Incannex Healthcare Ltd (ASX:IHL, NASDAQ:IXHL) has begun the process of shifting all outstanding shares to the Nasdaq after making the decision to redomicile to the United States via a scheme of arrangement in a move the company says will provide greater exposure to US markets, which IHL believes will bring its market valuation in line with its value proposition.
“The board is excited to enact this landmark unanimous decision in conjunction with our key shareholders and other stakeholders,” Incannex Healthcare CEO and managing director Joel Latham said.
“It is a decision made with the intention to maximise shareholder value. Incannex has matured on the ASX to the point that it has a large and diversified drug portfolio with two exciting drug candidates imminently entering pivotal clinical trials.
“By committing our presence to the United States, we believe that our company’s visibility to international investors will increase markedly, partly due to our value proposition compared to similar emerging biotech companies with a presence in North America.”
IHL has formed a new Delaware corporation, Incannex Healthcare Inc, to become the ultimate parent company of the group, wherein all outstanding ordinary IHL shares will be listed on the Nasdaq.
Incannex will give shareholders and option holders the opportunity to vote on redomiciling to the US in October 2023, anticipating a swift implementation of the Nasdaq listing should approval be given.
Increasing US investor demand
“After 18 months of engaging with the US investor community, Incannex has witnessed investor demand increase, which was demonstrated on July 6 when IXHL ADRs traded the equivalent of 160 million IHL shares in one day of trade,” Latham continued.
“Incannex has less than 1.5% of its securities trading as American Depositary Receipts (ADRs) in the US and it has presented a limitation for investors to aggregate investment positions in our company."
Latham emphasised that very few Australian brokers were capable of trading ADRs, while most online trading platforms facilitated direct market access to trading US shares, meaning ASX traders wouldn’t be left out.
IHL said it would assist shareholders to seamlessly transfer their holdings to US shares should the move be approved.
“Having all Incannex shares in the company trading on Nasdaq will facilitate a cohesive single market with the appropriate level of liquidity expected by the US investment banks, some of which have commenced the process to initiate independent research coverage on Incannex,” Latham said.
“We look forward to providing ongoing guidance to our shareholders over the coming months prior to the anticipated shareholder and option holder vote in October.
“We are arranging webinars and other forums for stakeholders to have direct access to management to openly discuss this transition as we are committed to making the move to Nasdaq as seamless as possible.”
The IHL board also anticipates the following benefits from the move:
- Improved access to large pools of lower-cost equity capital over the long term.
- Increased alignment with prominent pharmaceutical companies.
- A simplified corporate structure for any future potential merger or acquisition transactions.
- Enhanced access to FDA resources.