Psychedelic-assisted treatment provider Field Trip Health & Wellness Ltd. is on the market.
This comes after the publicly traded company announced that it was not solvent and searching for a deal to stay afloat while it reorganizes its financial obligations in court. The news marks a huge stumble in a nearly $100 million endeavor to bring psychedelics to the forefront of mental health care.
CEO and board member Ronan Levy resigned has resigned from his role at the company while board member Keith Merker assumed the role of chief restructuring officer.
Toronto-based Field Trip Health & Wellness offers therapy enhanced by micro-dosing the anesthetic ketamine in clinics and, for a brief time, in patients’ homes via telehealth. The therapy helps patients better access memories and feeling via an alternative state of consciousness, the documents state.
On Wednesday, a Canadian court granted the Field Trip Health & Wellness protection from creditors under the country’s Companies’ Creditors Arrangement Act (CCAA). The Canadian CCAA provides something of an alternative to bankruptcy which allows debtor companies to remain in operation.
The company has a 10-day shield from creditors to present its reorganization. Public documents show Field Trip Health & Wellness will seek additional stays in legal proceedings as part of its reorganization efforts.
It also recently announced that it would close treatment locations it operated in Chicago, Washington, D.C., Seattle and San Diego, effective April 15. At one point, it operated 9 locations in the U.S. and Canada.
The CCAA proceedings show the closures are part of Field Trip Health & Wellness’ plan to keep operating but “in a substantially smaller, but stronger, form that preserves their business value, goals, and objectives.”
The public documents do not lay out explicitly the reasons why the company has reached insolvency beyond a failure to generate revenue growth and any profit. The company has not responded to a request for comment.
Field Trip Health & Wellness plans to operate four locations while it seeks a sale or additional financing to help the company continue. The move to seek CCAA protection and close centers comes from an independent committee made up of company board members. The committee was formed in December 2022 and engaged with PwC as a consultant on strategic alternatives. The recent court order also makes PwC the “monitor” for the proceedings.
The company also announced that reducing locations will translate to “a company-wide reduction in corporate and clinical staff,” according to a news release.
As of March 8, the company employed 102 people — 47 full-time employees, 12 part-time employees and 43 independent contractors, according to the documents.
Field Trip Health & Wellness maintains confidence that it will be able to find a deal that would allow it to continue as a going concern.
“[Field Trip] has been in discussions with insiders and third parties to obtain bridge financing where necessary for any period necessary to complete a sale and investment solicitation process and approve a transaction, if available,” the documents state. “The [company] has received a number of informal inquiries about the acquisition of some or all of the clinics as well as an offer to acquire a controlling, or 100%, share interest in the [company] or provide debtor in possession financing in any insolvency proceeding.”
Between private funding rounds and an IPO, Field Trip raised two private funding rounds and an IPO that totaled about $96 million.
The public financial filings show steep losses.
Field Trip Health & Wellness generated CA$5.3 million and sustained a loss of $29.6 million in the nine months of its fiscal year 2023, ending December 31, 2022.
In its full fiscal 2022, the company hauled in $4.9 million in revenue and posted a $55 million loss.
“The Field Trip Group has experienced year-over-year losses and has always been a cash flow negative business,” one CCAA preceding document states. “Due to the ongoing negative cash flows and high fixed costs, including for payroll and lease payments, the Field Trip Group’s cash position has continued to deteriorate since December 31, 2022.”
It estimates that aggregated claims against the company could total $59 million as of the end of January.
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