Psyence Biomedical Reaches Settlement Agreement with KAOS Capital

Psyence Biomedical entered into a settlement agreement to resolve a direct shareholder claim made by KAOS Capital. The claim, originally made on January 14 and amplified on January 26, alleged, among other things, improper and oppressive actions on the part of the Company against KAOS, resulting in KAOS suffering alleged damages. The Company, its board of directors and officers have denied the allegations and believe they are unsubstantiated and meritless. On January 16, KAOS issued a notice of application in the Ontario Superior Court with respect to the KAOS Allegations and sought, among other remedies, to adjourn the shareholders' meeting of the Company originally scheduled for January 22. On January 21, the Court dismissed the Application and ordered KAOS to pay the Company's costs fixed in the amount of C$75,000. Under the terms of the settlement, the Company will pay an aggregate amount of $1,500,000 to KAOS and the Company has agreed to release KAOS from any obligation to pay the Costs Award. Furthermore, KAOS agrees that it will sell, or cause to be sold, all the common shares held by it in the Company to a third party designated by the Company at a price of $5 per share. The settlement also includes a full retraction of the unproven KAOS Allegations, a full mutual release of all claims between the parties and such other customary undertakings of a settlement of this nature. The settlement represents a compromise of disputed claims and does not constitute an admission of liability or wrongdoing by the Company, the Board or any of its officers. The Company expects that the settlement will be funded by cash on hand and will be recorded in accordance with applicable accounting standards. Although the Company, the Board and its officers deny any wrongdoing, they have opted for a settlement to avoid further litigation, disruption to the Company's business, and the significant costs related thereto.