SAINT LAURENT, Quebec, March 11, 2024 (GLOBE NEWSWIRE) -- IntelGenx Technologies Corp. (TSX:IGX) (OTCQB:IGXT) (the “Company”) announces that its wholly-owned subsidiary, IntelGenx Corp. (“IntelGenx Corp.”), has entered into a third amended and restated loan agreement dated as of March 8, 2024 (amending the second amended and restated loan agreement dated as of September 30, 2023) (the “Loan Agreement”) with atai Life Sciences AG (“atai”), pursuant to which, among other things, atai has agreed to make (i) one (1) additional term loan in the amount of US$1,000,000 to IntelGenx Corp., which loan is to be disbursed within three (3) business days of the execution of the Loan Agreement (the “First Tranche Loan”), and (ii) one (1) additional term loan in the amount of US$1,000,000 to IntelGenx Corp., which loan is to be disbursed upon the achievement of a pre-defined milestone (the “Second Tranche Loan” and collectively with the Second Tranche Loan, the “Additional Term Loans”). The Additional Term Loans will mature on February 1, 2026.
Subject to obtaining approval from the Toronto Stock Exchange (the “TSX”), the Loan Agreement provides for the ability for atai to convert (the “Conversion Feature”), from time to time, (i) the principal outstanding under the First Tranche Loan into shares of common stock of the Company (the “Shares”) at a conversion price of US$0.185 per Share (the “Conversion Price”), and (ii) the principal outstanding under the Second Tranche Loan into Shares at a conversion price equal to the greater of (a) the Conversion Price and (b) the 5-day volume-weighted average price (the “5-day VWAP”) of the Shares on the TSX ending on the day preceding the disbursement by atai of the Second Tranche Loan to the Company or IntelGenx, less the maximum permissible discount under the applicable TSX rules.
Additionally, and subject to approval of the TSX, the Company may elect, with the consent of atai, to pay any accrued but unpaid interest on the Additional Term Loans in Shares at a price per Share equal to the 5-day VWAP of the Shares ending on the day that is the second business day before the day the interest becomes due and payable, less the maximum permissible discount under the applicable TSX rules.
Concurrently to entering into the Loan Agreement, the Company has issued 4,000,000 warrants (the “Warrants”) to atai. The Warrants entitle atai to purchase Shares at a price of US$0.17 per Share, for a period of 36 months following their issuance.
Furthermore, on December 5, 2023, atai made a loan in the amount of US$500,000 to the Company, which will mature on December 31, 2024.
Related Party Transactions
atai is an insider of the Company as a result of its beneficial ownership of, or control or direction over, directly or indirectly, greater than 10% of the outstanding Shares. The participation of atai in the Loan Agreement (including the issuance of the Warrants) constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) which, absent any available exemption, would require a formal valuation and minority approval under MI 61-101. The board of directors of the Company unanimously determined that the Company may rely on the “financial hardship” exemption from the formal valuation and minority approval requirements set out in Section 5.5(g) and Section 5.7(e) of MI 61-101 with respect to such transaction, given that the Company is in serious financial difficulty, the participation of atai in the Loan Agreement is designed to improve the financial position of the Company, the exemption provided for in Section 5.5(f) of MI 61-101 is not available, as the transaction contemplated is not subject to court approval under bankruptcy or insolvency law, and there is no other requirement, corporate or otherwise, to hold a meeting to obtain any approval of the Company’s shareholders. In addition, the Company has one or more independent directors who have determined that the terms and conditions of the participation of atai in the Loan Agreement is reasonable for the Company in the circumstances and is in its best interests. The Company did not file a material change report in respect of the related party transaction 21 days in advance of closing of the offering because insider participation had not been determined at that time. The shorter period was necessary in order to permit the Company to close the Loan Agreement in a timeframe consistent with usual market practice for transactions of this nature.
Early Warning Disclosure
This press release is also being issued pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues (“NI 62-103”) in connection with the acquisition by atai (Wallstraße 16, 10179 Berlin, Germany) of certain conversion rights and Warrants under the Loan Agreement (the “Acquisition”). The Acquisition occurred on a private placement basis. In connection with the Acquisition, atai will advance up to US$2 million, the principal of which will be convertible into 10,810,810 Shares (assuming that the Second Tranche Loan is advanced and that the conversion price of the Second Tranche Loan will be equal to US$0.185), and atai also acquired 4,000,000 Warrants.
Immediately prior to the Acquisition, atai had ownership and control over 37,300,000 Shares and securities convertible into approximately 226,708,724 Shares representing approximately 65.78% of the issued and outstanding Shares, on a partially diluted basis. Assuming the conversion and/or exercise of the principal amount of Additional Term Loans and Warrants, atai would beneficially own or control in aggregate 278,819,534 Shares representing approximately 67% of the issued and outstanding Shares of the Company, on a partially diluted basis.
atai’s acquisitions and dispositions were made for investment purposes. In accordance with applicable securities laws, atai may, from time to time and at any time, acquire additional shares and/or other equity, debt or other securities or instruments (collectively, “Securities”) of the Company in the open market or otherwise, and reserves the right to dispose of any or all of its Securities in the open market or otherwise at any time and from time to time, and to engage in similar transactions with respect to the Securities, the whole depending on market conditions, the business and prospects of the Company and other relevant factors.
An early warning report will be filed under the Company’s profile on the SEDAR+ website at www.sedarplus.ca. To obtain more information or to obtain a copy of the early warning report filed in respect of this press release, please contact atai by email at ir@atai.life.
This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities described herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification or registration under the securities laws of any such jurisdiction. This press release does not constitute an offer of securities for sale in the United States. The securities described herein have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent registration under U.S. federal and state securities laws or an applicable exemption from such U.S. registration requirements.
About IntelGenx
IntelGenx is a leading drug delivery company focused on the development and manufacturing of pharmaceutical films. IntelGenx’s superior film technologies, including VersaFilm®, DisinteQ™, VetaFilm® and transdermal VevaDerm™, allow for next generation pharmaceutical products that address unmet medical needs. IntelGenx’s innovative product pipeline offers significant benefits to patients and physicians for many therapeutic conditions. IntelGenx's highly skilled team provides comprehensive pharmaceuticals services to pharmaceutical partners, including R&D, analytical method development, clinical monitoring, IP and regulatory services. IntelGenx's state-of-the-art manufacturing facility offers full service by providing lab-scale to pilot- and commercial-scale production. For more information, visit www.intelgenx.com.
Forward-Looking Information
This document may contain forward-looking information which involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. All statements, other than statements of historical fact, contained in this press release including, but not limited to, statements regarding (i) the disbursement of the First Tranche Loan and the Second Tranche Loan, (ii) the achievement of the pre-determined milestone to disburse the Second Tranche Loan, (iii) the receipt of the TSX approvals, (iv) the Conversion Feature (including the conversion price for the Second Tranche Loan), (v) the payment of interest into Shares, and (vi) generally, the “About IntelGenx” paragraph which essentially describe the Corporation’s outlook and objectives, constitute “forward-looking information” or “forward-looking statements” and are based on necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Corporation as the time of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. Because these forward-looking statements are subject to a number of risks and uncertainties, IntelGenx’ actual results, objectives and plans could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading “Risk Factors” in IntelGenx’ annual report on Form 10-K, filed with the United States Securities and Exchange Commission and available at www.sec.gov, and also filed with Canadian securities regulatory authorities at www.sedarplus.ca. IntelGenx assumes no obligation to update any such forward-looking statements. Moreover, all forward-looking information contained herein is subject to certain assumptions. There can be no assurance that such approvals will be obtained.
For more information, please contact:
Stephen Kilmer
Investor Relations
(647) 872-4849
stephen@kilmerlucas.com
Or
Andre Godin, CPA, CA
President and CFO
IntelGenx Technologies Corp.
(514) 331-7440 ext 203
andre@intelgenx.com
