Activist Investor Informs MindMed of Financial Misstatements, Questions Internal Controls

SHERIDAN, Wyo., Nov. 14, 2022 (GLOBE NEWSWIRE) -- Today, FCM MM HOLDINGS, LLC ("FCM") announces that it has sent a letter (the "Letter") to the Board of Directors (the "Board") of Mind Medicine (MindMed) Inc. (NASDAQ:MNMD) ("MindMed", the "Company"). On November 10, 2022, MindMed filed with the Securities and Exchange Commission (the "SEC") form 10-Q for quarter three of 2022 (the "ER"). The Letter focuses on false statements made by MindMed in the ER whereby MindMed, among other errors, underreported last years related party transactions (regarding legal fees) by over one and a half million dollars despite statements in the ER "that [MindMed's] disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2022." The false statement about related party transactions comes as MindMed has been embroiled in allegations of self-dealing and securities fraud. The Letter questions whether MindMed is engaging in activities to hide or otherwise mislead investors that MindMed's previous outside counsel had a conflict of interest in protecting MindMed's intellectual property and other assets.

The Letter probes whether MindMed's internal controls are adequate to ensure that MindMed accurately reports financial results considering Ernst & Young's disclosure that the Company had a material weakness in its internal controls under Sarbanes-Oxley in FY 2021. Subsequently, MindMed terminated Ernst & Young after reporting the material weakness.

The Letter also notes that, concurrent to the accounting errors, MindMed's management received an employment package where they would receive significant benefits in the event of resignation or termination (the "Golden Parachute").

"It is abhorrent that the Board believes that it is more important to ensure management has golden parachutes rather than performing the most basic oversight on MindMed's filings," said FCM's Chief Executive Manager Jake Freeman.

A copy of the Letter is available at: https://mindmed.zone/board-letter-11-14-2022

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: [email protected] 

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