Algernon Announces Closing of $6.8 Million Private Placement Offering, Including Exercise of the Over-Allotment Option

Algernon Announces Closing of $6

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
VANCOUVER, British Columbia, May 13, 2020 (GLOBE NEWSWIRE) — Algernon Pharmaceuticals Inc. (“Algernon” or the “Company”) (CSE: AGN) (FRANKFURT: AGW) (OTCQB: AGNPF), a clinical stage pharmaceutical development company, is pleased to announce that it has closed its previously announced private placement offering of special warrants of the Company (the “Special Warrants”), which included the exercise of the over-allotment option, pursuant to which the Company issued 19,605,285 Special Warrants at a price of $0.35 per Special Warrant, for aggregate gross proceeds of approximately $6,861,849 (the “Offering”). The Offering was led by Mackie Research Capital Corporation (the “Agent”), as sole agent and bookrunner.Each Special Warrant is exercisable, for no additional consideration at the option of the holder, into one unit of the Company (each, a “Unit“), with each Unit consisting of one Class A common share of the Company (a “Common Share”) and one Common Share purchase warrant (a “Warrant”). Each Warrant will entitle the holder thereof to acquire one Common Share (each, a “Warrant Share”) at an exercise price of $0.55 per Warrant Share for a period of 24 months after the Closing Date (the “Expiry Date”), subject to acceleration of the Expiry Date as described below.All unexercised Special Warrants will be automatically exercised on the date (the “Qualification Date”) that is the earlier of: (i) four months and a day following May 13, 2020 (the “Closing Date”); and (ii) three business days following the date on which receipt is issued by the British Columbia Securities Commission for a final short form prospectus (the “Qualifying Prospectus”) qualifying the distribution of the Units underlying the Special Warrants and the Units underlying the compensation options granted to the Agent (the “Compensation Option Units”).The Company will use its commercially reasonable efforts to prepare and file, with each of the securities regulatory authorities in each of the provinces of Canada (other than Quebec) in which the Special Warrants are sold, and obtain a receipt for the Qualifying Prospectus, in compliance with applicable securities law, on or before the date that is 35 days from the Closing Date (the “Qualification Deadline”). In the event the Qualification Date has not occurred prior to 5:00 p.m. (Vancouver time) on the Qualification Deadline, each unexercised Special Warrant will thereafter entitle holders thereof to receive upon the exercise or deemed exercise thereof, for no additional consideration, 1.10 Units in lieu of one (1) Unit and thereafter at the end of each additional 30 day period prior to the Qualification Date, each Special Warrant will be exercisable for an additional 0.02 of a Unit.If, at any time after the Qualification Date and prior to the Expiry Date, the volume weighted average trading price of the Common Shares on the Canadian Securities Exchange (the “Exchange”), or other principal exchange on which the Common Shares are listed, is greater than $1.00 for 10 consecutive trading days, the Company may, within 15 days of the occurrence of such event, deliver a notice to the holders of Warrants accelerating the Expiry Date to the date that is 30 days following the date of such notice (the “Accelerated Exercise Period”). Concurrent with the giving of such notice, the Company will also issue a press release disclosing the Accelerated Exercise Period. Any unexercised Warrants will automatically expire at the end of the Accelerated Exercise Period.The net proceeds raised under the Offering will be used for ongoing research, clinical trials, working capital and general corporate purposes.The Company will use commercially reasonable efforts to obtain the necessary approvals to list the Common Shares, Warrant Shares, and Common Shares issuable on the exercise of the Compensation Option Units on the Exchange on the Closing Date and the date of the issuance of the underlying Warrant Shares, respectively.In connection with the Offering, the Company has agreed with the Agent not to deliver any notice to the holders of its outstanding warrants exercisable at $0.12 per share which expire in August 2022 accelerating the expiry date of such warrants, until after the day that is six months following the closing date of the Offering.The Company has also agreed that, until after the Qualification Date, it will not deliver any notice to the holders of any of its other outstanding common share purchase warrants (including the outstanding warrants issued pursuant to the Company’s previously completed public offering dated November 1, 2019 exercisable at $0.12 per common share) that the Company is accelerating the expiry date of such warrants.Appointment of New Board Member
The Company is also pleased to announce that Christopher J. Moreau, the Company’s Chief Executive Officer, has been appointed to the board of the directors of the Company effective today.
This press release is not an offer to sell or the solicitation of an offer to buy the securities in the United States or in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification or registration under the securities laws of such jurisdiction. The securities being offered 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 or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from U.S. registration requirements and applicable U.S. state securities laws.About Algernon Pharmaceuticals Inc.
Algernon is a drug re-purposing company that investigates safe, already approved drugs for new disease applications, moving them efficiently and safely into new human trials, developing new formulations and seeking new regulatory approvals in global markets. Algernon specifically investigates compounds that have never been approved in the U.S. or Europe to avoid off label prescription writing.
Contact Information:Christopher J. Moreau
CEO
Algernon Pharmaceuticals Inc.
604.398.4175 ext 701
info@algernonpharmaceuticals.com
investors@algernonpharmaceuticals.com
www.algernonpharmaceuticals.com

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