Matters to be Considered include Changes to Reflect Amendments to the CPC Policy

TORONTO, ON / ACCESSWIRE / September 22, 2021 / GHP Noetic Science-Psychedelic Pharma Inc. (TSXV:PSYF.P) ('GHP' or the 'Company'), a Capital Pool Company listed on the TSX Venture Exchange (the 'Exchange'), announces that, pursuant to recent changes by the Exchange to its Capital Pool Company program and Exchange Policy 2.4 - Capital Pool Companies, which became effective as of January 1, 2021 (the 'New CPC Policy'), GHP intends to seek the requisite approvals of its shareholders (the 'Shareholders') for certain matters to align the Company with the new CPC Policy at its upcoming annual general and special meeting of Shareholders, scheduled to be held on October 12, 2021 (the 'Meeting').

Capitalized terms used and not otherwise defined in this news release have the meaning given to them in the New CPC Policy or otherwise in the Exchange's Corporate Finance Manual of the Exchange.

At the Meeting, as required to give effect to the amendments reflected in the New CPC Policy, among other things, Shareholders will be asked to pass four ordinary resolutions, by the affirmative vote of not less than a majority of the votes cast by disinterested Shareholders at the Meeting ('Disinterested Approval'), to:

1. authorize the Company to approve certain amendments to its existing stock option plan (the 'Option Plan'), pursuant to which, among other things, the total number of common shares of the Company (each, a 'Share') reserved for issuance both before and after completion of a Qualifying Transaction will be 10% of the issued and outstanding Shares as at the date of grant, rather than at the closing date of the Company's IPO;
2. approve the removal of the consequences associated with the Company not completing a Qualifying Transaction within 24 months of its date of listing on the Exchange (the 'Listing Date') in accordance with the New CPC Policy;
3. authorize the Company to make certain amendments to the Company's CPC escrow agreement to effect certain changes contemplated under the New CPC Policy; and
4. authorize and permit the Company to pay any finder's fee or commission to a Non-Arm's Length Party to the Company upon completion of a Qualifying Transaction in accordance with the terms of the New CPC Policy, including payment of a finder's fee to Grey House Partners Inc., a company controlled by Michael Franks (CEO and director) and Sa'ad Shah (Corporate Secretary and director), comprised of $500,000 in cash and the issuance of 500,000 warrants of the Company, in connection with the Company's previously announced proposed Qualifying Transaction with Diamond Therapeutics Inc., if completed.

Additional details with respect to each of the above resolutions are included below and in the Company's management information circular for the Meeting, which will be filed under the Company's profile on SEDAR at www.sedar.com.

Amendments to the Option Plan

GHP will seek Disinterested Approval to make certain amendments to the Option Plan, which was prepared in compliance with the previous iteration of Policy 2.4, to reflect certain amendments set out in the New CPC Policy. The principal amendment proposed is to change the Option Plan to a '10% rolling' plan, such that the total number of Shares that may be reserved for issuance pursuant to stock options granted under the Option Plan may not exceed 10% of the issued and outstanding Shares as at the date of grant, rather than at the closing date of GHP's IPO. If Disinterested Approval is obtained at the Meeting, the amended option plan will replace the current Option Plan. In seeking such Disinterested Approval, GHP will exclude all votes attached to the Shares held by Insiders to whom stock options may be granted under the Option Plan, as well as their Associates and Affiliates.

Consequences of Failing to Complete a QT within 24 Months of the Listing Date

Pursuant to the previous iteration of Policy 2.4, if GHP fails to complete a Qualifying Transaction within 24 months of the Listing Date, it faces the consequences of either (i) having its Shares delisted or suspended from the Exchange, or (ii) subject to the approval of a majority of Shareholders, transferring its Shares to list on the NEX board of the Exchange and cancelling certain Seed Shares issued to its founders. The New CPC Policy eliminates the requirement to complete a Qualifying Transaction within 24 months of the Listing Date, and eliminates the associated consequences of not completing such requirement.

As such, at the Meeting, GHP will seek Disinterested Approval to remove the requirement to complete a Qualifying Transaction within 24 months of the Listing Date, and the associated consequences of not completing such requirement. In seeking Disinterested Approval, GHP will exclude all votes attached to the Shares held by Non-Arm's Length Parties to the Company who own Seed Shares, as well as their Associates and Affiliates. The Company believes that the removal of this requirement and the associated consequences will put it in a better position to complete a Qualifying Transaction that will be beneficial to both Shareholders and the Company, by allowing increased flexibility to complete such a transaction. Further, this change will allow the Company to better withstand any potential volatility in the capital markets at a future date, such as that which arose in 2020 in connection with the COVID-19 pandemic.

Amendments to the Escrow Agreement

Under the New CPC Policy, securities subject to a CPC Escrow Agreement are subject to an 18-month escrow period, as opposed to the 36-month period previously required under Policy 2.4. At the Meeting, GHP will seek Disinterested Approval to amend the terms of its CPC Escrow Agreement to reduce the length of the term of any escrow provision to an 18-month escrow term, as permitted by the New CPC Policy. In seeking such Disinterested Approval, GHP will exclude all votes attached to the Shares held by Shareholders who are parties to the CPC Escrow Agreement, as well as their Associates and Affiliates.

Permission to Pay Finder's Fee or Commission to a Non-Arm's Length Party

The New CPC Policy permits the payment of a finder's fee or a commission to a Non-Arm's Length Party to the Company upon Completion of the Qualifying Transaction, which was not permitted under the previous iteration of Policy 2.4. At the Meeting, GHP will seek Disinterested Approval to permit the payment of any finder's fee or commission to a Non-Arm's Length Party to the Company upon Completion of the Qualifying Transaction, in accordance with the New CPC Policy. The total value of any finder's fee or commission paid by GHP in connection with its Qualifying Transaction will be in compliance with the limits set out in applicable Exchange policies, including Policy 5.1 - Loans, Loan Bonuses, Finder's Fees and Commissions, and any such fee or commission will be subject to the review and approval of the Exchange.

As announced in the Company's news release dated February 4, 2021, the Company has entered into a non-binding letter of intent with Diamond Therapeutics Inc. ('Diamond') in respect of a proposed business combination (the 'Proposed Transaction') that would result in the reverse takeover of the Company by Diamond. The Company intends that the Proposed Transaction will constitute its Qualifying Transaction. Prior to the closing of the Proposed Transaction, and subject to Shareholder approval, the Company expects to effect a consolidation of the Shares on the basis of 1.137 pre-consolidation Shares for each post-consolidation Share (the 'Consolidation'). If the Proposed Transaction is completed, it is anticipated that the Company may pay a finder's fee to Grey House Partners Inc., a company controlled by Michael Franks and Sa'ad Shah, comprised of $500,000 in cash and the issuance of 500,000 warrants (on a post-Consolidation basis), or such other fee as may be determined by the Company's board of directors and approved by the Exchange. Each warrant is expected to be exercisable into one post-Consolidation Share for five years following the date of closing of the Proposed Transaction at an exercise price equal to the higher of: (i) the Market Price of the Shares as at January 18, 2021, being the date trading in the Shares was halted in connection with the announcement of the Proposed Transaction, adjusted to give effect to the Consolidation, and (ii) the price of the concurrent financing undertaken in connection with the Proposed Transaction.

In seeking Disinterested Approval, GHP will exclude all votes attached to the Shares held by all Non-Arm's Length Parties to the Company, as well as their Associates and Affiliates, and pursuant to the New CPC Policy, such approval must constitute Majority of the Minority Approval.

Other Changes

Under the New CPC Policy, the Company is permitted to adopt other transition provisions without obtaining Shareholder approval. As a result, the Company also intends to adopt the changes under the New CPC Policy that do not require Shareholder approval, including:

1. increasing the maximum aggregate gross proceeds to the treasury that the Company can raise from the issuance of Shares under its IPO, Seed Shares and private placements to the new maximum of $10,000,000, rather than $5,000,000 (which was the limit under the previous iteration of Policy 2.4);
2. removing the restriction providing that no more than the lesser of 30% of the gross proceeds from the sale of securities issued by the Company and $210,000 may be used for purposes other than identifying and evaluating assets or businesses and obtaining Shareholder approval for a proposed Qualifying Transaction, and implementing the restrictions on the permitted use of proceeds and prohibited payments under the New CPC Policy, under which reasonable general and administrative expenses not exceeding $3,000 per month are permitted;
3. removing the restriction on the Company's ability to issue new agent's options in connection with a private placement; and
4. providing that one person has the ability to act as the chief executive officer, chief financial officer and corporate secretary of the Company at the same time, which was not permitted under the previous iteration of Policy 2.4.

The Company believes that the implementing the amendments provided for in the New CPC Policy is in the best interest of the Company as it will allow the Company to have greater flexibility and mechanisms to increase Shareholder value. This will be especially important in the event the Company does not complete the Proposed Transaction.

The proposed amendments remain subject to the final approval of the Exchange.

About GHP

GHP is a Capital Pool Company led by Michael Franks and Sa'ad Shah of Grey House Partners GP Inc. Its principal business activity is to identify and evaluate opportunities to acquire assets or business. Incorporated under the laws of the Province of Ontario, GHP is a reporting issuer in the Provinces of British Columbia, Alberta and Ontario. Its Shares are listed for trading on the Exchange under the symbol PSYF.P.

For further information, please contact:

Michael Franks
Chief Executive Officer
Phone: 647.949.2663
Email: michael@greyhousepartners.ca

Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements Regarding Forward-Looking Information

This news release includes certain 'forward-looking statements' under applicable Canadian securities legislation. Forward-looking statements are statements other than statements of historical fact that can be identified by phrases such as 'expects', 'anticipates', 'intends', 'aims', 'plans' and 'believes', and are based on expectations, estimates and projections as at the date of this news release. Forward-looking statements in this news release include, but are not limited to, statements with respect to the GHP's expectation as to receipt of the requisite Disinterested Approvals and its adoption of and alignment with certain matters under the New CPC Policy. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to 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 statements. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. GHP disclaims any intention or obligation to update or revise any forward-looking statements in this news release, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE: GHP Noetic Science-Psychedelic Pharma Inc.