FSD Pharma Inc (NASDAQ:HUGE) (CSE:HUGE.CN) (FRA:0K9A) announced Thursday a private placing to raise around C$10.125 million.
In a statement, the Cobourg, Ontario-headquartered company said it had struck agreements with institutional investors for the purchase and sale of 1.5 million of its shares at C$6.75 each.
READ: FSD Pharma wins FDA nod to design Phase 2a clinical trial of its lead candidate micro-PEA to treat coronavirus patients
The firm has also agreed to issue share purchase warrants on 1.5 million of its shares.
The warrants have a term of five years and an exercise price of C$9.65 each. The closing of the offering, which the company said was for working capital and other general corporate purposes, is expected to occur on or around June 8 this year.
FSD Pharma also said it had granted the investors an option to acquire up to a further C$10.125 million of units on the same terms for 30 days following the initial closing.
On June 3, the firm revealed that the US Food and Drug Administration (FDA) had given the company permission to submit an Investigational New Drug (IND) application for the use of its lead candidate FSD-201, or anti-inflammatory ultra-micronized-palmitoylethanolamide (PEA), to treat coronavirus (COVID-19) patients.
The company said that “severe COVID-19” the disease caused by the SARS-CoV-2 virus, is characterized by an “over-exuberant inflammatory response” that may lead to a cytokine storm and ultimately death.
FSD Pharma is focused on developing FSD-201 for its anti-inflammatory properties to avoid the cytokine storm associated with acute lung injury in hospitalized COVID-19 patients.
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