Intellipharmaceutics receives purchase agreement commitments for $12,000,000

Intellipharmaceutics International Inc. (Nasdaq:IPCI) (TSX:I) today announced that it has received purchase agreement commitments from institutional investors to provide the Company with approximately US$12,000,000 in gross proceeds through the sale of its common stock and warrants.

Among the investors in the transaction are 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," commented Isa Odidi, CEO of Intellipharmaceutics. "The funds from this offering provide us the necessary resources to continue to execute our business plan and build shareholder value."

Pursuant to the terms of the purchase agreement, the investors have agreed to purchase a total of approximately 4.8 million units at a price of US$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 US$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 US$2.50 per whole share. Each warrant represents the right to purchase 50% of the aggregate amount of shares of common stock being sold by the Company. Following the offering, the Company will have approximately 15.7 million shares of common stock outstanding.

Ladenburg Thalmann & Co. Inc., a wholly-owned subsidiary of Ladenburg Thalmann Financial Services Inc. (NYSE Amex:LTS), acted as the lead placement agent, with Loewen, Ondaatje, McCutcheon Ltd. acting as co-agent, in connection with this transaction. 

The offering is expected to close by the end of January 2011, subject to regulatory approvals and other customary closing conditions.  The Company estimates net proceeds from the financing to be approximately US$10.5 million after deducting placement agent fees and the estimated costs associated with the offering, without giving effect to the future exercise of the warrants. The Company intends to use the net proceeds 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 505(b)(2) NDA opportunities, to establish additional partnerships, and for working capital, research, product development and general corporate purposes.