(CSE: SHRM) – Champignon Brands – Company Profile

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Company Overview

Champignon Brands engages in the formulation and manufacturing of novel ketamine, anaesthetics and adaptogenic delivery platforms. The Company is pursuing the development and commercialization of rapid onset treatments capable of improving health outcomes. It targets mental health conditions including depression, post-traumatic stress disorder (PTSD), as well as substance and alcohol use disorders. In Q3 2020, the Company expects to advance its research into psilocybin mushrooms through clinical trials. Consequently assembling an intellectual property portfolio, clinical pipeline, and drug development platform. It plans to scale up the production of its pharmaceutical-grade psilocybin, which it can then use for clinical trials.

The Company listed on the Canadian Stock Exchange in early March 2020. It aspires to position itself to become a global force as a vertically integrated producer of artisanal medicinal mushrooms. The Company’s focus is on enhancing the health and wellness of millions of consumers through organic, non-GMO mushroom-infused formulations.

In addition to trading on the Canadian Stock Exchange, They have also successfully listed in the U.S. OTC market as well as in Germany.

Corporate Structure

Champignon Brands operates through its 4 subsidiaries; each within a different subsector in the psychedelics industry, complementing each other’s operations.

Psychedelics Medicine Clinic Platform (Altmed Capital Corp)

Leading Canadian ketamine clinic operator and psychedelic medicine IP aggregator. It aims to be the global leader in the R&D and application of rapid onset treatments. Furthermore, It has positioned itself as a vertically integrated center with expertise in R&D, clinical medicine, knowledge translation, and vocational rehabilitation.

The only Health Canada approved clinic for Randomized Controlled Trial (RCT) for psilocybin. They generated over C$1mn of revenues in their first full year of operations; having administered 1,500+ ketamine treatments.

As a result of the success, expansion is underway for 5 additional clinics across U.S. states with a target to be operational in Q3 2020.

Formulations & Delivery Systems (Novo Formulations)

Champignon Brands acquired Novo Formulations in late March. It operates as a specialty biotechnology company focused on developing delivery systems for numerous pharmaceuticals and natural molecules.

Novo operates a purpose-built GMP and pharmaceutical (DIN) licensed facility in Quebec and an accredited pharmacy in Ontario. Additionally, their manufacturing partner has been approved by Health Canada & USFDA.

R&D / Clinical Trials (Tassili LifeSciences)

Focused on the development of therapeutics for multiple pathological and psychological diseases based on psychedelic and cannabis compounds.

Through a partnership with the University of Miami, they aim to develop effective psilocybin based therapeutics for the treatment of mild traumatic brain injuries and PTSD. As a result, the teams are currently conducting preclinical studies before moving on to human trials.

CPG Portfolio

The Company’s consumer packaged goods portfolio includes two mushroom derived products:

Vitality Superteas: Champignon’s Flagship brand, Vitality Superteas, infuses a proprietary blend of artisanal mushrooms with medicinal properties. The products are formulated by leading health professionals and food scientists with expertise in nutrition, naturopathy, and biochemistry. Furthermore, they have generated into a product formulation deal with Drip Coffee Social to infuse their mushroom extract blend into cold brew coffee products.

Artisan Growers: Craft mushroom cultivation facility utilizing a variety of cultivation techniques to produce an assortment of organic craft mushroom varietals. Its newly established R&D laboratory will further investigate and formulate bioactive compounds extracted from plants/fungi.

The Lab looks to cultivate fungus varietals, including psilocybin. They expect to commence once appropriate regulatory approvals have been received.

Recent Company Developments

12^th May 2020: Announced Partnership with U.S. based Wellness Clinic to further advance their North American clinical expansion. Wellness Clinic operates a state-of-the-art ketamine infusion treatment center and is actively involved in research and complementary treatment protocols.

This is a major milestone in its vision of establishing a sizable footprint of integrated ketamine centric clinics.

11^th May 2020: Entered into an agreement with Canaccord Genuity and Eight Capital, to purchase, on a bought deal private placement basis, 11.7mn units of the Company, amounting to aggregate gross proceeds of $10mn.

The Company intends to use the net proceeds for its North American clinical expansion program.

30^th April 2020: Added a central fill and compounding infrastructure for its ketamine formulations via a leading Canadian retail pharmacy chain (the “Pharmacy”).

Consequently, Champignon will leverage the Pharmacy’s existing infrastructure to distribute ketamine topical prescriptions to a network of Canadian medical and pain/addiction clinics.

With this arrangement, the Company boasts of complete vertical integration with respect to rapid onset ketamine treatments and therapies. The central fill capabilities will optimize the Company’s prescription fulfillment infrastructure while advancing its ketamine data collation initiatives. The data collated will help improve the success outcomes of its planned trials scheduled later down the line in 2020.

Outlook

The global edible mushroom market is poised for significant growth in the coming years. The market is expected to be worth US$74bn by 2024 translating into a CAGR of 8%, providing companies such as Champignon Brands huge opportunity to capture revenues.

There are a limited number of publicly traded companies focused on psilocybin applications. Therefore, it is no surprise that investors are rushing to jump onto the bandwagon. This is evident from the monstrous appreciation in its share price since listing. To conclude, All those with patience to ride through the extreme volatility characteristic to this sector will be handsomely rewarded.

Disclaimer: The Author of this report certifies that: (1) He does not hold any equity position in the Company and (2) the views expressed in this report reflect his personal views about the subject matter discussed.

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