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. The Company’s 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.

Further Information

For further information, please contact:

Evan Levine CEO, PsyBio Therapeutics Corp. e: evan@psybiolife.com