TORONTO - FSD Pharma Inc. (NASDAQ:HUGE)(CSE:HUGE)(FRA:0K9A), a biopharmaceutical company, has increased its loan to Celly Nutrition Corp., a Canadian firm developing a beverage aimed at enhancing recovery from alcohol consumption. On Sunday, Celly Nutrition announced an additional $300,000 to the existing senior secured term loan, raising the total to $1.3 million.
The amended agreement also includes a deferral of the first annual interest payment, which will now be payable on the second anniversary of the term loan. The loan, bearing an interest rate of 10% per annum, is set to expire on July 31, 2026. Celly Nutrition retains the obligation to make regular interest payments as per the original terms, with FSD Pharma holding an option to convert outstanding amounts into common shares in the event of a default.
Funds from the loan will support the production of unbuzzd™, Celly Nutrition's upcoming product. Billed as a scientifically formulated blend of vitamins, minerals, and herbs, unbuzzd™ is designed to promote mental alertness and expedite alcohol metabolism, with a release scheduled for later this summer.
John Duffy, CEO of Celly Nutrition, expressed gratitude for FSD Pharma's continued support, which he believes will help bring the new product to the North American market.
FSD Pharma, known for its focus on neurodegenerative and metabolic disorders as well as alcohol misuse disorders, has licensed the technology for unbuzzd™ to Celly Nutrition and will receive royalties from its sales. The company continues to research and develop treatments for alcohol misuse disorders and other health conditions.
This financial move is part of FSD Pharma's broader strategy to invest in innovative healthcare solutions and maintain a diverse portfolio through its subsidiary, FSD Strategic Investments Inc.
The information in this article is based on a press release statement.
InvestingPro Insights
FSD Pharma Inc. (NASDAQ:HUGE) is making strategic moves in the biopharmaceutical space, as evidenced by its recent loan increase to Celly Nutrition Corp. As investors consider the implications of this decision, certain financial metrics and InvestingPro Tips provide a deeper understanding of the company's current position.
InvestingPro Data shows a challenging financial landscape for FSD Pharma, with a market capitalization of 23.88 million USD and a negative P/E ratio of -1.32, indicating that the company is not currently profitable. The adjusted P/E ratio for the last twelve months as of Q4 2023 stands at -1.35, further underscoring this point. Additionally, the company has faced a significant price total return decrease of -66.67% over the past year.
However, there are positive aspects to consider from the InvestingPro Tips. FSD Pharma holds more cash than debt on its balance sheet, which is a strong indicator of financial health and may provide the company with the flexibility to navigate through tough market conditions. Additionally, the company's net income is expected to grow this year, suggesting potential for recovery and growth in the near future.
Investors seeking a comprehensive analysis of FSD Pharma's financial health and future outlook can find additional insights with InvestingPro Tips. There are 13 more tips available at https://www.investing.com/pro/HUGE, which could be crucial for making informed investment decisions. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing even more value as you explore the potential of FSD Pharma and its strategic investments.
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