Full Press Release Details
No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This prospectus supplement, together with the short form base shelf prospectus dated June 7, 2021 (the "Base Prospectus") to which it relates, as amended or supplemented, and each document deemed to be incorporated by reference into the Base Prospectus, as amended or supplemented, and this prospectus supplement constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities.
These 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, or for the account or benefit of, U.S. persons or persons in the United States unless exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws are available. This prospectus supplement does not constitute an offer to sell or a solicitation or an offer to buy any of the securities offered hereby within the United States or to, or for the benefit of, U.S. persons. "United States" and "U.S. person" have the meanings ascribed to them in Regulation S under the U.S. Securities Act. See "Plan of Distribution".
Information has been incorporated by reference in this prospectus supplement from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from from Bright Minds Biosciences Inc., c/o 1500 - 1055 West Georgia Street, Vancouver, British Columbia, V6E 4N7, and are also available electronically at www.sedar.com.
PROSPECTUS SUPPLEMENT
To the Short Form Base Shelf Prospectus dated June 7, 2021
New IssueAugust 25, 2022
BRIGHT MINDS BIOSCIENCES INC.
Up to 2,858,000 Units
This prospectus supplement (the "Prospectus Supplement"), together with the accompanying Base Prospectus, qualifies the distribution of up to 2,858,000 units (the "Units") of Bright Minds Biosciences Inc. ("Bright Minds" or the "Company") at the price of $1.40 per Unit (the "Offering Price") for aggregate gross proceeds to the Company of up to $4,001,200 (the "Offering"). Each Unit will consist of one common share in the capital of the Company (a "Unit Share") and one common share purchase warrant of the Company (a "Warrant"). Each Warrant will entitle the holder thereof to acquire, subject to adjustment in certain circumstances, one common share of the Company (a "Warrant Share") at an exercise price of $1.76 per Warrant Share for a period of 24 months from the Closing Date (as defined herein). The Warrants will be governed by a warrant indenture (the "Warrant Indenture") to be dated as of the Closing Date between the Company and Computershare Trust Company of Canada, as warrant agent thereunder (in such capacity, the "Warrant Agent"). The Unit Shares and the Warrants comprising the Units will separate immediately upon the closing of the Offering. There is no minimum amount of funds that must be raised under the Offering. The Company could complete this Offering after raising only a small portion of the offering amount set out above. See "Plan of Distribution" and "Description of Units".
The Units will be issued and sold pursuant to the terms of an agency agreement (the "Agency Agreement") dated August 25, 2022 between the Company and Eight Capital, as sole agent and bookrunner (the "Agent"). The Agent conditionally offers the Units for sale if, as and when issued by the Company and accepted by the Agent on a "best efforts" agency basis in accordance with the conditions contained in the Agency Agreement, as more fully described under the section entitled "Plan of Distribution" in this Prospectus Supplement. The terms of the Offering, including the offering price of the Units, were established in the context of the market and through arm's length negotiations between the Company and the Agent, and may bear no relationship to the price that will prevail in the public marketplace. The Company has also engaged H.C. Wainwright & Co., LLC as its U.S. capital markets advisor (the "U.S. Capital Markets Advisor") in connection with the Offering.
The common shares of the Company (the "Common Shares") are listed and posted for trading on NASDAQ Capital Markets ("NASDAQ") and the Canadian Securities Exchange (the "CSE") under the symbol "DRUG". On August 24, 2022, the last trading date before the date hereof, the closing price of the Common Shares as reported on NASDAQ was USD$1.98 per Common Share, and on CSE was $2.64 per Common Share. The completion of the Offering will be subject to the Company meeting the requirements of each of the CSE and NASDAQ.
| Price to the Public | Agent's Commission (1 )(2) | Net Proceeds to the Company ( 3 ) | |
| Per Unit | $1.40 | $0.098 | $1.302 |
| Total ( 4 )( 5 ) | $4,001,200 | $280,084 | $3,721,116 |
(1)The Company will pay to the Agent a cash commission equal to 7% of the gross proceeds of the Offering, including the proceeds from the exercise of the Over-Allotment Option (as defined herein), if any, (the "Agent's Commission"). The amounts set forth above assume the maximum Agent's Commission of 7% is paid to the Agent. In addition to the Agent's Commission, the Agent will receive compensation warrants (the "Compensation Warrants") equal to 7% of the aggregate number of Units sold under the Offering (including any Additional Units (as defined herein) sold pursuant to the exercise of the Over-Allotment Option). Each Compensation Warrant will be exercisable to acquire one Unit (a "Compensation Unit") at the Offering Price for a period of 24 months from the Closing Date. Each Compensation Unit will consist of one common share of the Company (a "Compensation Unit Share") and one common share purchase warrant of the Company ("Compensation Unit Warrant"), each of which is exercisable into one common share of the Company (a "Compensation Unit Warrant Share") at a price of $1.76 for a period of 24 months from the Closing Date, subject to adjustment in certain events. The Compensation Unit Warrants shall be issued under, and governed by, the terms of the Warrant Indenture. This Prospectus Supplement also qualifies the distribution of the Compensation Units. In addition, the Company will pay to the Agent a cash corporate finance fee equal to $50,000 (the "Corporate Finance Fee").
(2)The Company will also (a) pay the U.S. Capital Markets Advisor a cash fee (the "US Advisory Fee") equal to (i) 7% of the gross proceeds of the Offering derived from investors introduced by the U.S. Capital Markets Advisor to the Company who participate in the Offering, and (ii) 2.33% of the gross proceeds of the Offering from all other investors who participate in the Offering (including any gross proceeds raised on exercise of the Over-Allotment Option); and (b) issue the U.S. Capital Markets Advisor Compensation Warrants equal to (i) 7% of the number of Units sold to investors introduced by the U.S. Capital Markets Advisor to the Company, and (ii) 2.33% of the number of Units sold to all other investors in the Offering (including any Units issued on exercise of the Over-Allotment Option).
(3)After deducting the Agent's Commission, but before deducting the Corporate Finance Fee, the US Advisory Fee and the expenses of this Offering, estimated to be approximately $200,000, which will be paid from the proceeds of the Offering.
(4)Assumes the Offering is fully subscribed.
(5) The Company has granted the Agent an option (the "Over-Allotment Option") exercisable in whole or in part for a period of 30 days after and including the closing date of the Offering (the "Closing Date") to cover over-allotments, if any, and for market stabilization purposes, to arrange for the sale of up to 428,700 additional Units (collectively, the "Additional Units") at the Offering Price, each such Additional Unit comprised of one Common Share (each an "Additional Share" and, collectively, the "Additional Shares") and one Warrant (an "Additional Warrant" and, collectively, the "Additional Warrants"). If the Over-Allotment Option is exercised in full, the Price to the Public, the Agent's Commission and the Net Proceeds to the Company (before deducting the Corporate Finance Fee, the US Advisory Fee and the estimated expenses of the Offering) will be $4,601,380, $322,096.60 and $4,279,283.40, respectively. This Prospectus Supplement also qualifies (i) the grant of the Over-Allotment Option, and (ii) the distribution of the Additional Units issuable upon exercise of the Over-Allotment Option. See "Plan of Distribution".
The following table sets forth the number of securities that have been issued or may be issued pursuant to the Over-Allotment Option and the Compensation Warrants:
| Agent 's Position | M aximum N umber of Securities Available | Exercise Period | Exercise Price or Acquisition Price |
| Over-Allotment Option | Up to 428,700 Additional Units | Up to 30 days from and including the Closing Date | $1.40 per Additional Unit |
| Compensation Warrants (1) (2) (3 ) | Up to 200,060 Compensation Units | 24 months from the Closing Date | $1.40 per Compensation Unit |
(1)This Prospectus Supplement also qualifies the distribution of the Compensation Warrants.
(2)Assumes the Offering is fully subscribed. If the Over-Allotment Option is exercised in full, the total "Maximum Number of Securities Available" will be 230,069Compensation Units.
(3)Excluding Compensation Units issuable to the U.S. Capital Markets Advisor.
The Company intends to take such action as required by the policies of the CSE to ensure the Common Shares, including any Additional Shares, Warrant Shares, Compensation Unit Shares and Compensation Unit Warrant Shares to be distributed under this Prospectus Supplement, are listed on the CSE. Further, the Company has provided notice to list the Common Shares to be distributed under this Prospectus Supplement on NASDAQ. Listing on NASDAQ is subject to the Company fulfilling all of the listing requirements of NASDAQ.
There is no market through which the Warrants may be sold and the Warrants will not be listed. Accordingly, purchasers may not be able to resell such Warrants purchased under this Prospectus Supplement. This may affect
the pricing of the Warrants in the secondary market, the transparency and availability of trading prices, the liquidity of the Warrants, and the extent of issuer regulation. See "Risk Factors".
Due to the nature of the Company's business, an investment in the Units involves a high degree of risk. You should carefully review the risks outlined in this Prospectus Supplement and in the documents incorporated by reference in this Prospectus Supplement and consider such risks in connection with an investment in the Units. See "Risk Factors" in this Prospectus Supplement and the accompanying Base Prospectus.
Unless the context otherwise requires, all references to the "Offering" in this Prospectus Supplement shall include the Over-Allotment Option and all references to the "Units", "Unit Shares" and "Warrants" shall include Additional Units (and the Additional Shares and Additional Warrants comprising the Additional Units) issuable upon exercise of the Over-Allotment Option, as applicable.
Subscriptions for Units will be received subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any time without notice. The Units qualified for distribution under this Prospectus Supplement (other than those offered or sold to certain persons in the United States or to persons who are acting for the account or benefit of such persons, which will be represented by individual definitive certificates bearing U.S. restrictive legends) will be available for delivery in book-entry form through CDS Clearing and Depository Services Inc. ("CDS") or its nominee and will be deposited with CDS at the closing of the Offering which is expected to occur on or about August 30, 2022 or such other date as may be agreed between the Company and the Agent (the "Closing Date"). Purchasers of Units will receive only a customer confirmation from the registered dealer that is a CDS participant and from or through which the Units are purchased.
No securities offered under this Prospectus Supplement will be offered or sold in the Province of Quebec or any of the territories of Canada. Subject to applicable law, the Agent and any selling group members may offer the Units in such other jurisdictions outside of Canada as agreed between the Company and the Agent. See "Plan of Distribution".
There is no underwriter involved in the Offering and the Offering is not underwritten or guaranteed by any person. The Agent, on behalf of the Company, and any selling group members conditionally offer the Units on a "best efforts" agency basis, subject to prior sale, if, as and when issued by the Company and accepted by the Agent in accordance with the conditions contained in the Agency Agreement referred to under "Plan of Distribution" and subject to approval of certain legal matters by McMillan LLP, on behalf of the Company, and by DLA Piper (Canada) LLP, on behalf of the Agent.
The Agent shall be permitted to appoint a soliciting dealer group of other registered dealers acceptable to the Company for the purpose of arranging for purchases of Units under the Offering.
Subject to applicable laws in connection with the Offering, the Agent may effect transactions intended to stabilize or maintain the market price for the Common Shares at a level above that which might otherwise prevail on the open market. Such transactions, if commenced, may be discontinued at any time. See "Plan of Distribution".
NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION ("SEC") NOR ANY STATE OR CANADIAN SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.
You should rely on the information contained in or incorporated by reference into this Prospectus Supplement and the accompanying Base Prospectus. The Company and the Agent have not authorized anyone to provide you with different information. The Company is not making an offer of the Units in any jurisdiction where the offer is not permitted. You should not assume that the information contained in this Prospectus Supplement or incorporated by reference in this Prospectus Supplement is accurate as of any date other than the date on the front of this Prospectus Supplement or the date of such documents incorporated by reference herein, as applicable.
Prospective investors should be aware that the acquisition, holding and the disposition of the securities described herein may have tax consequences both in the Canada and in the United States that may not be described fully in this Prospectus Supplement or the Base Prospectus. Prospective investors are urged to consult their own tax advisors with respect to their own particular circumstances. See "Certain Material Canadian Federal Income Tax Considerations".
The enforcement by investors of civil liabilities under the United States federal securities laws may be affected adversely by the fact that the Company is incorporated under the laws of British Columbia, and that the majority of its officers and directors are residents of Canada.
Alan Kozikowski, Nils Bottler, Jeremy Fryzuk, and Jan Torleif Pedersen (the "Non-Resident D&O") are directors and/or officers of the Company, and reside outside of Canada. They have appointed McMillan LLP at Suite 1500, 1055 West Georgia Street, Vancouver, British Columbia, V6E 4N7 as agent for service of process. Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process.
The head office and the registered office of the Company is located at Suite 1500, 1055 West Georgia Street, PO Box 11117, Vancouver, British Columbia V6E 4N7.
Prospectus Supplement
IMPORTANT NOTICE ABOUT THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND
THE BASE PROSPECTUS6
MARKETING MATERIALS6
MARKET AND INDUSTRY DATA7
FORWARD-LOOKING STATEMENTS AND FINANCIAL OUTLOOK INFORMATION7
CURRENCY PRESENTATION9
DOCUMENTS INCORPORATED BY REFERENCE10
CONSOLIDATED CAPITALIZATION13
PLAN OF DISTRIBUTION15
DESCRIPTION OF SECURITIES BEING DISTRIBUTED18
TRADING PRICE AND VOLUME21
ELIGIBILITY FOR INVESTMENT25
CERTAIN MATERIAL CANADIAN FEDERAL INCOME TAX CONSIDERATIONS26
AUDITORS, TRANSFER AGENT AND REGISTRAR30
INTEREST OF EXPERTS30
STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION31
CERTIFICATE OF THE COMPANY1
CERTIFICATE OF THE AGENT2
ABOUT THIS PROSPECTUS5
DOCUMENTS INCORPORATED BY REFERENCE5
MARKET AND INDUSTRY DATA7
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION7
CURRENCY PRESENTATION10
THE SELLING SECURITYHOLDERS20
CONSOLIDATED CAPITALIZATION20
PLAN OF DISTRIBUTION21
DESCRIPTION OF SECURITIES BEING DISTRIBUTED23
TRADING PRICE AND VOLUME28
CERTAIN INCOME TAX CONSIDERATIONS40
INTEREST OF EXPERTS40
TRANSFER AGENT AND REGISTRAR40
WHERE YOU CAN FIND ADDITIONAL INFORMATION40
STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION41
CONTRACTUAL RIGHTS OF RESCISSION41
CERTIFICATE OF THE COMPANY42
IMPORTANT NOTICE ABOUT THE INFORMATION
IN THIS PROSPECTUS SUPPLEMENT AND THE BASE PROSPECTUS
This document is in two parts. The first part is this Prospectus Supplement, which describes the specific terms of the Offering and securities being distributed hereunder and also adds to and updates information contained in the Base Prospectus and the documents that are incorporated by reference into this Prospectus Supplement and the Base Prospectus. The second part is the Base Prospectus, which provides more general information. This Prospectus Supplement is deemed to be incorporated by reference into the Base Prospectus solely for the purposes of the Offering. Other documents are also incorporated or deemed to be incorporated by reference into this Prospectus Supplement and into the Base Prospectus. See "Documents Incorporated by Reference".
The Company has filed the Base Prospectus with the securities commissions in each of the provinces of Canada, other than Quebec (the "Qualifying Jurisdictions"), in order to qualify the offering of the securities described in the Base Prospectus in accordance with National Instrument 44-102 - Shelf Distributions ("NI 44-102"). The British Columbia Securities Commission issued a receipt dated June 7, 2021 in respect of the final Base Prospectus as the principal regulatory authority under Multilateral Instrument 11-102 - Passport System, and each of the other commissions in the Qualifying Jurisdictions is deemed to have issued a receipt under National Policy 11-202 - Process for Prospectus Review in Multiple Jurisdictions.
You should rely only on the information contained in or incorporated by reference in this Prospectus Supplement and the Base Prospectus. If the description of the Units, Unit Shares and Warrants varies between this Prospectus Supplement and the Base Prospectus, you should rely on the information in this Prospectus Supplement. To the extent that any statement made in this Prospectus Supplement differs from those in the Base Prospectus, the statements made in the Base Prospectus and the information incorporated by reference herein and therein are deemed modified or superseded by the statements made by this Prospectus Supplement. The Company has not authorized any other person to provide investors with additional or different information. If anyone provides you with any additional, different or inconsistent information, you should not rely on it.
You should not assume that the information contained in or incorporated by reference in this Prospectus Supplement or the Base Prospectus is accurate as of any date other than the date of the document in which such information appears. The Company's business, financial condition, results of operations and prospects may have changed since those dates. Information in this Prospectus Supplement updates and modifies the information in the Base Prospectus and information incorporated by reference herein and therein.
This Prospectus Supplement does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this Prospectus Supplement by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.
Market data and certain industry forecasts used in this Prospectus Supplement, the accompanying Base Prospectus and the documents incorporated by reference in this Prospectus Supplement and the accompanying Base Prospectus were obtained from market research, publicly available information and industry publications. The Company believes that these sources are generally reliable, but the accuracy and completeness of this information is not guaranteed. Neither the Company nor the Agent has independently verified such information, and they do not make any representation as to the accuracy of such information. The links included in this Prospectus Supplement are included as inactive textual reference for reference purposes only and the information on or connected to these websites is not part of, or incorporated by reference into, this Prospectus Supplement.
In this Prospectus Supplement, "Bright Minds", "we", "us" and "our" refer, collectively, to Bright Minds Biosciences Inc. and its subsidiaries on a consolidated basis.
In connection with the Offering, the Agent used the Term Sheet (as hereinafter defined) (the "Marketing Materials") as "marketing materials" (as such term is defined under applicable Canadian securities laws). The Marketing Materials do not form part of this Prospectus Supplement or the Base Prospectus to the extent that the contents of
the template version of the marketing materials have been modified or superseded by a statement contained in this Prospectus Supplement. Any template version of any marketing materials that has been, or will be, filed on SEDAR before the termination of the distribution under the Offering (including any amendments to, or an amended version of, any template version of any marketing materials) is deemed to be incorporated by reference into this Prospectus Supplement.
MARKET AND INDUSTRY DATA
This Prospectus Supplement and the accompanying Base Prospectus includes market data and forecasts concerning the industry and markets in which the Company operates. Although the Company is responsible for the disclosure contained in this Prospectus Supplement and the accompanying Base Prospectus, in some cases the Company relies on and refers to market data and certain industry forecasts that were obtained from third party surveys, market research, consultant surveys, publicly available information and industry publications and surveys that it believes to be reliable. Unless otherwise indicated, all market and industry data and other statistical information and forecasts contained in this Prospectus Supplement and the accompanying Base Prospectus are based on independent industry publications, reports by market research firms or other published independent sources and other externally obtained data that the Company believes to be reliable. Any such market data, information or forecast may prove to be inaccurate because of the method by which it was obtained or because it cannot always be verified with complete certainty given the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties, including those discussed under the captions "Risk Factors". As a result, although the Company believes that these sources are reliable, it has not independently verified the information.
FORWARD-LOOKING STATEMENTS AND FINANCIAL OUTLOOK INFORMATION
This Prospectus Supplement and the accompanying Base Prospectus, including the documents incorporated by reference herein and therein, contain forward-looking statements within the meaning of applicable Canadian securities legislation and U.S. securities legislation that may not be based on historical fact. Forward-looking statements include statements that may relate to our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing and other information that is not historical information. These statements appear in a number of different places in this Prospectus Supplement and can often be identified by words such as "anticipates", "estimates", "projects", "expects", "intends", "believes", "plans", "will", "could", "may", or their negatives or other comparable words. Such forward-looking statements are necessarily based on estimates and involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. These forward-looking statements include, among other things, statements relating to:
the duration and effects of COVID-19 and any other pandemics on the Company's workforce, business, operations and financial condition;
the Company's expectations regarding the achievement of clinical and regulatory milestones;
the executive compensation of the Company;
the composition of the board of directors (the "Board") and management of the Company;
the Company's expectations regarding its revenue, expenses and research and development operations;
the Company's anticipated cash needs and its needs for additional financing;
the use by the Company of the net proceeds raised from the Offering, including as to achieving the related business objectives described herein;
expectations of the timing and completion of the Offering and the listing of the Unit Shares, the Warrant Shares and the Compensation Unit Shares (including those issuable upon any exercise of the Over-Allotment Option) on the CSE and NASDAQ, as applicable;
the Company's intention to grow the business and its operations;
expectations with respect to the success of its research and development of serotonergic therapeutics;
expectations regarding growth rates, growth plans and strategies of the Company;