Algernon Pharmaceuticals Wraps Up Rights Offering to Advance Its Mission

Algernon Pharmaceuticals Inc. (CSE: AGN) (FRANKFURT: AGW0) (OTCQB: AGNPF) has successfully concluded its Rights Offering which expired on April 27, 2023. The Company raised a total gross amount of approximately $1,188,342 by issuing 4,753,369 Units at a subscription price of $0.25 each. Each Unit comprises one Class A common share and one Share purchase warrant.

The Warrants are exercisable for one Share at the exercise price of $0.52 until November 5, 2024. Should the volume weighted average price of the Shares for any ten consecutive trading days on the Canadian Securities Exchange exceed $1.04, the Warrants may be accelerated to a date not less than 30 days after an acceleration notice is delivered to the holders.

The Company saw an impressive response to their offering, with a total of 2,871,597 Units subscribed to through the basic subscription privilege and an additional 1,881,772 Units subscribed through the additional subscription privilege.

Upon completion of the Rights Offering, the Company will have issued and outstanding a total of 14,550,757 Shares – a figure that increases even further if the Warrants are exercised.

The Rights Offering saw more than two million units acquired by directors, officers, and insiders of the Company, for total subscription proceeds of $504,746. Remarkably, no one became a new shareholder holding more than 10% of the Shares upon the closing of the Rights Offering. 1,418,982 Units were purchased under the basic subscription privilege, and an additional 600,000 Units were purchased under the additional subscription privilege.

The Company’s directors, officers and 10% shareholders, all of whom are considered related parties, are participating in the Rights Offering. This constitutes a related party transaction as defined by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.

The Company is availing itself of an exemption from the formal valuation and minority approval requirements of MI 61-101, since the fair market value of this participation does not exceed 25% of the Company’s market capitalization.

The Company entered into a Dealer Manager Agreement with Research Capital Corporation (“RCC” or the “Soliciting Dealer”) and, in accordance with the agreement, paid RCC a cash fee of $42,292 and a corporate finance fee of $22,600. To settle these fees, the Company issued 40,000 Units and 90,400 Units, respectively.

Additionally, RCC received 165,166 Soliciting Dealer warrants, each of which is exercisable for one Unit at the exercise price of $0.25 until November 5, 2024. All securities issued in compensation to RCC are subject to a four month and one day hold period in accordance with applicable Canadian securities laws.

The proceeds of the Rights Offering will be used to bolster our working capital and support our general corporate activities and administrative costs. This is an exciting opportunity to further strengthen our organization and ensure that we remain well-positioned to meet our future objectives.

About Algernon Pharmaceuticals Inc. 

Algernon is a revolutionary drug re-purposing company that takes already approved drugs and investigates them for new and innovative disease applications. From naturally occurring compounds to new formulations and global regulatory approvals, Algernon is committed to efficiently and safely moving these compounds into new human trials.

In addition, they specifically target compounds that have never been approved in the U.S. or Europe, avoiding any potential off label prescription writing.

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