Court File and Parties

Court File No.: CL-26-0000016 Date: 2026-01-21 Ontario Superior Court of Justice

Between:

KAOS CAPITAL LTD., Applicant

-- and --

PSYENCE BIOMEDICAL LTD., Respondent

Counsel:

James Bunting, Sean Campbell, Zac Smith & Nader Hasan, for the Applicant

Adam Chisholm, Samantha Gordon, Fernanda Martins, Caelan MacDonald & Lia Boritz, for the Respondent

Heard: January 20, 2026

Justice Jana Steele

Reasons for Decision

[1] The applicant, KAOS Capital Ltd. ("KAOS"), brings an urgent application under section 248 of the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 ("OBCA"). Among other things, KAOS seeks to move the date of Psyence Biomedical Ltd.'s ("PBM") Annual General and Special Meeting of Shareholders. The AGM is currently scheduled for January 22, 2026. KAOS asks that it be held no earlier than February 22, 2026. KAOS also seeks to move the record date to a date no earlier than January 23, 2026.

[2] KAOS also speculates that PBM actively took steps to dilute its holdings in the company once PBM became aware of KAOS' holdings. [^1] KAOS further speculates that there may be conflicts that were not disclosed in the Circular (defined below). [^2] However, on this urgent application, there was not sufficient evidence for the court to make any findings on these issues.

[3] For the reasons set out below the application is dismissed.

Background

[4] KAOS was founded by Adam Arviv in October 2019. KAOS, a hedge fund, focuses on investing in certain Canadian companies, including those operating in the crypto, cannabis, and gaming industries.

[5] PBM is a biotechnology company that is developing nature-derived psilocybin-based psychedelic medicines. PBM was incorporated under the OBCA on or about June 29, 2023.

[6] PBM's board of directors is comprised of chief executive officer and executive chairman Jody Aufrichtig, chief financial officer Warwick Corden-Lloyd, Seth Feuerstein, Mark Balkin, and Graham Patrick (the "PBM Board").

[7] PBM's last annual meeting of shareholders was held on or about November 12, 2024. Accordingly, under s. 94(1)(a) of the OBCA, it is required to call its next annual meeting by February 12, 2026.

[8] On or about January 25, 2024, PBM was spun out of its former parent, Psyence Group Inc. ("PGI") in a go-public transaction that resulted in PBM being listed on the NASDAQ.

[9] On or about November 24, 2025, KAOS started to acquire a significant stake in PBM through a series of transactions.

[10] The notice of PBM's AGM was published in the Globe and Mail, on December 15, 2025. It provides:

PSYENCE BIOMEDICAL LTD.

NOTICE IS HEREBY GIVEN that the annual general and special meeting of the shareholders of Psyence Biomedical Ltd. will be held on January 22, 2026. The close of business on December 23, 2025 has been fixed as the record date for determining the shareholders of Psyence Biomedical Ltd. entitled to receive notice of and to vote at the annual general and special meeting.

[11] PBM also has an Advanced Notice By-Law that requires that written notice of a director nomination must be given at least 30 days before the date of an annual meeting of shareholders.

[12] Mr. Arviv sent an email to the PBM Board on or about January 14, 2026 to outline his concerns.

[13] Jody Aufrichtig, for the PBM Board, responded on January 16, 2026, at 6:50 AM. The email states, among other things:

[T]he Board fully supports shareholder engagement and therefore representatives of the Board are prepared to meet virtually with you (with or without counsel present), on a without prejudice basis only, prior to the January 22, 2026 shareholders' meeting, Currently we are available during the following time periods: [8-10 AM time slots provided on January 19, 20, and 21].

[14] The application was filed on an urgent basis on January 16, 2026.

Analysis

Should the Shareholder Meeting currently scheduled for January 22, 2026 be adjourned and a new record date set?

[15] The applicant asks the Court to adjourn the January 22, 2026 meeting.

[16] The Supreme Court of British Columbia, in TELUS Corporation (Re), 2012 BCSC 1919, 9 B.L.R. (5th) 23, at para. 200, stated: "[t]he court will not lightly interfere with the conduct of a shareholder meeting which is properly called and, in particular, will not lightly order that a properly called meeting not proceed."

[17] Here we have a meeting that was called in accordance with the statutory requirements, which KAOS seeks to adjourn. I agree with the Supreme Court of British Columbia that the court will not lightly order that a shareholder meeting that has been properly called should not proceed.

[18] KAOS initially took the position that the notice of the meeting was not compliant with the OBCA. However, the notice was compliant with the OBCA.

[19] On January 8, 2026, PBM filed a management information circular (the "Circular") with the U.S. Securities and Exchange Commission (the "SEC") containing information relevant for the January 22, 2026 shareholder meeting. The Circular was circulated to shareholders on or about January 9, 2026.

[20] Section 96(1) of the OBCA sets out the requirement for notice:

Notice of shareholders' meetings

96 (1) Notice of the time and place of a meeting of shareholders shall be sent, in the case of an offering corporation, not less than twenty-one days and, in the case of any other corporation, not less than ten days, but, in either case, not more than fifty days, before the meeting,

(a) to each shareholder entitled to vote at the meeting;

(b) to each director; and

(c) to the auditor of the corporation.

[21] KAOS was under the mistaken impression that PBM is an "offering corporation." It is not.

[22] "Offering corporation" is defined in s. 1(1) of the OBCA to mean "a corporation that is offering its securities to the public within the meaning of subsection (6) and that is not the subject of an order of the Commission deeming it to have ceased to be offering its securities to the public." S. 1(6) of the OBCA provides:

For the purposes of this Act, a corporation is offering its securities to the public only where,

(a) in respect of any of its securities a prospectus or statement of material facts has been filed under the Securities Act or any predecessor thereof, or in respect of which a prospectus has been filed under The Corporations Information Act, being chapter 72 of the Revised Statutes of Ontario, 1960, or any predecessor thereof, so long as any of such securities are outstanding or any securities into which such securities are converted are outstanding; or

(b) any of its securities have been at any time since the 1st day of May, 1967, listed and posted for trading on any stock exchange in Ontario recognized by the Commission regardless of when such listing and posting for trading commenced,

except that where, upon the application of a corporation, the Commission is satisfied, in its discretion, that to do so would not be prejudicial to the public interest, the Commission may order, subject to such terms and conditions as the Commission may impose, that the corporation shall be deemed to have ceased to be offering its securities to the public.

[23] PBM is an Ontario registered company, with its headquarters in Toronto. However, its shares are listed on the NASDAQ and its filings are done with the U.S. SEC. The Ontario Securities Commission has published a list of exchanges that are recognized by the OSC for operation in Ontario. The NASDAQ is not on the list.

[24] Accordingly, because PBM is not an offering corporation under s. 96(1) of the OBCA it falls within the broad category of "any other corporation" and is required to provide the notice not less than ten days before the meeting. PBM met this technical requirement.

[25] In my view, the instant case is distinguishable from Gupta v. East Asia Minerals Corporation, 2018 BCSC 214, 78 B.L.R. (5th) 265, relied upon by KAOS. In Gupta, the Court granted a brief delay of the AGM, which had been sought by a group of dissident shareholders trying to gain control of the board. The company alleged that there was an issue with the circular filed by the dissident group. The dissident group was required to file a supplemental circular, which was published on SEDAR shortly before the proxy filing deadline. The British Columbia Supreme Court was concerned that the company's shareholders would not have sufficient time to consider the supplemental materials before the voting deadline. Fitzpatrick J. stated at para. 60: "It is beyond question that the procedures for communications to the shareholders are intended to allow some reasonable time to those shareholders to consider the matters which are to be addressed at the AGM." I agree. In the instant case, all the relevant materials were provided in accordance with the applicable timelines. There was no supplemental material to be considered by the shareholders as was the case in Gupta. At para. 63, in Gupta, Fitzpatrick J. contrasts her decision in TELUS:

This situation is to be contrasted with that at issue in TELUS Corporation. There, I dismissed an attempt to overturn the Master's decision where she declined to grant an adjournment of the meeting. At para. 202, I stated that "fully informed shareholders" had participated in the process and would have been prejudiced by a delay in the holding of the meeting. It is anything but apparent here that the shareholders of the Company were "fully informed" by the proxy deadline, at least as to the [dissident shareholders'] point of view, which the shareholders were entitled to consider.

[26] In the instant case, the shareholders of PBM have been provided with the information for the shareholder meeting in advance of the meeting and in accordance with the timelines in the legislation.

[27] KAOS argued that under s. 248 of the OBCA [^3], if I find that there has been oppressive conduct, I can adjourn the shareholders' meeting, despite the technical requirements having been met. The Court does have broad jurisdiction under s. 248 where the court is satisfied that the corporation or the directors have acted or threatened to act in a manner "that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer of the corporation."

[28] In BCE Inc. v. 1976 Debentureholders, 2008 SCC 69, [2008] 3 S.C.R. 560, at para. 119, the Supreme Court made it clear that the "oppression remedy is a broad and equitable remedy that focuses on the reasonable expectations of stakeholders" and that "the onus is on the claimant to establish oppression or unfairness." As noted by the Supreme Court in BCE, at para. 56, "[i]f a breach of a reasonable expectation is established, one must go on to consider whether the conduct complained of amounts to "oppression", "unfair prejudice" or "unfair disregard" as set out in s. 241(2) of the CBCA [the oppression section of the CBCA].

[29] KAOS argued that there is a difference between technical compliance and meaningful compliance. KAOS submitted that PBM ought to have posted the notice that was published in the Globe and Mail on December 15, 2025 on the news page of PBM's investor site and filed it with the SEC. KAOS rightly points out that in the digital age, PBM taking the additional step of posting the filing on its investor page would not be remotely onerous. However, the statute does not require that this additional step be taken. KAOS speculates that PBM did not do so because they wanted to keep shareholders in the dark until January 8, 2026, when the Circular was filed with the SEC.

[30] While Mr. Arviv's evidence is that his expectation was that any meeting would be called on at least 45 days' notice given the 30-day advanced notice requirement in PBM's by-laws, in BCE, at para. 62, the Supreme Court made it clear that the court does not rely solely on the actual expectations of a particular shareholder:

As denoted by "reasonable", the concept of reasonable expectations is objective and contextual. The actual expectation of a particular stakeholder is not conclusive. In the context of whether it would be "just and equitable" to grant a remedy, the question is whether the expectation is reasonable having regard to the facts of the specific case, the relationships at issue, and the entire context, including the fact that there may be conflicting claims and expectations.

[31] KAOS argued that the reasonable expectation of PBM's shareholders would be that they should receive the same notice as public issuers in the province of Ontario. However, that is not what the legislation provides, as set out above.

[32] I agree with PBM's submissions that the steps the company took satisfied stakeholders' "reasonable expectations." First, as discussed above, the OBCA technical compliance requirements were met. Second, because PBM's last AGM was held on or about November 12, 2024, under the OBCA PBM was required to hold the shareholders meeting by February 12, 2026. [^4] The shareholders would reasonably expect that a meeting would be called before the Feb. 12, 2026 deadline to comply with the OBCA requirements. Third, PBM followed substantially similar procedures and timelines (re., publication, etc.) in informing shareholders of the meeting and setting the record date as PBM did for the prior two meetings. As noted by PBM, the notice process that was employed for this shareholders' meeting was not tactical or designed to respond to KAOS' new investment; it simply followed the company's past practice.

[33] KAOS also submits that PBM acted oppressively in the setting of the record date. As noted above, the record date was set as December 23, 2025 in the notice that was published in the Globe and Mail on December 15, 2025. KAOS's position is that reasonable notice was not provided of the record date. There was technical compliance with s. 95(4) of the OBCA, which provides:

(4) If a record date is fixed, unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice thereof shall be given, not less than seven days before the date so fixed,

(a) by advertisement in a newspaper published or distributed in the place where the corporation has its registered office and in each place in Canada where it has a transfer agent or where a transfer of its shares may be recorded; and

(b) by written notice to each stock exchange in Canada on which the shares of the corporation are listed for trading.

[34] PBM, which is not listed on a Canadian stock exchange, complied with s. 95(4) by placing an advertisement in a newspaper where PBM has its registered office at least seven days before the fixed date. As above, the "reasonable expectations" of a PBM shareholder would be informed by the statutory requirements, which have been met. They would also be informed by past practice. As noted above, PBM followed substantially similar procedures and timelines as for the prior two meetings.

[35] KAOS also points to PBM's Advance Notice By-Law. KAOS submits that the timing of PBM's notice, paired with the advance notice requirement in section 5.3 of the bylaws, effectively blocked shareholders from nominating directors for the shareholder meeting. Section 5.3 of PBM's Advance notice By-Law requires that written notice of a director nomination must be given at least 30 days before the date of an annual meeting of shareholders:

A Nominating Shareholder must give written notice of its director nomination (the contents of such notice are set out in this Section 5 (such notice, a "Nomination Notice")) to the secretary of the Corporation even if such matter is already the subject of a notice to the shareholders or a Public Announcement. The Nomination Notice must be received by the Corporation:

(a) In the case of an annual meeting of shareholder, not less than 30 days before the date of such meeting.

[36] KAOS submits that the thirty-day period in the Advance Notice By-Law is a further notice period; however, the by-law does not say this. As noted by PBM, KAOS became an investor in PBM at least 59 days before the scheduled shareholder meeting. KAOS could have submitted a Nomination Notice at any time after they became a PBM shareholder [^5] -- KAOS still has not submitted a Nomination Notice. The notice that was published in the Globe and Mail on December 15, 2025 provided sufficient time for a director nomination to be made in accordance with the bylaw.

[37] As set out above, I have determined that the timeline and method of providing notice of the shareholder meeting and setting the record date did not breach the reasonable expectations of PBM's shareholders. None of the proposed reasons to delay the shareholder meeting have been established.

[38] At this stage, there is much speculation. The application was brought on an urgent basis and the respondent was given limited time to respond. There have not been discoveries. Because the application record focused primarily on the alleged technical deficiencies, the responding record focused on these issues as well. As noted above, the applicant's factum indicated that the alleged PBM Board misconduct and oppression was not the focus of the present application. I make no findings at this stage on the underlying conduct that is alleged to be oppressive in this application. The appropriate way forward is for the meeting to be held as scheduled. The applicant may return to court for relief under the OBCA if there is any evidence of impropriety.

Disposition and Costs

[39] The application is dismissed.

[40] The applicant shall pay the respondent's costs fixed in the amount of $75,000 (inclusive of taxes and disbursements).

Justice Jana Steele

Released: January 21, 2026

[^1]: KAOS took the position that PBM took active steps to dilute its interest by issuing shares under the Equity Line of Credit with White Lion Capital, LLC. KAOS filed a Schedule 13D under the Securities Exchange Act of 1934 on November 25, 2025, which disclosed its PBM shares as approximately 313,000. KAOS states in the 13D that based on the 1,872,051 common shares of PBM outstanding on September 30, 2025 KAOS' percentage of PBM's common shares is 16.77%. The Circular (Jan. 8, 2026) discloses 6,388,604 outstanding PBM common shares. The agreement with White Lion was entered into by PBM effective July 25, 2024, and provided for PBM to sell up to $25,000,000 of PBM's common stock to White Lion. The agreement with White Lion was publicly filed when it was entered into in 2024. There is no evidence regarding precisely when the additional common stock of PBM was issued to White Lion under the agreement. As noted by PBM, based on past practice (discussed below), the timing and notice of the shareholder meeting do not appear to have been tactical.

[^2]: Detailed disclosure of certain conflicts was set out in the Circular. KAOS speculates that there may be other relationships between Psyence Labs Inc. and/or Novaspore Ltd. and directors/officers/owners of PBM that ought to be disclosed. However, there is no evidence of such other relationships beyond speculation. Further, as noted by PBM, KAOS stated at para. 3 of its factum the focus of the urgent application, which was the timing and notice of the shareholders' meeting and the alleged steps taken to prevent other shareholders from nominating an alternative slate of directors.

[^3]: Section 248(2) of the OBCA provides: Where, upon an application under subsection (1), the court is satisfied that in respect of a corporation or any of its affiliates, (a) any act or omission of the corporation or any of its affiliates effects or threatens to effect a result; (b) the business or affairs of the corporation or any of its affiliates are, have been or are threatened to be carried on or conducted in a manner; or (c) the powers of the directors of the corporation or any of its affiliates are, have been or are threatened to be exercised in a manner, that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer of the corporation, the court may make an order to rectify the matters complained of.

[^4]: 94 (1) Subject to subsection 104 (1), the directors of a corporation, (a) shall call an annual meeting of shareholders not later than eighteen months after the corporation comes into existence and subsequently not later than fifteen months after holding the last preceding annual meeting; and (b) may at any time call a special meeting of shareholders.

[^5]: A "Nominating Shareholder" is defined in section 5.1 of the Advance Notice By-Law as "any person who: (i) at the close of business on the date of giving the Nomination Notice set out in Section 5.3, and on the record date for determining shareholders entitled to vote at such meeting, is entered in the securities register of the Corporation as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting [and provides evidence of such beneficial ownership to the Corporation]; and (ii) complies with the notice procedures set forth in this Section 5.