Dr. Isa Odidi reports

INTELLIPHARMACEUTICS ANNOUNCES SECOND QUARTER 2023 RESULTS

IntelliPharmaCeutics International Inc. has released the results of operations for the three and six months ended May 31, 2023. All dollar amounts referenced herein are in United States dollars, unless otherwise noted:

• On June 5, 2023, the company filed its annual audited financial statements for the year ended Nov. 30, 2022, as well as the interim (Q1 2023) financial statements, MD&A (management's discussion and analysis), and the required certifications. The Ontario Securities Commission (OSC) was satisfied that the company had filed the continuous disclosure documents required within the time specified in the failure-to-file cease trade order (CTO), then, in effect, revoked the CTO June 7, 2023.
• On March 7, 2023, the company had announced that the OSC had issued a general failure-to-file cease trade order pursuant to National Policy 11-103 -- Failure to File Cease Trade Orders in Multiple Jurisdictions dated March 6, 2023, in respect of the securities of the company as a result of the company's inability to file its annual audited financial statements and other required filings for the fiscal year ended Nov. 30, 2022, by the filing deadline of Feb. 28, 2023.

The CTO prohibited the trading, whether direct or indirect, by any person, of any securities of the company in each jurisdiction in Canada in which the company is a reporting issuer, for as long as the CTO remains in effect, however, the CTO provides an exception for beneficial security holders of the company who are not (and who were not as of March 6, 2023) insiders or control persons of the company and who sell securities of the company acquired before March 6, 2023, if both of the following criteria are met: (i) the sale is made through a foreign organized regulated market, as defined in Section 1.1 of the Universal Market Integrity Rules of the Investment Industry Regulatory Organization of Canada; and (ii) the sale is made through an investment dealer registered in a jurisdiction of Canada in accordance with applicable securities legislation. If the default is remedied within 90 days of the date of the CTO (March 6, 2023), including any annual or interim financial statements, MD&A and certifications that subsequently became due, the filing of the documents constitutes the application to revoke the CTO and no application fee would be required:

• On Feb. 3, 2023, the company had announced that its annual audited financial statements for the fiscal year ended Nov. 30, 2022, related management's discussion and analysis, and accompanying chief executive officer and chief financial officer certificates and annual information form for the fiscal year ended Nov. 30, 2022, due Feb. 28, 2023, will not be filed by the filing deadline.
• In August, 2022, the company announced that it has entered into a licence and supply agreement with Taro Pharmaceuticals Inc., by which the company has granted Taro an exclusive licence to market, sell and distribute in Canada, desvenlafaxine extended-release tablets in the 50-milligram (mg) and 100 mg strengths, approved for sale in the Canadian market by the Pharmaceutical Drugs Directory (PDD) of Health Canada.
• In February, 2022, the company received marketing approval for the Canadian market from Health Canada (notice of compliance) for generic Pristiq (desvenlafaxine succinate extended-release tablets) in the 50 mg and 100 mg strengths.

Results of operations

The company recorded a net loss for the three months ended May 31, 2023, of $54,121, or 0.2 cent per common share, compared with a net loss of $840,654, or three cents per common share, for the three months ended May 31, 2022. For the three months ended May 31, 2023, the net loss is attributed to expenditures related to continuing selling, general and administrative expenses related to professional and legal fees, as well as continuing R&D (research and development) expenses, offset by an increase in licensing revenue. In the three months ended May 31, 2022, the net loss was attributed to the gain on sale of equipment offset by increased administrative expense related to professional and legal fees, as well as R&D expenses.

The company recorded revenues of $480,203 for the three months ended May 31, 2023, versus nil for the three months ended May 31, 2022. Such revenues consisted primarily of licensing revenues from commercial sales of the company's generic Focalin XR under the Par agreement during the three months ended May 31, 2023.

Expenditures for R&D were $377,507 for the year ended May 31, 2023, in comparison with $956,851 the three months ended May 31, 2022. The decrease in the R&D expenses are attributed to the decrease in R&D staff in the first quarter of 2023, as well, in the second quarter of 2022 allocation of losses on royalty payments were included in R&D cost.

Selling, general and administrative expenses were $93,504 for the three months ended May 31, 2023, in comparison with $243,501 for the three months ended May 31, 2022, resulting in a decrease of $122,023. The decrease is due to a decrease in administrative costs, wages and occupancy cost.

As of May 31, 2023, the company's cash balance was $159,274. The company currently expects to meet its short-term cash requirements from potential revenues for approved generic products or other collaborations, other available financing, and by cost savings resulting from reduced R&D activities and staffing levels, as well as quarterly profit share from Par. Effective May 5, 2021, the company's exclusive licence agreements with Tris Pharma Inc. for generic Seroquel XR, generic Pristiq and generic Effexor XR were mutually terminated. Products were never supplied nor distributed under the licences. Termination of the exclusive agreements may provide opportunity for the company to explore options of supplying the products to multiple sources on non-exclusive basis. However, there can be no assurance that the products previously licensed to Tris Pharma will be successfully commercialized and produce significant revenues for us. The company will need to obtain additional financing to, among other things, further product commercialization activities and development of its product candidates. The company recently entered into a licence and supply agreement with Taro Pharmaceuticals, by which the company has granted Taro an exclusive licence to market, sell and distribute a product in Canada. There can be no assurance that the product will be successfully commercialized and produce significant revenues for the company. Potential sources of capital may include, if conditions permit, equity and/or debt financing, payments from licensing and/or development agreements, and/or new strategic partnership agreements. The company has financed its business activities principally through the issuance of securities, loans from related parties and funds from development agreements. There is no certainty that such financing will be available going forward or, if it is, whether it will be sufficient to meet the company's needs. IntelliPharmaCeutics' future operations are highly dependent upon its ability to source additional financing to support advancing its product candidate pipeline through continued R&D activities and to expand its operations. The company's ultimate success will depend on whether its product candidates are approved by the United States Food and Drug Administration (FDA), Health Canada or the regulatory authorities of other countries in which the company's products are proposed to be sold, and whether the company is able to successfully market its approved products. IntelliPharmaCeutics cannot be certain that it will receive such regulatory approval for any of its current or future product candidates, that it will reach the level of revenues necessary to achieve and sustain profitability, or that it will secure other capital sources on terms, or in amounts sufficient, to meet the company's needs, or at all.

There can be no assurance that IntelliPharmaCeutics will not be required to conduct further studies for its Aximris XR product candidate, that the FDA will approve any of the company's requested abuse-deterrence label claims, that the FDA will meet its deadline for review, or that the FDA will ultimately approve the NDA (new drug application) for the sale of the product candidate in the U.S. market, or that the product will ever be successfully commercialized and produce significant revenue for the company. If the Aximris XR NDA is approved, there can be no assurance that the company and Purdue will resolve any potential asserted patent infringement claims relating to the NDA within a 30-day period following the final approval, as provided in the stipulated dismissal agreement of the Purdue litigations. There can be no assurance that the Purdue parties will not pursue an infringement claim against the company again. There can be no assurance that any of the company's products or product candidates can be successfully commercialized and produce significant revenues for the company.

About IntelliPharmaCeutics International Inc.

is a pharmaceutical company specializing in the research, development and manufacture of novel and generic controlled-release and targeted-release oral solid dosage drugs. The company's patented Hypermatrix technology is a multidimensional controlled-release drug delivery platform that can be applied to a wide range of existing and new pharmaceuticals. IntelliPharmaCeutics has developed several drug delivery systems based on this technology platform, with a pipeline of products (some of which have received FDA approval) in various stages of development. The company has ANDA (abbreviated new drug application) and NDA 505(b)(2) drug product candidates in its development pipeline. These include the company's Oxycodone ER based on its proprietary nPODDDS novel point-of-divergence drug delivery system (for which an NDA has been filed with the FDA) and Regabatin XR (pregabalin extended-release capsules).

We seek Safe Harbor.