Structure & Valuation

Algernon NeuroScience Structure & Valuation

Grey Matters Health (Grey Matters) has formally completed an asset transfer and trademark license agreement, transferring all DMT research program assets into AGN Neuro. Grey Matters has also signed a management agreement with Algernon NeuroScience (AGN Neuro) to provide all day-to-day operations, as well as management of the DMT stroke and future traumatic brain injury (TBI) clinical trial programs.

AGN Neuro has filed a Form 1-A offering statement with the U.S. Securities and Exchange Commission (the “SEC”), seeking qualification to raise up to USD $5M for AGN Neuro by offering up to 37.5% of its common shares, (including the maximum amount of bonus shares) with majority ownership residing with Grey Matters, under a Tier II Regulation A+ offering (Reg A+). The capital raised will be used for research, development, and program management costs related to the completion of a Phase 1 and Phase 2a DMT stroke study.

Grey Matters has set a pre-valuation for AGN Neuro of USD $10M. Grey Matters’ valuation of AGN Neuro was based on multiple public company comparables for a wide range of pharmaceutical research programs, including for the indication of stroke, that have completed the Phase 1 clinical trial stage.

AGN Neuro will likely remain a private company until it has advanced through to the completion of a Phase 2a stroke study, and possibly a Phase 2a traumatic brain injury study as well, the former of which is planned to begin in Q3 of the 2025 calendar. Based on the strength of the data from one or both studies, AGN Neuro will review and consider a potential direct IPO listing onto the NASDAQ at that time.

Reg A+ financings are an SEC-regulated funding mechanism allowing issuers an alternative way to access the public markets, while reducing offering costs in the process. An offering under Reg A+ allows for greater marketing and promotion efforts than are permissible while soliciting to the general public under a traditional registered offering, including marketing using online and digital platforms.

AGN Neuro has retained Netcapital Securities Inc., a FINRA-registered broker-dealer, for its planned Regulation A (Reg A) offering. Netcapital plans to provide broker-dealer and administrative services, excluding underwriting and placement agent services, in connection with this offering.