Mind Medicine MindMed Inc

Item 1. Legal Proceedings

From time to time, we may become involved in litigation or other legal proceedings arising in the ordinary course of our business. We are not currently a party to any material litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors.

Scott Freeman and FCM Litigation

Breach of Contract Lawsuit

We filed suit against Dr. Scott Freeman and FCM MM Holdings, LLC (“FCM”) on July 26, 2023 in Nevada state court, alleging, among other things, breach by Dr. Freeman and FCM of the non-disparagement and confidentiality provisions of the Separation Agreement dated August 31, 2020, between the Company and Dr. Freeman. We sought permanent injunctive relief, as well as compensatory, punitive, and exemplary damages and attorneys’ fees. On August 30, 2023, FCM removed the case from Nevada state court to the U.S. District Court for the District of Nevada.

On March 14, 2024, the parties informed the court that they had reached an agreement in principle to resolve the dispute and another action then pending in the U.S. District Court for the Southern District of New York (addressed below) and sought a temporary stay of all case deadlines to allow the parties to focus on a definitive settlement agreement. On May 13, 2024, the parties filed a joint stipulation informing the court that they had entered into a settlement agreement resolving all claims and issues between the parties related to the litigation and asking the court to dismiss the case with prejudice, which the Court granted on May 14, 2024.

Section 14(a) Lawsuit

On September 5, 2023, we filed suit in the U.S. District Court for Southern District of New York against Dr. Scott Freeman, Jake Freeman, Chad Boulanger, FCM and the other three FCM director nominees (Farzin Farzaneh, Vivek Jain and Alexander Wodka) for violations of the federal securities laws governing proxy filings, primarily Section 14(a) of the Securities Exchange Act of 1934, as amended. We sought permanent injunctive relief and attorneys’ fees, as well as an award of damages sustained by us as a result of defendants’ actions, including expenses incurred in connection with the proxy contest caused by defendants’ material misstatements and omissions.

As of March 13, 2024, the parties had reached a settlement in principle that was the result of extensive negotiations overseen by a court-appointed mediator. On April 12, 2024, we informed the court that the parties had a final written settlement agreement and were in the process of executing the agreement and completing certain commitments outlined therein. On May 2, 2024, we informed the court that the parties had a fully executed settlement agreement and jointly sought entry of a stipulated injunction. On May 10, 2024, the court ordered entry of the stipulated injunction, which enjoined the defendants from engaging in activities specified in the settlement agreement for a period of five years and dismissed the underlying case with prejudice.