Mr. Zeeshan Saeed reports

FSD PHARMA ANNOUNCES PLAN TO SPIN-OUT SUBSIDIARY AS DISTRIBUTION TO SHAREHOLDERS; SHAREHOLDER MEETING SCHEDULED FOR JUNE 29, 2023

FSD Pharma Inc. intends to complete a spinout transaction via a plan of arrangement under the Business Corporations Act (Ontario) whereby the shares of its yet-to-be-formed wholly owned subsidiary (Pubco) will be separated into an independent public company. The spinout transaction, which is expected to be completed in July, 2023, is intended to enable the company to focus on development of its core assets and maximize shareholder value.

All shareholders of the company as of the distribution date will exchange their shares in the capital of the company for the same number of existing shares of the company (having identical terms, both for the Class A multiple voting shares and Class B subordinate voting shares) plus common shares in the capital of the Pubco, on a pro rata basis. Pubco will only have one class of shares.

Shareholders must hold FSD shares as of the distribution date to qualify to receive shares of Pubco in the distribution. FSD Pharma will provide further updates on the distribution date in due course.

Following the spinout transaction, FSD Pharma will remain listed on the Nasdaq Stock Market and Canadian Securities Exchange (CSE). Following the spinout transaction, Pubco will become a reporting issuer in the same jurisdictions in Canada that FSD Pharma is a reporting issuer, with a view to completing a reverse takeover transaction with a business that has yet to be identified.

FSD Pharma will hold an annual general and special shareholders meeting on June 29, 2023, where shareholders will be able vote on the spinout transaction. The record date for shareholders entitled to vote at the meeting will be May 15, 2023.

FSD Pharma and Pubco expect to enter into an arrangement agreement to effect the spinout transaction and the expected closing date of the spinout transaction is July, 2023. The completion of the spinout transaction will be subject to conditions customary of a transaction of this nature, including but not limited to: (i) the receipt of tax and legal advice for the company and Pubco; (ii) the approval of the plan of arrangement by (A) the shareholders at the meeting, and (B) the Superior Court of Justice (Ontario); and (iii) the satisfaction of customary closing conditions, including, among other things, the receipt of other requisite regulatory approvals (including, where required, the approval of applicable Canadian securities regulators and the CSE).

The company intends to provide further details of the spinout transaction, including details pertaining to the board of directors and management of Pubco, at a later date. Readers are cautioned that the final details of the spinout transaction are still to be determined and that there can be no certainty that the spinout transaction will be completed on the terms currently proposed, or at all.

In addition, Florida-based ClearThink Capital has been engaged for a term of three months, during which it will assist in all aspects of a marketing campaign for the company (contract signed March 10, 2023). As consideration for its services, the company will pay ClearThink a monthly fee of $4,000 (U.S.) and at the end of the first quarter they will receive 7,742 Class B common shares of the company at a price equal to $1.55 (U.S.). The FSD shares will be subject to the statutory hold period of four months and one day.

As well, FSD Pharma has also engaged New Hampshire-based RagingBull with a one-time payment of $15,000 (U.S.); it will assist in all aspects of a marketing campaign for the company.

About FSD Pharma Inc.

FSD Pharma is a biotechnology company with three drug candidates in different stages of development. FSD BioSciences Inc., a wholly owned subsidiary, is focused on pharmaceutical research and development of its lead compound, FSD201, a proprietary ultramicronized PEA (palmitoyl ethylamine) formulation, for the treatment of inflammatory diseases. Lucid Psychss Inc., a wholly owned subsidiary, is focused on the research and development of its lead compounds, Lucid-Psych and Lucid-MS. Lucid-Psych is a molecular compound identified for the potential treatment of mental health disorders, and expanding this category, the company is investigating other products addressing acute medical needs due to the abuse of drugs such as alcohol. Lucid-MS is a molecular compound identified for the potential treatment of neurodegenerative disorders.

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