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Incannex Healthcare Inc. (NASDAQ:IXHL), a pharmaceutical company currently trading at $0.49 and near its 52-week low of $0.47, announced today that it has entered into a Sales Agreement with A.G.P./Alliance Global Partners (NYSE:GLP). The agreement allows for the potential sale of its common stock from time to time, in what is known as an "at-the-market" equity offering. According to InvestingPro analysis, the company appears undervalued based on its Fair Value calculation, though investors should note the stock's high volatility with a beta of 2.13.
The company, however, is not obligated to sell any shares and retains the right to suspend or terminate the agreement. Sales could occur on The Nasdaq Global Market or other U.S. trading markets, with A.G.P. making sales based on Incannex's instructions. This financing move comes as InvestingPro data shows the company is quickly burning through cash, with negative free cash flow of $15.87 million in the last twelve months.
Following a private placement on March 7, 2025, Incannex has limited the minimum sale price of its common stock to $1.08 per share for 30 days post-Release Date. The Release Date is when securities from the private placement become unrestricted or when stockholder approval is obtained for two key proposals: the issuance of shares underlying Series A Warrants and an increase in authorized common stock from 100 million to 800 million shares.
Currently, Incannex can't issue more than seven shares prior to obtaining stockholder approval due to a lack of available authorized stock, meaning the Sales Agreement may not be immediately utilized.
A.G.P. will receive a 3% commission on sales, and Incannex has agreed to indemnify them and reimburse certain expenses. The offering is limited to $16,768,099 worth of shares and will end upon the earliest of the sales limit being reached, the expiration of the registration statement, or the termination of the Sales Agreement.
This information is based on a press release statement and the offering of shares is subject to a shelf registration statement on Form S-3 (File No. 333-283028) and a prospectus supplement filed with the SEC. The Sales Agreement itself is detailed in Exhibit 10.1 of the current 8-K form filed with the SEC. For deeper insights into IXHL's financial health and 17 additional key investment tips, consider subscribing to InvestingPro, which provides comprehensive analysis of the company's performance and prospects.
In other recent news, Incannex Healthcare has been notified by the Nasdaq Stock Market that it no longer meets the minimum Market Value of Listed Securities (MVLS) requirement. The company received this notice on January 3, 2025, indicating that its MVLS had dropped below the $50.0 million threshold mandated by Nasdaq Listing Rule 5450(b)(2)(A). This notification is not an immediate delisting action but serves as a warning of non-compliance. Incannex Healthcare has been given 180 calendar days, until July 2, 2025, to regain compliance by ensuring its MVLS exceeds $50.0 million for at least ten consecutive business days. The company is considering transferring its listing to the Nasdaq Capital Market, which may offer more time to meet the necessary standards. Incannex Healthcare has expressed its intention to monitor its MVLS closely and evaluate all available options to regain compliance. The company has made forward-looking statements about its ability to meet Nasdaq's compliance standards, though there is no guarantee of success. Management has not disclosed specific strategies to address the MVLS shortfall, and investors are reminded that forward-looking statements involve risks and uncertainties.
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