Psyence BioMed settles shareholder litigation for $1.5 million

Psyence Biomedical Ltd. (NASDAQ: PBM) announced it has reached a settlement agreement to resolve litigation brought by shareholder KAOS Capital Ltd., according to a company statement.

The settlement requires Psyence BioMed to pay $1.5 million to KAOS Capital and release the shareholder from a $75,000 court costs obligation. Under the agreement, KAOS Capital will sell all its common shares in the company to a third party designated by Psyence BioMed at $5 per share.

The litigation originated from claims made by KAOS Capital on January 14, 2026, alleging improper actions by the company. KAOS Capital filed a court application on January 16, 2026, seeking to adjourn a shareholders' meeting scheduled for January 22, 2026. The Ontario Superior Court dismissed the application on January 21, 2026, and ordered KAOS Capital to pay the company's legal costs.

The settlement includes a full retraction of the allegations by KAOS Capital and mutual releases of all claims between the parties. Psyence BioMed stated it denied the allegations and considered them unsubstantiated, but opted to settle to avoid further litigation costs and business disruption.

The company said it expects to fund the settlement using cash on hand and will record it according to applicable accounting standards. The settlement does not constitute an admission of liability or wrongdoing by the company, its board or officers.

Psyence BioMed develops psychedelic-based therapeutics, focusing on nature-derived psilocybin and ibogaine treatments for mental health disorders.

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