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Incannex Healthcare Inc. (NASDAQ:IXHL), a pharmaceutical company, announced on Thursday that it has entered into new agreements with the holders of its Series A warrants. These warrants were initially issued in a private placement on March 10, 2025. The revised terms, detailed in the letter agreements dated May 15, 2025, allow the company to allocate a portion of its net proceeds from common stock sales to the warrant holders.
The net proceeds, defined as gross proceeds minus a 3.0% placement agent fee and related legal expenses, will be distributed to the warrant holders up to $12,499,828. This arrangement will continue until the earlier of the company raising the specified amount in net proceeds or obtaining stockholder approval for the exercise of the Series A Warrants.
In exchange for the Warrant Cancellation Payment, the number of shares that each warrant holder is entitled to will be decreased. The reduction will be based on the amount of the Warrant Cancellation Payment divided by $2.14, rounded down to the nearest whole share. For instance, if Incannex pays out an aggregate of $12.5 million in net proceeds, the total number of shares underlying all Series A Warrants would decrease by approximately 5.8 million shares.
Additionally, the warrant holders have agreed to waive certain reserve requirements, allowing the company to reserve shares for issuance under a Sales Agreement prior to stockholder approval. They have also waived provisions that prevented sales under the Sales Agreement at prices below $1.08 per share until the approval is received.
Incannex emphasized that there is no obligation to issue or sell any common stock under the Sales Agreement and that the actual amount of net proceeds, if any, cannot be assured. The company’s special meeting to consider stockholder approval for the warrant exercise is scheduled for May 27, 2025, but there is no guarantee that the approval will be obtained.
This news is based on a press release statement and aims to provide investors with the latest developments regarding Incannex’s financial arrangements and strategic decisions.
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