SHERIDAN, Wyo., Nov. 03, 2022 (GLOBE NEWSWIRE) -- Today, FCM MM HOLDINGS, LLC (“FCM”) notifies shareholders that it has formally filed a complaint (the “Complaint”) with the Securities and Exchange Commission (the “SEC”) and will file a referral to the Department of Justice regarding allegations against Mind Medicine (MindMed) Inc. (NASDAQ:MNMD) (“MindMed”, the “Company”). The Complaint focuses on the following allegations: self-dealing, lack of material disclosure, false statements/public statement fraud, and if the allegations are true, criminal activities, by CEO Robert Barrow, under Sarbanes-Oxley.
The Complaint presents and analyses the allegations in the lawsuit Freeman v. Burbank et al. (the “Lawsuit”) that MindMed’s intellectual property was mishandled due to a one-sided deal (the “Deal”) negotiated by Mr. Stephen Hurst, then MindMed’s CEO, and Mr. Carey Turnbull, CEO of Ceruvia Lifesciences LLC (“Ceruvia”). Mr. Hurst founded Ceruvia’s predecessor, purportedly in secret. If the Deal occurred, Ceruvia has undisclosed freedom to operate on MindMed’s IP surrounding LSD and its derivatives, and MindMed is not able to research or compete on BOL-148. The Complaint also lists Ceruvia executives who concurrently worked for MindMed during Messrs. Hurst and Barrow’s tenure and the implications for MindMed’s IP and trade secrets.
Additionally, the Complaint scrutinizes whether MindMed adequately disclosed to investors the significant risk of MM-110’s failure in gaining full Food and Drug Administration (“FDA”) product approval. After MindMed terminated the MM-110 program in August of 2022, FCM conducted a rigorous review of publicly available data of MM-110, a core drug of MindMed, from primarily both MM-110’s patent application and protocol of the Phase I trial (the “Study”), which were available prior to the initiation the Study. The Complaint addresses FCM’s conclusion that it is highly unlikely the FDA would have allowed the Study to be performed in the US as written – i.e. patients would be treated at a dose thirty-five times higher than the comparable dose which caused death in mice. Ultimately, MindMed instead performed the Study in Australia, and in May 2022, reported that the Study’s topline results (the “Results”) were favorable regarding safety and tolerability and builds on “encouraging” results from pre-clinical studies. The Results were then presented to the FDA, and MindMed later disclosed that the FDA now requires MindMed to complete a myriad of pre-clinical safety studies (the “Pre-Clinical Studies”) prior to instituting additional clinical trials in the US. Mr. Barrow stated that the Pre-Clinical Studies could take years, and MindMed subsequently shuttered the program.
“The FDA is the regulatory gold standard to ensure patient safety in clinical trials. Although it is a common practice to ‘offshore’ clinical trials, it is not acceptable to skirt known FDA required pre-clinical safety studies by going to another country,” said FCM’s Chad Boulanger.
The Complaint also examines the departures of several high-profile executives of the Company right before they were required to sign off on MindMed’s SEC filings. Similar to Chief Legal Officer Cynthia Hu who left one month prior to being required to sign MindMed’s stock offering, Chief Financial Officer David Guebert resigned from MindMed the business day before he was obligated to make his first Sarbanes-Oxley certification of MindMed’s financials. The Complaint further notes that MindMed’s auditor Ernst & Young was fired shortly after reporting that MindMed had a material weakness in its internal controls under Sarbanes-Oxley.
FCM will continue to provide extensive information to the SEC and a litany of supporting documents to assist the SEC in their investigation. FCM thanks the countless sources who have assisted in its investigation and encourages any person with information to come forward either to FCM or directly to the SEC.
FCM also announces that it has sent MindMed’s Board of Directors (the “Board”) a letter (the “Letter”) that demands MindMed immediately take action to investigate the origins of the Medihuasca entities. Medihuasca is a recently discovered rival company whose website, which went public in May 2021, uses proprietary MindMed IP and lists Nico Forte, MindMed’s Chief of Staff and associate of Mr. Hurst, as its CEO. The Letter demands an investigation to determine if any MindMed employee was involved, if any nefarious purpose existed, to what extent has MindMed’s IP been compromised, and what measures need to be implemented to ensure that MindMed adequately polices its IP going forward. FCM calls for these investigations to be done by a third-party independent law firm with a public report.
Moreover, the Letter calls for the immediate termination of:
- CEO Robert Barrow who has been employed by MindMed for twenty-eight months during which time the mishandling of MindMed IP and alleged transgressions occurred;
- Chief of Staff Nico Forte who, in addition to being listed as CEO of Medihuasca, serves on the Board of a competitor company (Savant HWP, Inc. which founded Ceruvia); and
- Board Member Brigid Makes, a decades long associate of Mr. Hurst, who allegedly took compensation from Savant HWP, Inc. while the alleged activities occurred.
“Let me be clear; we continue to see significant value in MindMed; however, executives and complicit board members must go immediately, so we can unleash the potential of MindMed,” said FCM’s Chief Executive Manager Jake Freeman.
A copy of the Letter is available at: https://mindmed.zone/board-letter-11-3-2022
To stay informed as to the latest developments, FCM encourages MindMed stakeholders to sign up for its newsletter at: https://mindmed.zone/signup
About FCM
FCM is managed by Mr. Jake Freeman and represents an investment of 4.9% of MindMed's shares outstanding. FCM seeks to implement its Value Enhancement Plan detailed in its letter to Ms. Carol Vallone dated August 11, 2022. The Value Enhancement Plan seeks to refocus MindMed on its core drugs, drastically cut spending, and significantly decrease shareholder dilution. Despite the controversy, FCM has not reduced its stake in MindMed.
FCM additionally represents other early investors in MindMed, who all have a strong interest in seeing the long-term success of MindMed.
For additional disclosures relating to public broadcast solicitations please see mindmed.zone/disclosure or read the disclosure herein.
Media Contact
Jake Freeman
Chief Executive Manager
FCM MM HOLDINGS, LLC
30 N Gould St. Ste R
Sheridan, WY 82801
Phone: 908-308-2381
Email: jake@mindmed.zone
Disclosures
The information contained in this press release does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable securities laws. FCM has not requisitioned a meeting of shareholders to reconsider its proposals, there is currently no record or meeting date set for a shareholders’ meeting and shareholders are not being asked at this time to execute a proxy in favour of FCM. In connection with any future shareholders’ meeting, FCM may file a dissident information circular in due course in compliance with applicable securities laws. Notwithstanding the foregoing, FCM is voluntarily providing the disclosure required under section 9.2(4) of National Instrument 51-102 – Continuous Disclosure Obligations applicable to public broadcast solicitations. The information contained herein, and any solicitation made by FCM in advance of a future shareholders’ meeting is, or will be, as applicable, made by FCM and not by or on behalf of the management of the Company. All costs incurred for any solicitation will be borne by FCM, provided that, subject to applicable law, FCM may in certain circumstances seek reimbursement from the Company of FCM’s out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection with a new meeting. FCM is not soliciting proxies in connection with a shareholders’ meeting at this time. FCM may engage the services of one or more agents and authorize other persons to assist in soliciting proxies on behalf of FCM. Any solicitation of proxies by or on behalf of FCM, including by any agent, will be done primarily by mail, supplemented by telephone, internet, electronic communication or other means of contact, pursuant to a dissident information circular or by way of public broadcast, including through press releases, speeches or publications and by any other manner permitted under corporate and securities laws. Any such proxies may be revoked by instrument in writing executed by a shareholder or by his or her attorney authorized in writing or, if the shareholder is a body corporate, by an officer or attorney thereof duly authorized or by any other manner permitted by law. FCM will not have any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at any future requisitioned shareholders’ meeting. Scott Freeman is a resident of the United States Virgin Islands and is a citizen of the United States of America. Scott Freeman’s principal occupation is a consultant and works on behalf of Scott Freeman Consultant LLC, a limited liability company incorporated in the State of Nevada. Scott Freeman directly owns 11,643,949 voting shares of MindMed. Scott Freeman additionally holds an economic interest in several million shares of MindMed held by Savant HWP Holdings, LLC and its affiliate entities. Scott Freeman has not been, within 10 years, a director, chief executive officer, or chief financial officer of any company, that meets the following conditions: (1) was subject to an order imposed by a securities regulator, such as a management cease trade order imposed by Canadian securities regulators, that was issued while the proposed director was acting in the capacity as director, chief executive officer or chief financial officer; or (2) was subject to an order that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer. Scott Freeman has not been, within 10 years, a director or executive officer of any company (including the company in respect of which the information circular is being prepared) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, state the fact. Scott Freeman has not, within 10 years, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director, state the fact. The registered address of MindMed is located at 1055 West Hastings Street, Suite 1700, Vancouver, British Columbia, Canada, V6E 2E9. A copy of this press release may be obtained on the Company’s SEDAR profile at www.sedar.com
