ChitogenX Inc (CSE:CHGX, OTCQB:CHNXF) has announced a best efforts private placement of 19,333,333 units of the company at a price of $0.225 per unit for gross proceeds of up to $4.35 million, subject to a minimum of $3 million being raised.
In addition, the company said it is undertaking, concurrent with the offering, a non-brokered private placement of up to 7,777,777 units on the same terms for gross proceeds of up to $1.75 million. The closing of the offering is conditional upon the closing of the concurrent private placement.
The company said it will use the net proceeds of the offering to complete enrollment of its Rotator Cuff Tear Repair US phase I/II clinical trial program, and for working capital and general corporate purposes.
Each unit in the offering will consist of one class A share of the company and one share purchase warrant. Each warrant will entitle the holder to purchase one share of the company at a price of $0.35 each at any time on or before the date which is 60 months after the closing date of the offering, subject to adjustment in certain events.
READ: ChitogenX earns repeat ‘Outperform’ rating from Noble Capital on above-average market opportunity in regenerative medicine
If, at any time following the date that is six months following the closing date, the daily volume weighted average trading price of the shares on the Canadian Securities Exchange is greater than $0.50 per share for the preceding 10 consecutive trading days, the company shall have the right to accelerate the expiry date of the warrants to a date that is at least 30 days following the date of such notice to holders of warrants.
The offering will be conducted by Echelon Capital Markets as the lead agent and sole bookrunner, on behalf of a syndicate of agents.
The company has granted the agents an option to arrange for the sale of up to an additional 15% of the units at the issue price. The agents' option may be exercised in whole or in part at any time up to 48 hours prior to the closing date subject to limitations prescribed by the LIFE exemption.
At the closing of the offering, the company shall pay to the agents a cash commission equal to 8.0% of the gross proceeds of the offering (including any exercise of the agents' option) and will issue to the agents a number of non-transferable warrants of the company equal to 8.0% of the number of units sold under the offering.
Each broker warrant is exercisable for a period of 24 months following the closing of the offering to acquire a unit at an exercise price equal to the issue price, subject to adjustment in certain events. A reduced cash commission of 4.0% and a reduced number of broker warrants equal to 4.0% of the number of units shall be payable with respect to units sold to purchasers in the offering on a president's list.
The offering and concurrent private placement is scheduled to close on or around February 28, 2023, and is subject to certain conditions including, but not limited to, receipt of all necessary approvals including satisfaction of listing conditions of the Canadian Securities Exchange.
The securities to be sold in the offering have not been and will not be registered under the US Securities Act or any state securities laws and may not be offered or sold within the United States or to US Persons unless registered under the US Securities Act and applicable state securities laws or an exemption from such registration is available.
ChitogenX is a clinical-stage regenerative medicine company dedicated to the development of novel therapeutic tissue repair technologies to improve tissue healing.
The company is committed to the clinical development of its proprietary ORTHO-R technology platform, a muco-adhesive CHITOSAN-based biopolymer matrix, specifically designed to deliver biologics such as platelet-rich plasma (PRP) or bone marrow aspirate concentrate (BMAC), to enhance healing in various Regenerative Medicine Applications.
Other formulations are being developed to leverage the technology's performance characteristics such as tissue adhesion, pliability, and ability to deliver biologics or therapeutics to various tissues damaged by trauma or disease.
Contact the author at jon.hopkins@proactiveinvestors.com