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MYnd Analytics to merge with biopharma company Emmaus, spin off assets

Healthcare technology company MYnd Analytics Inc. is merging with biopharmaceutical company Emmaus Life Sciences Inc. in a stock-for-stock deal that will result in a spinoff of MYnd's assets.

Under the deal, Torrance, Calif.-based Emmaus will become a unit of Mission Viejo, Calif-based MYnd Analytics in exchange for the telepsychiatry and teletherapy company's issuance of common stock to Emmaus shareholders and other equity holders.

The exchange ratio will result in security holders of the maker of sickle cell disease treatment Endari owning about 94% of the MYnd Analytics' common stock on a fully diluted basis after the merger.

Sickle cell disease is an inherited blood disorder that causes red blood cells to become rigid and change form so that they appear sickle-shaped instead of soft and rounded. Emmaus' Endari, which was approved in the U.S. in 2017 and launched in early 2018, is intended to reduce the acute complications of the disease in adult and pediatric patients five years of age and older.

According to a Jan. 7 news release, the combined entity is expected to change its name Emmaus Life Sciences Inc. and receive a new ticker symbol on the Nasdaq Capital Market. The combined company's board will comprise one member from MYnd and up to six members from Emmaus.

In connection with the merger, MYnd Analytics plans to transfer all of its assets, including cash and its equity interest in Arcadian Telepsychiatry Services LLC, and liabilities into its unit MYnd Analytics California under a proposed spin-off. It will also distribute the shares of MYnd Analytics California to MYnd Analytics' shareholders before the merger.

The completion of the deal is subject to customary closing conditions, including receipt of approval from the shareholders of each company and Nasdaq approval.

MYnd Analytics and Emmaus' merger has been unanimously approved by the boards of both companies and is expected to close in the first half of 2019, according to a Jan. 7 SEC filing.

A.G.P./Alliance Global Partners is acting as a financial adviser in the deal for Emmaus, which engages in the discovery, development, marketing and sale of treatments and therapies, including those in the rare and orphan disease categories.

Following the spinoff, MYnd Analytics California is expected to start trading as an independent company. Patrick Herguth will be CEO of the newly independent company, which will continue operating, integrating and growing its technology-enabled telepsychiatry and teletherapy businesses.

After the expected spin-off, MYnd Analytics' shareholders will continue to own 100% of the predictive analytics and telemedicine business, said MYnd Analytics Chairman Robin Smith.