CHITOGENX ANNOUNCES SIGNING OF BINDING LETTER OF INTENT WITH OLIGO MEDIC INC., ISSUANCE OF PARTIAL REVOCATION ORDER, AND FINANCING
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MONTREAL, Sept. 9, 2025 /CNW/ - ChitogenX Inc., (CSE: CHGX) (OTCQB: CHNXF) ("ChitogenX" or the "Company"), today confirms that it has entered into a binding letter of intent (the "LOI") dated September 8, 2025 with Oligo Medic Inc. ("Oligo Medic"), a private Canadian biotechnology company, to pursue a potential reverse takeover ("RTO") transaction (the "Proposed Transaction").
The Proposed Transaction is part of a first step of a broader strategic initiative by ChitogenX and Oligo Medic to create a public platform in the field of regenerative medicine, expand global commercial capabilities, and enhance shareholder value. While negotiations are ongoing and no definitive agreement has yet been signed, the parties have agreed to exclusivity during the due diligence period and have commenced joint planning efforts.
"We believe the contemplated transaction has the potential to significantly transform our business platform and accelerate our commercial and clinical ambitions leveraging the clinical expertise and expanding global commercial footprint of Oligo Medic," said Pierre Laurin, CEO of ChitogenX.
The Proposed Transaction would include:
- The execution of a share exchange agreement between ChitogenX and Oligo Medic based on agreed valuations (the "Definitive Agreement");
- A concurrent private placement financing (the "Concurrent Financing") anticipated to support the Proposed Transaction and growth strategy, with terms subject to final negotiation; and
- A post-closing governance structure led by Oligo Medic's management team.
Further details will be disclosed upon execution of the Definitive Agreement. There can be no assurance that a Definitive Agreement will be entered into or that the Proposed Transaction will be completed as proposed. The Proposed Transaction is to be arm's length and will be subject to the necessary regulatory approvals, including acceptance from the Canadian Securities Exchange (the "CSE"). If completed, it is anticipated that the Proposed Transaction will constitute a "fundamental change" pursuant to the policies of the CSE and is expected to require the approval of the Company's shareholders at a meeting of shareholders.
Certain specific terms of the LOI remain subject to, among other conditions, the following: (i) both parties having obtained board approval; (ii) the execution of a Definitive Agreement; (iii) completion of due diligence; (iv) completion of the Concurrent Financing; (v) ChitogenX having obtained required shareholder approval; (vi) CSE and OTC Markets approvals, as applicable; (vii) delivery of audited financials from Oligo Medic for the previous two financial year-ends; and (viii) formal meeting with a strategic partner to confirm its intention to continue a partnership.
Partial Revocation Order
The execution of the LOI was made possible following the grant by the Autorité des marchés financiers (the "AMF") of a partial revocation dated September 5, 2025 of the failure-to-file cease trade order (the "FFCTO") issued against the Company on June 6, 2025. The FFCTO was imposed due to delays in filing certain continuous disclosure documents. This partial revocation (the "Partial Revocation Order") allows the Company: i) to sign the LOI to effect the Proposed Transaction; and ii) to complete a private placement (the "Private Placement") to obtain the necessary funds to prepare and file all outstanding continuous disclosure documents to subsequently apply for and obtain a full revocation order of the FFCTO.
Private Placement
In connection with the Partial Revocation Order, the Company announces its intention to raise up to $300,000 through the issuance of secured debentures (the "Debentures"). The purpose of the Private Placement is to obtain the necessary funds to prepare and file all outstanding continuous disclosure documents (the "Unfiled Documents") to subsequently apply for and obtain a full revocation order.
The anticipated allocation of net proceeds from the Private Placement is summarized in the following table.
Use of Proceeds of the Private Placement |
Approx. Cash |
|
1. |
Preparation, audit, review and filing of the Unfiled Documents |
$100,000 |
2. |
Private Placement completion costs (legal, staff): |
$50,000 |
3. |
Fees directly related to the Partial Revocation Order, the full revocation order and |
$35,000 |
4. |
Pressing accounts payable (including Exchange and Transfer Agent fees) |
$85,000 |
5. |
General and administrative expenses |
$30,000 |
TOTAL: |
$300,000 |
Closing of the Private Placement will be subject to acceptance by the CSE and other customary closing conditions. In addition to any applicable resale restrictions under Canadian securities laws, the securities issued pursuant to the Private Placement will be subject to a statutory hold period of four months and one day from the date of issuance, in accordance with applicable securities legislation.
The participation of certain directors or officers in the Private Placement would constitute a related party transaction as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company intends to rely on the exemption from the formal valuation requirement provided under Section 5.5(b) of MI 61-101 and the exemption from the minority shareholder approval requirement provided under Section 5.7(1)(e) of MI 61-101.
Prior to the closing of the Private Placement, the Company will provide written notice to each subscriber that the common shares of the Company will remain subject to the FFCTO until such time as a full revocation is granted and that the granting of any partial revocation does not guarantee the issuance of a full revocation order in the future.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any Debentures in the United States. The securities to be sold in the Private Placement have not been and will not be registered under the U.S. Securities Act or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
About Oligo Medic Inc.
Oligo Medic is a global commercial regenerative medicine company focused on orthopedic soft tissue repair and preservation.
About ChitogenX Inc.
ChitogenX Inc. is a clinical stage regenerative medicine company dedicated to the development of novel therapeutic tissue repair technologies to improve tissue healing. The Company is committed to the clinical development of its proprietary Chitosan Based Biopolymer technology platform, a proprietary muco-adhesive scaffold, specifically designed to be combined with therapeutics to improve tissue repair.
Other formulations are being developed to leverage the technology's performance characteristics such as tissue adhesion, pliability, and ability to deliver biologics or therapeutics to various tissues damaged by trauma or disease. Further information about ChitogenX is available on the Company's website at www.chitogenx.com and on SEDAR+ at www.sedarplus.ca.
Forward-Looking Statements
This news release may contain certain forward-looking statements regarding the Company's expectations for future events, including statements regarding completion of the LOI, the Company obtaining CSE approval, the Company obtaining shareholder approval of the Proposed Transaction, the completion of the Concurrent Financing, the completion of the Private Placement, the Company obtaining a full revocation order, and the date thereof. Such expectations are based on certain assumptions that are founded on currently available information. If these assumptions prove incorrect, actual results may differ materially from those contemplated by the forward-looking statements contained in this press release. Factors that could cause actual results to differ include, amongst others, uncertainty as to the final result and other risks. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by security laws.
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATIONS SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
SOURCE ChitogenX Inc.
For further information: Contacts: Company: Pierre Laurin, Interim President and Chief Executive Officer, 514-475-2588, [email protected]; or Luc Mainville, Senior Vice-president and Chief Financial Officer, 438-826-1426, [email protected]
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