FILAMENT HEALTH ANNOUNCES WARRANT EXERCISE AND NOTE CONVERSION BY NEGEV CAPITAL AND CONCURRENT PRIVATE PLACEMENT OF COMMON SHARES TO BENJAMIN LIGHTBURN, CHIEF EXECUTIVE OFFICER

VANCOUVER, BC, June 3, 2024 /CNW/ - Filament Health Corp. (OTCQB: FLHLF) (Cboe CA: FH) (FSE: 7QS) ("Filament" or the "Company"), a clinical‐stage natural psychedelic drug development company, today announced that it has entered into agreements with Negev Capital Fund One, LP ("Negev"), a leading psychedelic drug development venture fund and existing investor in the Company, and Benjamin Lightburn, the Chief Executive Officer and Co-Founder of the Company, to complete a C$1.0 million bridge financing (the "Financing").

Pursuant to the Financing, Negev will exercise its outstanding warrants (the "Warrants") to purchase an aggregate of 17,284,443 common shares in the capital of the Company ("Common Shares") and will convert its outstanding C$1.25 million convertible note, due July 13, 2024 (the "Note"), into 25,000,000 Common Shares. In consideration for the immediate exercise of the Warrants for cash, Filament has agreed to reduce the exercise price of such Warrants to C$0.05 per share, which is equal to the 15-day volume-weighted average closing price of the Common Shares on the Cboe Canada Canada Inc. ("Cboe Canada") prior to entry into the agreement to complete the Financing. In connection with the conversion of the Note, Filament also agreed to reduce the conversion price to C$0.05 per share concurrent with the exercise of the Warrants. The Company also agreed to extend the expiration date of remaining warrants held by Negev's affiliates by twelve months. The gross proceeds to the Company from the exercise of the Warrants by Negev are C$0.9 million.

Additionally, as part of the Financing, Benjamin Lightburn, Chief Executive Officer of the Company, will purchase 2,700,000 Common Shares, also at a price of C$0.05 per share for gross proceeds to the Company of C$0.1 million. The Common Shares issued to Benjamin Lightburn will be subject to a four month and one day hold period in accordance with applicable securities laws.

Filament intends to complete the Financing, subject to regulatory approval, including the approval of Cboe Canada, on or about June 10, 2024. 

"We are pleased to reinforce our continued commitment to Filament Health," said Ken Belotsky, Partner at Negev Capital. "Filament is strategically positioned to combat substance use disorders, leveraging its groundbreaking botanical drug development platform and an industry-leading intellectual property portfolio."

"We are thrilled that Negev, a strategic investor with strong industry expertise, has reaffirmed their commitment to Filament Health," said Benjamin Lightburn, Chief Executive Officer and Co‐Founder at Filament. "We believe that the Financing is in the best interest of our shareholders and is necessary for the continued advancement of our clinical development programs."

As a result of the exercise of Warrants and the conversion of the Note, Negev will become a holder of greater than 20% of the issued and outstanding Common Shares. The terms of the Financing and associated contractual amendments are exempt from shareholder approval pursuant to Section 10.10(2) of the Cboe Canada Listing Manual due to the current financial difficulties of the Company and the related risk of its ability to continue as a going concern as previously disclosed in Filament's financial statements. Additionally, the independent directors of the Company's board of directors have determined that the completion of the Financing, including the amendments to the exercise price of the Warrants and the conversion price of the Note, is in the best interests of the Company and is reasonable in the current circumstances and market conditions. It would also not be feasible to obtain shareholder approval or to complete an offering to existing shareholders on the same terms.

As Benjamin Lightburn, Chief Executive Officer and a Director of the Company (the "Related Party") is participating in the Financing, the Financing is considered to be a "related party transaction" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). All of the independent directors of the Company, acting in good faith, have considered the Financing and have determined that the fair market value of the Common Shares being issued to the Related Party and the consideration being paid is reasonable. The Company has relied on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(b) and 5.7(a) of MI 61-101.

ABOUT FILAMENT HEALTH (OTCQB:FLHLF) (CBOE CA:FH) (FSE:7QS)
Filament Health is a clinical-stage natural psychedelic drug development company. We believe that safe, standardized, naturally-derived psychedelic medicines can improve the lives of many, and our mission is to see them in the hands of everyone who needs them as soon as possible. Filament's platform of proprietary intellectual property enables the discovery, development, and delivery of natural psychedelic medicines for clinical development. We are paving the way with the first-ever natural psychedelic drug candidates.

Learn more at www.filament.health and on Twitter, Instagram, and LinkedIn.

FORWARD LOOKING INFORMATION
Certain statements and information contained herein may constitute "forward‐looking statements" and "forward‐looking information," respectively, under Canadian securities legislation. Generally, forward‐looking information can be identified by the use of forward‐looking terminology such as, "expect", "anticipate", "continue", "estimate", "may", "will", "should", "believe", "intends", "forecast", "plans", "guidance" and similar expressions are intended to identify forward‐looking statements or information. The forward‐looking statements are not historical facts, but reflect the current expectations of management of Filament regarding future results or events and are based on information currently available to them. Certain material factors and assumptions were applied in providing these forward‐looking statements. Forward‐looking statements regarding the Company are based on the Company's estimates and are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of Filament to be materially different from those expressed or implied by such forward‐looking statements or forward‐looking information. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward‐ looking statements and forward‐looking information. Filament will not update any forward‐ looking statements or forward‐looking information that are incorporated by reference herein, except as required by applicable securities laws.

SOURCE Filament Health Corp.

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