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Intellipharmaceuticals International (IPCI) Announces $12M Financing; Lays Out Allocation Plans

|Includes: IntelliPharmaCeutics International Inc (IPCI)

Intellipharmaceuticals International Inc. today announced it has received purchase agreement commitments from institutional investors to provide the company with approximately $12 million in gross proceeds through the sale of its common stock and warrants. The offering is expected to close by the end of January 2011, subject to regulatory approvals and other customary closing conditions.

The company said the stature of the participating investors reflects the value of the company’s operations, and that it needs the funds to fulfill its business plans. Investors include H&Q Healthcare Investors (NYSE:HQH) and H&Q Life Sciences Investors (NYSE:HQL).

“The quality of the healthcare investors who have participated in this offering is testament to the work we are doing and adds considerable credibility in the financial markets to both our technologies and business plan,” Isa Odidi, CEO of Intellipharmaceutics stated in the press release. “The funds from this offering provide us the necessary resources to continue to execute our business plan and build shareholder value.”

Per the agreement, the investors will purchase a total of approximately 4.8 million units at $2.50 per unit, each unit consisting of one share of common stock, a five-year warrant to purchase one-half of a share of common stock at an exercise price of $2.50 per whole share, and a two-year warrant to purchase one-half of a share of common stock at an exercise price of $2.50 per whole share.

Each warrant represents the right to purchase 50 percent of the aggregate amount of shares of common stock being sold. After the offering, Intellipharmaceutics will have approximately 15.7 million shares of common stock outstanding.

The company said it plans on using the approximately $10.5 million to file additional Abbreviated New Drug Applications (ANDAs) with the Food and Drug Administration; to advance clinical trials for its abuse resistant Rexista technology and/or other NDA opportunities; to establish additional partnerships; and for working capital, research, product development and general corporate purposes.

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