Item 1.01
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Entry Into a Material Definitive
Agreement
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On October 18, 2018, IntelGenx Technologies Corp. (the
Company) agreed to issue and sell to investors a total of 17,144,314 units
(the Units) at a price of $0.70 per Unit (the Offering Price) for gross
proceeds of approximately $12 million (the Offering). Each Unit consists of
one share of common stock of the Company and one half of one warrant (a
Warrant) each whole Warrant to purchase one share of common stock of the
Company at an exercise price of $1.00 per share. The Warrants will be
exercisable immediately and will expire on the third anniversary of the date of
their issuance.
The Offering was made on a best efforts basis in the United
States and the Canadian provinces of British Columbia, Alberta, Manitoba,
Ontario and Québec. H.C. Wainwright & Co., LLC (Wainwright) acted as the
exclusive agent for the Units offered in the United States. Echelon Wealth
Partners Inc. (Echelon and, together with Wainwright, the Placement Agents)
acted as the exclusive placement agent for the Units offered in Canada.
The Company intends to use the net proceeds of the Offering for
its Phase 2a Montelukast study, its Tadalafil 505(b)(2) submission to U.S. Food
and Drug Administration, and working capital.
The closing of the Offering is expected to take place on or
about October 22, 2018, subject to the satisfaction of customary closing
conditions.
The sale of Units to certain investors in the United States
will be made through securities purchase agreements (the Securities Purchase
Agreements) entered into directly with certain institutional investors at the
investors option. The Units (and shares issuable upon exercise of the Warrants
and Placement Agent Warrants) will be issued pursuant to an effective Shelf
Registration Statement on Form S-3, which was filed with the Securities and
Exchange Commission (SEC) on September 24, 2018 and subsequently declared
effective on October 15, 2018 (File No. 333- 227498), as amended. The Company
has filed a prospectus supplement with the SEC in connection with the sale of
the Units.
The Securities Purchase Agreements contain customary
representations, warranties and covenants by the Company, customary conditions
to closing, indemnification obligations of the Company, including for
liabilities under the Securities Act of 1933, as amended, other obligations of
the parties and termination provisions.
Pursuant to the Placement Agent Agreements, the Company will
pay the Placement Agents (pro rata based on the sales made by such Placement
Agent) a cash transaction fee equal to 7% of the aggregate gross proceeds to the
Company from the sale of Units in the Offering. The Company will issue to the
Placement Agents (pro rata based on the sales made by such Placement Agent)
compensation warrants (the Placement Agent Warrants) to purchase a number of
shares of the Companys common stock equal to 7% of the number of shares of the
Companys common stock sold in the Offering. The Placement Agent Warrants are
exercisable at a price of $0.875 and expire on October 22, 2021. As required by
FINRA, the Placement Agent Warrants issued to Wainwright are subject to a
180-day lock-up, subject to certain customary exceptions.
The Company has granted Echelon an over-allotment option
exercisable, in whole or in part, at the sole discretion of Echelon, at any time
prior to 5:00 p.m. (Montreal time) on the date that is the 30th day after the
closing of the Offering, to purchase additional Units and/or any combination of
common stock and/or Warrants in an amount representing up to an additional 15%
of the number of Units sold pursuant to the Offering, at the Offering Price to
cover over-allocations, if any, and for market stabilization purposes.
The legal opinion of Dorsey & Whitney LLP relating to the
legality of the issuance and sale of the Units and the common stock and Warrants
included therein is attached as Exhibit 5.1 to this Current Report on Form 8-K.
The foregoing is a summary of certain material terms and
conditions of the Placement Agent Agreements, the Warrants, the Securities
Purchase Agreements and are not a complete discussion of such agreements.
Accordingly, the foregoing is qualified in its entirety by reference to the full
text of the Placement Agent Agreements, Form of Warrant and Form of Securities
Purchase Agreement attached to this Current Report on Form 8-K in Exhibits 1.1,
1.2, 4.1 and 10.1 respectively, and incorporated herein by reference.
Warning Concerning Forward Looking Statements
This Current Report on Form 8-K contains statements which constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward looking statements are based upon the
Company’s present intent, beliefs or expectations, but forward looking statements are not guaranteed to occur and may not occur for various reasons, including some reasons which are beyond the Company’s control. For example, this Current
Report on Form 8-K states that the Offering is expected to close on or about October 22, 2018. In fact, the closing of the Offering is subject to various conditions and contingencies as are customary in securities purchase agreements in the United
States and Canada. If these conditions are not satisfied or the specified contingencies do not occur, this Offering may not close. For this reason, among others, you should not place undue reliance upon the Company’s forward looking
statements. Except as required by law, the Company undertakes no obligation to revise or update any forward looking statements in order to reflect any event or circumstance that may arise after the date of this Current Report on Form 8-K.