Algernon Pharmaceuticals Inc announced that it is undertaking a rights offering to raise gross proceeds of approximately $2,416,747.
The Canadian clinical stage pharmaceutical development company said will be offering 9,666,988 rights to holders of its Class A common shares at the close of business on the record date of March 29, 2023, on the basis of one right for each share held, with each right entitling the holder to subscribe for one Algernon Pharmaceuticals unit at the subscription price of $0.25 per unit.
Algernon noted that proceeds of the rights offering are expected to be used for working capital and general corporate purposes and administrative expenses.
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Each unit will consist of one company share plus one share purchase warrant, with each warrant being exercisable for one Algernon Pharmaceuticals share at the exercise price of $0.52 for a period of 18 months after the date of issue of the warrants, subject to acceleration to a date that is not less than 30 days following delivery of an acceleration notice to the holders of the warrants if the volume weighted average price of the shares for each of the 10 consecutive trading days on the Canadian Securities Exchange (CSE) exceeds $1.04.
The company said it is expected that the rights will trade on the CSE under the symbol ‘AGN.RT’ beginning on or about March 28, 2023, and will trade until 9 AM PDT on or about April 27, 2023, at which point it will expire at 2 PM that day.
As well, Algernon stated that AlphaNorth Asset Management as an “insider” and holder of greater than 10% of the issued and outstanding shares of the company, has advised Algernon that it intends to exercise, subject to relevant restrictions, its basic subscription privilege to acquire 1,268,040 units for total gross proceeds to the company of $317,010.
Furthermore, Algernon reported that it has entered into an agreement with Research Capital Corporation (RCC), pursuant to which RCC has been appointed as the exclusive soliciting dealer for and on behalf of the company on a commercially reasonable efforts basis.
RCC will also have the right, but not the obligation, to purchase up to $500,000 of units for which subscriptions have not been received by the expiry time on the expiry date.
RCC will receive a commission of 5% of the gross proceeds of the rights offering, excluding those rights exercised by shareholders on the president’s list for which a commission of 2% will be paid to a maximum of 25% of the gross proceeds of the rights offering, according to the company.
Algernon added that it will also pay RCC a corporate finance fee of $20,000 plus tax.
Algernon Pharmaceuticals is a Canadian clinical-stage drug development and repurposing company investigating multiple drugs for unmet global medical needs. It also has active research programs for IPF with chronic cough, and chronic kidney disease.
Contact Sean at sean@proactiveinvestors.com