November 25, 2020

Universal Ibogaine Inc. Announces Initial Closing Of Private Placement Financing

November 25, 2020

Vancouver, British Columbia – Universal Ibogaine Inc. (“UI” or the “Company”)is pleased to advise that it has completed a first closing of $2.3 million under its current private placement offering of $0.25 Units (the “Offering”),with the following highlights:

  • ‍a total of 9,369,392 Units have been issued with a value of $2,342,348
  • the Units issued under the Offeringconsist of one UI common share and one warrant to purchase an additional UI common share (the “Warrants”). 
  • the Warrants will have a 5-year term to expiry,and an escalating annual exercise price (increasing by $0.25 per year, startingat $0.50 if exercised in year 1, to $1.50 if exercised in year 5).

This initial closing includes Units issued for cash received to November 20, 2020 and Units issued in settlement of services received and certain obligations owing by the Company.  In addition, UI will issue a minimum of $500,000 of Units as partial consideration payable on closing of the pending acquisition of the Kelburn Clinic (as described further below).

The above total of $774,499 includes Units valued at $306,667 which were issued for the value of past services received from members of UI’s Board ofDirectors.  

Additional subscription agreements have been received under the Offering, and UI will process a further closing in the next two weeks for additional cash proceeds in processof being received.

Shayne Nyquvest, UI Chairman and Founder, noted “We are excited by the level ofinterest we have received for the Offering – this financing gives us financial flexibility to achieve our short-term objectives, and build on our momentum heading into our Prospectus offering and RTO go-public transaction.”

Following issuance of the above noted 9,369,392 Units, UI will have approximately 92.5million common shares issued and outstanding. In addition, UI is obligated to issue i) a total of 30 million common shares for issuance under a 2019 Licensing Agreement with Clear Sky Recovery Cancun SA de CV (“Clear Sky”), ii) 2 million common shares for the Kelburn Clinic acquisitionand iii) approximately 10 million common shares to be issued to certain UI shareholders on completion of the upcoming RTO “liquidity event”.  The Clear Sky shares are to be issued onclosing of the RTO / merger with PSQ (see below) with their release subject to UI achieving various future performance milestones related to the Licensing Agreement with Clear Sky.

Pending Acquisition by UI of the Kelburn Clinic

UI previously entered into a letter of intent with an arms-length party to acquire the operations of an addiction treatment facility near Winnipeg, Manitoba, the Kelburn Mental Health & Addiction Recovery Centre (the “Kelburn Clinic“).  The Kelburn Clinic is privately owned and has been in operation for 6 years.  UI is in process of finalizing a purchase agreement, and intends to close the funding of this acquisition no later than closing of the RTO and related Prospectus (described further below).

It is intended that consideration payable for the Kelburn Clinic acquisition will consist of $1 million cash and a minimum of $500,000 equity requested by the owners of the property, payable in the form of 2,000,000 UI Units (which willhave the same terms as those being issued under the current Offering).

The Kelburn Clinic site is operated under a long-term lease of the premises from certain of its related party shareholders. UI intends to initially acquire solely the operations of the KelburnClinic, and lease the related land and building (with a two-year option to subsequently acquire those assets). Further, UI intends to expand the operations and optimize and improve Kelburn’shistorical occupancy.

Planned RTO and Go-public Transaction

On October 7, 2020, UI finalized an Amalgamation Agreement for the proposed business combination / merger with P Squared Renewables Inc. (“PSQ“),a capital pool company listed (TSXV: PSQ.P) on the TSX Venture Exchange (the “TSXV”).

The merger with UI, the related prospectus financing (described below), and UI’s pending acquisition of the Kelburn Clinic are intended to constitute PSQ’s“Qualifying Transaction” (the “QT”) pursuant to the requirements of the TSXV.

Forfurther details, please refer to PSQ’s prior news release of October 9, 2020,the highlights of which are summarized as:

The merger with PSQ will result in areverse take-over (“RTO”) of PSQ by UI.

PSQ plans to conduct a prospectusoffering of units closing concurrently with the QT, for gross proceeds of a minimum of $3 million and a maximum of up to $5 million (the “Prospectus”).  It is intended that the units issued under the Prospectus will be comprised of one common share and one-half of one common share purchase warrant.

PSQ and UI have submitted a preliminary Prospectus to the TSXV for review, and are in process of forming a syndicate of investment bankers who will market this financing.‍

Significant Conditions to Completion of the QT

Completion of the QT is subject to a number of conditions, including but not limited to: (i) the ‎conditions stipulated in the Amalgamation Agreement (including completion of the Prospectus Offering); (ii) closing conditions customary to‎ transactions of the nature of the QT; (iii) the approval of UI’s shareholders; and (iv) the ‎approval of applicable regulatory bodies in connection with the QT, including but not limited to ‎the TSXV.

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