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   <TITLE>IntelGenx Technologies Corp.: Form S-1 - Prepared by TNT Filings Inc.</TITLE>

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As filed with the Securities and Exchange Commission on August 12, 2009
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<p align="right">&nbsp;Registration No. 333-
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<font size="5">&nbsp;<B>UNITED STATES</B> </font>
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<B><font size="5">SECURITIES AND EXCHANGE COMMISSION</font></B><font size="5">
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&nbsp;WASHINGTON, D.C. 20549
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<font size="5">&nbsp;<B>FORM S-1</B> </font>
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<B>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</B>
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&nbsp;
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<font size="6">&nbsp;<B>IntelGenx Technologies Corp.</B> </font>
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(Exact name of registrant as specified in its charter)
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&nbsp;
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&nbsp;
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<b>&nbsp;Delaware </b>
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<font style="text-decoration: overline">(State or other jurisdiction of incorporation or organization)
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<B>2834</B>
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<B>870299034</B>
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<font style="text-decoration: overline">(Primary Standard Industrial </font>
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<font style="text-decoration: overline">(I.R.S. Employer Identification Number)
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Classification Code Number)
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&nbsp;
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<b>6425 Abrams, Ville St- Laurent, Quebec, H4S 1X9 </b>
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<b>&nbsp;(514) 331-7440 </b>
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<font style="text-decoration: overline">(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
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&nbsp;
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&nbsp;
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<b>&nbsp;Horst Zerbe </b>
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<b>&nbsp;Chief Executive Officer </b>
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<b>IntelGenx Technologies Corp, 6425 Abrams, Quebec, H4S 1X9 </b>
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<b>&nbsp;(514) 331-7440 </b>
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<font style="text-decoration: overline">(Name, address, including zip code, and telephone number, including area code, of agent for service)
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&nbsp;
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&nbsp;Copies to:
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<b>&nbsp;Richard Raymer </b>
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<b>&nbsp;Hodgson Russ LLP </b>
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<b>150 King Street West, Suite 2309, Toronto, Ontario M5H 1J9 </b>
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<b>&nbsp;Canada </b>
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<b>&nbsp;Tel: (416) 595-5100 </b>
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<b>
<U>As soon as practicable after the effective date of this Registration Statement</U>
</b>
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(Approximate date of commencement of proposed sale to the public)
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<P align="justify">
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:
<font face="Wingdings">x</font></P>
<P align="justify">
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration
statement for the same offering: <font face="Wingdings">o</font></P>
<P align="justify">
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. <font face="Wingdings">o</font></P>
<P align="justify">
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. <font face="Wingdings">o</font></P>
<P align="justify">
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company: </P>
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Large accelerated filer <font face="Wingdings">o</font></TD>
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Accelerated filer <font face="Wingdings">o</font></TD>
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Non-accelerated filer <font face="Wingdings">o</font></TD>
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Smaller reporting company <font face="Wingdings">x</font></TD>
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1 </P>

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  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="10%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Proposed</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%" nowrap>&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="10%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>maximum</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%" nowrap><B>Proposed</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="10%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>offering</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%" nowrap><B>maximum</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Amount to be</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>price per</B> </TD>
    <TD align=center width="2%" style="border-bottom-style: none; border-bottom-width: medium" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%" nowrap><B>aggregate offering</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Amount of</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>Title of each
      class of securities to be registered</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>registered</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" align=center
      width="10%"><STRONG>share (4)</STRONG> </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=center width="2%"
    ></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%" nowrap><B>price</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>registration fee</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Common stock, par value $.00001 per share
      (1) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff nowrap>12,292,640 shares </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff style="border-right-style: none; border-right-width: medium">&nbsp;0.70 </TD>
    <TD align=left width="2%"  bgColor=#e6efff style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff style="border-left-style: none; border-left-width: medium">$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;8,604,848 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;480.15 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Common stock underlying warrants, par value $.00001 per
      share (2) </TD>
    <TD align=left width="1%" ><BR></TD>
    <TD align=right width="10%" nowrap>12,711,680 shares </TD>
    <TD align=left width="2%" ><BR></TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%" style="border-right-style: none; border-right-width: medium">0.70 </TD>
    <TD align=left width="2%" style="border-style: none; border-width: medium" ><BR></TD>
    <TD align=left width="1%" style="border-left-style: none; border-left-width: medium" >$</TD>
    <TD align=right width="10%">8,898,176 </TD>
    <TD align=left width="2%" ><BR></TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">496.52</TD>
    <TD align=left width="2%" ><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Common stock purchase warrants (3) </TD>
    <TD align=left width="1%"  bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1" nowrap>
    12,711,680 warrants </TD>
    <TD align=left width="2%"  bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff style="border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1">-- </TD>
    <TD align=left width="2%"  bgColor=#e6efff style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">-- </TD>
    <TD align=left width="2%"  bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">-- </TD>
    <TD align=left width="2%"  bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD></TR>
  <TR>
    <TD><BR></TD>
    <TD width="1%" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1" nowrap>25,004,320 shares </TD>
    <TD width="2%" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
    <TD width="1%" style="border-top-style: solid; border-top-width: 1">$</TD>
    <TD align=right width="10%" style="border-right-style: none; border-right-width: medium; border-top-style: solid; border-top-width: 1">0.70 </TD>
    <TD width="2%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD width="1%" style="border-left-style: none; border-left-width: medium; border-top-style: solid; border-top-width: 1">$</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1">17,503,024 </TD>
    <TD width="2%" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
    <TD width="1%" style="border-top-style: solid; border-top-width: 1">$</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1">976.67 </TD>
    <TD width="2%" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Total </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="10%" nowrap>12,711,680 warrants </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: 3px double #000000; ; border-right-style:none; border-right-width:medium" align=right
      width="10%">&nbsp;-- </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 3px double #000000; ; border-left-style:none; border-left-width:medium" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="10%">&nbsp;-- </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="10%">&nbsp;-- </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD></TR></TABLE>
<P align=justify>(1) Represents shares of common stock, par value $.00001. </P>
<P align=justify>(2) Represents shares of common stock underlying warrants to
purchase shares of common stock, par value $.00001. </P>
<P align=justify>(3) Represents common stock purchase warrants exercisable at
$0.80 per share, subject to adjustment, expiring July 13, 2012, and 350,000
common stock purchase warrants exercisable at $0.80 per share, subject to
adjustment, expiring July 22, 2012. </P>
<P align=justify>(4) Estimated solely for purposes of calculating the
registration fee in accordance with Rule 457(c) and Rule 457(g) under the
Securities Act of 1933, as amended, based upon the average of the high and low
prices of a share of common stock of IntelGenx Technologies Corp. as reported on
the OTC Bulletin Board on August 7, 2009. </P>
<P align=justify>THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE. </P>
<P align=center>2 </P>
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<P align=justify><B>The information contained in this prospectus is not complete
and may be changed. The selling security holders may not sell these securities
until the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.</B></P>
<P align=center><B>SUBJECT TO COMPLETION, dated August ___, 2009</B> </P>
<p align="center"><b>Prospectus</b></p>
<P align=center><B>IntelGenx Technologies Corp. </B></P>
<P align=center><B>25,074,320</B> <B>Shares of Common Stock and 11,908,600
Warrants</B> <B>Offered by Selling Security Holders</B> </P>
<P align=justify>This prospectus relates to the sale by the selling security
holders listed herein of up to 25,074,320 shares of common stock, par value
$.00001 per share, and 11,908,600 common stock purchase warrants of IntelGenx
Technologies Corp. (&#147;IntelGenx&#148; or the &#147;Company&#148;). The securities being
registered were purchased by the selling security holders in a private placement
completed on July 13, 2009 (the &#147;July 2009 Private Placement&#148;). For a complete
description of this private placement please see the section entitled
&#147;Description of the July 2009 Private Placement&#148;, below).</P>
<P align=justify>The securities being registered include shares of outstanding
common stock (the &#147;Common Shares&#148;), common stock purchase warrants exercisable
at $0.80 per share, subject to adjustment (the &#147;Warrants&#148;), and shares of common
stock underlying the Warrants (the &#147;Warrant Shares&#148;). The securities being
registered also include Common Shares and options issued to the placement agents
in connection with the July 2009 Private Placement (the &#147;Placement Agent
Options&#148;). The Placement Agent Options permit the placement agents to purchase
shares of common stock (the &#147;Placement Agent Option Shares&#148;) at a price of $0.80
per share, subject to adjustment.</P>
<P align=justify>Accordingly, the shares being registered include (i) 11,245,040
Common Shares, (ii) 10,826,000 Warrants, (iii) 10,826,000 Warrant Shares, (iv)
838,080 shares of Placement Agent Common Shares, issuable upon exercise of the
Placement Agent Options, (v) 1,082,600 Common Shares issuable if the Company
fails to satisfy its registration obligations in connection with the July 2009
Private Placement; (vi) 1,082,600 Warrants issuable if the Company fails to
satisfy its registration obligations in connection with the July 2009 Private
Placement, and (vii) 1,082,600 Warrant Shares issuable upon the exercise of
Warrants if the Company fails to satisfy its registration obligations in
connection with the July 2009 Private Placement. </P>
<P align=justify>The common stock will be offered by the selling security
holders at fixed prices, at the then-prevailing market prices at the time of
sale, at varying prices, or in negotiated transactions (See &#147;Plan of
Distribution&#148;). Our common stock is traded on the OTC Bulletin Board (the
&#147;OTCBB&#148;) under the symbol &#147;IGXT&#148; and on the TSX Venture Exchange (the &#147;TSX&#148;)
under the symbol &#147;IGX&#148;. The closing price of our common stock on the OTCBB on
August 7, 2009 was $0.70, and the closing price of our common stock on the TSX
on August 6, 2009 was CDN $0.64.</P>
<P align=justify>Our executive office is located at 6425 Abrams, Ville
Saint-Laurent, Quebec, H45 1X9, Canada, and our telephone number is (514)
331-7440. </P>
<P align=justify>We will not receive any proceeds from the sale of the shares of
common stock offered by the selling security holders to the public. However, we
will receive proceeds from the exercise of the Warrants, as well as from the
exercise of the Placement Agent Options. Any such proceeds will be used to
support the Company's strategic development projects and for working capital. We
have agreed to pay all of the costs of this offering, excluding commissions and
discounts regarding the sale of the common stock by the selling security
holders. </P>
<P align=justify>Brokers or dealers effecting transactions in the shares should
confirm the registration of these securities under the securities laws of the
states in which such transactions occur or the existence of an exemption from
such registration. </P>
<P align=justify>Certain selling security holders and any participating
broker-dealers may be deemed to be &#147;underwriters&#148; within the meaning of the
Securities Act of 1933, as amended (the &#147;Securities Act&#148;), and any commissions
or discounts given to any such broker-dealer may be regarded as underwriting
commissions or discounts under the Securities Act. See &#147;Selling Security
Holders&#148; and &#147;Plan of Distribution&#148;. </P>
<P align=justify><B>Investing in our securities involves a high degree of risk.
You should invest in the common stock only if you can afford to lose your entire
investment. See &#147;Risk Factors&#148; beginning on page 4.</B> </P>
<P align=justify><B>Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to the
contrary is a criminal offense.</B> </P>
<P align=justify>The date of this prospectus is ______________, 2009</P>
<P align=center>3 </P>
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<P align=center><B>TABLE OF CONTENTS </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Forward Looking Statements </TD>
    <TD align=center width="15%" bgColor=#e6efff>2 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Prospectus Summary </TD>
    <TD align=center width="15%">2 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>The Offering </TD>
    <TD align=center width="15%" bgColor=#e6efff>3 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Risk Factors </TD>
    <TD align=center width="15%">4 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Description of Business </TD>
    <TD align=center width="15%" bgColor=#e6efff>10 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Description of Property </TD>
    <TD align=center width="15%">16 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Management's Discussion and Analysis of
      Financial Condition and Results of Operations </TD>
    <TD align=center width="15%" bgColor=#e6efff>16 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Use of Proceeds </TD>
    <TD align=center width="15%">22 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Market Price of and Dividends on
      Registrant's Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities </TD>
    <TD align=center width="15%" bgColor=#e6efff>23 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Selling Security Holders </TD>
    <TD align=center width="15%">25 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Directors and Executive Officers </TD>
    <TD align=center width="15%" bgColor=#e6efff>32 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Corporate Governance </TD>
    <TD align=center width="15%">33 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Security Ownership of Certain Beneficial
      Owners and Management </TD>
    <TD align=center width="15%" bgColor=#e6efff>35 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Executive Compensation </TD>
    <TD align=center width="15%">37 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Certain Relationships and Related
      Transactions, and Director Independence </TD>
    <TD align=center width="15%" bgColor=#e6efff>39 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Plan of Distribution </TD>
    <TD align=center width="15%">40 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Description of Securities </TD>
    <TD align=center width="15%" bgColor=#e6efff>41 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Legal Proceedings </TD>
    <TD align=center width="15%">41 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Legal Matters </TD>
    <TD align=center width="15%" bgColor=#e6efff>41 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Experts </TD>
    <TD align=center width="15%">41 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Disclosure of Commission Position on
      Indemnification for Securities Act Liabilities </TD>
    <TD align=center width="15%" bgColor=#e6efff>41 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Where You Can Find Additional Information </TD>
    <TD align=center width="15%">41 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Financial Statements </TD>
    <TD align=center width="15%" bgColor=#e6efff>F1</TD></TR></TABLE>
<P align=justify>You should rely only on the information contained in this
prospectus or any prospectus supplement. We have not and the selling security
holders have not authorized anyone else to provide you with different
information. If anyone provides you with different information, you should not
rely on it. We are not and the selling security holders are not making an offer
to sell these securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this prospectus
or any prospectus supplement is accurate only as of the date on the front cover
of the applicable document. Our business, financial condition, results of
operations and prospects may have changed since that date. </P>
<P align=center>1 </P>
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<P align=center><B>FORWARD-LOOKING STATEMENTS</B> </P>
<P align=justify>Certain statements included or incorporated by reference in
this prospectus constitute forward-looking statements within the meaning of
applicable securities laws. All statements contained in this prospectus that are
not clearly historical in nature are forward-looking, and the words
&#147;anticipate&#148;, &#147;believe&#148;, &#147;continue&#148;, &#147;expect&#148;, &#147;estimate&#148;, &#147;intend&#148;, &#147;may&#148;,
&#147;plan&#148;, &#147;will&#148;, &#147;shall&#148; and other similar expressions are generally intended to
identify forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934. All
forward-looking statements are based on our beliefs and assumptions based on
information available at the time the assumption was made. These forward-looking
statements are not based on historical facts but on management&#146;s expectations
regarding future growth, results of operations, performance, future capital and
other expenditures (including the amount, nature and sources of funding
thereof), competitive advantages, business prospects and opportunities.
Forward-looking statements involve significant known and unknown risks,
uncertainties, assumptions and other factors that may cause our actual results,
levels of activity, performance or achievements to differ materially from those
implied by forward-looking statements. These factors should be considered
carefully and prospective investors should not place undue reliance on the
forward-looking statements. Although the forward-looking statements contained in
this prospectus or incorporated by reference herein are based upon what
management believes to be reasonable assumptions, there is no assurance that
actual results will be consistent with these forward-looking statements. These
forward-looking statements are made as of the date of this prospectus or as of
the date specified in the documents incorporated by reference herein, as the
case may be. <B>The Company undertakes no obligation to update any
forward-looking statements to reflect events or circumstances after the date on
which such statements were made or to reflect the occurrence of unanticipated
events, except as may be required by applicable securities laws.</B> The factors
listed above in the section captioned "Risk Factors", as well as any cautionary
language in this prospectus, provide examples of risks, uncertainties and events
that may cause IntelGenx's actual results to differ materially from the
expectations IntelGenx describes in our forward-looking statements. Before you
invest in the common stock, you should be aware that the occurrence of the
events described as risk factors and elsewhere in this prospectus could have a
material adverse effect on our business, operating results and financial
condition. </P>
<P align=center><B>PROSPECTUS SUMMARY</B> </P>
<P align=justify>The following summary is qualified in its entirety by the more
detailed information appearing elsewhere in this prospectus. In this prospectus,
the words "Company," "IntelGenx" "we," "us," and "our," refer collectively to
IntelGenx Technologies Corp. and IntelGenx Corp., our wholly-owned Canadian
subsidiary. </P>
<P align=justify><B>Our Business</B> </P>
<P align=justify>We are a drug delivery company headquartered in Montreal,
Quebec, Canada which focuses on the development of novel oral immediate release
and controlled-release products for the generic pharmaceutical market. </P>
<P align=justify>Our product development efforts are based upon three delivery
platform technologies: (1) the &#147;VersaTab&#148; Multilayer Tablet technology, (2) the
&#147;VersaFilm&#148; Oral Film technology, and (3) the &#147;AdVersa&#148; Mucoadhesive Tablet
technology. Our Multilayer platform technology allows for the development of
oral controlled release products. It is versatile and is aimed at significantly
reducing manufacturing costs as compared to competing delivery technologies. The
Oral Film technology allows for the instant delivery of pharmaceuticals to the
oral cavity, while the Mucoadhesive Tablet allows for the controlled release of
active substances to the oral mucosa.</P>
<P align=justify>Our executive offices are located at 6425 Abrams, Ville
Saint-Laurent, Quebec, H4S 1X9, Canada and our telephone number is (514)
331-7440. Our web site address is http://www.IntelGenx.com. Information
contained on our web site is not a part of this prospectus. </P>
<P align=center>2 </P>
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<P align=center><B>THE OFFERING</B><B> </B></P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>
    <p style="margin-left: 10; margin-right: 10"><B>The Offering</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="50%"
    bgColor=#e6efff>
    <p style="margin-left: 10; margin-right: 10">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>
      <P align=justify style="margin-left: 10; margin-right: 10">Shares of common stock offered by the selling security
      holders </P></TD>
    <TD align=left width="50%">
      <font FACE="Times New Roman" SIZE="2">
      <p align="justify" style="margin-left: 10; margin-right: 10">Up to
      25,004,320 shares of common stock and 12,711,680 Warrants, including (i)
      11,245,040 Common Shares, (ii) 10,826,000 Warrants, (iii) 10,826,000
      Warrant Shares, (iv) 838,080 Placement Agent Options, (v) 838,080 shares
      of Placement Agent Common Shares, issuable upon exercise of the Placement
      Agent Options, (vi) 1,047,600 Common Shares issuable if the Company fails
      to satisfy its registration obligations in connection with the July 2009
      Private Placement; (vii) 1,047,600 Warrants issuable if the Company fails
      to satisfy its registration obligations in connection with the July 2009
      Private Placement, and (viii) 1,082,600 Warrant Shares issuable upon the
      exercise of Warrants if the Company fails to satisfy its registration
      obligations in connection with the July 2009 Private Placement. Assuming
      the full exercise of all the Warrants and the Placement Agent Options, and
      assuming the registration obligations are not satisfied, the shares being
      registered would represent approximately 53% of our outstanding common
      stock. (1)</font><font FACE="Times New Roman"> </font></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
      <P align=justify style="margin-left: 10; margin-right: 10">Common stock to be outstanding after the offering </P></TD>
    <TD align=left width="50%" bgColor=#e6efff>
      <P align=justify style="margin-left: 10; margin-right: 10">Up to 47,424,433 shares of Common Stock, assuming the
      exercise of all of the Warrants and the Placement Agent Options.
</P></TD></TR>
  <TR vAlign=top>
    <TD align=left>
      <P align=justify style="margin-left: 10; margin-right: 10">Use of proceeds </P></TD>
    <TD align=left width="50%">
      <P align=justify style="margin-left: 10; margin-right: 10">IntelGenx will not receive any proceeds from the sale of
      the shares of common stock offered by the selling security holders to the
      public. However, IntelGenx will receive proceeds from any cash exercise of
      the Warrants, as well as from the exercise of the Placement Agent Options.
      Any such proceeds will be used to support the Company's strategic
      development projects and for working capital. </P></TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>
    <p style="margin-left: 10; margin-right: 10">OTCBB Ticker Symbol </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="50%"
    bgColor=#e6efff>
    <p style="margin-left: 10; margin-right: 10">IGXT </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>
    <p style="margin-left: 10; margin-right: 10">TSX Venture
      Exchange Symbol </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="50%">
    <p style="margin-left: 10; margin-right: 10">IGX
  </TD></TR></TABLE></DIV>
<P align=justify>(1) The above information regarding common stock to be
outstanding after the offering is based on 22,350,114 shares of common stock
outstanding as of August 10, 2009. </P>
<P align=justify><B>Description of July 2009 Private Placement</B></P>
<P align=justify><U>Canadian Private Placement</U> </P>
<P align=justify><font FACE="Times New Roman" SIZE="2">On July 13, 2009, we
completed an offering to investors of 10,476,000 special warrants (the &quot;Special
Warrants&quot;) at a price of CDN$0.40 per Special Warrant for gross proceeds of
approximately CDN$4,200,000 (the &quot;Gross Proceeds&quot;) and net proceeds of
approximately CDN$3,780,050 (&quot;the &quot;Canadian Private Placement&quot;). Each Special
Warrant may be exercised at any time at the holder&#146;s option and will
automatically exercise, in each case for no additional consideration, on the
earliest to occur of (a) the fifth business day after the later of (i) the date
a receipt is issued by the relevant securities regulatory authorities in Canada
for the final prospectus qualifying the Common Shares and the Warrants to be
issued upon the exercise of the Special Warrants, and (ii) the date this
Registration Statement is declared effective by the U.S. Securities and Exchange
Commission and (b) November 14, 2009. Each Special Warrant entitles its holder
to receive, upon exercise or deemed exercise thereof, one Common Share and one
Warrant, which together were referred to in the subscription agreements as a
&quot;Unit&quot;. Each Warrant will entitle the holder to purchase one Common Share (the
&quot;Warrant Shares&quot;) at a price of U.S.$0.80 per share, subject to adjustment,
until July 13, 2012. The exercise price of the Warrants is subject to adjustment
for certain events, including dividends, distributions or split of the Company's
common stock, subsequent equity sales or rights offerings by the Company, or in
the event of the Company's consolidation, merger or reorganization. </P>
</font>
<P align=justify><font FACE="Times New Roman" SIZE="2">Paradigm Capital Inc.
(&quot;Paradigm&quot;), Bolder Investment Partners Ltd. (&quot;Bolder&quot;) and Union Securities
Ltd. (&quot;Union&quot;) (collectively, the &quot;Placement Agents&quot;) acted as placement agents
for the Canadian Private Placement on a best efforts basis. The Placement
Agents&#146; compensation consists of a cash commission equal to 8% of the Gross
Proceeds, 419,040 Common Shares (the &quot;Placement Agent Shares&quot;) and an option to
acquire 838,080 Common Shares at U.S.$0.80 per unit, subject to adjustment,
until July 13, 2012 (the &quot;Placement Agent Options&quot;). (The shares of common stock
issuable upon exercise of the Placement Agent Options shall be referred to as
the &quot;Placement Agent Option Shares&quot;.) The exercise price of the Placement Agent
Options is subject to adjustment for certain events, including dividends,
distributions or split of the Company's common stock, subsequent equity sales or
rights offerings by the Company, or in the event of the Company's consolidation,
merger or reorganization. </P>
</font>
<P align=center>3 </P>
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<font FACE="Times New Roman" SIZE="2">
<p ALIGN="JUSTIFY">In connection with the Canadian Private Placement, the
Company entered into a registration rights agreement (the &quot;Registration Rights
Agreement&quot;) providing for the filing of a registration statement (the
&quot;Registration Statement&quot;) with the U.S. Securities and Exchange Commission
registering the Common Shares, the Warrants, the Warrant Shares, the Placement
Agent Shares, the Placement Agent Options and the Placement Agent Option Shares.
The Company is obligated to file the Registration Statement no later than 30
days from the date of closing and to use its commercially reasonable efforts to
cause the Registration Statement to be declared effective no later than 120 days
after the date of closing. </p>
<p ALIGN="JUSTIFY">If, on the 5<sup>th</sup> business day following the later
of:, (a) a receipt being issued by the relevant securities regulatory
authorities in Canada for the final prospectus qualifying the Common Shares and
the Warrants to be issued upon the exercise of the Special Warrants, and (b)
this Registration Statement beeing declared effective by the U.S. Securities and
Exchange Commission; has not occurred on or before 120 days following the
closing date, than each unexercised Special Warrant will be deemed exercised for
1.1 Common Shares and 1.1 Warrants. </p>
<p ALIGN="JUSTIFY">In connection with the Canadian Private Placement, each of
the Company&#146;s officers and directors have entered into lock-up agreements in
favor of the Placement Agents pursuant to which they have agreed not to sell or
transfer their shares for a period of 90 days following the fifth business day
after the later of (a) the date the Company receives a receipt for a prospectus
qualifying the Common Shares and the Warrants issuable upon exercise of the
Special Warrants, and (b) the date this Registration Statement is declared
effective by the U.S. Securities and Exchange Commission, unless they first
obtain the prior written consent of Paradigm or there occurs a take-over bid or
similar transaction involving a change of control of the Company. </p>
<p ALIGN="JUSTIFY">The issuances under the Canadian Private Placement were
exempt from registration under Section 4(2) of the Securities Act and/or
Regulation S, promulgated pursuant to the Securities Act. None of the purchasers
under the Canadian Private Placement are U.S. persons, no sales efforts were
conducted in the U.S., and the Common Shares, the Warrants, the Warrant Shares,
the Placement Agent Shares, the Placement Agent Options and the Placement Agent
Option Shares issued in connection with the Canadian Private Placement contain,
or will contain upon issuance, a legend restricting the sale of such securities
in accordance with Regulation S and pursuant to applicable Canadian securities
laws. </p>
</font>
<P align=justify><U>U.S. Private Placement</U> </P>
<P align=justify>On July 22, 2009, concurrently with the Canadian Private
Placement, the Company completed an offering of 350,000 units to investors in
the United States (the &#147;U.S. Private Placement&#148; and together with the Canadian
Private Placement, the &#147;July 2009 Private Placement&#148;). No placement agent was
used for the U.S. Private Placement and no commissions were paid in connection
therewith. As in the Canadian Private Placement, each unit consists of one
Common Share and one Warrant. Each Warrant entitles the holder thereof to
purchase one Common Share at an initial exercise price of US$0.80 per common
share and expires on July 22, 2012. The exercise price of the Warrants is
subject to adjustment for certain events, including without limitation,
dividends, distributions or split of the Company's common stock, subsequent
rights offerings by the Company, or in the event of the Company's consolidation,
merger or reorganization. </P>
<P align=justify>The issuances under the U.S. Private Placement were exempt from
registration under Section 4(2) of the Securities Act. The Common Shares, the
Warrants and the Warrant Shares issued in connection with the U.S. Private
Placement are subject to statutory resale restrictions under the Securities Act
and contain, or will contain upon issuance, a legend restricting the sale of
such securities in accordance with applicable exemptions from the registration
requirements of the Securities Act.</P>
<P align=center><B>RISK FACTORS </B></P>
<P align=justify><I>An investment in our common stock involves significant
risks. You should carefully consider the following risks and all other
information set forth in this prospectus before deciding to invest in shares of
our common stock. If any of the events or developments described below occurs,
our business, financial condition and results of operations may suffer. In that
case, the value of our common stock may decline and you could lose all or part
of your investment.</I> </P>
<P align=justify><B>Risks Related to Our Business</B></P>
<P align=justify><B>We continue to sustain losses and our revenues are not
sufficient to sustain our operations. </B>Even though we ceased being a
&#147;development stage&#148; company in April 2006, we are still subject to all of the
risks associated with having a limited operating history and pursuing the
development of new products. Our cash flows may be insufficient to meet expenses
relating to our operations and the development of our business, and may be
insufficient to allow us to develop new products. We currently conduct research
and development using our proprietary platform technologies to develop oral
controlled release and other delivery products. We do not know whether we will
be successful in the development of such products. We have an accumulated
deficit of approximately $4,725,045 since our inception in 2003 through December 31, 2008. To date, these
losses have been financed principally through sales of equity securities,
long-term debt and debt from related parties. Our revenues for the years ended
December 31, 2008, December 31, 2007, December 31, 2006, December 31, 2005 and
December 31, 2004 were $976,610, $862,731, $265,901, $19,990 and $257,374
respectively. Our revenues consisted primarily of development fee revenues from
five clients and have not been sufficient to sustain our operations. In order to
achieve profitability, our revenue streams will have to increase and there is no
assurance that revenues will increase to such a level.</P>
<P align=center>4 </P>
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<P align=justify><B>We may incur losses associated with foreign currency
fluctuations.</B></P>
<P align=justify>The majority of our expenses are paid in Canadian dollars,
while our revenues are primarily in U.S. dollars. Our financial results are
subject to the impact of currency exchange rate fluctuations. Adverse movements
in exchange rates could have a material adverse effect on our financial
condition and results of operations.<B> We may need additional capital to
fulfill our business strategies. We may also incur unforeseen costs. Failure to
obtain such capital would adversely affect our business. </B></P>
<P align=justify>We will need to expend significant capital in order to continue
with our research and development by hiring additional research staff and
acquiring additional equipment. If our cash flows from operations are
insufficient to fund our expected capital needs, or our needs are greater than
anticipated, we will be required to raise additional funds in the future through
private or public sales of equity securities or the incurrence of additional
indebtedness. Additional funding may not be available on favorable terms, or at
all. If we borrow additional funds, we likely will be obligated to make periodic
interest or other debt service payments and may be subject to additional
restrictive covenants. If we fail to obtain sufficient additional capital in the
future, we could be forced to curtail our growth strategy by reducing or
delaying capital expenditures, selling assets or downsizing or restructuring our
operations. If we raise additional funds through public or private sales of
equity securities, the sales may be at prices below the market price of our
stock and our shareholders may suffer significant dilution. </P>
<P align=justify><B>The loss of the services of key personnel would adversely
affect our business. </B></P>
<P align=justify>Our future success depends to a significant degree on the
skills, experience and efforts of our executive officers and senior management
staff. The loss of the services of existing personnel, particularly Horst Zerbe,
our Chairman of the Board and Chief Executive Officer, would be detrimental to
our research and development programs and to our overall business. </P>
<P align=justify><B>We are dependent on business partners to conduct clinical
trials of, obtain regulatory approvals for, and manufacture, market, and sell
our controlled release products.</B></P>
<P align=justify>We depend heavily on our pharmaceutical partners to pay for
part or all of the research and development expenses associated with developing
a new product and to obtain approval from regulatory bodies such as the U.S.
Food and Drug Administration (the &#147;FDA&#148;) to commercialize these products. We
also depend on our partners to distribute these products after receiving
regulatory approval. Our revenues from research and development fees, milestone
payments and royalty fees are provided by our partners. Our inability to find
pharmaceutical partners who are willing to pay us these fees in order to develop
new products would negatively impact our business and our cash flows. </P>
<P align=justify>We have limited experience in manufacturing, marketing and
selling pharmaceutical products. Accordingly, if we cannot maintain our existing
partnerships or establish new partnerships with respect to our other products in
development, we will have to establish our own capabilities or discontinue the
commercialization of the affected product. Developing our own capabilities would
be expensive and time consuming and could delay the commercialization of the
affected product. There can be no assurance that we would be able to develop
these capabilities. </P>
<P align=justify>Our existing agreements with pharmaceutical industry partners
are generally subject to termination by the counterparty on short notice upon
the occurrence of certain circumstances, including but not limited to the
following: a determination that the product in development is not likely to be
successfully developed or not likely to receive regulatory approval; our failure
to satisfy our obligations under the agreement, or the occurrence of a
bankruptcy event. If any of our partnerships are terminated, we may be required
to devote additional resources to the product, seek a new partner on short
notice, or abandon the product development efforts. The terms of any additional
partnerships or other arrangements that we establish may not be favorable to us.
</P>
<P align=justify>We are also at risk that these partnerships or other
arrangements may not be successful. Factors that may affect the success of our
partnerships include the following: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>Our partners may be pursuing alternative technologies or developing
  alternative products that are competitive to our product, either on their own
  or in partnership with others;
  <LI>Our partners may reduce marketing or sales efforts, or discontinue
  marketing or sales of our products. This would reduce our revenues received on
  the products;
  <LI>Our partners may terminate their partnerships with us. This could make it
  difficult for us to attract new partners or adversely affect perception of us
  in the business and financial communities; and </LI></UL>
<P align=center>5 </P>
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<UL style="TEXT-ALIGN: justify">
  <LI>Our partners may pursue higher priority programs or change the focus of
  their development programs, which could affect the partner&#146;s commitment to us.
  Pharmaceutical and biotechnology companies historically have re-evaluated
  their priorities from time to time, including following mergers and
  consolidations, a common occurrence in recent years. </LI></UL>
<P align=justify><B>We face competition in our industry, and many of our
competitors have substantially greater experience and resources than we do.
</B></P>
<P align=justify>We compete with other companies within the drug delivery
industry, many of which have more capital, more extensive research and
development capabilities and greater human resources than we do. Some of these
drug delivery competitors include Biovail Corporation, Labopharm Inc., and
Flamel Technologies S.A. Our competitors may develop new or enhanced products or
processes that may be more effective, less expensive, safer or more readily
available than any products or processes that we develop, or they may develop
proprietary positions that prevent us from being able to successfully
commercialize new products or processes that we develop. As a result, our
products or processes may not compete successfully, and research and development
by others may render our products or processes obsolete or uneconomical.
Competition may increase as technological advances are made and commercial
applications broaden. </P>
<P align=justify><B>We are dependent upon sales outside the United States, which
are subject to a number of risks. </B></P>
<P align=justify>Our future results of operation could be harmed by risks
inherent in doing business in international markets, including: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>Unforeseen changes in regulatory requirements;
  <LI>Weaker intellectual property rights protection in some countries;
  <LI>New export license requirements, changes in tariffs or trade restrictions;
  and
  <LI>Political and economic instability in our target markets. </LI></UL>
<P align=justify><B>We rely upon third-party manufacturers, which puts us at
risk for supplier business interruptions.</B></P>
<P align=justify>We have entered into agreements with third party manufacturers
to manufacture certain of our products once we complete development and after we
receive regulatory approval. If our third-party manufacturers fail to perform,
our ability to market products and to generate revenue would be adversely
affected. Our failure to deliver products in a timely manner could lead to the
dissatisfaction of our distribution partners and damage our reputation, causing
our distribution partners to cancel existing agreements with us and to stop
doing business with us. </P>
<P align=justify>The third-party manufacturers that we depend on to manufacture
our products are required to adhere to FDA regulations regarding current Good
Manufacturing Practices (&#147;cGMP&#148;), which include testing, control and
documentation requirements. Ongoing compliance with cGMP and other regulatory
requirements is monitored by periodic inspection by the FDA and comparable
agencies in other countries. Failure by our third-party manufacturers to comply
with cGMP and other regulatory requirements could result in actions against them
by regulatory agencies and jeopardize our ability to obtain products on a timely
basis. </P>
<P align=justify><B>We are subject to extensive government regulation including
the requirement of approval before our products may be marketed. Even if we
obtain marketing approval, our products will be subject to ongoing regulatory
review.</B></P>
<P align=justify>We, our partners, our products, and our product candidates are
subject to extensive regulation by governmental authorities in the United States
and other countries. Failure to comply with applicable requirements could result
in warning letters, fines and other civil penalties, delays in approving or
refusal to approve a product candidate, product recall or seizure, withdrawal of
product approvals, interruption of manufacturing or clinical trials, operating
restrictions, injunctions, and criminal prosecution. </P>
<P align=justify>Our products cannot be marketed in the United States without
FDA approval. Obtaining FDA approval requires substantial time, effort, and
financial resources, and there can be no assurance that any approval will be
granted on a timely basis, if at all. We rely on our partners for the
preparation of applications and for obtaining regulatory approvals. If the FDA
does not approve our product candidates in a timely fashion, or does not approve
them at all, our business and financial condition may be adversely affected.
Further, the terms of approval of any marketing application, including the
labeling content, may be more restrictive than we desire and could affect the
marketability of our or our collaborator's products. Subsequent discovery of
problems with an approved product may result in restrictions on the product or
its withdrawal from the market. In addition, both before and after regulatory
approval, we, our collaborators, our products, and our product candidates are
subject to numerous FDA requirements covering testing, manufacturing, quality
control, cGMP, adverse event reporting, labeling, advertising, promotion,
distribution, and export. Our partners and we are subject to surveillance and
periodic inspections to ascertain compliance with these regulations. Further,
the relevant law and regulations may change in ways that could affect us, our
partners, our products, and our product candidates. Failure to comply with
regulatory requirements could have a material adverse impact on our business.
</P>
<P align=center>6 </P>
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<P align=justify>Regulations regarding the manufacture and sale of our future
products are subject to change. We cannot predict what impact, if any, such
changes may have on our business, financial condition or results of operations.
Failure to comply with applicable regulatory requirements could have a material
adverse effect on our business, financial condition and results of operations.
</P>
<P align=justify>Additionally, the time required for obtaining regulatory
approval is uncertain. We may encounter delays or product rejections based upon
changes in FDA policies, including cGMP, during periods of product development.
We may encounter similar delays in countries outside of the United States. We
may not be able to obtain these regulatory acceptances on a timely basis, or at
all. </P>
<P align=justify>The failure to obtain timely regulatory acceptance of our
products, any product marketing limitations, or any product withdrawal would
have a material adverse effect on our business, financial condition and results
of operations. In addition, before it grants approvals, the FDA or any foreign
regulatory authority may impose numerous other requirements with which we must
comply. Regulatory acceptance, if granted, may include significant limitations
on the indicated uses for which the product may be marketed. FDA enforcement
policy strictly prohibits the marketing of accepted products for unapproved
uses. Product acceptance could be withdrawn or civil or criminal sanctions could
be imposed for our failure to comply with regulatory standards or the occurrence
of unforeseen problems following initial marketing. </P>
<P align=justify>The third party manufacturers that we depend on to manufacture
our products are required to adhere to FDA regulations regarding cGMP and
similar regulations in other countries, which include testing, control and
documentation requirements. Ongoing compliance with cGMP and other regulatory
requirements is monitored by periodic inspection by the FDA and comparable
agencies in other countries. </P>
<P align=justify><B>We may not be able to expand or enhance our existing product
lines with new products limiting our ability to grow. </B></P>
<P align=justify>If we are not successful in the development and introduction of
new products, our ability to grow will be impeded. We may not be able to
identify products to enhance or expand our product lines. Even if we can
identify potential products, our investment in research and development might be
significant before we could bring the products to market. Moreover, even if we
identify a potential product and expend significant dollars on development, we
may never be able to bring the product to market or achieve market acceptance
for such product. As a result, we may never recover our expenses. </P>
<P align=justify><B>The market may not be receptive to products incorporating
our drug delivery technologies.</B></P>
<P align=justify>The commercial success of any of our products that are approved
for marketing by the FDA and other regulatory authorities will depend upon their
acceptance by the medical community and third party payors as clinically useful,
cost-effective and safe. No product based on our technologies is marketed in the
United States, so there can be no assurance as to market acceptance. </P>
<P align=justify>Factors that we believe could materially affect market
acceptance of these products include:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>the timing of the receipt of marketing approvals and the countries in
  which such approvals are obtained;
  <LI>the safety and efficacy of the product as compared to competitive
  products;
  <LI>the relative convenience and ease of administration as compared to
  competitive products;
  <LI>the strength of marketing distribution support; and
  <LI>the cost-effectiveness of the product and the ability to receive third
  party reimbursement. </LI></UL>
<P align=justify><B>We are subject to environmental regulations and any failure
to comply may result in substantial fines and sanctions. </B></P>
<P align=justify>Our operations are subject to Canadian and international
environmental laws and regulations governing, among other things, emissions to
air, discharges to waters and the generation, handling, storage, transportation,
treatment and disposal of raw materials, waste and other materials. Many of
these laws and regulations provide for substantial fines and criminal sanctions
for violations. We believe that we are and have been operating our business and
facility in a manner that complies in all material respects with environmental,
health and safety laws and regulations; however, we may incur material costs or
liabilities if we fail to operate in full compliance. We do not maintain
environmental damage insurance coverage with respect to the products which we
manufacture. </P>
<P align=justify>We may have to make significant expenditures in the future to
comply with evolving environmental, health and safety requirements, including
new requirements that may be adopted or imposed in the future. To meet changing
licensing and regulatory standards, we may have to make significant additional
site or operational modifications that could involve substantial expenditures or
reduction or suspension of some of our operations. We cannot be certain that we
have identified all environmental and health and safety matters affecting our
activities and in the future our environmental, health and safety problems, and
the costs to remediate them, may be materially greater than we expect.</P>
<P align=center>7 </P>
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<P align=justify><B>Our limited cash resources restrict our ability to pay cash
dividends. </B></P>
<P align=justify>Since our inception, we have not paid any cash dividends on our
common stock. We currently intend to retain future earnings, if any, to support
operations and to finance the growth and development of our business. Therefore,
we do not expect to pay cash dividends in the foreseeable future. Any future
determination relating to our dividend policy will be made at the discretion of
our Board of Directors and will depend on a number of factors, including future
earnings, capital requirements, financial conditions and future prospect and
other factors that the board of directors may deem relevant. If we do not pay
any dividends on our common stock, our stockholders will be able to profit from
an investment only if the price of the stock appreciates before the stockholder
sells it. Investors seeking cash dividends should not purchase our common
stock.</P>
<P align=justify><B>Risks Related to Our Intellectual Property </B></P>
<P align=justify><B>If we are not able to adequately protect our intellectual
property, we may not be able to compete effectively.</B></P>
<P align=justify>Our success depends, to a significant degree, upon the
protection of our proprietary technologies. While we currently own three U.S.
patents and have applied for seven U.S. patents, we will need to pursue
additional protection for our intellectual property as we develop new products
and enhance existing products. We may not be able to obtain appropriate
protection for our intellectual property in a timely manner, or at all. Our
inability to obtain appropriate protections for our intellectual property may
allow competitors to enter our markets and produce or sell the same or similar
products. </P>
<P align=justify>If we are forced to resort to legal proceedings to enforce our
intellectual property rights, the proceedings could be burdensome and expensive.
In addition, our proprietary rights could be at risk if we are unsuccessful in,
or cannot afford to pursue, those proceedings. </P>
<P align=justify>We also rely on trade secrets and contract law to protect some
of our proprietary technology. We have entered into confidentiality and
invention agreements with our employees and consultants. Nevertheless, these
agreements may not be honored and they may not effectively protect our right to
our un-patented trade secrets and know-how. Moreover, others may independently
develop substantially equivalent proprietary information and techniques or
otherwise gain access to our trade secrets and know-how. </P>
<P align=justify>In 1995, the U.S. Patent and Trademark Office adopted changes
to the U.S. patent law that made the term of issued patents 20 years from the
date of filing rather than 17 years from the date of issuance, subject to
specified transition periods. Beginning in June 1995, the patent term became 20
years from the earliest effective filing date of the underlying patent
application. These changes may reduce the effective term of protection for
patents that are pending for more than three years. While we cannot predict the
effect that these changes will have on our business, they could have a material
adverse effect on our ability to protect our proprietary information.
Furthermore, the possibility of extensive delays in the patent issuance process
could effectively reduce the term during which a marketed product is protected
by patents. </P>
<P align=justify>We may need to obtain licenses to patents or other proprietary
rights from third parties. We may not be able to obtain the licenses required
under any patents or proprietary rights or they may not be available on
acceptable terms. If we do not obtain required licenses, we may encounter delays
in product development or find that the development, manufacture or sale of
products requiring licenses could be foreclosed. We may, from time to time,
support and collaborate in research conducted by universities and governmental
research organizations. We may not be able to acquire exclusive rights to the
inventions or technical information derived from these collaborations, and
disputes may arise over rights in derivative or related research programs
conducted by us or our collaborators. </P>
<P align=justify><B>If we infringe on the rights of third parties, we may not be
able to sell our products, and we may have to defend against litigation and pay
damages. </B></P>
<P align=justify>If a competitor were to assert that our products infringe on
its patent or other intellectual property rights, we could incur substantial
litigation costs and be forced to pay substantial damages. Third-party
infringement claims, regardless of their outcome, would not only consume
significant financial resources, but would also divert our management&#146;s time and
attention. Such claims could also cause our customers or potential customers to
purchase competitors&#146; products or defer or limit their purchase or use of our
affected products until resolution of the claim. If any of our products are
found to violate third-party intellectual property rights, we may have to
re-engineer one or more of our products, or we may have to obtain licenses from
third parties to continue offering our products without substantial
re-engineering. Our efforts to re-engineer or obtain licenses could require
significant expenditures and may not be successful. </P>
<P align=justify><B>Our controlled release products that are generic versions of
branded controlled release products that are covered by one or more patents may
be subject to litigation, which could delay FDA approval and commercial launch
of our products </B></P>
<P align=justify>We expect to file or have our collaborators file Abbreviated
New Drug Applications or New Drug Applications (ANDAs or NDAs) for our
controlled release products under development that are covered by one or more
patents of the branded product. It is likely that the owners of the patents
covering the brand name product or the sponsors of the NDA with respect to the
branded product will sue or undertake regulatory initiatives to preserve
marketing exclusivity. Any significant delay in obtaining FDA approval to market
our products as a result of litigation, as well as the expense of such
litigation, whether or not we or our collaborators are successful, could have a
materially adverse effect on our business, financial condition and results of
operations.</P>
<P align=center>8 </P>
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<P align=justify><B>Risks Related to Our Securities: </B></P>
<P align=justify><B>The price of our common stock could be subject to
significant fluctuations.</B> </P>
<P align=justify>Any of the following factors could affect the market price of
our common stock: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>Our failure to achieve and maintain profitability;
  <LI>Changes in earnings estimates and recommendations by financial analysts;
  <LI>Actual or anticipated variations in our quarterly results of operations;
  <LI>Changes in market valuations of similar companies;
  <LI>Announcements by us or our competitors of significant contracts, new
  products, acquisitions, commercial relationships, joint ventures or capital
  commitments;
  <LI>The loss of major customers or product or component suppliers;
  <LI>The loss of significant partnering relationships; and
  <LI>General market, political and economic conditions. </LI></UL>
<P align=justify>We have a significant number of convertible securities
outstanding that could be exercised in the future. Subsequent resale of these
and other shares could cause the Company&#146;s stock price to decline. This could
also make it more difficult to raise funds at acceptable levels via future
securities offerings. </P>
<P align=justify><B>We have a concentration of stock ownership and control, and
a small number of stockholders have the ability to exert significant control in
matters requiring stockholder vote and may have interests that conflict with
ours. </B></P>
<P align=justify>Our common stock ownership is highly concentrated. See
&#147;Security Ownership of Certain Beneficial Owners and Management.&#148; As a result, a
relatively small number of stockholders, acting together, have the ability to
control all matters requiring stockholder approval, including the election of
directors and approval of mergers and other significant corporate transactions.
This concentration of ownership may have the effect of delaying, preventing or
deterring a change in control of our company. It could also deprive our
stockholders of an opportunity to receive a premium for their shares as part of
a sale of our company and it may affect the market price of our common stock. In
deciding how to vote on such matters, those stockholders&#146; interests may conflict
with yours. </P>
<P align=justify><B>Lack of Independent Directors</B></P>
<P align=justify>We cannot guarantee that our Board of Directors will always
have a majority of independent directors. In the absence of a majority of
independent directors, our chief executive officer, who is also a principal
stockholder and director, could establish policies and enter into transactions
without independent review and approval thereof. This could present the
potential for a conflict of interest between the Company and its stockholders
generally and the controlling officers, stockholders or directors. </P>
<P align=justify><B>Our common stock is a high risk investment. </B>Our common
stock has been quoted on the OTC Bulletin Board under the symbol &#147;IGXT&#148; since
January 2007 and has been listed on the TSX Venture Exchange under the symbol
&#147;IGX&#148; since May 2008. </P>
<P align=justify>There is a limited trading market for our common stock, which
may affect the ability of shareholders to sell our common stock and the prices
at which they may be able to sell our common stock. </P>
<P align=justify>The market price of our common stock has been volatile, and
fluctuates widely in price in response to various factors which are beyond our
control. The price of our common stock is not necessarily indicative of our
operating performance or long term business prospects. In addition, the
securities markets have from time to time experienced significant price and
volume fluctuations that are unrelated to the operating performance of
particular companies. These market fluctuations may also materially and
adversely affect the market price of our common stock. </P>
<P align=justify>In the United States, our common stock is considered a &#147;penny
stock&#148;. The U.S. Securities and Exchange Commission has adopted rules that
regulate broker-dealer practices in connection with transactions in &#147;penny
stocks&#148;. These rules further restrict the trading activity and marketability of
our common stock. </P>
<P align=justify>As a result of the foregoing, our common stock should be
considered a high risk investment. </P>
<P align=justify><B>We became public by means of a reverse merger, and as a
result we are subject to the risks associated with the prior activities of the
public company. In addition, we may not be able to attract the attention of
major brokerage firms or institutional buyers. </B></P>
<P align=justify>Additional risks may exist because we became public through a
"reverse merger" with a shell corporation. Although the shell did not have
recent or past operations or assets and we performed a due diligence review of
the public company, there can be no assurance that we will not be exposed to
undisclosed liabilities resulting from the prior operations of our company.</P>
<P align=center>9 </P>
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<P align=justify>Security analysts of major brokerage firms and securities
institutions may not cover us since there are no broker-dealers who sold our
stock in a public offering who would have an incentive to follow or recommend
the purchase of our common stock. No assurance can be given that established
brokerage firms will want to conduct any financings for us in the future. </P>
<P align=center><B>DESCRIPTION OF BUSINESS </B></P>
<P align=justify><B>Corporate History </B></P>
<P align=justify>Our predecessor company, Big Flash Corp., was incorporated in
Delaware on July 27, 1999. On April 28, 2006, Big Flash, through its Canadian
holding corporation, completed the acquisition of IntelGenx Corp., a Canadian
company incorporated on June 15, 2003. The Company did not have any operations
prior to the acquisition of IntelGenx Corp.. In connection with the acquisition,
we changed our name from Big Flash Corp. to IntelGenx Technologies Corp.
IntelGenx Corp. has continued operations as our operating subsidiary. </P>
<P align=justify><B>Overview </B></P>
<P align=justify>We are a drug delivery company focusing on the development of
novel, orally administered drug delivery products based on our proprietary oral
drug delivery technologies. We have positioned ourself as a provider of product
development services for the pharmaceutical industry, including the branded and
generic pharmaceutical markets.</P>
<P align=justify>Drug delivery systems are an important tool in the hands of
physicians for purposes of optimizing drug therapy. For the pharmaceutical
industry, drug delivery systems represent an opportunity to extend the market
exclusivity and product lifecycle of drugs whose patent protection is nearing
expiration.</P>
<P align=justify>According to a report by CMR International, a pharmaceutical
industry research firm, products incorporating drug delivery systems represented
13% of the $337 billion global pharmaceutical market. In the United States,
sales of drug delivery products totaled $35 billion in 2006. Of this amount, the
orally administered segment of the drug delivery market totaled $21 billion in
sales, according to CMR International. Controlled release (CR) dosage
technologies play an important role in the development of orally administered
drug delivery systems. Control release technology provides patients with the
required amount of medication over a pre-determined, prolonged period of time,
preferably over 24 hours. Because of the reduced fluctuation of the active drug
in the blood, controlled release products are deemed safer and more tolerable
than conventional dosage forms, and have shown better patient compliance. </P>
<P align=justify>Our primary business strategy is to develop pharmaceutical
products based upon our proprietary drug delivery technologies and license the
commercial rights to companies in the pharmaceutical industry once the viability
of a product has been demonstrated. In exchange for licensing rights to our
products, we seek funding consisting of a combination of one or more of the
following: advance down payments, milestone fees, reimbursement for development
costs, and royalties on sales. In addition, we may receive a manufacturing
royalty from our contract manufacturers for the exclusive right to manufacture
our products. The companies we partner with are typically responsible for
managing the regulatory approval process of the product with the FDA and/or
other regulatory bodies, as well as for the marketing and distribution of the
products. On a case-by-case basis, IntelGenx may be responsible for providing
all or part of the documentation required for the regulatory submission. In
addition to pursuing partnering arrangements that provide for the full funding
of a drug development project, we may undertake development of selected product
opportunities until the marketing and distribution stage. We would first assess
the potential and associated costs for successful development of a product, and
then determine at which stage it would be most prudent to seek a partner,
balancing costs against the potential for higher returns later in the
development process. </P>
<P align=justify><B>Technology Platforms </B></P>
<P align=justify>Our product development efforts are based upon three delivery
platform technologies: (1) a Multilayer Tablet technology (2) an Oral Film
technology, and (3) a Mucoadhesive Tablet technology. Our Multilayer platform
technology allows for the development of oral controlled release products. It is
designed to be versatile and to reduce manufacturing costs as compared to
competing oral extended-release delivery technologies. The oral film technology
allows for the instant delivery of pharmaceuticals to the oral cavity, while the
Mucoadhesive Tablet allows for the controlled release of active substances to
the oral mucosa. </P>
<P align=justify>The Multilayer Tablet (&#147;VersaTab&#148;) platform technology
represents a new generation of controlled release layered tablets designed to
modulate the release of active compounds. The technology is based on a
multilayer tablet with an active core layer and erodible cover layers. The
release of the active drug from the core matrix initially occurs in a
first-order fashion. As the cover layers start to erode-, ther permeability for
the active ingredient through the cover layers increases. Thus, the Multilayer
Tablet can produce quasi-linear (zero-order) kinetics for releasing a chemical
compound over a desired period of time. The erosion rate of the cover layers can
be customized according to the physico-chemical properties of the active drug.
In addition, our multilayer technology offers the opportunity to develop
combination products in a regulatory-compliant format. Combination products are
made up of two or more active ingredients that are combined into a single dosage
form. </P>
<P align=center>10 </P>
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<P align=justify>The Oral Film technology (&#147;VersaFilm&#148;) is made up of a thin
(25-35 micron) polymeric film comprised of USP components that are approved by
the FDA for use in food, pharmaceutical, and cosmetic products. Derived from the
edible film technology used for breath strips and initially developed for the
instant delivery of savory flavors to food substrates, the VersaFilm technology
is designed to provide a rapid response relative to existing fast dissolving
oral tablets. The VersaFilm technology is intended for indications requiring
rapid onset of action, such as migraine, motion sickness, erectile dysfunction,
and nausea. </P>
<P align=justify>The Mucoadhesive Tablet (&#147;AdVersa&#148;) is a drug delivery system
capable of adhering to the oral mucosa and releasing the drug onto the site of
application at a controlled rate. The Mucoadhesive Tablet is designed to provide
the following advantages relative to competing technologies: (i) it avoids the
first pass effect (whereby the liver metabolizes the active and greatly reduces
the level of drug in the systemic circulation), (ii) it leads to a higher
absorption rate as compared to the conventional oral route, and (iii) it
achieves a rapid onset of action for the drug. The Mucoadhesive Tablet
technology is designed to be versatile in order to permit the site of
application, residence time, and rate of release of the drug to be modulated to
achieve the desired results. </P>
<P align=justify><B>Product Portfolio </B></P>
<P align=justify>Our product portfolio includes a blend of generic and branded
products based on our proprietary delivery technology (&#147;generic&#148; drugs are
essentially copies of drugs that have already received FDA approval).</P>
<P align=justify>INT0001/2004. This is the most advanced generic product
involving our trilayer technology. Equivalency with the reference product Toprol
XL and its European equivalent Beloc-ZOK has been demonstrated <I>in-vitro</I>.
The product has been tested in phase I studies. </P>
<P align=justify>INT0003/2005. We have entered into a partnership with Cary
Pharmaceuticals for the development of a once-daily tablet product containing an
antidepressant and a nicotine antagonist. The product is intended for smoking
cessation.</P>
<P align=justify>INT0004/2006. The development of an antidepressant has been
completed. A regulatory file for a 505(b)(2) NDA submission was filed and has
been accepted by the FDA for &#147;standard review&#148;.</P>
<P align=justify>INT0005/2005. We are developing a bilayer tablet containing a
fixed-dose combination of a non-steroidal anti-inflammatory drug and a synthetic
prostaglandin. Formulation development is completed and a pilot bio batch has
been manufactured. </P>
<P align=justify>INT0006/2005. We have entered into a development agreement with
Azur Pharma for the development and manufacture of a prenatal vitamin
supplement. The product was developed using our proprietary technology. The
product was launched in the United States during the fourth quarter of 2008
under the brand name Gesticare&#174;. </P>
<P align=justify>INT0010/2006. We have entered into an agreement with Cannasat
Therapeutics Inc. for the development of a buccal mucoadhesive tablet product
containing a cannabinoid-based drug for the treatment of neuropathic pain and
nausea in cancer patients undergoing chemotherapy. </P>
<P align=justify>INT0014/2008. Under a development agreement with Cannasat
Therapeutics Inc., we are developing a controlled-release tablet containing
Cannabidiol for the treatment of schizophrenia. </P>
<P align=justify>INT0007/2006. An oral film product based on our proprietary
edible film technology is currently in the early development stage. The product
is intended for the treatment of erectile dysfunction (ED). </P>
<P align=justify>INT0008/2007. An oral film product based on our proprietary
edible film technology is currently in the early development stage. The product
is intended for the treatment of migraine. </P>
<P align=justify>INT0015/2008. An oral film product based on our proprietary
edible film technology is currently in the early development stage. The product
is intended for the treatment of panic attacks. </P>
<P align=justify>INT0018/2008. We have entered into a development and licensing
agreement with Circ Pharma Ltd. to formulate, manufacture and supply a novel
drug product, based upon our proprietary VersaTab technology, for the treatment
of hyperlipidemia. The product is currently in the early development stage. </P>
<P align=justify>INT0019/2009. An oral film product based on our proprietary
edible film technology is currently in the early development stage. The product
is intended for the treatment of diarrhea. </P>
<P align=justify>The current development status of each of our products as of
the date of this filing is summarized in the following table: </P>
<P align=center>11 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Product</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="33%"><B>Application</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="33%"><B>Status of Development</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>INT0001/2004 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%"
    bgColor=#e6efff>CHF, Hypertension </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%"
    bgColor=#e6efff>Pivotal batches in preparation </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>INT0003/2005 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="33%">Smoking cessation </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%">Pilot
      biostudy completed </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>INT0004/2006 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%"
    bgColor=#e6efff>Antidepressant </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%"
    bgColor=#e6efff>NDA filed Q1, 2009 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>INT0010/2006 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="33%">Neuropathic pain </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%">Pilot
      biostudy completed </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>INT0006/2005 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%"
    bgColor=#e6efff>Prenatal vitamin supplement </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%"
    bgColor=#e6efff>Product launched in USA Q4, 2008 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>INT0005/2005 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="33%">Osteoarthritis </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%">Pilot
      batch completed </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>INT0007/2006 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%"
    bgColor=#e6efff>ED </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%"
    bgColor=#e6efff>Formulation development ongoing </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>INT0008/2007 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="33%">Migraine </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="33%">Formulation development ongoing </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>INT0014/2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%"
    bgColor=#e6efff>Schizophrenia </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%"
    bgColor=#e6efff>Formulation development ongoing </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>INT0015/2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%">Panic
      Attack </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="33%">Formulation development ongoing </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>INT0018/2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%"
    bgColor=#e6efff>Hyperlipidemia </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="33%"
    bgColor=#e6efff>Formulation development ongoing </TD></TR>
  <TR vAlign=top>
    <TD align=left>INT0019/2009 </TD>
    <TD align=left width="33%">Diarrhea </TD>
    <TD align=left width="33%">Formulation development ongoing
</TD></TR></TABLE></DIV>
<P align=justify><B>Growth Strategy</B></P>
<P align=justify>Our primary growth strategies include: (1) identifying
lifecycle management opportunities for existing &#147;blockbuster&#148; products, (2)
developing generic drugs with high barriers to entry, (3) developing products
for the (non-pharmaceutical) nutritional supplement market, and (4) developing
new drug delivery technologies. </P>
<P align=justify><B>Lifecycle Management Opportunities </B></P>
<P align=justify>We are seeking to position our delivery technologies as an
opportunity for lifecycle management of products for which the patent protection
of the active ingredient is nearing expiration. While the patent for the
underlying substance cannot be extended, patent protection can be obtained for a
new and improved formulation by filing an application with the FDA under Section
505(b)(2) of the U.S. Federal Food, Drug and Cosmetic Act. Such applications,
known as a &#147;505(b)(2) NDA&#148;, are permitted for new drug products that
incorporate previously approved active ingredients, even if the proposed new
drug incorporates an approved active ingredient in a novel formulation or for a
new indication. A 505(b)(2) NDA may include information regarding safety and
efficacy of a proposed drug that comes from studies not conducted by or for the
applicant. The first formulation for a respective active ingredient filed with
the FDA under a 505(b)(2) application may qualify for up to three years of
market exclusivity upon approval. Based upon a review of past partnerships
between third party drug delivery companies and pharmaceutical companies,
management believes that drug delivery companies which possess innovative
technologies to develop these special dosage formulations present an attractive
opportunity to pharmaceutical companies. Accordingly, we believe these so-called
&#147;505(b)(2) products&#148; represent a viable business opportunity for us. </P>
<P align=justify><B>Generic Drugs with High Barriers to Entry </B></P>
<P align=justify>We will also plan to pursue the development of generic drugs
that have certain barriers to entry, e.g., where product development and
manufacturing are complex and can limit the number of potential entrants into
the generic market. We plan to pursue such projects only if the number of
potential competitors is deemed relatively insignificant. An example of such a
product is our project INT0005/2005, a fixed-dose combination medication
requiring complex formulation and manufacturing technology.</P>
<P align=center>12 </P>
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<P align=justify><B>Nutritional Supplement Products </B></P>
<P align=justify>We plan to develop additional products for the nutritional
supplement market based upon our proprietary drug delivery technologies. The
market for these supplements is large, with little differentiation between
products. Our proprietary technology is aimed at increasing the absorption rate
of active ingredients. We believe that supplements represent attractive short
term revenue opportunities since they are not regulated as pharmaceutical
products and do not require FDA approval.</P>
<P align=justify><B>Development of New Drug Delivery Technologies </B></P>
<P align=justify>The rapidly disintegrating film technology contained in our
VersaFilm and our AdVersa mucosal adhesive tablet are examples of our efforts to
develop alternate technology platforms. As we work with various partners on
different products, we seek opportunities to develop new proprietary
technologies.</P>
<P align=justify><B>Competition </B></P>
<P align=justify>The pharmaceutical industry is highly competitive and is
subject to the rapid emergence of new technologies, governmental regulations,
healthcare legislation, availability of financing, patent litigation and other
factors. Many of our competitors, including Biovail Corporation, Labopharm Inc.,
and Flamel Technologies S.A., have longer operating histories and greater
financial, technical, marketing, legal and other resources than us. In addition,
many of our competitors have significantly greater experience than we have in
conducting clinical trials of pharmaceutical products, obtaining FDA and other
regulatory approvals of products, and marketing and selling products that have
been approved. We expect that we will be subject to competition from numerous
other companies that currently operate or are planning to enter the markets in
which we compete.</P>
<P align=justify>The key factors affecting the development and commercialization
of our drug delivery products are likely to include, among other factors:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>The safety and efficacy of our products;
  <LI>The relative speed with which we can develop products;
  <LI>Generic competition for any product that we develop;
  <LI>Our ability to defend our existing intellectual property and to broaden
  our intellectual property and technology base;
  <LI>Our ability to differentiate our products;
  <LI>Our ability to manufacture our products in compliance with &quot;cGMP&quot; and any other regulatory requirements; and
  <LI>Our ability to obtain financing. </LI></UL>
<P align=justify>In order to establish ourselves as a viable industry partner,
we plan to continue to invest in our research and development activities in
order to further strengthen our technology base and to develop the ability to
manufacture our products through our manufacturing partner at competitive
costs.</P>
<P align=justify><B>Our Competitive Strengths</B></P>
<P align=justify>We believe that our key competitive strengths include:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>Our intellectual property;
  <LI>The versatility of our drug delivery technology; and
  <LI>The potential manufacturing cost savings associated with our technology.
  </LI></UL>
<P align=justify><B>Manufacturing Partnership </B></P>
<P align=justify>We have entered into a collaboration agreement with Keata
Pharma Inc. (&quot;Keata
Pharma&quot;), a wholly owned subsidiary of PharmEng International Inc., based in
Markham, Ontario. Under this agreement, Keata Pharma is our preferred supplier
for the manufacturing of clinical test batches and commercial products. We also have a reciprocal relationship
whereby we recommend Keata Pharma to our partners for pharmaceutical
manufacturing services and Keata Pharma promotes our product development
services to pharmaceutical companies.</P>
<P align=center>13 </P>
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<P align=justify><B>Dependence on Major Customers </B></P>
<P align=justify>We do not rely on any one or a few major customers for our end
products. However, we depend upon a limited number of partners to develop our
products, to provide funding for the development of our products, and to assist
in obtaining regulatory approvals that are required in order to commercialize
these products. </P>
<P align=justify><B>Intellectual Property and Patent Protection </B></P>
<P align=justify>We protect our intellectual property and technology by using
the following methods: (i) applying for patent protection in the United States
and in the appropriate foreign markets, (ii) non-disclosure agreements, license
agreements and appropriate contractual restrictions and controls on the
distribution of information, (iii) trade secrets, common law trademark rights
and trademark registrations. We plan to file core technology patents covering
the use of our platform technologies in any pharmaceutical products. </P>
<P align=justify>We have obtained three (3) patents and have an additional seven
(7) pending patent applications pending, as described below. The patents expire
20 years after submission of the initial application.</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left><B>Patent No.</B> </TD>
    <TD align=left width="25%"><B>Title</B> </TD>
    <TD align=left width="25%"><B>Subject</B> </TD>
    <TD align=left width="25%"><B>Date submitted / issued</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
      <P align=justify>US 6,231,957 </P></TD>
    <TD align=left width="25%" bgColor=#e6efff>
      <P align=justify>Rapidly disintegrating flavor wafer for flavor enrichment
      </P></TD>
    <TD align=left width="25%" bgColor=#e6efff>
      <P align=justify>The composition, manufacturing, and use of rapidly
      disintegrating flavored films for releasing flavors to certain substrates
      </P></TD>
    <TD align=left width="25%" bgColor=#e6efff>
      <P align=justify>Issued May 15, 2001 </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>US 6,660,292 </TD>
    <TD align=left width="25%">Rapidly disintegrating film for precooked foods
    </TD>
    <TD align=left width="25%">Composition and manufacturing of flavored films
      for releasing flavors to precooked food substrates </TD>
    <TD align=left width="25%">Issued December 9, 2003 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>US 7,132,113 </TD>
    <TD align=left width="25%" bgColor=#e6efff>Flavored film </TD>
    <TD align=left width="25%" bgColor=#e6efff>Composition and manufacturing
      method of multi-layered films </TD>
    <TD align=left width="25%" bgColor=#e6efff>Issued April 16, 2002 </TD></TR>
  <TR vAlign=top>
    <TD align=left>US Appl. 2007/0190144 </TD>
    <TD align=left width="25%">Multilayer Tablet </TD>
    <TD align=left width="25%">Formulation and Method of Preparation of
      Multilayered Tablets </TD>
    <TD align=left width="25%">Published August 16, 2007
</TD></TR></TABLE></DIV>
<P align=center>14 </P>
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<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
      <P align=justify>US Appl. 2007/0128272 </P></TD>
    <TD align=left width="25%" bgColor=#e6efff>
      <P align=justify>Multi-Vitamin And Mineral Supplement </P></TD>
    <TD align=left width="25%" bgColor=#e6efff>
      <P align=justify>Formulation And Method of Preparation of Prenatal
      Multivitamin Supplement </P></TD>
    <TD align=left width="25%" bgColor=#e6efff>
      <P align=justify>Published June 7, 2007 </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>
      <P align=justify>PCT/CA2006/000336<I>;</I> US Appl. 11/403,262 </P></TD>
    <TD align=left width="25%">
      <P align=justify>Delayed Release Oral Dosage Form And Method Of Making
      Same </P></TD>
    <TD align=left width="25%">
      <P align=justify>Formulation And Method Of Making Bilayer Tablets
      Containing Delayed-Release Diclofenac And Misoprostol </P></TD>
    <TD align=left width="25%">
      <P align=justify>February 13, 2006 </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
      <P align=justify>US Appl. 11/782,838 PCT/IB2007/03950 </P></TD>
    <TD align=left width="25%" bgColor=#e6efff>
      <P align=justify>Controlled Release Pharmaceutical Tablets </P></TD>
    <TD align=left width="25%" bgColor=#e6efff>
      <P align=justify>Formulation And Method Of Making Tablets Containing
      Bupropion And Mecamylamine </P></TD>
    <TD align=left width="25%" bgColor=#e6efff>
      <P align=justify>July 2006 </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>
      <P align=justify>US Appl. Make Special 11/828,287 </P></TD>
    <TD align=left width="25%">
      <P align=justify>Stabilized sustained- release Bupropion and Bupropion /
      Mecamylamine tablets </P></TD>
    <TD align=left width="25%">
      <P align=justify>Formulation And Method Of Making Tablets Containing
      Bupropion And Mecamylamine </P></TD>
    <TD align=left width="25%">
      <P align=justify>August 2007 </P></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
      <P align=justify>US Provisional Appl. Attorney Docket INT34 P-311 </P></TD>
    <TD align=left width="25%" bgColor=#e6efff>
      <P align=justify>Buccal And Sublingual Dosage Forms </P></TD>
    <TD align=left width="25%" bgColor=#e6efff>
      <P align=justify>Formulation And Method of Preparation of mucoadhesive
      tablets containing THC </P></TD>
    <TD align=left width="25%" bgColor=#e6efff>
      <P align=justify>July 2007 </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>US Provisional Appl. Attorney Docket INT34 P-310 </TD>
    <TD align=left width="25%">Cannabinoid Complexes </TD>
    <TD align=left width="25%">Formulation And Method of Preparation of gamma-
      cyclodextrin complexes containing CBD </TD>
    <TD align=left width="25%">July 2007 </TD></TR></TABLE></DIV>
<P align=justify><B>Government Regulation</B> </P>
<P align=justify>The pharmaceutical industry is highly regulated. The products
we participate in developing require certain regulatory approvals. In the United
States, drugs are subject to rigorous regulation by the FDA. The U.S. Federal
Food, Drug, and Cosmetic Act, and other federal and state statutes and
regulations, govern, among other things, the research, development, testing,
manufacture, storage, record keeping, packaging, labeling, adverse event
reporting, advertising, promotion, marketing, distribution, and import and
export of pharmaceutical products. Failure to comply with applicable regulatory
requirements may subject a company to a variety of administrative or
judicially-imposed sanctions and/or the inability to obtain or maintain required
approvals or to market drugs. The steps ordinarily required before a new
pharmaceutical product may be marketed in the United States include: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>preclinical laboratory tests, animal studies and formulation studies under
  FDA&#146;s good laboratory practices regulations, or GLPs;
  <LI>the submission to the FDA of an investigational new drug application, or
  IND, which must become effective before human clinical trials may begin;
  <LI>the completion of adequate and well-controlled clinical trials according
  to good clinical practice regulations, or GCPs, to establish the safety and
  efficacy of the product for each indication for which approval is sought;
  <LI>After successful completion of the required clinical testing, submission
  to the FDA of a New Drug Application, or NDA, or an Abbreviated New Drug
  Application, or ANDA, for generic drugs. In certain cases, an application for
  marketing approval may include information regarding safety and efficacy of a
  proposed drug that comes from studies not conducted by or for the applicant.
  Such applications, known as a 505(b)(2) NDA, are permitted for new drug
  products that incorporate previously approved active ingredients, even if the
  proposed new drug incorporates an approved active ingredient in a novel
  formulation or for a new indication.
  <LI>satisfactory completion of an FDA inspection of the manufacturing facility
  or facilities at which the product is produced to assess compliance with cGMPs
  to assure that the facilities, methods and controls are adequate to preserve
  the drug&#146;s identity, strength, quality and purity; and
  <LI>FDA review and approval of the NDA or ANDA. </LI></UL>
<P align=center>15 </P>
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<P align=justify>The cost of complying with the foregoing requirements,
including preparing and submitting an NDA or ANDA, may be substantial.</P>
<P align=justify>Accordingly, we typically rely upon our partners in the
pharmaceutical industry to spearhead and bear the costs of the FDA approval
process. We also seek to mitigate regulatory costs by focusing on 505(b)(2) NDA
opportunities. By applying our drug delivery technology to existing drugs, we
seek to develop products with lower R&amp;D expenses and shorter time-to-market
timelines as compared to regular NDA products.</P>
<P align=justify><B>Research and Development Expense</B></P>
<P align=justify>Our Research &amp; Development (&#147;R&amp;D&#148;) expenses, net of
R&amp;D tax credits, for the year ended December 31, 2008 were $1,779,741 as
compared to $603,374 for the year ended December 31, 2007. </P>
<P align=justify><B>Environmental Regulatory Compliance </B></P>
<P align=justify>We believe that we are in compliance with environmental
regulations applicable to our research and development facility located in Ville
Saint-Laurent, Quebec. </P>
<P align=justify><B>Employees </B></P>
<P align=justify>As of the date of this filing, we have nine full time
employees. </P>
<P align=center><B>DESCRIPTION OF PROPERTY </B></P>
<P align=justify>We currently occupy 3,100 square feet of leased space at a rate
of CDN$8.64/square foot in an industrial zone in Ville St.-Laurent, Quebec,
Canada under a five year renewable lease agreement signed in 2004. We extended
the term of the lease agreement to August 31, 2010 under similar financial
conditions, with the option to terminate at any time after February 28, 2010,
provided we give four months notice. We expanded our laboratory and office space
at this facility to its maximum during the second quarter of 2006. In order to
continue to support ongoing product development activities and allow the
addition of further development programs we might be required to seek a
different location in 2009. Management has therefore entered into discussions
with the current landlord to look for alternative facilities that would meet our
need for additional space at affordable costs. </P>
<P align=center><B>MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION</B> <BR><B>AND RESULTS OF OPERATIONS</B> </P>
<P align=justify><B>Results of Operations - Year ended December 31, 2008
compared to Year ended December 31, 2007. </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="10%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Increase/</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Percentage</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>2008</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>2007</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>(Decrease)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Revenue </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;976,610 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;862,731 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;113,879 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>13% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Research and Development Expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">2,085,433 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">777,773 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">1,307,660 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">168% </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Research and Development Tax Credit </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(305,692</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(174,399</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(131,293</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>75% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Management Salaries </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">551,771 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">328,513 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">223,258 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">68% </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>General and Administrative Expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>212,915 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>166,249 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>46,666 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>28% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Professional Fees </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">695,158 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">424,817 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">270,341 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">64% </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Interest and Financing Fees </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>766,136 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>349,093 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>417,043 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>120% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Foreign Exchange </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">(122,915</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">113,552 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">(236,467</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">N/A </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Income taxes </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(151,581</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(64,077</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(87,504</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>137% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Net Income (Loss) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">(2,806,387</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">(1,100,793</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">(1,705,594</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">155% </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=center>16 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_20></A>
<P align=justify><B>Revenues </B></P>
<P align=justify>Total revenue increased $113,879, or 13%, to $976,610 for the
year ended December 31, 2008 from $862,731 for the year ended December 31,
2007.</P>
<P align=justify>The increase in revenue is primarily attributable to revenues
invoiced pursuant to our research and development agreements with our
pharmaceutical partners for development milestones achieved, which amounted to
$945,760 in 2008 compared with $835,376 in the previous year.</P>
<P align=justify>Also included within revenue is interest income of $30,864
earned on the cash proceeds from the sale of our securities in May 2007 and in
March 2008. This compares to interest income of $27,355 in 2007.</P>
<P align=justify><B>Research and Development (&#147;R&amp;D&#148;) Expenses </B></P>
<P align=justify>R&amp;D expenses, net of R&amp;D tax credits, for the year
ended December 31, 2008 were $1,779,741 and represent an increase of $1,176,367
compared to the year ended December 31, 2007.</P>
<P align=justify>Gross R&amp;D expenses for the year ended December 31, 2008
were $2,085,433, as compared to $777,773 for the previous year. </P>
<P align=justify>Included within R&amp;D expenses for 2008 are approximately
$915,444 of costs related to the development of the CPI-300 pursuant to the
collaboration agreement with Cary Pharmaceuticals. These expenses, while
significant, are in line with both the project plan and with management&#146;s
expectations. These expenses include approximately $500,122 related to clinical
trials for the Food Effect Study and the Bioequivalence Study undertaken in
recent months. </P>
<P align=justify>The remainder of the increase is primarily attributable to the
increased drug development activities of our other projects.</P>
<P align=justify>Also included within R&amp;D expenses for 2008 are R&amp;D
Salaries of $422,930, approximately $13,404 of which represents non-cash
compensation. This compares to R&amp;D salaries of $301,935 in 2007, including
$18,187 in non-cash compensation. </P>
<P align=justify>For the year ended December 31, 2008, we have recorded
estimated Research and Development Tax Credits and refunds of $305,692, as
compared to $174,399 for 2007.</P>
<P align=justify><B>Management Salaries and General and Administrative Expenses
</B></P>
<P align=justify>Management salaries increased $223,258, or 68% in 2008, to
$551,771 from $328,513 in 2007. General and administrative expenses increased
28%, to $212,915 in 2008 from $166,249 in 2007.</P>
<P align=justify>The following items are included in management salaries: (i)
approximately $40,572 in non-recurring cash compensation to non employee
directors of the Company (no such costs were incurred in 2007) (ii)
approximately $51,727 in non cash compensation in the form of options granted to
non-employee directors, as compared to $76,734 in 2007, and (iii) approximately
$45,483 in non cash compensation resulting from options granted to management
employees in 2007 and 2008, as compared to $21,218 in 2007. The remaining
increase in management salaries is attributable to the hiring of a full time
Chief Financial Officer and a Vice-President Business Development.</P>
<P align=justify>The increase in general and administrative expenses is
primarily attributable to the increase in corporate operations.<B> </B></P>
<P align=justify><B>Professional Fees </B></P>
<P align=justify>Professional fees for the year ended December 31, 2008
increased by $270,341, or 64%, to $695,158 from $424,817 in 2007.</P>
<P align=justify>The increase in professional fees is primarily attributable to:
(i) management fees of approximately $222,236 paid to Cary Pharmaceuticals
related to the CPI 300 antidepressant (no such costs were incurred in 2007), and
(ii) expenses of approximately $108,714 related to the Company&#146;s listing on the
TSX Venture Exchange, as compared to $22,418 in 2007.</P>
<P align=justify><B>Share-Based Compensation Expense, Warrants and Stock Based
Payments</B></P>
<P align=justify>Share-based compensation expense, warrants and share based
payments totaled $365,225 for the year ended December 31, 2008, as compared to
$202,607 for the year ended December 31, 2007.</P>
<P align=center>17 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_21></A>
<P align=justify>We expensed $111,619 in connection with the amendment of the
anti-dilution terms of convertible notes issued in May 2007. As consideration
for entering into this amendment, the Company agreed to issue to the note
holders an aggregate of 159,456 fully paid common shares. At the same time, the
exercise price of outstanding warrants held by the note holders was adjusted
from $1.02 to $0.80, resulting in an increase in the fair value of the warrant
and an additional compensation charge of $92,571. </P>
<P align=justify>We also expensed approximately $58,887 during 2008 for options
granted to Company employees in 2006, 2007 and 2008 under the 2006 Stock Option
Plan, $51,727 for options granted to non-employee directors, and $50,421 for
options granted to Auctus Capital for investor relations services. </P>
<P align=justify>There remains approximately $47,162 in stock based compensation
to be expensed in fiscal 2009 and 2010 related to the issuance of options during
2007 and 2008. We anticipate that we will issue additional options and warrants
in the future, which will continue to result in stock-based compensation
expense.</P>
<P align=justify><B>Financing Cost</B></P>
<P align=justify>We incurred interest and financing fee expense of $766,136 for
the year ended December 31, 2008, as compared to $349,093 in 2007. Approximately
$670,108 of the expense incurred in 2008 relates to non-cash items. </P>
<P align=justify>The costs in 2008 relate primarily to a non-cash accretion
expense of $465,918 (2007 - $195,317) and cash interest payments of $79,215
(2007 - $66,180) on the convertible notes issued in May 2007. </P>
<P align=justify>In addition, we expensed a non-cash amount of $111,619 in
connection with the amendment of the anti-dilution terms of convertible notes
issued in May 2007. As consideration for entering into this amendment, the
Company agreed to issue to the note holders an aggregate of 159,456 fully paid
common shares. At the same time, the exercise price of outstanding warrants held
by the note holders was adjusted from $1.02 to $0.80, resulting in an increase
in the fair value of the warrant and an additional compensation charge of
$92,571. </P>
<P align=justify>The remainder of $16,813 in financing cost relates to interest
paid on the outstanding shareholder loan, bank fees, and interest.</P>
<P align=justify>Based on the outstanding principal amount of the convertible
notes issued in May 2007, and assuming no additional conversions of these notes
into common stock, we expect to incur interest expense of approximately $71,627
and approximately $515,739 of accreted interest in 2009. </P>
<P align=justify><B>Foreign Exchange</B></P>
<P align=justify>A foreign exchange gain of $122,915 was recorded in 2008, as
compared to a foreign exchange loss of $113,552 in 2007. The foreign exchange
gain in 2008 and the foreign exchange loss in 2007 relate primarily to currency
fluctuations between the Canadian dollar and the U.S. dollar. </P>
<P align=justify><B>Net Loss </B></P>
<P align=justify>The net loss for the year ended December 31, 2008 was
$2,806,387, an increase of $1,705,594, or 155%, as compared to a net loss of
$1,100,793 in 2007. The increase in net loss is attributable to the following:
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD>
      <P align=justify>R&amp;D expenses of approximately $915,444 and Management
      Fees of approximately $222,236 relating to the collaboration agreement
      with Cary Pharmaceuticals to develop the antidepressant CP-300;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD>
      <P align=justify>Professional fees of approximately $108,714 related to
      the Company&#146;s listing on the TSX Venture Exchange; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD>
      <P align=justify>Financing costs of approximately $749,323 incurred in
      relation to the convertible notes issued in May 2007, of which
      approximately $545,133 relates to interest paid and accreted, and $204,190
      relates to amendments to the terms and conditions of the convertible
      notes.</P></TD></TR></TABLE>
<P align=justify>Non-cash related expenses totaling approximately $882,915 are
included within the net loss for 2008, as follows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD>
      <P align=justify>$465,918 in respect of accretion expense on the
      convertible notes issued in May 2007;</P></TD></TR></TABLE>
<P align=center>18 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_22></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD>
      <P align=justify>$111,619 related to the amendment of the anti-dilution
      terms of the convertible notes whereby, as consideration for entering into
      this amendment, the Company agreed to issue to the holders of the
      convertible notes an aggregate of 159,456 fully paid common
  shares;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD>
      <P align=justify>$92,571 additional compensation charge relating to the
      amendment of the exercise price of the outstanding warrants to the note
      holders from $1.02 to $0.80 resulting in an increase in the fair value of
      the warrant;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">d) </TD>
    <TD>
      <P align=justify>$58,887 for options granted to Company
  employees;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">e) </TD>
    <TD>
      <P align=justify>$51,772 in respect of the amortization of fixed
      assets;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">f) </TD>
    <TD>
      <P align=justify>$51,727 for options granted to non-employee directors;
      and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">g) </TD>
    <TD>
      <P align=justify>$50,421 for options granted to Auctus Capital as per the
      investor relations agreement.</P></TD></TR></TABLE>
<P align=justify><B>Key items from the Balance Sheet </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="10%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Increase/</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Percentage</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>2008</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>2007</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>(Decrease)</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>Change</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current Assets </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;1,464,374 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;1,035,920 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;428,454 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>41% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Property and Equipment </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">157,156 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">235,244 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">(78,088</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">33% </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current Liabilities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>525,661 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>261,485 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>264,176 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>101% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Loan Payable, Shareholder </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">82,357 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">101,193 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">(18,836</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">19% </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Convertible notes </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>714,502 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>417,634 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>296,868 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>71% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Deferred Income Tax Liability </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">127,408 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">278,988 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">(151,580</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">54% </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Capital Stock </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>209 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>162 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>47 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>29% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Additional Paid-in-Capital </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">5,080,780 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">2,071,818 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">3,008,962 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">145% </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify><B>Current Assets </B></P>
<P align=justify>Current assets totaled $1,464,374 at December 31, 2008, as
compared to $1,035,920 at December 31, 2007. The increase of $428,454 is
primarily attributable to an increase in cash resulting from the completion of
our private placement on March 27, 2008, and also includes a cash balance of
$277,220 which is restricted in accordance with the Collaborative Agreement with
Cary Pharmaceuticals to jointly develop and commercialize an oral antidepressant
using IntelGenx&#146;s proprietary oral delivery technology.</P>
<P align=justify><B>Prepaid Expenses </B></P>
<P align=justify>As of December 31, 2008, prepaid expenses totaled $44,936, as
compared to $23,443 at December 31, 2007. The increase of $21,493 is
attributable to the payment of a security deposit of $22,681 in connection with
a lease agreement for new premises that the Company plans to relocate to in
2009. </P>
<P align=justify><B>Contractual Obligations and Commitments </B></P>
<P align=justify>Excluding trade accounts payable and accrued liabilities, the
Company is committed to the following contractual obligations and commitments.
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2009</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><B>2010</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Operating Lease Obligations </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>8,119 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>0 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Investor relation </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">24,630 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">0 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Interest on Convertible Notes </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>71,627 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>0 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Total</B> </TD>
    <TD align=left width="1%" ><B>$</B></TD>
    <TD align=right width="12%"><B>104,376</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><B>$</B></TD>
    <TD align=right width="12%"><B>0</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=center>19 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_23></A>
<P align=justify><B>Liquidity and Capital Resources </B></P>
<P align=justify>Our cash and cash equivalents totaled $833,219 as of December
31, 2008, an increase of $502,252 as compared to $330,967 as of December 31,
2007. The increase is primarily attributable to proceeds received from a private
placement completed on March 27, 2008. Our cash and cash equivalents balance
includes a restricted cash amount of $277,220. This amount represents the
remaining balance of the $2,000,000 in cash that was set aside under the terms
of the Collaborative Agreement ratified on April 7, 2008 with Cary
Pharmaceuticals to jointly develop and commercialize an oral antidepressant
using IntelGenx&#146;s proprietary oral delivery technology. </P>
<P align=justify>As at December 31, 2008, we had an accumulated deficit of
$4,725,045, as compared to an accumulated deficit of $1,918,658 as of December
31, 2007. Total assets amounted to $1,621,530 and shareholders&#146; equity amounted
to $171,602 as of December 31, 2008, as compared with total assets and
shareholders&#146; equity of $1,271,164 and $211,864, respectively, as of December
31, 2007. </P>
<P align=justify>As of December 31, 2008, accounts receivable totaled $317,063
(2007 - $427,476), of which $122,095 is a sales tax refund which we expect to
receive during the first quarter of 2009. In addition, we had R&amp;D investment
tax credits receivable of $269,156, as compared to $243,006 as at December 31,
2007. We expect to receive the R&amp;D investment tax credits during the third
quarter of 2009. </P>
<P align=justify>Accounts payable and accrued liabilities as of December 31,
2008 amounted to $525,661 (2007 - $261,485), of which approximately $435,100
relates to research and development activities, approximately $12,706 relates to
professional fees, and $17,857 relates to a retainer to a non-employee director
of the Company. Included within other accruals is approximately $13,390 due to a
shareholder. </P>
<P align=justify>Our consolidated financial statements as of December 31, 2008
have been prepared under the assumption that we will continue as a going concern
for the twelve months ending December 31, 2009. The report of our independent
registered public accounting firm which accompanies our financial statements
includes an explanatory paragraph raising substantial doubt about our ability to
continue as a going concern due to our operating losses our need to obtain
significant additional capital in order to finance our operations and repay our
indebtedness. Accordingly, our ability to continue as a going concern is
dependent upon our ability to obtain additional capital from equity and/or debt
financing, or by generating increased revenues or other sources of income.</P>
<P align=justify>We presently do not have any available credit, bank financing
or other external sources of liquidity as at December 31, 2008. Due to our brief
operating history, our operations have not been a consistent source of
liquidity. We have financed our operating and capital expenditures principally
through the sale of debt and equity securities to accredited and institutional
investors. In May 2007, we issued convertible notes in an aggregate principal
amount of $1.5 million, of which $1,230,241 remained outstanding as of December
31, 2008. In March 2008, we completed a private placement of common stock and
warrants for net proceeds of $2,349,119. Management believes that the Company&#146;s
existing cash resources will be sufficient to meet our operating requirements
for the first six months of 2009. We are seeking additional funding through
additional equity and/or debt financings. However, there can be no assurance
that that any additional financing will become available to us, and if
available, on terms acceptable to us. Any financing, if available, may involve
restrictive covenants that impact our ability to conduct our business and raise
additional funds. If we are unable to raise additional capital when required or
on acceptable terms, we may have to significantly delay, scale back or
discontinue the development and/or commercialization of one or more of our
product candidates.</P>
<P align=justify><B>Property and Equipment </B></P>
<P align=justify>As at December 31, 2008, the net book value of our property and
equipment amounted to $157,156, as compared to $235,244 at December 31, 2007. In
the year ended December 31, 2008 additions to assets totaled $11,274 and
comprised $2,812 for computer equipment, $6,579 for laboratory equipment, and
$1,883 for office equipment, fixtures and fittings. Total depreciation in the
year ended December 31, 2008 amounted to $51,772 and a foreign exchange loss of
$37,590 was recorded. </P>
<P align=justify><B>Loan Payable, Shareholder </B></P>
<P align=justify>As of December 31, 2008, we had a loan payable to a shareholder
with an outstanding principal amount of $82,357, as compared to an outstanding
principal amount of $101,193 at December 31, 2007. $18,836 of the decrease in
the outstanding principal amount is attributable to currency exchange rate
fluctuation. </P>
<P align=justify><B>Capital Stock </B></P>
<P align=justify>As at December 31, 2008, capital stock amounted to $209
compared to $162 at December 31, 2007. The increase reflects the issue of
4,692,856 shares at par value of $0.00001, the majority of which relates to the
private placement completed on March 27, 2008. Capital stock is disclosed at its
par value with the excess of proceeds shown in Additional Paid-in-Capital.</P>
<P align=center>20 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_24></A>
<P align=justify><I>Private Placement of Convertible Notes and Warrants - May
2007 </I></P>
<P align=justify>On May 22, 2007 the Company entered into convertible note
agreements with certain institutional and accredited investors for amounts
totaling $1,500,000. The convertible notes bear interest at the rate of 8% per
annum and are repayable on September 22, 2009. Interest is payable quarterly and
payments commenced on July 1, 2007. The notes are convertible into common shares
of the Company, at the option of the holders, at a conversion price of $0.70 per
share. The Company also issued to the holders 2,142,857 stock purchase warrants
exercisable at $1.02 per share before May 22, 2012. The exercise price of the
warrants was subsequently amended to $0.80 per share in the second quarter of
2008. </P>
<P align=justify>The Company may, at its option, elect to pay the interest by
the issuance of common shares. The number of shares is to be determined by
dividing the amount of the interest payment by the number which is 85% of the
average market price of the Company&#146;s common shares for the 20 trading days
immediately prior to the interest payment date assuming that the average market
price is equal or greater than $0.70 as adjusted for reverse and forward share
splits, recapitalizations and the like that occur after the date of the
Securities Purchase Agreements. </P>
<P align=justify>On May 22, 2007 the Company paid approximately $229,323 in cash
consideration and issued warrants with a fair value of $82,993 in consideration
for transaction costs. These transaction costs were allocated between the
convertible debt and the warrants based on their relative fair value. </P>
<P align=justify>In the second quarter of 2008 the Company issued 159,456 shares
of common stock at $0.70 per share for a total of $111,619 to convertible note
holders. The compensation was for acceptance of the amendment of the
anti-dilution terms of the convertible notes required in connection with the
Company&#146;s TSX listing. At the same time the exercise price of the warrants was
amended from $1.02 to $0.80 per share. </P>
<P align=justify>As at December 31, 2008 we had convertible notes of $714,502
(2007 - $417,634) outstanding, which represents $1,230,241 in convertible note
financing less unamortized discount and deferred charges of $515,739. In 2008 a
total of 235,714 notes were converted into common shares resulting in an
increase of $165,000 in additional paid in capital.</P>
<P align=justify><I>Private Placement of Common Stock and Warrants - March 2008
</I></P>
<P align=justify>On March 27, 2008, we completed a private placement of common
stock and warrants for gross proceeds of $2,800,700. We sold 4,001,000 units,
with each unit consisting of one share of common stock and one common share
purchase warrant. Each warrant entitles the holder to purchase one share of
common stock at an exercise price of $1.02 per common share and expires 24
months after the date of issuance. </P>
<P align=justify>In connection with this private placement, we paid a placement
agent a cash commission in the amount of $196,000, which is equal to 7% of the
gross proceeds of the offering. We also issued to the placement agent an option
entitling the placement agent to acquire 320,080 units at $0.70 per unit, which
expires 24 months after the date of issuance.</P>
<P align=justify>The cash consideration paid to the placement agent and the fair
value of the placement agent&#146;s option is reflected as a reduction to additional
paid-in capital. </P>
<P align=justify>Pursuant to the terms of the private placement, we were
obligated to use our best efforts to: (i) have our common stock listed on the
TSX Venture Exchange, and (ii) file a resale registration statement with the
U.S. Securities and Exchange Commission that registers for resale the common
stock and the common stock issuable upon exercise of the warrants and the
placement agent option. We fulfilled these obligations within the required time
limits. </P>
<P align=justify><B>Additional Paid-in-Capital </B></P>
<P align=justify>Additional paid-in capital totaled $5,080,780 at December 31,
2008, as compared to $2,071,818 at December 31, 2007. The increase is
attributable to increases of $2,127,920, $672,740, and $95,000 for the private
placement completed in March 2008 in relation to common stock issued, warrants
and placement agent compensation respectively as well as a decrease of $546,581
for transaction costs. Additional paid in capital also increased by $365,223 for
stock based compensation. Of this amount, $111,617 relates to compensation to
convertible note holders for their acceptance of an amendment of the
anti-dilution terms of their convertible notes required in connection with the
Company&#146;s TSX listing; $92,571 relates to the adjustment of the exercise price
of the warrants held by the convertible note holders; and $161,035 relates to
the amortization of stock options granted to employees, directors, and to our
investor relations consultant, Auctus Capital. Additional paid in capital
increased further by $164,998 for converted notes, by $88,663 for options
exercised, and by $40,999 for warrants exercised.<B>Key items from the Statement
of Cash Flows </B></P>
<P align=center>21 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_25></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="10%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Increase/</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Percentage</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>2008</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>2007</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>(Decrease)</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B>Change</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Operating Activities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;(1,737,032</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;(968,659</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;(768,373</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>79% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Financing Activities </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">2,478,784 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">1,162,806 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">1,315,978 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">113% </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Investing Activities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(284,277</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(82,961</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(201,316</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>243% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cash and cash equivalents - end of period </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">555,999 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">330,967 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">225,032 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">68% </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify>Net cash used by operating activities was $1,737,032 in the
year ended December 31, 2008, as compared to $968,659 for the same period in
2007. In 2008, net cash used by operating activities consisted of an operating
loss of $2,806,387 and an increase in non-cash operating elements of working
capital of $337,974.</P>
<P align=justify>Non-cash items included in operating activities totaled
approximately $731,334, as follows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD>
      <P align=justify>$465,918 in respect of accretion expense on the
      convertible notes issued in May 2007l</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD>
      <P align=justify>$111,619 related to the amendment of the anti-dilution
      terms of the convertible notes whereby, as consideration for entering into
      this amendment, the Company agreed to issue to the holders of the
      convertible notes an aggregate of 159,456 fully paid common
  shares;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD>
      <P align=justify>$92,571 additional compensation charge relating to the
      amendment of the exercise price of the outstanding warrants to the note
      holders from $1.02 to $0.80 resulting in an increase in the fair value of
      the warrant;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">d) </TD>
    <TD>
      <P align=justify>$58,887 for options granted to Company
  employees;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">e) </TD>
    <TD>
      <P align=justify>$51,772 in respect of the amortization of fixed
      assets;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">f) </TD>
    <TD>
      <P align=justify>$51,727 for options granted to non-employee
    directors;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">g) </TD>
    <TD>
      <P align=justify>$50,421 for options granted to Auctus Capital as per the
      investor relation agreement; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">h) </TD>
    <TD>
      <P align=justify>($151,581) in respect of deferred income tax related to
      the convertible debt.</P></TD></TR></TABLE>
<P align=justify>Our operating activities will continue to consume our available
funds until we can generate increased revenues. </P>
<P align=justify>Net cash provided by financing activities was $2,478,784 for
the year ended December 31, 2008, as compared to $1,162,806 provided in 2007. Of
the net cash provided by financing activities in 2008, $2,800,700 came from a
private placement financing completed on March 27, 2008, less $451,581 used to
pay related transaction costs, and $129,665 was generated from the issue of
capital stock in the second and third quarters. </P>
<P align=justify>Net cash used in investing activities was $284,277 for the year
ended December 31, 2008 compared to a use of funds of $82,961 in 2007. Net cash
used in investing activities in 2008 includes $277,220 of cash restricted for
the CPI-300 project under the collaborative agreement with Cary Pharmaceuticals.
In accordance with the collaborative agreement dated April 7, 2008 the Company
agreed to restrict $2,000,000 of its cash reserves in development support
activities for an oral antidepressant using the Company&#146;s proprietary oral
delivery technology. As at December 31, 2008, in line with project planning and
management&#146;s expectations, the Company had expensed approximately $1,832,470 on
the project of which $1,722,780 had been disbursed, resulting in a restricted
cash balance of $277,220 and amounts payable of $109,690. Included within these
disbursements is approximately $222,236 paid to Cary Pharmaceuticals in respect
of management fees.</P>
<P align=justify>Cash of $7,057 was used to purchase capital assets in 2008, as
compared to $82,961 in 2007. </P>
<P align=justify>The balance of cash as of December 31, 2008 amounted to
$555,999, as compared to $330,967 at December 31, 2007. This amount excludes the
restricted cash amount of $277,220 for the CPI-300 project. The increase in cash
is primarily the result of proceeds from the private placement completed in
March 2008. The increase in cash was partially offset by an increase in R&amp;D
expenses, the full year effect of management salaries, and costs associated with
the Company&#146;s listing on the TSX Venture Exchange. </P>
<P align=center><B>USE OF PROCEEDS </B></P>
<P align=justify>The selling security holders will receive all of the proceeds
from the sale of shares of common stock pursuant to this prospectus. We will not
receive any proceeds from the sale of the shares of common stock offered by the
selling security holders to the public. However, we will receive proceeds from
the exercise of the Warrants, as well as from the exercise of the Placement
Agent Options. Any such proceeds will be used to support the Company's strategic
development projects and for working capital. </P>
<P align=center>22 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_26></A>
<P align=center><B>MARKET PRICE OF AND DIVIDENDS ON REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER</B> <B>MATTERS </B></P>
<P align=justify><B>Market for Registrant&#146;s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities </B></P>
<P align=justify>Our common stock has been quoted on the OTC Bulletin Board
under the symbol &#147;IGXT&#148; since January 2007. In addition, our common stock has
been listed on the TSX Venture Exchange under the symbol &#147;IGX&#148; since May 2008.
The table below sets forth the high and low bid prices of our common stock as
reported by the OTC Bulletin Board and the TSX for the periods indicated. These
prices represent inter-dealer quotations without retail markup, markdown, or
commission and may not necessarily represent actual transactions. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="23%" colSpan=4><B>OTCBB</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="23%" colSpan=4><B>TSX</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>High</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Low</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>High</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%"><B>Low</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="10%">(U.S.$) </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%">(U.S.$) </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%">(CDN$) </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="10%">(CDN$) </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>2009</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Second Quarter</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;0.60 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;0.28 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;0.62 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;0.37 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>First Quarter</B> </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;0.60 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;0.25 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;0.75 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;0.40 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff><BR><B>2008</B> </TD>
    <TD width="1%"  bgColor=#e6efff><BR></TD>
    <TD width="10%" bgColor=#e6efff><BR></TD>
    <TD width="2%"  bgColor=#e6efff><BR></TD>
    <TD width="1%"  bgColor=#e6efff><BR></TD>
    <TD width="10%" bgColor=#e6efff><BR></TD>
    <TD width="2%"  bgColor=#e6efff><BR></TD>
    <TD width="1%"  bgColor=#e6efff><BR></TD>
    <TD width="10%" bgColor=#e6efff><BR></TD>
    <TD width="2%"  bgColor=#e6efff><BR></TD>
    <TD width="1%"  bgColor=#e6efff><BR></TD>
    <TD width="10%" bgColor=#e6efff><BR></TD>
    <TD width="2%"  bgColor=#e6efff><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left>Fourth Quarter </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;0.95 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;0.30 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;0.90 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;0.50 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Third Quarter </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;0.98 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;0.67 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;1.09 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;0.85 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Second Quarter </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;1.01 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;0.80 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;1.00 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;0.80 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>First Quarter </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;1.02 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;0.51 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;N/A </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;N/A </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD><BR><B>2007</B> </TD>
    <TD width="1%" ><BR></TD>
    <TD width="10%"><BR></TD>
    <TD width="2%" ><BR></TD>
    <TD width="1%" ><BR></TD>
    <TD width="10%"><BR></TD>
    <TD width="2%" ><BR></TD>
    <TD width="1%" ><BR></TD>
    <TD width="10%"><BR></TD>
    <TD width="2%" ><BR></TD>
    <TD width="1%" ><BR></TD>
    <TD width="10%"><BR></TD>
    <TD width="2%" ><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Fourth Quarter </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;1.05 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;0.45 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;N/A </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;N/A </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Third Quarter </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;1.90 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;0.87 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;N/A </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;N/A </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Second Quarter </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;1.31 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;0.60 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;N/A </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;N/A </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>First Quarter </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;1.20 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;0.67 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;N/A </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;N/A </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify><B>Number of Shareholders </B></P>
<P align=justify>On August 3, 2009, there were approximately 76 holders of
record of our common shares, one of which was Cede &amp; Co., a nominee for
Depository Trust Company and one of which was The Canadian Depository for
Securities Limited, or CDS. All of our common shares held by brokerage firms,
banks and other financial institutions in the United States and Canada as
nominees for beneficial owners are considered to be held of record by Cede &amp;
Co. in respect of brokerage firms, banks and other financial institutions in the
United States, and by CDS in respect of brokerage firms, banks and other
financial institutions located in Canada. Cede &amp; Co. and CDS are each
considered to be one shareholder of record. <B></B></P>
<P align=justify><B>Dividend Policy </B></P>
<P align=justify>We have never declared or paid any cash dividends on our common
stock. We currently intend to retain any earnings to support operations and to
finance the growth and development of our business. Therefore, we do not expect
to pay cash dividends in the foreseeable future. Any future determination
relating to our dividend policy will be made at the discretion of our Board of
Directors and will depend on a number of factors, including future earnings,
capital requirements, financial conditions and future prospect and other factors
that the board of directors may deem relevant. </P>
<P align=justify><B>Equity Compensation Plan Information </B></P>
<P align=justify><I>2006 Stock Option Plan </I></P>
<P align=justify>A majority of our shareholders approved the 2006 Stock Option
Plan at our Annual General Meeting of Stockholders held on August 10, 2006.
Under the 2006 Stock Option Plan, up to 1,600,749 shares of common stock may be
issued upon the exercise of options granted to directors, management, employees
and consultants.</P>
<P align=center>23 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_27></A>
<P align=justify>In May of 2008, the term of all options granted under the 2006
Stock Option Plan was amended to provide for a term not to exceed five years, in
order to ensure compliance with applicable rules and regulation of the TSX
Venture Exchange. </P>
<P align=justify>At the Annual General Meeting of Stockholders on September 8,
2008, our shareholders approved an amendment to the 2006 Stock Option Plan in
order to increase the number of shares available under the plan by 473,251, to
2,074,000.</P>
<P align=justify>As of March 4, 2009, 2,027,676 options have been issued,
191,500 options have been exercised, 50,000 were forfeited, 62,500 expired and
1,698,676 options remain outstanding under the 2006 Stock Option Plan.</P>
<P align=center><B>Equity Compensation Plan Information as of December 31, 2008
</B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="25%">Number of securities </TD>
    <TD align=center width="25%">Weighted- </TD>
    <TD align=center width="25%">Number of securities </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="25%">to be issued upon </TD>
    <TD align=center width="25%">average </TD>
    <TD align=center width="25%">remaining available </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="25%">exercise of </TD>
    <TD align=center width="25%">exercise price of </TD>
    <TD align=center width="25%">for future issuance </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="25%">outstanding options </TD>
    <TD align=center width="25%">outstanding </TD>
    <TD align=center width="25%">under equity </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="25%">&nbsp; </TD>
    <TD align=center width="25%">options </TD>
    <TD align=center width="25%">compensation plans </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="25%">&nbsp; </TD>
    <TD align=left width="25%">&nbsp; </TD>
    <TD align=center width="25%">(excluding securities </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="25%">&nbsp; </TD>
    <TD align=left width="25%">&nbsp; </TD>
    <TD align=center width="25%">reflected in column (a)) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=center width="25%">(a) </TD>
    <TD align=center width="25%">(b) </TD>
    <TD align=center width="25%">(c) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF">Equity Compensation Plans Approved by </TD>
    <TD align=left width="25%" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD align=left width="25%" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD align=left width="25%" bgcolor="#E6EFFF">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF">Security Holders </TD>
    <TD align=center width="25%" bgcolor="#E6EFFF">1,698,676 </TD>
    <TD align=center width="25%" bgcolor="#E6EFFF">$1.01 </TD>
    <TD align=center width="25%" bgcolor="#E6EFFF">183,824 </TD></TR>
  <TR>
    <TD bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width="25%" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width="25%" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width="25%" bgcolor="#E6EFFF">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>Equity Compensation Plans Not </TD>
    <TD align=left width="25%">&nbsp; </TD>
    <TD align=left width="25%">&nbsp; </TD>
    <TD align=left width="25%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>Approved by Security Holders </TD>
    <TD align=center width="25%">-- </TD>
    <TD align=center width="25%">N/A </TD>
    <TD align=center width="25%">-- </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="25%">&nbsp; </TD>
    <TD width="25%">&nbsp; </TD>
    <TD width="25%">&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="25%">&nbsp; </TD>
    <TD width="25%">&nbsp; </TD>
    <TD width="25%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF">Total </TD>
    <TD align=center width="25%" bgcolor="#E6EFFF">1,698,676 </TD>
    <TD align=center width="25%" bgcolor="#E6EFFF">$1.01 </TD>
    <TD align=center width="25%" bgcolor="#E6EFFF">183,824 </TD></TR></TABLE>
<P align=justify>On September 26, 2006 we granted options to purchase 225,000
shares of common stock to three non-employee directors. These options have an
exercise price of $0.41, vest upon issuance and expire on September 26, 2016.
The expiration date was subsequently amended to September 26, 2011. 75,000 of
those options have been exercised on August 18, 2008, 35,000 have been exercised
on August 19, 2008.</P>
<P align=justify>On October 1, 2006 we granted options to purchase up to 69,000
shares of common stock to a consultant. These options have an exercise price of
$0.41, vest upon issuance, and expire on October 1, 2016. The expiration date
was subsequently amended to September 26, 2011. </P>
<P align=justify>On November 9, 2006 we granted options to purchase up to
450,000 shares of common stock to the chief financial officer and a management employee. These
options have an exercise price of $0.41, vest upon issuance, and expire on
November 9, 2016. The expiration date was subsequently amended to September 26,
2011. </P>
<P align=justify>On November 13, 2006 we granted options to purchase up to
250,000 shares of common stock to a consultant. These options have an exercise
price of $0.41, vest over two years at the rate of 25% every six months, and
expire on November 13, 2016. The expiration date was subsequently amended to
September 26, 2011. </P>
<P align=justify>On November 16, 2006 we granted options to purchase up to
100,000 shares of common stock to employees and 25,000 options to a consultant.
These options have an exercise price of $0.41, vest over 2 years at the rate of
25% every six months, and expire on November 16, 2016. The expiration date was
subsequently amended to September 26, 2011. </P>
<P align=justify>On August 9, 2007 we granted options to purchase up to 107,500
shares of common stock to four non-employee directors. These options have an
exercise price of $1.15, vest upon issuance, and expire on August 9, 2017. The
expiration date was subsequently amended to August 9, 2012. </P>
<P align=justify>On August 9, 2007 we granted options to purchase up to 75,000
shares of common stock to our Vice President of Business Development. These
options have an exercise price of $1.15, vest over 2 years at the rate of 25%
every six months, and expire on August 9, 2017. The expiration date was
subsequently amended to August 9, 2012. </P>
<P align=justify>On August 9, 2007 we granted options to purchase up to 75,000
shares of common stock to our chief financial officer. These options have an
exercise price of $1.15, vest over 2 years at the rate of 25% every six months,
and expire on August 9, 2017. The expiration date was subsequently amended to August 9, 2012. As the result of the
termination of the employment agreement the 75,000 shares to purchase common
stock expired un-exercised in November of 2008. </P>
<P align=center>24 </P>
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<P align=justify>On May 22, 2008 we granted options to purchase up to 51,176
shares of common stock to two of our non-employee directors. These options have
an exercise price of $0.85, vest immediately and expire on May 22, 2013. </P>
<P align=justify>On May 29, 2008 we granted options to purchase up to 400,000
shares of common stock to Auctus Capital Partners Inc. in consideration for investor relation
services. The option grant was subject to shareholder approval to increase the
number of shares to be issued under the 2006 Stock Option Plan. The shareholders
approved to increase the number of shares by 473,251, to 2,074,000 at the Annual
General Meeting on September 8, 2008. The options granted to Auctus Capital have
an exercise price of $1.00, and vest based on a combination of the achievement
of certain performance conditions and the passage of time. The options expire on
May 29, 2013.</P>
<P align=justify>On September 8, 2008 we granted options to purchase up to
75,000 shares of common stock to a non-employee director of the company. These
options have an exercise price of $0.85, vest immediately and expire on
September 8, 2013. </P>
<P align=justify>On September 8, 2008 we granted options to purchase up to
100,000 shares of common stock to our chief financial officer. These options
have an exercise price of $0.85, vest over 2 years at the rate of 25% every six
months, and expire on September 8, 2013. </P>
<P align=center><B>SELLING SECURITY HOLDERS</B> <B></B></P>
<P align=justify>In accordance with (a) a certain Registration Rights Agreement
dated as of July 13, 2009, between the Company and the Placement Agents, entered
into in connection with the Canadian Private Placement, and (b) certain
Subscription Agreements between the Company and certain investors in connection
with the U.S. Private Placement, we have agreed with the selling stockholders to
register the Common Shares, Warrants, Warrant Shares, Placement Agent Shares,
Placement Agent Options and Placement Agent Option Shares. The selling security
holders purchased the Common Shares and Warrants covering these shares in the
July 2009 Private Placement (See &#147;Description of July 2009 Private Placement of
Special Warrants&#148;). The Warrants have not yet been exercised by the selling
security holders.</P>
<P align=justify>Paradigm is a FINRA member broker-dealer. We do not have any arrangement with any of the
Placement Agents for any of them to act as a broker-dealer for the sale of the
shares included herein for the selling stockholders. Paradigm, Bolder  and/or Union may be deemed to
be an underwriter with respect to their respective sales of shares to be offered
by them in this prospectus. Paradigm, Bolder and Union served as the placement
agents in connection with our July 2009 Private Placement. Each of the other
selling security holders has represented to us that it is not a FINRA member nor
an affiliate or associate thereof. </P>
<P align=justify>The shares offered by this prospectus may be offered from time
to time by the selling security holders listed in the following table. Each
selling security holder will determine the number of shares to be sold and the
timing of the sales. Our registration of the shares does not necessarily mean
that the selling security holders will sell all or any of the shares. Because
the selling security holders may offer all, some or none of their shares, no
definitive estimate as to the number of shares thereof that will be held by the
selling security holders after such offering can be provided, and the following
table has been prepared on the assumption that all shares of common stock
offered under this prospectus will ultimately be sold. </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>Name </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Common <BR>Shares
      <BR>Beneficially Owned <BR>Prior to <BR>this <BR>Offering </TD>
    <TD align=center width="10%"><BR><BR><BR>Common <BR>Shares to <BR>Be
      <BR>Received <BR>upon the <BR>Exercise of <BR>Special <BR>Warrants </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Common <BR>Shares to <BR>Be
      <BR>Received <BR>upon the <BR>Exercise of <BR>Warrants </TD>
    <TD align=center width="10%">Common <BR>Shares to <BR>Be <BR>Received
      <BR>upon the <BR>Exercise <BR>of <BR>Placement <BR>Agent <BR>Options
      <BR>(1) </TD>
    <TD align=center width="10%"><BR><BR><BR>Number of <BR>Additional
      <BR>Common <BR>Shares to Be <BR>Received <BR>upon a <BR>Registration
      <BR>Default (2) </TD>
    <TD align=center width="10%">Number of <BR>Common <BR>Shares to Be
      <BR>Received <BR>Upon the <BR>Exercise of <BR>Warrants to <BR>Be Received
      <BR>Upon a <BR>Registration <BR>Default (2) </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Total <BR>Common <BR>Shares
      <BR>that May <BR>Be <BR>Offered <BR>Hereby </TD>
    <TD align=center width="10%"><BR><BR><BR>Common <BR>Shares
      <BR>Beneficially <BR>Owned <BR>Upon <BR>Completion <BR>of This
      <BR>Offering </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Percent <BR>Beneficially
      <BR>Owned <BR>Upon <BR>Completion <BR>of This <BR>Offering (3) </TD></TR>
  <TR vAlign=top>
    <TD align=left>1225131 Alberta <BR>Ltd. </TD>
    <TD align=right width="10%"><BR>-- </TD>
    <TD align=right width="10%"><BR>250,000 </TD>
    <TD align=right width="10%"><BR>250,000 </TD>
    <TD align=right width="10%"><BR>-- </TD>
    <TD align=right width="10%"><BR>25,000 </TD>
    <TD align=right width="10%"><BR>25,000 </TD>
    <TD align=right width="10%"><BR>550,000 </TD>
    <TD align=right width="10%"><BR>-- </TD>
    <TD align=right width="10%"><BR>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>4985479 MB <BR>Ltd. </TD>
    <TD align=right width="10%" bgColor=#e6efff><BR>-- </TD>
    <TD align=right width="10%" bgColor=#e6efff><BR>28,000 </TD>
    <TD align=right width="10%" bgColor=#e6efff><BR>28,000 </TD>
    <TD align=right width="10%" bgColor=#e6efff><BR>-- </TD>
    <TD align=right width="10%" bgColor=#e6efff><BR>2,800 </TD>
    <TD align=right width="10%" bgColor=#e6efff><BR>2,800 </TD>
    <TD align=right width="10%" bgColor=#e6efff><BR>61,600 </TD>
    <TD align=right width="10%" bgColor=#e6efff><BR>-- </TD>
    <TD align=right width="10%" bgColor=#e6efff><BR>--
</TD></TR></TABLE></DIV>
<P align=center>25 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>Name </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Common <BR>Shares
      <BR>Beneficially<BR>Owned <BR>Prior to <BR>this <BR>Offering </TD>
    <TD align=center width="10%"><BR><BR><BR>Common <BR>Shares to <BR>Be
      <BR>Received <BR>upon the <BR>Exercise of <BR>Special <BR>Warrants </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Common <BR>Shares to <BR>Be
      <BR>Received <BR>upon the <BR>Exercise of <BR>Warrants </TD>
    <TD align=center width="10%">Common <BR>Shares to <BR>Be <BR>Received
      <BR>upon the <BR>Exercise <BR>of <BR>Placement <BR>Agent <BR>Options
      <BR>(1) </TD>
    <TD align=center width="10%"><BR><BR><BR>Number of <BR>Additional
      <BR>Common <BR>Shares to Be <BR>Received <BR>upon a <BR>Registration
      <BR>Default (2) </TD>
    <TD align=center width="10%">Number of <BR>Common <BR>Shares to Be
      <BR>Received <BR>Upon the <BR>Exercise of <BR>Warrants to <BR>Be Received
      <BR>Upon a <BR>Registration <BR>Default (2) </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Total <BR>Common <BR>Shares
      <BR>that May <BR>Be <BR>Offered <BR>Hereby </TD>
    <TD align=center width="10%"><BR><BR><BR>Common <BR>Shares
      <BR>Beneficially <BR>Owned <BR>Upon <BR>Completion <BR>of This
      <BR>Offering </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Percent <BR>Beneficially
      <BR>Owned <BR>Upon <BR>Completion <BR>of This <BR>Offering (3) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Acker Finley Asset Management </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>1,565,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>1,565,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>156,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>156,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>3,443,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Donald Bainbridge </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">125,000 </TD>
    <TD vAlign=bottom align=right width="10%">125,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">12,500 </TD>
    <TD vAlign=bottom align=right width="10%">12,500 </TD>
    <TD vAlign=bottom align=right width="10%">275,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Banque SCS Alliance </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>500,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>500,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>50,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>50,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>1,100,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Jeffrey Benison
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">--</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">--</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">220,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Julia Berdrodt </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>12,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>12,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>1,250 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>1,250 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>27,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Bertilvic Investments Ltd. </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">100,000 </TD>
    <TD vAlign=bottom align=right width="10%">100,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">10,000 </TD>
    <TD vAlign=bottom align=right width="10%">10,000 </TD>
    <TD vAlign=bottom align=right width="10%">220,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Julian Bharti </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>62,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>62,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>6,250 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>6,250 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>137,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Bolder Opportunities II LP </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">500,000 </TD>
    <TD vAlign=bottom align=right width="10%">500,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">50,000 </TD>
    <TD vAlign=bottom align=right width="10%">50,000 </TD>
    <TD vAlign=bottom align=right width="10%">1,100,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Randy Boomhour </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>75,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>75,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>7,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>7,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>165,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Maurice Boucher </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">100,000 </TD>
    <TD vAlign=bottom align=right width="10%">100,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">10,000 </TD>
    <TD vAlign=bottom align=right width="10%">10,000 </TD>
    <TD vAlign=bottom align=right width="10%">220,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Brahma Finance (BVI) Ltd. </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>32,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>32,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>3,200 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>3,200 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>70,400 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>C. Channing Buckland </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">400,000 </TD>
    <TD vAlign=bottom align=right width="10%">400,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">40,000 </TD>
    <TD vAlign=bottom align=right width="10%">40,000 </TD>
    <TD vAlign=bottom align=right width="10%">880,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Bukchuk Holdings Ltd. </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>50,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>50,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>5,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>5,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>110,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>David Burt </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">1,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">1,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">22,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Hugh Cleland Jr. </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>50,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>50,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>5,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>5,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>110,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Hugh Cleland Sr. </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">125,000 </TD>
    <TD vAlign=bottom align=right width="10%">125,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">12,500 </TD>
    <TD vAlign=bottom align=right width="10%">12,500 </TD>
    <TD vAlign=bottom align=right width="10%">275,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cresco Enterprises Ltd. </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>10,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>10,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>1,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>1,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>22,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Dawn Patrol Investments LLP </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">12,500 </TD>
    <TD vAlign=bottom align=right width="10%">12,500 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">1,250 </TD>
    <TD vAlign=bottom align=right width="10%">1,250 </TD>
    <TD vAlign=bottom align=right width="10%">27,500 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Henry Der </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>25,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>25,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>2,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>2,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>55,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Peter Dickson </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">220,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Double J Creations </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>37,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>37,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>3,750 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>3,750 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>82,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Derrick Dryden </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">130,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">130,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">13,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">13,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">286,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Jason D&#146;silva </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>40,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>40,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>4,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>4,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>88,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Stephen Dulmage </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">62,500 </TD>
    <TD vAlign=bottom align=right width="10%">62,500 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">6,250 </TD>
    <TD vAlign=bottom align=right width="10%">6,250 </TD>
    <TD vAlign=bottom align=right width="10%">137,500 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Endeavor Asset Management L.P. </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>11,429 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>250,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>250,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>--</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>--</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>550,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>11,429 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>* </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Leslie Frame </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">50,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">50,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">5,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">5,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">110,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>John &amp; Anne Funk </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>25,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>25,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>2,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>2,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>55,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>--
</TD></TR></TABLE></DIV>
<P align=center>26 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_30></A><BR>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>Name </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Common <BR>Shares
      <BR>Beneficiall <BR>y Owned <BR>Prior to <BR>this <BR>Offering </TD>
    <TD align=center width="10%"><BR><BR><BR>Common <BR>Shares to <BR>Be
      <BR>Received <BR>upon the <BR>Exercise of <BR>Special <BR>Warrants </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Common <BR>Shares to <BR>Be
      <BR>Received <BR>upon the <BR>Exercise of <BR>Warrants </TD>
    <TD align=center width="10%">Common <BR>Shares to <BR>Be <BR>Received
      <BR>upon the <BR>Exercise <BR>of <BR>Placement <BR>Agent <BR>Options
      <BR>(1) </TD>
    <TD align=center width="10%"><BR><BR><BR>Number of <BR>Additional
      <BR>Common <BR>Shares to Be <BR>Received <BR>upon a <BR>Registration
      <BR>Default (2) </TD>
    <TD align=center width="10%">Number of <BR>Common <BR>Shares to Be
      <BR>Received <BR>Upon the <BR>Exercise of <BR>Warrants to <BR>Be Received
      <BR>Upon a <BR>Registration <BR>Default (2) </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Total <BR>Common <BR>Shares
      <BR>that May <BR>Be <BR>Offered <BR>Hereby </TD>
    <TD align=center width="10%"><BR><BR><BR>Common <BR>Shares
      <BR>Beneficially <BR>Owned <BR>Upon <BR>Completion <BR>of This
      <BR>Offering </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Percent <BR>Beneficially
      <BR>Owned <BR>Upon <BR>Completion <BR>of This <BR>Offering (3) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Garden Gate Auto Group </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>25,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>25,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>2,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>2,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>55,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Paul Geyer </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">125,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">125,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">12,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">12,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">275,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Jason Grelowski </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>275,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>275,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>27,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>27,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>605,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Joseph Groia </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">25,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">25,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">2,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">2,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">55,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Dr. Essam Hamza </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>25,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>25,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>2,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>2,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>55,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Haywood Securities Inc.(4) </TD>
    <TD vAlign=bottom align=right width="10%">3,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">9,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">12,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Haywood Securities Inc. ITF Bolder
      Investment Partners Ltd. (5) </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>320,780 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>641,560 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>962,340 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Haywood Securities Inc. ITF Woodstone Capital Inc. (6) </TD>
    <TD vAlign=bottom align=right width="10%">3,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">9,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">12,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Herschfeld Hog Farm Ltd. </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>12,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>12,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>1,200 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>1,200 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>26,400 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Sean Hirtle </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">40,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">40,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">4,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">4,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">88,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Geoff Houlton </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>12,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>12,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>1,250 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>1,250 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>27,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Insight Limited Partnership II </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">100,000 </TD>
    <TD vAlign=bottom align=right width="10%">100,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">10,000 </TD>
    <TD vAlign=bottom align=right width="10%">10,000 </TD>
    <TD vAlign=bottom align=right width="10%">220,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Traviss Jeana </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>220,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Paul Jennings </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">62,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">62,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">6,250 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">6,250 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">137,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Douglas Johnson </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>1,500,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>1,500,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>150,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>150,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>3,300,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Rusi Kavarana </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">1,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">1,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">22,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Anthony Ker </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>220,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Johannes Kingma </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">62,500 </TD>
    <TD vAlign=bottom align=right width="10%">62,500 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">6,250 </TD>
    <TD vAlign=bottom align=right width="10%">6,250 </TD>
    <TD vAlign=bottom align=right width="10%">137,500 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Scott Koyich </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>75,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>75,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>7,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>7,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>165,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Dan Kramer </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">87,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">87,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">8,750 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">8,750 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">192,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Yas Lee </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>12,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>12,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>1,200 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>1,200 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>26,400 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Bill Mah </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">7,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">7,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">750 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">750 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">16,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Bernice Mayert </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>40,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>40,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>4,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>4,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>88,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Wayne McCannan </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">10,000 </TD>
    <TD vAlign=bottom align=right width="10%">10,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">1,000 </TD>
    <TD vAlign=bottom align=right width="10%">1,000 </TD>
    <TD vAlign=bottom align=right width="10%">22,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Dennis McCrea </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>40,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>40,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>4,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>4,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>88,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Shane Meyers </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">125,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">125,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">12,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">12,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">275,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Timothy Mills </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>150,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>150,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>15,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>15,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>330,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Rod Muir </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">15,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">15,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">1,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">1,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">33,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Renita Narayan </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>12,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>12,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>1,250 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>1,250 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>27,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Nextel Investment Properties </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">150,000 </TD>
    <TD vAlign=bottom align=right width="10%">150,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">15,000 </TD>
    <TD vAlign=bottom align=right width="10%">15,000 </TD>
    <TD vAlign=bottom align=right width="10%">330,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Leo Nicolaas </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>1,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>1,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>22,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR></TABLE></DIV>
<P align=center>27 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_31></A><BR>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>Name </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Common <BR>Shares
      <BR>Beneficially<BR> Owned <BR>Prior to <BR>this <BR>Offering </TD>
    <TD align=center width="10%"><BR><BR><BR>Common <BR>Shares to <BR>Be
      <BR>Received <BR>upon the <BR>Exercise of <BR>Special <BR>Warrants </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Common <BR>Shares to <BR>Be
      <BR>Received <BR>upon the <BR>Exercise of <BR>Warrants </TD>
    <TD align=center width="10%">Common <BR>Shares to <BR>Be <BR>Received
      <BR>upon the <BR>Exercise <BR>of <BR>Placement <BR>Agent <BR>Options
      <BR>(1) </TD>
    <TD align=center width="10%"><BR><BR><BR>Number of <BR>Additional
      <BR>Common <BR>Shares to Be <BR>Received <BR>upon a <BR>Registration
      <BR>Default (2) </TD>
    <TD align=center width="10%">Number of <BR>Common <BR>Shares to Be
      <BR>Received <BR>Upon the <BR>Exercise of <BR>Warrants to <BR>Be Received
      <BR>Upon a <BR>Registration <BR>Default (2) </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Total <BR>Common <BR>Shares
      <BR>that May <BR>Be <BR>Offered <BR>Hereby </TD>
    <TD align=center width="10%"><BR><BR><BR>Common <BR>Shares
      <BR>Beneficially <BR>Owned <BR>Upon <BR>Completion <BR>of This
      <BR>Offering </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Percent <BR>Beneficially
      <BR>Owned <BR>Upon <BR>Completion <BR>of This <BR>Offering (3) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Paradigm Capital Inc. (7) </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>646,160 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>12,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>18,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>640,160 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>2.86% </TD></TR>
  <TR vAlign=top>
    <TD align=left>Ermanno Pascotto </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">100,000 </TD>
    <TD vAlign=bottom align=right width="10%">100,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">10,000 </TD>
    <TD vAlign=bottom align=right width="10%">10,000 </TD>
    <TD vAlign=bottom align=right width="10%">220,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>David Purcell </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>120,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>120,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>12,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>12,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>264,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Research Capital Corp. </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">15,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">15,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>RWG Holdings Ltd. (8)</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>25,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>25,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>2,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>2,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>55,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Kersi Sarkaul </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">7,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">7,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">750 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">750 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">16,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Selective Asset Management as agent for
      Northwest Specialty Innovations Fund </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>625,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>625,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>62,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>62,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>1,375,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Stephen Silman </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">12,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">12,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">1,250 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">1,250 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">27,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Sandina Sklavenitis </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>50,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>50,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>5,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>5,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>110,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Terry Sklavenitis </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">25,000 </TD>
    <TD vAlign=bottom align=right width="10%">25,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">2,500 </TD>
    <TD vAlign=bottom align=right width="10%">2,500 </TD>
    <TD vAlign=bottom align=right width="10%">55,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Lynne Southward </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>70,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>70,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>7,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>7,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>154,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Scott Southward
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">37,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">37,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">3,750 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">3,750 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">82,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Michael Sweeney </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>12,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>12,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>1,250 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>1,250 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>27,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>TAB Mills </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">150,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">150,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">15,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">15,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">330,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Union Securities Ltd. (9) </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>86,260 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>151,520 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>237,780 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>David Wallster </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">125,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">125,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">12,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">12,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">275,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Suzanne Wallster </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>125,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>125,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>12,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>12,500 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>275,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Phil Walsh </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">37,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">37,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">3,750 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">3,750 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">82,500 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Chris Wardle </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>400,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>400,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>40,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>40,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>880,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>David Wardle Jr.
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">220,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>David Brian Wardle Sr. </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>250,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>250,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>25,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>25,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>550,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Marianne Wardle </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">225,000 </TD>
    <TD vAlign=bottom align=right width="10%">225,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">22,500 </TD>
    <TD vAlign=bottom align=right width="10%">22,500 </TD>
    <TD vAlign=bottom align=right width="10%">495,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>David and Lena Wiebe </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>150,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>150,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>15,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>15,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>330,000 </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD align=left>WKW I Limited Partnership </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">100,000 </TD>
    <TD vAlign=bottom align=right width="10%">100,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">10,000 </TD>
    <TD vAlign=bottom align=right width="10%">10,000 </TD>
    <TD vAlign=bottom align=right width="10%">220,000 </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD>
    <TD vAlign=bottom align=right width="10%">-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Arthur Wong </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>32,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>32,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>3,200 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>3,200 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>70,400 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>-- </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Erroll Wong </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">10,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">1,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">1,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">22,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">-- </TD></TR></TABLE></DIV>
<P align=center>28 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>Name </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Common <BR>Shares
      <BR>Beneficially<BR>Owned <BR>Prior to <BR>this <BR>Offering </TD>
    <TD align=center width="10%"><BR><BR><BR>Common <BR>Shares to <BR>Be
      <BR>Received <BR>upon the <BR>Exercise of <BR>Special <BR>Warrants </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Common <BR>Shares to <BR>Be
      <BR>Received <BR>upon the <BR>Exercise of <BR>Warrants </TD>
    <TD align=center width="10%">Common <BR>Shares to <BR>Be <BR>Received
      <BR>upon the <BR>Exercise <BR>of <BR>Placement <BR>Agent <BR>Options
      <BR>(1) </TD>
    <TD align=center width="10%"><BR><BR><BR>Number of <BR>Additional
      <BR>Common <BR>Shares to Be <BR>Received <BR>upon a <BR>Registration
      <BR>Default (2) </TD>
    <TD align=center width="10%">Number of <BR>Common <BR>Shares to Be
      <BR>Received <BR>Upon the <BR>Exercise of <BR>Warrants to <BR>Be Received
      <BR>Upon a <BR>Registration <BR>Default (2) </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Total <BR>Common <BR>Shares
      <BR>that May <BR>Be <BR>Offered <BR>Hereby </TD>
    <TD align=center width="10%"><BR><BR><BR>Common <BR>Shares
      <BR>Beneficially <BR>Owned <BR>Upon <BR>Completion <BR>of This
      <BR>Offering </TD>
    <TD align=center width="10%"><BR><BR><BR><BR>Percent <BR>Beneficially
      <BR>Owned <BR>Upon <BR>Completion <BR>of This <BR>Offering (3) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgcolor="#E6EFFF">TOTALS </TD>
    <TD align=right width="10%" bgcolor="#E6EFFF">1,070,629 </TD>
    <TD align=right width="10%" bgcolor="#E6EFFF">10,826,000 </TD>
    <TD align=right width="10%" bgcolor="#E6EFFF">10,826,000 </TD>
    <TD align=right width="10%" bgcolor="#E6EFFF">838,080 </TD>
    <TD align=right width="10%" bgcolor="#E6EFFF">1,047,600 </TD>
    <TD align=right width="10%" bgcolor="#E6EFFF">1,047,600 </TD>
    <TD align=right width="10%" bgcolor="#E6EFFF">25,004,320 </TD>
    <TD align=right width="10%" bgcolor="#E6EFFF">651,589 </TD>
    <TD align=right width="10%" bgcolor="#E6EFFF">2.86% </TD></TR></TABLE></DIV>
<P align=justify>* Less than 1%. </P>
<P align=justify>(1) Placement Agent Options are options to acquire Common
Shares at $0.80 per unit, subject to adjustment, until July 13, 2012. </P>
<P align=justify><font FACE="Times New Roman" SIZE="2">(2) Pursuant to the terms
of a certain Registration Rights Agreement dated as of July 13, 2009, between
the Company and the Placement Agents, entered into in connection with the
Canadian Private Placement if the Common Shares and Warrants issuable upon
exercise of the Special Warrants are not qualified by resale by an effective
registration statement on or before November 14, 2009 with respect to Special
Warrants issued in connection with the Canadian Private Placement each
unexercised Special Warrant will be deemed exercised for 1.1 Common Shares and
1.1 Warrants.</P>
</font>
<P align=justify>(3) Assumes that all registered securities will be sold. The
percentages set forth in this column are based on 22,350,113 shares of common
stock outstanding as of August 3, 2009. The number and percentage of shares
beneficially owned is determined in accordance with Rule 13d-3 of the Securities
Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), and the information is
not necessarily indicative of beneficial ownership for any other purpose. Under
such rule, beneficial ownership includes any shares as to which the selling
security holder has sole or shared voting power or investment power and also any
shares, which the selling security holder has the right to acquire within 60
days. </P>
<font FACE="Times New Roman" SIZE="2">
<p align="justify">(4) Includes 3,000 Placement Agent Shares issued on July 13,
2009, and 9,000 common shares underlying Placement Agent Options, issued as
compensation for services as a placement agent in connection with the Canadian
Private Placement. We do not have any arrangement with Haywood Securities Inc.
(&quot;Haywood&quot;) to act as a broker-dealer for the sale of the shares included herein
for the selling stockholders. Haywood may be deemed to be an underwriter with
respect to its sales of shares to be offered by it in this prospectus. </p>
<p align="justify">(5) Includes 320,780 Placement Agent Shares issued on July
13, 2009, and 641,560 common shares underlying Placement Agent Options, issued
as compensation for services as a placement agent in connection with the
Canadian Private Placement. We do not have any arrangement with Bolder to act as
a broker-dealer for the sale of the shares included herein for the selling
stockholders. Bolder may be deemed to be an underwriter with respect to its
sales of shares to be offered by it in this prospectus. </p>
<p align="justify">(6) Includes 3,000 Placement Agent Shares issued on July 13,
2009, and 9,000 common shares underlying Placement Agent Options, issued as
compensation for services as a placement agent in connection with the Canadian
Private Placement. We do not have any arrangement with Woodstone Capital Inc. (&quot;Woodstone&quot;)
to act as a broker-dealer for the sale of the shares included herein for the
selling stockholders. Woodstone may be deemed to be an underwriter with respect
to its sales of shares to be offered by it in this prospectus. </p>
<p align="justify">(7) Includes 6,000 Placement Agent Shares issued on July 13,
2009, and 12,000 common shares underlying Placement Agent Options, issued as
compensation for services as Placement Agent in connection with the Canadian
Private Placement. Also includes the following securities issuable upon exercise
of options granted to Paradigm as placement agent in the Company&#146;s March 2008
private placement of units (the &quot;March 2008 Private Placement&quot;): 320,080 shares
of common stock and 320,080 shares of common stock underlying warrants with an
exercise price of $1.02, subject to adjustment, expiring March 27, 2010. In
accordance with rule 13d-3 under the Securities Exchange Act of 1934, as
amended, Tony Pullen may be deemed a control person of the shares owned by this
selling security holder. Paradigm is a FINRA member broker-dealer. We do not
have any arrangement with Paradigm for it to act as a broker-dealer for the sale
of the shares included herein for the selling stockholders. Paradigm may be
deemed to be an underwriter with respect to its respective sales of shares to be
offered by them in this prospectus. Paradigm served as a placement agent in
connection with our Canadian Private Placement and the sole placement agent in
connection with our March 2008 Private Placement. </p>
<p align="justify">(8) Includes 15,000 Placement Agent Common Shares to be
issued upon exercise of Placement Agent Options issued on July 13, 2009, as
compensation for services as a placement agent in connection with the Canadian
Private Placement. We do not have any arrangement with Research Capital Corp.
(&quot;Research&quot;) to act as a broker-dealer for the sale of the shares included
herein for the selling stockholders. Research may be deemed to be an underwriter
with respect to its sales of shares to be offered by it in this prospectus. </p>
<p ALIGN="JUSTIFY">(9) Includes 86,260 Placement Agent Shares issued on July 13,
2009, and 151,520 common shares underlying Placement Agent Options, issued as
compensation for services as a placement agent in connection with the Canadian
Private Placement. We do not have any arrangement with Union to act as a
broker-dealer for the sale of the shares included herein for the selling
stockholders. Union may be deemed to be an underwriter with respect to its sales
of shares to be offered by it in this prospectus.</p>
</font>
<P align=center>29 </P>
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<P align=justify><B>Description of July 2009 Private Placement of Special
Warrants </B></P>
<P align=justify><U>Canadian Private Placement</U> </P>
<P align=justify><font FACE="Times New Roman" SIZE="2">On July 13, 2009, we
completed an offering to investors of 10,476,000 special warrants (the &quot;Special
Warrants&quot;) at a price of CDN$0.40 per Special Warrant for gross proceeds of
approximately CDN$4,200,000 (the &quot;Gross Proceeds&quot;) and net proceeds of
approximately CDN$3,780,050 (&quot;the &quot;Canadian Private Placement&quot;). Each Special
Warrant may be exercised at any time at the holder&#146;s option and will
automatically exercise, in each case for no additional consideration, on the
earliest to occur of (a) the fifth business day after the later of (i) the date
a receipt is issued by the relevant securities regulatory authorities in Canada
for the final prospectus qualifying the Common Shares and the Warrants to be
issued upon the exercise of the Special Warrants, and (ii) the date this
Registration Statement is declared effective by the U.S. Securities and Exchange
Commission and (b) November 14, 2009. Each Special Warrant entitles its holder
to receive, upon exercise or deemed exercise thereof, one Common Share and one
Warrant, which together were referred to in the subscription agreements as a
&quot;Unit&quot;. Each Warrant will entitle the holder to purchase one Common Share (the
&quot;Warrant Shares&quot;) at a price of U.S.$0.80 per share, subject to adjustment,
until July 13, 2012. The exercise price of the Warrants is subject to adjustment
for certain events, including dividends, distributions or split of the Company's
common stock, subsequent equity sales or rights offerings by the Company, or in
the event of the Company's consolidation, merger or reorganization. </P>
</font>
<P align=justify><font FACE="Times New Roman" SIZE="2">Paradigm Capital Inc.
(&quot;Paradigm&quot;), Bolder Investment Partners Ltd. (&quot;Bolder&quot;) and Union Securities
Ltd. (&quot;Union&quot;) (collectively, the &quot;Placement Agents&quot;) acted as placement agents
for the Canadian Private Placement on a best efforts basis. The Placement
Agents&#146; compensation consists of a cash commission equal to 8% of the Gross
Proceeds, 419,040 Common Shares (the &quot;Placement Agent Shares&quot;) and an option to
acquire 838,080 Common Shares at U.S.$0.80 per unit, subject to adjustment,
until July 13, 2012 (the &quot;Placement Agent Options&quot;). (The shares of common stock
issuable upon exercise of the Placement Agent Options shall be referred to as
the &quot;Placement Agent Option Shares&quot;.) The exercise price of the Placement Agent
Options is subject to adjustment for certain events, including dividends,
distributions or split of the Company's common stock, subsequent equity sales or
rights offerings by the Company, or in the event of the Company's consolidation,
merger or reorganization. </P>
<p ALIGN="JUSTIFY">In connection with the Canadian Private Placement, the
Company entered into a registration rights agreement (the &quot;Registration Rights
Agreement&quot;) providing for the filing of a registration statement (the
&quot;Registration Statement&quot;) with the U.S. Securities and Exchange Commission
registering the Common Shares, the Warrants, the Warrant Shares, the Placement
Agent Shares, the Placement Agent Options and the Placement Agent Option Shares.
The Company is obligated to file the Registration Statement no later than 30
days from the date of closing and to use its commercially reasonable efforts to
cause the Registration Statement to be declared effective no later than 120 days
after the date of closing. </p>
<p ALIGN="JUSTIFY">If, on the 5<sup>th</sup> business day following the later
of:, (a) a receipt being issued by the relevant securities regulatory
authorities in Canada for the final prospectus qualifying the Common Shares and
the Warrants to be issued upon the exercise of the Special Warrants, and (b)
this Registration Statement being declared effective by the U.S. Securities and
Exchange Commission; has not occurred on or before 120 days following the
closing date, than each unexercised Special Warrant will be deemed exercised for
1.1 Common Shares and 1.1 Warrants. </p>
<p ALIGN="JUSTIFY">In connection with the Canadian Private Placement, each of
the Company&#146;s officers and directors have entered into lock-up agreements in
favor of the Placement Agents pursuant to which they have agreed not to sell or
transfer their shares for a period of 90 days following the fifth business day
after the later of (a) the date the Company receives a receipt for a prospectus
qualifying the Common Shares and the Warrants issuable upon exercise of the
Special Warrants, and (b) the date this Registration Statement is declared
effective by the U.S. Securities and Exchange Commission, unless they first
obtain the prior written consent of Paradigm or there occurs a take-over bid or
similar transaction involving a change of control of the Company. </p>
<p ALIGN="JUSTIFY">The issuances under the Canadian Private Placement were
exempt from registration under Section 4(2) of the Securities Act and/or
Regulation S, promulgated pursuant to the Securities Act. None of the purchasers
under the Canadian Private Placement are U.S. persons, no sales efforts were
conducted in the U.S., and the Common Shares, the Warrants, the Warrant Shares,
the Placement Agent Shares, the Placement Agent Options and the Placement Agent
Option Shares issued in connection with the Canadian Private Placement contain,
or will contain upon issuance, a legend restricting the sale of such securities
in accordance with Regulation S and pursuant to applicable Canadian securities
laws. </p>
</font>
<P align=justify><U>U.S. Private Placement</U> </P>
<P align=justify>On July 22, 2009, concurrently with the Canadian Private
Placement, the Company completed an offering of 350,000 units to investors in
the United States (the &#147;U.S. Private Placement&#148; and together with the Canadian
Private Placement, the &#147;July 2009 Private Placement&#148;). No placement agent was
used for the U.S. Private Placement and no commissions were paid in connection
therewith. As in the Canadian Private Placement, each unit consists of one
Common Share and one Warrant. Each Warrant entitles the holder thereof to
purchase one Common Share at an initial exercise price of US$0.80 per common
share and expires on July 22, 2012. The exercise price of the Warrants is
subject to adjustment for certain events, including without limitation,
dividends, distributions or split of the Company's common stock, subsequent
rights offerings by the Company, or in the event of the Company's consolidation,
merger or reorganization.</P>
<P align=center>30 </P>
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<P align=justify>The issuances under the U.S. Private Placement were exempt from
registration under Section 4(2) of the Securities Act. The Common Shares, the
Warrants and the Warrant Shares issued in connection with the U.S. Private
Placement are subject to statutory resale restrictions under the Securities Act
and contain, or will contain upon issuance, a legend restricting the sale of
such securities in accordance with applicable exemptions from the registration
requirements of the Securities Act.</P>
<P align=justify><B>Additional Disclosures</B> </P>
<P align=justify>Set forth below is certain additional information regarding the
Special Warrants. </P>
<P align=justify><B>Total Dollar Value of Securities </B></P>
<P align=justify>The total dollar value of the Common Shares, Warrant Shares and
Placement Agent Option Shares that are being registered for resale (using the
total number of shares that we have registered for resale and the market price
per share on the date of sale) are as follows: </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=center><B>Common Shares, Warrant Shares and</B> <BR><B>Placement
      Agent Shares</B> </TD>
    <TD align=center width="33%"><B>Market Price at August 10, 2009</B>
      <BR><B>(1)</B> </TD>
    <TD align=center width="33%">
      <P><B>Dollar Value of Underlying</B> <BR><B>Securities</B> </P></TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      bgColor=#e6efff>25,074,320 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="33%"
    bgColor=#e6efff>$0.64 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="33%"
    bgColor=#e6efff>$16,047,565 </TD></TR></TABLE></DIV>
<P align=justify>(1) Fair market value based on the average of the high and low
prices reported on the Over the Counter Bulletin Board on August 10, 2009. </P>
<P align=justify><B>Cash Payments in Connection with the Offering </B></P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left><BR><B>Placement agent and other fees</B> <BR></TD>
    <TD align=left width="25%"><B>Payment</B> <BR><B>Reference</B> </TD>
    <TD align=center width="25%"><BR><B>Date</B> <BR></TD>
    <TD align=right width="25%"><BR><B>Amount</B> <BR></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Paradigm Capital, Inc. </TD>
    <TD align=left width="25%" bgColor=#e6efff>Placement Agent Fee </TD>
    <TD align=center width="25%" bgColor=#e6efff>July 13, 2009 </TD>
    <TD align=right width="25%" bgColor=#e6efff>$ 4,800 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Bolder Investment Partners Ltd. (&#147;Bolder&#148;) a </TD>
    <TD align=left width="25%">Placement Agent Fee </TD>
    <TD align=center width="25%">July 13, 2009 </TD>
    <TD align=right width="25%">$ 256,649 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Union Securities Ltd. </TD>
    <TD align=left width="25%" bgColor=#e6efff>Placement Agent Fee </TD>
    <TD align=center width="25%" bgColor=#e6efff>July 13, 2009 </TD>
    <TD align=right width="25%" bgColor=#e6efff>$ 73,900. </TD></TR>
  <TR vAlign=top>
    <TD align=left>Cassels Brock &amp; Blackwell LLP, Toronto </TD>
    <TD align=left width="25%">Legal and Due Diligence Fee of Investors </TD>
    <TD align=center width="25%">July 13, 2009 </TD>
    <TD align=right width="25%">$ 75,000 </TD></TR>
  <TR>
    <TD bgColor=#e6efff><B>Total</B> </TD>
    <TD width="25%" bgColor=#e6efff></TD>
    <TD align=center width="25%" bgColor=#e6efff></TD>
    <TD align=right width="25%" bgColor=#e6efff>$ 410,349
</TD></TR></TABLE></DIV>
<P align=justify><B>Existing Short Positions by Selling Security Holders
</B></P>
<P align=justify>Based upon information provided by the selling security
holders, to the best of management's knowledge, the Company is not aware of any
of the selling security holders having an existing short position in the
Company's common stock. </P>
<P align=justify><B>Relationships Between the Company and Selling Security
Holders and Affiliates</B> </P>
<P align=justify>The Company hereby confirms that a description of the
relationships and arrangements between and among those parties already is
presented in the prospectus and that all agreements between and/or among those
parties are included as exhibits to the registration statement by incorporation
by reference. </P>
<P align=center>31 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_35></A>
<P align=center><B>Directors and Executive Officers </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>Name</B> </TD>
    <TD align=center width="10%" ><B>Age</B> </TD>
    <TD align=left width="30%"><B>Position</B> </TD>
    <TD align=left width="30%"><B>Position since</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Horst G. Zerbe </TD>
    <TD align=center width="10%" bgColor=#e6efff >62 </TD>
    <TD align=left width="30%" bgColor=#e6efff>Chairman of the Board,
      President and Chief Executive Officer </TD>
    <TD align=left width="30%" bgColor=#e6efff>April 2006 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Paul A. Simmons </TD>
    <TD align=center width="10%" >47 </TD>
    <TD align=left width="30%">Chief Financial Officer </TD>
    <TD align=left width="30%">September 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>J. Bernard Boudreau<SUP>(1) </SUP>(2) </TD>
    <TD align=center width="10%" bgColor=#e6efff >65 </TD>
    <TD align=left width="30%" bgColor=#e6efff>Director </TD>
    <TD align=left width="30%" bgColor=#e6efff>June 2006 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Ian Troup<SUP>(1) </SUP>(2) </TD>
    <TD align=center width="10%" >67 </TD>
    <TD align=left width="30%">Director </TD>
    <TD align=left width="30%">May 2008 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Bernd Melchers <SUP>(1)</SUP> </TD>
    <TD align=center width="10%" bgColor=#e6efff >58 </TD>
    <TD align=left width="30%" bgColor=#e6efff>Director </TD>
    <TD align=left width="30%" bgColor=#e6efff>April 2009 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Ingrid Zerbe </TD>
    <TD align=center width="10%" >55 </TD>
    <TD align=left width="30%">Secretary, Director Finance and Administration
    </TD>
    <TD align=left width="30%">April 2006 </TD></TR></TABLE>
<P align=justify>(1) Audit Committee member (2) Compensation Committee
member</P>
<P align=justify>All directors hold office until the next annual meeting of
stockholders and until their successors have been duly elected and qualified.
There are no agreements with respect to the election of directors. Officers are
appointed annually by the board of directors and each executive officer serves
at the discretion of the board.</P>
<P align=justify><B>Horst G. Zerbe, Ph.D.</B> </P>
<P align=justify>Dr. Zerbe has more than 20 years experience in the
pharmaceutical industry. He has been the President, Chief Executive Officer, and
Chairman of IntelGenx Technologies Corp. since April 2006. In addition, Dr.
Zerbe has served as the President, Chief Executive Officer and Director of
IntelGenx Corp., our Canadian Subsidiary, since 2005. From 1998 to 2005, he
served as the president of Smartrix Technologies Inc. in Montreal; prior
thereto, from 1994 to 1998, he was Vice President of R&amp;D at LTS Lohmann
Therapy Systems in West Caldwell, NJ. He has published numerous scientific
papers in recognized journals and holds over 30 patents. </P>
<P align=justify><B>Paul A. Simmons </B></P>
<P align=justify>Mr. Simmons was appointed as our Chief Financial Officer in
September 2008. From 2003-2008, Mr. Simmons was employed by the CLAAS Group, a
leading manufacturer of agricultural harvesting machinery. Mr. Simmons was
initially based at Group HQ in Germany as Head of Corporate Controlling. In
August 2005, he was transferred to the Baler Manufacturing subsidiary (Usines
CLAAS France). In September 2006, Paul was transferred to French subsidiary
Renault Agriculture to restructure and integrate the newly acquired Tractor
Manufacturing Division into the CLAAS Group. </P>
<P align=justify>Mr. Simmons&#146; international finance credentials include an
Association of Financial Controllers and Administrators (AFCA) certification,
and a designation with the Association of Accounting Technicians (MAAT). He has
expertise in both U.S. Generally Accepted Accounting Principles (GAAP) and
International Financial Reporting Standards (IFRS). </P>
<P align=justify><B>J. Bernard Boudreau </B></P>
<P align=justify>Mr. Boudreau has been a director of IntelGenx since June 2006.
Since 2005, Mr. Boudreau has served as the Vice-president of Pharmeng
International Inc., a company listed on the Toronto Stock Exchange. From 2001 to
July 2005, he was President and CEO of Radcliffe Consulting and Investment
Limited, a private consulting firm located in Halifax, N.S.. Mr. Boudreau has
also served on the Board of Directors of a number of public and private
companies, including Export Development Canada.</P>
<P align=justify>Mr. Boudreau has worked as a lawyer and as a public official in
Canada. His litigation experience includes appearances at every level of the
judicial system in Nova Scotia. He was appointed as Queen's Counsel in 1985. Mr.
Boudreau was first elected to the provincial legislature of Nova Scotia in 1988.
He served as Chair of the Public Accounts Committee and opposition critic for
Finance and Economic Development. In 1993 he was re-elected as a member of
government and held responsibilities as Minister of Finance, Minister of Health,
Chair of the Cabinet Priorities and Planning Committee. Mr. Boudreau served as
Government Leader in the Senate of Canada and Member of the federal Cabinet
between 1999 and 2001.</P>
<P align=justify><B>Ian Troup </B></P>
<P align=justify>Mr. Troup has been a director of IntelGenx Technologies Corp.
since May 2008. Since April 2008 Mr. Troup has been a Director of Vital Medix,
an early stage drug development company. In July 2007 he was appointed to the
Board of Medisyn Technologies Inc., a privately held "in silica" drug discovery and development company. From
September 1995 until December 2003, Mr. Troup was President and COO of
Upsher-Smith Laboratories, a privately held generic company.</P>
<P align=center>32 </P>
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noShade SIZE=5>
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<P align=justify>Born and educated in Scotland, Mr. Troup has worked in the
pharmaceutical industry for over 35 years. Originally an industrial chemist, he
has served in roles in the sales and marketing area for several leading
companies. As President, he led the UK wing of Schwarz Pharma for 7 years before
serving as President in Schwarz's subsidiary in the USA for an additional 9
years. Following this he served as President/COO of Upsher-Smith Laboratories.
His experience includes new product development and launch, M&amp;A work and
strategic planning.</P>
<P align=justify><B>Bernd Melchers </B></P>
<P align=justify>Mr. Melchers has been a director of IntelGenx Technologies
Corp. since April 2009. Mr. Melchers is a 30-year veteran of the pharmaceutical
industry with extensive hands-on international experience in corporate financial
management. He also brings a wealth of international team management skills and
leadership experience. From January 2001 until December 2004 Mr. Melchers was
Chief Financial Officer at 3M Dyneon GmbH &amp; Co. KG, Germany. Prior to this
he was, from July 1995 to December 2000, Controller at the European Business
Center of 3M Medical Markets Europe in Belgium.Mr. Melchers retired from his
position at 3M Dyneon Group in 2004. </P>
<P align=justify><B>Ingrid Zerbe</B> </P>
<P align=justify>Mrs. Zerbe is our Corporate Secretary, Director of Finance and
Administration and is a full time employee of IntelGenx . Mrs. Zerbe is the
founder of IntelGenx Corp., our Canadian Subsidiary. She served as the president
of IntelGenx Corp, since its incorporation in June 2003 until December, 2005.
She has been a Director of the subsidiary since its incorporation in June, 2003
and a Director of the parent company from April 2006 until August 2006. Prior to
founding IntelGenx, she worked in the travel industry. She holds a bachelor
degree in economics from the business school in Bottrop, Germany, and a bachelor
degree in social sciences from the University of Dortmund, Germany. </P>
<P align=justify><B>Key Personnel and Consultants</B> </P>
<P align=justify><B>James Wittenberg, R.Ph, MS </B></P>
<P align=justify>Mr. Wittenberg serves as IntelGenx's Vice President Business
Development since August, 2007. He has accumulated over 20 years of experience
in the pharmaceutical industry in market research and most recently as Director
of Business Development at Schwarz Pharma.</P>
<P align=justify><B>Nadine Paiement, MSc</B> </P>
<P align=justify>Ms. Paiement serves as our Director of Research &amp;
Development. She joined IntelGenx in 2006. Ms. Paiement holds a M.Sc. degree in
Polymer Chemistry from Sherbrooke University, and is co-inventor of IntelGenx's
Tri-Layer technology. Prior to joining IntelGenx, she worked for five years as a
formulation scientist at Smartrix Technologies, Inc. </P>
<P align=center><B>CORPORATE GOVERNANCE </B></P>
<P align=justify><B>The Board of Directors Meetings of the Board of Directors
</B></P>
<P align=justify>The Company's Board of Directors held four meetings during our
2008 Fiscal Year.</P>
<P align=justify><B>Compensation of the Board of Directors </B></P>
<P align=justify>Directors are reimbursed for their out-of-pocket expenses
incurred in attending meetings of the Board of Directors. As described below in
"Director Compensation", during our 2008 Fiscal Year, our non-employee directors
were granted options to purchase an aggregate number of 126,176 shares of our
common stock. Since November of 2008 our directors receive cash compensation of
CDN $500 for attending board meeting in person and CDN$100 for participating in
board meetings via teleconference. Effective as at the third quarter of 2009 the
board of directors resolved, that the non-employee directors of the board will
receive an annual stipend of C$12,000, paid in quarterly installments.
Furthermore an attendance fee of CDN$1,000 will be paid per board meeting. The
chairmen of the board committees are entitled to receive an additional C$500 and
the members of the committees will receive an additional C$250 for attending the
committee meetings. </P>
<P align=center>33 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<P align=justify><B>Committees of the Board of Directors </B></P>
<P align=justify>The Board of Directors has two standing committees: the Audit
Committee and the Compensation Committee.</P>
<P align=justify><B><U>Audit Committee</U></B><U>.</U> The Audit Committee is
currently composed of J. Bernard Boudreau, Ian Troup and Bernd Melcher. The
Audit Committee held four meetings during our 2008 Fiscal Year. Joel Cohen had
served on the Audit Committee until his resignation from the board of directors
in June 2009. </P>
<P align=justify>Our Audit Committee assists our board of directors in
fulfilling its responsibilities for oversight and supervision of financial and
accounting matters. The chairman of the Audit Committee is J. Bernard Boudreau.
Our Audit Committee&#146;s responsibilities include, among others (i) recommending to
the board of directors the engagement of the external auditor and the terms of
the external auditor&#146;s engagement; (ii) overseeing the work of the external
auditor, including dispute resolution between management and the external
auditor, if required; (iii) pre-approving all non- audit service to be provided
to us by our external auditor; (iv) reviewing our financial statements,
management&#146;s discussion and analysis and annual and interim earnings press
releases before this information is publicly disclosed; (v) assessing the
adequacy of procedures for our public disclosure of financial information; (vi)
establishing procedures to deal with complaints received by us relating to our
accounting and auditing matters; and (vii) reviewing our hiring policies
regarding employees of our external auditor or former auditor. We have adopted,
along with our Audit Committee, a written charter of the Audit Committee setting
out the mandate and responsibilities of the Audit Committee which provides that
the Audit Committee convene no less than four times per year. </P>
<P align=justify>Accordingly, the Audit Committee discusses with RSM Richter,
LLP, our auditors, our audited financial statements, including, among other
things the quality of our accounting principles, the methodologies and
accounting principles applied to significant transactions, the underlying
processes and estimates used by our management in our financial statements and
the basis for the auditor's conclusions regarding the reasonableness of those
estimates, in addition to the auditor's independence. </P>
<P align=justify><U>Audit Committee Financial Expert.</U> <U>Audit Committee
Financial Expert.</U> Joel Cohen served as our Audit Committee financial expert
until his resignation in June of 2009. Mr. Cohen was not an &#147;independent
director&#148;, as defined in the Nasdaq Stock Market, Inc. Marketplace Rules. Since
Mr. Cohen's resignation, Mr. Bernd Melchers serves as the Financial Expert of the Audit
Committee. Mr. Melchers is an &#145;independent director&#146; as defined in the Nasdaq
Stock Market, Inc. Marketplace Rules. </P>
<P align=justify><B><U>Compensation Committee</U></B><U>.</U> The Compensation
Committee of the Board of Directors currently consists of J. Bernard Boudreau
and Ian Troup. The Compensation Committee held its formal annual meeting in
September 2008 during the 2008 Fiscal Year. David Coffin-Beach served on the
Compensation Committee until his resignation from the board of directors March
17, 2009. The Compensation Committee held its formal annual meeting in September
2008 during the 2008 Fiscal Year. </P>
<P align=justify>Our Compensation Committee reviews and makes recommendations to
our board of directors concerning the compensation of our executive officers and
key employees which include the review of our executive compensation and other
human resource policies, the review and administration of any bonuses and stock
options and major changes to our benefit plans and the review of and
recommendations regarding the performance of the Chief Executive Officer and the
Chief Financial Officer of the Company. Our Compensation Committee is comprised
of non-management members of our board of directors and is required to convene
at least annually. Until his resignation in March of 2009 Mr. Coffin-Beach was
the chairman of our compensation committee. Following his resignation, Mr. Ian
Troup filled the position as chairman of the committee. </P>
<P align=justify><U>Compensation Committee Interlocks and Insider
Participation.</U> As stated above, the Compensation Committee consists of J.
Bernard Boudreau and Ian Troup. There are no interlocking relationships, as
described by the Securities and Exchange Commission, between the Compensation
Committee members. </P>
<P align=justify><U>Executive Compensation</U> </P>
<P align=justify>The key objectives of the Company's executive compensation
policies are to attract and retain key executives who are important to the
long-term success of the Company and to provide incentives for these executives
to achieve high levels of job performance and enhancement of shareholder value.
The Company seeks to achieve these objectives by paying its executives a
competitive level of base compensation for companies of similar size and
industry and by providing its executives an opportunity for further reward for
outstanding performance in both the short term and the long term. </P>
<P align=justify><U>Executive Officer Compensation.</U> The Company's executive
officer compensation program is comprised of three elements: base salary, annual
cash bonus and long-term incentive compensation in the form of stock option
grants. </P>
<P align=center>34 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Salary</U>. The Compensation
Committee and the Board of Directors will review base salaries for the Company's
executive officers, taking into account individual experience, job
responsibility and individual performance during the prior year. These factors
are not assigned a specific weight in establishing individual base salaries. The
Compensation Committee will also consider the Company's executive officers'
salaries relative to salary information for executives in similar industries and
similarly sized companies. </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Cash Bonuses</U>. The purpose
of the cash bonus component of the compensation program is to provide a direct
financial incentive in the form of cash bonuses to executives. </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Stock Options</U>. Stock
options are the primary vehicle for rewarding long-term achievement of Company
goals. The objectives of the program are to align employee and shareholder
long-term interests by creating a strong and direct link between compensation
and increases in share value. Under the Company's Stock Option Plan, the Board
of Directors or the Compensation Committee may authorize the grant of options to
purchase common stock of the Company to key employees of the Company. The
options generally vest in increments over a period of years established at the
time of grant except for the options granted to the non-employees directors
which vest immediately. </P>
<P align=justify><B>Code of Ethics </B></P>
<P align=justify>We have adopted a Code of Business Conduct and Ethics that
applies to our directors and officers, including our principal executive
officer, principal financial officer and principal accounting officer. The Code
of Business Conduct and Ethics is posted on our website at
<U>http://www.intelgenx.com</U>. </P>
<P align=justify><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT </B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth
certain information concerning the beneficial ownership of our shares of common
stock by our directors and executive officers, and by each beneficial owner of
five percent (5%) or more of our outstanding common stock. Based on information
available to us, all persons named in the table have sole voting and investment
power with respect to all shares of common stock beneficially owned by them,
unless otherwise indicated. Beneficial ownership is determined in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934, as amended. In
computing the number of shares beneficially owned by a person or a group and the
percentage ownership of that person or group, shares of our common stock subject
to options or warrants currently exercisable or exercisable within 60 days after
the date of this prospectus are deemed outstanding, but are not deemed
outstanding for the purpose of computing the percentage of ownership of any
other person. Applicable percentage ownership is based upon 22,350,113 shares of
common stock outstanding as of August 3, 2009. Unless otherwise indicated, the
address of each of the named persons is care of IntelGenx Technologies Corp.,
6425 Abrams, Ville St-Laurent, Quebec, H4S 1X9. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>Name and Address </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">Amount and Nature of </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">Percent of </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Of Owner </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">Beneficial Ownership </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">Class
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Horst G. Zerbe<SUP>(1)</SUP> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>4,934,643.5 </TD>
    <TD align=left width="2%"  bgColor=#e6efff><SUP>(1)</SUP> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>22.1% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Ingrid Zerbe<SUP>(2)</SUP> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">5,956,356.5 </TD>
    <TD align=left width="2%" ><SUP>(2)</SUP> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">26.6% </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Joel Cohen<SUP>(3)</SUP> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>580,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff><SUP>(3)</SUP> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2.6% </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Bernard Boudreau <SUP>(4)</SUP> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">133,088 </TD>
    <TD align=left width="2%" ><SUP>(4)</SUP> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">* </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Ian Troup<SUP>(5)</SUP> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>75,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff><SUP>(5)</SUP> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>* </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Paul A.
      Simmons<SUP>(6)</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="12%">50,000</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><SUP>(6)</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">* </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>All directors and officers as a group (6 persons)
      <SUP>(11)</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>11,729,088 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>52.5% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>AGF Canadian Small
      Cap Fund <BR>TD Bank Tower, 31<SUP>st </SUP>Floor <BR>Toronto ON M5K 1E9
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    ><BR><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><BR>2,082,915 <BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><BR><SUP>(7)</SUP> <BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    ><BR><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><BR>9.99% <BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><BR><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Northern Rivers Capital Management Inc.
      <BR>Royal Bank Plaza <BR>North Tower, Suite 2000 <BR>200 Bay Street, P.O.
      Box 66 <BR>Toronto ON M5J 2J2 </TD>
    <TD align=left width="1%"
bgColor=#e6efff><BR><BR><BR><BR></TD>
    <TD align=right width="12%" bgColor=#e6efff><BR>2,082,915 <BR><BR><BR></TD>
    <TD align=left width="2%"  bgColor=#e6efff><BR><SUP>(8)</SUP>
      <BR><BR><BR></TD>
    <TD align=left width="1%"
bgColor=#e6efff><BR><BR><BR><BR></TD>
    <TD align=right width="12%" bgColor=#e6efff><BR>9.99% <BR><BR><BR></TD>
    <TD align=left width="2%"
  bgColor=#e6efff><BR><BR><BR><BR></TD></TR></TABLE>
<P align=justify>* Less than 1%. </P>
<P align=justify>(1) In connection with the acquisition of IntelGenx in 2006,
Horst Zerbe became our President, Chief Executive Officer and Director and
acquired 4,709,643.5 exchangeable shares of our Canadian holding corporation
6544631Canada Inc., a Canadian special purpose corporation which wholly owns
IntelGenx Corp. (the "Exchangeable Shares"). The 4,709,643.5 Exchangeable Shares
are exchangeable, on a one for one basis, into shares of common stock of IntelGenx
Technologies Corp. at Horst Zerbe's discretion. Prior to exchanging the
Exchangeable Shares for shares of common stock, Horst Zerbe has the right to
vote 4,709,643.5 shares of common stock which are currently held in trust on
behalf of Horst Zerbe. The 4,709,643.5 shares of common stock have not been
registered for resale at this time. In addition to the Exchangeable Shares,
Horst Zerbe's beneficial ownership includes 225,000 shares of common stock
underlying options granted November 9, 2006, which are currently exercisable.
The options have an exercise price of $0.41. Horst Zerbe and Ingrid Zerbe are
husband and wife. </P>
<P align=center>35 </P>
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noShade SIZE=5>
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<P align=justify>(2) In connection with the acquisition of IntelGenx in 2006,
Ingrid Zerbe became our Secretary and our director of Finance and Administration
and acquired 4,709,643.5 Exchangeable Shares. In June of 2009 Ingrid Zerbe
acquired 1,021,713 Exchangeable Shares from Joel Cohen in a private transaction.
The 5,731,356.5 Exchangeable Shares are exchangeable, on a one for one basis,
into shares of common stock of IntelGenx Technologies Corp. at Ingrid Zerbe&#146;s
discretion. Prior to exchanging the Exchangeable Shares, Ingrid Zerbe has the
right to vote 5,731,356.5 shares of common stock which are currently held in
trust on behalf of Ingrid Zerbe. The 5,731,356.5 shares of common stock have not
been registered for resale at this time. In addition to the Exchangeable Shares,
Ingrid Zerbe's beneficial ownership includes 225,000 shares of common stock
underlying options granted November 9, 2006, which are currently exercisable.
The options have an exercise price of $0.41. Horst Zerbe and Ingrid Zerbe are
husband and wife. </P>
<P align=justify>(3) In connection with the acquisition of IntelGenx in 2006,
Joel Cohen became a Director and acquired 1,571,713 Exchangeable Shares. In June
of 2009 Joel Cohen disposed of 1,021,713 Exchangeable Shares. He also exchanged
of 220,000 Exchangeable Shares into Common Shares and in July of 2009 he
disposed the 220,000 common shares. The remaining 350,000 Exchangeable Shares
are exchangeable, on a one for one basis, into shares of common stock of
IntelGenx Technologies Corp. at Joel Cohen&#146;s discretion. Prior to exchanging the
Exchangeable Shares for shares of common stock, Joel Cohen has the right to vote
350,000 shares of common stock which are currently held in trust on behalf of
Joel Cohen. The 350,000 shares of common stock have not been registered for
resale at this time. In addition to the Exchangeable Shares, Mr. Cohen&#146;s
beneficial ownership includes 250,000 exercisable options to purchase common
stock at an exercise price of $0.41 granted on November 13, 2006 and 25,000
exercisable options to purchase common stock at an exercise price of $1.15,
granted on August 9, 2007. </P>
<P align=justify>Mr. Cohen resigned from the board of directors on June 30,
2009. </P>
<P align=justify>(4) Mr. Boudreau's beneficial ownership consists of 75,000
exercisable options to purchase common stock at an exercise price of $0.70
(adjusted from $0.41 in May 2008), granted in October 2006, 32,500 exercisable
options to purchase common stock at an exercise price of $1.15, granted on
August 9, 2007 and 25,588 options to purchase common stock at an exercise price
of $0.85. On November, 2008 Mr. Boudreau exercised 35,000 options at an exercise
price of $0.41 in exchange for the same number of shares of common stock. </P>
<P align=justify>(5) Mr. Troup&#146;s beneficial ownership consists of 75,000
exercisable options to purchase common stock at an exercise price of $0.85,
granted in September of 2008. </P>
<P align=justify>(6) Mr. Simmon's beneficial ownership consists of 100,000
options to purchase common stock at an exercise price of $0.85, granted in
September of 2008. The Options vest over two years, 25% every six months, 50,000
of which are exercisable within 60 days of this 10K filing.</P>
<P align=justify>(7) AGF is the beneficial owner of an aggregate of 1,143,000
shares of common stock and 1,143,000 shares of common stock underlying two-year
warrants exercisable at $1.02, subject to adjustment. However, AGF has
contractually agreed to restrict its ability to exercise the warrants and
receive shares of our common stock such that the number of shares of common
stock held by them in the aggregate and their affiliates after such exercise
does not exceed 9.99% of the then issued and outstanding shares of common stock
as determined in accordance with Section 13(d) of the Exchange Act. Accordingly,
this column represents the aggregate maximum number and percentage of shares
that AGF can own at one time due to the 9.99% limitation. </P>
<P align=justify>(8) Northern Rivers is the beneficial owner of an aggregate of
1,429,000 shares of common stock and 1,429,000 shares of common stock underlying
two-year warrants exercisable at $1.02, subject to adjustment. However, Northern
Rivers has contractually agreed to restrict its ability to exercise the warrants
and receive shares of our common stock such that the number of shares of common
stock held by them in the aggregate and their affiliates after such exercise
does not exceed 9.99% of the then issued and outstanding shares of common stock
as determined in accordance with Section 13(d) of the Exchange Act. Accordingly,
this columns represents the aggregate maximum number and percentage of shares
that Northern Rivers can own at one time due to the 9.99% limitation. </P>
<P align=center>36 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_40></A>
<P align=center><B>EXECUTIVE COMPENSATION </B></P>
<P align=justify>The following table sets forth all compensation awarded to, or
earned by, our Principal Executive Officer, and our two other most highly
compensated executive officers for the years indicated.</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=center>Name and <BR>principal <BR>position <BR>(a) </TD>
    <TD align=center width="16%"><BR><BR>Year <BR>(b) </TD>
    <TD align=center width="16%"><BR><BR>Salary ($) <BR>(c) </TD>
    <TD align=center width="16%">Option <BR>Awards <BR>($) <BR>(f) </TD>
    <TD align=center width="16%">All Other <BR>Compensation <BR>($) <BR>(i)
</TD>
    <TD align=center width="16%"><BR><BR>Total ($) <BR>(j) </TD></TR>
  <TR vAlign=top>
    <TD align=center bgColor=#e6efff>Horst Zerbe, <BR>President and CEO </TD>
    <TD align=center width="16%" bgColor=#e6efff>2008 <BR>2007 </TD>
    <TD align=center width="16%" bgColor=#e6efff>178,427 <BR>176,536 </TD>
    <TD align=center width="16%" bgColor=#e6efff>Nil <BR>Nil </TD>
    <TD align=center width="16%" bgColor=#e6efff>Nil <BR>Nil </TD>
    <TD align=center width="16%" bgColor=#e6efff>178,427 <BR>176,536 </TD></TR>
  <TR vAlign=top>
    <TD align=center>Paul A. Simmons <BR>CFO<SUP>(1)</SUP> </TD>
    <TD align=center width="16%">2008 <BR>2007 </TD>
    <TD align=center width="16%">45,738 <BR>N/A </TD>
    <TD align=center width="16%">Nil <BR></TD>
    <TD align=center width="16%">16,917<SUP>(2)</SUP> <BR></TD>
    <TD align=center width="16%">62,655 <BR></TD></TR>
  <TR vAlign=top>
    <TD align=center bgColor=#e6efff>Gino Di Iorio, <BR>CFO <SUP>(3)</SUP> </TD>
    <TD align=center width="16%" bgColor=#e6efff>2008 <BR>2007 </TD>
    <TD align=center width="16%" bgColor=#e6efff>78,921 <BR>46,235 </TD>
    <TD align=center width="16%" bgColor=#e6efff>12,731<SUP>(4)</SUP> <BR>Nil
    </TD>
    <TD align=center width="16%" bgColor=#e6efff>Nil <BR>Nil </TD>
    <TD align=center width="16%" bgColor=#e6efff>91,652 <BR>46,235
  </TD></TR></TABLE></DIV>
<P align=justify><B></B>(1) Mr. Paul A. Simmons joined the Company in September
2008.</P>
<P align=justify>(2) Mr. Paul A. Simmons received a cash compensation for
services provided prior to his employment agreement.</P>
<P align=justify>(3) Mr. Di Iorio was the Company's chief financial officer from
August, 2007 until to July, 2008. As per his employment agreement he was
entitled to receive his base salary until October of 2008.</P>
<P align=justify>(4) As a result of his departure from the Company, Mr. Di Iorio
was only be entitled to exercise half, or 37,500, of the options granted to him.
The vested options to purchase common stock expired un-exercised in November of
2008. </P>
<P align=justify><B>Compensation Discussion and Analysis </B></P>
<P align=justify><B>Employment Agreements</B></P>
<P align=justify><B><I>Horst Zerbe.</I></B> Effective December 1, 2005, we
entered into an employment agreement with Dr. Horst Zerbe, our President and
Chief Executive Officer. The agreement is for an indefinite period of time.
Under the agreement, Dr. Zerbe is entitled to receive: (1) a minimum base salary
of CDN$175,000 per year; and (2) an annual bonus equal to 50% of base salary
upon the performance of certain milestones set out by the board of
directors.</P>
<P align=justify>As per recommendation of the Compensation Committee the board
of directors approved the increase of Mr. Zerbe&#146;s minimum base salary by 5% to
CDN$183,750 effective as of September 2008 (US$171,364 at year-end 2008).</P>
<P align=justify><B><I>Paul A. Simmons</I></B>. Effective September 1, 2008, we
entered into an employment agreement with Mr. Paul A. Simmons, to serve as our
Chief Financial Officer. Under the agreement, Mr. Simmons is entitled to
receive: (1) a minimum base salary of CDN$150,000 (US$110,965 at year-end 2008)
per year, and (2) option grants under the 2006 Stock Option Plan, and (3) an
annual bonus up to 30% of his base salary upon the achievement of specific
performance targets established by the board of directors.</P>
<P align=justify><B><I>Gino Di Iorio</I></B>. Effective August 6, 2007, we
entered into an employment agreement with Mr. Gino Di Iorio, to serve as Chief
Financial Officer. Under the agreement, Mr. Di Iorio is entitled to receive: (1)
a minimum base salary of CDN$110,000 (US$110,965 at year-end 2007) per year, and
(2) option grants under the 2006 Stock Option Plan. Mr. Di Iorio&#146;s agreement was
terminated in July of 2008.</P>
<P align=center>37 </P>
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noShade SIZE=5>
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<P align=justify><B>Incentive Plan Awards</B> </P>
<P align=justify>The following table presents information regarding the
outstanding equity awards held by each of the named officers as of December 31,
2008, including the vesting dates for the portions of these awards that had not
vested as of that date.</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      colSpan=6>&nbsp;<B>OUTSTANDING EQUITY AWARDS AT FISCAL
      YEAR-END</B>&nbsp;&nbsp; </TD></TR>
  <TR>
    <TD>
      <P>&nbsp;</P>
      <P><BR><BR><BR><BR>Name <BR>(a) </P></TD>
    <TD align=right width="16%">
      <P>Number of Securities <BR>Underlying <BR>Unexercised <BR>Options <BR>(#)
      <BR>Exercisable <BR>(b) </P></TD>
    <TD align=right width="16%"><BR>Number of Securities <BR>Underlying
      <BR>Unexercised <BR>Options <BR>(#) <BR>Unexercisable <BR>(c) </TD>
    <TD align=right width="16%"><BR>Equity Incentive Plan <BR>Awards: Number
      of <BR>Securities Underlying <BR>Unexercised <BR>Unearned Options <BR>(#)
      <BR>(d) </TD>
    <TD align=right width="16%"><BR><BR><BR>Option <BR>Exercise <BR>Price
      <BR>($) <BR>(e) </TD>
    <TD align=right width="16%"><BR><BR><BR><BR>Option <BR>Expiration <BR>Date
      <BR>(f) </TD></TR>
  <TR>
    <TD bgColor=#e6efff><BR>Horst G. Zerbe </TD>
    <TD align=right width="16%" bgColor=#e6efff><BR>225,000 </TD>
    <TD align=right width="16%" bgColor=#e6efff><BR>Nil </TD>
    <TD align=right width="16%" bgColor=#e6efff><BR>Nil </TD>
    <TD align=right width="16%" bgColor=#e6efff><BR>0.41 </TD>
    <TD align=right width="16%" bgColor=#e6efff><BR>Nov. 9, 2011 </TD></TR>
  <TR>
    <TD><BR>Paul A. Simmons </TD>
    <TD align=right width="16%"><BR>Nil </TD>
    <TD align=right width="16%"><BR>100,000 <SUP>1</SUP> </TD>
    <TD align=right width="16%"><BR>Nil </TD>
    <TD align=right width="16%"><BR>0.85 </TD>
    <TD align=right width="16%"><BR>Sep.8, 2013 </TD></TR></TABLE></DIV>
<P align=justify><SUP>1</SUP> On September 8, 2008, 100,000 options were granted
to Mr. Paul Simmons in connection with his employment agreement. The options
vest over two years, none of which are exercisable as of year-end 2008. </P>
<P align=justify><B>Director Compensation </B></P>
<P align=justify>The following table sets forth compensation paid to each named
director during the year end December 31, 2008. </P>
<P align=justify>In addition, directors are reimbursed for reasonable expenses
incurred in their capacity as directors, including travel and other
out-of-pocket expenses incurred in connection with meetings of the board of
directors or any committee of the board of directors.</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      colSpan=8><B>DIRECTOR COMPENSATION</B> </TD></TR>
  <TR>
    <TD ><BR><BR><BR><BR><BR>Name <BR>(a) </TD>
    <TD align=right width="9%"><BR>Fees <BR>Earned <BR>or Paid <BR>in Cash
      <BR>($) <BR>(b) </TD>
    <TD align=right width="9%"><BR><BR><BR>Stock <BR>Awards <BR>($) <BR>(c)
</TD>
    <TD align=right width="9%"><BR><BR><BR>Option <BR>Awards <BR>($) <BR>(d)
    </TD>
    <TD align=right width="9%"><BR>Non-Equity <BR>Incentive <BR>Plan
      <BR>Compensation <BR>($) <BR>(e) </TD>
    <TD align=right width="9%"><BR>Non-Qualified <BR>Deferred <BR>Compensation
      <BR>Earnings <BR>($) <BR>(f) </TD>
    <TD align=right width="9%"><BR><BR>All <BR>Other <BR>Compensation <BR>($)
      <BR>(g) </TD>
    <TD align=right width="9%"><BR><BR><BR><BR><BR>Total ($) <BR>(j) </TD></TR>
  <TR>
    <TD bgColor=#e6efff ><BR>Bernhard J. Boudreau<SUP>4</SUP> </TD>
    <TD align=right width="9%" bgColor=#e6efff><BR>466 </TD>
    <TD align=right width="9%" bgColor=#e6efff><BR>Nil </TD>
    <TD align=right width="9%" bgColor=#e6efff><BR>10,174<SUP>1</SUP> </TD>
    <TD align=right width="9%" bgColor=#e6efff><BR>Nil </TD>
    <TD align=right width="9%" bgColor=#e6efff><BR>Nil </TD>
    <TD align=right width="9%" bgColor=#e6efff><BR>18,921<SUP>5</SUP> </TD>
    <TD align=right width="9%" bgColor=#e6efff><BR>29,561 </TD></TR>
  <TR>
    <TD ><BR>David Coffin-Beach<SUP>4</SUP> </TD>
    <TD align=right width="9%"><BR>93 </TD>
    <TD align=right width="9%"><BR>Nil </TD>
    <TD align=right width="9%"><BR>10,174<SUP>2</SUP> </TD>
    <TD align=right width="9%"><BR>Nil </TD>
    <TD align=right width="9%"><BR>Nil </TD>
    <TD align=right width="9%"><BR>18,921<SUP>6</SUP> </TD>
    <TD align=right width="9%"><BR>29,188 </TD></TR>
  <TR>
    <TD bgColor=#e6efff ><BR>Joel Cohen<SUP>4</SUP> </TD>
    <TD align=right width="9%" bgColor=#e6efff><BR>466 </TD>
    <TD align=right width="9%" bgColor=#e6efff><BR>Nil </TD>
    <TD align=right width="9%" bgColor=#e6efff><BR>Nil </TD>
    <TD align=right width="9%" bgColor=#e6efff><BR>Nil </TD>
    <TD align=right width="9%" bgColor=#e6efff><BR>Nil </TD>
    <TD align=right width="9%" bgColor=#e6efff><BR>Nil </TD>
    <TD align=right width="9%" bgColor=#e6efff><BR>466 </TD></TR>
  <TR>
    <TD ><BR>Ian Troup<SUP>4</SUP> </TD>
    <TD align=right width="9%"><BR>466 </TD>
    <TD align=right width="9%"><BR>Nil </TD>
    <TD align=right width="9%"><BR>30,398<SUP>3</SUP> </TD>
    <TD align=right width="9%"><BR>Nil </TD>
    <TD align=right width="9%"><BR>Nil </TD>
    <TD align=right width="9%"><BR>Nil </TD>
    <TD align=right width="9%"><BR>30,864 </TD></TR></TABLE></DIV>
<P align=justify><SUP>1</SUP>Represents 25,588 options issued on May 22, 2008
</P>
<P align=justify><SUP>2</SUP>Represents 25,588 options issued on May 22, 2008
</P>
<P align=justify><SUP>3</SUP>Represents 75,000 options issued on September 8,
2008 </P>
<P align=center>38 </P>
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<P align=justify><SUP>4</SUP> As of November 2008 non-employee directors are
entitled to a cash compensation fee of CDN$500 per board meeting attendance and
CDN$100 per board meeting attendance by conference call. The cash amounts
represent the equivalent U.S. Dollar value measured at the appropriate year end
exchange rate used in the financial statements.</P>
<P align=justify><SUP>5</SUP>Represents the grant of a one-time cash
compensation in form of a retainer for services provided as chairman of the
Audit Committee. Mr. Boudreau used the total retained compensation to exercise
stock option in August of 2008.</P>
<P align=justify><SUP>6</SUP>Represents the grant of a one-time cash
compensation in form of a retainer for services provided as chairman of the
Compensation Committee.</P>
<P align=justify><B>Directors&#146; and Officers&#146; Liability Insurance </B></P>
<P align=justify>We carry directors&#146; and officers&#146; liability insurance at an
approximate annual cost of $18,188. </P>
<P align=center><B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE </B></P>
<P align=justify><B>Review, Approval or Ratification of Transactions with
Related Persons </B></P>
<P align=justify>Although IntelGenx has not adopted formal procedures for the
review, approval or ratification of transactions with related persons, we adhere
to a general policy that such transactions should only be entered into if they
are on terms that, on the whole, are no more favorable, or no less favorable,
than those available from unaffiliated third parties and their approval is in
accordance with applicable law. Such transactions require the approval of our
board of directors. </P>
<P align=justify>During the year ended December 31, 2008, $5,614 of interest was
paid to Ingrid Zerbe, our secretary and director of finance and administration
for interest on a long-term shareholder loan. The loan is unsecured, bears
interest at 6% per annum and is not repayable prior to January 1, 2010. The
amount outstanding at December 31, 2008, was $101,193. Ingrid Zerbe was also
paid $18,882 under an equipment lease for the year ended 2008. The lease expires
on August 31, 2010. </P>
<P align=justify><B>Director Independence</B> </P>
<P align=justify>Three of our four directors, J. Bernard Boudreau, Ian Troup and
Bernd Melchers, are deemed &#147;independent directors&#148;, as defined by the Nasdaq
Stock Market, Inc. Marketplace Rules. We cannot guarantee that our Board of
Directors will always have a majority of independent directors. In the absence
of a majority of independent directors, our executive officer, who is also a
principal stockholder and director, could establish policies and enter into
transactions without independent review and approval thereof. This could present
the potential for a conflict of interest between the Company and its
stockholders generally and the controlling officers, stockholders or directors.
</P>
<P align=justify><B>Family Relationships </B></P>
<P align=justify>Horst Zerbe and Ingrid Zerbe are husband and wife. </P>
<P align=center>39 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_43></A>
<P align=center><B>PLAN OF DISTRIBUTION</B> </P>
<P align=justify>Each selling security holder of the common stock and any of
their pledgees, assignees and successors-in-interest may, from time to time,
sell any or all of the shares of common stock offered by this prospectus on any
stock exchange or automated interdealer quotation system on which the common
stock is listed or quoted at the time of sale, in the over-the-counter market,
in privately negotiated transactions or otherwise, at fixed prices that may be
changed, at market prices prevailing at the time of sale, at prices related to
prevailing market prices or at prices otherwise negotiated. A selling security
holder may use any one or more of the following methods when selling shares:
</P>
<UL style="TEXT-ALIGN: justify">
  <LI>ordinary brokerage transactions and transactions in which the
  broker-dealer solicits purchasers;
  <LI>block trades in which the broker-dealer will attempt to sell the shares as
  agent but may position and resell a portion of the block as principal to
  facilitate the transaction;
  <LI>purchases by a broker-dealer as principal and resale by the broker-dealer
  for its account;
  <LI>an exchange distribution in accordance with the rules of the applicable
  exchange;
  <LI>privately negotiated transactions;
  <LI>settlement of short sales entered into after the effective date of the
  registration statement of which this prospectus is a part;
  <LI>broker-dealers may agree with the selling security holders to sell a
  specified number of such shares at a stipulated price per share;
  <LI>through the writing or settlement of options or other hedging
  transactions, whether through an options exchange or otherwise;
  <LI>a combination of any such methods of sale; or
  <LI>any other method permitted pursuant to applicable law. </LI></UL>
<P align=justify>The selling security holders may also sell shares under Rule
144 under the Securities Act, if available, rather than under this prospectus.
</P>
<P align=justify>Broker-dealers engaged by the selling stockholders may arrange
for other broker dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
</P>
<P align=justify>A selling stockholder may from time to time pledge or grant a
security interest in some or all of the shares or common stock owned by him and,
if the selling stockholder defaults in the performance of the secured
obligations, the pledgees or secured parties may offer and sell the shares of
common stock from time to time under this prospectus, or under an amendment to
this prospectus under Rule 424(b)(3) or other applicable provision of the
Securities Act amending the list of selling stockholders to include the pledgee,
transferee or other successors in interest as selling stockholders under this
prospectus. </P>
<P align=justify>In connection with the sale of our common stock or interests
therein, the selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions which may in turn engage in short
sales of our common stock in the course of hedging the positions they assume.
The selling stockholders may, after the date of this prospectus, also sell
shares of our common stock short and deliver these securities to close out their
short positions, or loan or pledge their common stock to broker-dealers that in
turn may sell these securities. The selling stockholders may also enter into
option or other transactions with broker-dealers or other financial institutions
or the creation of one or more derivative securities which require the delivery
to such broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction). </P>
<P align=justify>The selling stockholders and any broker-dealers or agents that
are involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.</P>
<P align=justify>Because the selling stockholders may be deemed to be
"underwriters" within the meaning of the Securities Act, they will be subject to
the prospectus delivery requirements of the Securities Act. Federal securities
laws, including Regulation M, may restrict the timing of purchases and sales of
our common stock by the selling stockholders and any other persons who are
involved in the distribution of the shares of common stock pursuant to this
prospectus.</P>
<P align=justify>There is no underwriter or coordinating broker acting in
connection with the proposed sale of the shares by the selling security holders.
</P>
<P align=center>40 </P>
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<P align=justify>The resale shares will be sold only through registered or
licensed brokers or dealers if required under applicable state securities laws.
In addition, in certain states, the shares may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption from
the registration or qualification requirement is available and is complied with.
</P>
<P align=justify>The Company is required to pay certain fees and expenses
incurred by the Company incident to the registration of the common stock and the
warrants, but the Company will not receive any proceeds from the sale of the
shares of common stock offered by the selling security holders to the public.
However, we will receive proceeds from the exercise of the Warrants, as well as
from the exercise of the Placement Agent Options. The Company has agreed to
indemnify the selling security holders against certain losses, claims, damages
and liabilities, including liabilities under the Securities Act.</P>
<P align=center><B>DESCRIPTION OF SECURITIES</B> </P>
<P align=justify>We have an authorized capital of 100,000,000 shares of common
stock, par value $0.00001 per share, and 20,000,000 shares of preferred stock,
par value $0.00001 per share. As of August 3, 2009, 22,350,113 shares of common
stock were outstanding. There were no shares of preferred stock outstanding as
of August 3, 2009. </P>
<P align=justify><B>Common Stock</B> </P>
<P align=justify>The holders of common stock are entitled to one vote per share
on all matters voted on by stockholders, including the election of directors.
Except as otherwise required by law, the holders of common stock exclusively
possess all voting power. The holders of common stock are entitled to dividends
as may be declared from time to time by the Board from funds available for
distribution to holders. No holder of common stock has any preemptive right to
subscribe to any securities of ours of any kind or class or any cumulative
voting rights. The outstanding shares of common stock are, and the shares, upon
issuance and sale as contemplated will be, duly authorized, validly issued,
fully paid and non assessable. </P>
<P align=justify><B>Preferred Stock </B></P>
<P align=justify>Our board of directors is authorized to issue all and any of
the shares of preferred stock in one or more series, fix the number of shares,
determine or alter for each such series voting powers or other rights,
qualifications, limitations or restrictions thereof. </P>
<P align=center><B>LEGAL PROCEEDINGS </B></P>
<P align=justify>There are no material pending legal proceedings to which we are
a party or to which any of our property is subject and to the best of our
knowledge, no such actions against us are contemplated or threatened. </P>
<P align=center><B>LEGAL MATTERS</B> </P>
<P align=justify>The validity of the common stock offered hereby will be passed
upon by Hodgson Russ LLP. </P>
<P align=center><B>EXPERTS </B></P>
<P align=justify>IntelGenx Technologies Corp. financial statements for the years
ended December 31, 2008 and 2007 included in this registration statement have
been audited by RSM Richter, LLP, Montreal, Quebec, an independent registered
public accounting firm, as stated in their report, and have been so included in
reliance upon the report of said firm and their authority as experts in
accounting and auditing. This report expresses an unqualified opinion and
includes an explanatory paragraph relating to the Company's ability to continue
as a going concern.</P>
<P align=center><B>DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES </B></P>
<P align=justify>Pursuant to our certificate of incorporation and bylaws, we
have agreed to indemnify our officers and directors to the fullest extent
permitted by law. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
our Company pursuant to the foregoing provisions, or otherwise, we have been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.<B> </B></P>
<P align=center><B>WHERE YOU CAN FIND ADDITIONAL INFORMATION </B></P>
<P align=center>41 </P>
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<P align=justify>We file reports and other information with the Securities and
Exchange Commission. We have also filed a registration statement on Form S-1,
including exhibits, with the SEC with respect to the shares being offered in
this offering. This prospectus is part of the registration statement, but it
does not contain all of the information included in the registration statement
or exhibits. For further information with respect to us and our common stock, we
refer you to the registration statement and to the exhibits and schedules to the
registration statement. Statements contained in this prospectus as to the
contents of any contract or any other document referred to are not necessarily
complete, and in each instance, we refer you to the copy of the contract or
other document filed as an exhibit to the registration statement. Each of these
statements is qualified in all respects by this reference. You may inspect a
copy of the registration statement and other reports we file with the Securities
and Exchange Commission without charge at the SEC's principal office in
Washington, D.C., and copies of all or any part of the registration statement
may be obtained from the Public Reference Section of the SEC, 100 F Street NE,
Washington, D.C. 20549, upon payment of fees prescribed by the SEC. The SEC
maintains an internet site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC. The address of the Web site is http://www.sec.gov. The SEC's toll
free investor information service can be reached at 1-800-SEC-0330. </P>
<P align=center><B>FINANCIAL STATEMENTS </B></P>
<P align=justify>The financial statements for the fiscal years ending December
31, 2008 and 2007 are set forth on pages F-1 through F-42.</P>
<P align=justify>YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFERENT FROM
THAT CONTAINED IN THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND SEEKING OFFERS
TO BUY, SHARES OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE
PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF
THE DATE OF THIS PROSPECTUS REGARDLESS OF THE TIME OF DELIVERY OF THIS
PROSPECTUS, OR OF ANY SALE OF OUR COMMON STOCK. </P>
<P align=center><B>IntelGenx Technologies Corp.</B> </P>
<P align=center><B>25,074,320 Shares of Common Stock <BR>11,908,600 Warrants</B>
</P>
<P align=center><B>PROSPECTUS</B> </P>
<P align=center>__________________, 2009 </P>
<P align=center>42 </P>
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<P align=justify><B>PART II - INFORMATION NOT REQUIRED IN PROSPECTUS </B></P>
<P align=justify><B>ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
</B><B></B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth
the costs and expenses payable by us in connection with the distribution of the
securities being registered. All of the amounts shown are estimates, except the
Securities and Exchange Commission registration fee. We have agreed to bear all
expenses (other than underwriting discounts and selling commissions) in
connection with the registration and sale of the securities offered by the
selling security holders. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Securities and Exchange Commission
      registration fee </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;980 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Printing fees </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp; -</TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Accounting fees and expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>5,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Legal fees and expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">20,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Miscellaneous expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>1,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Total(1) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">&nbsp;26,980 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR></TABLE>
<P align=justify>(1) The amounts set forth above are estimates except for the
Securities and Exchange Commission registration fee. </P>
<P align=justify><B>ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
</B>Section 145 of the Delaware General Corporation Law (the &#147;DGCL&#148;), provides
that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys&#146;
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 145 further provides that a corporation similarly may indemnify any such
person serving in any such capacity who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor, against expenses
(including attorneys&#146; fees) actually and reasonably incurred in connection with
the defense or settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation and except that no indemnification shall be made in respect
of any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the Delaware
Court of Chancery or such other court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.</P>
<P align=justify>IntelGenx has agreed to indemnify its officers and directors to
the fullest extent permitted by law. Such indemnification is intended to
supplement our officers&#146; and directors&#146; liability insurance.</P>
<P align=justify>Our certificate of incorporation provides that no director
shall be personally liable to the corporation or its stockholders for monetary
damages for any breach of fiduciary duty by such director as a director. A
director shall be liable to the extent provided by applicable law, however, (a)
for breach of the director&#146;s duty of loyalty to the corporation or its
stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) pursuant to Section
174 of the DGCL. Pr (d) for any transaction from which the director derived an
improper personal benefit.</P>
<P align=justify>To the extent permitted by applicable law, we are also
authorized to provide indemnification of (and advancement of expenses to) such
agents (and any other persons to which Delaware law permits us to provide
indemnification) through provisions in our bylaws, agreements with such agents
or other persons, voting of security holders or disinterested directors or
otherwise, in excess of the indemnification and advancement otherwise permitted
by Section 145 of the DGCL, subject only to limits created by applicable
Delaware law (statutory or non-statutory), with respect to actions for breach of
duty to the Company, its security holders and others.</P>
<P align=justify>Any repeal or modification of any of the foregoing provisions
of the indemnification provisions in our certificate of incorporation or bylaws
shall be prospective and shall not adversely affect any right or protection of a
director, officer, agent, or other person existing at the time of, or increase the liability of any director of the Company with
respect to any acts or omissions of such director occurring prior to, such
repeal or modification.</P>
<P align=center>43 </P>
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<P align=justify><B>ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES</B> </P>
<P align=justify>The following issuance of shares were exempt from registration
under section 4(2) of the Securities Act, Regulation D and/or Regulation S
promulgated thereunder: </P>
<P align=justify>On May 22, 2007, we completed the sale of 8% Secured
Convertible Debentures in an aggregate principal amount of approximately $1.5
million to certain institutional and accredited investors, pursuant to a
Securities Purchase Agreement. The Company received net proceeds of
approximately $1.36 million. Proceeds were used for general working capital
purposes and to repay a secured bank loan.(see CAPITAL STOCK above) Carter
Securities LLC served as placement agent in connection with the sale of
debentures. </P>
<P align=justify>On March 27, 2008, we completed a private placement to certain
accredited investors and issued 4,001,000 units of our securities at $0.70 per
unit for gross proceeds of approximately $2.8 million. Each unit consists of one
share of the Company&#146;s common stock and one two-year warrant to purchase one
share of common stock at an initial exercise price of $1.02 per share, subject
to adjustment. After deduction of costs related to the private placement, the
Company received net proceeds of approximately $2,538,651. Paradigm  served as placement agent in connection with this offering. Proceeds from the
private placement were used to support the Company&#146;s CPI300 project and for
general working capital purposes. </P>
<P align=justify>On July 13, 2009, we completed an offering to investors of
10,476,000 special warrants at a price of CDN$0.40 per Special Warrant for gross
proceeds of approximately CDN$4,200,000. Each special warrant entitles its
holder to receive, upon exercise or deemed exercise thereof, one common share
and one common share purchase warrant. Each warrant will entitle the holder to
purchase one common share at a price of U.S.$0.80 per share, subject to
adjustment, until July 13, 2012. The exercise price of the warrants is subject
to adjustment for certain events, including dividends, distributions or split of
the Company's common stock, subsequent equity sales or rights offerings by the
Company, or in the event of the Company's consolidation, merger or
reorganization. Paradigm Capital Inc., Bolder Investment Partners Ltd. and Union
Securities Ltd. (collectively, the &#147;Placement Agents&#148;) acted as placement agents
for the Canadian Private Placement on a best efforts basis. The Placement
Agents&#146; compensation consists of a cash commission equal to 8% of the Gross
Proceeds, 419,040 Common Shares (the &#147;Placement Agent Shares&#148;) and an option to
acquire 838,080 Common Shares at U.S.$0.80 per unit, subject to adjustment,
until July 13, 2012 (the &#147;Placement Agent Options&#148;). (The shares of common stock
issuable upon exercise of the Placement Agent Options shall be referred to as
the &#147;Placement Agent Option Shares&#148;.) The exercise price of the Placement Agent
Options is subject to adjustment for certain events, including dividends,
distributions or split of the Company's common stock, subsequent equity sales or
rights offerings by the Company, or in the event of the Company's consolidation,
merger or reorganization. Proceeds from the offering will be used for
commercialization and development of drugs to be delivered using Oral Film
Technology and the Versatab Multi-Layer Tablet platform, repay outstanding
convertible notes, working capital and capital expenditures, as well as
strategic investments including business development and pharmaceutical research
and development. </P>
<P align=justify>On July 22, 2009, the Company completed an offering of 350,000
units to investors in the United States. Each unit entitles its holder to
receive, upon exercise or deemed exercise thereof, one common share and one
common share purchase warrant. Each warrant will entitle the holder to purchase
one common share at a price of $0.80 per share, subject to adjustment, until
July 13, 2012. The exercise price of the warrants is subject to adjustment for
certain events, including dividends, distributions or split of the Company's
common stock, subsequent equity sales or rights offerings by the Company, or in
the event of the Company's consolidation, merger or reorganization. No placement
agent was used for the U.S. Private Placement and no commissions were paid in
connection therewith. Proceeds from the offering will be used for
commercialization and development of drugs to be delivered using Oral Film
Technology and the Versatab Multi-Layer Tablet platform, repay outstanding
convertible notes, working capital and capital expenditures, as well as
strategic investments including business development and pharmaceutical research
and development. </P>
<P align=center>44 </P>
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<P align=justify><B>ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >2.1 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Share exchange agreement dated
      April 10, 2006, incorporated by reference to the Form 8-K/A filed on April
      28, 2006 </TD></TR>
  <TR vAlign=top>
    <TD align=left >3.1 </TD>
    <TD align=left width="90%">Articles of incorporation (incorporated by
      reference to the Form SB-2 (File No. 333-90149) filed on November 16,
      1999) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >3.2 </TD>
    <TD align=left width="90%" bgColor=#e6efff>By-Laws (incorporated by
      reference to the Form SB-2 (File No. 333-91049) filed on November 16,
      1999) </TD></TR>
  <TR vAlign=top>
    <TD align=left >3.3 </TD>
    <TD align=left width="90%">Amendment to the Articles of Incorporation
      (incorporated by reference to amendment No. 2 to Form SB-2 (File No.
      333-135591) filed on August 28, 2006) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >3.4</TD>
    <TD align=left width="90%" bgColor=#e6efff>Amendment to the Articles of
      Incorporation (To be filed by amendment)</TD></TR>
  <TR vAlign=top>
    <TD align=left >4.1 </TD>
    <TD align=left width="90%">Agency Agreement, dated as of July 13, 2009, by
      and among the Company, Bolder Investment Partners Ltd., Union Securities
      Ltd. and Paradigm Capital Inc. (incorporated by reference to the Form 8-K
      filed on July 14, 2009) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >4.2 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Registration Rights Agreement,
      dated as of July 13, 2009, by and among the Company, Paradigm Capital
      Inc., Bolder Investment Partners Ltd. and Union Securities Ltd.
      (incorporated by reference to the Form 8-K filed on July 14, 2009) </TD></TR>
  <TR vAlign=top>
    <TD align=left >4.3 </TD>
    <TD align=left width="90%">Form of Subscription Agreement for Canadian
      Private Placement (incorporated by reference to the Form 8-K filed on July
      14, 2009) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >4.4 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Form of Special Warrant
      (incorporated by reference to the Form 8-K filed on July 14, 2009) </TD></TR>
  <TR vAlign=top>
    <TD align=left >4.5 </TD>
    <TD align=left width="90%">Form of Warrant (incorporated by reference to
      the Form 8-K filed on July 14, 2009) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >4.6 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Form of Compensation Option
      (incorporated by reference to the Form 8-K filed on July 14, 2009) </TD></TR>
  <TR vAlign=top>
    <TD align=left ><a href="intelgenx_exh47.htm" style="text-decoration: none">4.7*
    </a> </TD>
    <TD align=left width="90%">
    <a href="intelgenx_exh47.htm" style="text-decoration: none">Form of Subscription Agreement for U.S. Private
      Placement </a> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >5.1 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Legal Opinion (To be filed by
      amendment) </TD></TR>
  <TR vAlign=top>
    <TD align=left >9.1 </TD>
    <TD align=left width="90%">Voting Trust agreement (incorporated by
      reference to the Form 8-K/A filed on April 28, 2006) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >10.1 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Horst Zerbe employment
      agreement (incorporated by reference to the Form SB-2 (File No.
      333-135591) filed on July 3, 2006) </TD></TR>
  <TR vAlign=top>
    <TD align=left >10.2 </TD>
    <TD align=left width="90%">Joel Cohen consulting agreement (incorporated
      by reference to the Form SB-2 (File No. No. 333-135591) filed on July 3,
      2006) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >10.3 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Ingrid Zerbe employment
      agreement (incorporated by reference to the Form SB-2 (File No.
      333-135591) filed on July 3, 2006) </TD></TR>
  <TR vAlign=top>
    <TD align=left >10.4 </TD>
    <TD align=left width="90%">Registration rights agreement, incorporated by
      reference to the Form SB-2 (File No. 333-135591) filed on July 3, 2006)
  </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >10.5 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Principal's registration rights
      agreement (incorporated by reference to the Form SB-2 (File No.
      333-135591) filed on July 3, 2006) </TD></TR>
  <TR vAlign=top>
    <TD align=left >10.6 </TD>
    <TD align=left width="90%">Investor relations consulting agreement
      (incorporated by reference to the Form SB-2 (File No. 333-135591) filed on
      July 3, 2006). </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >10.7 </TD>
    <TD align=left width="90%" bgColor=#e6efff>2006 Stock Option Plan
      (incorporated by reference to the Form S-8 filed on November 21, 2006)
  </TD></TR>
  <TR vAlign=top>
    <TD align=left >10.8 </TD>
    <TD align=left width="90%">Form of Securities Purchase Agreement
      (incorporated by reference to the Form 8-K filed on May 23, 2007) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >10.9 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Form of 8% Secured Convertible
      Debenture (incorporated by reference to the Form 8-K filed on May 23,
      2007) </TD></TR>
  <TR vAlign=top>
    <TD align=left >10.10 </TD>
    <TD align=left width="90%">Form of Registration Rights Agreement
      (incorporated by reference to the Form 8-K filed on May 23, 2007) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >10.11 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Form of Warrant (incorporated
      by reference to the Form 8-K filed on May 23, 2007) </TD></TR>
  <TR vAlign=top>
    <TD align=left >10.12 </TD>
    <TD align=left width="90%">Form of Security Agreement (incorporated by
      reference to the Form 8-K filed on May 23, 2007) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >10.13 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Subsidiary Guarantee
      (incorporated by reference to the Form 8-K filed on May 23, 2007) </TD></TR>
  <TR vAlign=top>
    <TD align=left >10.14 </TD>
    <TD align=left width="90%">Deed of Hypothec (incorporated by reference to
      the Form 8-K filed on May 23, 2007) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >10.15 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Agency Agreement (incorporated
      by reference to the Form 8-K filed on March 28, 2008) </TD></TR>
  <TR vAlign=top>
    <TD align=left >10.16 </TD>
    <TD align=left width="90%">Form of Subscription Agreement (incorporated by
      reference to the Form 8-K filed on March 28, 2008) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >10.17 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Form of Amending Letter to
      Subscription Agreement (incorporated by reference to the Form 8-K filed on
      March 28, 2008) </TD></TR>
  <TR vAlign=top>
    <TD align=left >10.18 </TD>
    <TD align=left width="90%">Form of Registration Rights Agreement
      (incorporated by reference to the Form 8-K filed on March 28, 2008) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >10.19 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Form of Warrant (incorporated
      by reference to the Form 8-K filed on March 28, 2008) </TD></TR>
  <TR vAlign=top>
    <TD align=left >10.20 </TD>
    <TD align=left width="90%">Form of Lock up Agreement (incorporated by
      reference to the Form 8-K filed on March 28, 2008) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >10.21 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Broker&#146;s Warrant (incorporated
      by reference to the Form S-1 filed on March 24, 2009) </TD></TR>
  <TR vAlign=top>
    <TD align=left >10.22 </TD>
    <TD align=left width="90%">Form of Amended and Restated Warrant
      (incorporated by reference to the Form 8-K filed on August 4, 2008) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >10.23 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Employment Contract Paul A.
      Simmons (incorporated by reference to the Form 8-K filed on September 5,
      2008) </TD></TR>
  <TR vAlign=top>
    <TD align=left >10.24 </TD>
    <TD align=left width="90%">Amended and Restated 2006 Stock Option Plan,
      May 29, 2008 (incorporated by reference to the Form 10-K filed on March
    25, 2009)</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >10.25 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Warrants dated March 16, 2006
      issued to Patrick J. Caruso (incorporated by reference to the Form SB-2
      (File No. 333-135591), filed on July 3, 2006) </TD></TR>
  <TR vAlign=top>
    <TD align=left >14 </TD>
    <TD align=left width="90%">Code of Ethics (incorporated by reference to
      the Form S-1 filed on March 24, 2009) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >16.1 </TD>
    <TD align=left width="90%" bgColor=#e6efff>Letter on change in certifying
      accountant (incorporated by reference to the Form SB-2 (File No.
      333-135591) filed on July 3, 2006) </TD></TR>
  <TR vAlign=top>
    <TD align=left >21.1 </TD>
    <TD align=left width="90%">Subsidiaries of the small business issuer
      (incorporated by reference to the Form SB-2 (File No. 333-135591) filed on
      July 3, 2006) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >
    <a href="intelgenx_exh231.htm" style="text-decoration: none">23.1* </a> </TD>
    <TD align=left width="90%" bgColor=#e6efff>
    <a href="intelgenx_exh231.htm" style="text-decoration: none">Consent of RSM Richter LLP
    </a>
  </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="90%">* Filed herewith. </TD></TR></TABLE>
<P align=center>45 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_49></A>
<P align=justify><B>ITEM 17. UNDERTAKINGS </B></P>
<P align=justify>The undersigned Registrant hereby undertakes to provide
certificates in such denominations and registered in such names as required by
the purchasers to permit prompt delivery to each purchaser. </P>
<P align=justify>Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.</P>
<P align=justify>The undersigned Registrant hereby undertakes: </P>
<P align=justify>(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement: </P>
<P align=justify>(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933; </P>
<P align=justify>(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement. </P>
<P align=justify>(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement; </P>
<P align=justify>(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial <I>bona fide</I> offering thereof. </P>
<P align=justify>(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering. </P>
<P align=justify>(4) Not applicable. </P>
<P align=justify>(5) That for the purpose of determining liability under the
Securities Act of 1933 to any purchaser: </P>
<P align=justify>(i) Not applicable. </P>
<P align=justify>(ii) Each prospectus filed pursuant to Rule 424(b) as part of
this registration statement, shall be deemed to be part of and included in this
registration statement as of the date it is first used after effectiveness;
provided, however, that no statement made in this registration statement or
prospectus that is part of this registration statement or made in a document
incorporated or deemed incorporated by reference into this registration
statement or prospectus that is part of this registration statement will, as to
a purchaser with a time of contract of sale prior to such first use, supersede
or modify any statement that was made in this registration statement or
prospectus that was part of this registration statement or made in any such
document immediately prior to such date of first use. </P>
<P align=justify>(6) That, for the purpose of determining liability of the
registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities: </P>
<P align=center>46 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_50></A>
<P align=justify>The undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or
sell such securities to such purchaser: (i) Any preliminary prospectus of the
undersigned registrant relating to the offering required to be filed pursuant to
Rule 424; </P>
<P align=justify>(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant; </P>
<P align=justify>(iii) The portion of any other free writing prospectus relating
to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and
</P>
<P align=justify>(iv) Any other communication that is an offer in the offering
made by the undersigned registrant to the purchaser. </P>
<P align=justify>The undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of </P>
<P align=center>47 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_51></A>
<P align=center><B>POWER OF ATTORNEY </B></P>
<P align=justify>Each person whose signature appears below constitutes and
appoints Horst Zerbe his or her true and lawful attorney in fact and agent, with
full power of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments
(including post effective amendments) to the Registration Statement, and to sign
any registration statement for the same offering covered by this Registration
Statement that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and all post effective amendments thereto,
and to file the same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, each acting alone, or his or her substitute or substitutes, may lawfully
do or cause to be done by virtue hereof. </P>
<P align=center><B>SIGNATURES</B> </P>
<P align=justify>Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Ville St-
Laurent, Province of Quebec, on August 12, 2009. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>By: <I><U>/s/ Horst G. Zerbe</U></I> </TD>
    <TD align=left width="50%">August 12, 2009 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Name: Horst G. Zerbe </TD>
    <TD align=left width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>Title: Director, Chief Executive Officer and President </TD>
    <TD align=left width="50%">&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>By: <U>/s/</U><I><U>Paul A. Simmons</U></I> </TD>
    <TD align=left width="50%">August 12, 2009 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Name: Paul A. Simmons </TD>
    <TD align=left width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>Title: Chief Financial Officer (Principal Accounting and
</TD>
    <TD align=left width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>Financial Officer) </TD>
    <TD align=left width="50%">&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>By: /s/ <I>Bernard Boudreau</I> </TD>
    <TD align=left width="50%">August 12, 2009 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Name: Bernard Boudreau </TD>
    <TD align=left width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>Title: Director </TD>
    <TD align=left width="50%">&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>By: /s/ <I>Ian Troup</I> </TD>
    <TD align=left width="50%">August 12, 2009 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Name: John (Ian Troup) </TD>
    <TD align=left width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>Title: Director </TD>
    <TD align=left width="50%">&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>By: /s/ <I>Bernd Melchers</I> </TD>
    <TD align=left width="50%">August 12, 2009 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Name: Bernd Melchers </TD>
    <TD align=left width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>Title: Director </TD>
    <TD align=left width="50%">&nbsp; </TD></TR></TABLE>
<P align=center>48 </P>
<DIV align=right>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=top>
    <TD align=left colSpan=2><B>INTELGENX TECHNOLOGIES CORP.</B> </TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="90%">&nbsp; </TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="90%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left >By: </TD>
    <TD align=left width="90%"><I><U>/s/ Horst G. Zerbe</U></I> </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="90%">Name: Horst G. Zerbe </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="90%">Title: Chief Executive Officer and President
      (Principal Executive </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="90%">Officer) </TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="90%">&nbsp; </TD></TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="90%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left >By: </TD>
    <TD align=left width="90%"><I><U>/s/ Paul A. Simmons</U></I> </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="90%">Name: Paul A. Simmons </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="90%">Title: Chief Financial Officer, (Principal
      Accounting and Financial </TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="90%">Officer) </TD></TR></TABLE></DIV>
<P align=justify>Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<!--$$/page=--><A name=page_1></A>
<P align=justify><B><font size="5">IntelGenx Technologies Corp.<br>
</font> </B><font size="5"><BR></font><B><font size="5">Consolidated
Financial Statements </font> </B><font size="5"><BR></font><B><font size="5">December 31, 2008 and 2007
</font> </B><BR><B>(Expressed
in U.S. Funds) </B><BR></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_2></A>
<P align=justify><B><font size="4">IntelGenx Technologies Corp. </font> </B></P>
<P align=justify><B>Consolidated
Financial Statements </B><BR><B>December 31, 2008 and 2007 </B><BR><B>(Expressed
in U.S. Funds) </B></P>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>Contents</B> </TD>
    <TD align=left width="17%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Report of Independent Registered Public
      Accounting Firm </TD>
    <TD align=right width="17%" bgColor=#e6efff>F-1 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Balance Sheets </TD>
    <TD align=right width="17%">F-2 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Statements of Shareholders' Equity </TD>
    <TD align=right width="17%" bgColor=#e6efff>F3 - F-4 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Statements of Operations and Comprehensive Loss </TD>
    <TD align=right width="17%">F-5 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Statements of Cash Flows </TD>
    <TD align=right width="17%" bgColor=#e6efff>F-6 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to Financial Statements </TD>
    <TD align=right width="17%">F-7 - F-30 </TD></TR></TABLE>
<p><BR>
</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<p><A name=page_3></A><BR>
</p>
<DIV align=right>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="25%" border=0>

  <TR vAlign=top>
    <TD align=left><B>RSM Richter LLP</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Comptables agr&#233;&#233;s</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Chartered Accountants</B> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>2, Place Alexis Nihon </TD></TR>
  <TR vAlign=top>
    <TD align=left>Montr&#233;al, (Qu&#233;bec) H3Z 3C2 </TD></TR>
  <TR vAlign=top>
    <TD align=left>T&#233;l&#233;phone / Telephone : (514) 934-3400 </TD></TR>
  <TR vAlign=top>
    <TD align=left>T&#233;l&#233;copieur / Facsimile : (514) 934-3408 </TD></TR>
  <TR vAlign=top>
    <TD align=left>www.rsmrichter.com </TD></TR></TABLE></DIV>
<P align=justify><B><font size="4">Report of Independent Registered Public Accounting Firm
</font>
</B></P>
<P align=justify>To the Shareholders and Board of Directors of <BR><B>IntelGenx
Technologies Corp. </B></P>
<P align=justify>We have audited the accompanying consolidated balance sheets of
IntelGenx Technologies Corp. as at December 31, 2008 and 2007 and the related
consolidated statements of operations and comprehensive loss, shareholders'
equity and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit. </P>
<P align=justify>We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform an audit to obtain reasonable assurance whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion. </P>
<P align=justify>In our opinion, these consolidated financial statements present
fairly in all material respects, the financial position of the Company as at
December 31, 2008 and 2007 and the results of its operations, comprehensive
loss, and its cash flows for the years then ended in accordance with accounting
principles generally accepted in the United States. </P>
<P align=justify>The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As described in note
2 to the financial statements, the Company has experienced operating losses and
requires significant capital to finance operations and repay existing
indebtedness. This raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in note 2. The financial statements do not include any adjustments that may
result from the outcome of this uncertainty. </P>
<P align=justify>We were not engaged to examine management&#146;s assertion about the
effectiveness of the Company&#146;s internal control over financial reporting as at
December 31, 2008 included in the accompanying 10 &#150; K filing and, accordingly,
we do not express an opinion thereon. </P>
<P align=justify>RSM Richter LLP (signed) </P>
<P align=justify><B>Chartered Accountants </B></P>
<P align=justify>Montreal, Quebec <BR>March 23, 2009 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<p><A name=page_4></A><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Consolidated Balance Sheets</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>As at December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left colSpan=2>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=center
      width="11%"><B>2008</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=center width="11%">2007
    </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left colSpan=2 style="border-top-style: none; border-top-width: medium"><B>Assets</B> </TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="1%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="11%" style="border-top-style: none; border-top-width: medium">&nbsp; </TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="1%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="11%" style="border-top-style: none; border-top-width: medium">&nbsp; </TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left colSpan=2><B>Current</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="11%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="11%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Cash and cash equivalents </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;<STRONG>$</STRONG></TD>
    <TD align=right width="11%" bgColor=#e6efff><B>555,999</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="11%" bgColor=#e6efff>&nbsp;330,967 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Restricted cash
      (note 6) </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="11%"><B>277,220</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="11%">- </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Accounts receivable </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="11%" bgColor=#e6efff><B>317,063</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="11%" bgColor=#e6efff>427,476 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Income taxes
      recoverable </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="11%"><B>-</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="11%">11,028 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Prepaid expenses </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="11%" bgColor=#e6efff><B>44,936</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="11%" bgColor=#e6efff>23,443 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left colSpan=2>&nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp;Investment tax credits receivable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="11%"><B>269,156</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="11%">243,006 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff colSpan=2>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="11%" bgColor=#e6efff><B>1,464,374</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="11%" bgColor=#e6efff>1,035,920 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      colSpan=2><B>Property and Equipment </B>(note 7) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="11%"><B>157,156</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="11%">235,244 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left bgColor=#e6efff
    colSpan=2>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    bgColor=#e6efff>&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="11%"
    bgColor=#e6efff><B>1,621,530</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="11%"
    bgColor=#e6efff>&nbsp;1,271,164 </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD align=left colSpan=2 style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="1%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=right width="11%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="1%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=right width="11%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff colSpan=2><B>Liabilities</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left colSpan=2><B>Current</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="11%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="11%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Accounts payable and accrued liabilities </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="11%" bgColor=#e6efff><B>525,661</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="11%" bgColor=#e6efff>261,485 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Convertible
      notes, less unamortized discount of $515,739 (note 10) </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="11%"><B>714,502</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="11%">- </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left bgColor=#e6efff
    colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Deferred income tax liability
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff><B>127,408</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left colSpan=2>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="11%"><B>1,367,571</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="11%">261,485 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left bgColor=#e6efff
    colSpan=2><B>Loan Payable, Shareholder</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff><B>82,357</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>101,193 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      colSpan=2><B>Convertible Notes</B>, less unamortized discount $1,082,366
      (note 10) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="11%"><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="11%">417,634 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left bgColor=#e6efff
    colSpan=2><B>Deferred Income Tax Liability</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>278,988 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left colSpan=2><B>Commitments </B>(note 11) </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="11%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="11%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff colSpan=2><B>Shareholders' Equity</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left colSpan=2><B>Capital Stock </B>(note 12) </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="11%"><B>209</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="11%">162 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff colSpan=2><B>Additional Paid-in-Capital</B>
    </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="11%" bgColor=#e6efff><B>5,080,780</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="11%" bgColor=#e6efff>2,071,818 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left colSpan=2><B>Accumulated Other Comprehensive Income</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="11%"><B>(184,342</B></TD>
    <TD align=left width="2%"><B>)</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="11%">58,542 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left bgColor=#e6efff
    colSpan=2><B>Accumulated Deficit</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff><B>(4,725,045</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>(1,918,658</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left colSpan=2>&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="11%"><B>171,602</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="11%">211,864 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left bgColor=#e6efff
    colSpan=2>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    bgColor=#e6efff>&nbsp;<STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="11%"
    bgColor=#e6efff><B>1,621,530</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="11%"
    bgColor=#e6efff>&nbsp;1,271,164 </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left colSpan=2 style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="1%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="11%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="1%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="11%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left colSpan=2 style="border-top-style: none; border-top-width: medium">See accompanying notes </TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="1%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="11%" style="border-top-style: none; border-top-width: medium">&nbsp; </TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="1%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="11%" style="border-top-style: none; border-top-width: medium">&nbsp; </TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#FFFFFF colSpan=2>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="11%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="11%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#FFFFFF colSpan=2><B>Approved on Behalf of the
      Board:</B> </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="11%" bgColor=#FFFFFF>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="11%" bgColor=#FFFFFF>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left bgcolor="#FFFFFF"><I>/s/ J. Bernard
      Boudreau</I> </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; " align=left
      width="34%" bgcolor="#FFFFFF">&nbsp;Director</TD>
    <TD align=left width="2%" bgcolor="#FFFFFF">&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#FFFFFF">&nbsp;</TD>
    <TD align=left width="11%" bgcolor="#FFFFFF">&nbsp; </TD>
    <TD align=left width="2%" bgcolor="#FFFFFF">&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#FFFFFF">&nbsp;</TD>
    <TD align=left width="11%" bgcolor="#FFFFFF">&nbsp; </TD>
    <TD align=left width="2%" bgcolor="#FFFFFF">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#FFFFFF><I>/s/ Horst G. Zerbe</I> </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-top-style:none; border-top-width:medium" align=left width="34%"
    bgColor=#FFFFFF>&nbsp;Director</TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="11%" bgColor=#FFFFFF>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="11%" bgColor=#FFFFFF>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD></TR></TABLE>
<P align=center>F-2</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=-->
<p><A name=page_5></A><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Consolidated Statement of Shareholders' Equity</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 8pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><font size="2">&nbsp; </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">Accumulated </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><font size="2">&nbsp; </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">Additional </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">Other </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><B><font size="2">Total</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><font size="2">&nbsp; </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="17%"
    colSpan=4><font size="2">Capital Stock </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">Paid-In </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">Comprehensive </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><B><font size="2">Shareholders'</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><font size="2">&nbsp;
    </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
      width="7%"><font size="2">Number </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
      width="7%"><font size="2">Amount </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
      width="7%"><font size="2">Capital </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
      width="7%"><font size="2">Income (Loss) </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
      width="7%"><font size="2">Deficit </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
      width="7%"><B><font size="2">Equity</font></B><font size="2"> </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="7%">&nbsp;</TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="7%">&nbsp;</TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%">&nbsp;</TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%">&nbsp;</TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B><font size="2">Balance - December 31, 2006</font></B><font size="2">
    </font> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">16,007,489 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><font size="2">$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;160 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><font size="2">$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;1,165,403 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><font size="2">$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;(19,619</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;(817,865</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="7%" bgColor=#e6efff><B>&nbsp;328,079</B> </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><font size="2">Foreign currency translation adjustment </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">78,161 </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><B><font size="2">78,161</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><font size="2">Debenture conversion </font> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">149,657 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">2 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">104,757 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><B><font size="2">104,759</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><font size="2">Warrants issued, net of transaction costs of $121,063
    </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">452,023 </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><B><font size="2">452,023</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><font size="2">Stock-based compensation
    </font> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">202,607 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><B><font size="2">202,607</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><font size="2">Beneficial conversion feature, net of a deferred income
    </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><font size="2">tax liability of $343,065
    </font> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">147,028 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><B><font size="2">147,028</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><font size="2">Net loss for the
      year </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <font size="2">- </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <font size="2">- </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <font size="2">- </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <font size="2">- </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="7%"><font size="2">(1,100,793</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%">) </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="7%"><B><font size="2">(1,100,793</font></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="2%"><B>)</B> </font> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff><B><font size="2">Balance &#150; December 31, 2007</font></B><font size="2">
    </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff><font size="2">16,157,146 </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff><font size="2">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff>&nbsp;162 </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff><font size="2">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff>&nbsp;2,071,818 </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff><font size="2">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff>&nbsp;58,542 </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff><font size="2">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff>&nbsp;(1,918,658</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff><B>&nbsp;211,864</B> </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD><font size="2">&nbsp; </font> </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%"><font size="2">&nbsp; </font> </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%"><font size="2">&nbsp; </font> </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%"><font size="2">&nbsp; </font> </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%"><font size="2">&nbsp; </font> </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%"><font size="2">&nbsp; </font> </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%"><font size="2">&nbsp; </font> </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#FFFFFF><font size="2">See accompanying notes </font> </TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD></TR></TABLE>
<P align=center>F-3</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=-->
<p><A name=page_6></A><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Consolidated Statement of Shareholders' Equity</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2008</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 8pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><font size="2">&nbsp; </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">Accumulated </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><font size="2">&nbsp; </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">Additional </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">Other </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><B><font size="2">Total</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><font size="2">&nbsp; </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="17%"
    colSpan=4><font size="2">Capital Stock </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">Paid-In </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">Comprehensive </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><font size="2">&nbsp; </font> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%"><B><font size="2">Shareholders'</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><font size="2">&nbsp;
    </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
      width="7%"><font size="2">Number </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
      width="7%"><font size="2">Amount </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
      width="7%"><font size="2">Capital </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
      width="7%"><font size="2">Income (Loss) </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
      width="7%"><font size="2">Deficit </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=middle
      width="7%"><B><font size="2">Equity</font></B><font size="2"> </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="7%">&nbsp;</TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%">&nbsp;</TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%">&nbsp;</TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%">&nbsp;</TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%">&nbsp;</TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="7%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B><font size="2">Balance - December 31, 2007</font></B><font size="2">
    </font> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">16,157,146 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><font size="2">$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;162 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><font size="2">$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;2,071,818 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><font size="2">$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;58,542 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><font size="2">$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;(1,918,658</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="7%" bgColor=#e6efff><B>&nbsp;211,864</B> </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><font size="2">Foreign currency translation adjustment </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">(242,884</TD>
    <TD align=left width="2%">) </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><B><font size="2">(242,884</font></B></TD>
    <TD align=left width="2%"><B>)</B> </font> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><font size="2">Issue of common stock, net of transaction
      costs of </font> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><font size="2">$415,290 (note 12) </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">4,001,000 </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">40 </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">1,712,630 </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><B><font size="2">1,712,670</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><font size="2">Warrants issued, net of transaction costs
      of $131,291 </font> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><font size="2">&nbsp; &nbsp;(note 13) </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">541,449 </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><B><font size="2">541,449</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><font size="2">Cashless warrants exercised (note 13)
    </font> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">5,186 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><B><font size="2">-</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><font size="2">Agent&#146;s options (note 13) </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">95,000 </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><B><font size="2">95,000</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><font size="2">Stock-based compensation (note 13)
    </font> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">161,035 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><B><font size="2">161,035</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><font size="2">Options exercised (note 13) </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">191,500 </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">2 </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">88,663 </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><B><font size="2">88,665</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><font size="2">Warrants exercised (note 13)
    </font> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">100,000 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">1 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">40,999 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><B><font size="2">41,000</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><font size="2">Modification of warrant terms (note 13) </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">92,571 </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><B><font size="2">92,571</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><font size="2">Debenture conversions (note 10)
    </font> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">235,714 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">2 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">164,998 </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><font size="2">- </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><B><font size="2">165,000</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><font size="2">Stock compensation to debenture holders (note 13)
    </font> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">159,456 </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">2 </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">111,617 </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><font size="2">- </font> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><B><font size="2">111,619</font></B><font size="2">
    </font> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><font size="2">Net loss for the year </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><font size="2">- </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><font size="2">- </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><font size="2">- </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><font size="2">- </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><font size="2">(2,806,387</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><B><font size="2">(2,806,387</font></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff><B>)</B> </font> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B><font size="2">Balance &#150;
      December 31, 2008</font></B><font size="2"> </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="7%"><font size="2">20,850,002 </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%">
    <font size="2">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="7%">&nbsp;209 </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%">
    <font size="2">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="7%">&nbsp;5,080,780 </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%">
    <font size="2">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="7%">&nbsp;(184,342</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="7%">&nbsp;(4,725,045</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%"><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="7%"><B>&nbsp;171,602</B> </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#FFFFFF><font size="2">See accompanying notes </font> </TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#FFFFFF><font size="2">&nbsp; </font> </TD>
    <TD align=left width="2%" bgColor=#FFFFFF>&nbsp;</TD></TR></TABLE>
<P align=center>F-4</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=-->
<p><A name=page_7></A><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Consolidated Statements of Operations and Comprehensive
      Loss</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=middle
      width="12%"><B>2008</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=middle width="12%">2007
    </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-top-style:none; border-top-width:medium" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-top-style:none; border-top-width:medium" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-top-style:none; border-top-width:medium" align=middle
    width="12%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-top-style:none; border-top-width:medium" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-top-style:none; border-top-width:medium" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-top-style:none; border-top-width:medium" align=middle
    width="12%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-top-style:none; border-top-width:medium" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff style="border-top-style: none; border-top-width: medium"><B>Revenue</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff style="border-top-style: none; border-top-width: medium"><B>$</B></TD>
    <TD align=right width="12%" bgColor=#e6efff style="border-top-style: none; border-top-width: medium"><B>&nbsp;945,746</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff style="border-top-style: none; border-top-width: medium">$</TD>
    <TD align=right width="12%" bgColor=#e6efff style="border-top-style: none; border-top-width: medium">&nbsp;835,376 </TD>
    <TD align=left width="2%" bgColor=#e6efff style="border-top-style: none; border-top-width: medium">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Interest</B>
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>30,864</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">27,355 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>976,610</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>862,731 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Expenses</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Research and development </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>2,085,433</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>777,773 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Research
      and development tax credits </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>(305,692</B></TD>
    <TD align=left width="2%"><B>)</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(174,399</TD>
    <TD align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Management salaries </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>551,771</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>328,513 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;General and
      administrative </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>212,915</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">166,249 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Professional fees </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>695,158</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>424,817 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Depreciation </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>51,772</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">42,003 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Foreign exchange </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>(122,915</B></TD>
    <TD align=left width="2%" bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>113,552 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Interest and financing fees </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>766,136</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">349,093 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>3,934,578</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>2,027,601 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Loss Before Income Taxes</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>(2,957,968</B></TD>
    <TD align=left width="2%"><B>)</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(1,164,870</TD>
    <TD align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Income taxes (note 14) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>(151,581</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(64,077</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Net Loss</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>(2,806,387</B></TD>
    <TD align=left width="2%"><B>)</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(1,100,793</TD>
    <TD align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Other Comprehensive Loss</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Foreign currency translation adjustment
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>(242,884</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="2%"><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">78,161 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff><B>Comprehensive Loss</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><B>&nbsp;(2,563,503</B></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    bgColor=#e6efff><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff>&nbsp;(1,022,632</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left><B>Basic Weighted
      Average Number of Shares Outstanding</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right
      width="12%"><B>19,657,224</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right
      width="12%">16,042,791 </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff><B>Basic and Diluted Loss Per Common Share </B>(note 17)
    </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><B>&nbsp;(0.14</B></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    bgColor=#e6efff><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff>&nbsp;(0.07</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>See accompanying notes </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR></TABLE>
<P align=center>F-5</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=-->
<p><A name=page_8></A><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Consolidated Statement of Cash Flows</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Year Ended December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=center
      width="12%"><B>2008</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=center width="12%">2007
    </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD style="border-top-style: none; border-top-width: medium">&nbsp; </TD>
    <TD width="1%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD width="12%" style="border-top-style: none; border-top-width: medium">&nbsp; </TD>
    <TD width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD width="1%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD width="12%" style="border-top-style: none; border-top-width: medium">&nbsp; </TD>
    <TD width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Funds Provided (Used) -</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Operating Activities</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Net loss
    </TD>
    <TD align=left width="1%" bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="12%" bgColor=#e6efff><B>&nbsp;(2,806,387</B></TD>
    <TD align=left width="2%" bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(1,100,793</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Depreciation </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>51,772</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">42,003 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Investor
      relations services </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>50,421</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>68,349 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Stock-based compensation
    </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>110,661</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">202,607 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Modification of warrant terms </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>92,571</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Interest accretion </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>465,918</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">195,317 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Deferred
      income tax </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>(151,581</B></TD>
    <TD align=left width="2%" bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(64,077</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Amendment of convertible notes </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>111,619</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>(2,075,006</B></TD>
    <TD align=left width="2%" bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(656,594</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Changes in non-cash operating elements of working
      capital </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>337,974</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(312,065</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%">)
</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>(1,737,032</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(968,659</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Financing Activities</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Repayment
      of long-term debt </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>-</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(107,871</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Issue of capital stock
</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>2,930,365</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Transaction costs </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>(451,581</B></TD>
    <TD align=left width="2%" bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(229,323</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Convertible notes </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">1,500,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>2,478,784</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>1,162,806 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Investing Activities</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Additions
      to property and equipment </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>(7,057</B></TD>
    <TD align=left width="2%" bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(82,961</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Restricted cash (note 6) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>(277,220</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      width="2%"><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>(284,277</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(82,961</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Increase in Cash and Cash Equivalent</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>457,475</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">111,186 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Effect of Foreign Exchange on Cash and
      Cash Equivalents</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>(232,443</B></TD>
    <TD align=left width="2%" bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(7,797</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Cash and Cash Equivalents</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B>Beginning of Year</B>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>330,967</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>227,578 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left>&nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;<B>End of Year</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    width="1%"><B>$</B></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right
      width="12%"><B>&nbsp;555,999</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right
      width="12%">&nbsp;330,967 </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#FFFFFF style="border-top-style: none; border-top-width: medium">&nbsp; </TD>
    <TD width="1%" bgColor=#FFFFFF style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD width="12%" bgColor=#FFFFFF style="border-top-style: none; border-top-width: medium">&nbsp; </TD>
    <TD width="2%" bgColor=#FFFFFF style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD width="1%" bgColor=#FFFFFF style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD width="12%" bgColor=#FFFFFF style="border-top-style: none; border-top-width: medium">&nbsp; </TD>
    <TD width="2%" bgColor=#FFFFFF style="border-top-style: none; border-top-width: medium">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>See accompanying notes </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR></TABLE>
<P align=center>F-6</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<p><A name=page_9></A><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>1.</B> </TD>
    <TD>
      <P align=justify><B>Basis of Presentation</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company prepares its financial statements in
      accordance with accounting principles generally accepted in the United
      States. This basis of accounting involves the application of accrual
      accounting and consequently, revenues and gains are recognized when
      earned, and expenses and losses are recognized when incurred.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The consolidated financial statements include the
      accounts of the Company and its subsidiary companies. On consolidation,
      all inter-entity transactions and balances have been eliminated.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The financial statements are expressed in U.S.
    funds.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>2.</B> </TD>
    <TD>
      <P align=justify><B>Going Concern</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The accompanying financial statements have been prepared
      assuming the Company will continue as a going concern. The Company has
      reported an accumulated deficit of $4,725,045 (2007 $1,918,658). To date,
      the Company&#146;s operations have been financed principally through the
      issuance of capital stock, long term debt and debt from related parties.
      Additional capital and/or borrowings will be necessary in order for the
      Company to continue in existence and attain profitable operations. With
      the Company's existing working capital levels, it will be able to continue
      operations at least through the end of the second quarter of fiscal
      2009.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company's strategy is to continue to focus on the
      development of novel oral immediate release and controlled release
      products for the branded and generic pharmaceutical markets. The Company
      will continue to develop novel, orally administered drug delivery products
      based upon its proprietary oral drug delivery technologies and will
      continue to position itself as a provider of product development services
      for the pharmaceutical industry.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>To date revenues consisted primarily of research and
      development fee revenues and have not been sufficient to sustain
      operations. However, the Company expects to generate revenues from sales
      and manufacturing royalties in future years following development and
      commercialization of products within its current pipeline.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The first product fully-developed by the Company, a
      prenatal multivitamin supplement marketed as Gesticare&#174; in the USA, was
      commercialized in November 2008. Management anticipates generating royalty
      revenue of between $0.5 million and $0.75 million from royalty payments
      from this product in fiscal 2009. In addition, management is actively
      pursuing marketing opportunities for the product outside of the
  USA.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company currently has a pipeline of 11 products under
      development. Of the products under development, CPI- 300, an oral
      antidepressant formulated using the Company&#146;s proprietary controlled
      release technology, is the most advanced. The Company is currently
      finalizing the preparation of a 505(b)(2) New Drug Application for this
      product that is expected to be filed with the FDA in the first quarter of
      2009.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Nonetheless, in order to achieve profitability, revenue
      streams will have to increase significantly from current levels and there
      is no assurance that revenues can increase to such a
  level.</P></TD></TR></TABLE>
<P align=center>F-7</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<p><A name=page_10></A><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>2.</B> </TD>
    <TD>
      <P align=justify><B>Going Concern (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On May 22, 2007 the Company entered into convertible note
      agreements with certain institutional and accredited investors for amounts
      totaling $1,500,000, of which $1,230,241 remained outstanding at December
      31, 2008. The notes are repayable on September 22, 2009. The notes are
      convertible into common stock of the Company, at the option of the
      holders, at a rate of $0.70 per share.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company raised net cash proceeds of $2,478,784
      through the issuance of common shares in the year ended December 31, 2008.
      We are seeking additional funding through additional equity and/or debt
      financings. However, there can be no assurance that that any additional
      financing will become available to us, and if available, on terms
      acceptable to us. Any financing, if available, may involve restrictive
      covenants that impact our ability to conduct our business and raise
      additional funds. If we are unable to raise additional capital when
      required or on acceptable terms, we may have to significantly delay, scale
      back or discontinue our operations, including the development and/or
      commercialization of one or more of our product candidates. The Company
      may also receive funds through the exercise of outstanding stock options
      and warrants in addition to funds that may be generated from pre-
      commercialization payments. There can be no assurance that such proceeds,
      if any, will be material.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Should the Company be unable to continue as a going
      concern, it may be unable to realize the carrying value of its assets and
      to meet its liabilities as they become due.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>3.</B> </TD>
    <TD>
      <P align=justify><B>Nature of Business</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company specializes in the development of
      pharmaceutical products in co-operation with various pharmaceutical
      companies. The Company has developed three proprietary technologies and is
      currently utilizing these to develop 11 products, 7 of which are partnered
      and 4 of which are in the clinical development stage.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company&#146;s first product, a prenatal multivitamin
      supplement marketed as Gesticare&#174; in the USA, was commercialized in
      November 2008.</P></TD></TR></TABLE>
<P align=center>F-8</P>
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<p><A name=page_11></A><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>4.</B> </TD>
    <TD align=left width="95%">
      <P align=justify><B>Summary of Significant Accounting Policies</B>
  </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%">
      <P align=justify><B>Use of Estimates</B> </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="95%">
      <P align=justify>The preparation of financial statements in conformity
      with accounting principles generally accepted in the United States
      requires management to make estimates and assumptions that affect the
      reported amounts of assets and liabilities, disclosure of contingent
      assets and liabilities at the date of the financial statements, and the
      reported amounts of revenues and expenses during the reporting period. The
      financial statements include estimates based on currently available
      information and management's judgment as to the outcome of future
      conditions and circumstances. Significant estimates in these financial
      statements include the allowance for doubtful accounts, useful lives and
      impairment of long-lived assets, stock-based compensation costs,
      determination of the fair value of the warrants issued with the
      convertible notes, the investments tax credits receivable and the
      resulting impact on the allocation of the proceeds between the convertible
      notes, the beneficial conversion feature and the warrants. </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="95%">
      <P align=justify>Changes in the status of certain facts or circumstances
      could result in material changes to the estimates used in the preparation
      of the financial statements and actual results could differ from the
      estimates and assumptions. </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%">
      <P align=justify><B>Revenue Recognition</B> </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="95%">
      <P align=justify>The Company recognizes revenue from research and
      development contracts as the contracted services are performed or when
      milestones are achieved, in accordance with the terms of the specific
      agreements and when collection of the payment is reasonably assured. In
      addition, the performance criteria for the achievement of milestones are
      met if substantive effort was required to achieve the milestone and the
      amount of the milestone payment appears reasonably commensurate with the
      effort expended. Amounts received in advance of the recognition criteria
      being met, if any, are included in deferred income. </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="95%">
      <P align=justify>The Company has license agreements that specify that
      certain royalties are earned by the Company on sales of licensed products
      in the licensed territories. Licensees report sales and royalty
      information in the 45 days after the end of the quarter in which the
      activity takes place and typically do not provide the Company with forward
      estimates or current-quarter information. Because the Company is not able
      to reasonably estimate the amount of royalties earned during the period in
      which these licensees actually ship products, royalty revenue is not
      recognized until the royalties are reported to the Company and the
      collection of these royalties is reasonably assured. </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%">
      <P align=justify><B>Sales Tax</B> </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="95%">
      <P align=justify>A company should disclose the amount of those taxes that
      is recognized on a gross basis in interim and annual financial statements
      for each period for which an income statement is presented if those
      amounts are significant. While the amounts are not material, the Company&#146;s
      policy is to present such taxes on a net basis in the consolidated
      statements of operations. </P></TD></TR></TABLE>
<P align=center>F-9</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>4.</B> </TD>
    <TD>
      <P align=justify><B>Summary of Significant Accounting Policies
      (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Financial Instruments</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company estimates the fair value of its financial
      instruments based on current interest rates, market value and pricing of
      financial instruments with comparable terms. Unless otherwise indicated,
      the carrying value of these financial instruments approximates their fair
      market value.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Cash and Cash Equivalent</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Cash and cash equivalent is comprised of cash on hand and
      a term deposit with an original maturity date of less than three months
      that are stated at cost, which approximates market value.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Accounts Receivable</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company accounts for trade receivables at original
      invoice amount less an estimate made for doubtful receivables based on a
      review of all outstanding amounts on a monthly basis. Management
      determines the allowance for doubtful accounts by regularly evaluating
      individual customer receivables and considering a customer's financial
      condition, credit history and current economic conditions. The Company
      writes off trade receivables when they are deemed uncollectible. The
      Company records recoveries of trade receivables previously written-off
      when they receive them. Management considers that no allowance for
      doubtful accounts is necessary in order to adequately cover exposure to
      loss in its December 31, 2008 and 2007 accounts receivable.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Investment Tax Credits</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Investment tax credits relating to qualifying
      expenditures are recognized in the accounts at the time at which the
      related expenditures are incurred and there is reasonable assurance of
      their realization. Management has made estimates and assumptions in
      determining the expenditures eligible for investment tax credits
      claimed.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Property and Equipment</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Property and equipment are recorded at cost. Provisions
      for depreciation are based on their estimated useful lives using the
      methods as follows:</P></TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left width="5%">&nbsp;</TD>
    <TD align=left width="50%">On the declining balance method - </TD>
    <TD align=left width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left width="5%">&nbsp;</TD>
    <TD align=left width="50%">&nbsp; &nbsp; &nbsp; &nbsp;Laboratory and
      office equipment </TD>
    <TD align=left width="50%">20% </TD></TR>
  <TR vAlign=top>
    <TD align=left width="5%">&nbsp;</TD>
    <TD align=left width="50%">&nbsp; &nbsp; &nbsp; &nbsp;Computer equipment
    </TD>
    <TD align=left width="50%">30% </TD></TR>
  <TR>
    <TD align=left width="5%">&nbsp;</TD>
    <TD align=left width="50%">&nbsp;</TD>
    <TD align=left width="50%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="5%">&nbsp;</TD>
    <TD align=left width="50%">On the straight-line method - </TD>
    <TD align=left width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left width="5%">&nbsp;</TD>
    <TD align=left width="50%">&nbsp; &nbsp; &nbsp; &nbsp;Leasehold
      improvements </TD>
    <TD align=left width="50%">over the lease term </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Upon retirement or disposal, the cost
of the asset disposed of and the related accumulated depreciation are removed
from the accounts and any gain or loss is reflected in income. Expenditures for
repair and maintenance are expensed as incurred.</P>
<P align=center>F-10</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD colSpan=2>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>4.</B> </TD>
    <TD colSpan=2>
      <P align=justify><B>Summary of Significant Accounting Policies
      (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify><B>Impairment of Long-Lived Assets</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify>Long-lived assets held and used by the Company are
      reviewed for possible impairment whenever events or changes in
      circumstances indicate the carrying amount of an asset may not be
      recoverable. Recoverability of assets to be held and used is measured by a
      comparison of the carrying amount of the assets to the estimated
      undiscounted cash flows expected to be generated by the asset. If such
      assets are considered to be impaired, the impairment to be recognized is
      measured by the amount by which the carrying amount of the asset exceeds
      the fair value thereof.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify><B>Foreign Currency Translation</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify>The Company's reporting currency is the United States
      dollar. The Canadian dollar is the functional currency of the Company's
      Canadian operations, which is translated to the United States dollar using
      the current rate method. Under this method, accounts are translated as
      follows:</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%">
      <P align=justify>&nbsp;</P></TD>
    <TD>Assets and liabilities - at exchange rates in effect at the balance
      sheet date;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%">
      <P align=justify>&nbsp;</P></TD>
    <TD>
      <P align=justify>Revenue and expenses - at average exchange rates
      prevailing during the year.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify>Gains and losses arising from foreign currency
      translation are included in other comprehensive income.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify><B>Income Taxes</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify>The Company accounts for income taxes in accordance with
      SFAS No. 109, "Accounting for Income Taxes". Deferred taxes are provided
      on the liability method whereby deferred tax assets are recognized for
      deductible temporary differences, and deferred tax liabilities are
      recognized for taxable temporary differences. Temporary differences are
      the differences between the reported amounts of assets and liabilities and
      their tax bases. Deferred tax assets are reduced by a valuation allowance
      when, in the opinion of management, it is more likely than not that some
      portion or all of the deferred tax assets will be realized. Deferred tax
      assets and liabilities are adjusted for the effects of changes in tax laws
      and rates on the date of enactment.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify><B>Share-Based Payments</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify>The Company accounts for share-based payments in
      accordance with the provisions of FAS 123R "Share-based payments
      (Revised)" and accordingly recognizes in its financial statements
      share-based payments at their fair value. In addition, the Company will
      recognize in the financial statements an expense based on the grant date
      fair value of stock options granted to employees. The expense will be
      recognized on a straight-line basis over the vesting period and the
      offsetting credit will be recorded in additional paid-in capital. Upon
      exercise of options, the consideration paid together with the amount
      previously recorded as additional paid-in capital will be recognized as
      capital stock. The Company estimates its forfeiture rate in order to
      determine its compensation expense arising from stock-based awards. The
      Company uses the Black-Scholes-Merton option pricing model to determine
      the fair value of the options.</P></TD></TR></TABLE>
<P align=center>F-11</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="95%">&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B>4.</B> </TD>
    <TD align=left width="95%"><B>Summary of Significant Accounting Policies
      (Cont&#146;d)</B> </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%"><B>Loss Per Share</B> </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="95%">
      <P align=justify>Basic loss per share is calculated based on the weighted
      average number of shares outstanding during the year. Any antidilutive
      instruments are excluded from the calculation of diluted loss per share.
      </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="95%">
      <P align=justify><B>Recent Accounting Pronouncements</B> </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="95%">
      <P align=justify>In December 2007, the Financial Accounting Standards
      Board (&#147;FASB&#148;) issued SFAS No. 141 (Revised 2007), &#147;Business Combinations&#148;
      (&#147;SFAS 141R&#148;). SFAS 141R will significantly change the accounting for
      business combinations. Under SFAS 141R, an acquiring entity will be
      required to recognize all the assets acquired and liabilities assumed in a
      transaction at the acquisition-date fair value with limited exceptions.
      SFAS 141R will change the accounting treatment for certain specific
      acquisition related items including: (1) expensing acquisition related
      costs as incurred; (2) valuing noncontrolling interests at fair value at
      the acquisition date; and (3) expensing restructuring costs associated
      with an acquired business. SFAS 141R also includes a substantial number of
      new disclosure requirements. SFAS 141R is to be applied prospectively to
      business combinations for which the acquisition date is on or after
      January 1, 2009. We expect SFAS 141R will have an impact on our accounting
      for future business combinations once adopted but the effect is dependent
      upon the acquisitions that are made in the future. </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="95%">
      <P align=justify>In December 2007, the FASB issued SFAS No. 160,
      &#147;Noncontrolling Interests in Consolidated Financial Statements&#148; (&#147;SFAS
      160&#148;). SFAS 160 establishes new accounting and reporting standards for the
      noncontrolling interest in a subsidiary and for the deconsolidation of a
      subsidiary. It clarifies that a noncontrolling interest in a subsidiary
      (minority interest) is an ownership interest in the consolidated entity
      that should be reported as equity in the Consolidated Financial Statements
      and separate from the parent company&#146;s equity. Among other requirements,
      this statement requires consolidated net income to be reported at amounts
      that include the amounts attributable to both the parent and the
      noncontrolling interest. It also requires disclosure, on the face of the
      Consolidated Statement of Operations, of the amounts of consolidated net
      income attributable to the parent and to the noncontrolling interest. We
      expect SFAS 160 will have an impact on our accounting for future business
      combinations once adopted but the effect is dependent upon the
      acquisitions that are made in the future. </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="95%">
      <P align=justify>In March 2008, the Financial Accounting Standards Board
      issued SFAS Statement No. 161, "Disclosures about Derivative Instruments
      and Hedging Activities" ("SFAS 161"). This standard is intended to improve
      financial reporting about derivative instruments and hedging activities by
      requiring enhanced disclosures to enable investors to better understand
      their effects on an entity's financial position, financial performance,
      and cash flows. It is effective for financial statements issued for fiscal
      years and interim periods beginning after November 15, 2008, with early
      application encouraged. The Company is currently evaluating the impact
      that this statement will have on its disclosures related to derivative
      instruments and hedging activities. </P></TD></TR></TABLE>
<P align=center>F-12</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="95%">&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B>4.</B> </TD>
    <TD align=left width="95%"><B>Summary of Significant Accounting Policies
      (Cont&#146;d)</B> </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="95%">
      <P align=justify>The FASB issued SFAS 162, &#147;The Hierarchy of Generally
      Accepted Accounting Principles&#148;. The new standard is intended to improve
      financial reporting by identifying a consistent framework, or hierarchy,
      for selecting accounting principles to be used in preparing financial
      statements that are presented in conformity with U.S. generally accepted
      accounting principles (GAAP) for nongovernmental entities. Statement 162
      is effective 60 days following the Securities and Exchanges Commission's
      approval of the Public Company Accounting Oversight Board Auditing
      amendments to AU Section 411, The Meaning of Present Fairly in Conformity
      with Generally Accepted Accounting Principles. The adoption of SFAS 162
      will not have a material effect on the Company&#146;s financial position or
      results of operations. </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="95%">
      <P align=justify>The FASB issued FSP APB-14-1, Accounting for Convertible
      Debt Instruments That May Be Settled in Cash upon Conversion (Including
      Partial Cash Settlement). FSP APB 14-1 clarifies that convertible debt
      instruments that may be settled in cash upon conversion (including partial
      cash settlement) are not addressed by paragraph 12 of APB Opinion No. 14,
      Accounting for Convertible Debt and Debt Issued with Stock Purchase
      Warrants. Additionally, this FSP specifies that issuers of such
      instruments should separately account for the liability and equity
      components in a manner that will reflect the entity's nonconvertible debt
      borrowing rate when interest cost is recognized in subsequent periods.
      This FSP is effective for financial statements issued for fiscal years
      beginning after December 15, 2008, and interim periods within those fiscal
      years. Early adoption is not permitted. The Company is currently
      evaluating the impact of this Statement on its financial statements.
    </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="95%">
      <P align=justify>The FASB issued FSP FAS 142-3, Determination of the
      Useful Life of Intangible Assets. This FSP amends the factors that should
      be considered in developing renewal or extension assumptions used to
      determine the useful life of a recognized intangible asset under FASB
      Statement No. 142, Goodwill and Other Intangible Assets. This FSP is
      effective for financial statements issued for fiscal years beginning after
      December 15, 2008, and interim periods within those fiscal years. The
      adoption of FSP FAS 142-3 is not expected to have a material effect on the
      Company&#146;s financial position or results of operations. </P></TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="95%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="95%">
      <P align=justify>The FASB issued FSP EITF 03-6-1, Determining Whether
      Instruments Granted in Share-Based Payment Transactions Are Participating
      Securities. This FSP states that unvested share-based payment awards that
      contain nonforfeitable rights to dividends or dividend equivalents
      (whether paid or unpaid) are participating securities and shall be
      included in the computation of earnings per share pursuant to the
      two-class method. The FSP is effective for financial statements issued for
      fiscal years beginning after December 15, 2008, and interim periods within
      those years. The Company is currently evaluating the impact of this
      Statement on its financial statements. </P></TD></TR></TABLE>
<P align=center>F-13</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>4.</B> </TD>
    <TD>
      <P align=justify><B>Summary of Significant Accounting Policies
      (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>EITF 07-5, Determining Whether an Instrument (or Embedded
      Feature) Is Indexed to an Entity's Own Stock was ratified by the FASB.
      This EITF addresses the determination of whether an instrument (or an
      embedded feature) is indexed to an entity's own stock. This EITF is
      effective for financial statements issued for fiscal years beginning after
      December 15, 2008, and interim periods within those fiscal years. The
      adoption of EITF 07-5 is not expected to have a material effect on the
      Company&#146;s financial position or results of operations.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>EITF 08-3, Accounting by Lessees for Nonrefundable
      Maintenance Deposits was ratified by the FASB. This EITF prescribes the
      accounting for all nonrefundable maintenance deposits. This EITF is
      effective for financial statements issued for fiscal years beginning after
      December 15, 2008, and interim periods within those fiscal years. The
      adoption of EITF 08-3 is not expected to have a material effect on the
      Company&#146;s financial position or results of operations.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The EITF issued EITF 08-6, &#147;Equity Method Investment
      Accounting Considerations&#148;. This EITF considers whether all of the
      provisions of Statement 141(R) and Statement 160 should be applied when
      accounting for an equity method investment. This EITF is effective on a
      prospective basis in fiscal years beginning on or after December 15, 2008
      and interim periods within those fiscal years. The Company is currently
      evaluating the impact of this Statement on its consolidated financial
      statements.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The EITF issued EITF 08-8, &#147;Accounting for an Instrument
      (or an Embedded Feature) with a Settlement Amount That Is Based on the
      Stock of an Entity's Consolidated Subsidiary&#148;. This Issue addresses the
      determination of whether a financial instrument for which the payoff to
      the counterparty is based, in whole or in part, on the stock of an
      entity's consolidated subsidiary, is indexed to the reporting entity's own
      stock and therefore should not be precluded from qualifying for the first
      part of the scope exception in paragraph 11(a) of Statement 133 or being
      within the scope of Issue 00-19. This EITF is effective for fiscal years
      beginning on or after December 15, 2008, and interim periods within those
      fiscal years. The Company is currently evaluating the impact of this
      Statement on its consolidated financial statements.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>5.</B> </TD>
    <TD>
      <P align=justify><B>Adoption of New Accounting Standards</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Fair Value Measurements</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>SFAS No.157 is effective for financial assets and
      liabilities in fiscal years beginning after November 15, 2007, and for
      non-financial assets and liabilities in fiscal years beginning after
      November 15, 2008. The Company adopted SFAS No.157 for financial assets
      and liabilities in the first quarter of fiscal 2008 with no material
      impact to the consolidated financial statements. The Company is currently
      evaluating the potential impact of the application of SFAS No.157 on the
      non-financial assets and liabilities found on its consolidated financial
      statements.</P></TD></TR></TABLE>
<P align=center>F-14</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_17></A>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>5.</B> </TD>
    <TD>
      <P align=justify><B>Adoption of New Accounting Standards
    (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>SFAS No. 157 applies to all assets and liabilities that
      are being measured and reported on a fair value basis. SFAS No. 157
      requires new disclosure that establishes a framework for measuring fair
      value in GAAP, and expands disclosure about fair value measurements. This
      statement enables the reader of the financial statements to assess the
      inputs used to develop those measurements by establishing a hierarchy for
      ranking the quality and reliability of the information used to determine
      fair values. The statement requires that assets and liabilities carried at
      fair value be classified and disclosed in one of the following three
      categories:</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Level 1:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Quoted market
      prices in active markets for identical assets or liabilities.</P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Level 2:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Observable market
      based inputs or unobservable inputs that are corroborated by market data.
      </P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>Level 3:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unobservable inputs that are
      not corroborated by market data.</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In determining the appropriate levels, the Company
      performs a detailed analysis of the assets and liabilities that are
      subject to SFAS No. 157. At each reporting period, all assets and
      liabilities for which the fair value measurement is based on significant
      unobservable inputs are classified as Level 3. There are no assets or
      liabilities measured at fair value as at December 31, 2008.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Fair Value of Financial Instruments</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The table below presents the carrying value and fair
      value of Company&#146;s financial instruments. The disclosure excludes
      leases.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The fair value represents management&#146;s best estimates
      based on a range of methodologies and assumptions. The carrying value of
      receivables and payables arising in the ordinary course of business and
      the investment tax credits receivable and the convertible notes
      approximate fair value because of the relatively short period of time
      between their origination and expected realization. The loan payable,
      shareholder is presumed to have a fair value measured by the cash proceeds
      exchanged at issuance in accordance with APB-21 &#147;Interest on Receivables
      and Payables&#148;.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The convertible notes use significant unobservable inputs
      and thus are shown as Level 3 hierarchy items. The fair value of the
      convertible notes is calculated by discounting the stream of future
      payments of interest and principal at the prevailing market rate for a
      similar liability that does not have an associated equity component.
      Results of discounted cash flow calculations may be adjusted, as
      appropriate, to reflect other market conditions or the perceived changes
      in credit risk of the borrower.</P></TD></TR></TABLE>
<P align=center>F-15</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>5.</B> </TD>
    <TD>
      <P align=justify><B>Adoption of New Accounting Standards
    (Cont&#146;d)</B></P></TD></TR></TABLE>
<p><BR>
</p>
<DIV>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="8%">&nbsp; </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="19%"
    colSpan=4><B>December 31, 2008</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="19%"
    colSpan=4>December 31, 2007 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="8%">&nbsp; </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="8%"><B>Carrying</B> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="8%"><B>Estimated</B> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="8%">Carrying </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="8%">Estimated </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
      width="8%"><B>Level</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
      width="8%"><B>Value</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
      width="8%"><B>Fair Value</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="8%">Value
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="8%">Fair
      Value </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Financial assets </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Cash and cash
      equivalents </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=middle width="8%" bgColor=#e6efff>Level 1 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="8%" bgColor=#e6efff><B>&nbsp;555,999</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="8%" bgColor=#e6efff><B>&nbsp;555,999</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;330,967 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;330,967 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Restricted cash </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="8%">Level 1 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%"><B>277,220</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%"><B>277,220</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Investment tax
      credits receivable </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=middle width="8%" bgColor=#e6efff>Level 1 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff><B>269,156</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff><B>269,156</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>243,006 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>243,006 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Financial liabilities </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Loan payable,
      shareholder </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=middle width="8%" bgColor=#e6efff>Level 2 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff><B>82,357</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff><B>82,357</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>101,193 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>101,193 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Convertible notes,
      excluding unamortized discounts </TD>
    <TD align=left width="1%"></TD>
    <TD align=middle width="8%">Level 3 </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="8%"><B>1,230,241</B> </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="8%"><B>1,099,280</B> </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="8%">417,634 </TD>
    <TD align=left width="2%"></TD>
    <TD align=left width="1%"></TD>
    <TD align=right width="8%">417,634 </TD>
    <TD align=left width="2%"></TD></TR></TABLE></DIV>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>6.</B> </TD>
    <TD>
      <P align=justify><B>Collaborative Agreements</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On April 7, 2008, the Company ratified with Cary
      Pharmaceutical, a pharmaceutical development company, an Agreement to
      jointly develop and commercialize an oral antidepressant using IntelGenx&#146;s
      proprietary oral delivery technology. Under the terms of the agreement,
      IntelGenx will provide funding and development support for the product and
      will be entitled to profit sharing. The Company accounts for this
      transaction as a collaborative agreement as defined as EITF 07-1
      &#147;Accounting for Collaborative agreements&#148;. Per the Agreement, $2,000,000
      of the Company&#146;s cash and cash equivalents was initially restricted for
      the funding of this venture. This cash was taken from the proceeds of the
      private placement of March 27, 2008.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In accordance with the project plan, as of December 31,
      2008, the Company has expensed approximately $1,832,470 on the project of
      which $1,722,780 had been disbursed, resulting in a restricted cash
      balance of $277,220 and amounts payable of $109,690. Included within these
      disbursements is approximately $222,236 paid to Cary Pharmaceutical in
      respect of management fees. All expenses incurred with respect to the
      collaborative agreement were expensed in the statement of operations and
      were classified as research and development expenses and professional
      fees.</P></TD></TR></TABLE>
<P align=center>F-16</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>7.</B> </TD>
    <TD>
      <P align=justify><B>Property and Equipment</B></P></TD></TR></TABLE>
<p><BR>
</p>
<DIV>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="10%">&nbsp; </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="10%">&nbsp; </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="10%"><B>2008</B> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="10%">2007 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="10%">&nbsp; </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="10%">Accumulated </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="10%"><B>Net Carrying</B> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="10%">Net Carrying </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="10%">Cost
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
      width="10%">Depreciation </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
      width="10%"><B>Amount</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
      width="10%">Amount </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Laboratory and office equipment </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>237,551 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>109,438 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="10%" bgColor=#e6efff><B>128,113</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>185,073 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Computer equipment </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">24,337 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">12,783 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%"><B>11,554</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">16,085 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Leasehold improvements </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>51,263 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>33,774 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff><B>17,489</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>34,086 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD align=right style="border-bottom-style: solid; border-bottom-width: 2"><BR></TD>
    <TD align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 2"><BR>$</TD>
    <TD align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 2"><BR>313,151 </TD>
    <TD align=right width="2%" style="border-bottom-style: solid; border-bottom-width: 2"><BR></TD>
    <TD align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 2"><BR>$</TD>
    <TD align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 2"><BR>155,995 </TD>
    <TD align=right width="2%" style="border-bottom-style: solid; border-bottom-width: 2"><BR></TD>
    <TD align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 2"><BR><B>$</B></TD>
    <TD align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 2"><BR><B>157,156</B> </TD>
    <TD align=right width="2%" style="border-bottom-style: solid; border-bottom-width: 2"><BR></TD>
    <TD align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 2"><BR>$</TD>
    <TD align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 2"><BR>235,244 </TD>
    <TD align=right width="2%" style="border-bottom-style: solid; border-bottom-width: 2"><BR></TD></TR>
  </TABLE></DIV>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>8.</B> </TD>
    <TD>
      <P align=justify><B>Accounts Payable and Accrued Liabilities</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Included in accounts payable and accrued liabilities is
      approximately $13,390 (2007 - $71,651) payable to shareholders, who are
      also officers of the Company.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>9.</B> </TD>
    <TD>
      <P align=justify><B>Loan Payable, Shareholder</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The loan payable, shareholder, who is also an officer of
      the Company, is unsecured, bears interest at 6% per annum and is not
      repayable prior to January 1, 2010. Interest incurred during the year
      amounted to approximately $5,614 (2007 - $5,636) which is measured at the
      exchange amount.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>10.</B> </TD>
    <TD>
      <P align=justify><B>Convertible Notes</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On May 22, 2007 the Company entered into convertible note
      agreements with certain institutional and accredited investors for amounts
      totaling $1,500,000. The convertible notes bear interest at the rate of 8%
      per annum and are repayable on September 22, 2009. Interest is payable
      quarterly and payments commenced on July 1, 2007. The notes are
      convertible into common stock of the Company, at the option of the
      holders, at a rate of $0.70 per share. The Company also issued to the
      holders 2,142,857 stock purchase warrants exercisable at $1.02 per share
      before May 22, 2012.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On May 22, 2007, the Company paid approximately $229,323
      in cash consideration and issued warrants with a fair value of $82,993 in
      consideration for transaction costs. These transaction costs were
      allocated between the convertible debt and the warrants based on their
      relative fair value.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company may, at its option, elect to pay the interest
      by the issuance of common shares. The number of shares is to be determined
      by dividing the amount of the interest payment by the number which is 85%
      of the average market price of the Company's common shares for the 20
      trading days immediately prior to the interest payment date assuming the
      average market price is equal or greater than $0.70 as adjusted for
      reverse and forward share splits, recapitalizations and the like that
      occur after the date of the Securities Purchase
  Agreements.</P></TD></TR></TABLE>
<P align=center>F-17</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_20></A>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>10.</B> </TD>
    <TD>
      <P align=justify><B>Convertible Notes (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In accordance with EITF Issue 98-5 "Accounting for
      Convertible Securities with Beneficial Conversion Features or Contingently
      Adjustable Conversion Ratios", the Company recognized the value of the
      embedded beneficial conversion feature of $490,093 as additional paid-in
      capital and an equivalent discount which will be expensed over the term of
      the convertible notes. In addition, in accordance with EITF Issue 00-27
      "Application of Issue No.98-5 to Certain Convertible Instruments", the
      Company has allocated the proceeds of issuance between the convertible
      notes and the detachable warrants based on their relative fair value.
      Accordingly, the Company recognized the fair value of the detachable
      warrants of $490,093 as additional paid-in capital and an equivalent
      discount against the convertible notes. The difference between the face
      amount of the convertible notes and their carrying value is amortized over
      the life of the convertible notes. The Black-Scholes Model was used to
      calculate the fair value of the warrants.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The underlying assumptions included in the Black-Scholes
      Model were as follows:</P></TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left bgColor=#e6efff style="border-top-style: solid; border-top-width: 2">Expected volatility </TD>
    <TD align=middle width="50%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 2">64% </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgcolor="#FFFFFF">&nbsp;</TD>
    <TD align=left>Contractual life </TD>
    <TD align=middle width="50%">5 years </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
    <TD align=middle width="50%" bgColor=#e6efff>4.39% </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgcolor="#FFFFFF">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Dividend yield </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="50%">Nil
    </TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Substantially all of the assets of the Company have been
      pledged as security of the convertible notes. In the year ended December
      31, 2008, $103,820 of interest was paid (2007 - $66,180), and $465,918 of
      interest has been accreted (2007 - $195,317). During the year, $165,000
      (2007 - $104,759) of convertible notes were exchanged for 235,714 (2007 -
      149,657) shares of common stock.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>11.</B> </TD>
    <TD>
      <P align=justify><B>Commitments</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company has entered into an agreement to lease
      premises up to August 2009. The future minimum lease payments until expiry
      of the existing lease period are approximately $8,119. The total rental
      expense in 2008 was $14,800.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On May 29, 2008, the Company signed a new agreement with
      Auctus Capital for investor relation services. As part of the terms of
      this agreement, the Company is required to pay CDN $6,000 (US- $4,926) a
      month to Auctus Capital for a period of one year.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In the fourth quarter of 2008 the Company paid a deposit
      totaling $22,681 to Cushman &amp; Wakefield Lepage to be held &#147;in trust&#148;
      in respect of a right to lease alternative, local, premises. Under the
      terms of the agreement the Company will forfeit the deposit if the Company
      fails to sign a lease agreement.</P></TD></TR></TABLE>
<P align=center>F-18</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>12.</B> </TD>
    <TD>
      <P align=justify><B>Capital Stock</B></P></TD></TR></TABLE>
<div align="right">
  <table CELLSPACING="0" BORDER="0" WIDTH="95%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
    <tr>
      <td WIDTH="70%">&nbsp;</td>
      <td WIDTH="3%">&nbsp;</td>
      <td WIDTH="12%" align="center">&nbsp;</td>
      <td WIDTH="3%" align="center">&nbsp;</td>
      <td WIDTH="12%" align="center">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="70%" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
      <td WIDTH="3%" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
      <td WIDTH="12%" align="center" style="border-bottom-style: solid; border-bottom-width: 2">
      <font SIZE="2"><b>2008</b></font></td>
      <td WIDTH="3%" align="center" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
      <td WIDTH="12%" align="center" style="border-bottom-style: solid; border-bottom-width: 2">
      <font SIZE="2">2007</font></td>
    </tr>
    <tr>
      <td WIDTH="70%" bgcolor="#E6EFFF"><font SIZE="2">Authorized -</font></td>
      <td WIDTH="3%" bgcolor="#E6EFFF">&nbsp;</td>
      <td WIDTH="12%" bgcolor="#E6EFFF">&nbsp;</td>
      <td WIDTH="3%" bgcolor="#E6EFFF">&nbsp;</td>
      <td WIDTH="12%" bgcolor="#E6EFFF">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="70%"><font SIZE="2">100,000,000 common shares of $0.00001 par
      value</font></td>
      <td WIDTH="3%">&nbsp;</td>
      <td WIDTH="12%">&nbsp;</td>
      <td WIDTH="3%">&nbsp;</td>
      <td WIDTH="12%">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="70%" bgcolor="#E6EFFF"><font SIZE="2">20,000,000 preferred
      shares of $0.00001 par value</font></td>
      <td WIDTH="3%" bgcolor="#E6EFFF">&nbsp;</td>
      <td WIDTH="12%" bgcolor="#E6EFFF">&nbsp;</td>
      <td WIDTH="3%" bgcolor="#E6EFFF">&nbsp;</td>
      <td WIDTH="12%" bgcolor="#E6EFFF">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="70%"><font SIZE="2">Issued -</font></td>
      <td WIDTH="3%">&nbsp;</td>
      <td WIDTH="12%">&nbsp;</td>
      <td WIDTH="3%">&nbsp;</td>
      <td WIDTH="12%">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="70%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF">
      <font SIZE="2">20,850,002 (December 31, 2007 - 16,157,146) common shares</font></td>
      <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF">
      <font SIZE="2"><b>$</b></font></td>
      <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF">
      <font SIZE="2"><b>209</b></font></td>
      <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF">
      <font SIZE="2">$</font></td>
      <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF">
      <font SIZE="2">&nbsp;162</font></td>
    </tr>
  </table>
</div>
<P style="MARGIN-LEFT: 5%" align=justify>On April 10, 2007, the Board of
Directors of the Corporation approved an amendment, subject to shareholder
approval, to the Corporation's Certificate of Incorporation, to increase the
number of authorized common shares from 20,000,000 to 100,000,000 and to
authorize the creation of 20,000,000 shares of "blank check" preferred shares.
On April 10, 2007, the majority stockholder of the Corporation approved the same
resolution as the Board of Directors. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On March 27, 2008, as part of a private
placement, the Company issued 4,001,000 units for gross proceeds of $2,800,700.
Each unit consists of one common share of the Company and one common share
purchase warrant. Each warrant entitles the holder to purchase one common share
at an exercise price of $1.02 per common share and expires 24 months after the
date of issuance. Proceeds were allocated between the common shares and the
warrants based on their relative fair value. The common shares were recorded at
a value of $2,127,960 excluding transaction costs. (See note 13 for the portion
allocated to the warrants.) </P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company paid an agent a cash
commission in the amount of $196,000, which is equal to 7% of the gross proceeds
of the offering and issued an agent option entitling the agent to acquire
320,080 units (consisting of one common share and one common share purchase
warrant) at $0.70 per unit, which expire 24 months after the date of issuance.
Each common share purchase warrant included in the unit entitles the holder to
purchase one common share at an exercise price of $1.02 per common share and
expires 24 months after the date of issuance of the unit.</P>
<P style="MARGIN-LEFT: 5%" align=justify>In addition, the Company paid
approximately $256,000 in cash consideration for other transaction costs. All
the above transaction costs have been reflected as a reduction of the common
shares and the warrants based on their relative fair values. </P>
<P style="MARGIN-LEFT: 5%" align=justify>Pursuant to the terms of the private
placement, the Company was obliged to use its best efforts to (i) have the
common shares listed on the TSX Venture Exchange, and (ii) prepare and file
with, and have declared effective, by the U.S. Securities and Exchange
Commission, a resale registration statement in respect of the common shares and
the warrants issued to subscribers as well as those issuable upon exercise of
the agents warrants, all prior to 4 months after March 27, 2008. All of these
provisions were satisfied within the required time limits during the second
quarter of 2008.</P>
<P style="MARGIN-LEFT: 5%" align=justify>On April 22, 2008, 100,000 warrants
were exercised for 100,000 common shares having a par value of $1 for cash
consideration of $41,000, resulting in an increase in additional paid-in capital
of $40,999. </P>
<P align=center>F-19</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>12.</B> </TD>
    <TD>
      <P align=justify><B>Capital Stock (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On April 22, 2008, the Company entered into agreements to
      amend the anti-dilution terms of the convertible notes. As consideration
      for entering into this amendment, the Company agreed to issue to the
      holders of the convertible notes an aggregate of 159,456 fully paid common
      shares having a par value of $2 in aggregate, resulting in an increase in
      additional paid-in capital of $111,617.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In the year ended December 31, 2008, 191,500 stock
      options were exercised for 191,500 common shares having a par value of $2
      in aggregate, for cash consideration of $88,665, resulting in an increase
      in additional paid-in capital of $88,663.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>13.</B> </TD>
    <TD>
      <P align=justify><B>Additional Paid-In Capital</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Stock Options</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In November 2006, the Company adopted the 2006 Stock
      Incentive Plan ("Plan") for the purpose of issuing both Incentive Options
      and Nonqualified Options to officers, employees, directors and eligible
      consultants of the Company. A total of 1,600,749 shares of common stock
      were reserved for issuance under this plan. Options may be granted under
      the Plan on terms and at prices as determined by the Board of Directors
      except that the options cannot be granted at less than 100%, of the fair
      market value of the common stock on the date of the grant. Each option
      will be exercisable after the period or periods specified in the option
      agreement, but no option may be exercised after the expiration of 10 years
      from the date of grant. All options granted to individuals other than non-
      employee directors will have a total vesting period of 24 months from the
      date of grant, with one quarter of the total options granted vesting and
      becoming exercisable every six months. Options granted to non-employees
      will vest and become 100% fully exercisable immediately upon
  grant.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On August 9, 2007, the Company granted 257,500 stock
      options to employees and directors to purchase common shares. The stock
      options are exercisable at $1.15 per share and have a term of 10 years
      with vesting provisions ranging from immediate to vesting in equal
      increments over two years.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The fair values of all options granted during 2007 were
      estimated as of the date of grant using the Black-Scholes option pricing
      model with the following weighted average
assumptions:</P></TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" bgcolor="#FFFFFF">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%"><B>2007</B> </TD></TR>
  <TR>
    <TD width="5%" bgcolor="#FFFFFF">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="15%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Expected option life </TD>
    <TD align=right width="15%" bgColor=#e6efff><B>5.00 - 5.75 years</B>
</TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgcolor="#FFFFFF">&nbsp;</TD>
    <TD align=left>Volatility </TD>
    <TD align=right width="15%"><B>71%</B> </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
    <TD align=right width="15%" bgColor=#e6efff><B>4.58%</B> </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgcolor="#FFFFFF">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left>Dividend yield </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right
      width="15%"><B>Nil</B> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The weighted average grant-date fair
values for stock options granted during 2007 were $0.74 per option,
respectively.</P>
<P align=center>F-20</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>13.</B> </TD>
    <TD>
      <P align=justify><B>Additional Paid-In Capital (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On March 27, 2008, IntelGenx Technologies Corp. issued
      320,080 agent&#146;s options exercisable into one common share and one stock
      purchase warrant per agent&#146;s option. The exercise price of the option and
      the stock purchase warrant are $0.70 and $1.02 respectively and they
      expire on March 27, 2010. As at December 31, 2008, no agent&#146;s options had
      been exercised. The agent&#146;s options were issued as part of the transaction
      costs in connection with the private placement described in note 12. The
      agent&#146;s options were accounted for at their fair value, as determined by
      the Black-Scholes valuation model, of $95,000, using the assumptions
      below:</P></TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">Expected volatility </TD>
    <TD align=middle width="15%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">77% </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgcolor="#FFFFFF">&nbsp;</TD>
    <TD align=left>Expected life </TD>
    <TD align=middle width="15%">2 years </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#FFFFFF>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
    <TD align=middle width="15%" bgColor=#e6efff>1.75% </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgcolor="#FFFFFF">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Dividend yield </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="15%">Nil
    </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>A modification was made to the 2006
Stock Option Plan. The life of the options was reduced from 10 years to 5 years
to comply with the regulations of the TSX-V. Accordingly, because the grant-date
fair value of the modified options was less than the fair value of the original
options measured immediately before the modification, no incremental share-based
compensation expense resulted from the modification. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On May 22, 2008, the Company granted
51,176 stock options to two non-employee directors to purchase common shares.
The stock options are exercisable at $0.85 per share and have a term of 5 years
with immediate vesting provisions. The stock options were accounted for at their
fair value, as determined by the Black-Scholes valuation model, of $21,329,
using the following assumptions: </P>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">Expected volatility </TD>
    <TD align=middle width="15%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">76% </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Expected life </TD>
    <TD align=middle width="15%">2.5 years </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
    <TD align=middle width="15%" bgColor=#e6efff>2.70% </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Dividend yield </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="15%">Nil
    </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>On May 29, 2008, 400,000 stock options
were granted to Auctus Capital as compensation for investor relation services.
The option grant was subject to shareholder approval to increase the number of
shares to be issued under the stock option plan, which was subsequently given at
the Annual General Meeting, held on September 8, 2008. The exercise price of the
options is $1. The options vest based upon a combination of the achievement of
certain performance conditions and the passage of time. As of December 31, 2008,
performance conditions have been met for the first 200,000 options tranche. The
first tranche of the 200,000 stock options were accounted for at its fair value,
as determined by the Black-Scholes valuation model, of $86,112, using the
following assumptions: </P>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">Expected volatility </TD>
    <TD align=middle width="15%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">75% </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Expected life </TD>
    <TD align=middle width="15%">2.69 years </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
    <TD align=middle width="15%" bgColor=#e6efff>2.81% </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Dividend yield </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="15%">Nil
    </TD></TR></TABLE>
<P align=center>F-21</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>13.</B> </TD>
    <TD>
      <P align=justify><B>Additional Paid-In Capital (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>As a result of the May 29, 2008 grant, the Company
      recorded a compensation expense of $50,421 in the year ended December 31,
      2008 for the first tranche of 200,000 options. As at December 31, 2008,
      the performance conditions for the second tranche of 200,000 stock options
      had not yet been achieved and as such no compensation expense has been
      recognized.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>At the Annual General Meeting on September 8, 2008 the
      Shareholders of the Company approved to amend the 2006 Stock Option Plan
      to increase the number of shares available for issuance under the Plan
      from 1,600,749 to 2,074,000, or 10% of the Company&#146;s issued and
      outstanding shares as of July 28, 2008.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On September 8, 2008, the Company granted 75,000 stock
      options to a non-employee director to purchase common shares. The stock
      options are exercisable at $0.85 per share and have a term of 5 years with
      immediate vesting provisions. The stock options were accounted for at
      their fair value, as determined by the Black-Scholes valuation model, of
      $30,398, using the following assumptions:</P></TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">Expected volatility </TD>
    <TD align=middle width="15%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">78% </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Expected life </TD>
    <TD align=middle width="15%">2.5 years </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
    <TD align=middle width="15%" bgColor=#e6efff>2.40% </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Dividend yield </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="15%">Nil
    </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>On September 8, 2008, the Company
granted 100,000 stock options to an officer to purchase common shares. The stock
options are exercisable at $0.85 per share, have a term of 5 years and vest in
equal increments over two years at 25% every six months. The stock options were
accounted for at their fair value, as determined by the Black-Scholes valuation
model, of $39,735, using the following assumptions: </P>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">Expected volatility </TD>
    <TD align=middle width="15%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">76% </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Expected life </TD>
    <TD align=middle width="15%">3.1 years </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
    <TD align=middle width="15%" bgColor=#e6efff>2.49% </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Dividend yield </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="15%">Nil
    </TD></TR></TABLE>
<P align=center>F-22</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_25></A>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>13.</B> </TD>
    <TD>
      <P align=justify><B>Additional Paid-In Capital (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Information with respect to stock option activity for
      2007 and 2008 is as follows:</P></TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>Weighted Average</B> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>Number of Options</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>Exercise Price</B> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="12%">&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 2"><BR>Outstanding &#150; January 1, 2007 </TD>
    <TD width="1%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 2"><BR></TD>
    <TD align=right width="12%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 2"><BR>1,119,000 </TD>
    <TD align=right width="2%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 2"><BR></TD>
    <TD align=right width="1%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 2"><BR></TD>
    <TD align=right width="12%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 2"><BR>0.41 </TD>
    <TD width="2%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 2"><BR></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD><BR>Granted </TD>
    <TD width="1%"><BR></TD>
    <TD align=right width="12%"><BR>257,500 </TD>
    <TD align=right width="2%"><BR></TD>
    <TD align=right width="1%"><BR></TD>
    <TD align=right width="12%"><BR>1.15 </TD>
    <TD width="2%"><BR></TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Forfeited </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Expired </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=right width="2%">&nbsp;</TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Exercised </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD style="border-bottom-style: solid; border-bottom-width: 1"><BR>Outstanding &#150; December 31, 2007 </TD>
    <TD width="1%" style="border-bottom-style: solid; border-bottom-width: 1"><BR></TD>
    <TD align=right width="12%" style="border-bottom-style: solid; border-bottom-width: 1"><BR>1,376,500 </TD>
    <TD align=right width="2%" style="border-bottom-style: solid; border-bottom-width: 1"><BR></TD>
    <TD align=right width="1%" style="border-bottom-style: solid; border-bottom-width: 1"><BR></TD>
    <TD align=right width="12%" style="border-bottom-style: solid; border-bottom-width: 1"><BR>0.55 </TD>
    <TD width="2%" style="border-bottom-style: solid; border-bottom-width: 1"><BR></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><BR>Granted </TD>
    <TD width="1%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><BR></TD>
    <TD align=right width="12%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><BR>626,176 </TD>
    <TD align=right width="2%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><BR></TD>
    <TD align=right width="1%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><BR></TD>
    <TD align=right width="12%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><BR>0.95 </TD>
    <TD width="2%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1"><BR></TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Forfeited </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(50, 000</TD>
    <TD align=left width="2%">) </TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=right width="12%">(0.97</TD>
    <TD align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Expired </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(62,500</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(1.15</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Exercised </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(191,500</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="12%">(0.46</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%">)
</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 2"><BR>Outstanding &#150; December 31, 2008 </TD>
    <TD width="1%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 2"><BR></TD>
    <TD align=right width="12%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 2"><BR>1,698,676 </TD>
    <TD align=right width="2%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 2"><BR></TD>
    <TD align=right width="1%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 2"><BR></TD>
    <TD align=right width="12%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 2"><BR>1.01 </TD>
    <TD width="2%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 2"><BR></TD></TR>
  </TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Details of stock options outstanding as
at December 31, 2008 are as follows: </P>
<div align="right">
  <table CELLSPACING="0" BORDER="0" WIDTH="95%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
    <tr>
      <td WIDTH="12%" align="center">&nbsp;</td>
      <td WIDTH="48%" COLSPAN="4" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
      <font SIZE="2"><b>Outstanding Options</b></font></td>
      <td WIDTH="39%" COLSPAN="3" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
      <font SIZE="2"><b>Exercisable Options</b></font></td>
    </tr>
    <tr>
      <td WIDTH="12%" align="center">&nbsp;</td>
      <td WIDTH="12%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
      <td WIDTH="12%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
      <td WIDTH="12%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
      <td WIDTH="12%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
      <td WIDTH="13%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
      <td WIDTH="13%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
      <td WIDTH="13%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="12%" align="center">&nbsp;</td>
      <td WIDTH="12%" align="center">&nbsp;</td>
      <td WIDTH="12%" align="center">&nbsp;</td>
      <td WIDTH="12%" align="center"><font SIZE="2"><b>Weighted</b></font></td>
      <td WIDTH="12%" align="center">&nbsp;</td>
      <td WIDTH="13%" align="center">&nbsp;</td>
      <td WIDTH="13%" align="center"><font SIZE="2"><b>Weighted</b></font></td>
      <td WIDTH="13%" align="center">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="12%" align="center">&nbsp;</td>
      <td WIDTH="12%" align="center">&nbsp;</td>
      <td WIDTH="12%" align="center"><font SIZE="2"><b>Weighted Average</b></font></td>
      <td WIDTH="12%" align="center"><font SIZE="2"><b>Average</b></font></td>
      <td WIDTH="12%" align="center"><font SIZE="2"><b>Aggregate</b></font></td>
      <td WIDTH="13%" align="center">&nbsp;</td>
      <td WIDTH="13%" align="center"><font SIZE="2"><b>Average</b></font></td>
      <td WIDTH="13%" align="center"><font SIZE="2"><b>Aggregate</b></font></td>
    </tr>
    <tr>
      <td WIDTH="12%" align="center"><font SIZE="2"><b>Exercise</b></font></td>
      <td WIDTH="12%" align="center"><font SIZE="2"><b>Number of</b></font></td>
      <td WIDTH="12%" align="center"><font SIZE="2"><b>Remaining</b></font></td>
      <td WIDTH="12%" align="center"><font SIZE="2"><b>Exercise</b></font></td>
      <td WIDTH="12%" align="center"><font SIZE="2"><b>Intrinsic</b></font></td>
      <td WIDTH="13%" align="center"><font SIZE="2"><b>Number of</b></font></td>
      <td WIDTH="13%" align="center"><font SIZE="2"><b>Exercise</b></font></td>
      <td WIDTH="13%" align="center"><font SIZE="2"><b>Intrinsic</b></font></td>
    </tr>
    <tr>
      <td WIDTH="12%" align="center"><font SIZE="2"><b>Prices</b></font></td>
      <td WIDTH="12%" align="center"><font SIZE="2"><b>Options</b></font></td>
      <td WIDTH="12%" align="center"><font SIZE="2"><b>Contractual Life</b></font></td>
      <td WIDTH="12%" align="center"><font SIZE="2"><b>Price</b></font></td>
      <td WIDTH="12%" align="center"><font SIZE="2"><b>Value</b></font></td>
      <td WIDTH="13%" align="center"><font SIZE="2"><b>Options</b></font></td>
      <td WIDTH="13%" align="center"><font SIZE="2"><b>Price</b></font></td>
      <td WIDTH="13%" align="center"><font SIZE="2"><b>Value</b></font></td>
    </tr>
    <tr>
      <td WIDTH="12%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
      <font SIZE="2"><b>$</b></font></td>
      <td WIDTH="12%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
      <td WIDTH="12%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
      <font SIZE="2"><b>(years)</b></font></td>
      <td WIDTH="12%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
      <font SIZE="2"><b>$</b></font></td>
      <td WIDTH="12%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
      <font SIZE="2"><b>$</b></font></td>
      <td WIDTH="13%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
      <td WIDTH="13%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
      <font SIZE="2"><b>$</b></font></td>
      <td WIDTH="13%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
      <font SIZE="2"><b>$</b></font></td>
    </tr>
    <tr>
      <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
      <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
      <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
      <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
      <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
      <td WIDTH="13%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
      <td WIDTH="13%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
      <td WIDTH="13%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="12%" align="center" bgcolor="#E6EFFF"><font SIZE="2">0.41</font></td>
      <td WIDTH="12%" align="right" bgcolor="#E6EFFF"><font SIZE="2">
      <p style="margin-right: 4">800,000</font></td>
      <td WIDTH="12%" align="right" bgcolor="#E6EFFF"><font SIZE="2">
      <p style="margin-right: 4">2.88</font></td>
      <td WIDTH="12%" align="right" bgcolor="#E6EFFF"><font SIZE="2">
      <p style="margin-right: 4">0.41</font></td>
      <td WIDTH="12%" align="right" bgcolor="#E6EFFF">
      <p style="margin-right: 4">&nbsp;</td>
      <td WIDTH="13%" align="right" bgcolor="#E6EFFF"><font SIZE="2">
      <p style="margin-right: 4">800,000</font></td>
      <td WIDTH="13%" align="right" bgcolor="#E6EFFF"><font SIZE="2">
      <p style="margin-right: 4">0.41</font></td>
      <td WIDTH="13%" align="right" bgcolor="#E6EFFF">
      <p style="margin-right: 4">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="12%" align="center"><font SIZE="2">0.70-0.85</font></td>
      <td WIDTH="12%" align="right"><font SIZE="2">
      <p style="margin-right: 4">341,176</font></td>
      <td WIDTH="12%" align="right"><font SIZE="2">
      <p style="margin-right: 4">3.98</font></td>
      <td WIDTH="12%" align="right"><font SIZE="2">
      <p style="margin-right: 4">0.80</font></td>
      <td WIDTH="12%" align="right">
      <p style="margin-right: 4">&nbsp;</td>
      <td WIDTH="13%" align="right"><font SIZE="2">
      <p style="margin-right: 4">241,176</font></td>
      <td WIDTH="13%" align="right"><font SIZE="2">
      <p style="margin-right: 4">0.78</font></td>
      <td WIDTH="13%" align="right">
      <p style="margin-right: 4">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="12%" align="center" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF">
      <font SIZE="2">1.00-1.15</font></td>
      <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF">
      <font SIZE="2">
      <p style="margin-right: 4">557,500</font></td>
      <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF">
      <font SIZE="2">
      <p style="margin-right: 4">4.18</font></td>
      <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF">
      <font SIZE="2">
      <p style="margin-right: 4">1.05</font></td>
      <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF">
      <p style="margin-right: 4">&nbsp;</td>
      <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF">
      <font SIZE="2">
      <p style="margin-right: 4">236,667</font></td>
      <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF">
      <font SIZE="2">
      <p style="margin-right: 4">1.08</font></td>
      <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF">
      <p style="margin-right: 4">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
      <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
      <p style="margin-right: 4">&nbsp;</td>
      <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
      <p style="margin-right: 4">&nbsp;</td>
      <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
      <p style="margin-right: 4">&nbsp;</td>
      <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
      <p style="margin-right: 4">&nbsp;</td>
      <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1">
      <p style="margin-right: 4">&nbsp;</td>
      <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1">
      <p style="margin-right: 4">&nbsp;</td>
      <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1">
      <p style="margin-right: 4">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="12%" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
      <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
      <font SIZE="2">
      <p style="margin-right: 4">1,698,676</font></td>
      <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
      <font SIZE="2">
      <p style="margin-right: 4">3.51</font></td>
      <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
      <font SIZE="2">
      <p style="margin-right: 4">1.01</font></td>
      <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
      <font SIZE="2">
      <p style="margin-right: 4">152,000</font></td>
      <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
      <font SIZE="2">
      <p style="margin-right: 4">1,277,843</font></td>
      <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
      <font SIZE="2">
      <p style="margin-right: 4">0.60</font></td>
      <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 2">
      <font SIZE="2">
      <p style="margin-right: 4">152,000</font></td>
    </tr>
  </table>
</div>
<DIV>
&nbsp;</DIV>
<P align=center>F-23</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_26></A>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>13.</B> </TD>
    <TD>
      <P align=justify><B>Additional Paid-In Capital (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Stock-based compensation expense recognized in 2008 in
      regards to the stock options was $161,035 (2007 - $202,607). As of
      December 31, 2008, total unrecognized compensation expense related to
      unvested stock options was $83,177. This amount is expected to be
      recognized as expense over a period of two years. A change in control of
      the Company due to acquisition would cause the vesting of these stock
      options to accelerate and would result in this amount being charged to
      stock-based compensation expense.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Warrants</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On May 22, 2007, IntelGenx Technologies Corp. issued
      214,286 stock purchase warrants exercisable into common shares at $0.70
      per share which expire on May 22, 2011. The Stock purchase warrants were
      issued as part of the transaction costs in connection with the convertible
      notes described in note 10. The stock purchase warrants were accounted for
      at their fair value, as determined by the Black-Scholes valuation model,
      of $82,993, using the following assumptions:</P></TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">Expected volatility </TD>
    <TD align=right width="15%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">64% </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Expected life </TD>
    <TD align=right width="15%">4 years </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
    <TD align=right width="15%" bgColor=#e6efff>4.39% </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Dividend yield </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%">Nil
    </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>On May 22, 2007 the Company entered
into convertible note agreements with certain institutional and accredited
investors as described in note 10. The Company also issued to the holders
2,142,857 stock purchase warrants exercisable at $1.02 per share before May 22,
2012.</P>
<P style="MARGIN-LEFT: 5%" align=justify>On March 19, 2008, the Company restated
the exercise price of the warrants initially issued with respect to the
convertible notes transaction on May 22, 2007 from $1.02 to $0.80. This
modification was treated as an exchange of the original warrant for a new
warrant in accordance to FAS 123 (R) "Share-based payments". This resulted in an
increase in fair value of the warrants of $92,571. This increase was recorded as
an additional compensation expense and a corresponding increase in additional
paid-up capital. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On March 27, 2008, the Company issued
4,001,000 stock purchase warrants exercisable into common shares at $1.02 per
share which expire on March 27, 2010. The stock purchase warrants were issued in
connection with the private placement described in note 12. The stock purchase
warrants were valued at $672,740, before transaction costs, based on their
relative fair value, as determined by the Black-Scholes valuation model using
the assumptions below: </P>
<P align=center>F-24</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_27></A>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>13.</B> </TD>
    <TD>
      <P align=justify><B>Additional Paid-In Capital
  (Cont&#146;d)</B></P></TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">Expected volatility </TD>
    <TD align=middle width="15%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">77% </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Expected life </TD>
    <TD align=middle width="15%">2 years </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
    <TD align=middle width="15%" bgColor=#e6efff>1.75% </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Dividend yield </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="15%">Nil
    </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>As at March 31, 2008, 5,186 shares of
common stock were issued as a result of the cashless exercise of 10,638 warrants
with an exercise price of $0.41 and a fair value of $0.80. These warrants were
initially granted for services rendered pursuant to the share exchange
transaction of April 28, 2006. The remaining 180,053 warrants that were granted
in 2006 expired on April 28, 2008 and November 13, 2008. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On April 22, 2008, $100,000 warrants
were exercised for 100,000 common shares having a par value of $1 for cash
consideration of $41,000, resulting in an increase in additional paid-in capital
of $40,999. </P>
<P style="MARGIN-LEFT: 5%" align=justify>As at December 31, 2008, no additional
stock purchase warrants had been exercised. </P>
<P style="MARGIN-LEFT: 5%" align=justify>Information with respect to warrant
activity for 2007 and 2008 is as follows: </P>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left width="5%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD align=left style="border-left-style: none; border-left-width: medium">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="12%">&nbsp; </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="12%"><B>Weighted</B> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="5%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD align=left style="border-left-style: none; border-left-width: medium">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="12%"><B>Number of</B> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="12%"><B>Average</B> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="5%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD align=left style="border-left-style: none; border-left-width: medium">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=middle width="12%"><B>Warrants</B> </TD>
    <TD align=middle width="2%">&nbsp;</TD>
    <TD align=middle width="1%">&nbsp;</TD>
    <TD align=middle width="12%"><B>Exercise Price</B> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
      width="12%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
      width="12%"><STRONG>$</STRONG></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD width="5%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD style="border-left-style: none; border-left-width: medium">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" align=left bgcolor="#E6EFFF">Outstanding &#150;
      January 1, 2007 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%" bgcolor="#E6EFFF">190,69 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=center align=left
    width="2%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%" bgcolor="#E6EFFF">0.4
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%" bgcolor="#E6EFFF">&nbsp;</TD></TR>
  <TR>
    <TD width="5%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD style="border-left-style: none; border-left-width: medium">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD vAlign=center width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="5%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD align=left style="border-left-style: none; border-left-width: medium">Attached to convertible notes (note 10) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">2,142,857 </TD>
    <TD vAlign=center align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">1.02 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" align=left bgcolor="#E6EFFF">Issued as part of
      transaction costs </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%" bgcolor="#E6EFFF">214,286 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=center align=left
    width="2%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%" bgcolor="#E6EFFF">0.70
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%" bgcolor="#E6EFFF">&nbsp;</TD></TR>
  <TR>
    <TD width="5%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD style="border-left-style: none; border-left-width: medium">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD vAlign=center width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" align=left>Outstanding &#150;
      December 31, 2007 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">2,547,834 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=center align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">0.97
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD width="5%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD style="border-left-style: none; border-left-width: medium" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD width="12%" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD vAlign=center width="2%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD width="12%" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width="2%" bgcolor="#E6EFFF">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="5%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD align=left style="border-left-style: none; border-left-width: medium" bgcolor="#E6EFFF">Attached to private placement </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right width="12%" bgcolor="#E6EFFF">4,001,000 </TD>
    <TD vAlign=center align=left width="2%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right width="12%" bgcolor="#E6EFFF">1.02 </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="5%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD align=left style="border-left-style: none; border-left-width: medium">Issued to agent </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">320,080 </TD>
    <TD vAlign=center align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">1.02 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="5%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD align=left style="border-left-style: none; border-left-width: medium" bgcolor="#E6EFFF">Re-pricing - Cancellation of original warrants </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right width="12%" bgcolor="#E6EFFF">(2,142,857 </TD>
    <TD vAlign=center align=left width="2%" bgcolor="#E6EFFF">)&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right width="12%" bgcolor="#E6EFFF">(1.02 </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF">)</TD></TR>
  <TR vAlign=top>
    <TD align=left width="5%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD align=left style="border-left-style: none; border-left-width: medium">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Re-Issue of Warrants </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">2,142,857 </TD>
    <TD vAlign=center align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">0.80 </TD>
    <TD align=left width="2%">)&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="5%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD align=left style="border-left-style: none; border-left-width: medium" bgcolor="#E6EFFF">Expired </TD>
    <TD align=left width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right width="12%" bgcolor="#E6EFFF">(80,053 </TD>
    <TD vAlign=center align=left width="2%" bgcolor="#E6EFFF">)&nbsp;</TD>
    <TD align=left width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD align=right width="12%" bgcolor="#E6EFFF">(0.4 </TD>
    <TD align=left width="2%" bgcolor="#E6EFFF">)&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" align=left>Exercised </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(110,638 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=center align=left
    width="2%">)&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">(0.4
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">)&nbsp;</TD></TR>
  <TR>
    <TD width="5%" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD style="border-left-style: none; border-left-width: medium" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD width="12%" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD vAlign=center width="2%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD width="12%" bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width="2%" bgcolor="#E6EFFF">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left bgcolor="#E6EFFF">Outstanding -
      December 31, 2008 </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left
    width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=right
      width="12%" bgcolor="#E6EFFF">6,678,223 </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" vAlign=center align=left
    width="2%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left
    width="1%" bgcolor="#E6EFFF">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=right width="12%" bgcolor="#E6EFFF">0.95
    </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=left
    width="2%" bgcolor="#E6EFFF">&nbsp;</TD></TR></TABLE>
<P align=center>F-25</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_28></A>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>14.</B> </TD>
    <TD>
      <P align=justify><B>Income Taxes</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Income taxes reported differ from the amount computed by
      applying the statutory rates to losses. The reasons are as
  follows:</P></TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
      width="12%"><B>2008</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="12%">2007
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Statutory income taxes </TD>
    <TD align=left width="1%" bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="12%" bgColor=#e6efff><B>&nbsp;(944,000</B></TD>
    <TD align=left width="2%" bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(352,000</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Net operating losses for which no tax benefits have been
      recorded </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>567,000</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">140,000 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Excess of amortization over capital cost
      allowance </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>17,000</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>14,000 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Non-deductible expenses </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>185,000</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">147,000 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Undeducted research and development
      expenses </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>441,000</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>143,000 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Tax deductible portion of transaction costs </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>(37,000</B></TD>
    <TD align=left width="2%"><B>)</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(36,000</TD>
    <TD align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Investment tax credit </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>(181,000</B></TD>
    <TD align=left width="2%" bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(56,000</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Unrealized foreign exchange gain </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>(48,000</B></TD>
    <TD align=left width="2%"><B>)</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Amortization of convertible debt discount </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>(152,000</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(64,000</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD style="border-bottom-style: solid; border-bottom-width: 2"><BR></TD>
    <TD width="1%" style="border-bottom-style: solid; border-bottom-width: 2"><BR><B>$</B></TD>
    <TD align=right width="12%" style="border-bottom-style: solid; border-bottom-width: 2"><BR><B>(152,000</B></TD>
    <TD width="2%" style="border-bottom-style: solid; border-bottom-width: 2"><BR><B>)</B> </TD>
    <TD width="1%" style="border-bottom-style: solid; border-bottom-width: 2"><BR>$</TD>
    <TD align=right width="12%" style="border-bottom-style: solid; border-bottom-width: 2"><BR>(64,000</TD>
    <TD width="2%" style="border-bottom-style: solid; border-bottom-width: 2"><BR>) </TD></TR>
  </TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The major components of the deferred
tax assets classified by the source of temporary differences are as follows:
</P>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
      width="12%"><B>2008</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="12%">2007
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Property and equipment </TD>
    <TD align=left width="1%" bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="12%" bgColor=#e6efff><B>&nbsp;(12,000</B></TD>
    <TD align=left width="2%" bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(15,000</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Net operating losses carryforward </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>838,000</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">264,000 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Undeducted research and development
      expenses </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>518,000</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>206,000 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Non-refundable tax credits carryforward </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>237,000</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">23,000 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Transaction costs to be deducted in future years </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>73,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>108,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD><BR></TD>
    <TD width="1%"><BR></TD>
    <TD align=right width="12%"><BR><B>1,654,000</B> </TD>
    <TD width="2%"><BR></TD>
    <TD width="1%"><BR></TD>
    <TD align=right width="12%"><BR>586,000 </TD>
    <TD width="2%"><BR></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1"><BR>Valuation allowance </TD>
    <TD width="1%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1"><BR></TD>
    <TD align=right width="12%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1"><BR><B>(1,654,000</B></TD>
    <TD width="2%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1"><BR><B>)</B> </TD>
    <TD width="1%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1"><BR></TD>
    <TD align=right width="12%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1"><BR>(586,000</TD>
    <TD width="2%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1"><BR>) </TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><BR></TD>
    <TD width="1%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><BR><B>$</B></TD>
    <TD align=right width="12%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><BR><B>-</B> </TD>
    <TD width="2%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><BR></TD>
    <TD width="1%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><BR>$</TD>
    <TD align=right width="12%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><BR>- </TD>
    <TD width="2%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2"><BR></TD></TR>
  </TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>There were Canadian and provincial net
operating losses of approximately $2,585,000 (2007 - $794,000) and $2,702,000
(2007 - $908,000) respectively, that may be applied against earnings of future
years. Utilization of the net operating losses is subject to significant
limitations imposed by the change in control provisions. A portion of the net
operating losses may expire before they can be utilized. </P>
<P style="MARGIN-LEFT: 5%" align=justify>As at December 31, 2008, the Company
had non-refundable tax credits of $237,000 (2007 -$24,000) of which 24,000 is
expiring in 2017 and 213,000 is expiring in 2018 and undeducted research and
development expenses of $1,548,000 (2007 - $670,000) with no expiration date.
</P>
<P align=center>F-26</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_29></A>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>14.</B> </TD>
    <TD>
      <P align=justify><B>Income Taxes (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Due to the reorganization of the Company, there were
      $549,000 of transaction costs of which $115,000 was deductible in the
      current year (2007- $113,000). The remaining transaction costs are
      deductible for income tax purposes in equal amounts over the next three
      years.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The deferred tax benefit of these items was not
      recognized in the accounts.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Deferred Income Taxes</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The balance of deferred income taxes as at December 31,
      2008 represents the tax effect of the convertible debt arising from the
      difference between the convertible debt&#146;s basis for accounting purposes
      and that for income tax purposes and it has been charged to additional
      paid-in capital. As the convertible debt is repaid, the deferred tax
      liability will be charged to expenses.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Unrecognized Tax Benefits</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On January 1, 2007, the Company adopted the provisions
      for FIN 48, which is an interpretation of SFAS No. 109. FIN 48 prescribes
      a recognition threshold that a tax position is required to meet before
      being recognized in the financial statements and provides guidance on
      de-recognition, measurement, classification, interest and penalties,
      accounting in interim periods, disclosure and transition issues. FIN 48
      contains a two-step approach to recognizing and measuring uncertain tax
      positions accounted for in accordance with SFAS No. 109. The first step is
      to evaluate the tax position for recognition by determining if the weight
      of available evidence indicates that it is more likely than not that the
      position will be sustained upon ultimate settlement with a taxing
      authority, including resolution of related appeals or litigation
      processes, if any. The second step is to measure the tax benefit as the
      largest amount that is more than 50% likely of being realized upon
      ultimate settlement. Prior to January 1, 2007 and the implementation of
      FIN 48, the Company recorded tax contingencies when the exposure item
      became probable and reasonably estimable, in accordance with SFAS No. 5,
      <I>Accounting for Contingencies</I>.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The adoption of FIN 48 has not had a material effect on
      our financial position or results of operations for the years 2007 and
      2008.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company does not expect its unrecognized tax benefits
      to change significantly over the next twelve months.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Classification of Interest and Penalties</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Additionally, FIN 48 requires the Company to accrue
      interest and related penalties, if applicable, on all tax positions for
      which reserves have been established consistent with jurisdictional tax
      laws<I>.</I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company&#146;s policy to include interest and penalties
      related to unrecognized tax benefits within the provision for income taxes
      did not change as a result of adopting FIN 48.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The interest and penalties as of December 31, 2008 and
      for the years ended December 31, 2008 and 2007 were
$Nil.</P></TD></TR></TABLE>
<P align=center>F-27</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_30></A>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>14.</B> </TD>
    <TD>
      <P align=justify><B>Income Taxes (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Tax Years and Examination</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company files tax returns in each jurisdiction in
      which it is registered to do business. For each jurisdiction a statute of
      limitations period exists. After a statute of limitations period expires,
      the respective tax authorities may no longer assess additional income tax
      for the expired period. Similarly, the Company is no longer eligible to
      file claims for refund for any tax that it may have overpaid. The
      following table summarizes the Company&#146;s major tax jurisdictions and the
      tax years that remain subject to examination by these jurisdictions as of
      December 31, 2008:</P></TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="70">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:none; border-right-width:medium" align=middle width="630"><B>Tax
      Jurisdictions</B> </TD>
    <TD style="BORDER-BOTTOM: medium none #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium" align=middle
      width="70">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:none; border-left-width:medium" align=middle
      width="631"><B>Tax Years</B> </TD></TR>
  <TR vAlign=top>
    <TD width="70">&nbsp;</TD>
    <TD align=middle bgColor=#e6efff width="630" style="border-right-style: none; border-right-width: medium">Federal - Canada </TD>
    <TD align=middle width="70" bgColor=#e6efff style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD align=middle width="631" bgColor=#e6efff style="border-left-style: none; border-left-width: medium">2004 and onward </TD></TR>
  <TR vAlign=top>
    <TD width="70">&nbsp;</TD>
    <TD align=middle width="630" style="border-right-style: none; border-right-width: medium">Provincial - Quebec </TD>
    <TD align=middle width="70" style="border-style: none; border-width: medium">&nbsp;</TD>
    <TD align=middle width="631" style="border-left-style: none; border-left-width: medium">2004 and onward </TD></TR>
  </TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>15.</B> </TD>
    <TD>
      <P align=justify><B>Statement of Cash Flows
  Information</B></P></TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
      width="12%"><B>2008</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=middle width="12%">2007
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Accounts receivable </TD>
    <TD align=left width="1%" bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="12%" bgColor=#e6efff><B>&nbsp;110,413</B> </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(292,253</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Prepaid expenses </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>(21,493</B></TD>
    <TD align=left width="2%"><B>)</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">49,471 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Investment tax credits receivable </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>(15,122</B></TD>
    <TD align=left width="2%" bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(200,774</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Accounts payable
      and accrued liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>264,176</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">131,491 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff>Changes in non-cash operating elements of working capital
    </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><B>&nbsp;337,974</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff>&nbsp;(312,065</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left style="border-top-style: none; border-top-width: medium"><B>Additional Cash Flow Information:</B> </TD>
    <TD align=left width="1%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="12%" style="border-top-style: none; border-top-width: medium">&nbsp; </TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="1%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="12%" style="border-top-style: none; border-top-width: medium">&nbsp; </TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff>Interest paid </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><B>&nbsp;189,885</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff>&nbsp;81,194 </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<p><BR>
</p>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>16.</B> </TD>
    <TD>
      <P align=justify><B>Related Party Transactions</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In December 2007, the Company purchased $60,000 in
      laboratory equipment from a shareholder who is also an officer. The
      Company has had the use of the equipment since 2005.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Included in professional fees are $Nil (2007 - $18,104)
      paid to a non-employee director of the Company.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>During the year, the Company incurred expenses of
      approximately $18,882 (2007 - $18,606) for laboratory equipment leased
      from a shareholder, who is also an officer of the Company, and $5,614
      (2007 - $5,636) for interest on the loan payable, shareholder.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Included in management salaries are $20,156 (2007 -
      $10,609) for options granted to the Chief Financial Officer under the 2006
      Stock Option Plan and $51,727 for options granted to non employee
      directors in May and September of 2008.</P></TD></TR></TABLE>
<P align=center>F-28</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_31></A>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>December 31, 2008 and 2007</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR></TABLE>
<TABLE
style="FONT-SIZE: 10pt; BORDER-LEFT-COLOR: black; BORDER-BOTTOM-COLOR: black; BORDER-TOP-COLOR: black; BORDER-COLLAPSE: collapse; BORDER-RIGHT-COLOR: black"
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>16.</B> </TD>
    <TD>
      <P align=justify><B>Related Party Transactions</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Also included in management salaries are $40,572 (2007 -
      $Nil) cash compensation in form of a retainer for two non employee
      directors.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Included in accounts payable and accrued liabilities is
      approximately $13,390 (2007 - $71,029) payable to shareholders, who are
      also officers of the Company and a cash retainer of $17,857(2007- $Nil)
      payable to a director.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The above related party transactions have been measured
      at the exchange amount which is the amount of the consideration
      established and agreed to by the related parties.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>17.</B> </TD>
    <TD>
      <P align=justify><B>Basic and Diluted Loss Per Common Share</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Basic and diluted loss per common share is calculated
      based on the weighted average number of shares outstanding during the
      period. The warrants, share-based compensation and convertible notes have
      been excluded from the calculation of diluted loss per share since they
      are anti-dilutive.</P></TD></TR></TABLE>
<P align=center>F-29</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>


<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Consolidated Interim Financial Statements</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>March 31, 2009</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Unaudited)</B> </TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="15%">&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B><font size="3">Contents</font></B><font size="3"> </font> </TD>
    <TD align=left width="15%">&nbsp; </TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff><BR>Balance Sheet </TD>
    <TD align=right width="15%"  bgColor=#e6efff><BR>2 </TD></TR>
  <TR>
    <TD align=left ><BR>Statement of Shareholders' Equity
      (Deficiency) </TD>
    <TD align=right width="15%" ><BR>3 </TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff><BR>Statement of Operations
      and Comprehensive Loss </TD>
    <TD align=right width="15%"  bgColor=#e6efff><BR>4 </TD></TR>
  <TR>
    <TD align=left ><BR>Statement of Cash Flows </TD>
    <TD align=right width="15%" ><BR>5 </TD></TR>
  <TR>
    <TD align=left  bgColor=#e6efff><BR>Notes to Financial
      Statements </TD>
    <TD align=right width="15%"  bgColor=#e6efff><BR>6 - 13
  </TD></TR></TABLE>
<p align="center">F-30</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp. </font> </B></TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Consolidated Balance Sheet </B></TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in Thousands of U.S. Dollars ($&#146;000) Except
      Share and Per Share Data) </B></TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Unaudited) </B></TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp;</TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>March 31, </B></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">December 31, </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center
      width="12%"><B>2009 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="12%">2008
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Assets </B></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Current </B></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Cash and
      cash equivalents </TD>
    <TD align=left width="1%"  bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="12%" bgColor=#e6efff><B>&nbsp;305.6 </B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;556.0 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Restricted cash (note 4)
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>28.7 </B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">277.2 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Accounts
      receivable </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>389.5 </B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>317.1 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Prepaid expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>48.3 </B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">44.9 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Investment tax credits
      receivable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>295.6 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>269.2 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>1,067.7 </B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">1,464.4 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><B>Property and Equipment </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>144.0 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>157.2 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    ><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%"><B>&nbsp;1,211.7 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%">&nbsp;1,621.5 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Liabilities </B></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Current </B></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Accounts
      payable and accrued liabilities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>581.8 </B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>525.8 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Convertible notes, less
      unamortized discount of $370.6 thousands (note 5) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>859.6 </B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">714.5 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Deferred income tax
      liability </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>88.4 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>127.4 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>1,529.8 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">1,367.7 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><B>Loan Payable, Shareholder </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>79.5 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>82.4 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Shareholders' Equity (Deficiency) </B></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Capital Stock </B>(note 6) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>0.2 </B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>0.2 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Additional Paid-in-Capital </B></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>5,113.8 </B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">5,080.8 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Accumulated Other Comprehensive Income
      </B></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>(193.7</B></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>) </B></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(184.4</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Accumulated
      Deficit </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>(5,317.9</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><B>) </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(4,725.0</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>(397.6</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff><B>) </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>171.6 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    ><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%"><B>&nbsp;1,211.7 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%">&nbsp;1,621.5 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD></TR></TABLE>
<P align=justify>See accompanying notes </P>
<P align=justify><B>Approved on Behalf of the Board: </B></P>
<P align=justify><I><U>/s/Bernard
Boudreau&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U></I>Director </P>
<P align=justify><U>/s/ <I>Horst G.
Zerbe&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</I></U>Director </P>
<p align="center">F-31</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=-->
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Consolidated Statement of Shareholders' Equity
      (Deficiency)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>For the Period Ended March 31, 2009</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in Thousands of U.S. Dollars ($&#146;000) Except
      Share and Per Share Data)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Unaudited)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR></TABLE>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="7%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="7%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="7%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="7%">Accumulated </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="7%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="7%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="7%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="7%">Additional </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="7%">Other </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="7%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="7%"><B>Total</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="17%"
    colSpan=4>Capital Stock </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="7%">Paid-In </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="7%">Comprehensive </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="7%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="7%"><B>Shareholders'</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center
      width="7%">Number </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center
      width="7%">Amount </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center
      width="7%">Capital </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center
      width="7%">Income (Loss) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center
      width="7%">Deficit </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center
      width="7%"><B>Equity</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Balance - December 31, 2008</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff>20,852,002 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;0.2 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;5,080.8 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;(184.4</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;(4,725.0</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="7%" bgColor=#e6efff><B>&nbsp;171.6</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Foreign currency translation adjustment </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%">(9.3</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><B>(9.3</B></TD>
    <TD align=left width="2%" ><B>)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Stock-based compensation (note 7) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff>33.0 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><B>33.0</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Net loss for the
      period </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="7%">(592.9</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="7%"><B>(592.9</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><B>)</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff><B>Balance &#150; March 31, 2009</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff><B>20,850,002</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff><B>&nbsp;0.2</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff><B>&nbsp;5,113.8</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff><B>&nbsp;(193.7</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
     bgColor=#e6efff><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff><B>&nbsp;(5,317.9</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
     bgColor=#e6efff><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff><B>&nbsp;(397.6</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
     bgColor=#e6efff><B>)</B> </TD></TR></TABLE></DIV>
<P align=justify>See accompanying notes</P>
<p align="center">F-32</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=-->
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Consolidated Statement of Operations and Comprehensive
      Loss</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in Thousands of U.S. Dollars ($&#146;000) Except
      Share and Per Share Data)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Unaudited)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="27%" colSpan=4>For the Three-Month Period </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="27%"
    colSpan=4>Ended March 31, </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="12%">2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="12%">2008
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Revenue</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="12%" bgColor=#e6efff><B>&nbsp;201.0</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;145.0 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Interest</B>
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">13.1
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>201.0</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>158.1 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Expenses</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Research and development </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>435.0</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>337.6 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Research
      and development tax credits </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>(35.8</B></TD>
    <TD align=left width="2%" ><B>)</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(44.8</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Management salaries </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>104.8</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>107.5 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;General and
      administrative </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>39.9</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">48.2 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Professional fees </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>84.6</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>118.4 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Depreciation </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>9.5</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">13.6 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Foreign exchange </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>24.7</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(51.5</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Interest and financing fees </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>170.2</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">127.9
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>832.9</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>656.9 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Loss Before Income Taxes</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>(631.9</B></TD>
    <TD align=left width="2%" ><B>)</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(498.8</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Income taxes (note 8) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>(39.0</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(35.4</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Net Loss</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>(592.9</B></TD>
    <TD align=left width="2%" ><B>)</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(463.4</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Other Comprehensive Loss</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Foreign currency translation adjustment
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>(9.3</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="12%">(53.1</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff><B>Comprehensive Loss</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff><B>&nbsp;(602.2</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
     bgColor=#e6efff><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;(516.5</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
     bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Basic Weighted
      Average Number of Shares Outstanding</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>20,850,002</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">16,123,812 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>Basic and Diluted Loss Per Common Share (note 10) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff><B>&nbsp;(0.03</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
     bgColor=#e6efff><B>)&nbsp;</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>(0.03</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
     bgColor=#e6efff>) </TD></TR></TABLE>
<P align=justify>See accompanying notes</P>
<p align="center">F-33</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=-->
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Consolidated Statement of Cash Flows</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in thousands of U.S. Dollars ($&#146;000) Except
      Share and Per Share Data)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Unaudited)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="27%" colSpan=4>For the Three-Month Period </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="27%"
    colSpan=4>Ended March 31, </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="12%">2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center width="12%">2008
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Funds Provided (Used) -</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>&nbsp;&nbsp; Operating Activities</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Net loss
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="12%" bgColor=#e6efff><B>&nbsp;(592.9</B></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(463.4</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Depreciation </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>9.5</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">13.6 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Investor
      relations services </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>21.6</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Stock-based compensation
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>11.4</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">16.6 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Interest
      accretion </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>145.1</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>97.4 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Deferred income tax </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>(39.0</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="12%">(35.4</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>(444.3</B></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(371.2</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Changes in non-cash operating elements of working
      capital </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>(44.3</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">651.9
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>(488.6</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>280.7 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>&nbsp;&nbsp; Financing Activities</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Issue of
      capital stock </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>-</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2,800.7 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Transaction costs </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="12%">(451.6</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>2,349.1 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>&nbsp;&nbsp; Investing Activities</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Additions
      to property and equipment </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>(1.8</B></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(4.4</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Restricted cash (note 4) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>248.5</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>246.7</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(4.4</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Increase (Decrease) in Cash and Cash Equivalent</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B>(241.9</B></TD>
    <TD align=left width="2%" ><B>)</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">2,625.4 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Effect of Foreign Exchange on Cash and
      Cash Equivalents</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B>(8.5</B></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(77.2</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Cash and Cash Equivalents</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B>Beginning of
      Period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B>556.0</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>331.0 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;<B>End of Period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    ><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%"><B>&nbsp;305.6</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%">&nbsp;2,879.2 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD></TR></TABLE>
<P align=justify>See accompanying notes </P>
<p align="center">F-34</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=-->
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Interim Financial Statements</B>
    </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>March 31, 2009</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Unaudited)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>1.</B> </TD>
    <TD>
      <P align=justify><B>Basis of Presentation</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The accompanying unaudited consolidated financial
      statements have been prepared in accordance with generally accepted
      accounting principles for interim financial information and with the
      instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
      they do not include all of the information and footnotes required by
      generally accepted accounting principles for complete consolidated
      financial statements. In the opinion of management, all adjustments
      considered necessary for a fair presentation have been included. All such
      adjustments are of a normal and recurring nature.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>These financial statements should be read in conjunction
      with the audited financial statements at December 31, 2008. Operating
      results for the quarter ended March 31, 2009 are not necessarily
      indicative of the results that may be expected for the year ending
      December 31, 2009. The Company prepares its financial statements in
      accordance with accounting principles generally accepted in the United
      States. This basis of accounting involves the application of accrual
      accounting and consequently, revenues and gains are recognized when
      earned, and expenses and losses are recognized when incurred.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The consolidated financial statements include the
      accounts of the Company and its subsidiary companies. On consolidation,
      all inter-entity transactions and balances have been eliminated.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The financial statements are expressed in U.S.
    funds.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>2.</B> </TD>
    <TD>
      <P align=justify><B>Going Concern</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The accompanying financial statements have been prepared
      assuming the Company will continue as a going concern. The Company has
      reported an accumulated deficit of $5,317,978 (at December 31, 2008 -
      $4,725,045). To date, these losses have been financed principally through
      capital stock, long-term debt and debt from related parties. Additional
      capital and/or borrowings will be necessary in order for the Company to
      continue in existence and attain profitable operations.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company's strategy is to continue to focus on the
      development of novel oral immediate release and controlled release
      products for the branded and generic pharmaceutical markets. The Company
      will continue to develop novel, orally administered drug delivery products
      based upon its proprietary oral drug delivery technologies and will
      continue to position itself as a provider of product development services
      for the pharmaceutical industry.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>To date revenues consisted primarily of research and
      development fee revenues and have not been sufficient to sustain
      operations. However, the Company expects to generate revenues from sales
      and manufacturing royalties in future years following successful
      development and commercialization of products within its current
      pipeline.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The first product fully-developed by the Company, a
      prenatal multivitamin supplement marketed as Gesticare&#174; in the USA, was
      commercialized in November 2008. Royalty revenue totaling approximately
      $42,915 was received by the Company in the first quarter of 2009 with
      respect to commercial activities which took place in November and December
      2008.</P></TD></TR></TABLE>
<p align="center">F-35</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Interim Financial Statements</B>
    </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>March 31, 2009</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Unaudited)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>2.</B> </TD>
    <TD>
      <P align=justify><B>Going Concern (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Management anticipates generating additional royalty
      revenue from this product in fiscal 2009. In addition, management is
      actively pursuing marketing opportunities for the product outside of the
      USA.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company currently has a pipeline of 11 products under
      development. Of the products under development, CPI- 300, an oral
      antidepressant formulated using the Company&#146;s proprietary controlled
      release technology, is the most advanced. A New Drug Application (&#147;NDA&#148;)
      (505(b)(2) for this product was filed with the FDA on April 3,
  2009.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Nonetheless, in order to achieve profitability, revenue
      streams will have to increase significantly from current levels and there
      is no assurance that revenues can increase to such a level.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On May 22, 2007, the Company entered into convertible
      note agreements with certain institutional and accredited investors for
      amounts totaling $1,500,000, of which $1,230,241 remained outstanding at
      March 31, 2009. The notes are repayable on September 22, 2009. The notes
      are convertible into common stock of the Company, at the option of the
      holders, at a rate of $0.70 per share.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>We are seeking additional funding through additional
      equity and/or debt financings. However, there can be no assurance that any
      additional financing will become available to us, and if available, on
      terms acceptable to us. Any financing, if available, may involve
      restrictive covenants that impact our ability to conduct our business and
      raise additional funds. If we are unable to raise additional capital when
      required or on acceptable terms, we may have to significantly delay, scale
      back or discontinue our operations, including the development and/or
      commercialization of one or more of our product candidates. The Company
      may also receive funds through the exercise of outstanding stock options
      and warrants in addition to funds that may be generated from
      pre-commercialization payments. There can be no assurance that such
      proceeds, if any, will be material.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Should the Company be unable to continue as a going
      concern, it may be unable to realize the carrying value of its assets and
      to meet its liabilities as they become due.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>3.</B> </TD>
    <TD>
      <P align=justify><B>Adoption of New Accounting Standards</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Fair Value Measurements</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>SFAS No.157 is effective for financial assets and
      liabilities in fiscal years beginning after November 15, 2007, and for
      non-financial assets and liabilities in fiscal years beginning after
      November 15, 2008. The Company adopted SFAS No.157 for financial assets
      and liabilities in the first quarter of fiscal 2008 with no material
      impact to the consolidated financial statements. The Company adopted SFAS
      No.157 for non-financial assets and liabilities in the first quarter of
      fiscal 2009 with no material impact to the consolidated financial
      statements.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>.</P></TD></TR></TABLE>
<p align="center">F-36</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Interim Financial Statements</B>
    </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>March 31, 2009</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Unaudited)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>3.</B> </TD>
    <TD>
      <P align=justify><B>Adoption of New Accounting Standards
    (Cont&#146;d)</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>SFAS No. 157 applies to all assets and liabilities that
      are being measured and reported on a fair value basis. SFAS No. 157
      requires new disclosure that establishes a framework for measuring fair
      value in GAAP, and expands disclosure about fair value measurements. This
      statement enables the reader of the financial statements to assess the
      inputs used to develop those measurements by establishing a hierarchy for
      ranking the quality and reliability of the information used to determine
      fair values. The statement requires that assets and liabilities carried at
      fair value be classified and disclosed in one of the following three
      categories:</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="6%"  >&nbsp;</TD>
    <TD align=left width="5%" nowrap >
    <p style="margin-right: 20">Level 1: </TD>
    <TD align=left width="89%">Quoted market prices in active markets for
      identical assets or liabilities. </TD></TR>
  <TR vAlign=top>
    <TD width="6%" >&nbsp;</TD>
    <TD align=left width="5%" nowrap >
    <p style="margin-right: 20">Level 2: </TD>
    <TD align=left width="89%">Observable market based inputs or unobservable
      inputs that are corroborated by market data. </TD></TR>
  <TR vAlign=top>
    <TD width="6%" >&nbsp;</TD>
    <TD align=left width="5%" nowrap >
    <p style="margin-right: 20">Level 3: </TD>
    <TD align=left width="89%">Unobservable inputs that are not corroborated
      by market data. </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>In determining the appropriate levels,
the Company performs a detailed analysis of the assets and liabilities that are
subject to SFAS No. 157. At each reporting period, all assets and liabilities
for which the fair value measurement is based on significant unobservable inputs
are classified as Level 3. There are no assets or liabilities measured at fair
value as at March 31, 2009. </P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Fair Value of Financial Instruments
</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>The table below presents the carrying
value and fair value of Company&#146;s financial instruments expressed in thousands
of US$. The disclosure excludes leases. </P>
<P style="MARGIN-LEFT: 5%" align=justify>The fair value represents management&#146;s
best estimates based on a range of methodologies and assumptions. The carrying
value of receivables and payables arising in the ordinary course of business and
the investment tax credits receivable and the convertible notes approximate fair
value because of the relatively short period of time between their origination
and expected realization. The loan payable, shareholder is presumed to have a
fair value measured by the cash proceeds exchanged at issuance in accordance
with APB-21 &#147;Interest on Receivables and Payables&#148;. </P>
<P style="MARGIN-LEFT: 5%" align=justify>The convertible notes use significant
unobservable inputs and thus are shown as Level 3 hierarchy items. The fair
value of the convertible notes is calculated by discounting the stream of future
payments of interest and principal at the prevailing market rate for a similar
liability that does not have an associated equity component. Results of
discounted cash flow calculations may be adjusted, as appropriate, to reflect
other market conditions or the perceived changes in credit risk of the
borrower.</P>
<p align="center">F-37</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Interim Financial Statements</B>
    </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>March 31, 2009</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Unaudited)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>3.</B> </TD>
    <TD>
      <P align=justify><B>Adoption of New Accounting Standards
    (Cont&#146;d)</B></P></TD></TR>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR></TABLE>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left><B><U>US$ thousands</U></B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="19%"
    colSpan=4><B>March 31, 2009</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="19%"
    colSpan=4>December 31, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Carrying</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%"><B>Estimated</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Carrying </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Estimated </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%"><B>Level</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%"><B>Value</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%"><B>Fair Value</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="8%">Value
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="8%">Fair
      Value </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Financial assets </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Cash and cash equivalents </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Level 1 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><B>$</B></TD>
    <TD align=right width="8%"><B>&nbsp;305.6</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><B>$</B></TD>
    <TD align=right width="8%"><B>&nbsp;305.6</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="8%">&nbsp;556.0 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="8%">&nbsp;556.0 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Restricted cash
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="8%" bgColor=#e6efff>Level 1</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff><B>28.7</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff><B>28.7</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>277.2 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>277.2 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Investment tax credits
      receivable </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Level 1</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%"><B>295.6</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%"><B>295.6</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">269.2 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">269.2 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Financial liabilities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp;Loan payable, shareholder </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Level 2</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%"><B>79.5</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%"><B>79.5</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">82.4 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">82.4 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp;Convertible
      notes, excluding unamortized discounts </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="8%" bgColor=#e6efff>Level 3</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff><B>1,230.2</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff><B>1,134.0</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>1,230.2 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>1,099.3 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE></DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>4.</B> </TD>
    <TD>
      <P align=justify><B>Collaborative Agreements</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On April 7, 2008, the Company ratified with Cary
      Pharmaceutical, a pharmaceutical development company, an Agreement to
      jointly develop and commercialize an oral antidepressant using IntelGenx&#146;s
      proprietary oral delivery technology. Under the terms of the agreement,
      IntelGenx will provide funding and development support for the product and
      will be entitled to profit sharing. The Company accounts for this
      transaction as a collaborative agreement as defined in EITF 07-1
      &#147;Accounting for Collaborative agreements&#148;. Per the Agreement, $2,000,000
      of the Company&#146;s cash and cash equivalents was initially restricted for
      the funding of this venture. This cash was taken from the proceeds of the
      private placement of March 27, 2008. Expenses exceeding the initial
      $2,000,000 are to be equally shared between the Company and Cary
      Pharmaceuticals.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>As of March 31, 2009, the Company has expensed
      approximately $2,085,853 on the project of which $1,971,303 had been
      disbursed, resulting in a restricted cash balance of $28,697 and amounts
      payable of $114,550. Included within these disbursements is approximately
      $222,236 paid to Cary Pharmaceutical in respect of management fees. All
      expenses incurred with respect to the collaborative agreement were
      expensed in the statement of operations and were classified as research
      and development expenses and professional fees.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Development work for this product was completed in the
      fourth quarter of 2008 and a New Drug Application (&#147;NDA&#148;) (505(b)(2) was
      filed with the FDA on April 3, 2009.</P></TD></TR></TABLE>
<p align="center">F-38</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Interim Financial Statements</B>
    </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>March 31, 2009</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Unaudited)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>5.</B> </TD>
    <TD>
      <P align=justify><B>Convertible Notes</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On May 22, 2007 the Company entered into convertible note
      agreements with certain institutional and accredited investors for amounts
      totaling $1,500,000. The convertible notes bear interest at the rate of 8%
      per annum and are repayable on September 22, 2009. Interest is payable
      quarterly and payments commenced on July 1, 2007. The notes are
      convertible into common stock of the Company, at the option of the
      holders, at a rate of $0.70 per share. The Company also issued to the
      holders 2,142,857 stock purchase warrants exercisable at $1.02 per share
      before May 22, 2012.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On May 22, 2007, the Company paid approximately $229,323
      in cash consideration and issued warrants with a fair value of $82,993 in
      consideration for transaction costs. These transaction costs were
      allocated between the convertible debt and the warrants based on their
      relative fair value.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company may, at its option, elect to pay the interest
      by the issuance of common shares. The number of shares is to be determined
      by dividing the amount of the interest payment by the number which is 85%
      of the average market price of the Company's common shares for the 20
      trading days immediately prior to the interest payment date assuming the
      average market price is equal or greater than $0.70 as adjusted for
      reverse and forward share splits, recapitalizations and the like that
      occur after the date of the Securities Purchase Agreements.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In accordance with EITF Issue 98-5 "Accounting for
      Convertible Securities with Beneficial Conversion Features or Contingently
      Adjustable Conversion Ratios", the Company recognized the value of the
      embedded beneficial conversion feature of $490,093 as additional paid-in
      capital and an equivalent discount which will be expensed over the term of
      the convertible notes. In addition, in accordance with EITF Issue 00-27
      "Application of Issue No.98-5 to Certain Convertible Instruments", the
      Company has allocated the proceeds of issuance between the convertible
      notes and the detachable warrants based on their relative fair value.
      Accordingly, the Company recognized the fair value of the detachable
      warrants of $490,093 as additional paid-in capital and an equivalent
      discount against the convertible notes. The difference between the face
      amount of the convertible notes and their carrying value is amortized over
      the life of the convertible notes. The Black-Scholes Model was used to
      calculate the fair value of the warrants.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The underlying assumptions included in the Black-Scholes
      Model were as follows:</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">Expected volatility </TD>
    <TD align=center width="50%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 1">64% </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Contractual life </TD>
    <TD align=center width="50%">5 years </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
    <TD align=center width="50%" bgColor=#e6efff>4.39% </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Dividend yield </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="50%">Nil
    </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Substantially all of the assets of the
Company have been pledged as security of the convertible notes. In the three
months ended March 31, 2009, $23,578 of interest was paid (2008 - $28,714), and
$145,129 of interest has been accreted (2008 - $97,498). In the first quarter of
2009, no convertible notes were exchanged for shares of common stock (2008 -
Nil). </P>
<p align="center">F-39</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=-->
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Interim Financial Statements</B>
    </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>March 31, 2009</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Unaudited)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>6.</B> </TD>
    <TD>
      <P align=justify><B>Capital Stock</B></P></TD></TR>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff style="border-top-style: solid; border-top-width: 2">Authorized - </TD>
    <TD align=left width="1%"  bgColor=#e6efff style="border-top-style: solid; border-top-width: 2">&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff style="border-top-style: solid; border-top-width: 2">&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff style="border-top-style: solid; border-top-width: 2">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>100,000,000 common shares of $0.00001 par value </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>20,000,000 preferred shares of $0.00001 par
      value </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Issued - </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>20,850,002 common shares </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff><B>&nbsp;209</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>During the three months ended March 31, 2009 the Company
      had no transactions affecting capital stock.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>7.</B> </TD>
    <TD>
      <P align=justify><B>Additional Paid-In Capital</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Stock Options</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>No stock options were granted and no stock options were
      exercised during the first quarter of 2009.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Compensation expenses for stock-based compensation of
      $32,951 and $16,560 were recorded during the three months ended March 31,
      2009 and 2008 respectively. Of the amount expensed in 2009, $21,609 (2008
      - $Nil) relates to stock options granted to Auctus Capital as compensation
      for investor relation services and $11,342 (2008 - $16,560) relates to
      stock options granted to employees. The amount expensed in 2008 relates to
      stock options granted to employees. As at March 31, 2009, the Company has
      $51,039 (2008 - $79,894) of unrecognized stock-based
  compensation.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Warrants</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>As of March 31, 2009, the Company had 6,678,223, warrants
      outstanding at an average exercise price of $0.95 per warrant for one
      share each of the Company&#146;s ordinary shares. The warrants will expire at
      various dates, with 4,321,080 expiring in 2010 and 2,357,143 expiring in
      2012.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>No warrants were exercised during the three months ended
      March 31, 2009. As at March 31, 2008, 5,186 shares of common stock were
      issued as a result of the cashless exercise of 10,638 warrants with an
      exercise price of $0.41 and a fair value of $0.80.</P></TD></TR></TABLE>
<p align="center">F-40</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Interim Financial Statements</B>
    </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>March 31, 2009</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Unaudited)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>7.</B> </TD>
    <TD>
      <P align=justify><B>Additional Paid-In Capital
  (Cont&#146;d)</B></P></TD></TR>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>Number of</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>Weighted average</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>warrants</B> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><B>exercise price</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%"><STRONG>$</STRONG>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      bgColor=#e6efff><BR>Outstanding warrants at January 1, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><BR>6,678,2 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    bgColor=#e6efff><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><BR>0.95 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    bgColor=#e6efff><BR></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD><BR>Warrants granted </TD>
    <TD width="1%" ><BR></TD>
    <TD align=right width="12%"><BR></TD>
    <TD width="2%" ><BR></TD>
    <TD width="1%" ><BR></TD>
    <TD align=right width="12%"><BR>- </TD>
    <TD width="2%" ><BR></TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Exercised </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Expired </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff>
      <P>Outstanding warrants at March 31, 2009 </P></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>6,678,2 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="1%"
    bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>0.95 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" width="2%"
    bgColor=#e6efff></TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%"><B>8.</B> </TD>
    <TD>
      <P align=justify><B>Income Taxes</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Deferred Income Taxes</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The balance of deferred income taxes as at March 31, 2009
      represents the tax effect of the convertible debt arising from the
      difference between the convertible debt&#146;s basis for accounting purposes
      and that for income tax purposes and it has been charged to additional
      paid-in capital. As the convertible debt is repaid, the deferred tax
      liability will be charged to expenses.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>9.</B> </TD>
    <TD>
      <P align=justify><B>Related Party Transactions</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>During the three month period ended March 31, 2009, the
      Company incurred expenses of approximately $4,030 (2008 - $5,044) for
      laboratory equipment leased from a shareholder, who is also an officer of
      the Company, and $1,241 (2008 - $1,545) for interest on the loan payable,
      shareholder.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Included in management salaries are $4,967 (2008 -
      $6,365) for options granted to the Chief Financial Officer under the 2006
      Stock Option.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Included in accounts payable and accrued liabilities is
      approximately $18,378 (2008 - $76,000) payable to shareholders, who are
      also officers of the Company and a cash retainer of $17,243 (2008- $Nil)
      payable to a director.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The above related party transactions have been measured
      at the exchange amount which is the amount of the consideration
      established and agreed to by the related parties.</P></TD></TR></TABLE>
<p align="center">F-41</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR>

  <TR vAlign=top>
    <TD align=left><B><font size="4">IntelGenx Technologies Corp.</font></B><font size="4">
    </font> </TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Notes to Consolidated Interim Financial Statements</B>
    </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>March 31, 2009</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Expressed in U.S. Funds)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>(Unaudited)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD></TR></TABLE>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>10.</B> </TD>
    <TD>
      <P align=justify><B>Basic and Diluted Loss Per Common Share</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Basic and diluted loss per common share is calculated
      based on the weighted average number of shares outstanding during the
      period. The warrants, share-based compensation and convertible notes have
      been excluded from the calculation of diluted loss per share since they
      are anti-dilutive.</P></TD></TR></TABLE>
<P align=center>&nbsp;</P>
<p align="center">F-42</p>
<hr color="#000000" size="5">


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IntelGenx Technologies Corp.: Form S-1 - Prepared by TNT Filings Inc.
As filed with the Securities and Exchange Commission on August 12, 2009
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
IntelGenx Technologies Corp.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
2834
870299034
(Primary Standard Industrial
(I.R.S. Employer Identification Number)
Classification Code Number)
6425 Abrams, Ville St- Laurent, Quebec, H4S 1X9
(514) 331-7440
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
Horst Zerbe
Chief Executive Officer
IntelGenx Technologies Corp, 6425 Abrams, Quebec, H4S 1X9
(514) 331-7440
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Richard Raymer
Hodgson Russ LLP
150 King Street West, Suite 2309, Toronto, Ontario M5H 1J9
Canada
Tel: (416) 595-5100
As soon as practicable after the effective date of this Registration Statement
(Approximate date of commencement of proposed sale to the public)
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:
x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration
statement for the same offering:
o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company:
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
x
1
Proposed
maximum
Proposed
offering
maximum
Amount to be
price per
aggregate offering
Amount of
Title of each
      class of securities to be registered
registered
share (4)
price
registration fee
Common stock, par value $.00001 per share
      (1)
12,292,640 shares
$
0.70
$
8,604,848
$
480.15
Common stock underlying warrants, par value $.00001 per
      share (2)
12,711,680 shares
$
0.70
$
8,898,176
$
496.52
Common stock purchase warrants (3)
12,711,680 warrants
--
--
--
25,004,320 shares
$
0.70
$
17,503,024
$
976.67
Total
12,711,680 warrants
$
--
$
--
$
--
(1) Represents shares of common stock, par value $.00001.
(2) Represents shares of common stock underlying warrants to
purchase shares of common stock, par value $.00001.
(3) Represents common stock purchase warrants exercisable at
$0.80 per share, subject to adjustment, expiring July 13, 2012, and 350,000
common stock purchase warrants exercisable at $0.80 per share, subject to
adjustment, expiring July 22, 2012.
(4) Estimated solely for purposes of calculating the
registration fee in accordance with Rule 457(c) and Rule 457(g) under the
Securities Act of 1933, as amended, based upon the average of the high and low
prices of a share of common stock of IntelGenx Technologies Corp. as reported on
the OTC Bulletin Board on August 7, 2009.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
2
The information contained in this prospectus is not complete
and may be changed. The selling security holders may not sell these securities
until the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, dated August ___, 2009
Prospectus
IntelGenx Technologies Corp.
25,074,320
Shares of Common Stock and 11,908,600
Warrants
Offered by Selling Security Holders
This prospectus relates to the sale by the selling security
holders listed herein of up to 25,074,320 shares of common stock, par value
$.00001 per share, and 11,908,600 common stock purchase warrants of IntelGenx
Technologies Corp. ("IntelGenx" or the "Company"). The securities being
registered were purchased by the selling security holders in a private placement
completed on July 13, 2009 (the "July 2009 Private Placement"). For a complete
description of this private placement please see the section entitled
"Description of the July 2009 Private Placement", below).
The securities being registered include shares of outstanding
common stock (the "Common Shares"), common stock purchase warrants exercisable
at $0.80 per share, subject to adjustment (the "Warrants"), and shares of common
stock underlying the Warrants (the "Warrant Shares"). The securities being
registered also include Common Shares and options issued to the placement agents
in connection with the July 2009 Private Placement (the "Placement Agent
Options"). The Placement Agent Options permit the placement agents to purchase
shares of common stock (the "Placement Agent Option Shares") at a price of $0.80
per share, subject to adjustment.
Accordingly, the shares being registered include (i) 11,245,040
Common Shares, (ii) 10,826,000 Warrants, (iii) 10,826,000 Warrant Shares, (iv)
838,080 shares of Placement Agent Common Shares, issuable upon exercise of the
Placement Agent Options, (v) 1,082,600 Common Shares issuable if the Company
fails to satisfy its registration obligations in connection with the July 2009
Private Placement; (vi) 1,082,600 Warrants issuable if the Company fails to
satisfy its registration obligations in connection with the July 2009 Private
Placement, and (vii) 1,082,600 Warrant Shares issuable upon the exercise of
Warrants if the Company fails to satisfy its registration obligations in
connection with the July 2009 Private Placement.
The common stock will be offered by the selling security
holders at fixed prices, at the then-prevailing market prices at the time of
sale, at varying prices, or in negotiated transactions (See "Plan of
Distribution"). Our common stock is traded on the OTC Bulletin Board (the
"OTCBB") under the symbol "IGXT" and on the TSX Venture Exchange (the "TSX")
under the symbol "IGX". The closing price of our common stock on the OTCBB on
August 7, 2009 was $0.70, and the closing price of our common stock on the TSX
on August 6, 2009 was CDN $0.64.
Our executive office is located at 6425 Abrams, Ville
Saint-Laurent, Quebec, H45 1X9, Canada, and our telephone number is (514)
331-7440.
We will not receive any proceeds from the sale of the shares of
common stock offered by the selling security holders to the public. However, we
will receive proceeds from the exercise of the Warrants, as well as from the
exercise of the Placement Agent Options. Any such proceeds will be used to
support the Company's strategic development projects and for working capital. We
have agreed to pay all of the costs of this offering, excluding commissions and
discounts regarding the sale of the common stock by the selling security
holders.
Brokers or dealers effecting transactions in the shares should
confirm the registration of these securities under the securities laws of the
states in which such transactions occur or the existence of an exemption from
such registration.
Certain selling security holders and any participating
broker-dealers may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), and any commissions
or discounts given to any such broker-dealer may be regarded as underwriting
commissions or discounts under the Securities Act. See "Selling Security
Holders" and "Plan of Distribution".
Investing in our securities involves a high degree of risk.
You should invest in the common stock only if you can afford to lose your entire
investment. See "Risk Factors" beginning on page 4.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to the
contrary is a criminal offense.
The date of this prospectus is ______________, 2009
3
TABLE OF CONTENTS
Forward Looking Statements
2
Prospectus Summary
2
The Offering
3
Risk Factors
4
Description of Business
10
Description of Property
16
Management's Discussion and Analysis of
      Financial Condition and Results of Operations
16
Use of Proceeds
22
Market Price of and Dividends on
      Registrant's Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
23
Selling Security Holders
25
Directors and Executive Officers
32
Corporate Governance
33
Security Ownership of Certain Beneficial
      Owners and Management
35
Executive Compensation
37
Certain Relationships and Related
      Transactions, and Director Independence
39
Plan of Distribution
40
Description of Securities
41
Legal Proceedings
41
Legal Matters
41
Experts
41
Disclosure of Commission Position on
      Indemnification for Securities Act Liabilities
41
Where You Can Find Additional Information
41
Financial Statements
F1
You should rely only on the information contained in this
prospectus or any prospectus supplement. We have not and the selling security
holders have not authorized anyone else to provide you with different
information. If anyone provides you with different information, you should not
rely on it. We are not and the selling security holders are not making an offer
to sell these securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this prospectus
or any prospectus supplement is accurate only as of the date on the front cover
of the applicable document. Our business, financial condition, results of
operations and prospects may have changed since that date.
1
FORWARD-LOOKING STATEMENTS
Certain statements included or incorporated by reference in
this prospectus constitute forward-looking statements within the meaning of
applicable securities laws. All statements contained in this prospectus that are
not clearly historical in nature are forward-looking, and the words
"anticipate", "believe", "continue", "expect", "estimate", "intend", "may",
"plan", "will", "shall" and other similar expressions are generally intended to
identify forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934. All
forward-looking statements are based on our beliefs and assumptions based on
information available at the time the assumption was made. These forward-looking
statements are not based on historical facts but on management's expectations
regarding future growth, results of operations, performance, future capital and
other expenditures (including the amount, nature and sources of funding
thereof), competitive advantages, business prospects and opportunities.
Forward-looking statements involve significant known and unknown risks,
uncertainties, assumptions and other factors that may cause our actual results,
levels of activity, performance or achievements to differ materially from those
implied by forward-looking statements. These factors should be considered
carefully and prospective investors should not place undue reliance on the
forward-looking statements. Although the forward-looking statements contained in
this prospectus or incorporated by reference herein are based upon what
management believes to be reasonable assumptions, there is no assurance that
actual results will be consistent with these forward-looking statements. These
forward-looking statements are made as of the date of this prospectus or as of
the date specified in the documents incorporated by reference herein, as the
case may be.
The Company undertakes no obligation to update any
forward-looking statements to reflect events or circumstances after the date on
which such statements were made or to reflect the occurrence of unanticipated
events, except as may be required by applicable securities laws.
The factors
listed above in the section captioned "Risk Factors", as well as any cautionary
language in this prospectus, provide examples of risks, uncertainties and events
that may cause IntelGenx's actual results to differ materially from the
expectations IntelGenx describes in our forward-looking statements. Before you
invest in the common stock, you should be aware that the occurrence of the
events described as risk factors and elsewhere in this prospectus could have a
material adverse effect on our business, operating results and financial
condition.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information appearing elsewhere in this prospectus. In this prospectus,
the words "Company," "IntelGenx" "we," "us," and "our," refer collectively to
IntelGenx Technologies Corp. and IntelGenx Corp., our wholly-owned Canadian
subsidiary.
Our Business
We are a drug delivery company headquartered in Montreal,
Quebec, Canada which focuses on the development of novel oral immediate release
and controlled-release products for the generic pharmaceutical market.
Our product development efforts are based upon three delivery
platform technologies: (1) the "VersaTab" Multilayer Tablet technology, (2) the
"VersaFilm" Oral Film technology, and (3) the "AdVersa" Mucoadhesive Tablet
technology. Our Multilayer platform technology allows for the development of
oral controlled release products. It is versatile and is aimed at significantly
reducing manufacturing costs as compared to competing delivery technologies. The
Oral Film technology allows for the instant delivery of pharmaceuticals to the
oral cavity, while the Mucoadhesive Tablet allows for the controlled release of
active substances to the oral mucosa.
Our executive offices are located at 6425 Abrams, Ville
Saint-Laurent, Quebec, H4S 1X9, Canada and our telephone number is (514)
331-7440. Our web site address is http://www.IntelGenx.com. Information
contained on our web site is not a part of this prospectus.
2
THE OFFERING
The Offering
Shares of common stock offered by the selling security
      holders
Up to
      25,004,320 shares of common stock and 12,711,680 Warrants, including (i)
      11,245,040 Common Shares, (ii) 10,826,000 Warrants, (iii) 10,826,000
      Warrant Shares, (iv) 838,080 Placement Agent Options, (v) 838,080 shares
      of Placement Agent Common Shares, issuable upon exercise of the Placement
      Agent Options, (vi) 1,047,600 Common Shares issuable if the Company fails
      to satisfy its registration obligations in connection with the July 2009
      Private Placement; (vii) 1,047,600 Warrants issuable if the Company fails
      to satisfy its registration obligations in connection with the July 2009
      Private Placement, and (viii) 1,082,600 Warrant Shares issuable upon the
      exercise of Warrants if the Company fails to satisfy its registration
      obligations in connection with the July 2009 Private Placement. Assuming
      the full exercise of all the Warrants and the Placement Agent Options, and
      assuming the registration obligations are not satisfied, the shares being
      registered would represent approximately 53% of our outstanding common
      stock. (1)
Common stock to be outstanding after the offering
Up to 47,424,433 shares of Common Stock, assuming the
      exercise of all of the Warrants and the Placement Agent Options.
Use of proceeds
IntelGenx will not receive any proceeds from the sale of
      the shares of common stock offered by the selling security holders to the
      public. However, IntelGenx will receive proceeds from any cash exercise of
      the Warrants, as well as from the exercise of the Placement Agent Options.
      Any such proceeds will be used to support the Company's strategic
      development projects and for working capital.
OTCBB Ticker Symbol
IGXT
TSX Venture
      Exchange Symbol
IGX
(1) The above information regarding common stock to be
outstanding after the offering is based on 22,350,114 shares of common stock
outstanding as of August 10, 2009.
Description of July 2009 Private Placement
Canadian Private Placement
On July 13, 2009, we
completed an offering to investors of 10,476,000 special warrants (the "Special
Warrants") at a price of CDN$0.40 per Special Warrant for gross proceeds of
approximately CDN$4,200,000 (the "Gross Proceeds") and net proceeds of
approximately CDN$3,780,050 ("the "Canadian Private Placement"). Each Special
Warrant may be exercised at any time at the holder's option and will
automatically exercise, in each case for no additional consideration, on the
earliest to occur of (a) the fifth business day after the later of (i) the date
a receipt is issued by the relevant securities regulatory authorities in Canada
for the final prospectus qualifying the Common Shares and the Warrants to be
issued upon the exercise of the Special Warrants, and (ii) the date this
Registration Statement is declared effective by the U.S. Securities and Exchange
Commission and (b) November 14, 2009. Each Special Warrant entitles its holder
to receive, upon exercise or deemed exercise thereof, one Common Share and one
Warrant, which together were referred to in the subscription agreements as a
"Unit". Each Warrant will entitle the holder to purchase one Common Share (the
"Warrant Shares") at a price of U.S.$0.80 per share, subject to adjustment,
until July 13, 2012. The exercise price of the Warrants is subject to adjustment
for certain events, including dividends, distributions or split of the Company's
common stock, subsequent equity sales or rights offerings by the Company, or in
the event of the Company's consolidation, merger or reorganization.
Paradigm Capital Inc.
("Paradigm"), Bolder Investment Partners Ltd. ("Bolder") and Union Securities
Ltd. ("Union") (collectively, the "Placement Agents") acted as placement agents
for the Canadian Private Placement on a best efforts basis. The Placement
Agents' compensation consists of a cash commission equal to 8% of the Gross
Proceeds, 419,040 Common Shares (the "Placement Agent Shares") and an option to
acquire 838,080 Common Shares at U.S.$0.80 per unit, subject to adjustment,
until July 13, 2012 (the "Placement Agent Options"). (The shares of common stock
issuable upon exercise of the Placement Agent Options shall be referred to as
the "Placement Agent Option Shares".) The exercise price of the Placement Agent
Options is subject to adjustment for certain events, including dividends,
distributions or split of the Company's common stock, subsequent equity sales or
rights offerings by the Company, or in the event of the Company's consolidation,
merger or reorganization.
3
In connection with the Canadian Private Placement, the
Company entered into a registration rights agreement (the "Registration Rights
Agreement") providing for the filing of a registration statement (the
"Registration Statement") with the U.S. Securities and Exchange Commission
registering the Common Shares, the Warrants, the Warrant Shares, the Placement
Agent Shares, the Placement Agent Options and the Placement Agent Option Shares.
The Company is obligated to file the Registration Statement no later than 30
days from the date of closing and to use its commercially reasonable efforts to
cause the Registration Statement to be declared effective no later than 120 days
after the date of closing.
If, on the 5
th
business day following the later
of:, (a) a receipt being issued by the relevant securities regulatory
authorities in Canada for the final prospectus qualifying the Common Shares and
the Warrants to be issued upon the exercise of the Special Warrants, and (b)
this Registration Statement beeing declared effective by the U.S. Securities and
Exchange Commission; has not occurred on or before 120 days following the
closing date, than each unexercised Special Warrant will be deemed exercised for
1.1 Common Shares and 1.1 Warrants.
In connection with the Canadian Private Placement, each of
the Company's officers and directors have entered into lock-up agreements in
favor of the Placement Agents pursuant to which they have agreed not to sell or
transfer their shares for a period of 90 days following the fifth business day
after the later of (a) the date the Company receives a receipt for a prospectus
qualifying the Common Shares and the Warrants issuable upon exercise of the
Special Warrants, and (b) the date this Registration Statement is declared
effective by the U.S. Securities and Exchange Commission, unless they first
obtain the prior written consent of Paradigm or there occurs a take-over bid or
similar transaction involving a change of control of the Company.
The issuances under the Canadian Private Placement were
exempt from registration under Section 4(2) of the Securities Act and/or
Regulation S, promulgated pursuant to the Securities Act. None of the purchasers
under the Canadian Private Placement are U.S. persons, no sales efforts were
conducted in the U.S., and the Common Shares, the Warrants, the Warrant Shares,
the Placement Agent Shares, the Placement Agent Options and the Placement Agent
Option Shares issued in connection with the Canadian Private Placement contain,
or will contain upon issuance, a legend restricting the sale of such securities
in accordance with Regulation S and pursuant to applicable Canadian securities
laws.
U.S. Private Placement
On July 22, 2009, concurrently with the Canadian Private
Placement, the Company completed an offering of 350,000 units to investors in
the United States (the "U.S. Private Placement" and together with the Canadian
Private Placement, the "July 2009 Private Placement"). No placement agent was
used for the U.S. Private Placement and no commissions were paid in connection
therewith. As in the Canadian Private Placement, each unit consists of one
Common Share and one Warrant. Each Warrant entitles the holder thereof to
purchase one Common Share at an initial exercise price of US$0.80 per common
share and expires on July 22, 2012. The exercise price of the Warrants is
subject to adjustment for certain events, including without limitation,
dividends, distributions or split of the Company's common stock, subsequent
rights offerings by the Company, or in the event of the Company's consolidation,
merger or reorganization.
The issuances under the U.S. Private Placement were exempt from
registration under Section 4(2) of the Securities Act. The Common Shares, the
Warrants and the Warrant Shares issued in connection with the U.S. Private
Placement are subject to statutory resale restrictions under the Securities Act
and contain, or will contain upon issuance, a legend restricting the sale of
such securities in accordance with applicable exemptions from the registration
requirements of the Securities Act.
RISK FACTORS
An investment in our common stock involves significant
risks. You should carefully consider the following risks and all other
information set forth in this prospectus before deciding to invest in shares of
our common stock. If any of the events or developments described below occurs,
our business, financial condition and results of operations may suffer. In that
case, the value of our common stock may decline and you could lose all or part
of your investment.
Risks Related to Our Business
We continue to sustain losses and our revenues are not
sufficient to sustain our operations.
Even though we ceased being a
"development stage" company in April 2006, we are still subject to all of the
risks associated with having a limited operating history and pursuing the
development of new products. Our cash flows may be insufficient to meet expenses
relating to our operations and the development of our business, and may be
insufficient to allow us to develop new products. We currently conduct research
and development using our proprietary platform technologies to develop oral
controlled release and other delivery products. We do not know whether we will
be successful in the development of such products. We have an accumulated
deficit of approximately $4,725,045 since our inception in 2003 through December 31, 2008. To date, these
losses have been financed principally through sales of equity securities,
long-term debt and debt from related parties. Our revenues for the years ended
December 31, 2008, December 31, 2007, December 31, 2006, December 31, 2005 and
December 31, 2004 were $976,610, $862,731, $265,901, $19,990 and $257,374
respectively. Our revenues consisted primarily of development fee revenues from
five clients and have not been sufficient to sustain our operations. In order to
achieve profitability, our revenue streams will have to increase and there is no
assurance that revenues will increase to such a level.
4
We may incur losses associated with foreign currency
fluctuations.
The majority of our expenses are paid in Canadian dollars,
while our revenues are primarily in U.S. dollars. Our financial results are
subject to the impact of currency exchange rate fluctuations. Adverse movements
in exchange rates could have a material adverse effect on our financial
condition and results of operations.
We may need additional capital to
fulfill our business strategies. We may also incur unforeseen costs. Failure to
obtain such capital would adversely affect our business.
We will need to expend significant capital in order to continue
with our research and development by hiring additional research staff and
acquiring additional equipment. If our cash flows from operations are
insufficient to fund our expected capital needs, or our needs are greater than
anticipated, we will be required to raise additional funds in the future through
private or public sales of equity securities or the incurrence of additional
indebtedness. Additional funding may not be available on favorable terms, or at
all. If we borrow additional funds, we likely will be obligated to make periodic
interest or other debt service payments and may be subject to additional
restrictive covenants. If we fail to obtain sufficient additional capital in the
future, we could be forced to curtail our growth strategy by reducing or
delaying capital expenditures, selling assets or downsizing or restructuring our
operations. If we raise additional funds through public or private sales of
equity securities, the sales may be at prices below the market price of our
stock and our shareholders may suffer significant dilution.
The loss of the services of key personnel would adversely
affect our business.
Our future success depends to a significant degree on the
skills, experience and efforts of our executive officers and senior management
staff. The loss of the services of existing personnel, particularly Horst Zerbe,
our Chairman of the Board and Chief Executive Officer, would be detrimental to
our research and development programs and to our overall business.
We are dependent on business partners to conduct clinical
trials of, obtain regulatory approvals for, and manufacture, market, and sell
our controlled release products.
We depend heavily on our pharmaceutical partners to pay for
part or all of the research and development expenses associated with developing
a new product and to obtain approval from regulatory bodies such as the U.S.
Food and Drug Administration (the "FDA") to commercialize these products. We
also depend on our partners to distribute these products after receiving
regulatory approval. Our revenues from research and development fees, milestone
payments and royalty fees are provided by our partners. Our inability to find
pharmaceutical partners who are willing to pay us these fees in order to develop
new products would negatively impact our business and our cash flows.
We have limited experience in manufacturing, marketing and
selling pharmaceutical products. Accordingly, if we cannot maintain our existing
partnerships or establish new partnerships with respect to our other products in
development, we will have to establish our own capabilities or discontinue the
commercialization of the affected product. Developing our own capabilities would
be expensive and time consuming and could delay the commercialization of the
affected product. There can be no assurance that we would be able to develop
these capabilities.
Our existing agreements with pharmaceutical industry partners
are generally subject to termination by the counterparty on short notice upon
the occurrence of certain circumstances, including but not limited to the
following: a determination that the product in development is not likely to be
successfully developed or not likely to receive regulatory approval; our failure
to satisfy our obligations under the agreement, or the occurrence of a
bankruptcy event. If any of our partnerships are terminated, we may be required
to devote additional resources to the product, seek a new partner on short
notice, or abandon the product development efforts. The terms of any additional
partnerships or other arrangements that we establish may not be favorable to us.
We are also at risk that these partnerships or other
arrangements may not be successful. Factors that may affect the success of our
partnerships include the following:
Our partners may be pursuing alternative technologies or developing
  alternative products that are competitive to our product, either on their own
  or in partnership with others;
Our partners may reduce marketing or sales efforts, or discontinue
  marketing or sales of our products. This would reduce our revenues received on
  the products;
Our partners may terminate their partnerships with us. This could make it
  difficult for us to attract new partners or adversely affect perception of us
  in the business and financial communities; and
5
Our partners may pursue higher priority programs or change the focus of
  their development programs, which could affect the partner's commitment to us.
  Pharmaceutical and biotechnology companies historically have re-evaluated
  their priorities from time to time, including following mergers and
  consolidations, a common occurrence in recent years.
We face competition in our industry, and many of our
competitors have substantially greater experience and resources than we do.
We compete with other companies within the drug delivery
industry, many of which have more capital, more extensive research and
development capabilities and greater human resources than we do. Some of these
drug delivery competitors include Biovail Corporation, Labopharm Inc., and
Flamel Technologies S.A. Our competitors may develop new or enhanced products or
processes that may be more effective, less expensive, safer or more readily
available than any products or processes that we develop, or they may develop
proprietary positions that prevent us from being able to successfully
commercialize new products or processes that we develop. As a result, our
products or processes may not compete successfully, and research and development
by others may render our products or processes obsolete or uneconomical.
Competition may increase as technological advances are made and commercial
applications broaden.
We are dependent upon sales outside the United States, which
are subject to a number of risks.
Our future results of operation could be harmed by risks
inherent in doing business in international markets, including:
Unforeseen changes in regulatory requirements;
Weaker intellectual property rights protection in some countries;
New export license requirements, changes in tariffs or trade restrictions;
  and
Political and economic instability in our target markets.
We rely upon third-party manufacturers, which puts us at
risk for supplier business interruptions.
We have entered into agreements with third party manufacturers
to manufacture certain of our products once we complete development and after we
receive regulatory approval. If our third-party manufacturers fail to perform,
our ability to market products and to generate revenue would be adversely
affected. Our failure to deliver products in a timely manner could lead to the
dissatisfaction of our distribution partners and damage our reputation, causing
our distribution partners to cancel existing agreements with us and to stop
doing business with us.
The third-party manufacturers that we depend on to manufacture
our products are required to adhere to FDA regulations regarding current Good
Manufacturing Practices ("cGMP"), which include testing, control and
documentation requirements. Ongoing compliance with cGMP and other regulatory
requirements is monitored by periodic inspection by the FDA and comparable
agencies in other countries. Failure by our third-party manufacturers to comply
with cGMP and other regulatory requirements could result in actions against them
by regulatory agencies and jeopardize our ability to obtain products on a timely
basis.
We are subject to extensive government regulation including
the requirement of approval before our products may be marketed. Even if we
obtain marketing approval, our products will be subject to ongoing regulatory
review.
We, our partners, our products, and our product candidates are
subject to extensive regulation by governmental authorities in the United States
and other countries. Failure to comply with applicable requirements could result
in warning letters, fines and other civil penalties, delays in approving or
refusal to approve a product candidate, product recall or seizure, withdrawal of
product approvals, interruption of manufacturing or clinical trials, operating
restrictions, injunctions, and criminal prosecution.
Our products cannot be marketed in the United States without
FDA approval. Obtaining FDA approval requires substantial time, effort, and
financial resources, and there can be no assurance that any approval will be
granted on a timely basis, if at all. We rely on our partners for the
preparation of applications and for obtaining regulatory approvals. If the FDA
does not approve our product candidates in a timely fashion, or does not approve
them at all, our business and financial condition may be adversely affected.
Further, the terms of approval of any marketing application, including the
labeling content, may be more restrictive than we desire and could affect the
marketability of our or our collaborator's products. Subsequent discovery of
problems with an approved product may result in restrictions on the product or
its withdrawal from the market. In addition, both before and after regulatory
approval, we, our collaborators, our products, and our product candidates are
subject to numerous FDA requirements covering testing, manufacturing, quality
control, cGMP, adverse event reporting, labeling, advertising, promotion,
distribution, and export. Our partners and we are subject to surveillance and
periodic inspections to ascertain compliance with these regulations. Further,
the relevant law and regulations may change in ways that could affect us, our
partners, our products, and our product candidates. Failure to comply with
regulatory requirements could have a material adverse impact on our business.
6
Regulations regarding the manufacture and sale of our future
products are subject to change. We cannot predict what impact, if any, such
changes may have on our business, financial condition or results of operations.
Failure to comply with applicable regulatory requirements could have a material
adverse effect on our business, financial condition and results of operations.
Additionally, the time required for obtaining regulatory
approval is uncertain. We may encounter delays or product rejections based upon
changes in FDA policies, including cGMP, during periods of product development.
We may encounter similar delays in countries outside of the United States. We
may not be able to obtain these regulatory acceptances on a timely basis, or at
all.
The failure to obtain timely regulatory acceptance of our
products, any product marketing limitations, or any product withdrawal would
have a material adverse effect on our business, financial condition and results
of operations. In addition, before it grants approvals, the FDA or any foreign
regulatory authority may impose numerous other requirements with which we must
comply. Regulatory acceptance, if granted, may include significant limitations
on the indicated uses for which the product may be marketed. FDA enforcement
policy strictly prohibits the marketing of accepted products for unapproved
uses. Product acceptance could be withdrawn or civil or criminal sanctions could
be imposed for our failure to comply with regulatory standards or the occurrence
of unforeseen problems following initial marketing.
The third party manufacturers that we depend on to manufacture
our products are required to adhere to FDA regulations regarding cGMP and
similar regulations in other countries, which include testing, control and
documentation requirements. Ongoing compliance with cGMP and other regulatory
requirements is monitored by periodic inspection by the FDA and comparable
agencies in other countries.
We may not be able to expand or enhance our existing product
lines with new products limiting our ability to grow.
If we are not successful in the development and introduction of
new products, our ability to grow will be impeded. We may not be able to
identify products to enhance or expand our product lines. Even if we can
identify potential products, our investment in research and development might be
significant before we could bring the products to market. Moreover, even if we
identify a potential product and expend significant dollars on development, we
may never be able to bring the product to market or achieve market acceptance
for such product. As a result, we may never recover our expenses.
The market may not be receptive to products incorporating
our drug delivery technologies.
The commercial success of any of our products that are approved
for marketing by the FDA and other regulatory authorities will depend upon their
acceptance by the medical community and third party payors as clinically useful,
cost-effective and safe. No product based on our technologies is marketed in the
United States, so there can be no assurance as to market acceptance.
Factors that we believe could materially affect market
acceptance of these products include:
the timing of the receipt of marketing approvals and the countries in
  which such approvals are obtained;
the safety and efficacy of the product as compared to competitive
  products;
the relative convenience and ease of administration as compared to
  competitive products;
the strength of marketing distribution support; and
the cost-effectiveness of the product and the ability to receive third
  party reimbursement.
We are subject to environmental regulations and any failure
to comply may result in substantial fines and sanctions.
Our operations are subject to Canadian and international
environmental laws and regulations governing, among other things, emissions to
air, discharges to waters and the generation, handling, storage, transportation,
treatment and disposal of raw materials, waste and other materials. Many of
these laws and regulations provide for substantial fines and criminal sanctions
for violations. We believe that we are and have been operating our business and
facility in a manner that complies in all material respects with environmental,
health and safety laws and regulations; however, we may incur material costs or
liabilities if we fail to operate in full compliance. We do not maintain
environmental damage insurance coverage with respect to the products which we
manufacture.
We may have to make significant expenditures in the future to
comply with evolving environmental, health and safety requirements, including
new requirements that may be adopted or imposed in the future. To meet changing
licensing and regulatory standards, we may have to make significant additional
site or operational modifications that could involve substantial expenditures or
reduction or suspension of some of our operations. We cannot be certain that we
have identified all environmental and health and safety matters affecting our
activities and in the future our environmental, health and safety problems, and
the costs to remediate them, may be materially greater than we expect.
7
Our limited cash resources restrict our ability to pay cash
dividends.
Since our inception, we have not paid any cash dividends on our
common stock. We currently intend to retain future earnings, if any, to support
operations and to finance the growth and development of our business. Therefore,
we do not expect to pay cash dividends in the foreseeable future. Any future
determination relating to our dividend policy will be made at the discretion of
our Board of Directors and will depend on a number of factors, including future
earnings, capital requirements, financial conditions and future prospect and
other factors that the board of directors may deem relevant. If we do not pay
any dividends on our common stock, our stockholders will be able to profit from
an investment only if the price of the stock appreciates before the stockholder
sells it. Investors seeking cash dividends should not purchase our common
stock.
Risks Related to Our Intellectual Property
If we are not able to adequately protect our intellectual
property, we may not be able to compete effectively.
Our success depends, to a significant degree, upon the
protection of our proprietary technologies. While we currently own three U.S.
patents and have applied for seven U.S. patents, we will need to pursue
additional protection for our intellectual property as we develop new products
and enhance existing products. We may not be able to obtain appropriate
protection for our intellectual property in a timely manner, or at all. Our
inability to obtain appropriate protections for our intellectual property may
allow competitors to enter our markets and produce or sell the same or similar
products.
If we are forced to resort to legal proceedings to enforce our
intellectual property rights, the proceedings could be burdensome and expensive.
In addition, our proprietary rights could be at risk if we are unsuccessful in,
or cannot afford to pursue, those proceedings.
We also rely on trade secrets and contract law to protect some
of our proprietary technology. We have entered into confidentiality and
invention agreements with our employees and consultants. Nevertheless, these
agreements may not be honored and they may not effectively protect our right to
our un-patented trade secrets and know-how. Moreover, others may independently
develop substantially equivalent proprietary information and techniques or
otherwise gain access to our trade secrets and know-how.
In 1995, the U.S. Patent and Trademark Office adopted changes
to the U.S. patent law that made the term of issued patents 20 years from the
date of filing rather than 17 years from the date of issuance, subject to
specified transition periods. Beginning in June 1995, the patent term became 20
years from the earliest effective filing date of the underlying patent
application. These changes may reduce the effective term of protection for
patents that are pending for more than three years. While we cannot predict the
effect that these changes will have on our business, they could have a material
adverse effect on our ability to protect our proprietary information.
Furthermore, the possibility of extensive delays in the patent issuance process
could effectively reduce the term during which a marketed product is protected
by patents.
We may need to obtain licenses to patents or other proprietary
rights from third parties. We may not be able to obtain the licenses required
under any patents or proprietary rights or they may not be available on
acceptable terms. If we do not obtain required licenses, we may encounter delays
in product development or find that the development, manufacture or sale of
products requiring licenses could be foreclosed. We may, from time to time,
support and collaborate in research conducted by universities and governmental
research organizations. We may not be able to acquire exclusive rights to the
inventions or technical information derived from these collaborations, and
disputes may arise over rights in derivative or related research programs
conducted by us or our collaborators.
If we infringe on the rights of third parties, we may not be
able to sell our products, and we may have to defend against litigation and pay
damages.
If a competitor were to assert that our products infringe on
its patent or other intellectual property rights, we could incur substantial
litigation costs and be forced to pay substantial damages. Third-party
infringement claims, regardless of their outcome, would not only consume
significant financial resources, but would also divert our management's time and
attention. Such claims could also cause our customers or potential customers to
purchase competitors' products or defer or limit their purchase or use of our
affected products until resolution of the claim. If any of our products are
found to violate third-party intellectual property rights, we may have to
re-engineer one or more of our products, or we may have to obtain licenses from
third parties to continue offering our products without substantial
re-engineering. Our efforts to re-engineer or obtain licenses could require
significant expenditures and may not be successful.
Our controlled release products that are generic versions of
branded controlled release products that are covered by one or more patents may
be subject to litigation, which could delay FDA approval and commercial launch
of our products
We expect to file or have our collaborators file Abbreviated
New Drug Applications or New Drug Applications (ANDAs or NDAs) for our
controlled release products under development that are covered by one or more
patents of the branded product. It is likely that the owners of the patents
covering the brand name product or the sponsors of the NDA with respect to the
branded product will sue or undertake regulatory initiatives to preserve
marketing exclusivity. Any significant delay in obtaining FDA approval to market
our products as a result of litigation, as well as the expense of such
litigation, whether or not we or our collaborators are successful, could have a
materially adverse effect on our business, financial condition and results of
operations.
8
Risks Related to Our Securities:
The price of our common stock could be subject to
significant fluctuations.
Any of the following factors could affect the market price of
our common stock:
Our failure to achieve and maintain profitability;
Changes in earnings estimates and recommendations by financial analysts;
Actual or anticipated variations in our quarterly results of operations;
Changes in market valuations of similar companies;
Announcements by us or our competitors of significant contracts, new
  products, acquisitions, commercial relationships, joint ventures or capital
  commitments;
The loss of major customers or product or component suppliers;
The loss of significant partnering relationships; and
General market, political and economic conditions.
We have a significant number of convertible securities
outstanding that could be exercised in the future. Subsequent resale of these
and other shares could cause the Company's stock price to decline. This could
also make it more difficult to raise funds at acceptable levels via future
securities offerings.
We have a concentration of stock ownership and control, and
a small number of stockholders have the ability to exert significant control in
matters requiring stockholder vote and may have interests that conflict with
ours.
Our common stock ownership is highly concentrated. See
"Security Ownership of Certain Beneficial Owners and Management." As a result, a
relatively small number of stockholders, acting together, have the ability to
control all matters requiring stockholder approval, including the election of
directors and approval of mergers and other significant corporate transactions.
This concentration of ownership may have the effect of delaying, preventing or
deterring a change in control of our company. It could also deprive our
stockholders of an opportunity to receive a premium for their shares as part of
a sale of our company and it may affect the market price of our common stock. In
deciding how to vote on such matters, those stockholders' interests may conflict
with yours.
Lack of Independent Directors
We cannot guarantee that our Board of Directors will always
have a majority of independent directors. In the absence of a majority of
independent directors, our chief executive officer, who is also a principal
stockholder and director, could establish policies and enter into transactions
without independent review and approval thereof. This could present the
potential for a conflict of interest between the Company and its stockholders
generally and the controlling officers, stockholders or directors.
Our common stock is a high risk investment.
Our common
stock has been quoted on the OTC Bulletin Board under the symbol "IGXT" since
January 2007 and has been listed on the TSX Venture Exchange under the symbol
"IGX" since May 2008.
There is a limited trading market for our common stock, which
may affect the ability of shareholders to sell our common stock and the prices
at which they may be able to sell our common stock.
The market price of our common stock has been volatile, and
fluctuates widely in price in response to various factors which are beyond our
control. The price of our common stock is not necessarily indicative of our
operating performance or long term business prospects. In addition, the
securities markets have from time to time experienced significant price and
volume fluctuations that are unrelated to the operating performance of
particular companies. These market fluctuations may also materially and
adversely affect the market price of our common stock.
In the United States, our common stock is considered a "penny
stock". The U.S. Securities and Exchange Commission has adopted rules that
regulate broker-dealer practices in connection with transactions in "penny
stocks". These rules further restrict the trading activity and marketability of
our common stock.
As a result of the foregoing, our common stock should be
considered a high risk investment.
We became public by means of a reverse merger, and as a
result we are subject to the risks associated with the prior activities of the
public company. In addition, we may not be able to attract the attention of
major brokerage firms or institutional buyers.
Additional risks may exist because we became public through a
"reverse merger" with a shell corporation. Although the shell did not have
recent or past operations or assets and we performed a due diligence review of
the public company, there can be no assurance that we will not be exposed to
undisclosed liabilities resulting from the prior operations of our company.
9
Security analysts of major brokerage firms and securities
institutions may not cover us since there are no broker-dealers who sold our
stock in a public offering who would have an incentive to follow or recommend
the purchase of our common stock. No assurance can be given that established
brokerage firms will want to conduct any financings for us in the future.
DESCRIPTION OF BUSINESS
Corporate History
Our predecessor company, Big Flash Corp., was incorporated in
Delaware on July 27, 1999. On April 28, 2006, Big Flash, through its Canadian
holding corporation, completed the acquisition of IntelGenx Corp., a Canadian
company incorporated on June 15, 2003. The Company did not have any operations
prior to the acquisition of IntelGenx Corp.. In connection with the acquisition,
we changed our name from Big Flash Corp. to IntelGenx Technologies Corp.
IntelGenx Corp. has continued operations as our operating subsidiary.
Overview
We are a drug delivery company focusing on the development of
novel, orally administered drug delivery products based on our proprietary oral
drug delivery technologies. We have positioned ourself as a provider of product
development services for the pharmaceutical industry, including the branded and
generic pharmaceutical markets.
Drug delivery systems are an important tool in the hands of
physicians for purposes of optimizing drug therapy. For the pharmaceutical
industry, drug delivery systems represent an opportunity to extend the market
exclusivity and product lifecycle of drugs whose patent protection is nearing
expiration.
According to a report by CMR International, a pharmaceutical
industry research firm, products incorporating drug delivery systems represented
13% of the $337 billion global pharmaceutical market. In the United States,
sales of drug delivery products totaled $35 billion in 2006. Of this amount, the
orally administered segment of the drug delivery market totaled $21 billion in
sales, according to CMR International. Controlled release (CR) dosage
technologies play an important role in the development of orally administered
drug delivery systems. Control release technology provides patients with the
required amount of medication over a pre-determined, prolonged period of time,
preferably over 24 hours. Because of the reduced fluctuation of the active drug
in the blood, controlled release products are deemed safer and more tolerable
than conventional dosage forms, and have shown better patient compliance.
Our primary business strategy is to develop pharmaceutical
products based upon our proprietary drug delivery technologies and license the
commercial rights to companies in the pharmaceutical industry once the viability
of a product has been demonstrated. In exchange for licensing rights to our
products, we seek funding consisting of a combination of one or more of the
following: advance down payments, milestone fees, reimbursement for development
costs, and royalties on sales. In addition, we may receive a manufacturing
royalty from our contract manufacturers for the exclusive right to manufacture
our products. The companies we partner with are typically responsible for
managing the regulatory approval process of the product with the FDA and/or
other regulatory bodies, as well as for the marketing and distribution of the
products. On a case-by-case basis, IntelGenx may be responsible for providing
all or part of the documentation required for the regulatory submission. In
addition to pursuing partnering arrangements that provide for the full funding
of a drug development project, we may undertake development of selected product
opportunities until the marketing and distribution stage. We would first assess
the potential and associated costs for successful development of a product, and
then determine at which stage it would be most prudent to seek a partner,
balancing costs against the potential for higher returns later in the
development process.
Technology Platforms
Our product development efforts are based upon three delivery
platform technologies: (1) a Multilayer Tablet technology (2) an Oral Film
technology, and (3) a Mucoadhesive Tablet technology. Our Multilayer platform
technology allows for the development of oral controlled release products. It is
designed to be versatile and to reduce manufacturing costs as compared to
competing oral extended-release delivery technologies. The oral film technology
allows for the instant delivery of pharmaceuticals to the oral cavity, while the
Mucoadhesive Tablet allows for the controlled release of active substances to
the oral mucosa.
The Multilayer Tablet ("VersaTab") platform technology
represents a new generation of controlled release layered tablets designed to
modulate the release of active compounds. The technology is based on a
multilayer tablet with an active core layer and erodible cover layers. The
release of the active drug from the core matrix initially occurs in a
first-order fashion. As the cover layers start to erode-, ther permeability for
the active ingredient through the cover layers increases. Thus, the Multilayer
Tablet can produce quasi-linear (zero-order) kinetics for releasing a chemical
compound over a desired period of time. The erosion rate of the cover layers can
be customized according to the physico-chemical properties of the active drug.
In addition, our multilayer technology offers the opportunity to develop
combination products in a regulatory-compliant format. Combination products are
made up of two or more active ingredients that are combined into a single dosage
form.
10
The Oral Film technology ("VersaFilm") is made up of a thin
(25-35 micron) polymeric film comprised of USP components that are approved by
the FDA for use in food, pharmaceutical, and cosmetic products. Derived from the
edible film technology used for breath strips and initially developed for the
instant delivery of savory flavors to food substrates, the VersaFilm technology
is designed to provide a rapid response relative to existing fast dissolving
oral tablets. The VersaFilm technology is intended for indications requiring
rapid onset of action, such as migraine, motion sickness, erectile dysfunction,
and nausea.
The Mucoadhesive Tablet ("AdVersa") is a drug delivery system
capable of adhering to the oral mucosa and releasing the drug onto the site of
application at a controlled rate. The Mucoadhesive Tablet is designed to provide
the following advantages relative to competing technologies: (i) it avoids the
first pass effect (whereby the liver metabolizes the active and greatly reduces
the level of drug in the systemic circulation), (ii) it leads to a higher
absorption rate as compared to the conventional oral route, and (iii) it
achieves a rapid onset of action for the drug. The Mucoadhesive Tablet
technology is designed to be versatile in order to permit the site of
application, residence time, and rate of release of the drug to be modulated to
achieve the desired results.
Product Portfolio
Our product portfolio includes a blend of generic and branded
products based on our proprietary delivery technology ("generic" drugs are
essentially copies of drugs that have already received FDA approval).
INT0001/2004. This is the most advanced generic product
involving our trilayer technology. Equivalency with the reference product Toprol
XL and its European equivalent Beloc-ZOK has been demonstrated
in-vitro
.
The product has been tested in phase I studies.
INT0003/2005. We have entered into a partnership with Cary
Pharmaceuticals for the development of a once-daily tablet product containing an
antidepressant and a nicotine antagonist. The product is intended for smoking
cessation.
INT0004/2006. The development of an antidepressant has been
completed. A regulatory file for a 505(b)(2) NDA submission was filed and has
been accepted by the FDA for "standard review".
INT0005/2005. We are developing a bilayer tablet containing a
fixed-dose combination of a non-steroidal anti-inflammatory drug and a synthetic
prostaglandin. Formulation development is completed and a pilot bio batch has
been manufactured.
INT0006/2005. We have entered into a development agreement with
Azur Pharma for the development and manufacture of a prenatal vitamin
supplement. The product was developed using our proprietary technology. The
product was launched in the United States during the fourth quarter of 2008
under the brand name Gesticare®.
INT0010/2006. We have entered into an agreement with Cannasat
Therapeutics Inc. for the development of a buccal mucoadhesive tablet product
containing a cannabinoid-based drug for the treatment of neuropathic pain and
nausea in cancer patients undergoing chemotherapy.
INT0014/2008. Under a development agreement with Cannasat
Therapeutics Inc., we are developing a controlled-release tablet containing
Cannabidiol for the treatment of schizophrenia.
INT0007/2006. An oral film product based on our proprietary
edible film technology is currently in the early development stage. The product
is intended for the treatment of erectile dysfunction (ED).
INT0008/2007. An oral film product based on our proprietary
edible film technology is currently in the early development stage. The product
is intended for the treatment of migraine.
INT0015/2008. An oral film product based on our proprietary
edible film technology is currently in the early development stage. The product
is intended for the treatment of panic attacks.
INT0018/2008. We have entered into a development and licensing
agreement with Circ Pharma Ltd. to formulate, manufacture and supply a novel
drug product, based upon our proprietary VersaTab technology, for the treatment
of hyperlipidemia. The product is currently in the early development stage.
INT0019/2009. An oral film product based on our proprietary
edible film technology is currently in the early development stage. The product
is intended for the treatment of diarrhea.
The current development status of each of our products as of
the date of this filing is summarized in the following table:
11
Product
Application
Status of Development
INT0001/2004
CHF, Hypertension
Pivotal batches in preparation
INT0003/2005
Smoking cessation
Pilot
      biostudy completed
INT0004/2006
Antidepressant
NDA filed Q1, 2009
INT0010/2006
Neuropathic pain
Pilot
      biostudy completed
INT0006/2005
Prenatal vitamin supplement
Product launched in USA Q4, 2008
INT0005/2005
Osteoarthritis
Pilot
      batch completed
INT0007/2006
ED
Formulation development ongoing
INT0008/2007
Migraine
Formulation development ongoing
INT0014/2008
Schizophrenia
Formulation development ongoing
INT0015/2008
Panic
      Attack
Formulation development ongoing
INT0018/2008
Hyperlipidemia
Formulation development ongoing
INT0019/2009
Diarrhea
Formulation development ongoing
Growth Strategy
Our primary growth strategies include: (1) identifying
lifecycle management opportunities for existing "blockbuster" products, (2)
developing generic drugs with high barriers to entry, (3) developing products
for the (non-pharmaceutical) nutritional supplement market, and (4) developing
new drug delivery technologies.
Lifecycle Management Opportunities
We are seeking to position our delivery technologies as an
opportunity for lifecycle management of products for which the patent protection
of the active ingredient is nearing expiration. While the patent for the
underlying substance cannot be extended, patent protection can be obtained for a
new and improved formulation by filing an application with the FDA under Section
505(b)(2) of the U.S. Federal Food, Drug and Cosmetic Act. Such applications,
known as a "505(b)(2) NDA", are permitted for new drug products that
incorporate previously approved active ingredients, even if the proposed new
drug incorporates an approved active ingredient in a novel formulation or for a
new indication. A 505(b)(2) NDA may include information regarding safety and
efficacy of a proposed drug that comes from studies not conducted by or for the
applicant. The first formulation for a respective active ingredient filed with
the FDA under a 505(b)(2) application may qualify for up to three years of
market exclusivity upon approval. Based upon a review of past partnerships
between third party drug delivery companies and pharmaceutical companies,
management believes that drug delivery companies which possess innovative
technologies to develop these special dosage formulations present an attractive
opportunity to pharmaceutical companies. Accordingly, we believe these so-called
"505(b)(2) products" represent a viable business opportunity for us.
Generic Drugs with High Barriers to Entry
We will also plan to pursue the development of generic drugs
that have certain barriers to entry, e.g., where product development and
manufacturing are complex and can limit the number of potential entrants into
the generic market. We plan to pursue such projects only if the number of
potential competitors is deemed relatively insignificant. An example of such a
product is our project INT0005/2005, a fixed-dose combination medication
requiring complex formulation and manufacturing technology.
12
Nutritional Supplement Products
We plan to develop additional products for the nutritional
supplement market based upon our proprietary drug delivery technologies. The
market for these supplements is large, with little differentiation between
products. Our proprietary technology is aimed at increasing the absorption rate
of active ingredients. We believe that supplements represent attractive short
term revenue opportunities since they are not regulated as pharmaceutical
products and do not require FDA approval.
Development of New Drug Delivery Technologies
The rapidly disintegrating film technology contained in our
VersaFilm and our AdVersa mucosal adhesive tablet are examples of our efforts to
develop alternate technology platforms. As we work with various partners on
different products, we seek opportunities to develop new proprietary
technologies.
Competition
The pharmaceutical industry is highly competitive and is
subject to the rapid emergence of new technologies, governmental regulations,
healthcare legislation, availability of financing, patent litigation and other
factors. Many of our competitors, including Biovail Corporation, Labopharm Inc.,
and Flamel Technologies S.A., have longer operating histories and greater
financial, technical, marketing, legal and other resources than us. In addition,
many of our competitors have significantly greater experience than we have in
conducting clinical trials of pharmaceutical products, obtaining FDA and other
regulatory approvals of products, and marketing and selling products that have
been approved. We expect that we will be subject to competition from numerous
other companies that currently operate or are planning to enter the markets in
which we compete.
The key factors affecting the development and commercialization
of our drug delivery products are likely to include, among other factors:
The safety and efficacy of our products;
The relative speed with which we can develop products;
Generic competition for any product that we develop;
Our ability to defend our existing intellectual property and to broaden
  our intellectual property and technology base;
Our ability to differentiate our products;
Our ability to manufacture our products in compliance with "cGMP" and any other regulatory requirements; and
Our ability to obtain financing.
In order to establish ourselves as a viable industry partner,
we plan to continue to invest in our research and development activities in
order to further strengthen our technology base and to develop the ability to
manufacture our products through our manufacturing partner at competitive
costs.
Our Competitive Strengths
We believe that our key competitive strengths include:
Our intellectual property;
The versatility of our drug delivery technology; and
The potential manufacturing cost savings associated with our technology.
Manufacturing Partnership
We have entered into a collaboration agreement with Keata
Pharma Inc. ("Keata
Pharma"), a wholly owned subsidiary of PharmEng International Inc., based in
Markham, Ontario. Under this agreement, Keata Pharma is our preferred supplier
for the manufacturing of clinical test batches and commercial products. We also have a reciprocal relationship
whereby we recommend Keata Pharma to our partners for pharmaceutical
manufacturing services and Keata Pharma promotes our product development
services to pharmaceutical companies.
13
Dependence on Major Customers
We do not rely on any one or a few major customers for our end
products. However, we depend upon a limited number of partners to develop our
products, to provide funding for the development of our products, and to assist
in obtaining regulatory approvals that are required in order to commercialize
these products.
Intellectual Property and Patent Protection
We protect our intellectual property and technology by using
the following methods: (i) applying for patent protection in the United States
and in the appropriate foreign markets, (ii) non-disclosure agreements, license
agreements and appropriate contractual restrictions and controls on the
distribution of information, (iii) trade secrets, common law trademark rights
and trademark registrations. We plan to file core technology patents covering
the use of our platform technologies in any pharmaceutical products.
We have obtained three (3) patents and have an additional seven
(7) pending patent applications pending, as described below. The patents expire
20 years after submission of the initial application.
Patent No.
Title
Subject
Date submitted / issued
US 6,231,957
Rapidly disintegrating flavor wafer for flavor enrichment
The composition, manufacturing, and use of rapidly
      disintegrating flavored films for releasing flavors to certain substrates
Issued May 15, 2001
US 6,660,292
Rapidly disintegrating film for precooked foods
Composition and manufacturing of flavored films
      for releasing flavors to precooked food substrates
Issued December 9, 2003
US 7,132,113
Flavored film
Composition and manufacturing
      method of multi-layered films
Issued April 16, 2002
US Appl. 2007/0190144
Multilayer Tablet
Formulation and Method of Preparation of
      Multilayered Tablets
Published August 16, 2007
14
US Appl. 2007/0128272
Multi-Vitamin And Mineral Supplement
Formulation And Method of Preparation of Prenatal
      Multivitamin Supplement
Published June 7, 2007
PCT/CA2006/000336
;
US Appl. 11/403,262
Delayed Release Oral Dosage Form And Method Of Making
      Same
Formulation And Method Of Making Bilayer Tablets
      Containing Delayed-Release Diclofenac And Misoprostol
February 13, 2006
US Appl. 11/782,838 PCT/IB2007/03950
Controlled Release Pharmaceutical Tablets
Formulation And Method Of Making Tablets Containing
      Bupropion And Mecamylamine
July 2006
US Appl. Make Special 11/828,287
Stabilized sustained- release Bupropion and Bupropion /
      Mecamylamine tablets
Formulation And Method Of Making Tablets Containing
      Bupropion And Mecamylamine
August 2007
US Provisional Appl. Attorney Docket INT34 P-311
Buccal And Sublingual Dosage Forms
Formulation And Method of Preparation of mucoadhesive
      tablets containing THC
July 2007
US Provisional Appl. Attorney Docket INT34 P-310
Cannabinoid Complexes
Formulation And Method of Preparation of gamma-
      cyclodextrin complexes containing CBD
July 2007
Government Regulation
The pharmaceutical industry is highly regulated. The products
we participate in developing require certain regulatory approvals. In the United
States, drugs are subject to rigorous regulation by the FDA. The U.S. Federal
Food, Drug, and Cosmetic Act, and other federal and state statutes and
regulations, govern, among other things, the research, development, testing,
manufacture, storage, record keeping, packaging, labeling, adverse event
reporting, advertising, promotion, marketing, distribution, and import and
export of pharmaceutical products. Failure to comply with applicable regulatory
requirements may subject a company to a variety of administrative or
judicially-imposed sanctions and/or the inability to obtain or maintain required
approvals or to market drugs. The steps ordinarily required before a new
pharmaceutical product may be marketed in the United States include:
preclinical laboratory tests, animal studies and formulation studies under
  FDA's good laboratory practices regulations, or GLPs;
the submission to the FDA of an investigational new drug application, or
  IND, which must become effective before human clinical trials may begin;
the completion of adequate and well-controlled clinical trials according
  to good clinical practice regulations, or GCPs, to establish the safety and
  efficacy of the product for each indication for which approval is sought;
After successful completion of the required clinical testing, submission
  to the FDA of a New Drug Application, or NDA, or an Abbreviated New Drug
  Application, or ANDA, for generic drugs. In certain cases, an application for
  marketing approval may include information regarding safety and efficacy of a
  proposed drug that comes from studies not conducted by or for the applicant.
  Such applications, known as a 505(b)(2) NDA, are permitted for new drug
  products that incorporate previously approved active ingredients, even if the
  proposed new drug incorporates an approved active ingredient in a novel
  formulation or for a new indication.
satisfactory completion of an FDA inspection of the manufacturing facility
  or facilities at which the product is produced to assess compliance with cGMPs
  to assure that the facilities, methods and controls are adequate to preserve
  the drug's identity, strength, quality and purity; and
FDA review and approval of the NDA or ANDA.
15
The cost of complying with the foregoing requirements,
including preparing and submitting an NDA or ANDA, may be substantial.
Accordingly, we typically rely upon our partners in the
pharmaceutical industry to spearhead and bear the costs of the FDA approval
process. We also seek to mitigate regulatory costs by focusing on 505(b)(2) NDA
opportunities. By applying our drug delivery technology to existing drugs, we
seek to develop products with lower R&D expenses and shorter time-to-market
timelines as compared to regular NDA products.
Research and Development Expense
Our Research & Development ("R&D") expenses, net of
R&D tax credits, for the year ended December 31, 2008 were $1,779,741 as
compared to $603,374 for the year ended December 31, 2007.
Environmental Regulatory Compliance
We believe that we are in compliance with environmental
regulations applicable to our research and development facility located in Ville
Saint-Laurent, Quebec.
Employees
As of the date of this filing, we have nine full time
employees.
DESCRIPTION OF PROPERTY
We currently occupy 3,100 square feet of leased space at a rate
of CDN$8.64/square foot in an industrial zone in Ville St.-Laurent, Quebec,
Canada under a five year renewable lease agreement signed in 2004. We extended
the term of the lease agreement to August 31, 2010 under similar financial
conditions, with the option to terminate at any time after February 28, 2010,
provided we give four months notice. We expanded our laboratory and office space
at this facility to its maximum during the second quarter of 2006. In order to
continue to support ongoing product development activities and allow the
addition of further development programs we might be required to seek a
different location in 2009. Management has therefore entered into discussions
with the current landlord to look for alternative facilities that would meet our
need for additional space at affordable costs.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS
Results of Operations - Year ended December 31, 2008
compared to Year ended December 31, 2007.
Increase/
Percentage
2008
2007
(Decrease)
Change
Revenue
$
976,610
$
862,731
$
113,879
13%
Research and Development Expenses
2,085,433
777,773
1,307,660
168%
Research and Development Tax Credit
(305,692
)
(174,399
)
(131,293
)
75%
Management Salaries
551,771
328,513
223,258
68%
General and Administrative Expenses
212,915
166,249
46,666
28%
Professional Fees
695,158
424,817
270,341
64%
Interest and Financing Fees
766,136
349,093
417,043
120%
Foreign Exchange
(122,915
)
113,552
(236,467
)
N/A
Income taxes
(151,581
)
(64,077
)
(87,504
)
137%
Net Income (Loss)
(2,806,387
)
(1,100,793
)
(1,705,594
)
155%
16
Revenues
Total revenue increased $113,879, or 13%, to $976,610 for the
year ended December 31, 2008 from $862,731 for the year ended December 31,
2007.
The increase in revenue is primarily attributable to revenues
invoiced pursuant to our research and development agreements with our
pharmaceutical partners for development milestones achieved, which amounted to
$945,760 in 2008 compared with $835,376 in the previous year.
Also included within revenue is interest income of $30,864
earned on the cash proceeds from the sale of our securities in May 2007 and in
March 2008. This compares to interest income of $27,355 in 2007.
Research and Development ("R&D") Expenses
R&D expenses, net of R&D tax credits, for the year
ended December 31, 2008 were $1,779,741 and represent an increase of $1,176,367
compared to the year ended December 31, 2007.
Gross R&D expenses for the year ended December 31, 2008
were $2,085,433, as compared to $777,773 for the previous year.
Included within R&D expenses for 2008 are approximately
$915,444 of costs related to the development of the CPI-300 pursuant to the
collaboration agreement with Cary Pharmaceuticals. These expenses, while
significant, are in line with both the project plan and with management's
expectations. These expenses include approximately $500,122 related to clinical
trials for the Food Effect Study and the Bioequivalence Study undertaken in
recent months.
The remainder of the increase is primarily attributable to the
increased drug development activities of our other projects.
Also included within R&D expenses for 2008 are R&D
Salaries of $422,930, approximately $13,404 of which represents non-cash
compensation. This compares to R&D salaries of $301,935 in 2007, including
$18,187 in non-cash compensation.
For the year ended December 31, 2008, we have recorded
estimated Research and Development Tax Credits and refunds of $305,692, as
compared to $174,399 for 2007.
Management Salaries and General and Administrative Expenses
Management salaries increased $223,258, or 68% in 2008, to
$551,771 from $328,513 in 2007. General and administrative expenses increased
28%, to $212,915 in 2008 from $166,249 in 2007.
The following items are included in management salaries: (i)
approximately $40,572 in non-recurring cash compensation to non employee
directors of the Company (no such costs were incurred in 2007) (ii)
approximately $51,727 in non cash compensation in the form of options granted to
non-employee directors, as compared to $76,734 in 2007, and (iii) approximately
$45,483 in non cash compensation resulting from options granted to management
employees in 2007 and 2008, as compared to $21,218 in 2007. The remaining
increase in management salaries is attributable to the hiring of a full time
Chief Financial Officer and a Vice-President Business Development.
The increase in general and administrative expenses is
primarily attributable to the increase in corporate operations.
Professional Fees
Professional fees for the year ended December 31, 2008
increased by $270,341, or 64%, to $695,158 from $424,817 in 2007.
The increase in professional fees is primarily attributable to:
(i) management fees of approximately $222,236 paid to Cary Pharmaceuticals
related to the CPI 300 antidepressant (no such costs were incurred in 2007), and
(ii) expenses of approximately $108,714 related to the Company's listing on the
TSX Venture Exchange, as compared to $22,418 in 2007.
Share-Based Compensation Expense, Warrants and Stock Based
Payments
Share-based compensation expense, warrants and share based
payments totaled $365,225 for the year ended December 31, 2008, as compared to
$202,607 for the year ended December 31, 2007.
17
We expensed $111,619 in connection with the amendment of the
anti-dilution terms of convertible notes issued in May 2007. As consideration
for entering into this amendment, the Company agreed to issue to the note
holders an aggregate of 159,456 fully paid common shares. At the same time, the
exercise price of outstanding warrants held by the note holders was adjusted
from $1.02 to $0.80, resulting in an increase in the fair value of the warrant
and an additional compensation charge of $92,571.
We also expensed approximately $58,887 during 2008 for options
granted to Company employees in 2006, 2007 and 2008 under the 2006 Stock Option
Plan, $51,727 for options granted to non-employee directors, and $50,421 for
options granted to Auctus Capital for investor relations services.
There remains approximately $47,162 in stock based compensation
to be expensed in fiscal 2009 and 2010 related to the issuance of options during
2007 and 2008. We anticipate that we will issue additional options and warrants
in the future, which will continue to result in stock-based compensation
expense.
Financing Cost
We incurred interest and financing fee expense of $766,136 for
the year ended December 31, 2008, as compared to $349,093 in 2007. Approximately
$670,108 of the expense incurred in 2008 relates to non-cash items.
The costs in 2008 relate primarily to a non-cash accretion
expense of $465,918 (2007 - $195,317) and cash interest payments of $79,215
(2007 - $66,180) on the convertible notes issued in May 2007.
In addition, we expensed a non-cash amount of $111,619 in
connection with the amendment of the anti-dilution terms of convertible notes
issued in May 2007. As consideration for entering into this amendment, the
Company agreed to issue to the note holders an aggregate of 159,456 fully paid
common shares. At the same time, the exercise price of outstanding warrants held
by the note holders was adjusted from $1.02 to $0.80, resulting in an increase
in the fair value of the warrant and an additional compensation charge of
$92,571.
The remainder of $16,813 in financing cost relates to interest
paid on the outstanding shareholder loan, bank fees, and interest.
Based on the outstanding principal amount of the convertible
notes issued in May 2007, and assuming no additional conversions of these notes
into common stock, we expect to incur interest expense of approximately $71,627
and approximately $515,739 of accreted interest in 2009.
Foreign Exchange
A foreign exchange gain of $122,915 was recorded in 2008, as
compared to a foreign exchange loss of $113,552 in 2007. The foreign exchange
gain in 2008 and the foreign exchange loss in 2007 relate primarily to currency
fluctuations between the Canadian dollar and the U.S. dollar.
Net Loss
The net loss for the year ended December 31, 2008 was
$2,806,387, an increase of $1,705,594, or 155%, as compared to a net loss of
$1,100,793 in 2007. The increase in net loss is attributable to the following:
a)
R&D expenses of approximately $915,444 and Management
      Fees of approximately $222,236 relating to the collaboration agreement
      with Cary Pharmaceuticals to develop the antidepressant CP-300;
b)
Professional fees of approximately $108,714 related to
      the Company's listing on the TSX Venture Exchange; and
c)
Financing costs of approximately $749,323 incurred in
      relation to the convertible notes issued in May 2007, of which
      approximately $545,133 relates to interest paid and accreted, and $204,190
      relates to amendments to the terms and conditions of the convertible
      notes.
Non-cash related expenses totaling approximately $882,915 are
included within the net loss for 2008, as follows:
a)
$465,918 in respect of accretion expense on the
      convertible notes issued in May 2007;
18
b)
$111,619 related to the amendment of the anti-dilution
      terms of the convertible notes whereby, as consideration for entering into
      this amendment, the Company agreed to issue to the holders of the
      convertible notes an aggregate of 159,456 fully paid common
  shares;
c)
$92,571 additional compensation charge relating to the
      amendment of the exercise price of the outstanding warrants to the note
      holders from $1.02 to $0.80 resulting in an increase in the fair value of
      the warrant;
d)
$58,887 for options granted to Company
  employees;
e)
$51,772 in respect of the amortization of fixed
      assets;
f)
$51,727 for options granted to non-employee directors;
      and
g)
$50,421 for options granted to Auctus Capital as per the
      investor relations agreement.
Key items from the Balance Sheet
Increase/
Percentage
2008
2007
(Decrease)
Change
Current Assets
$
1,464,374
$
1,035,920
$
428,454
41%
Property and Equipment
157,156
235,244
(78,088
)
33%
Current Liabilities
525,661
261,485
264,176
101%
Loan Payable, Shareholder
82,357
101,193
(18,836
)
19%
Convertible notes
714,502
417,634
296,868
71%
Deferred Income Tax Liability
127,408
278,988
(151,580
)
54%
Capital Stock
209
162
47
29%
Additional Paid-in-Capital
5,080,780
2,071,818
3,008,962
145%
Current Assets
Current assets totaled $1,464,374 at December 31, 2008, as
compared to $1,035,920 at December 31, 2007. The increase of $428,454 is
primarily attributable to an increase in cash resulting from the completion of
our private placement on March 27, 2008, and also includes a cash balance of
$277,220 which is restricted in accordance with the Collaborative Agreement with
Cary Pharmaceuticals to jointly develop and commercialize an oral antidepressant
using IntelGenx's proprietary oral delivery technology.
Prepaid Expenses
As of December 31, 2008, prepaid expenses totaled $44,936, as
compared to $23,443 at December 31, 2007. The increase of $21,493 is
attributable to the payment of a security deposit of $22,681 in connection with
a lease agreement for new premises that the Company plans to relocate to in
2009.
Contractual Obligations and Commitments
Excluding trade accounts payable and accrued liabilities, the
Company is committed to the following contractual obligations and commitments.
2009
2010
Operating Lease Obligations
$
8,119
$
0
Investor relation
$
24,630
$
0
Interest on Convertible Notes
$
71,627
$
0
Total
$
104,376
$
0
19
Liquidity and Capital Resources
Our cash and cash equivalents totaled $833,219 as of December
31, 2008, an increase of $502,252 as compared to $330,967 as of December 31,
2007. The increase is primarily attributable to proceeds received from a private
placement completed on March 27, 2008. Our cash and cash equivalents balance
includes a restricted cash amount of $277,220. This amount represents the
remaining balance of the $2,000,000 in cash that was set aside under the terms
of the Collaborative Agreement ratified on April 7, 2008 with Cary
Pharmaceuticals to jointly develop and commercialize an oral antidepressant
using IntelGenx's proprietary oral delivery technology.
As at December 31, 2008, we had an accumulated deficit of
$4,725,045, as compared to an accumulated deficit of $1,918,658 as of December
31, 2007. Total assets amounted to $1,621,530 and shareholders' equity amounted
to $171,602 as of December 31, 2008, as compared with total assets and
shareholders' equity of $1,271,164 and $211,864, respectively, as of December
31, 2007.
As of December 31, 2008, accounts receivable totaled $317,063
(2007 - $427,476), of which $122,095 is a sales tax refund which we expect to
receive during the first quarter of 2009. In addition, we had R&D investment
tax credits receivable of $269,156, as compared to $243,006 as at December 31,
2007. We expect to receive the R&D investment tax credits during the third
quarter of 2009.
Accounts payable and accrued liabilities as of December 31,
2008 amounted to $525,661 (2007 - $261,485), of which approximately $435,100
relates to research and development activities, approximately $12,706 relates to
professional fees, and $17,857 relates to a retainer to a non-employee director
of the Company. Included within other accruals is approximately $13,390 due to a
shareholder.
Our consolidated financial statements as of December 31, 2008
have been prepared under the assumption that we will continue as a going concern
for the twelve months ending December 31, 2009. The report of our independent
registered public accounting firm which accompanies our financial statements
includes an explanatory paragraph raising substantial doubt about our ability to
continue as a going concern due to our operating losses our need to obtain
significant additional capital in order to finance our operations and repay our
indebtedness. Accordingly, our ability to continue as a going concern is
dependent upon our ability to obtain additional capital from equity and/or debt
financing, or by generating increased revenues or other sources of income.
We presently do not have any available credit, bank financing
or other external sources of liquidity as at December 31, 2008. Due to our brief
operating history, our operations have not been a consistent source of
liquidity. We have financed our operating and capital expenditures principally
through the sale of debt and equity securities to accredited and institutional
investors. In May 2007, we issued convertible notes in an aggregate principal
amount of $1.5 million, of which $1,230,241 remained outstanding as of December
31, 2008. In March 2008, we completed a private placement of common stock and
warrants for net proceeds of $2,349,119. Management believes that the Company's
existing cash resources will be sufficient to meet our operating requirements
for the first six months of 2009. We are seeking additional funding through
additional equity and/or debt financings. However, there can be no assurance
that that any additional financing will become available to us, and if
available, on terms acceptable to us. Any financing, if available, may involve
restrictive covenants that impact our ability to conduct our business and raise
additional funds. If we are unable to raise additional capital when required or
on acceptable terms, we may have to significantly delay, scale back or
discontinue the development and/or commercialization of one or more of our
product candidates.
Property and Equipment
As at December 31, 2008, the net book value of our property and
equipment amounted to $157,156, as compared to $235,244 at December 31, 2007. In
the year ended December 31, 2008 additions to assets totaled $11,274 and
comprised $2,812 for computer equipment, $6,579 for laboratory equipment, and
$1,883 for office equipment, fixtures and fittings. Total depreciation in the
year ended December 31, 2008 amounted to $51,772 and a foreign exchange loss of
$37,590 was recorded.
Loan Payable, Shareholder
As of December 31, 2008, we had a loan payable to a shareholder
with an outstanding principal amount of $82,357, as compared to an outstanding
principal amount of $101,193 at December 31, 2007. $18,836 of the decrease in
the outstanding principal amount is attributable to currency exchange rate
fluctuation.
Capital Stock
As at December 31, 2008, capital stock amounted to $209
compared to $162 at December 31, 2007. The increase reflects the issue of
4,692,856 shares at par value of $0.00001, the majority of which relates to the
private placement completed on March 27, 2008. Capital stock is disclosed at its
par value with the excess of proceeds shown in Additional Paid-in-Capital.
20
Private Placement of Convertible Notes and Warrants - May
2007
On May 22, 2007 the Company entered into convertible note
agreements with certain institutional and accredited investors for amounts
totaling $1,500,000. The convertible notes bear interest at the rate of 8% per
annum and are repayable on September 22, 2009. Interest is payable quarterly and
payments commenced on July 1, 2007. The notes are convertible into common shares
of the Company, at the option of the holders, at a conversion price of $0.70 per
share. The Company also issued to the holders 2,142,857 stock purchase warrants
exercisable at $1.02 per share before May 22, 2012. The exercise price of the
warrants was subsequently amended to $0.80 per share in the second quarter of
2008.
The Company may, at its option, elect to pay the interest by
the issuance of common shares. The number of shares is to be determined by
dividing the amount of the interest payment by the number which is 85% of the
average market price of the Company's common shares for the 20 trading days
immediately prior to the interest payment date assuming that the average market
price is equal or greater than $0.70 as adjusted for reverse and forward share
splits, recapitalizations and the like that occur after the date of the
Securities Purchase Agreements.
On May 22, 2007 the Company paid approximately $229,323 in cash
consideration and issued warrants with a fair value of $82,993 in consideration
for transaction costs. These transaction costs were allocated between the
convertible debt and the warrants based on their relative fair value.
In the second quarter of 2008 the Company issued 159,456 shares
of common stock at $0.70 per share for a total of $111,619 to convertible note
holders. The compensation was for acceptance of the amendment of the
anti-dilution terms of the convertible notes required in connection with the
Company's TSX listing. At the same time the exercise price of the warrants was
amended from $1.02 to $0.80 per share.
As at December 31, 2008 we had convertible notes of $714,502
(2007 - $417,634) outstanding, which represents $1,230,241 in convertible note
financing less unamortized discount and deferred charges of $515,739. In 2008 a
total of 235,714 notes were converted into common shares resulting in an
increase of $165,000 in additional paid in capital.
Private Placement of Common Stock and Warrants - March 2008
On March 27, 2008, we completed a private placement of common
stock and warrants for gross proceeds of $2,800,700. We sold 4,001,000 units,
with each unit consisting of one share of common stock and one common share
purchase warrant. Each warrant entitles the holder to purchase one share of
common stock at an exercise price of $1.02 per common share and expires 24
months after the date of issuance.
In connection with this private placement, we paid a placement
agent a cash commission in the amount of $196,000, which is equal to 7% of the
gross proceeds of the offering. We also issued to the placement agent an option
entitling the placement agent to acquire 320,080 units at $0.70 per unit, which
expires 24 months after the date of issuance.
The cash consideration paid to the placement agent and the fair
value of the placement agent's option is reflected as a reduction to additional
paid-in capital.
Pursuant to the terms of the private placement, we were
obligated to use our best efforts to: (i) have our common stock listed on the
TSX Venture Exchange, and (ii) file a resale registration statement with the
U.S. Securities and Exchange Commission that registers for resale the common
stock and the common stock issuable upon exercise of the warrants and the
placement agent option. We fulfilled these obligations within the required time
limits.
Additional Paid-in-Capital
Additional paid-in capital totaled $5,080,780 at December 31,
2008, as compared to $2,071,818 at December 31, 2007. The increase is
attributable to increases of $2,127,920, $672,740, and $95,000 for the private
placement completed in March 2008 in relation to common stock issued, warrants
and placement agent compensation respectively as well as a decrease of $546,581
for transaction costs. Additional paid in capital also increased by $365,223 for
stock based compensation. Of this amount, $111,617 relates to compensation to
convertible note holders for their acceptance of an amendment of the
anti-dilution terms of their convertible notes required in connection with the
Company's TSX listing; $92,571 relates to the adjustment of the exercise price
of the warrants held by the convertible note holders; and $161,035 relates to
the amortization of stock options granted to employees, directors, and to our
investor relations consultant, Auctus Capital. Additional paid in capital
increased further by $164,998 for converted notes, by $88,663 for options
exercised, and by $40,999 for warrants exercised.
Key items from the Statement
of Cash Flows
21
Increase/
Percentage
2008
2007
(Decrease)
Change
Operating Activities
$
(1,737,032
)
$
(968,659
)
$
(768,373
)
79%
Financing Activities
2,478,784
1,162,806
1,315,978
113%
Investing Activities
(284,277
)
(82,961
)
(201,316
)
243%
Cash and cash equivalents - end of period
555,999
330,967
225,032
68%
Net cash used by operating activities was $1,737,032 in the
year ended December 31, 2008, as compared to $968,659 for the same period in
2007. In 2008, net cash used by operating activities consisted of an operating
loss of $2,806,387 and an increase in non-cash operating elements of working
capital of $337,974.
Non-cash items included in operating activities totaled
approximately $731,334, as follows:
a)
$465,918 in respect of accretion expense on the
      convertible notes issued in May 2007l
b)
$111,619 related to the amendment of the anti-dilution
      terms of the convertible notes whereby, as consideration for entering into
      this amendment, the Company agreed to issue to the holders of the
      convertible notes an aggregate of 159,456 fully paid common
  shares;
c)
$92,571 additional compensation charge relating to the
      amendment of the exercise price of the outstanding warrants to the note
      holders from $1.02 to $0.80 resulting in an increase in the fair value of
      the warrant;
d)
$58,887 for options granted to Company
  employees;
e)
$51,772 in respect of the amortization of fixed
      assets;
f)
$51,727 for options granted to non-employee
    directors;
g)
$50,421 for options granted to Auctus Capital as per the
      investor relation agreement; and
h)
($151,581) in respect of deferred income tax related to
      the convertible debt.
Our operating activities will continue to consume our available
funds until we can generate increased revenues.
Net cash provided by financing activities was $2,478,784 for
the year ended December 31, 2008, as compared to $1,162,806 provided in 2007. Of
the net cash provided by financing activities in 2008, $2,800,700 came from a
private placement financing completed on March 27, 2008, less $451,581 used to
pay related transaction costs, and $129,665 was generated from the issue of
capital stock in the second and third quarters.
Net cash used in investing activities was $284,277 for the year
ended December 31, 2008 compared to a use of funds of $82,961 in 2007. Net cash
used in investing activities in 2008 includes $277,220 of cash restricted for
the CPI-300 project under the collaborative agreement with Cary Pharmaceuticals.
In accordance with the collaborative agreement dated April 7, 2008 the Company
agreed to restrict $2,000,000 of its cash reserves in development support
activities for an oral antidepressant using the Company's proprietary oral
delivery technology. As at December 31, 2008, in line with project planning and
management's expectations, the Company had expensed approximately $1,832,470 on
the project of which $1,722,780 had been disbursed, resulting in a restricted
cash balance of $277,220 and amounts payable of $109,690. Included within these
disbursements is approximately $222,236 paid to Cary Pharmaceuticals in respect
of management fees.
Cash of $7,057 was used to purchase capital assets in 2008, as
compared to $82,961 in 2007.
The balance of cash as of December 31, 2008 amounted to
$555,999, as compared to $330,967 at December 31, 2007. This amount excludes the
restricted cash amount of $277,220 for the CPI-300 project. The increase in cash
is primarily the result of proceeds from the private placement completed in
March 2008. The increase in cash was partially offset by an increase in R&D
expenses, the full year effect of management salaries, and costs associated with
the Company's listing on the TSX Venture Exchange.
USE OF PROCEEDS
The selling security holders will receive all of the proceeds
from the sale of shares of common stock pursuant to this prospectus. We will not
receive any proceeds from the sale of the shares of common stock offered by the
selling security holders to the public. However, we will receive proceeds from
the exercise of the Warrants, as well as from the exercise of the Placement
Agent Options. Any such proceeds will be used to support the Company's strategic
development projects and for working capital.
22
MARKET PRICE OF AND DIVIDENDS ON REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER
MATTERS
Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
Our common stock has been quoted on the OTC Bulletin Board
under the symbol "IGXT" since January 2007. In addition, our common stock has
been listed on the TSX Venture Exchange under the symbol "IGX" since May 2008.
The table below sets forth the high and low bid prices of our common stock as
reported by the OTC Bulletin Board and the TSX for the periods indicated. These
prices represent inter-dealer quotations without retail markup, markdown, or
commission and may not necessarily represent actual transactions.
OTCBB
TSX
High
Low
High
Low
(U.S.$)
(U.S.$)
(CDN$)
(CDN$)
2009
Second Quarter
$
0.60
$
0.28
$
0.62
$
0.37
First Quarter
$
0.60
$
0.25
$
0.75
$
0.40
2008
Fourth Quarter
$
0.95
$
0.30
$
0.90
$
0.50
Third Quarter
$
0.98
$
0.67
$
1.09
$
0.85
Second Quarter
$
1.01
$
0.80
$
1.00
$
0.80
First Quarter
$
1.02
$
0.51
$
N/A
$
N/A
2007
Fourth Quarter
$
1.05
$
0.45
$
N/A
$
N/A
Third Quarter
$
1.90
$
0.87
$
N/A
$
N/A
Second Quarter
$
1.31
$
0.60
$
N/A
$
N/A
First Quarter
$
1.20
$
0.67
$
N/A
$
N/A
Number of Shareholders
On August 3, 2009, there were approximately 76 holders of
record of our common shares, one of which was Cede & Co., a nominee for
Depository Trust Company and one of which was The Canadian Depository for
Securities Limited, or CDS. All of our common shares held by brokerage firms,
banks and other financial institutions in the United States and Canada as
nominees for beneficial owners are considered to be held of record by Cede &
Co. in respect of brokerage firms, banks and other financial institutions in the
United States, and by CDS in respect of brokerage firms, banks and other
financial institutions located in Canada. Cede & Co. and CDS are each
considered to be one shareholder of record.
Dividend Policy
We have never declared or paid any cash dividends on our common
stock. We currently intend to retain any earnings to support operations and to
finance the growth and development of our business. Therefore, we do not expect
to pay cash dividends in the foreseeable future. Any future determination
relating to our dividend policy will be made at the discretion of our Board of
Directors and will depend on a number of factors, including future earnings,
capital requirements, financial conditions and future prospect and other factors
that the board of directors may deem relevant.
Equity Compensation Plan Information
2006 Stock Option Plan
A majority of our shareholders approved the 2006 Stock Option
Plan at our Annual General Meeting of Stockholders held on August 10, 2006.
Under the 2006 Stock Option Plan, up to 1,600,749 shares of common stock may be
issued upon the exercise of options granted to directors, management, employees
and consultants.
23
In May of 2008, the term of all options granted under the 2006
Stock Option Plan was amended to provide for a term not to exceed five years, in
order to ensure compliance with applicable rules and regulation of the TSX
Venture Exchange.
At the Annual General Meeting of Stockholders on September 8,
2008, our shareholders approved an amendment to the 2006 Stock Option Plan in
order to increase the number of shares available under the plan by 473,251, to
2,074,000.
As of March 4, 2009, 2,027,676 options have been issued,
191,500 options have been exercised, 50,000 were forfeited, 62,500 expired and
1,698,676 options remain outstanding under the 2006 Stock Option Plan.
Equity Compensation Plan Information as of December 31, 2008
Number of securities
Weighted-
Number of securities
to be issued upon
average
remaining available
exercise of
exercise price of
for future issuance
outstanding options
outstanding
under equity
options
compensation plans
(excluding securities
reflected in column (a))
(a)
(b)
(c)
Equity Compensation Plans Approved by
Security Holders
1,698,676
$1.01
183,824
Equity Compensation Plans Not
Approved by Security Holders
--
N/A
--
Total
1,698,676
$1.01
183,824
On September 26, 2006 we granted options to purchase 225,000
shares of common stock to three non-employee directors. These options have an
exercise price of $0.41, vest upon issuance and expire on September 26, 2016.
The expiration date was subsequently amended to September 26, 2011. 75,000 of
those options have been exercised on August 18, 2008, 35,000 have been exercised
on August 19, 2008.
On October 1, 2006 we granted options to purchase up to 69,000
shares of common stock to a consultant. These options have an exercise price of
$0.41, vest upon issuance, and expire on October 1, 2016. The expiration date
was subsequently amended to September 26, 2011.
On November 9, 2006 we granted options to purchase up to
450,000 shares of common stock to the chief financial officer and a management employee. These
options have an exercise price of $0.41, vest upon issuance, and expire on
November 9, 2016. The expiration date was subsequently amended to September 26,
2011.
On November 13, 2006 we granted options to purchase up to
250,000 shares of common stock to a consultant. These options have an exercise
price of $0.41, vest over two years at the rate of 25% every six months, and
expire on November 13, 2016. The expiration date was subsequently amended to
September 26, 2011.
On November 16, 2006 we granted options to purchase up to
100,000 shares of common stock to employees and 25,000 options to a consultant.
These options have an exercise price of $0.41, vest over 2 years at the rate of
25% every six months, and expire on November 16, 2016. The expiration date was
subsequently amended to September 26, 2011.
On August 9, 2007 we granted options to purchase up to 107,500
shares of common stock to four non-employee directors. These options have an
exercise price of $1.15, vest upon issuance, and expire on August 9, 2017. The
expiration date was subsequently amended to August 9, 2012.
On August 9, 2007 we granted options to purchase up to 75,000
shares of common stock to our Vice President of Business Development. These
options have an exercise price of $1.15, vest over 2 years at the rate of 25%
every six months, and expire on August 9, 2017. The expiration date was
subsequently amended to August 9, 2012.
On August 9, 2007 we granted options to purchase up to 75,000
shares of common stock to our chief financial officer. These options have an
exercise price of $1.15, vest over 2 years at the rate of 25% every six months,
and expire on August 9, 2017. The expiration date was subsequently amended to August 9, 2012. As the result of the
termination of the employment agreement the 75,000 shares to purchase common
stock expired un-exercised in November of 2008.
24
On May 22, 2008 we granted options to purchase up to 51,176
shares of common stock to two of our non-employee directors. These options have
an exercise price of $0.85, vest immediately and expire on May 22, 2013.
On May 29, 2008 we granted options to purchase up to 400,000
shares of common stock to Auctus Capital Partners Inc. in consideration for investor relation
services. The option grant was subject to shareholder approval to increase the
number of shares to be issued under the 2006 Stock Option Plan. The shareholders
approved to increase the number of shares by 473,251, to 2,074,000 at the Annual
General Meeting on September 8, 2008. The options granted to Auctus Capital have
an exercise price of $1.00, and vest based on a combination of the achievement
of certain performance conditions and the passage of time. The options expire on
May 29, 2013.
On September 8, 2008 we granted options to purchase up to
75,000 shares of common stock to a non-employee director of the company. These
options have an exercise price of $0.85, vest immediately and expire on
September 8, 2013.
On September 8, 2008 we granted options to purchase up to
100,000 shares of common stock to our chief financial officer. These options
have an exercise price of $0.85, vest over 2 years at the rate of 25% every six
months, and expire on September 8, 2013.
SELLING SECURITY HOLDERS
In accordance with (a) a certain Registration Rights Agreement
dated as of July 13, 2009, between the Company and the Placement Agents, entered
into in connection with the Canadian Private Placement, and (b) certain
Subscription Agreements between the Company and certain investors in connection
with the U.S. Private Placement, we have agreed with the selling stockholders to
register the Common Shares, Warrants, Warrant Shares, Placement Agent Shares,
Placement Agent Options and Placement Agent Option Shares. The selling security
holders purchased the Common Shares and Warrants covering these shares in the
July 2009 Private Placement (See "Description of July 2009 Private Placement of
Special Warrants"). The Warrants have not yet been exercised by the selling
security holders.
Paradigm is a FINRA member broker-dealer. We do not have any arrangement with any of the
Placement Agents for any of them to act as a broker-dealer for the sale of the
shares included herein for the selling stockholders. Paradigm, Bolder  and/or Union may be deemed to
be an underwriter with respect to their respective sales of shares to be offered
by them in this prospectus. Paradigm, Bolder and Union served as the placement
agents in connection with our July 2009 Private Placement. Each of the other
selling security holders has represented to us that it is not a FINRA member nor
an affiliate or associate thereof.
The shares offered by this prospectus may be offered from time
to time by the selling security holders listed in the following table. Each
selling security holder will determine the number of shares to be sold and the
timing of the sales. Our registration of the shares does not necessarily mean
that the selling security holders will sell all or any of the shares. Because
the selling security holders may offer all, some or none of their shares, no
definitive estimate as to the number of shares thereof that will be held by the
selling security holders after such offering can be provided, and the following
table has been prepared on the assumption that all shares of common stock
offered under this prospectus will ultimately be sold.
Name
Common
Shares
Beneficially Owned
Prior to
this
Offering
Common
Shares to
Be
Received
upon the
Exercise of
Special
Warrants
Common
Shares to
Be
Received
upon the
Exercise of
Warrants
Common
Shares to
Be
Received
upon the
Exercise
of
Placement
Agent
Options
(1)
Number of
Additional
Common
Shares to Be
Received
upon a
Registration
Default (2)
Number of
Common
Shares to Be
Received
Upon the
Exercise of
Warrants to
Be Received
Upon a
Registration
Default (2)
Total
Common
Shares
that May
Be
Offered
Hereby
Common
Shares
Beneficially
Owned
Upon
Completion
of This
Offering
Percent
Beneficially
Owned
Upon
Completion
of This
Offering (3)
1225131 Alberta
Ltd.
--
250,000
250,000
--
25,000
25,000
550,000
--
--
4985479 MB
Ltd.
--
28,000
28,000
--
2,800
2,800
61,600
--
--
25
Name
Common
Shares
Beneficially
Owned
Prior to
this
Offering
Common
Shares to
Be
Received
upon the
Exercise of
Special
Warrants
Common
Shares to
Be
Received
upon the
Exercise of
Warrants
Common
Shares to
Be
Received
upon the
Exercise
of
Placement
Agent
Options
(1)
Number of
Additional
Common
Shares to Be
Received
upon a
Registration
Default (2)
Number of
Common
Shares to Be
Received
Upon the
Exercise of
Warrants to
Be Received
Upon a
Registration
Default (2)
Total
Common
Shares
that May
Be
Offered
Hereby
Common
Shares
Beneficially
Owned
Upon
Completion
of This
Offering
Percent
Beneficially
Owned
Upon
Completion
of This
Offering (3)
Acker Finley Asset Management
--
1,565,000
1,565,000
--
156,500
156,500
3,443,000
--
--
Donald Bainbridge
--
125,000
125,000
--
12,500
12,500
275,000
--
--
Banque SCS Alliance
--
500,000
500,000
--
50,000
50,000
1,100,000
--
--
Jeffrey Benison
--
100,000
100,000
--
--
--
220,000
--
--
Julia Berdrodt
--
12,500
12,500
--
1,250
1,250
27,500
--
--
Bertilvic Investments Ltd.
--
100,000
100,000
--
10,000
10,000
220,000
--
--
Julian Bharti
--
62,500
62,500
--
6,250
6,250
137,500
--
--
Bolder Opportunities II LP
--
500,000
500,000
--
50,000
50,000
1,100,000
--
--
Randy Boomhour
--
75,000
75,000
--
7,500
7,500
165,000
--
--
Maurice Boucher
--
100,000
100,000
--
10,000
10,000
220,000
--
--
Brahma Finance (BVI) Ltd.
--
32,000
32,000
--
3,200
3,200
70,400
--
--
C. Channing Buckland
--
400,000
400,000
--
40,000
40,000
880,000
--
--
Bukchuk Holdings Ltd.
--
50,000
50,000
--
5,000
5,000
110,000
--
--
David Burt
--
10,000
10,000
--
1,000
1,000
22,000
--
--
Hugh Cleland Jr.
--
50,000
50,000
--
5,000
5,000
110,000
--
--
Hugh Cleland Sr.
--
125,000
125,000
--
12,500
12,500
275,000
--
--
Cresco Enterprises Ltd.
--
10,000
10,000
--
1,000
1,000
22,000
--
--
Dawn Patrol Investments LLP
--
12,500
12,500
--
1,250
1,250
27,500
--
--
Henry Der
--
25,000
25,000
--
2,500
2,500
55,000
--
--
Peter Dickson
--
100,000
100,000
--
10,000
10,000
220,000
--
--
Double J Creations
--
37,500
37,500
--
3,750
3,750
82,500
--
--
Derrick Dryden
--
130,000
130,000
--
13,000
13,000
286,000
--
--
Jason D'silva
--
40,000
40,000
--
4,000
4,000
88,000
--
--
Stephen Dulmage
--
62,500
62,500
--
6,250
6,250
137,500
--
--
Endeavor Asset Management L.P.
11,429
250,000
250,000
--
--
--
550,000
11,429
*
Leslie Frame
--
50,000
50,000
--
5,000
5,000
110,000
--
--
John & Anne Funk
--
25,000
25,000
--
2,500
2,500
55,000
--
--
26
Name
Common
Shares
Beneficiall
y Owned
Prior to
this
Offering
Common
Shares to
Be
Received
upon the
Exercise of
Special
Warrants
Common
Shares to
Be
Received
upon the
Exercise of
Warrants
Common
Shares to
Be
Received
upon the
Exercise
of
Placement
Agent
Options
(1)
Number of
Additional
Common
Shares to Be
Received
upon a
Registration
Default (2)
Number of
Common
Shares to Be
Received
Upon the
Exercise of
Warrants to
Be Received
Upon a
Registration
Default (2)
Total
Common
Shares
that May
Be
Offered
Hereby
Common
Shares
Beneficially
Owned
Upon
Completion
of This
Offering
Percent
Beneficially
Owned
Upon
Completion
of This
Offering (3)
Garden Gate Auto Group
--
25,000
25,000
--
2,500
2,500
55,000
--
--
Paul Geyer
--
125,000
125,000
--
12,500
12,500
275,000
--
--
Jason Grelowski
--
275,000
275,000
--
27,500
27,500
605,000
--
--
Joseph Groia
--
25,000
25,000
--
2,500
2,500
55,000
--
--
Dr. Essam Hamza
--
25,000
25,000
--
2,500
2,500
55,000
--
--
Haywood Securities Inc.(4)
3,000
--
--
9,000
--
--
12,000
--
--
Haywood Securities Inc. ITF Bolder
      Investment Partners Ltd. (5)
320,780
--
--
641,560
--
--
962,340
--
--
Haywood Securities Inc. ITF Woodstone Capital Inc. (6)
3,000
--
--
9,000
--
--
12,000
--
--
Herschfeld Hog Farm Ltd.
--
12,000
12,000
--
1,200
1,200
26,400
--
--
Sean Hirtle
--
40,000
40,000
--
4,000
4,000
88,000
--
--
Geoff Houlton
--
12,500
12,500
--
1,250
1,250
27,500
--
--
Insight Limited Partnership II
--
100,000
100,000
--
10,000
10,000
220,000
--
--
Traviss Jeana
--
100,000
100,000
--
10,000
10,000
220,000
--
--
Paul Jennings
--
62,500
62,500
--
6,250
6,250
137,500
--
--
Douglas Johnson
--
1,500,000
1,500,000
--
150,000
150,000
3,300,000
--
--
Rusi Kavarana
--
10,000
10,000
--
1,000
1,000
22,000
--
--
Anthony Ker
--
100,000
100,000
--
10,000
10,000
220,000
--
--
Johannes Kingma
--
62,500
62,500
--
6,250
6,250
137,500
--
--
Scott Koyich
--
75,000
75,000
--
7,500
7,500
165,000
--
--
Dan Kramer
--
87,500
87,500
--
8,750
8,750
192,500
--
--
Yas Lee
--
12,000
12,000
--
1,200
1,200
26,400
--
--
Bill Mah
--
7,500
7,500
--
750
750
16,500
--
--
Bernice Mayert
--
40,000
40,000
--
4,000
4,000
88,000
--
--
Wayne McCannan
--
10,000
10,000
--
1,000
1,000
22,000
--
--
Dennis McCrea
--
40,000
40,000
--
4,000
4,000
88,000
--
--
Shane Meyers
--
125,000
125,000
--
12,500
12,500
275,000
--
--
Timothy Mills
--
150,000
150,000
--
15,000
15,000
330,000
--
--
Rod Muir
--
15,000
15,000
--
1,500
1,500
33,000
--
--
Renita Narayan
--
12,500
12,500
--
1,250
1,250
27,500
--
--
Nextel Investment Properties
--
150,000
150,000
--
15,000
15,000
330,000
--
--
Leo Nicolaas
--
10,000
10,000
--
1,000
1,000
22,000
--
--
27
Name
Common
Shares
Beneficially
Owned
Prior to
this
Offering
Common
Shares to
Be
Received
upon the
Exercise of
Special
Warrants
Common
Shares to
Be
Received
upon the
Exercise of
Warrants
Common
Shares to
Be
Received
upon the
Exercise
of
Placement
Agent
Options
(1)
Number of
Additional
Common
Shares to Be
Received
upon a
Registration
Default (2)
Number of
Common
Shares to Be
Received
Upon the
Exercise of
Warrants to
Be Received
Upon a
Registration
Default (2)
Total
Common
Shares
that May
Be
Offered
Hereby
Common
Shares
Beneficially
Owned
Upon
Completion
of This
Offering
Percent
Beneficially
Owned
Upon
Completion
of This
Offering (3)
Paradigm Capital Inc. (7)
646,160
--
--
12,000
--
--
18,000
640,160
2.86%
Ermanno Pascotto
--
100,000
100,000
--
10,000
10,000
220,000
--
--
David Purcell
--
120,000
120,000
--
12,000
12,000
264,000
--
--
Research Capital Corp.
--
--
--
15,000
--
--
15,000
--
--
RWG Holdings Ltd. (8)
--
25,000
25,000
--
2,500
2,500
55,000
--
--
Kersi Sarkaul
--
7,500
7,500
--
750
750
16,500
--
--
Selective Asset Management as agent for
      Northwest Specialty Innovations Fund
--
625,000
625,000
--
62,500
62,500
1,375,000
--
--
Stephen Silman
--
12,500
12,500
--
1,250
1,250
27,500
--
--
Sandina Sklavenitis
--
50,000
50,000
--
5,000
5,000
110,000
--
--
Terry Sklavenitis
--
25,000
25,000
--
2,500
2,500
55,000
--
--
Lynne Southward
--
70,000
70,000
--
7,000
7,000
154,000
--
--
Scott Southward
--
37,500
37,500
--
3,750
3,750
82,500
--
--
Michael Sweeney
--
12,500
12,500
--
1,250
1,250
27,500
--
--
TAB Mills
--
150,000
150,000
--
15,000
15,000
330,000
--
--
Union Securities Ltd. (9)
86,260
--
--
151,520
--
--
237,780
--
--
David Wallster
--
125,000
125,000
--
12,500
12,500
275,000
--
--
Suzanne Wallster
--
125,000
125,000
--
12,500
12,500
275,000
--
--
Phil Walsh
--
37,500
37,500
--
3,750
3,750
82,500
--
--
Chris Wardle
--
400,000
400,000
--
40,000
40,000
880,000
--
--
David Wardle Jr.
--
100,000
100,000
--
10,000
10,000
220,000
--
--
David Brian Wardle Sr.
--
250,000
250,000
--
25,000
25,000
550,000
--
--
Marianne Wardle
--
225,000
225,000
--
22,500
22,500
495,000
--
--
David and Lena Wiebe
--
150,000
150,000
--
15,000
15,000
330,000
--
--
WKW I Limited Partnership
--
100,000
100,000
--
10,000
10,000
220,000
--
--
Arthur Wong
--
32,000
32,000
--
3,200
3,200
70,400
--
--
Erroll Wong
--
10,000
10,000
--
1,000
1,000
22,000
--
--
28
Name
Common
Shares
Beneficially
Owned
Prior to
this
Offering
Common
Shares to
Be
Received
upon the
Exercise of
Special
Warrants
Common
Shares to
Be
Received
upon the
Exercise of
Warrants
Common
Shares to
Be
Received
upon the
Exercise
of
Placement
Agent
Options
(1)
Number of
Additional
Common
Shares to Be
Received
upon a
Registration
Default (2)
Number of
Common
Shares to Be
Received
Upon the
Exercise of
Warrants to
Be Received
Upon a
Registration
Default (2)
Total
Common
Shares
that May
Be
Offered
Hereby
Common
Shares
Beneficially
Owned
Upon
Completion
of This
Offering
Percent
Beneficially
Owned
Upon
Completion
of This
Offering (3)
TOTALS
1,070,629
10,826,000
10,826,000
838,080
1,047,600
1,047,600
25,004,320
651,589
2.86%
* Less than 1%.
(1) Placement Agent Options are options to acquire Common
Shares at $0.80 per unit, subject to adjustment, until July 13, 2012.
(2) Pursuant to the terms
of a certain Registration Rights Agreement dated as of July 13, 2009, between
the Company and the Placement Agents, entered into in connection with the
Canadian Private Placement if the Common Shares and Warrants issuable upon
exercise of the Special Warrants are not qualified by resale by an effective
registration statement on or before November 14, 2009 with respect to Special
Warrants issued in connection with the Canadian Private Placement each
unexercised Special Warrant will be deemed exercised for 1.1 Common Shares and
1.1 Warrants.
(3) Assumes that all registered securities will be sold. The
percentages set forth in this column are based on 22,350,113 shares of common
stock outstanding as of August 3, 2009. The number and percentage of shares
beneficially owned is determined in accordance with Rule 13d-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the information is
not necessarily indicative of beneficial ownership for any other purpose. Under
such rule, beneficial ownership includes any shares as to which the selling
security holder has sole or shared voting power or investment power and also any
shares, which the selling security holder has the right to acquire within 60
days.
(4) Includes 3,000 Placement Agent Shares issued on July 13,
2009, and 9,000 common shares underlying Placement Agent Options, issued as
compensation for services as a placement agent in connection with the Canadian
Private Placement. We do not have any arrangement with Haywood Securities Inc.
("Haywood") to act as a broker-dealer for the sale of the shares included herein
for the selling stockholders. Haywood may be deemed to be an underwriter with
respect to its sales of shares to be offered by it in this prospectus.
(5) Includes 320,780 Placement Agent Shares issued on July
13, 2009, and 641,560 common shares underlying Placement Agent Options, issued
as compensation for services as a placement agent in connection with the
Canadian Private Placement. We do not have any arrangement with Bolder to act as
a broker-dealer for the sale of the shares included herein for the selling
stockholders. Bolder may be deemed to be an underwriter with respect to its
sales of shares to be offered by it in this prospectus.
(6) Includes 3,000 Placement Agent Shares issued on July 13,
2009, and 9,000 common shares underlying Placement Agent Options, issued as
compensation for services as a placement agent in connection with the Canadian
Private Placement. We do not have any arrangement with Woodstone Capital Inc. ("Woodstone")
to act as a broker-dealer for the sale of the shares included herein for the
selling stockholders. Woodstone may be deemed to be an underwriter with respect
to its sales of shares to be offered by it in this prospectus.
(7) Includes 6,000 Placement Agent Shares issued on July 13,
2009, and 12,000 common shares underlying Placement Agent Options, issued as
compensation for services as Placement Agent in connection with the Canadian
Private Placement. Also includes the following securities issuable upon exercise
of options granted to Paradigm as placement agent in the Company's March 2008
private placement of units (the "March 2008 Private Placement"): 320,080 shares
of common stock and 320,080 shares of common stock underlying warrants with an
exercise price of $1.02, subject to adjustment, expiring March 27, 2010. In
accordance with rule 13d-3 under the Securities Exchange Act of 1934, as
amended, Tony Pullen may be deemed a control person of the shares owned by this
selling security holder. Paradigm is a FINRA member broker-dealer. We do not
have any arrangement with Paradigm for it to act as a broker-dealer for the sale
of the shares included herein for the selling stockholders. Paradigm may be
deemed to be an underwriter with respect to its respective sales of shares to be
offered by them in this prospectus. Paradigm served as a placement agent in
connection with our Canadian Private Placement and the sole placement agent in
connection with our March 2008 Private Placement.
(8) Includes 15,000 Placement Agent Common Shares to be
issued upon exercise of Placement Agent Options issued on July 13, 2009, as
compensation for services as a placement agent in connection with the Canadian
Private Placement. We do not have any arrangement with Research Capital Corp.
("Research") to act as a broker-dealer for the sale of the shares included
herein for the selling stockholders. Research may be deemed to be an underwriter
with respect to its sales of shares to be offered by it in this prospectus.
(9) Includes 86,260 Placement Agent Shares issued on July 13,
2009, and 151,520 common shares underlying Placement Agent Options, issued as
compensation for services as a placement agent in connection with the Canadian
Private Placement. We do not have any arrangement with Union to act as a
broker-dealer for the sale of the shares included herein for the selling
stockholders. Union may be deemed to be an underwriter with respect to its sales
of shares to be offered by it in this prospectus.
29
Description of July 2009 Private Placement of Special
Warrants
Canadian Private Placement
On July 13, 2009, we
completed an offering to investors of 10,476,000 special warrants (the "Special
Warrants") at a price of CDN$0.40 per Special Warrant for gross proceeds of
approximately CDN$4,200,000 (the "Gross Proceeds") and net proceeds of
approximately CDN$3,780,050 ("the "Canadian Private Placement"). Each Special
Warrant may be exercised at any time at the holder's option and will
automatically exercise, in each case for no additional consideration, on the
earliest to occur of (a) the fifth business day after the later of (i) the date
a receipt is issued by the relevant securities regulatory authorities in Canada
for the final prospectus qualifying the Common Shares and the Warrants to be
issued upon the exercise of the Special Warrants, and (ii) the date this
Registration Statement is declared effective by the U.S. Securities and Exchange
Commission and (b) November 14, 2009. Each Special Warrant entitles its holder
to receive, upon exercise or deemed exercise thereof, one Common Share and one
Warrant, which together were referred to in the subscription agreements as a
"Unit". Each Warrant will entitle the holder to purchase one Common Share (the
"Warrant Shares") at a price of U.S.$0.80 per share, subject to adjustment,
until July 13, 2012. The exercise price of the Warrants is subject to adjustment
for certain events, including dividends, distributions or split of the Company's
common stock, subsequent equity sales or rights offerings by the Company, or in
the event of the Company's consolidation, merger or reorganization.
Paradigm Capital Inc.
("Paradigm"), Bolder Investment Partners Ltd. ("Bolder") and Union Securities
Ltd. ("Union") (collectively, the "Placement Agents") acted as placement agents
for the Canadian Private Placement on a best efforts basis. The Placement
Agents' compensation consists of a cash commission equal to 8% of the Gross
Proceeds, 419,040 Common Shares (the "Placement Agent Shares") and an option to
acquire 838,080 Common Shares at U.S.$0.80 per unit, subject to adjustment,
until July 13, 2012 (the "Placement Agent Options"). (The shares of common stock
issuable upon exercise of the Placement Agent Options shall be referred to as
the "Placement Agent Option Shares".) The exercise price of the Placement Agent
Options is subject to adjustment for certain events, including dividends,
distributions or split of the Company's common stock, subsequent equity sales or
rights offerings by the Company, or in the event of the Company's consolidation,
merger or reorganization.
In connection with the Canadian Private Placement, the
Company entered into a registration rights agreement (the "Registration Rights
Agreement") providing for the filing of a registration statement (the
"Registration Statement") with the U.S. Securities and Exchange Commission
registering the Common Shares, the Warrants, the Warrant Shares, the Placement
Agent Shares, the Placement Agent Options and the Placement Agent Option Shares.
The Company is obligated to file the Registration Statement no later than 30
days from the date of closing and to use its commercially reasonable efforts to
cause the Registration Statement to be declared effective no later than 120 days
after the date of closing.
If, on the 5
th
business day following the later
of:, (a) a receipt being issued by the relevant securities regulatory
authorities in Canada for the final prospectus qualifying the Common Shares and
the Warrants to be issued upon the exercise of the Special Warrants, and (b)
this Registration Statement being declared effective by the U.S. Securities and
Exchange Commission; has not occurred on or before 120 days following the
closing date, than each unexercised Special Warrant will be deemed exercised for
1.1 Common Shares and 1.1 Warrants.
In connection with the Canadian Private Placement, each of
the Company's officers and directors have entered into lock-up agreements in
favor of the Placement Agents pursuant to which they have agreed not to sell or
transfer their shares for a period of 90 days following the fifth business day
after the later of (a) the date the Company receives a receipt for a prospectus
qualifying the Common Shares and the Warrants issuable upon exercise of the
Special Warrants, and (b) the date this Registration Statement is declared
effective by the U.S. Securities and Exchange Commission, unless they first
obtain the prior written consent of Paradigm or there occurs a take-over bid or
similar transaction involving a change of control of the Company.
The issuances under the Canadian Private Placement were
exempt from registration under Section 4(2) of the Securities Act and/or
Regulation S, promulgated pursuant to the Securities Act. None of the purchasers
under the Canadian Private Placement are U.S. persons, no sales efforts were
conducted in the U.S., and the Common Shares, the Warrants, the Warrant Shares,
the Placement Agent Shares, the Placement Agent Options and the Placement Agent
Option Shares issued in connection with the Canadian Private Placement contain,
or will contain upon issuance, a legend restricting the sale of such securities
in accordance with Regulation S and pursuant to applicable Canadian securities
laws.
U.S. Private Placement
On July 22, 2009, concurrently with the Canadian Private
Placement, the Company completed an offering of 350,000 units to investors in
the United States (the "U.S. Private Placement" and together with the Canadian
Private Placement, the "July 2009 Private Placement"). No placement agent was
used for the U.S. Private Placement and no commissions were paid in connection
therewith. As in the Canadian Private Placement, each unit consists of one
Common Share and one Warrant. Each Warrant entitles the holder thereof to
purchase one Common Share at an initial exercise price of US$0.80 per common
share and expires on July 22, 2012. The exercise price of the Warrants is
subject to adjustment for certain events, including without limitation,
dividends, distributions or split of the Company's common stock, subsequent
rights offerings by the Company, or in the event of the Company's consolidation,
merger or reorganization.
30
The issuances under the U.S. Private Placement were exempt from
registration under Section 4(2) of the Securities Act. The Common Shares, the
Warrants and the Warrant Shares issued in connection with the U.S. Private
Placement are subject to statutory resale restrictions under the Securities Act
and contain, or will contain upon issuance, a legend restricting the sale of
such securities in accordance with applicable exemptions from the registration
requirements of the Securities Act.
Additional Disclosures
Set forth below is certain additional information regarding the
Special Warrants.
Total Dollar Value of Securities
The total dollar value of the Common Shares, Warrant Shares and
Placement Agent Option Shares that are being registered for resale (using the
total number of shares that we have registered for resale and the market price
per share on the date of sale) are as follows:
Common Shares, Warrant Shares and
Placement
      Agent Shares
Market Price at August 10, 2009
(1)
Dollar Value of Underlying
Securities
25,074,320
$0.64
$16,047,565
(1) Fair market value based on the average of the high and low
prices reported on the Over the Counter Bulletin Board on August 10, 2009.
Cash Payments in Connection with the Offering
Placement agent and other fees
Payment
Reference
Date
Amount
Paradigm Capital, Inc.
Placement Agent Fee
July 13, 2009
$ 4,800
Bolder Investment Partners Ltd. ("Bolder") a
Placement Agent Fee
July 13, 2009
$ 256,649
Union Securities Ltd.
Placement Agent Fee
July 13, 2009
$ 73,900.
Cassels Brock & Blackwell LLP, Toronto
Legal and Due Diligence Fee of Investors
July 13, 2009
$ 75,000
Total
$ 410,349
Existing Short Positions by Selling Security Holders
Based upon information provided by the selling security
holders, to the best of management's knowledge, the Company is not aware of any
of the selling security holders having an existing short position in the
Company's common stock.
Relationships Between the Company and Selling Security
Holders and Affiliates
The Company hereby confirms that a description of the
relationships and arrangements between and among those parties already is
presented in the prospectus and that all agreements between and/or among those
parties are included as exhibits to the registration statement by incorporation
by reference.
31
Directors and Executive Officers
Name
Age
Position
Position since
Horst G. Zerbe
62
Chairman of the Board,
      President and Chief Executive Officer
April 2006
Paul A. Simmons
47
Chief Financial Officer
September 2008
J. Bernard Boudreau
(1)
(2)
65
Director
June 2006
Ian Troup
(1)
(2)
67
Director
May 2008
Bernd Melchers
(1)
58
Director
April 2009
Ingrid Zerbe
55
Secretary, Director Finance and Administration
April 2006
(1) Audit Committee member (2) Compensation Committee
member
All directors hold office until the next annual meeting of
stockholders and until their successors have been duly elected and qualified.
There are no agreements with respect to the election of directors. Officers are
appointed annually by the board of directors and each executive officer serves
at the discretion of the board.
Horst G. Zerbe, Ph.D.
Dr. Zerbe has more than 20 years experience in the
pharmaceutical industry. He has been the President, Chief Executive Officer, and
Chairman of IntelGenx Technologies Corp. since April 2006. In addition, Dr.
Zerbe has served as the President, Chief Executive Officer and Director of
IntelGenx Corp., our Canadian Subsidiary, since 2005. From 1998 to 2005, he
served as the president of Smartrix Technologies Inc. in Montreal; prior
thereto, from 1994 to 1998, he was Vice President of R&D at LTS Lohmann
Therapy Systems in West Caldwell, NJ. He has published numerous scientific
papers in recognized journals and holds over 30 patents.
Paul A. Simmons
Mr. Simmons was appointed as our Chief Financial Officer in
September 2008. From 2003-2008, Mr. Simmons was employed by the CLAAS Group, a
leading manufacturer of agricultural harvesting machinery. Mr. Simmons was
initially based at Group HQ in Germany as Head of Corporate Controlling. In
August 2005, he was transferred to the Baler Manufacturing subsidiary (Usines
CLAAS France). In September 2006, Paul was transferred to French subsidiary
Renault Agriculture to restructure and integrate the newly acquired Tractor
Manufacturing Division into the CLAAS Group.
Mr. Simmons' international finance credentials include an
Association of Financial Controllers and Administrators (AFCA) certification,
and a designation with the Association of Accounting Technicians (MAAT). He has
expertise in both U.S. Generally Accepted Accounting Principles (GAAP) and
International Financial Reporting Standards (IFRS).
J. Bernard Boudreau
Mr. Boudreau has been a director of IntelGenx since June 2006.
Since 2005, Mr. Boudreau has served as the Vice-president of Pharmeng
International Inc., a company listed on the Toronto Stock Exchange. From 2001 to
July 2005, he was President and CEO of Radcliffe Consulting and Investment
Limited, a private consulting firm located in Halifax, N.S.. Mr. Boudreau has
also served on the Board of Directors of a number of public and private
companies, including Export Development Canada.
Mr. Boudreau has worked as a lawyer and as a public official in
Canada. His litigation experience includes appearances at every level of the
judicial system in Nova Scotia. He was appointed as Queen's Counsel in 1985. Mr.
Boudreau was first elected to the provincial legislature of Nova Scotia in 1988.
He served as Chair of the Public Accounts Committee and opposition critic for
Finance and Economic Development. In 1993 he was re-elected as a member of
government and held responsibilities as Minister of Finance, Minister of Health,
Chair of the Cabinet Priorities and Planning Committee. Mr. Boudreau served as
Government Leader in the Senate of Canada and Member of the federal Cabinet
between 1999 and 2001.
Ian Troup
Mr. Troup has been a director of IntelGenx Technologies Corp.
since May 2008. Since April 2008 Mr. Troup has been a Director of Vital Medix,
an early stage drug development company. In July 2007 he was appointed to the
Board of Medisyn Technologies Inc., a privately held "in silica" drug discovery and development company. From
September 1995 until December 2003, Mr. Troup was President and COO of
Upsher-Smith Laboratories, a privately held generic company.
32
Born and educated in Scotland, Mr. Troup has worked in the
pharmaceutical industry for over 35 years. Originally an industrial chemist, he
has served in roles in the sales and marketing area for several leading
companies. As President, he led the UK wing of Schwarz Pharma for 7 years before
serving as President in Schwarz's subsidiary in the USA for an additional 9
years. Following this he served as President/COO of Upsher-Smith Laboratories.
His experience includes new product development and launch, M&A work and
strategic planning.
Bernd Melchers
Mr. Melchers has been a director of IntelGenx Technologies
Corp. since April 2009. Mr. Melchers is a 30-year veteran of the pharmaceutical
industry with extensive hands-on international experience in corporate financial
management. He also brings a wealth of international team management skills and
leadership experience. From January 2001 until December 2004 Mr. Melchers was
Chief Financial Officer at 3M Dyneon GmbH & Co. KG, Germany. Prior to this
he was, from July 1995 to December 2000, Controller at the European Business
Center of 3M Medical Markets Europe in Belgium.Mr. Melchers retired from his
position at 3M Dyneon Group in 2004.
Ingrid Zerbe
Mrs. Zerbe is our Corporate Secretary, Director of Finance and
Administration and is a full time employee of IntelGenx . Mrs. Zerbe is the
founder of IntelGenx Corp., our Canadian Subsidiary. She served as the president
of IntelGenx Corp, since its incorporation in June 2003 until December, 2005.
She has been a Director of the subsidiary since its incorporation in June, 2003
and a Director of the parent company from April 2006 until August 2006. Prior to
founding IntelGenx, she worked in the travel industry. She holds a bachelor
degree in economics from the business school in Bottrop, Germany, and a bachelor
degree in social sciences from the University of Dortmund, Germany.
Key Personnel and Consultants
James Wittenberg, R.Ph, MS
Mr. Wittenberg serves as IntelGenx's Vice President Business
Development since August, 2007. He has accumulated over 20 years of experience
in the pharmaceutical industry in market research and most recently as Director
of Business Development at Schwarz Pharma.
Nadine Paiement, MSc
Ms. Paiement serves as our Director of Research &
Development. She joined IntelGenx in 2006. Ms. Paiement holds a M.Sc. degree in
Polymer Chemistry from Sherbrooke University, and is co-inventor of IntelGenx's
Tri-Layer technology. Prior to joining IntelGenx, she worked for five years as a
formulation scientist at Smartrix Technologies, Inc.
CORPORATE GOVERNANCE
The Board of Directors Meetings of the Board of Directors
The Company's Board of Directors held four meetings during our
2008 Fiscal Year.
Compensation of the Board of Directors
Directors are reimbursed for their out-of-pocket expenses
incurred in attending meetings of the Board of Directors. As described below in
"Director Compensation", during our 2008 Fiscal Year, our non-employee directors
were granted options to purchase an aggregate number of 126,176 shares of our
common stock. Since November of 2008 our directors receive cash compensation of
CDN $500 for attending board meeting in person and CDN$100 for participating in
board meetings via teleconference. Effective as at the third quarter of 2009 the
board of directors resolved, that the non-employee directors of the board will
receive an annual stipend of C$12,000, paid in quarterly installments.
Furthermore an attendance fee of CDN$1,000 will be paid per board meeting. The
chairmen of the board committees are entitled to receive an additional C$500 and
the members of the committees will receive an additional C$250 for attending the
committee meetings.
33
Committees of the Board of Directors
The Board of Directors has two standing committees: the Audit
Committee and the Compensation Committee.
Audit Committee
.
The Audit Committee is
currently composed of J. Bernard Boudreau, Ian Troup and Bernd Melcher. The
Audit Committee held four meetings during our 2008 Fiscal Year. Joel Cohen had
served on the Audit Committee until his resignation from the board of directors
in June 2009.
Our Audit Committee assists our board of directors in
fulfilling its responsibilities for oversight and supervision of financial and
accounting matters. The chairman of the Audit Committee is J. Bernard Boudreau.
Our Audit Committee's responsibilities include, among others (i) recommending to
the board of directors the engagement of the external auditor and the terms of
the external auditor's engagement; (ii) overseeing the work of the external
auditor, including dispute resolution between management and the external
auditor, if required; (iii) pre-approving all non- audit service to be provided
to us by our external auditor; (iv) reviewing our financial statements,
management's discussion and analysis and annual and interim earnings press
releases before this information is publicly disclosed; (v) assessing the
adequacy of procedures for our public disclosure of financial information; (vi)
establishing procedures to deal with complaints received by us relating to our
accounting and auditing matters; and (vii) reviewing our hiring policies
regarding employees of our external auditor or former auditor. We have adopted,
along with our Audit Committee, a written charter of the Audit Committee setting
out the mandate and responsibilities of the Audit Committee which provides that
the Audit Committee convene no less than four times per year.
Accordingly, the Audit Committee discusses with RSM Richter,
LLP, our auditors, our audited financial statements, including, among other
things the quality of our accounting principles, the methodologies and
accounting principles applied to significant transactions, the underlying
processes and estimates used by our management in our financial statements and
the basis for the auditor's conclusions regarding the reasonableness of those
estimates, in addition to the auditor's independence.
Audit Committee Financial Expert.
Audit Committee
Financial Expert.
Joel Cohen served as our Audit Committee financial expert
until his resignation in June of 2009. Mr. Cohen was not an "independent
director", as defined in the Nasdaq Stock Market, Inc. Marketplace Rules. Since
Mr. Cohen's resignation, Mr. Bernd Melchers serves as the Financial Expert of the Audit
Committee. Mr. Melchers is an 'independent director' as defined in the Nasdaq
Stock Market, Inc. Marketplace Rules.
Compensation Committee
.
The Compensation
Committee of the Board of Directors currently consists of J. Bernard Boudreau
and Ian Troup. The Compensation Committee held its formal annual meeting in
September 2008 during the 2008 Fiscal Year. David Coffin-Beach served on the
Compensation Committee until his resignation from the board of directors March
17, 2009. The Compensation Committee held its formal annual meeting in September
2008 during the 2008 Fiscal Year.
Our Compensation Committee reviews and makes recommendations to
our board of directors concerning the compensation of our executive officers and
key employees which include the review of our executive compensation and other
human resource policies, the review and administration of any bonuses and stock
options and major changes to our benefit plans and the review of and
recommendations regarding the performance of the Chief Executive Officer and the
Chief Financial Officer of the Company. Our Compensation Committee is comprised
of non-management members of our board of directors and is required to convene
at least annually. Until his resignation in March of 2009 Mr. Coffin-Beach was
the chairman of our compensation committee. Following his resignation, Mr. Ian
Troup filled the position as chairman of the committee.
Compensation Committee Interlocks and Insider
Participation.
As stated above, the Compensation Committee consists of J.
Bernard Boudreau and Ian Troup. There are no interlocking relationships, as
described by the Securities and Exchange Commission, between the Compensation
Committee members.
Executive Compensation
The key objectives of the Company's executive compensation
policies are to attract and retain key executives who are important to the
long-term success of the Company and to provide incentives for these executives
to achieve high levels of job performance and enhancement of shareholder value.
The Company seeks to achieve these objectives by paying its executives a
competitive level of base compensation for companies of similar size and
industry and by providing its executives an opportunity for further reward for
outstanding performance in both the short term and the long term.
Executive Officer Compensation.
The Company's executive
officer compensation program is comprised of three elements: base salary, annual
cash bonus and long-term incentive compensation in the form of stock option
grants.
34
Salary
. The Compensation
Committee and the Board of Directors will review base salaries for the Company's
executive officers, taking into account individual experience, job
responsibility and individual performance during the prior year. These factors
are not assigned a specific weight in establishing individual base salaries. The
Compensation Committee will also consider the Company's executive officers'
salaries relative to salary information for executives in similar industries and
similarly sized companies.
Cash Bonuses
. The purpose
of the cash bonus component of the compensation program is to provide a direct
financial incentive in the form of cash bonuses to executives.
Stock Options
. Stock
options are the primary vehicle for rewarding long-term achievement of Company
goals. The objectives of the program are to align employee and shareholder
long-term interests by creating a strong and direct link between compensation
and increases in share value. Under the Company's Stock Option Plan, the Board
of Directors or the Compensation Committee may authorize the grant of options to
purchase common stock of the Company to key employees of the Company. The
options generally vest in increments over a period of years established at the
time of grant except for the options granted to the non-employees directors
which vest immediately.
Code of Ethics
We have adopted a Code of Business Conduct and Ethics that
applies to our directors and officers, including our principal executive
officer, principal financial officer and principal accounting officer. The Code
of Business Conduct and Ethics is posted on our website at
http://www.intelgenx.com
.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth
certain information concerning the beneficial ownership of our shares of common
stock by our directors and executive officers, and by each beneficial owner of
five percent (5%) or more of our outstanding common stock. Based on information
available to us, all persons named in the table have sole voting and investment
power with respect to all shares of common stock beneficially owned by them,
unless otherwise indicated. Beneficial ownership is determined in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934, as amended. In
computing the number of shares beneficially owned by a person or a group and the
percentage ownership of that person or group, shares of our common stock subject
to options or warrants currently exercisable or exercisable within 60 days after
the date of this prospectus are deemed outstanding, but are not deemed
outstanding for the purpose of computing the percentage of ownership of any
other person. Applicable percentage ownership is based upon 22,350,113 shares of
common stock outstanding as of August 3, 2009. Unless otherwise indicated, the
address of each of the named persons is care of IntelGenx Technologies Corp.,
6425 Abrams, Ville St-Laurent, Quebec, H4S 1X9.
Name and Address
Amount and Nature of
Percent of
Of Owner
Beneficial Ownership
Class
Horst G. Zerbe
(1)
4,934,643.5
(1)
22.1%
Ingrid Zerbe
(2)
5,956,356.5
(2)
26.6%
Joel Cohen
(3)
580,000
(3)
2.6%
Bernard Boudreau
(4)
133,088
(4)
*
Ian Troup
(5)
75,000
(5)
*
Paul A.
      Simmons
(6)
50,000
(6)
*
All directors and officers as a group (6 persons)
(11)
11,729,088
52.5%
AGF Canadian Small
      Cap Fund
TD Bank Tower, 31
st
Floor
Toronto ON M5K 1E9
2,082,915
(7)
9.99%
Northern Rivers Capital Management Inc.
Royal Bank Plaza
North Tower, Suite 2000
200 Bay Street, P.O.
      Box 66
Toronto ON M5J 2J2
2,082,915
(8)
9.99%
* Less than 1%.
(1) In connection with the acquisition of IntelGenx in 2006,
Horst Zerbe became our President, Chief Executive Officer and Director and
acquired 4,709,643.5 exchangeable shares of our Canadian holding corporation
6544631Canada Inc., a Canadian special purpose corporation which wholly owns
IntelGenx Corp. (the "Exchangeable Shares"). The 4,709,643.5 Exchangeable Shares
are exchangeable, on a one for one basis, into shares of common stock of IntelGenx
Technologies Corp. at Horst Zerbe's discretion. Prior to exchanging the
Exchangeable Shares for shares of common stock, Horst Zerbe has the right to
vote 4,709,643.5 shares of common stock which are currently held in trust on
behalf of Horst Zerbe. The 4,709,643.5 shares of common stock have not been
registered for resale at this time. In addition to the Exchangeable Shares,
Horst Zerbe's beneficial ownership includes 225,000 shares of common stock
underlying options granted November 9, 2006, which are currently exercisable.
The options have an exercise price of $0.41. Horst Zerbe and Ingrid Zerbe are
husband and wife.
35
(2) In connection with the acquisition of IntelGenx in 2006,
Ingrid Zerbe became our Secretary and our director of Finance and Administration
and acquired 4,709,643.5 Exchangeable Shares. In June of 2009 Ingrid Zerbe
acquired 1,021,713 Exchangeable Shares from Joel Cohen in a private transaction.
The 5,731,356.5 Exchangeable Shares are exchangeable, on a one for one basis,
into shares of common stock of IntelGenx Technologies Corp. at Ingrid Zerbe's
discretion. Prior to exchanging the Exchangeable Shares, Ingrid Zerbe has the
right to vote 5,731,356.5 shares of common stock which are currently held in
trust on behalf of Ingrid Zerbe. The 5,731,356.5 shares of common stock have not
been registered for resale at this time. In addition to the Exchangeable Shares,
Ingrid Zerbe's beneficial ownership includes 225,000 shares of common stock
underlying options granted November 9, 2006, which are currently exercisable.
The options have an exercise price of $0.41. Horst Zerbe and Ingrid Zerbe are
husband and wife.
(3) In connection with the acquisition of IntelGenx in 2006,
Joel Cohen became a Director and acquired 1,571,713 Exchangeable Shares. In June
of 2009 Joel Cohen disposed of 1,021,713 Exchangeable Shares. He also exchanged
of 220,000 Exchangeable Shares into Common Shares and in July of 2009 he
disposed the 220,000 common shares. The remaining 350,000 Exchangeable Shares
are exchangeable, on a one for one basis, into shares of common stock of
IntelGenx Technologies Corp. at Joel Cohen's discretion. Prior to exchanging the
Exchangeable Shares for shares of common stock, Joel Cohen has the right to vote
350,000 shares of common stock which are currently held in trust on behalf of
Joel Cohen. The 350,000 shares of common stock have not been registered for
resale at this time. In addition to the Exchangeable Shares, Mr. Cohen's
beneficial ownership includes 250,000 exercisable options to purchase common
stock at an exercise price of $0.41 granted on November 13, 2006 and 25,000
exercisable options to purchase common stock at an exercise price of $1.15,
granted on August 9, 2007.
Mr. Cohen resigned from the board of directors on June 30,
2009.
(4) Mr. Boudreau's beneficial ownership consists of 75,000
exercisable options to purchase common stock at an exercise price of $0.70
(adjusted from $0.41 in May 2008), granted in October 2006, 32,500 exercisable
options to purchase common stock at an exercise price of $1.15, granted on
August 9, 2007 and 25,588 options to purchase common stock at an exercise price
of $0.85. On November, 2008 Mr. Boudreau exercised 35,000 options at an exercise
price of $0.41 in exchange for the same number of shares of common stock.
(5) Mr. Troup's beneficial ownership consists of 75,000
exercisable options to purchase common stock at an exercise price of $0.85,
granted in September of 2008.
(6) Mr. Simmon's beneficial ownership consists of 100,000
options to purchase common stock at an exercise price of $0.85, granted in
September of 2008. The Options vest over two years, 25% every six months, 50,000
of which are exercisable within 60 days of this 10K filing.
(7) AGF is the beneficial owner of an aggregate of 1,143,000
shares of common stock and 1,143,000 shares of common stock underlying two-year
warrants exercisable at $1.02, subject to adjustment. However, AGF has
contractually agreed to restrict its ability to exercise the warrants and
receive shares of our common stock such that the number of shares of common
stock held by them in the aggregate and their affiliates after such exercise
does not exceed 9.99% of the then issued and outstanding shares of common stock
as determined in accordance with Section 13(d) of the Exchange Act. Accordingly,
this column represents the aggregate maximum number and percentage of shares
that AGF can own at one time due to the 9.99% limitation.
(8) Northern Rivers is the beneficial owner of an aggregate of
1,429,000 shares of common stock and 1,429,000 shares of common stock underlying
two-year warrants exercisable at $1.02, subject to adjustment. However, Northern
Rivers has contractually agreed to restrict its ability to exercise the warrants
and receive shares of our common stock such that the number of shares of common
stock held by them in the aggregate and their affiliates after such exercise
does not exceed 9.99% of the then issued and outstanding shares of common stock
as determined in accordance with Section 13(d) of the Exchange Act. Accordingly,
this columns represents the aggregate maximum number and percentage of shares
that Northern Rivers can own at one time due to the 9.99% limitation.
36
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, or
earned by, our Principal Executive Officer, and our two other most highly
compensated executive officers for the years indicated.
Name and
principal
position
(a)
Year
(b)
Salary ($)
(c)
Option
Awards
($)
(f)
All Other
Compensation
($)
(i)
Total ($)
(j)
Horst Zerbe,
President and CEO
2008
2007
178,427
176,536
Nil
Nil
Nil
Nil
178,427
176,536
Paul A. Simmons
CFO
(1)
2008
2007
45,738
N/A
Nil
16,917
(2)
62,655
Gino Di Iorio,
CFO
(3)
2008
2007
78,921
46,235
12,731
(4)
Nil
Nil
Nil
91,652
46,235
(1) Mr. Paul A. Simmons joined the Company in September
2008.
(2) Mr. Paul A. Simmons received a cash compensation for
services provided prior to his employment agreement.
(3) Mr. Di Iorio was the Company's chief financial officer from
August, 2007 until to July, 2008. As per his employment agreement he was
entitled to receive his base salary until October of 2008.
(4) As a result of his departure from the Company, Mr. Di Iorio
was only be entitled to exercise half, or 37,500, of the options granted to him.
The vested options to purchase common stock expired un-exercised in November of
2008.
Compensation Discussion and Analysis
Employment Agreements
Horst Zerbe.
Effective December 1, 2005, we
entered into an employment agreement with Dr. Horst Zerbe, our President and
Chief Executive Officer. The agreement is for an indefinite period of time.
Under the agreement, Dr. Zerbe is entitled to receive: (1) a minimum base salary
of CDN$175,000 per year; and (2) an annual bonus equal to 50% of base salary
upon the performance of certain milestones set out by the board of
directors.
As per recommendation of the Compensation Committee the board
of directors approved the increase of Mr. Zerbe's minimum base salary by 5% to
CDN$183,750 effective as of September 2008 (US$171,364 at year-end 2008).
Paul A. Simmons
. Effective September 1, 2008, we
entered into an employment agreement with Mr. Paul A. Simmons, to serve as our
Chief Financial Officer. Under the agreement, Mr. Simmons is entitled to
receive: (1) a minimum base salary of CDN$150,000 (US$110,965 at year-end 2008)
per year, and (2) option grants under the 2006 Stock Option Plan, and (3) an
annual bonus up to 30% of his base salary upon the achievement of specific
performance targets established by the board of directors.
Gino Di Iorio
. Effective August 6, 2007, we
entered into an employment agreement with Mr. Gino Di Iorio, to serve as Chief
Financial Officer. Under the agreement, Mr. Di Iorio is entitled to receive: (1)
a minimum base salary of CDN$110,000 (US$110,965 at year-end 2007) per year, and
(2) option grants under the 2006 Stock Option Plan. Mr. Di Iorio's agreement was
terminated in July of 2008.
37
Incentive Plan Awards
The following table presents information regarding the
outstanding equity awards held by each of the named officers as of December 31,
2008, including the vesting dates for the portions of these awards that had not
vested as of that date.
OUTSTANDING EQUITY AWARDS AT FISCAL
      YEAR-END
Name
(a)
Number of Securities
Underlying
Unexercised
Options
(#)
Exercisable
(b)
Number of Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(c)
Equity Incentive Plan
Awards: Number
      of
Securities Underlying
Unexercised
Unearned Options
(#)
(d)
Option
Exercise
Price
($)
(e)
Option
Expiration
Date
(f)
Horst G. Zerbe
225,000
Nil
Nil
0.41
Nov. 9, 2011
Paul A. Simmons
Nil
100,000
1
Nil
0.85
Sep.8, 2013
1
On September 8, 2008, 100,000 options were granted
to Mr. Paul Simmons in connection with his employment agreement. The options
vest over two years, none of which are exercisable as of year-end 2008.
Director Compensation
The following table sets forth compensation paid to each named
director during the year end December 31, 2008.
In addition, directors are reimbursed for reasonable expenses
incurred in their capacity as directors, including travel and other
out-of-pocket expenses incurred in connection with meetings of the board of
directors or any committee of the board of directors.
DIRECTOR COMPENSATION
Name
(a)
Fees
Earned
or Paid
in Cash
($)
(b)
Stock
Awards
($)
(c)
Option
Awards
($)
(d)
Non-Equity
Incentive
Plan
Compensation
($)
(e)
Non-Qualified
Deferred
Compensation
Earnings
($)
(f)
All
Other
Compensation
($)
(g)
Total ($)
(j)
Bernhard J. Boudreau
4
466
Nil
10,174
1
Nil
Nil
18,921
5
29,561
David Coffin-Beach
4
93
Nil
10,174
2
Nil
Nil
18,921
6
29,188
Joel Cohen
4
466
Nil
Nil
Nil
Nil
Nil
466
Ian Troup
4
466
Nil
30,398
3
Nil
Nil
Nil
30,864
1
Represents 25,588 options issued on May 22, 2008
2
Represents 25,588 options issued on May 22, 2008
3
Represents 75,000 options issued on September 8,
2008
38
4
As of November 2008 non-employee directors are
entitled to a cash compensation fee of CDN$500 per board meeting attendance and
CDN$100 per board meeting attendance by conference call. The cash amounts
represent the equivalent U.S. Dollar value measured at the appropriate year end
exchange rate used in the financial statements.
5
Represents the grant of a one-time cash
compensation in form of a retainer for services provided as chairman of the
Audit Committee. Mr. Boudreau used the total retained compensation to exercise
stock option in August of 2008.
6
Represents the grant of a one-time cash
compensation in form of a retainer for services provided as chairman of the
Compensation Committee.
Directors' and Officers' Liability Insurance
We carry directors' and officers' liability insurance at an
approximate annual cost of $18,188.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Review, Approval or Ratification of Transactions with
Related Persons
Although IntelGenx has not adopted formal procedures for the
review, approval or ratification of transactions with related persons, we adhere
to a general policy that such transactions should only be entered into if they
are on terms that, on the whole, are no more favorable, or no less favorable,
than those available from unaffiliated third parties and their approval is in
accordance with applicable law. Such transactions require the approval of our
board of directors.
During the year ended December 31, 2008, $5,614 of interest was
paid to Ingrid Zerbe, our secretary and director of finance and administration
for interest on a long-term shareholder loan. The loan is unsecured, bears
interest at 6% per annum and is not repayable prior to January 1, 2010. The
amount outstanding at December 31, 2008, was $101,193. Ingrid Zerbe was also
paid $18,882 under an equipment lease for the year ended 2008. The lease expires
on August 31, 2010.
Director Independence
Three of our four directors, J. Bernard Boudreau, Ian Troup and
Bernd Melchers, are deemed "independent directors", as defined by the Nasdaq
Stock Market, Inc. Marketplace Rules. We cannot guarantee that our Board of
Directors will always have a majority of independent directors. In the absence
of a majority of independent directors, our executive officer, who is also a
principal stockholder and director, could establish policies and enter into
transactions without independent review and approval thereof. This could present
the potential for a conflict of interest between the Company and its
stockholders generally and the controlling officers, stockholders or directors.
Family Relationships
Horst Zerbe and Ingrid Zerbe are husband and wife.
39
PLAN OF DISTRIBUTION
Each selling security holder of the common stock and any of
their pledgees, assignees and successors-in-interest may, from time to time,
sell any or all of the shares of common stock offered by this prospectus on any
stock exchange or automated interdealer quotation system on which the common
stock is listed or quoted at the time of sale, in the over-the-counter market,
in privately negotiated transactions or otherwise, at fixed prices that may be
changed, at market prices prevailing at the time of sale, at prices related to
prevailing market prices or at prices otherwise negotiated. A selling security
holder may use any one or more of the following methods when selling shares:
ordinary brokerage transactions and transactions in which the
  broker-dealer solicits purchasers;
block trades in which the broker-dealer will attempt to sell the shares as
  agent but may position and resell a portion of the block as principal to
  facilitate the transaction;
purchases by a broker-dealer as principal and resale by the broker-dealer
  for its account;
an exchange distribution in accordance with the rules of the applicable
  exchange;
privately negotiated transactions;
settlement of short sales entered into after the effective date of the
  registration statement of which this prospectus is a part;
broker-dealers may agree with the selling security holders to sell a
  specified number of such shares at a stipulated price per share;
through the writing or settlement of options or other hedging
  transactions, whether through an options exchange or otherwise;
a combination of any such methods of sale; or
any other method permitted pursuant to applicable law.
The selling security holders may also sell shares under Rule
144 under the Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the selling stockholders may arrange
for other broker dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
A selling stockholder may from time to time pledge or grant a
security interest in some or all of the shares or common stock owned by him and,
if the selling stockholder defaults in the performance of the secured
obligations, the pledgees or secured parties may offer and sell the shares of
common stock from time to time under this prospectus, or under an amendment to
this prospectus under Rule 424(b)(3) or other applicable provision of the
Securities Act amending the list of selling stockholders to include the pledgee,
transferee or other successors in interest as selling stockholders under this
prospectus.
In connection with the sale of our common stock or interests
therein, the selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions which may in turn engage in short
sales of our common stock in the course of hedging the positions they assume.
The selling stockholders may, after the date of this prospectus, also sell
shares of our common stock short and deliver these securities to close out their
short positions, or loan or pledge their common stock to broker-dealers that in
turn may sell these securities. The selling stockholders may also enter into
option or other transactions with broker-dealers or other financial institutions
or the creation of one or more derivative securities which require the delivery
to such broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).
The selling stockholders and any broker-dealers or agents that
are involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
Because the selling stockholders may be deemed to be
"underwriters" within the meaning of the Securities Act, they will be subject to
the prospectus delivery requirements of the Securities Act. Federal securities
laws, including Regulation M, may restrict the timing of purchases and sales of
our common stock by the selling stockholders and any other persons who are
involved in the distribution of the shares of common stock pursuant to this
prospectus.
There is no underwriter or coordinating broker acting in
connection with the proposed sale of the shares by the selling security holders.
40
The resale shares will be sold only through registered or
licensed brokers or dealers if required under applicable state securities laws.
In addition, in certain states, the shares may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption from
the registration or qualification requirement is available and is complied with.
The Company is required to pay certain fees and expenses
incurred by the Company incident to the registration of the common stock and the
warrants, but the Company will not receive any proceeds from the sale of the
shares of common stock offered by the selling security holders to the public.
However, we will receive proceeds from the exercise of the Warrants, as well as
from the exercise of the Placement Agent Options. The Company has agreed to
indemnify the selling security holders against certain losses, claims, damages
and liabilities, including liabilities under the Securities Act.
DESCRIPTION OF SECURITIES
We have an authorized capital of 100,000,000 shares of common
stock, par value $0.00001 per share, and 20,000,000 shares of preferred stock,
par value $0.00001 per share. As of August 3, 2009, 22,350,113 shares of common
stock were outstanding. There were no shares of preferred stock outstanding as
of August 3, 2009.
Common Stock
The holders of common stock are entitled to one vote per share
on all matters voted on by stockholders, including the election of directors.
Except as otherwise required by law, the holders of common stock exclusively
possess all voting power. The holders of common stock are entitled to dividends
as may be declared from time to time by the Board from funds available for
distribution to holders. No holder of common stock has any preemptive right to
subscribe to any securities of ours of any kind or class or any cumulative
voting rights. The outstanding shares of common stock are, and the shares, upon
issuance and sale as contemplated will be, duly authorized, validly issued,
fully paid and non assessable.
Preferred Stock
Our board of directors is authorized to issue all and any of
the shares of preferred stock in one or more series, fix the number of shares,
determine or alter for each such series voting powers or other rights,
qualifications, limitations or restrictions thereof.
LEGAL PROCEEDINGS
There are no material pending legal proceedings to which we are
a party or to which any of our property is subject and to the best of our
knowledge, no such actions against us are contemplated or threatened.
LEGAL MATTERS
The validity of the common stock offered hereby will be passed
upon by Hodgson Russ LLP.
EXPERTS
IntelGenx Technologies Corp. financial statements for the years
ended December 31, 2008 and 2007 included in this registration statement have
been audited by RSM Richter, LLP, Montreal, Quebec, an independent registered
public accounting firm, as stated in their report, and have been so included in
reliance upon the report of said firm and their authority as experts in
accounting and auditing. This report expresses an unqualified opinion and
includes an explanatory paragraph relating to the Company's ability to continue
as a going concern.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Pursuant to our certificate of incorporation and bylaws, we
have agreed to indemnify our officers and directors to the fullest extent
permitted by law. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
our Company pursuant to the foregoing provisions, or otherwise, we have been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
41
We file reports and other information with the Securities and
Exchange Commission. We have also filed a registration statement on Form S-1,
including exhibits, with the SEC with respect to the shares being offered in
this offering. This prospectus is part of the registration statement, but it
does not contain all of the information included in the registration statement
or exhibits. For further information with respect to us and our common stock, we
refer you to the registration statement and to the exhibits and schedules to the
registration statement. Statements contained in this prospectus as to the
contents of any contract or any other document referred to are not necessarily
complete, and in each instance, we refer you to the copy of the contract or
other document filed as an exhibit to the registration statement. Each of these
statements is qualified in all respects by this reference. You may inspect a
copy of the registration statement and other reports we file with the Securities
and Exchange Commission without charge at the SEC's principal office in
Washington, D.C., and copies of all or any part of the registration statement
may be obtained from the Public Reference Section of the SEC, 100 F Street NE,
Washington, D.C. 20549, upon payment of fees prescribed by the SEC. The SEC
maintains an internet site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC. The address of the Web site is http://www.sec.gov. The SEC's toll
free investor information service can be reached at 1-800-SEC-0330.
FINANCIAL STATEMENTS
The financial statements for the fiscal years ending December
31, 2008 and 2007 are set forth on pages F-1 through F-42.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFERENT FROM
THAT CONTAINED IN THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND SEEKING OFFERS
TO BUY, SHARES OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE
PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF
THE DATE OF THIS PROSPECTUS REGARDLESS OF THE TIME OF DELIVERY OF THIS
PROSPECTUS, OR OF ANY SALE OF OUR COMMON STOCK.
IntelGenx Technologies Corp.
25,074,320 Shares of Common Stock
11,908,600 Warrants
PROSPECTUS
__________________, 2009
42
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth
the costs and expenses payable by us in connection with the distribution of the
securities being registered. All of the amounts shown are estimates, except the
Securities and Exchange Commission registration fee. We have agreed to bear all
expenses (other than underwriting discounts and selling commissions) in
connection with the registration and sale of the securities offered by the
selling security holders.
Securities and Exchange Commission
      registration fee
$
980
Printing fees
-
Accounting fees and expenses
5,000
Legal fees and expenses
20,000
Miscellaneous expenses
1,000
Total(1)
$
26,980
(1) The amounts set forth above are estimates except for the
Securities and Exchange Commission registration fee.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL"), provides
that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 145 further provides that a corporation similarly may indemnify any such
person serving in any such capacity who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor, against expenses
(including attorneys' fees) actually and reasonably incurred in connection with
the defense or settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation and except that no indemnification shall be made in respect
of any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the Delaware
Court of Chancery or such other court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
IntelGenx has agreed to indemnify its officers and directors to
the fullest extent permitted by law. Such indemnification is intended to
supplement our officers' and directors' liability insurance.
Our certificate of incorporation provides that no director
shall be personally liable to the corporation or its stockholders for monetary
damages for any breach of fiduciary duty by such director as a director. A
director shall be liable to the extent provided by applicable law, however, (a)
for breach of the director's duty of loyalty to the corporation or its
stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) pursuant to Section
174 of the DGCL. Pr (d) for any transaction from which the director derived an
improper personal benefit.
To the extent permitted by applicable law, we are also
authorized to provide indemnification of (and advancement of expenses to) such
agents (and any other persons to which Delaware law permits us to provide
indemnification) through provisions in our bylaws, agreements with such agents
or other persons, voting of security holders or disinterested directors or
otherwise, in excess of the indemnification and advancement otherwise permitted
by Section 145 of the DGCL, subject only to limits created by applicable
Delaware law (statutory or non-statutory), with respect to actions for breach of
duty to the Company, its security holders and others.
Any repeal or modification of any of the foregoing provisions
of the indemnification provisions in our certificate of incorporation or bylaws
shall be prospective and shall not adversely affect any right or protection of a
director, officer, agent, or other person existing at the time of, or increase the liability of any director of the Company with
respect to any acts or omissions of such director occurring prior to, such
repeal or modification.
43
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The following issuance of shares were exempt from registration
under section 4(2) of the Securities Act, Regulation D and/or Regulation S
promulgated thereunder:
On May 22, 2007, we completed the sale of 8% Secured
Convertible Debentures in an aggregate principal amount of approximately $1.5
million to certain institutional and accredited investors, pursuant to a
Securities Purchase Agreement. The Company received net proceeds of
approximately $1.36 million. Proceeds were used for general working capital
purposes and to repay a secured bank loan.(see CAPITAL STOCK above) Carter
Securities LLC served as placement agent in connection with the sale of
debentures.
On March 27, 2008, we completed a private placement to certain
accredited investors and issued 4,001,000 units of our securities at $0.70 per
unit for gross proceeds of approximately $2.8 million. Each unit consists of one
share of the Company's common stock and one two-year warrant to purchase one
share of common stock at an initial exercise price of $1.02 per share, subject
to adjustment. After deduction of costs related to the private placement, the
Company received net proceeds of approximately $2,538,651. Paradigm  served as placement agent in connection with this offering. Proceeds from the
private placement were used to support the Company's CPI300 project and for
general working capital purposes.
On July 13, 2009, we completed an offering to investors of
10,476,000 special warrants at a price of CDN$0.40 per Special Warrant for gross
proceeds of approximately CDN$4,200,000. Each special warrant entitles its
holder to receive, upon exercise or deemed exercise thereof, one common share
and one common share purchase warrant. Each warrant will entitle the holder to
purchase one common share at a price of U.S.$0.80 per share, subject to
adjustment, until July 13, 2012. The exercise price of the warrants is subject
to adjustment for certain events, including dividends, distributions or split of
the Company's common stock, subsequent equity sales or rights offerings by the
Company, or in the event of the Company's consolidation, merger or
reorganization. Paradigm Capital Inc., Bolder Investment Partners Ltd. and Union
Securities Ltd. (collectively, the "Placement Agents") acted as placement agents
for the Canadian Private Placement on a best efforts basis. The Placement
Agents' compensation consists of a cash commission equal to 8% of the Gross
Proceeds, 419,040 Common Shares (the "Placement Agent Shares") and an option to
acquire 838,080 Common Shares at U.S.$0.80 per unit, subject to adjustment,
until July 13, 2012 (the "Placement Agent Options"). (The shares of common stock
issuable upon exercise of the Placement Agent Options shall be referred to as
the "Placement Agent Option Shares".) The exercise price of the Placement Agent
Options is subject to adjustment for certain events, including dividends,
distributions or split of the Company's common stock, subsequent equity sales or
rights offerings by the Company, or in the event of the Company's consolidation,
merger or reorganization. Proceeds from the offering will be used for
commercialization and development of drugs to be delivered using Oral Film
Technology and the Versatab Multi-Layer Tablet platform, repay outstanding
convertible notes, working capital and capital expenditures, as well as
strategic investments including business development and pharmaceutical research
and development.
On July 22, 2009, the Company completed an offering of 350,000
units to investors in the United States. Each unit entitles its holder to
receive, upon exercise or deemed exercise thereof, one common share and one
common share purchase warrant. Each warrant will entitle the holder to purchase
one common share at a price of $0.80 per share, subject to adjustment, until
July 13, 2012. The exercise price of the warrants is subject to adjustment for
certain events, including dividends, distributions or split of the Company's
common stock, subsequent equity sales or rights offerings by the Company, or in
the event of the Company's consolidation, merger or reorganization. No placement
agent was used for the U.S. Private Placement and no commissions were paid in
connection therewith. Proceeds from the offering will be used for
commercialization and development of drugs to be delivered using Oral Film
Technology and the Versatab Multi-Layer Tablet platform, repay outstanding
convertible notes, working capital and capital expenditures, as well as
strategic investments including business development and pharmaceutical research
and development.
44
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
2.1
Share exchange agreement dated
      April 10, 2006, incorporated by reference to the Form 8-K/A filed on April
      28, 2006
3.1
Articles of incorporation (incorporated by
      reference to the Form SB-2 (File No. 333-90149) filed on November 16,
      1999)
3.2
By-Laws (incorporated by
      reference to the Form SB-2 (File No. 333-91049) filed on November 16,
      1999)
3.3
Amendment to the Articles of Incorporation
      (incorporated by reference to amendment No. 2 to Form SB-2 (File No.
      333-135591) filed on August 28, 2006)
3.4
Amendment to the Articles of
      Incorporation (To be filed by amendment)
4.1
Agency Agreement, dated as of July 13, 2009, by
      and among the Company, Bolder Investment Partners Ltd., Union Securities
      Ltd. and Paradigm Capital Inc. (incorporated by reference to the Form 8-K
      filed on July 14, 2009)
4.2
Registration Rights Agreement,
      dated as of July 13, 2009, by and among the Company, Paradigm Capital
      Inc., Bolder Investment Partners Ltd. and Union Securities Ltd.
      (incorporated by reference to the Form 8-K filed on July 14, 2009)
4.3
Form of Subscription Agreement for Canadian
      Private Placement (incorporated by reference to the Form 8-K filed on July
      14, 2009)
4.4
Form of Special Warrant
      (incorporated by reference to the Form 8-K filed on July 14, 2009)
4.5
Form of Warrant (incorporated by reference to
      the Form 8-K filed on July 14, 2009)
4.6
Form of Compensation Option
      (incorporated by reference to the Form 8-K filed on July 14, 2009)
4.7*
Form of Subscription Agreement for U.S. Private
      Placement
5.1
Legal Opinion (To be filed by
      amendment)
9.1
Voting Trust agreement (incorporated by
      reference to the Form 8-K/A filed on April 28, 2006)
10.1
Horst Zerbe employment
      agreement (incorporated by reference to the Form SB-2 (File No.
      333-135591) filed on July 3, 2006)
10.2
Joel Cohen consulting agreement (incorporated
      by reference to the Form SB-2 (File No. No. 333-135591) filed on July 3,
      2006)
10.3
Ingrid Zerbe employment
      agreement (incorporated by reference to the Form SB-2 (File No.
      333-135591) filed on July 3, 2006)
10.4
Registration rights agreement, incorporated by
      reference to the Form SB-2 (File No. 333-135591) filed on July 3, 2006)
10.5
Principal's registration rights
      agreement (incorporated by reference to the Form SB-2 (File No.
      333-135591) filed on July 3, 2006)
10.6
Investor relations consulting agreement
      (incorporated by reference to the Form SB-2 (File No. 333-135591) filed on
      July 3, 2006).
10.7
2006 Stock Option Plan
      (incorporated by reference to the Form S-8 filed on November 21, 2006)
10.8
Form of Securities Purchase Agreement
      (incorporated by reference to the Form 8-K filed on May 23, 2007)
10.9
Form of 8% Secured Convertible
      Debenture (incorporated by reference to the Form 8-K filed on May 23,
      2007)
10.10
Form of Registration Rights Agreement
      (incorporated by reference to the Form 8-K filed on May 23, 2007)
10.11
Form of Warrant (incorporated
      by reference to the Form 8-K filed on May 23, 2007)
10.12
Form of Security Agreement (incorporated by
      reference to the Form 8-K filed on May 23, 2007)
10.13
Subsidiary Guarantee
      (incorporated by reference to the Form 8-K filed on May 23, 2007)
10.14
Deed of Hypothec (incorporated by reference to
      the Form 8-K filed on May 23, 2007)
10.15
Agency Agreement (incorporated
      by reference to the Form 8-K filed on March 28, 2008)
10.16
Form of Subscription Agreement (incorporated by
      reference to the Form 8-K filed on March 28, 2008)
10.17
Form of Amending Letter to
      Subscription Agreement (incorporated by reference to the Form 8-K filed on
      March 28, 2008)
10.18
Form of Registration Rights Agreement
      (incorporated by reference to the Form 8-K filed on March 28, 2008)
10.19
Form of Warrant (incorporated
      by reference to the Form 8-K filed on March 28, 2008)
10.20
Form of Lock up Agreement (incorporated by
      reference to the Form 8-K filed on March 28, 2008)
10.21
Broker's Warrant (incorporated
      by reference to the Form S-1 filed on March 24, 2009)
10.22
Form of Amended and Restated Warrant
      (incorporated by reference to the Form 8-K filed on August 4, 2008)
10.23
Employment Contract Paul A.
      Simmons (incorporated by reference to the Form 8-K filed on September 5,
      2008)
10.24
Amended and Restated 2006 Stock Option Plan,
      May 29, 2008 (incorporated by reference to the Form 10-K filed on March
    25, 2009)
10.25
Warrants dated March 16, 2006
      issued to Patrick J. Caruso (incorporated by reference to the Form SB-2
      (File No. 333-135591), filed on July 3, 2006)
14
Code of Ethics (incorporated by reference to
      the Form S-1 filed on March 24, 2009)
16.1
Letter on change in certifying
      accountant (incorporated by reference to the Form SB-2 (File No.
      333-135591) filed on July 3, 2006)
21.1
Subsidiaries of the small business issuer
      (incorporated by reference to the Form SB-2 (File No. 333-135591) filed on
      July 3, 2006)
23.1*
Consent of RSM Richter LLP
* Filed herewith.
45
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide
certificates in such denominations and registered in such names as required by
the purchasers to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial
bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) Not applicable.
(5) That for the purpose of determining liability under the
Securities Act of 1933 to any purchaser:
(i) Not applicable.
(ii) Each prospectus filed pursuant to Rule 424(b) as part of
this registration statement, shall be deemed to be part of and included in this
registration statement as of the date it is first used after effectiveness;
provided, however, that no statement made in this registration statement or
prospectus that is part of this registration statement or made in a document
incorporated or deemed incorporated by reference into this registration
statement or prospectus that is part of this registration statement will, as to
a purchaser with a time of contract of sale prior to such first use, supersede
or modify any statement that was made in this registration statement or
prospectus that was part of this registration statement or made in any such
document immediately prior to such date of first use.
(6) That, for the purpose of determining liability of the
registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities:
46
The undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or
sell such securities to such purchaser: (i) Any preliminary prospectus of the
undersigned registrant relating to the offering required to be filed pursuant to
Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;
(iii) The portion of any other free writing prospectus relating
to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering
made by the undersigned registrant to the purchaser.
The undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of
47
POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Horst Zerbe his or her true and lawful attorney in fact and agent, with
full power of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments
(including post effective amendments) to the Registration Statement, and to sign
any registration statement for the same offering covered by this Registration
Statement that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and all post effective amendments thereto,
and to file the same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, each acting alone, or his or her substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Ville St-
Laurent, Province of Quebec, on August 12, 2009.
By:
/s/ Horst G. Zerbe
August 12, 2009
Name: Horst G. Zerbe
Title: Director, Chief Executive Officer and President
By:
/s/
Paul A. Simmons
August 12, 2009
Name: Paul A. Simmons
Title: Chief Financial Officer (Principal Accounting and
Financial Officer)
By: /s/
Bernard Boudreau
August 12, 2009
Name: Bernard Boudreau
Title: Director
By: /s/
Ian Troup
August 12, 2009
Name: John (Ian Troup)
Title: Director
By: /s/
Bernd Melchers
August 12, 2009
Name: Bernd Melchers
Title: Director
48
INTELGENX TECHNOLOGIES CORP.
By:
/s/ Horst G. Zerbe
Name: Horst G. Zerbe
Title: Chief Executive Officer and President
      (Principal Executive
Officer)
By:
/s/ Paul A. Simmons
Name: Paul A. Simmons
Title: Chief Financial Officer, (Principal
      Accounting and Financial
Officer)
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
IntelGenx Technologies Corp.
Consolidated
Financial Statements
December 31, 2008 and 2007
(Expressed
in U.S. Funds)
IntelGenx Technologies Corp.
Consolidated
Financial Statements
December 31, 2008 and 2007
(Expressed
in U.S. Funds)
Contents
Report of Independent Registered Public
      Accounting Firm
F-1
Balance Sheets
F-2
Statements of Shareholders' Equity
F3 - F-4
Statements of Operations and Comprehensive Loss
F-5
Statements of Cash Flows
F-6
Notes to Financial Statements
F-7 - F-30
RSM Richter LLP
Comptables agréés
Chartered Accountants
2, Place Alexis Nihon
Montréal, (Québec) H3Z 3C2
Téléphone / Telephone : (514) 934-3400
Télécopieur / Facsimile : (514) 934-3408
www.rsmrichter.com
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
IntelGenx
Technologies Corp.
We have audited the accompanying consolidated balance sheets of
IntelGenx Technologies Corp. as at December 31, 2008 and 2007 and the related
consolidated statements of operations and comprehensive loss, shareholders'
equity and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform an audit to obtain reasonable assurance whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, these consolidated financial statements present
fairly in all material respects, the financial position of the Company as at
December 31, 2008 and 2007 and the results of its operations, comprehensive
loss, and its cash flows for the years then ended in accordance with accounting
principles generally accepted in the United States.
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As described in note
2 to the financial statements, the Company has experienced operating losses and
requires significant capital to finance operations and repay existing
indebtedness. This raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in note 2. The financial statements do not include any adjustments that may
result from the outcome of this uncertainty.
We were not engaged to examine management's assertion about the
effectiveness of the Company's internal control over financial reporting as at
December 31, 2008 included in the accompanying 10 – K filing and, accordingly,
we do not express an opinion thereon.
RSM Richter LLP (signed)
Chartered Accountants
Montreal, Quebec
March 23, 2009
IntelGenx Technologies Corp.
Consolidated Balance Sheets
As at December 31, 2008 and 2007
(Expressed in U.S. Funds)
2008
2007
Assets
Current
Cash and cash equivalents
$
555,999
$
330,967
Restricted cash
      (note 6)
277,220
-
Accounts receivable
317,063
427,476
Income taxes
      recoverable
-
11,028
Prepaid expenses
44,936
23,443
Investment tax credits receivable
269,156
243,006
1,464,374
1,035,920
Property and Equipment
(note 7)
157,156
235,244
$
1,621,530
$
1,271,164
Liabilities
Current
Accounts payable and accrued liabilities
525,661
261,485
Convertible
      notes, less unamortized discount of $515,739 (note 10)
714,502
-
Deferred income tax liability
127,408
-
1,367,571
261,485
Loan Payable, Shareholder
82,357
101,193
Convertible Notes
, less unamortized discount $1,082,366
      (note 10)
-
417,634
Deferred Income Tax Liability
-
278,988
Commitments
(note 11)
Shareholders' Equity
Capital Stock
(note 12)
209
162
Additional Paid-in-Capital
5,080,780
2,071,818
Accumulated Other Comprehensive Income
(184,342
)
58,542
Accumulated Deficit
(4,725,045
)
(1,918,658
)
171,602
211,864
$
1,621,530
$
1,271,164
See accompanying notes
Approved on Behalf of the
      Board:
/s/ J. Bernard
      Boudreau
Director
/s/ Horst G. Zerbe
Director
F-2
IntelGenx Technologies Corp.
Consolidated Statement of Shareholders' Equity
For the Year Ended December 31, 2007
(Expressed in U.S. Funds)
Accumulated
Additional
Other
Total
Capital Stock
Paid-In
Comprehensive
Shareholders'
Number
Amount
Capital
Income (Loss)
Deficit
Equity
Balance - December 31, 2006
16,007,489
$
160
$
1,165,403
$
(19,619
)
$
(817,865
)
$
328,079
Foreign currency translation adjustment
-
-
-
78,161
-
78,161
Debenture conversion
149,657
2
104,757
-
-
104,759
Warrants issued, net of transaction costs of $121,063
-
-
452,023
-
-
452,023
Stock-based compensation
-
-
202,607
-
-
202,607
Beneficial conversion feature, net of a deferred income
tax liability of $343,065
-
-
147,028
-
-
147,028
Net loss for the
      year
-
-
-
-
(1,100,793
)
(1,100,793
)
Balance – December 31, 2007
16,157,146
$
162
$
2,071,818
$
58,542
$
(1,918,658
)
$
211,864
See accompanying notes
F-3
IntelGenx Technologies Corp.
Consolidated Statement of Shareholders' Equity
For the Year Ended December 31, 2008
(Expressed in U.S. Funds)
Accumulated
Additional
Other
Total
Capital Stock
Paid-In
Comprehensive
Shareholders'
Number
Amount
Capital
Income (Loss)
Deficit
Equity
Balance - December 31, 2007
16,157,146
$
162
$
2,071,818
$
58,542
$
(1,918,658
)
$
211,864
Foreign currency translation adjustment
-
-
-
(242,884
)
-
(242,884
)
Issue of common stock, net of transaction
      costs of
$415,290 (note 12)
4,001,000
40
1,712,630
-
-
1,712,670
Warrants issued, net of transaction costs
      of $131,291
(note 13)
-
-
541,449
-
-
541,449
Cashless warrants exercised (note 13)
5,186
-
-
-
-
-
Agent's options (note 13)
-
-
95,000
-
-
95,000
Stock-based compensation (note 13)
-
-
161,035
-
-
161,035
Options exercised (note 13)
191,500
2
88,663
-
-
88,665
Warrants exercised (note 13)
100,000
1
40,999
-
-
41,000
Modification of warrant terms (note 13)
-
-
92,571
-
-
92,571
Debenture conversions (note 10)
235,714
2
164,998
-
-
165,000
Stock compensation to debenture holders (note 13)
159,456
2
111,617
-
-
111,619
Net loss for the year
-
-
-
-
(2,806,387
)
(2,806,387
)
Balance –
      December 31, 2008
20,850,002
$
209
$
5,080,780
$
(184,342
)
$
(4,725,045
)
$
171,602
See accompanying notes
F-4
IntelGenx Technologies Corp.
Consolidated Statements of Operations and Comprehensive
      Loss
For the Year Ended December 31, 2008 and 2007
(Expressed in U.S. Funds)
2008
2007
Revenue
$
945,746
$
835,376
Interest
30,864
27,355
976,610
862,731
Expenses
Research and development
2,085,433
777,773
Research
      and development tax credits
(305,692
)
(174,399
)
Management salaries
551,771
328,513
General and
      administrative
212,915
166,249
Professional fees
695,158
424,817
Depreciation
51,772
42,003
Foreign exchange
(122,915
)
113,552
Interest and financing fees
766,136
349,093
3,934,578
2,027,601
Loss Before Income Taxes
(2,957,968
)
(1,164,870
)
Income taxes (note 14)
(151,581
)
(64,077
)
Net Loss
(2,806,387
)
(1,100,793
)
Other Comprehensive Loss
Foreign currency translation adjustment
(242,884
)
78,161
Comprehensive Loss
$
(2,563,503
)
$
(1,022,632
)
Basic Weighted
      Average Number of Shares Outstanding
19,657,224
16,042,791
Basic and Diluted Loss Per Common Share
(note 17)
$
(0.14
)
$
(0.07
)
See accompanying notes
F-5
IntelGenx Technologies Corp.
Consolidated Statement of Cash Flows
For the Year Ended December 31, 2008 and 2007
(Expressed in U.S. Funds)
2008
2007
Funds Provided (Used) -
Operating Activities
Net loss
$
(2,806,387
)
$
(1,100,793
)
Depreciation
51,772
42,003
Investor
      relations services
50,421
68,349
Stock-based compensation
110,661
202,607
Modification of warrant terms
92,571
-
Interest accretion
465,918
195,317
Deferred
      income tax
(151,581
)
(64,077
)
Amendment of convertible notes
111,619
-
(2,075,006
)
(656,594
)
Changes in non-cash operating elements of working
      capital
337,974
(312,065
)
(1,737,032
)
(968,659
)
Financing Activities
Repayment
      of long-term debt
-
(107,871
)
Issue of capital stock
2,930,365
-
Transaction costs
(451,581
)
(229,323
)
Convertible notes
-
1,500,000
2,478,784
1,162,806
Investing Activities
Additions
      to property and equipment
(7,057
)
(82,961
)
Restricted cash (note 6)
(277,220
)
-
(284,277
)
(82,961
)
Increase in Cash and Cash Equivalent
457,475
111,186
Effect of Foreign Exchange on Cash and
      Cash Equivalents
(232,443
)
(7,797
)
Cash and Cash Equivalents
Beginning of Year
330,967
227,578
End of Year
$
555,999
$
330,967
See accompanying notes
F-6
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
1.
Basis of Presentation
The Company prepares its financial statements in
      accordance with accounting principles generally accepted in the United
      States. This basis of accounting involves the application of accrual
      accounting and consequently, revenues and gains are recognized when
      earned, and expenses and losses are recognized when incurred.
The consolidated financial statements include the
      accounts of the Company and its subsidiary companies. On consolidation,
      all inter-entity transactions and balances have been eliminated.
The financial statements are expressed in U.S.
    funds.
2.
Going Concern
The accompanying financial statements have been prepared
      assuming the Company will continue as a going concern. The Company has
      reported an accumulated deficit of $4,725,045 (2007 $1,918,658). To date,
      the Company's operations have been financed principally through the
      issuance of capital stock, long term debt and debt from related parties.
      Additional capital and/or borrowings will be necessary in order for the
      Company to continue in existence and attain profitable operations. With
      the Company's existing working capital levels, it will be able to continue
      operations at least through the end of the second quarter of fiscal
      2009.
The Company's strategy is to continue to focus on the
      development of novel oral immediate release and controlled release
      products for the branded and generic pharmaceutical markets. The Company
      will continue to develop novel, orally administered drug delivery products
      based upon its proprietary oral drug delivery technologies and will
      continue to position itself as a provider of product development services
      for the pharmaceutical industry.
To date revenues consisted primarily of research and
      development fee revenues and have not been sufficient to sustain
      operations. However, the Company expects to generate revenues from sales
      and manufacturing royalties in future years following development and
      commercialization of products within its current pipeline.
The first product fully-developed by the Company, a
      prenatal multivitamin supplement marketed as Gesticare® in the USA, was
      commercialized in November 2008. Management anticipates generating royalty
      revenue of between $0.5 million and $0.75 million from royalty payments
      from this product in fiscal 2009. In addition, management is actively
      pursuing marketing opportunities for the product outside of the
  USA.
The Company currently has a pipeline of 11 products under
      development. Of the products under development, CPI- 300, an oral
      antidepressant formulated using the Company's proprietary controlled
      release technology, is the most advanced. The Company is currently
      finalizing the preparation of a 505(b)(2) New Drug Application for this
      product that is expected to be filed with the FDA in the first quarter of
      2009.
Nonetheless, in order to achieve profitability, revenue
      streams will have to increase significantly from current levels and there
      is no assurance that revenues can increase to such a
  level.
F-7
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
2.
Going Concern (Cont'd)
On May 22, 2007 the Company entered into convertible note
      agreements with certain institutional and accredited investors for amounts
      totaling $1,500,000, of which $1,230,241 remained outstanding at December
      31, 2008. The notes are repayable on September 22, 2009. The notes are
      convertible into common stock of the Company, at the option of the
      holders, at a rate of $0.70 per share.
The Company raised net cash proceeds of $2,478,784
      through the issuance of common shares in the year ended December 31, 2008.
      We are seeking additional funding through additional equity and/or debt
      financings. However, there can be no assurance that that any additional
      financing will become available to us, and if available, on terms
      acceptable to us. Any financing, if available, may involve restrictive
      covenants that impact our ability to conduct our business and raise
      additional funds. If we are unable to raise additional capital when
      required or on acceptable terms, we may have to significantly delay, scale
      back or discontinue our operations, including the development and/or
      commercialization of one or more of our product candidates. The Company
      may also receive funds through the exercise of outstanding stock options
      and warrants in addition to funds that may be generated from pre-
      commercialization payments. There can be no assurance that such proceeds,
      if any, will be material.
Should the Company be unable to continue as a going
      concern, it may be unable to realize the carrying value of its assets and
      to meet its liabilities as they become due.
3.
Nature of Business
The Company specializes in the development of
      pharmaceutical products in co-operation with various pharmaceutical
      companies. The Company has developed three proprietary technologies and is
      currently utilizing these to develop 11 products, 7 of which are partnered
      and 4 of which are in the clinical development stage.
The Company's first product, a prenatal multivitamin
      supplement marketed as Gesticare® in the USA, was commercialized in
      November 2008.
F-8
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
4.
Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity
      with accounting principles generally accepted in the United States
      requires management to make estimates and assumptions that affect the
      reported amounts of assets and liabilities, disclosure of contingent
      assets and liabilities at the date of the financial statements, and the
      reported amounts of revenues and expenses during the reporting period. The
      financial statements include estimates based on currently available
      information and management's judgment as to the outcome of future
      conditions and circumstances. Significant estimates in these financial
      statements include the allowance for doubtful accounts, useful lives and
      impairment of long-lived assets, stock-based compensation costs,
      determination of the fair value of the warrants issued with the
      convertible notes, the investments tax credits receivable and the
      resulting impact on the allocation of the proceeds between the convertible
      notes, the beneficial conversion feature and the warrants.
Changes in the status of certain facts or circumstances
      could result in material changes to the estimates used in the preparation
      of the financial statements and actual results could differ from the
      estimates and assumptions.
Revenue Recognition
The Company recognizes revenue from research and
      development contracts as the contracted services are performed or when
      milestones are achieved, in accordance with the terms of the specific
      agreements and when collection of the payment is reasonably assured. In
      addition, the performance criteria for the achievement of milestones are
      met if substantive effort was required to achieve the milestone and the
      amount of the milestone payment appears reasonably commensurate with the
      effort expended. Amounts received in advance of the recognition criteria
      being met, if any, are included in deferred income.
The Company has license agreements that specify that
      certain royalties are earned by the Company on sales of licensed products
      in the licensed territories. Licensees report sales and royalty
      information in the 45 days after the end of the quarter in which the
      activity takes place and typically do not provide the Company with forward
      estimates or current-quarter information. Because the Company is not able
      to reasonably estimate the amount of royalties earned during the period in
      which these licensees actually ship products, royalty revenue is not
      recognized until the royalties are reported to the Company and the
      collection of these royalties is reasonably assured.
Sales Tax
A company should disclose the amount of those taxes that
      is recognized on a gross basis in interim and annual financial statements
      for each period for which an income statement is presented if those
      amounts are significant. While the amounts are not material, the Company's
      policy is to present such taxes on a net basis in the consolidated
      statements of operations.
F-9
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
4.
Summary of Significant Accounting Policies
      (Cont'd)
Financial Instruments
The Company estimates the fair value of its financial
      instruments based on current interest rates, market value and pricing of
      financial instruments with comparable terms. Unless otherwise indicated,
      the carrying value of these financial instruments approximates their fair
      market value.
Cash and Cash Equivalent
Cash and cash equivalent is comprised of cash on hand and
      a term deposit with an original maturity date of less than three months
      that are stated at cost, which approximates market value.
Accounts Receivable
The Company accounts for trade receivables at original
      invoice amount less an estimate made for doubtful receivables based on a
      review of all outstanding amounts on a monthly basis. Management
      determines the allowance for doubtful accounts by regularly evaluating
      individual customer receivables and considering a customer's financial
      condition, credit history and current economic conditions. The Company
      writes off trade receivables when they are deemed uncollectible. The
      Company records recoveries of trade receivables previously written-off
      when they receive them. Management considers that no allowance for
      doubtful accounts is necessary in order to adequately cover exposure to
      loss in its December 31, 2008 and 2007 accounts receivable.
Investment Tax Credits
Investment tax credits relating to qualifying
      expenditures are recognized in the accounts at the time at which the
      related expenditures are incurred and there is reasonable assurance of
      their realization. Management has made estimates and assumptions in
      determining the expenditures eligible for investment tax credits
      claimed.
Property and Equipment
Property and equipment are recorded at cost. Provisions
      for depreciation are based on their estimated useful lives using the
      methods as follows:
On the declining balance method -
Laboratory and
      office equipment
20%
Computer equipment
30%
On the straight-line method -
Leasehold
      improvements
over the lease term
Upon retirement or disposal, the cost
of the asset disposed of and the related accumulated depreciation are removed
from the accounts and any gain or loss is reflected in income. Expenditures for
repair and maintenance are expensed as incurred.
F-10
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
4.
Summary of Significant Accounting Policies
      (Cont'd)
Impairment of Long-Lived Assets
Long-lived assets held and used by the Company are
      reviewed for possible impairment whenever events or changes in
      circumstances indicate the carrying amount of an asset may not be
      recoverable. Recoverability of assets to be held and used is measured by a
      comparison of the carrying amount of the assets to the estimated
      undiscounted cash flows expected to be generated by the asset. If such
      assets are considered to be impaired, the impairment to be recognized is
      measured by the amount by which the carrying amount of the asset exceeds
      the fair value thereof.
Foreign Currency Translation
The Company's reporting currency is the United States
      dollar. The Canadian dollar is the functional currency of the Company's
      Canadian operations, which is translated to the United States dollar using
      the current rate method. Under this method, accounts are translated as
      follows:
Assets and liabilities - at exchange rates in effect at the balance
      sheet date;
Revenue and expenses - at average exchange rates
      prevailing during the year.
Gains and losses arising from foreign currency
      translation are included in other comprehensive income.
Income Taxes
The Company accounts for income taxes in accordance with
      SFAS No. 109, "Accounting for Income Taxes". Deferred taxes are provided
      on the liability method whereby deferred tax assets are recognized for
      deductible temporary differences, and deferred tax liabilities are
      recognized for taxable temporary differences. Temporary differences are
      the differences between the reported amounts of assets and liabilities and
      their tax bases. Deferred tax assets are reduced by a valuation allowance
      when, in the opinion of management, it is more likely than not that some
      portion or all of the deferred tax assets will be realized. Deferred tax
      assets and liabilities are adjusted for the effects of changes in tax laws
      and rates on the date of enactment.
Share-Based Payments
The Company accounts for share-based payments in
      accordance with the provisions of FAS 123R "Share-based payments
      (Revised)" and accordingly recognizes in its financial statements
      share-based payments at their fair value. In addition, the Company will
      recognize in the financial statements an expense based on the grant date
      fair value of stock options granted to employees. The expense will be
      recognized on a straight-line basis over the vesting period and the
      offsetting credit will be recorded in additional paid-in capital. Upon
      exercise of options, the consideration paid together with the amount
      previously recorded as additional paid-in capital will be recognized as
      capital stock. The Company estimates its forfeiture rate in order to
      determine its compensation expense arising from stock-based awards. The
      Company uses the Black-Scholes-Merton option pricing model to determine
      the fair value of the options.
F-11
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
4.
Summary of Significant Accounting Policies
      (Cont'd)
Loss Per Share
Basic loss per share is calculated based on the weighted
      average number of shares outstanding during the year. Any antidilutive
      instruments are excluded from the calculation of diluted loss per share.
Recent Accounting Pronouncements
In December 2007, the Financial Accounting Standards
      Board ("FASB") issued SFAS No. 141 (Revised 2007), "Business Combinations"
      ("SFAS 141R"). SFAS 141R will significantly change the accounting for
      business combinations. Under SFAS 141R, an acquiring entity will be
      required to recognize all the assets acquired and liabilities assumed in a
      transaction at the acquisition-date fair value with limited exceptions.
      SFAS 141R will change the accounting treatment for certain specific
      acquisition related items including: (1) expensing acquisition related
      costs as incurred; (2) valuing noncontrolling interests at fair value at
      the acquisition date; and (3) expensing restructuring costs associated
      with an acquired business. SFAS 141R also includes a substantial number of
      new disclosure requirements. SFAS 141R is to be applied prospectively to
      business combinations for which the acquisition date is on or after
      January 1, 2009. We expect SFAS 141R will have an impact on our accounting
      for future business combinations once adopted but the effect is dependent
      upon the acquisitions that are made in the future.
In December 2007, the FASB issued SFAS No. 160,
      "Noncontrolling Interests in Consolidated Financial Statements" ("SFAS
      160"). SFAS 160 establishes new accounting and reporting standards for the
      noncontrolling interest in a subsidiary and for the deconsolidation of a
      subsidiary. It clarifies that a noncontrolling interest in a subsidiary
      (minority interest) is an ownership interest in the consolidated entity
      that should be reported as equity in the Consolidated Financial Statements
      and separate from the parent company's equity. Among other requirements,
      this statement requires consolidated net income to be reported at amounts
      that include the amounts attributable to both the parent and the
      noncontrolling interest. It also requires disclosure, on the face of the
      Consolidated Statement of Operations, of the amounts of consolidated net
      income attributable to the parent and to the noncontrolling interest. We
      expect SFAS 160 will have an impact on our accounting for future business
      combinations once adopted but the effect is dependent upon the
      acquisitions that are made in the future.
In March 2008, the Financial Accounting Standards Board
      issued SFAS Statement No. 161, "Disclosures about Derivative Instruments
      and Hedging Activities" ("SFAS 161"). This standard is intended to improve
      financial reporting about derivative instruments and hedging activities by
      requiring enhanced disclosures to enable investors to better understand
      their effects on an entity's financial position, financial performance,
      and cash flows. It is effective for financial statements issued for fiscal
      years and interim periods beginning after November 15, 2008, with early
      application encouraged. The Company is currently evaluating the impact
      that this statement will have on its disclosures related to derivative
      instruments and hedging activities.
F-12
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
4.
Summary of Significant Accounting Policies
      (Cont'd)
The FASB issued SFAS 162, "The Hierarchy of Generally
      Accepted Accounting Principles". The new standard is intended to improve
      financial reporting by identifying a consistent framework, or hierarchy,
      for selecting accounting principles to be used in preparing financial
      statements that are presented in conformity with U.S. generally accepted
      accounting principles (GAAP) for nongovernmental entities. Statement 162
      is effective 60 days following the Securities and Exchanges Commission's
      approval of the Public Company Accounting Oversight Board Auditing
      amendments to AU Section 411, The Meaning of Present Fairly in Conformity
      with Generally Accepted Accounting Principles. The adoption of SFAS 162
      will not have a material effect on the Company's financial position or
      results of operations.
The FASB issued FSP APB-14-1, Accounting for Convertible
      Debt Instruments That May Be Settled in Cash upon Conversion (Including
      Partial Cash Settlement). FSP APB 14-1 clarifies that convertible debt
      instruments that may be settled in cash upon conversion (including partial
      cash settlement) are not addressed by paragraph 12 of APB Opinion No. 14,
      Accounting for Convertible Debt and Debt Issued with Stock Purchase
      Warrants. Additionally, this FSP specifies that issuers of such
      instruments should separately account for the liability and equity
      components in a manner that will reflect the entity's nonconvertible debt
      borrowing rate when interest cost is recognized in subsequent periods.
      This FSP is effective for financial statements issued for fiscal years
      beginning after December 15, 2008, and interim periods within those fiscal
      years. Early adoption is not permitted. The Company is currently
      evaluating the impact of this Statement on its financial statements.
The FASB issued FSP FAS 142-3, Determination of the
      Useful Life of Intangible Assets. This FSP amends the factors that should
      be considered in developing renewal or extension assumptions used to
      determine the useful life of a recognized intangible asset under FASB
      Statement No. 142, Goodwill and Other Intangible Assets. This FSP is
      effective for financial statements issued for fiscal years beginning after
      December 15, 2008, and interim periods within those fiscal years. The
      adoption of FSP FAS 142-3 is not expected to have a material effect on the
      Company's financial position or results of operations.
The FASB issued FSP EITF 03-6-1, Determining Whether
      Instruments Granted in Share-Based Payment Transactions Are Participating
      Securities. This FSP states that unvested share-based payment awards that
      contain nonforfeitable rights to dividends or dividend equivalents
      (whether paid or unpaid) are participating securities and shall be
      included in the computation of earnings per share pursuant to the
      two-class method. The FSP is effective for financial statements issued for
      fiscal years beginning after December 15, 2008, and interim periods within
      those years. The Company is currently evaluating the impact of this
      Statement on its financial statements.
F-13
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
4.
Summary of Significant Accounting Policies
      (Cont'd)
EITF 07-5, Determining Whether an Instrument (or Embedded
      Feature) Is Indexed to an Entity's Own Stock was ratified by the FASB.
      This EITF addresses the determination of whether an instrument (or an
      embedded feature) is indexed to an entity's own stock. This EITF is
      effective for financial statements issued for fiscal years beginning after
      December 15, 2008, and interim periods within those fiscal years. The
      adoption of EITF 07-5 is not expected to have a material effect on the
      Company's financial position or results of operations.
EITF 08-3, Accounting by Lessees for Nonrefundable
      Maintenance Deposits was ratified by the FASB. This EITF prescribes the
      accounting for all nonrefundable maintenance deposits. This EITF is
      effective for financial statements issued for fiscal years beginning after
      December 15, 2008, and interim periods within those fiscal years. The
      adoption of EITF 08-3 is not expected to have a material effect on the
      Company's financial position or results of operations.
The EITF issued EITF 08-6, "Equity Method Investment
      Accounting Considerations". This EITF considers whether all of the
      provisions of Statement 141(R) and Statement 160 should be applied when
      accounting for an equity method investment. This EITF is effective on a
      prospective basis in fiscal years beginning on or after December 15, 2008
      and interim periods within those fiscal years. The Company is currently
      evaluating the impact of this Statement on its consolidated financial
      statements.
The EITF issued EITF 08-8, "Accounting for an Instrument
      (or an Embedded Feature) with a Settlement Amount That Is Based on the
      Stock of an Entity's Consolidated Subsidiary". This Issue addresses the
      determination of whether a financial instrument for which the payoff to
      the counterparty is based, in whole or in part, on the stock of an
      entity's consolidated subsidiary, is indexed to the reporting entity's own
      stock and therefore should not be precluded from qualifying for the first
      part of the scope exception in paragraph 11(a) of Statement 133 or being
      within the scope of Issue 00-19. This EITF is effective for fiscal years
      beginning on or after December 15, 2008, and interim periods within those
      fiscal years. The Company is currently evaluating the impact of this
      Statement on its consolidated financial statements.
5.
Adoption of New Accounting Standards
Fair Value Measurements
SFAS No.157 is effective for financial assets and
      liabilities in fiscal years beginning after November 15, 2007, and for
      non-financial assets and liabilities in fiscal years beginning after
      November 15, 2008. The Company adopted SFAS No.157 for financial assets
      and liabilities in the first quarter of fiscal 2008 with no material
      impact to the consolidated financial statements. The Company is currently
      evaluating the potential impact of the application of SFAS No.157 on the
      non-financial assets and liabilities found on its consolidated financial
      statements.
F-14
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
5.
Adoption of New Accounting Standards
    (Cont'd)
SFAS No. 157 applies to all assets and liabilities that
      are being measured and reported on a fair value basis. SFAS No. 157
      requires new disclosure that establishes a framework for measuring fair
      value in GAAP, and expands disclosure about fair value measurements. This
      statement enables the reader of the financial statements to assess the
      inputs used to develop those measurements by establishing a hierarchy for
      ranking the quality and reliability of the information used to determine
      fair values. The statement requires that assets and liabilities carried at
      fair value be classified and disclosed in one of the following three
      categories:
Level 1:      Quoted market
      prices in active markets for identical assets or liabilities.
Level 2:      Observable market
      based inputs or unobservable inputs that are corroborated by market data.
Level 3:      Unobservable inputs that are
      not corroborated by market data.
In determining the appropriate levels, the Company
      performs a detailed analysis of the assets and liabilities that are
      subject to SFAS No. 157. At each reporting period, all assets and
      liabilities for which the fair value measurement is based on significant
      unobservable inputs are classified as Level 3. There are no assets or
      liabilities measured at fair value as at December 31, 2008.
Fair Value of Financial Instruments
The table below presents the carrying value and fair
      value of Company's financial instruments. The disclosure excludes
      leases.
The fair value represents management's best estimates
      based on a range of methodologies and assumptions. The carrying value of
      receivables and payables arising in the ordinary course of business and
      the investment tax credits receivable and the convertible notes
      approximate fair value because of the relatively short period of time
      between their origination and expected realization. The loan payable,
      shareholder is presumed to have a fair value measured by the cash proceeds
      exchanged at issuance in accordance with APB-21 "Interest on Receivables
      and Payables".
The convertible notes use significant unobservable inputs
      and thus are shown as Level 3 hierarchy items. The fair value of the
      convertible notes is calculated by discounting the stream of future
      payments of interest and principal at the prevailing market rate for a
      similar liability that does not have an associated equity component.
      Results of discounted cash flow calculations may be adjusted, as
      appropriate, to reflect other market conditions or the perceived changes
      in credit risk of the borrower.
F-15
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
5.
Adoption of New Accounting Standards
    (Cont'd)
December 31, 2008
December 31, 2007
Carrying
Estimated
Carrying
Estimated
Level
Value
Fair Value
Value
Fair
      Value
Financial assets
Cash and cash
      equivalents
Level 1
$
555,999
$
555,999
$
330,967
$
330,967
Restricted cash
Level 1
277,220
277,220
-
-
Investment tax
      credits receivable
Level 1
269,156
269,156
243,006
243,006
Financial liabilities
Loan payable,
      shareholder
Level 2
82,357
82,357
101,193
101,193
Convertible notes,
      excluding unamortized discounts
Level 3
1,230,241
1,099,280
417,634
417,634
6.
Collaborative Agreements
On April 7, 2008, the Company ratified with Cary
      Pharmaceutical, a pharmaceutical development company, an Agreement to
      jointly develop and commercialize an oral antidepressant using IntelGenx's
      proprietary oral delivery technology. Under the terms of the agreement,
      IntelGenx will provide funding and development support for the product and
      will be entitled to profit sharing. The Company accounts for this
      transaction as a collaborative agreement as defined as EITF 07-1
      "Accounting for Collaborative agreements". Per the Agreement, $2,000,000
      of the Company's cash and cash equivalents was initially restricted for
      the funding of this venture. This cash was taken from the proceeds of the
      private placement of March 27, 2008.
In accordance with the project plan, as of December 31,
      2008, the Company has expensed approximately $1,832,470 on the project of
      which $1,722,780 had been disbursed, resulting in a restricted cash
      balance of $277,220 and amounts payable of $109,690. Included within these
      disbursements is approximately $222,236 paid to Cary Pharmaceutical in
      respect of management fees. All expenses incurred with respect to the
      collaborative agreement were expensed in the statement of operations and
      were classified as research and development expenses and professional
      fees.
F-16
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
7.
Property and Equipment
2008
2007
Accumulated
Net Carrying
Net Carrying
Cost
Depreciation
Amount
Amount
Laboratory and office equipment
$
237,551
$
109,438
$
128,113
$
185,073
Computer equipment
24,337
12,783
11,554
16,085
Leasehold improvements
51,263
33,774
17,489
34,086
$
313,151
$
155,995
$
157,156
$
235,244
8.
Accounts Payable and Accrued Liabilities
Included in accounts payable and accrued liabilities is
      approximately $13,390 (2007 - $71,651) payable to shareholders, who are
      also officers of the Company.
9.
Loan Payable, Shareholder
The loan payable, shareholder, who is also an officer of
      the Company, is unsecured, bears interest at 6% per annum and is not
      repayable prior to January 1, 2010. Interest incurred during the year
      amounted to approximately $5,614 (2007 - $5,636) which is measured at the
      exchange amount.
10.
Convertible Notes
On May 22, 2007 the Company entered into convertible note
      agreements with certain institutional and accredited investors for amounts
      totaling $1,500,000. The convertible notes bear interest at the rate of 8%
      per annum and are repayable on September 22, 2009. Interest is payable
      quarterly and payments commenced on July 1, 2007. The notes are
      convertible into common stock of the Company, at the option of the
      holders, at a rate of $0.70 per share. The Company also issued to the
      holders 2,142,857 stock purchase warrants exercisable at $1.02 per share
      before May 22, 2012.
On May 22, 2007, the Company paid approximately $229,323
      in cash consideration and issued warrants with a fair value of $82,993 in
      consideration for transaction costs. These transaction costs were
      allocated between the convertible debt and the warrants based on their
      relative fair value.
The Company may, at its option, elect to pay the interest
      by the issuance of common shares. The number of shares is to be determined
      by dividing the amount of the interest payment by the number which is 85%
      of the average market price of the Company's common shares for the 20
      trading days immediately prior to the interest payment date assuming the
      average market price is equal or greater than $0.70 as adjusted for
      reverse and forward share splits, recapitalizations and the like that
      occur after the date of the Securities Purchase
  Agreements.
F-17
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
10.
Convertible Notes (Cont'd)
In accordance with EITF Issue 98-5 "Accounting for
      Convertible Securities with Beneficial Conversion Features or Contingently
      Adjustable Conversion Ratios", the Company recognized the value of the
      embedded beneficial conversion feature of $490,093 as additional paid-in
      capital and an equivalent discount which will be expensed over the term of
      the convertible notes. In addition, in accordance with EITF Issue 00-27
      "Application of Issue No.98-5 to Certain Convertible Instruments", the
      Company has allocated the proceeds of issuance between the convertible
      notes and the detachable warrants based on their relative fair value.
      Accordingly, the Company recognized the fair value of the detachable
      warrants of $490,093 as additional paid-in capital and an equivalent
      discount against the convertible notes. The difference between the face
      amount of the convertible notes and their carrying value is amortized over
      the life of the convertible notes. The Black-Scholes Model was used to
      calculate the fair value of the warrants.
The underlying assumptions included in the Black-Scholes
      Model were as follows:
Expected volatility
64%
Contractual life
5 years
Risk-free interest rate
4.39%
Dividend yield
Nil
Substantially all of the assets of the Company have been
      pledged as security of the convertible notes. In the year ended December
      31, 2008, $103,820 of interest was paid (2007 - $66,180), and $465,918 of
      interest has been accreted (2007 - $195,317). During the year, $165,000
      (2007 - $104,759) of convertible notes were exchanged for 235,714 (2007 -
      149,657) shares of common stock.
11.
Commitments
The Company has entered into an agreement to lease
      premises up to August 2009. The future minimum lease payments until expiry
      of the existing lease period are approximately $8,119. The total rental
      expense in 2008 was $14,800.
On May 29, 2008, the Company signed a new agreement with
      Auctus Capital for investor relation services. As part of the terms of
      this agreement, the Company is required to pay CDN $6,000 (US- $4,926) a
      month to Auctus Capital for a period of one year.
In the fourth quarter of 2008 the Company paid a deposit
      totaling $22,681 to Cushman & Wakefield Lepage to be held "in trust"
      in respect of a right to lease alternative, local, premises. Under the
      terms of the agreement the Company will forfeit the deposit if the Company
      fails to sign a lease agreement.
F-18
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
12.
Capital Stock
2008
2007
Authorized -
100,000,000 common shares of $0.00001 par
      value
20,000,000 preferred
      shares of $0.00001 par value
Issued -
20,850,002 (December 31, 2007 - 16,157,146) common shares
$
209
$
162
On April 10, 2007, the Board of
Directors of the Corporation approved an amendment, subject to shareholder
approval, to the Corporation's Certificate of Incorporation, to increase the
number of authorized common shares from 20,000,000 to 100,000,000 and to
authorize the creation of 20,000,000 shares of "blank check" preferred shares.
On April 10, 2007, the majority stockholder of the Corporation approved the same
resolution as the Board of Directors.
On March 27, 2008, as part of a private
placement, the Company issued 4,001,000 units for gross proceeds of $2,800,700.
Each unit consists of one common share of the Company and one common share
purchase warrant. Each warrant entitles the holder to purchase one common share
at an exercise price of $1.02 per common share and expires 24 months after the
date of issuance. Proceeds were allocated between the common shares and the
warrants based on their relative fair value. The common shares were recorded at
a value of $2,127,960 excluding transaction costs. (See note 13 for the portion
allocated to the warrants.)
The Company paid an agent a cash
commission in the amount of $196,000, which is equal to 7% of the gross proceeds
of the offering and issued an agent option entitling the agent to acquire
320,080 units (consisting of one common share and one common share purchase
warrant) at $0.70 per unit, which expire 24 months after the date of issuance.
Each common share purchase warrant included in the unit entitles the holder to
purchase one common share at an exercise price of $1.02 per common share and
expires 24 months after the date of issuance of the unit.
In addition, the Company paid
approximately $256,000 in cash consideration for other transaction costs. All
the above transaction costs have been reflected as a reduction of the common
shares and the warrants based on their relative fair values.
Pursuant to the terms of the private
placement, the Company was obliged to use its best efforts to (i) have the
common shares listed on the TSX Venture Exchange, and (ii) prepare and file
with, and have declared effective, by the U.S. Securities and Exchange
Commission, a resale registration statement in respect of the common shares and
the warrants issued to subscribers as well as those issuable upon exercise of
the agents warrants, all prior to 4 months after March 27, 2008. All of these
provisions were satisfied within the required time limits during the second
quarter of 2008.
On April 22, 2008, 100,000 warrants
were exercised for 100,000 common shares having a par value of $1 for cash
consideration of $41,000, resulting in an increase in additional paid-in capital
of $40,999.
F-19
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
12.
Capital Stock (Cont'd)
On April 22, 2008, the Company entered into agreements to
      amend the anti-dilution terms of the convertible notes. As consideration
      for entering into this amendment, the Company agreed to issue to the
      holders of the convertible notes an aggregate of 159,456 fully paid common
      shares having a par value of $2 in aggregate, resulting in an increase in
      additional paid-in capital of $111,617.
In the year ended December 31, 2008, 191,500 stock
      options were exercised for 191,500 common shares having a par value of $2
      in aggregate, for cash consideration of $88,665, resulting in an increase
      in additional paid-in capital of $88,663.
13.
Additional Paid-In Capital
Stock Options
In November 2006, the Company adopted the 2006 Stock
      Incentive Plan ("Plan") for the purpose of issuing both Incentive Options
      and Nonqualified Options to officers, employees, directors and eligible
      consultants of the Company. A total of 1,600,749 shares of common stock
      were reserved for issuance under this plan. Options may be granted under
      the Plan on terms and at prices as determined by the Board of Directors
      except that the options cannot be granted at less than 100%, of the fair
      market value of the common stock on the date of the grant. Each option
      will be exercisable after the period or periods specified in the option
      agreement, but no option may be exercised after the expiration of 10 years
      from the date of grant. All options granted to individuals other than non-
      employee directors will have a total vesting period of 24 months from the
      date of grant, with one quarter of the total options granted vesting and
      becoming exercisable every six months. Options granted to non-employees
      will vest and become 100% fully exercisable immediately upon
  grant.
On August 9, 2007, the Company granted 257,500 stock
      options to employees and directors to purchase common shares. The stock
      options are exercisable at $1.15 per share and have a term of 10 years
      with vesting provisions ranging from immediate to vesting in equal
      increments over two years.
The fair values of all options granted during 2007 were
      estimated as of the date of grant using the Black-Scholes option pricing
      model with the following weighted average
assumptions:
2007
Expected option life
5.00 - 5.75 years
Volatility
71%
Risk-free interest rate
4.58%
Dividend yield
Nil
The weighted average grant-date fair
values for stock options granted during 2007 were $0.74 per option,
respectively.
F-20
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
13.
Additional Paid-In Capital (Cont'd)
On March 27, 2008, IntelGenx Technologies Corp. issued
      320,080 agent's options exercisable into one common share and one stock
      purchase warrant per agent's option. The exercise price of the option and
      the stock purchase warrant are $0.70 and $1.02 respectively and they
      expire on March 27, 2010. As at December 31, 2008, no agent's options had
      been exercised. The agent's options were issued as part of the transaction
      costs in connection with the private placement described in note 12. The
      agent's options were accounted for at their fair value, as determined by
      the Black-Scholes valuation model, of $95,000, using the assumptions
      below:
Expected volatility
77%
Expected life
2 years
Risk-free interest rate
1.75%
Dividend yield
Nil
A modification was made to the 2006
Stock Option Plan. The life of the options was reduced from 10 years to 5 years
to comply with the regulations of the TSX-V. Accordingly, because the grant-date
fair value of the modified options was less than the fair value of the original
options measured immediately before the modification, no incremental share-based
compensation expense resulted from the modification.
On May 22, 2008, the Company granted
51,176 stock options to two non-employee directors to purchase common shares.
The stock options are exercisable at $0.85 per share and have a term of 5 years
with immediate vesting provisions. The stock options were accounted for at their
fair value, as determined by the Black-Scholes valuation model, of $21,329,
using the following assumptions:
Expected volatility
76%
Expected life
2.5 years
Risk-free interest rate
2.70%
Dividend yield
Nil
On May 29, 2008, 400,000 stock options
were granted to Auctus Capital as compensation for investor relation services.
The option grant was subject to shareholder approval to increase the number of
shares to be issued under the stock option plan, which was subsequently given at
the Annual General Meeting, held on September 8, 2008. The exercise price of the
options is $1. The options vest based upon a combination of the achievement of
certain performance conditions and the passage of time. As of December 31, 2008,
performance conditions have been met for the first 200,000 options tranche. The
first tranche of the 200,000 stock options were accounted for at its fair value,
as determined by the Black-Scholes valuation model, of $86,112, using the
following assumptions:
Expected volatility
75%
Expected life
2.69 years
Risk-free interest rate
2.81%
Dividend yield
Nil
F-21
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
13.
Additional Paid-In Capital (Cont'd)
As a result of the May 29, 2008 grant, the Company
      recorded a compensation expense of $50,421 in the year ended December 31,
      2008 for the first tranche of 200,000 options. As at December 31, 2008,
      the performance conditions for the second tranche of 200,000 stock options
      had not yet been achieved and as such no compensation expense has been
      recognized.
At the Annual General Meeting on September 8, 2008 the
      Shareholders of the Company approved to amend the 2006 Stock Option Plan
      to increase the number of shares available for issuance under the Plan
      from 1,600,749 to 2,074,000, or 10% of the Company's issued and
      outstanding shares as of July 28, 2008.
On September 8, 2008, the Company granted 75,000 stock
      options to a non-employee director to purchase common shares. The stock
      options are exercisable at $0.85 per share and have a term of 5 years with
      immediate vesting provisions. The stock options were accounted for at
      their fair value, as determined by the Black-Scholes valuation model, of
      $30,398, using the following assumptions:
Expected volatility
78%
Expected life
2.5 years
Risk-free interest rate
2.40%
Dividend yield
Nil
On September 8, 2008, the Company
granted 100,000 stock options to an officer to purchase common shares. The stock
options are exercisable at $0.85 per share, have a term of 5 years and vest in
equal increments over two years at 25% every six months. The stock options were
accounted for at their fair value, as determined by the Black-Scholes valuation
model, of $39,735, using the following assumptions:
Expected volatility
76%
Expected life
3.1 years
Risk-free interest rate
2.49%
Dividend yield
Nil
F-22
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
13.
Additional Paid-In Capital (Cont'd)
Information with respect to stock option activity for
      2007 and 2008 is as follows:
Weighted Average
Number of Options
Exercise Price
$
Outstanding – January 1, 2007
1,119,000
0.41
Granted
257,500
1.15
Forfeited
-
-
Expired
-
-
Exercised
-
-
Outstanding – December 31, 2007
1,376,500
0.55
Granted
626,176
0.95
Forfeited
(50, 000
)
(0.97
)
Expired
(62,500
)
(1.15
)
Exercised
(191,500
)
(0.46
)
Outstanding – December 31, 2008
1,698,676
1.01
Details of stock options outstanding as
at December 31, 2008 are as follows:
Outstanding Options
Exercisable Options
Weighted
Weighted
Weighted Average
Average
Aggregate
Average
Aggregate
Exercise
Number of
Remaining
Exercise
Intrinsic
Number of
Exercise
Intrinsic
Prices
Options
Contractual Life
Price
Value
Options
Price
Value
$
(years)
$
$
$
$
0.41
800,000
2.88
0.41
800,000
0.41
0.70-0.85
341,176
3.98
0.80
241,176
0.78
1.00-1.15
557,500
4.18
1.05
236,667
1.08
1,698,676
3.51
1.01
152,000
1,277,843
0.60
152,000
F-23
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
13.
Additional Paid-In Capital (Cont'd)
Stock-based compensation expense recognized in 2008 in
      regards to the stock options was $161,035 (2007 - $202,607). As of
      December 31, 2008, total unrecognized compensation expense related to
      unvested stock options was $83,177. This amount is expected to be
      recognized as expense over a period of two years. A change in control of
      the Company due to acquisition would cause the vesting of these stock
      options to accelerate and would result in this amount being charged to
      stock-based compensation expense.
Warrants
On May 22, 2007, IntelGenx Technologies Corp. issued
      214,286 stock purchase warrants exercisable into common shares at $0.70
      per share which expire on May 22, 2011. The Stock purchase warrants were
      issued as part of the transaction costs in connection with the convertible
      notes described in note 10. The stock purchase warrants were accounted for
      at their fair value, as determined by the Black-Scholes valuation model,
      of $82,993, using the following assumptions:
Expected volatility
64%
Expected life
4 years
Risk-free interest rate
4.39%
Dividend yield
Nil
On May 22, 2007 the Company entered
into convertible note agreements with certain institutional and accredited
investors as described in note 10. The Company also issued to the holders
2,142,857 stock purchase warrants exercisable at $1.02 per share before May 22,
2012.
On March 19, 2008, the Company restated
the exercise price of the warrants initially issued with respect to the
convertible notes transaction on May 22, 2007 from $1.02 to $0.80. This
modification was treated as an exchange of the original warrant for a new
warrant in accordance to FAS 123 (R) "Share-based payments". This resulted in an
increase in fair value of the warrants of $92,571. This increase was recorded as
an additional compensation expense and a corresponding increase in additional
paid-up capital.
On March 27, 2008, the Company issued
4,001,000 stock purchase warrants exercisable into common shares at $1.02 per
share which expire on March 27, 2010. The stock purchase warrants were issued in
connection with the private placement described in note 12. The stock purchase
warrants were valued at $672,740, before transaction costs, based on their
relative fair value, as determined by the Black-Scholes valuation model using
the assumptions below:
F-24
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
13.
Additional Paid-In Capital
  (Cont'd)
Expected volatility
77%
Expected life
2 years
Risk-free interest rate
1.75%
Dividend yield
Nil
As at March 31, 2008, 5,186 shares of
common stock were issued as a result of the cashless exercise of 10,638 warrants
with an exercise price of $0.41 and a fair value of $0.80. These warrants were
initially granted for services rendered pursuant to the share exchange
transaction of April 28, 2006. The remaining 180,053 warrants that were granted
in 2006 expired on April 28, 2008 and November 13, 2008.
On April 22, 2008, $100,000 warrants
were exercised for 100,000 common shares having a par value of $1 for cash
consideration of $41,000, resulting in an increase in additional paid-in capital
of $40,999.
As at December 31, 2008, no additional
stock purchase warrants had been exercised.
Information with respect to warrant
activity for 2007 and 2008 is as follows:
Weighted
Number of
Average
Warrants
Exercise Price
$
Outstanding –
      January 1, 2007
190,69
0.4
Attached to convertible notes (note 10)
2,142,857
1.02
Issued as part of
      transaction costs
214,286
0.70
Outstanding –
      December 31, 2007
2,547,834
0.97
Attached to private placement
4,001,000
1.02
Issued to agent
320,080
1.02
Re-pricing - Cancellation of original warrants
(2,142,857
)
(1.02
)
Re-Issue of Warrants
2,142,857
0.80
)
Expired
(80,053
)
(0.4
)
Exercised
(110,638
)
(0.4
)
Outstanding -
      December 31, 2008
6,678,223
0.95
F-25
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
14.
Income Taxes
Income taxes reported differ from the amount computed by
      applying the statutory rates to losses. The reasons are as
  follows:
2008
2007
Statutory income taxes
$
(944,000
)
$
(352,000
)
Net operating losses for which no tax benefits have been
      recorded
567,000
140,000
Excess of amortization over capital cost
      allowance
17,000
14,000
Non-deductible expenses
185,000
147,000
Undeducted research and development
      expenses
441,000
143,000
Tax deductible portion of transaction costs
(37,000
)
(36,000
)
Investment tax credit
(181,000
)
(56,000
)
Unrealized foreign exchange gain
(48,000
)
-
Amortization of convertible debt discount
(152,000
)
(64,000
)
$
(152,000
)
$
(64,000
)
The major components of the deferred
tax assets classified by the source of temporary differences are as follows:
2008
2007
Property and equipment
$
(12,000
)
$
(15,000
)
Net operating losses carryforward
838,000
264,000
Undeducted research and development
      expenses
518,000
206,000
Non-refundable tax credits carryforward
237,000
23,000
Transaction costs to be deducted in future years
73,000
108,000
1,654,000
586,000
Valuation allowance
(1,654,000
)
(586,000
)
$
-
$
-
There were Canadian and provincial net
operating losses of approximately $2,585,000 (2007 - $794,000) and $2,702,000
(2007 - $908,000) respectively, that may be applied against earnings of future
years. Utilization of the net operating losses is subject to significant
limitations imposed by the change in control provisions. A portion of the net
operating losses may expire before they can be utilized.
As at December 31, 2008, the Company
had non-refundable tax credits of $237,000 (2007 -$24,000) of which 24,000 is
expiring in 2017 and 213,000 is expiring in 2018 and undeducted research and
development expenses of $1,548,000 (2007 - $670,000) with no expiration date.
F-26
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
14.
Income Taxes (Cont'd)
Due to the reorganization of the Company, there were
      $549,000 of transaction costs of which $115,000 was deductible in the
      current year (2007- $113,000). The remaining transaction costs are
      deductible for income tax purposes in equal amounts over the next three
      years.
The deferred tax benefit of these items was not
      recognized in the accounts.
Deferred Income Taxes
The balance of deferred income taxes as at December 31,
      2008 represents the tax effect of the convertible debt arising from the
      difference between the convertible debt's basis for accounting purposes
      and that for income tax purposes and it has been charged to additional
      paid-in capital. As the convertible debt is repaid, the deferred tax
      liability will be charged to expenses.
Unrecognized Tax Benefits
On January 1, 2007, the Company adopted the provisions
      for FIN 48, which is an interpretation of SFAS No. 109. FIN 48 prescribes
      a recognition threshold that a tax position is required to meet before
      being recognized in the financial statements and provides guidance on
      de-recognition, measurement, classification, interest and penalties,
      accounting in interim periods, disclosure and transition issues. FIN 48
      contains a two-step approach to recognizing and measuring uncertain tax
      positions accounted for in accordance with SFAS No. 109. The first step is
      to evaluate the tax position for recognition by determining if the weight
      of available evidence indicates that it is more likely than not that the
      position will be sustained upon ultimate settlement with a taxing
      authority, including resolution of related appeals or litigation
      processes, if any. The second step is to measure the tax benefit as the
      largest amount that is more than 50% likely of being realized upon
      ultimate settlement. Prior to January 1, 2007 and the implementation of
      FIN 48, the Company recorded tax contingencies when the exposure item
      became probable and reasonably estimable, in accordance with SFAS No. 5,
Accounting for Contingencies
.
The adoption of FIN 48 has not had a material effect on
      our financial position or results of operations for the years 2007 and
      2008.
The Company does not expect its unrecognized tax benefits
      to change significantly over the next twelve months.
Classification of Interest and Penalties
Additionally, FIN 48 requires the Company to accrue
      interest and related penalties, if applicable, on all tax positions for
      which reserves have been established consistent with jurisdictional tax
      laws
.
The Company's policy to include interest and penalties
      related to unrecognized tax benefits within the provision for income taxes
      did not change as a result of adopting FIN 48.
The interest and penalties as of December 31, 2008 and
      for the years ended December 31, 2008 and 2007 were
$Nil.
F-27
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
14.
Income Taxes (Cont'd)
Tax Years and Examination
The Company files tax returns in each jurisdiction in
      which it is registered to do business. For each jurisdiction a statute of
      limitations period exists. After a statute of limitations period expires,
      the respective tax authorities may no longer assess additional income tax
      for the expired period. Similarly, the Company is no longer eligible to
      file claims for refund for any tax that it may have overpaid. The
      following table summarizes the Company's major tax jurisdictions and the
      tax years that remain subject to examination by these jurisdictions as of
      December 31, 2008:
Tax
      Jurisdictions
Tax Years
Federal - Canada
2004 and onward
Provincial - Quebec
2004 and onward
15.
Statement of Cash Flows
  Information
2008
2007
Accounts receivable
$
110,413
$
(292,253
)
Prepaid expenses
(21,493
)
49,471
Investment tax credits receivable
(15,122
)
(200,774
)
Accounts payable
      and accrued liabilities
264,176
131,491
Changes in non-cash operating elements of working capital
$
337,974
$
(312,065
)
Additional Cash Flow Information:
Interest paid
$
189,885
$
81,194
16.
Related Party Transactions
In December 2007, the Company purchased $60,000 in
      laboratory equipment from a shareholder who is also an officer. The
      Company has had the use of the equipment since 2005.
Included in professional fees are $Nil (2007 - $18,104)
      paid to a non-employee director of the Company.
During the year, the Company incurred expenses of
      approximately $18,882 (2007 - $18,606) for laboratory equipment leased
      from a shareholder, who is also an officer of the Company, and $5,614
      (2007 - $5,636) for interest on the loan payable, shareholder.
Included in management salaries are $20,156 (2007 -
      $10,609) for options granted to the Chief Financial Officer under the 2006
      Stock Option Plan and $51,727 for options granted to non employee
      directors in May and September of 2008.
F-28
IntelGenx Technologies Corp.
Notes to Consolidated Financial Statements
December 31, 2008 and 2007
(Expressed in U.S. Funds)
16.
Related Party Transactions
Also included in management salaries are $40,572 (2007 -
      $Nil) cash compensation in form of a retainer for two non employee
      directors.
Included in accounts payable and accrued liabilities is
      approximately $13,390 (2007 - $71,029) payable to shareholders, who are
      also officers of the Company and a cash retainer of $17,857(2007- $Nil)
      payable to a director.
The above related party transactions have been measured
      at the exchange amount which is the amount of the consideration
      established and agreed to by the related parties.
17.
Basic and Diluted Loss Per Common Share
Basic and diluted loss per common share is calculated
      based on the weighted average number of shares outstanding during the
      period. The warrants, share-based compensation and convertible notes have
      been excluded from the calculation of diluted loss per share since they
      are anti-dilutive.
F-29
IntelGenx Technologies Corp.
Consolidated Interim Financial Statements
March 31, 2009
(Expressed in U.S. Funds)
(Unaudited)
Contents
Balance Sheet
2
Statement of Shareholders' Equity
      (Deficiency)
3
Statement of Operations
      and Comprehensive Loss
4
Statement of Cash Flows
5
Notes to Financial
      Statements
6 - 13
F-30
IntelGenx Technologies Corp.
Consolidated Balance Sheet
(Expressed in Thousands of U.S. Dollars ($'000) Except
      Share and Per Share Data)
(Unaudited)
March 31,
December 31,
2009
2008
Assets
Current
Cash and
      cash equivalents
$
305.6
$
556.0
Restricted cash (note 4)
28.7
277.2
Accounts
      receivable
389.5
317.1
Prepaid expenses
48.3
44.9
Investment tax credits
      receivable
295.6
269.2
1,067.7
1,464.4
Property and Equipment
144.0
157.2
$
1,211.7
$
1,621.5
Liabilities
Current
Accounts
      payable and accrued liabilities
581.8
525.8
Convertible notes, less
      unamortized discount of $370.6 thousands (note 5)
859.6
714.5
Deferred income tax
      liability
88.4
127.4
1,529.8
1,367.7
Loan Payable, Shareholder
79.5
82.4
Shareholders' Equity (Deficiency)
Capital Stock
(note 6)
0.2
0.2
Additional Paid-in-Capital
5,113.8
5,080.8
Accumulated Other Comprehensive Income
(193.7
)
(184.4
)
Accumulated
      Deficit
(5,317.9
)
(4,725.0
)
(397.6
)
171.6
$
1,211.7
$
1,621.5
See accompanying notes
Approved on Behalf of the Board:
/s/Bernard
Boudreau
Director
/s/
Horst G.
Zerbe
Director
F-31
IntelGenx Technologies Corp.
Consolidated Statement of Shareholders' Equity
      (Deficiency)
For the Period Ended March 31, 2009
(Expressed in Thousands of U.S. Dollars ($'000) Except
      Share and Per Share Data)
(Unaudited)
Accumulated
Additional
Other
Total
Capital Stock
Paid-In
Comprehensive
Shareholders'
Number
Amount
Capital
Income (Loss)
Deficit
Equity
Balance - December 31, 2008
20,852,002
$
0.2
$
5,080.8
$
(184.4
)
$
(4,725.0
)
$
171.6
Foreign currency translation adjustment
-
-
-
(9.3
)
-
(9.3
)
Stock-based compensation (note 7)
-
-
33.0
-
-
33.0
Net loss for the
      period
-
-
-
-
(592.9
)
(592.9
)
Balance – March 31, 2009
20,850,002
$
0.2
$
5,113.8
$
(193.7
)
$
(5,317.9
)
$
(397.6
)
See accompanying notes
F-32
IntelGenx Technologies Corp.
Consolidated Statement of Operations and Comprehensive
      Loss
(Expressed in Thousands of U.S. Dollars ($'000) Except
      Share and Per Share Data)
(Unaudited)
For the Three-Month Period
Ended March 31,
2009
2008
Revenue
$
201.0
$
145.0
Interest
-
13.1
201.0
158.1
Expenses
Research and development
435.0
337.6
Research
      and development tax credits
(35.8
)
(44.8
)
Management salaries
104.8
107.5
General and
      administrative
39.9
48.2
Professional fees
84.6
118.4
Depreciation
9.5
13.6
Foreign exchange
24.7
(51.5
)
Interest and financing fees
170.2
127.9
832.9
656.9
Loss Before Income Taxes
(631.9
)
(498.8
)
Income taxes (note 8)
(39.0
)
(35.4
)
Net Loss
(592.9
)
(463.4
)
Other Comprehensive Loss
Foreign currency translation adjustment
(9.3
)
(53.1
)
Comprehensive Loss
$
(602.2
)
$
(516.5
)
Basic Weighted
      Average Number of Shares Outstanding
20,850,002
16,123,812
Basic and Diluted Loss Per Common Share (note 10)
$
(0.03
)
$
(0.03
)
See accompanying notes
F-33
IntelGenx Technologies Corp.
Consolidated Statement of Cash Flows
(Expressed in thousands of U.S. Dollars ($'000) Except
      Share and Per Share Data)
(Unaudited)
For the Three-Month Period
Ended March 31,
2009
2008
Funds Provided (Used) -
Operating Activities
Net loss
$
(592.9
)
$
(463.4
)
Depreciation
9.5
13.6
Investor
      relations services
21.6
-
Stock-based compensation
11.4
16.6
Interest
      accretion
145.1
97.4
Deferred income tax
(39.0
)
(35.4
)
(444.3
)
(371.2
)
Changes in non-cash operating elements of working
      capital
(44.3
)
651.9
(488.6
)
280.7
Financing Activities
Issue of
      capital stock
-
2,800.7
Transaction costs
-
(451.6
)
-
2,349.1
Investing Activities
Additions
      to property and equipment
(1.8
)
(4.4
)
Restricted cash (note 4)
248.5
-
246.7
(4.4
)
Increase (Decrease) in Cash and Cash Equivalent
(241.9
)
2,625.4
Effect of Foreign Exchange on Cash and
      Cash Equivalents
(8.5
)
(77.2
)
Cash and Cash Equivalents
Beginning of
      Period
556.0
331.0
End of Period
$
305.6
$
2,879.2
See accompanying notes
F-34
IntelGenx Technologies Corp.
Notes to Consolidated Interim Financial Statements
March 31, 2009
(Expressed in U.S. Funds)
(Unaudited)
1.
Basis of Presentation
The accompanying unaudited consolidated financial
      statements have been prepared in accordance with generally accepted
      accounting principles for interim financial information and with the
      instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
      they do not include all of the information and footnotes required by
      generally accepted accounting principles for complete consolidated
      financial statements. In the opinion of management, all adjustments
      considered necessary for a fair presentation have been included. All such
      adjustments are of a normal and recurring nature.
These financial statements should be read in conjunction
      with the audited financial statements at December 31, 2008. Operating
      results for the quarter ended March 31, 2009 are not necessarily
      indicative of the results that may be expected for the year ending
      December 31, 2009. The Company prepares its financial statements in
      accordance with accounting principles generally accepted in the United
      States. This basis of accounting involves the application of accrual
      accounting and consequently, revenues and gains are recognized when
      earned, and expenses and losses are recognized when incurred.
The consolidated financial statements include the
      accounts of the Company and its subsidiary companies. On consolidation,
      all inter-entity transactions and balances have been eliminated.
The financial statements are expressed in U.S.
    funds.
2.
Going Concern
The accompanying financial statements have been prepared
      assuming the Company will continue as a going concern. The Company has
      reported an accumulated deficit of $5,317,978 (at December 31, 2008 -
      $4,725,045). To date, these losses have been financed principally through
      capital stock, long-term debt and debt from related parties. Additional
      capital and/or borrowings will be necessary in order for the Company to
      continue in existence and attain profitable operations.
The Company's strategy is to continue to focus on the
      development of novel oral immediate release and controlled release
      products for the branded and generic pharmaceutical markets. The Company
      will continue to develop novel, orally administered drug delivery products
      based upon its proprietary oral drug delivery technologies and will
      continue to position itself as a provider of product development services
      for the pharmaceutical industry.
To date revenues consisted primarily of research and
      development fee revenues and have not been sufficient to sustain
      operations. However, the Company expects to generate revenues from sales
      and manufacturing royalties in future years following successful
      development and commercialization of products within its current
      pipeline.
The first product fully-developed by the Company, a
      prenatal multivitamin supplement marketed as Gesticare® in the USA, was
      commercialized in November 2008. Royalty revenue totaling approximately
      $42,915 was received by the Company in the first quarter of 2009 with
      respect to commercial activities which took place in November and December
      2008.
F-35
IntelGenx Technologies Corp.
Notes to Consolidated Interim Financial Statements
March 31, 2009
(Expressed in U.S. Funds)
(Unaudited)
2.
Going Concern (Cont'd)
Management anticipates generating additional royalty
      revenue from this product in fiscal 2009. In addition, management is
      actively pursuing marketing opportunities for the product outside of the
      USA.
The Company currently has a pipeline of 11 products under
      development. Of the products under development, CPI- 300, an oral
      antidepressant formulated using the Company's proprietary controlled
      release technology, is the most advanced. A New Drug Application ("NDA")
      (505(b)(2) for this product was filed with the FDA on April 3,
  2009.
Nonetheless, in order to achieve profitability, revenue
      streams will have to increase significantly from current levels and there
      is no assurance that revenues can increase to such a level.
On May 22, 2007, the Company entered into convertible
      note agreements with certain institutional and accredited investors for
      amounts totaling $1,500,000, of which $1,230,241 remained outstanding at
      March 31, 2009. The notes are repayable on September 22, 2009. The notes
      are convertible into common stock of the Company, at the option of the
      holders, at a rate of $0.70 per share.
We are seeking additional funding through additional
      equity and/or debt financings. However, there can be no assurance that any
      additional financing will become available to us, and if available, on
      terms acceptable to us. Any financing, if available, may involve
      restrictive covenants that impact our ability to conduct our business and
      raise additional funds. If we are unable to raise additional capital when
      required or on acceptable terms, we may have to significantly delay, scale
      back or discontinue our operations, including the development and/or
      commercialization of one or more of our product candidates. The Company
      may also receive funds through the exercise of outstanding stock options
      and warrants in addition to funds that may be generated from
      pre-commercialization payments. There can be no assurance that such
      proceeds, if any, will be material.
Should the Company be unable to continue as a going
      concern, it may be unable to realize the carrying value of its assets and
      to meet its liabilities as they become due.
3.
Adoption of New Accounting Standards
Fair Value Measurements
SFAS No.157 is effective for financial assets and
      liabilities in fiscal years beginning after November 15, 2007, and for
      non-financial assets and liabilities in fiscal years beginning after
      November 15, 2008. The Company adopted SFAS No.157 for financial assets
      and liabilities in the first quarter of fiscal 2008 with no material
      impact to the consolidated financial statements. The Company adopted SFAS
      No.157 for non-financial assets and liabilities in the first quarter of
      fiscal 2009 with no material impact to the consolidated financial
      statements.
.
F-36
IntelGenx Technologies Corp.
Notes to Consolidated Interim Financial Statements
March 31, 2009
(Expressed in U.S. Funds)
(Unaudited)
3.
Adoption of New Accounting Standards
    (Cont'd)
SFAS No. 157 applies to all assets and liabilities that
      are being measured and reported on a fair value basis. SFAS No. 157
      requires new disclosure that establishes a framework for measuring fair
      value in GAAP, and expands disclosure about fair value measurements. This
      statement enables the reader of the financial statements to assess the
      inputs used to develop those measurements by establishing a hierarchy for
      ranking the quality and reliability of the information used to determine
      fair values. The statement requires that assets and liabilities carried at
      fair value be classified and disclosed in one of the following three
      categories:
Level 1:
Quoted market prices in active markets for
      identical assets or liabilities.
Level 2:
Observable market based inputs or unobservable
      inputs that are corroborated by market data.
Level 3:
Unobservable inputs that are not corroborated
      by market data.
In determining the appropriate levels,
the Company performs a detailed analysis of the assets and liabilities that are
subject to SFAS No. 157. At each reporting period, all assets and liabilities
for which the fair value measurement is based on significant unobservable inputs
are classified as Level 3. There are no assets or liabilities measured at fair
value as at March 31, 2009.
Fair Value of Financial Instruments
The table below presents the carrying
value and fair value of Company's financial instruments expressed in thousands
of US$. The disclosure excludes leases.
The fair value represents management's
best estimates based on a range of methodologies and assumptions. The carrying
value of receivables and payables arising in the ordinary course of business and
the investment tax credits receivable and the convertible notes approximate fair
value because of the relatively short period of time between their origination
and expected realization. The loan payable, shareholder is presumed to have a
fair value measured by the cash proceeds exchanged at issuance in accordance
with APB-21 "Interest on Receivables and Payables".
The convertible notes use significant
unobservable inputs and thus are shown as Level 3 hierarchy items. The fair
value of the convertible notes is calculated by discounting the stream of future
payments of interest and principal at the prevailing market rate for a similar
liability that does not have an associated equity component. Results of
discounted cash flow calculations may be adjusted, as appropriate, to reflect
other market conditions or the perceived changes in credit risk of the
borrower.
F-37
IntelGenx Technologies Corp.
Notes to Consolidated Interim Financial Statements
March 31, 2009
(Expressed in U.S. Funds)
(Unaudited)
3.
Adoption of New Accounting Standards
    (Cont'd)
US$ thousands
March 31, 2009
December 31, 2008
Carrying
Estimated
Carrying
Estimated
Level
Value
Fair Value
Value
Fair
      Value
Financial assets
Cash and cash equivalents
Level 1
$
305.6
$
305.6
$
556.0
$
556.0
Restricted cash
Level 1
28.7
28.7
277.2
277.2
Investment tax credits
      receivable
Level 1
295.6
295.6
269.2
269.2
Financial liabilities
Loan payable, shareholder
Level 2
79.5
79.5
82.4
82.4
Convertible
      notes, excluding unamortized discounts
Level 3
1,230.2
1,134.0
1,230.2
1,099.3
4.
Collaborative Agreements
On April 7, 2008, the Company ratified with Cary
      Pharmaceutical, a pharmaceutical development company, an Agreement to
      jointly develop and commercialize an oral antidepressant using IntelGenx's
      proprietary oral delivery technology. Under the terms of the agreement,
      IntelGenx will provide funding and development support for the product and
      will be entitled to profit sharing. The Company accounts for this
      transaction as a collaborative agreement as defined in EITF 07-1
      "Accounting for Collaborative agreements". Per the Agreement, $2,000,000
      of the Company's cash and cash equivalents was initially restricted for
      the funding of this venture. This cash was taken from the proceeds of the
      private placement of March 27, 2008. Expenses exceeding the initial
      $2,000,000 are to be equally shared between the Company and Cary
      Pharmaceuticals.
As of March 31, 2009, the Company has expensed
      approximately $2,085,853 on the project of which $1,971,303 had been
      disbursed, resulting in a restricted cash balance of $28,697 and amounts
      payable of $114,550. Included within these disbursements is approximately
      $222,236 paid to Cary Pharmaceutical in respect of management fees. All
      expenses incurred with respect to the collaborative agreement were
      expensed in the statement of operations and were classified as research
      and development expenses and professional fees.
Development work for this product was completed in the
      fourth quarter of 2008 and a New Drug Application ("NDA") (505(b)(2) was
      filed with the FDA on April 3, 2009.
F-38
IntelGenx Technologies Corp.
Notes to Consolidated Interim Financial Statements
March 31, 2009
(Expressed in U.S. Funds)
(Unaudited)
5.
Convertible Notes
On May 22, 2007 the Company entered into convertible note
      agreements with certain institutional and accredited investors for amounts
      totaling $1,500,000. The convertible notes bear interest at the rate of 8%
      per annum and are repayable on September 22, 2009. Interest is payable
      quarterly and payments commenced on July 1, 2007. The notes are
      convertible into common stock of the Company, at the option of the
      holders, at a rate of $0.70 per share. The Company also issued to the
      holders 2,142,857 stock purchase warrants exercisable at $1.02 per share
      before May 22, 2012.
On May 22, 2007, the Company paid approximately $229,323
      in cash consideration and issued warrants with a fair value of $82,993 in
      consideration for transaction costs. These transaction costs were
      allocated between the convertible debt and the warrants based on their
      relative fair value.
The Company may, at its option, elect to pay the interest
      by the issuance of common shares. The number of shares is to be determined
      by dividing the amount of the interest payment by the number which is 85%
      of the average market price of the Company's common shares for the 20
      trading days immediately prior to the interest payment date assuming the
      average market price is equal or greater than $0.70 as adjusted for
      reverse and forward share splits, recapitalizations and the like that
      occur after the date of the Securities Purchase Agreements.
In accordance with EITF Issue 98-5 "Accounting for
      Convertible Securities with Beneficial Conversion Features or Contingently
      Adjustable Conversion Ratios", the Company recognized the value of the
      embedded beneficial conversion feature of $490,093 as additional paid-in
      capital and an equivalent discount which will be expensed over the term of
      the convertible notes. In addition, in accordance with EITF Issue 00-27
      "Application of Issue No.98-5 to Certain Convertible Instruments", the
      Company has allocated the proceeds of issuance between the convertible
      notes and the detachable warrants based on their relative fair value.
      Accordingly, the Company recognized the fair value of the detachable
      warrants of $490,093 as additional paid-in capital and an equivalent
      discount against the convertible notes. The difference between the face
      amount of the convertible notes and their carrying value is amortized over
      the life of the convertible notes. The Black-Scholes Model was used to
      calculate the fair value of the warrants.
The underlying assumptions included in the Black-Scholes
      Model were as follows:
Expected volatility
64%
Contractual life
5 years
Risk-free interest rate
4.39%
Dividend yield
Nil
Substantially all of the assets of the
Company have been pledged as security of the convertible notes. In the three
months ended March 31, 2009, $23,578 of interest was paid (2008 - $28,714), and
$145,129 of interest has been accreted (2008 - $97,498). In the first quarter of
2009, no convertible notes were exchanged for shares of common stock (2008 -
Nil).
F-39
IntelGenx Technologies Corp.
Notes to Consolidated Interim Financial Statements
March 31, 2009
(Expressed in U.S. Funds)
(Unaudited)
6.
Capital Stock
Authorized -
100,000,000 common shares of $0.00001 par value
20,000,000 preferred shares of $0.00001 par
      value
Issued -
20,850,002 common shares
$
209
During the three months ended March 31, 2009 the Company
      had no transactions affecting capital stock.
7.
Additional Paid-In Capital
Stock Options
No stock options were granted and no stock options were
      exercised during the first quarter of 2009.
Compensation expenses for stock-based compensation of
      $32,951 and $16,560 were recorded during the three months ended March 31,
      2009 and 2008 respectively. Of the amount expensed in 2009, $21,609 (2008
      - $Nil) relates to stock options granted to Auctus Capital as compensation
      for investor relation services and $11,342 (2008 - $16,560) relates to
      stock options granted to employees. The amount expensed in 2008 relates to
      stock options granted to employees. As at March 31, 2009, the Company has
      $51,039 (2008 - $79,894) of unrecognized stock-based
  compensation.
Warrants
As of March 31, 2009, the Company had 6,678,223, warrants
      outstanding at an average exercise price of $0.95 per warrant for one
      share each of the Company's ordinary shares. The warrants will expire at
      various dates, with 4,321,080 expiring in 2010 and 2,357,143 expiring in
      2012.
No warrants were exercised during the three months ended
      March 31, 2009. As at March 31, 2008, 5,186 shares of common stock were
      issued as a result of the cashless exercise of 10,638 warrants with an
      exercise price of $0.41 and a fair value of $0.80.
F-40
IntelGenx Technologies Corp.
Notes to Consolidated Interim Financial Statements
March 31, 2009
(Expressed in U.S. Funds)
(Unaudited)
7.
Additional Paid-In Capital
  (Cont'd)
Number of
Weighted average
warrants
exercise price
$
Outstanding warrants at January 1, 2009
6,678,2
0.95
Warrants granted
-
Exercised
-
Expired
-
Outstanding warrants at March 31, 2009
6,678,2
0.95
8.
Income Taxes
Deferred Income Taxes
The balance of deferred income taxes as at March 31, 2009
      represents the tax effect of the convertible debt arising from the
      difference between the convertible debt's basis for accounting purposes
      and that for income tax purposes and it has been charged to additional
      paid-in capital. As the convertible debt is repaid, the deferred tax
      liability will be charged to expenses.
9.
Related Party Transactions
During the three month period ended March 31, 2009, the
      Company incurred expenses of approximately $4,030 (2008 - $5,044) for
      laboratory equipment leased from a shareholder, who is also an officer of
      the Company, and $1,241 (2008 - $1,545) for interest on the loan payable,
      shareholder.
Included in management salaries are $4,967 (2008 -
      $6,365) for options granted to the Chief Financial Officer under the 2006
      Stock Option.
Included in accounts payable and accrued liabilities is
      approximately $18,378 (2008 - $76,000) payable to shareholders, who are
      also officers of the Company and a cash retainer of $17,243 (2008- $Nil)
      payable to a director.
The above related party transactions have been measured
      at the exchange amount which is the amount of the consideration
      established and agreed to by the related parties.
F-41
IntelGenx Technologies Corp.
Notes to Consolidated Interim Financial Statements
March 31, 2009
(Expressed in U.S. Funds)
(Unaudited)
10.
Basic and Diluted Loss Per Common Share
Basic and diluted loss per common share is calculated
      based on the weighted average number of shares outstanding during the
      period. The warrants, share-based compensation and convertible notes have
      been excluded from the calculation of diluted loss per share since they
      are anti-dilutive.
F-42