Algernon Pharmaceuticals Announces Closing of Rights Offering

VANCOUVER, British Columbia, May 05, 2023 (GLOBE NEWSWIRE) -- Algernon Pharmaceuticals Inc. (CSE: AGN) (FRANKFURT: AGW0) (OTCQB: AGNPF) (the “Company” or “Algernon”) a Canadian clinical stage pharmaceutical development company announces that it has closed its previously announced rights offering which expired on April 27, 2023 (the “Rights Offering”). At closing, the Company issued 4,753,369 units (the “Units”) at the subscription price of $0.25 per Unit for total gross proceeds of approximately $1,188,342. Each Unit consists of one Class A common share (a “Share”) and one Share purchase warrant (a “Warrant”), with each Warrant being exercisable for one Share at the exercise price of $0.52 until November 5, 2024, 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 ten consecutive trading days on the Canadian Securities Exchange exceeds $1.04.

The Company received subscriptions for 2,871,597 Units pursuant to the basic subscription privilege and 1,881,772 Units pursuant to the additional subscription privilege.

The total number of issued and outstanding Shares of the Company upon completion of the Rights Offering will be 14,550,757, before the exercise of the Warrants.

To the knowledge of the Company, after reasonable inquiry, directors, officers and insiders of the Company purchased 1,418,982 Units under their basic subscription privilege and 600,000 Units under the additional subscription privilege for an aggregate of 2,018,982 Units purchased under the Rights Offering, representing total subscription proceeds of $504,746. To the knowledge of the Company, after reasonable inquiry, no person became a new shareholder holding more than 10% of the Shares upon closing of the Rights Offering.

The participation in the Rights Offering by certain “related parties” of the Company, namely, directors, officers and 10% shareholders of Company, constitutes a “related party transaction”, as such terms are defined by Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company is relying on an exemption from the formal valuation and minority approval requirements of MI 61-101 as the fair market value of the participation in the Rights Offering does not exceed 25% of the market capitalization of the Company.