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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Acasti Pharma Inc | NASDAQ:ACST | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.13 | -4.50% | 2.76 | 2.70 | 3.66 | 2.89 | 2.70 | 2.84 | 9,015 | 05:00:01 |
6,594,615 Common Shares
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Page
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ABOUT THIS PROSPECTUS
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ii
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PROSPECTUS SUMMARY
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1
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THE OFFERING
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4
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RISK FACTORS
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6
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
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7
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USE OF PROCEEDS
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9
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DIVIDEND POLICY
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10
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SELLING SHAREHOLDERS
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11
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PLAN OF DISTRIBUTION
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13
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DESCRIPTION OF COMMON SHARES
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15
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MATERIAL DIFFERENCES BETWEEN THE BUSINESS CORPORATIONS ACT (QUÉBEC) AND THE DELAWARE GENERAL CORPORATION LAW
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16
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LEGAL MATTERS
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23
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EXPERTS
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23
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INCORPORATION BY REFERENCE
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23
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WHERE YOU CAN FIND MORE INFORMATION
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24
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•
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GTX-104 is a clinical stage, novel, injectable formulation of nimodipine being developed for intravenous infusion (IV) in
aneurysmal subarachnoid hemorrhage (aSAH) patients to address significant unmet medical needs. The unique nanoparticle technology of GTX-104 facilitates aqueous formulation of insoluble nimodipine for a standard peripheral IV infusion.
GTX-104 provides a convenient IV delivery of nimodipine in the Intensive Care Unit eliminating the need for nasogastric tube administration in unconscious or dysphagic patients. Intravenous delivery of GTX-104 also has the potential to
lower food effects, drug-to-drug interactions, and eliminate potential dosing errors. Further, GTX-104 has the potential to better manage hypotension in aSAH patients. GTX-104 has been administered in over 150 healthy volunteers and was
well tolerated with significantly lower inter- and intra-subject pharmacokinetic variability compared to oral nimodipine. The pivotal PK bridging study was successfully completed in May 2022.
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•
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GTX-102, an oral-mucosal betamethasone spray for the treatment of Ataxia Telangiectasia (“A-T”), a complex orphan pediatric genetic neurodegenerative disorder usually diagnosed in young children, for which no FDA approved treatment currently exists.
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•
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GTX-101, a topical bioadhesive film-forming bupivacaine spray for Postherpetic Neuralgia (“PHN”), which can be persistent and often causes debilitating pain following infection by the shingles virus. We believe that GTX-101 could be administered to patients with PHN
to treat pain associated with the disease.
|
•
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We are dependent on the success of our lead drug candidate, GTX-104.
|
•
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Clinical development is a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may
not be predictive of future trial results. Failure can occur at any stage of clinical development.
|
•
|
We are subject to uncertainty relating to healthcare reform measures and reimbursement policies which, if not favorable to our
drug candidates, could hinder or prevent our drug candidates’ commercial success.
|
•
|
If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our
drug products, if approved, we may be unable to generate any revenue.
|
•
|
If we are unable to differentiate our drug products from branded reference drugs or existing generic therapies for similar
treatments, or if the FDA or other applicable regulatory authorities approve products that compete with any of our drug products, our ability to successfully commercialize our drug products would be adversely affected.
|
•
|
Our success depends in part upon our ability to protect our intellectual property for our drug candidates.
|
•
|
Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
|
•
|
We do not have internal manufacturing capabilities, and if we fail to develop and maintain supply relationships with various
third-party manufacturers, we may be unable to develop or commercialize our drug candidates.
|
•
|
The design, development, manufacture, supply, and distribution of our drug candidates are highly regulated and technically
complex.
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THE OFFERING
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|||
Common shares to be offered by the Selling Shareholders
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Up to 6,594,615 common shares.
|
||
Common shares outstanding prior to this offering
|
|||
Common shares to be outstanding after this offering
|
14,042,648 common shares
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||
Use of proceeds
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We will not receive any proceeds from the sale of our common shares offered hereby by the Selling Shareholders, although we will
receive the net proceeds of any Warrants exercised for cash.
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||
Risk Factors
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An investment in our securities involves a high degree of risk. See “Risk Factors” beginning on page 6 of this prospectus and the
similarly titled sections in the documents incorporated by reference into this prospectus.
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Nasdaq Capital Market symbol
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Our common shares are listed on The Nasdaq Capital Market under the symbol “ACST.” We do not intend to apply for listing of the
Warrants on any securities exchange or nationally recognized trading system.
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•
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•
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921,775 common shares available for future
issuance under our Stock Option Plan and Equity Incentive Plan as of October 5, 2023.
|
Year ended March 31, 2023
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Year ended March 31, 2022
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|||||||||
As Originally filed
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||||||||||
Basic and diluted loss per share ($)
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$
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(0.95
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)
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$
|
(0.27
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)
|
||||
Weighted average number of common shares, basic and diluted (#)
|
44,612,831
|
36,841,762
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||||||||
Common Shares
|
44,612,831
|
44,288,183
|
||||||||
Stock Options
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4,445,492
|
2,989,381
|
||||||||
Stock Options strike price
|
$
|
2.27
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$
|
2.98
|
||||||
May 2018 Canadian public offering warrants
|
824,218
|
824,218
|
||||||||
May 2018 Canadian public offering warrants strike price
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$
|
10.48
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$
|
10.48
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||||||
December 2017 U.S. public offering warrants
|
-
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884,120
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||||||||
December 2017 U.S. public offering warrants strike price
|
-
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$
|
10.08
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|||||||
December 2017 US public offering broker warrants
|
-
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32,390
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||||||||
December 2017 US public offering broker warrants strike price
|
-
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$
|
10.10
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|||||||
As Revised With Impact of Share Consolidation
|
||||||||||
Basic and diluted loss per share ($)
|
$
|
(5.70
|
)
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$
|
(1.62
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)
|
||||
Weighted average number of common shares, basic and diluted (#)
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7,435,472
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6,140,294
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||||||||
Common Shares
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7,435,533
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7,381,425
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||||||||
Stock Options
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740,957
|
498,231
|
||||||||
Stock Options strike price
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$
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$
|
13.60
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$
|
17.88
|
|||||
May 2018 Canadian public offering warrants
|
137,370
|
137,370
|
||||||||
May 2018 Canadian public offering warrants strike price
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$
|
62.88
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$
|
62.88
|
||||||
December 2017 U.S. public offering warrants
|
-
|
147,354
|
||||||||
December 2017 U.S. public offering warrants strike price
|
-
|
$
|
60.48
|
|||||||
December 2017 US public offering broker warrants
|
-
|
5,399
|
||||||||
December 2017 US public offering broker warrants strike price
|
-
|
$
|
60.60
|
•
|
our clinical trials, including expected costs, goals, timing and other expectations related thereto;
|
•
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our ability to build a premier, late-stage specialty pharmaceutical company focused in rare and orphan disease and, on
developing and commercializing products that improve clinical outcomes using our novel drug delivery technologies;
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•
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our ability to apply new proprietary formulations to existing pharmaceutical compounds to achieve enhanced efficacy, faster
onset of action, reduced side effects, and more convenient drug delivery that can result in increased patient compliance;
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•
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the potential for our drug candidates to receive orphan drug designation from the FDA or regulatory approval under the Section
505 (b)(2) regulatory pathway under the Federal Food, Drug and Cosmetic Act;
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•
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the future prospects of our GTX-104, GTX-102 and GTX-101 drug candidates;
|
•
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our plan to prioritize the development of GTX-104;
|
•
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our plan to maximize the value of our de-prioritized drug candidates, GTX-102 and GTX-101, including through potential
development, out-licensing or sale of those drug candidates;
|
•
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the quality of our clinical data, the cost and size of our development programs, expectations and forecasts related to our
target markets and the size of our target markets; the cost and size of our commercial infrastructure and manufacturing needs in the United States, European Union, and the rest of the world; and our expected use of a range of
third-party contract research organizations and contract manufacturing organizations at multiple locations;
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•
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expectations and forecasts related to our intellectual property portfolio, including but not limited to the probability of
receiving orphan drug designation from the FDA for our leading pipeline products; our patent portfolio strategy; and outcomes of our patent filings and extent of patent protection;
|
•
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our strategy, future operations, prospects and the plans of our management with a goal to enhance shareholder value;
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•
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our intellectual property position and duration of our patent rights;
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•
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our need for additional financing, and our estimates regarding our operating runway and timing for future financing and capital
requirements;
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•
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our expectation regarding our financial performance, including our costs and expenses, liquidity, and capital resources;
|
•
|
our projected capital requirements to fund our anticipated expenses; and
|
•
|
our ability to establish strategic partnerships or commercial collaborations or obtain non-dilutive funding.
|
•
|
we are dependent on the success of our lead drug candidate, GTX-104;
|
•
|
clinical development is a lengthy and expensive process
with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results. Failure can occur at any stage of clinical development;
|
•
|
we are subject to uncertainty relating to healthcare reform measures and reimbursement policies which, if not favorable to our
drug candidates, could hinder or prevent our drug candidates’ commercial success;
|
•
|
if we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell
our drug products, if approved, we may be unable to generate any revenue;
|
•
|
if we are unable to differentiate our drug products from branded reference drugs or existing generic therapies for similar
treatments, or if the U.S. Food and Drug Administration (“FDA”) or other applicable regulatory authorities approve products that compete with any of our drug products, our ability to successfully commercialize our drug products would be
adversely affected;
|
•
|
our success depends in part upon our ability to protect our intellectual property for our drug candidates;
|
•
|
intellectual property rights do not necessarily address all potential threats to our competitive advantage;
|
•
|
we do not have internal manufacturing capabilities, and if we fail to develop and maintain supply relationships with various
third-party manufacturers, we may be unable to develop or commercialize our drug candidates;
|
•
|
the design, development, manufacture, supply, and distribution of our drug candidates are highly regulated and technically
complex; and
|
•
|
the other risks and uncertainties identified in Item 1A. Risk Factors included in our Annual Report on Form 10-K for the year
ended March 31, 2023.
|
|
|
|
|
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|
|
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Shares Beneficially Owned
After this Offering
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|
|||||||
Selling Shareholder
|
|
Number of Shares Beneficially
Owned Before this Offering(1) |
|
|
Number of Shares to be Sold in
this Offering |
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|
Number of Shares
|
|
|
Percentage of Total Outstanding Common Shares(1)
|
|
||||
ADAR1 Partners, LP (2)
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|
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3,323,885
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3,297,306
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26,579
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*
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Joseph F. Lawler (3)
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|
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1,099,103
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1,099,103
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0
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|
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|
-
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SS Pharma LLC (4)
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|
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1,505,846
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1,099,103
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406,743
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2.896%
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Shore Pharma LLC(5)
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|
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1,610,808
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|
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1,099,103
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|
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511,705
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4%
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(1)
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The ability to exercise the Warrants held by the
Selling Shareholders is subject to a beneficial ownership limitation that, at the time of initial issuance of the Warrants, was capped at 4.99%, 9.99% or 19.99% (solely with respect to Shore Pharma LLC) beneficial ownership of our
issued and outstanding common shares (post-exercise). These beneficial ownership limitations may be adjusted up or down (up to 19.99%), subject to providing advanced notice to us, provided, however, such Selling Shareholder
may increase or decrease such percentage to any other percentage not in excess of 19.99%, provided that any increase in such percentage shall not be effective until 61 days after such notice is delivered to the Company. Beneficial ownership as reflected in the Selling Shareholder table reflects the total number of shares potentially issuable underlying the Warrants and does not
give effect to these beneficial ownership limitations. Accordingly, actual beneficial ownership, as calculated in accordance with Section 13(d) and Rule 13d-3 thereunder may be lower than as reflected in the table.
|
(2)
|
The address of ADAR1 Partners, LP is c/o ADAR1 Capital Management, LLC, 3503 Wild Cherry Drive, Building 9, Austin, TX 78738.
The Warrants held by ADAR1 Partners, LP are subject to a beneficial ownership limitation of 4.99%, which limitation restricts ADAR1 Partners, LP from exercising that portion of the Warrants that would result in ADAR1 Partners, LP and
its affiliates owning, after exercise, a number of common shares in excess of the beneficial ownership limitation. The amounts and percentages in the table do not give effect to the beneficial ownership limitation.
|
(3)
|
The address of Joseph F. Lawler is 2110 Ranch Road 620 S, #341732, Lakeway, TX 78734. The Warrants held by Joseph F. Lawler
are subject to a beneficial ownership limitation of 4.99%, which limitation restricts Joseph F. Lawler from exercising that portion of the Warrants that would result in Joseph F. Lawler and his affiliates owning, after exercise, a
number of common shares in excess of the beneficial ownership limitation. The amounts and percentages in the table do not give effect to the beneficial ownership limitation.
|
(4)
|
The address for SS Pharma LLC is 186 Princeton Hightsown Road, Building 3A, Suite 6, West Windsor, New Jersey 08550. The
Warrants held by SS Pharma LLC are subject to a beneficial ownership limitation of 9.99%, which limitation restricts SS Pharma LLC from exercising that portion of the Warrants that would result in SS Pharma LLC and its affiliates
owning, after exercise, a number of common shares in excess of the beneficial ownership limitation. The amounts and percentages in the table do not give effect to the beneficial ownership limitation.
|
(5)
|
The securities are directly held by Shore Pharma LLC and may be deemed to be beneficially owned by Vimal Kavuru, the Chair
of the Company’s board of directors, as the sole member of Shore Pharma LLC. The address of Shore Pharma LLC is 11 Maacka Drive, Holmdel, NJ 07733. The Warrants held by Shore Pharma LLC are subject to a beneficial ownership
limitation of 19.99%, which limitation restricts Shore Pharma LLC from exercising that portion of the Warrants that would result in Shore Pharma LLC and its affiliates owning, after exercise, a number of common shares in excess of
the beneficial ownership limitation. The amounts and percentages in the table do not give effect to the beneficial ownership limitation.
|
•
|
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
|
•
|
transactions involving cross or block trades;
|
•
|
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
|
•
|
exchange distributions in accordance with the rules of the applicable exchange;
|
•
|
privately negotiated transactions;
|
•
|
short sales after the registration statement of which this prospectus forms a part becomes effective;
|
•
|
transactions through broker-dealers to sell a specified number of such securities at a stipulated price per share;
|
•
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through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
|
•
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“at the market” into an existing market for our common shares;
|
•
|
through the writing of options on the securities;
|
•
|
a combination of any such methods of sale; and
|
•
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any other method permitted pursuant to applicable law.
|
|
|
Delaware
|
|
QBCA
|
Number and Election of Directors
|
|
Under the DGCL, the board of directors must consist of at least one director. The number of directors shall be fixed by the bylaws of
the corporation, unless the certificate of incorporation fixes the number of directors, in which case a change in the number of directors shall only be made by an amendment of the certificate of incorporation. Under the DGCL, directors are
elected at annual stockholder meetings by plurality vote of the stockholders, unless a shareholder- adopted bylaw prescribes a different required vote.
|
|
Under the QBCA, the board of directors of a corporation must consist of at least three members, at least two of whom must not be
officers or employees of the corporation or an affiliate of the corporation, so long as the corporation remains a “reporting issuer” for purposes of the QBCA, which includes a corporation that has made a distribution of securities to the
public. Under the QBCA, directors are elected by the shareholders, in the manner and for the term, not exceeding three years, set out in the corporation’s bylaws. Our bylaws provide that our directors are elected at each annual meeting of
shareholders at which such an election is required.
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Removal of Directors
|
|
Under the DGCL, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors, except (i) unless the certificate of incorporation provides otherwise, in the case of a corporation whose board of directors is classified, stockholders may effect such removal only
for cause, or (ii) in the case of a corporation having cumulative voting, if less than the entire board of directors is to be removed, no director may be removed without cause if the votes cast against his removal would be sufficient to
elect him if then cumulatively voted at an election of the entire board of directors, or, if there are classes of directors, at an election of the class of directors of which he is a part.
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|
Under the QBCA, unless the articles of a corporation provide for cumulative voting (which is not the case for us), shareholders of the
corporation may, by resolution passed by a majority of the vote cast thereon at a special meeting of shareholders, remove any or all directors from office and may elect any qualified person to fill the resulting vacancy.
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Vacancies on the Board of Directors
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|
Under the DGCL, vacancies and newly created directorships may be filled by a majority of the directors then in office (even though less
than a quorum) or by a sole remaining director unless (i) otherwise provided in the certificate of incorporation or bylaws of the corporation or (ii) the certificate of incorporation directs that a particular class of stock is to elect such
director, in which case a majority of the other directors elected by such class, or a sole remaining director elected by such class, will fill such vacancy.
|
|
Under the QBCA, vacancies that exist on the board of directors may generally be filled by the board if the remaining directors
constitute a quorum. In the absence of a quorum, the remaining directors shall call a meeting of shareholders to fill the vacancy. If the directors refuse or fail to call a meeting or if there are no directors then in office, the meeting
may be called by any shareholder.
|
Board of Director Quorum and Vote Requirements
|
|
Under the DGCL, a majority of the total number of directors shall constitute a quorum for the transaction of business unless the
certificate of incorporation or bylaws require a greater number. The bylaws may lower the number required for a quorum to one-third the number of directors, but no less.
Under the DGCL, the board of directors may take action by the majority vote of the directors present at a meeting at which a quorum is
present unless the certificate of incorporation or bylaws require a greater vote.
|
|
Under the QBCA, subject to the corporation’s bylaws, a majority of the directors in office constitutes a quorum at any meeting of the
board. Our bylaws also provide that a majority of the directors in office constitutes a quorum at any meeting of the board.
Under the QBCA, a quorum of directors may exercise all the powers of the directors despite any vacancy on the board.
|
Transactions with Directors and Officers
|
|
The DGCL generally provides that no transaction between a corporation and one or more of its directors or officers, or between a
corporation and any other corporation or other organization in which one or more of its directors or officers, are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because
the director or officer is present at or participates in the meeting of the board or committee which authorizes the transaction, or solely because any such director’s or officer’s votes are counted for such purpose, if (i) the material
facts as to the director’s or officer’s interest and as to the transaction are known to the board of directors or the committee, and the board or committee in good faith authorizes the transaction by the affirmative votes of a majority of
the disinterested directors, even though the disinterested directors be less than a quorum (ii) the material facts as to the director’s or officer’s interest and as to the transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the transaction is specifically approved in good faith by vote of the stockholders; or (iii) the transaction is fair as to the corporation as of the time it is authorized, approved or ratified, by the board
of directors, a committee or the stockholders.
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|
Under the QBCA, every director or officer of a corporation must disclose the nature and value of any interest he or she has in a
contract or transaction to which the corporation is a party. For the purposes of this rule, “interest” means any financial stake in a contract or transaction that may reasonably be considered likely to influence decision-making.
Furthermore, a proposed contract or a proposed transaction, including related negotiations, is considered a contract or transaction. In addition, a director or an officer must disclose any contract or transaction to which the corporation
and any of the following are a party: (i) an associate of the director or officer; (ii) a group of which the director or officer is a director or officer; or (iii) a group in which the director or officer or an associate of the director
or officer has an interest. Such disclosure is required even for a contract or transaction that does not require approval by the board of directors. If a director is required to disclose his or her interest in a contract or transaction,
such director is not allowed to vote on any resolution to approve, amend or terminate the contract or transaction or be present during deliberations concerning the approval, amendment or termination of such contract or transaction, unless
the contract or transaction (i) relates primarily to the remuneration of the director or an associate of the director as a director, officer, employee or mandatory of the corporation or an affiliate of the corporation, (ii) is for
indemnity or liability insurance under the QBCA, or (iii) is with an affiliate of the corporation, and the sole interest of the director is as a director or officer of the affiliate.
If a director or officer does not disclose his or her interest in accordance with the QBCA, or (in the case of a director) votes in
respect of a resolution on a contract or transaction in which he or she is interested contrary to the QBCA, the corporation or a shareholder may ask the court to declare the contract or transaction null and to require the director or
officer to account to the corporation for any profit or gain realized on it by the director or officer or the associates of the director or officer, and to remit the profit or gain to the corporation, according to the conditions the court
considers appropriate. However, the contract or transaction may not be declared null if it was approved by the board of directors and the contract or transaction was in the interest of the corporation when it was approved, nor may the
director or officer concerned, in such a case, be required to account for any profit or gain realized or to remit the profit or gain to the corporation. In addition, the contract or transaction may not be declared null if it was approved
by ordinary resolution by the shareholders entitled to vote who do not have an interest in the contract or transaction, the required disclosure was made to the shareholders in a sufficiently clear manner and the contract or transaction
was in the best interests of the corporation when it was approved, and if the director or officer acted honestly and in good faith, he or she may not be required to account for the profit or gain realized and to remit the profit or gain
to the corporation.
|
Limitation on Liability of Directors
|
|
Under the DGCL, a corporation’s certificate of incorporation may include a provision eliminating or limiting the personal liability of
a director to the corporation and its stockholders for damages arising from a breach of fiduciary duty as a director. However, no provision can limit the liability of a director for:
•breach of the director’s duty of loyalty to the
corporation or its stockholders;
•acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law;
•intentional or negligent payment of unlawful
dividends or stock purchases or redemptions; or
•for any transaction from which the director derived
an improper personal benefit.
|
|
The QBCA does not permit the limitation of a director’s liability as the DGCL does.
|
Indemnification of Directors and Officers
|
|
The DGCL permits indemnification for derivative suits only for expenses (including legal fees) and only if the person is not found
liable, unless a court determines the person is fairly and reasonably entitled to the indemnification.
|
|
Under the QBCA, a corporation must indemnify a director or officer, a former director or officer or a person who acts or acted at the
corporation’s request as a director or officer, or an individual acting in a similar capacity of another group (who is referred to in this document as an indemnifiable person) against all costs, charges and expenses, including an amount
paid to settle an action or satisfy a judgment, reasonably incurred by the indemnifiable person on the exercise of the person’s functions or arising from any investigative or other proceeding in which the person is involved if:
•the person acted honestly and loyally in the interest
of the corporation or other group, and
•in the case of a proceeding enforceable by a monetary
penalty, the person had reasonable grounds for believing the person’s conduct was lawful.
In the case of a derivative action, indemnity may be made only with court approval.
|
Call and Notice of Shareholder Meetings
|
|
Under the DGCL, an annual or special stockholder meeting is held on such date, at such time and at such place as may be designated by
the board of directors or any other person authorized to call such meeting under the corporation’s certificate of incorporation or bylaws. If an annual meeting for election of directors is not held on the date designated or an action by
written consent to elect directors in lieu of an annual meeting has not been taken within 30 days after the date designated for the annual meeting, or if no date has been designated, for a period of 13 months after the later of the last
annual meeting or the last action by written consent to elect directors in lieu of an annual meeting, the Delaware Court of Chancery may summarily order a meeting to be held upon the application of any stockholder or director.
|
|
Under the QBCA, an annual meeting of shareholders must be held no later than 15 months after holding the last preceding annual
meeting. Under the QBCA, the directors of a corporation may call a special meeting at any time. In addition, holders of not less than 10% of the issued shares of a corporation that carry the right to vote at a meeting sought to be held
may requisition the directors to call a meeting of shareholders for the purposes stated in the requisition.
|
Shareholder Action by Written Consent
|
|
Under the DGCL, a majority of the stockholders of a corporation may act by written consent without a meeting unless such action is
prohibited by the corporation’s certificate of incorporation.
|
|
Under the QBCA, a written resolution signed by all the shareholders of a corporation who would have been entitled to vote on the
resolution at a meeting is effective to approve the resolution.
|
Shareholder Nominations and Proposals
|
|
Not applicable.
|
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Under the QBCA, a shareholder entitled to vote at a shareholders’ meeting may submit a shareholder proposal relating to matters which
the shareholder wishes to propose and discuss at an annual shareholders’ meeting and, subject to such shareholder’s compliance with the prescribed time periods and other requirements of the QBCA pertaining to shareholder proposals, the
corporation is required to include such proposal in the information circular pertaining to any annual meeting at which it solicits proxies, subject to certain exceptions. Notice of such a proposal must be provided to the corporation at
least 90 days before the anniversary date of the notice of meeting for the last annual shareholders’ meeting.
In addition, the QBCA requires that any shareholder proposal that includes nominations for the election of directors must be signed by
one or more holders of shares representing in the aggregate not less than five per cent of the shares or five per cent of the shares of a class of shares of the corporation entitled to vote at the meeting to which the proposal is to be
presented.
Our bylaws require shareholders wishing to nominate directors or propose business for a meeting of shareholders to give timely advance
notice in writing, as described in our bylaws.
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Shareholder Quorum and Vote Requirements
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Under the DGCL, quorum for a stock corporation is a majority of the shares entitled to vote at the meeting unless the certificate of
incorporation or bylaws specify a different quorum, but in no event may a quorum be less than one-third of the shares entitled to vote. Unless the DGCL, certificate of incorporation or bylaws provide for a greater vote, generally the
required vote under the DGCL is a majority of the shares present in person or represented by proxy, except for the election of directors which requires a plurality of the votes cast.
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Under the QBCA, unless the bylaws otherwise provide, the holders of a majority of the shares of a corporation entitled to vote at a
meeting of shareholders, whether present in person or represented by proxy, constitute a quorum.
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Amendment of Certificate of Incorporation
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Generally, under the DGCL, the affirmative vote of the holders of a majority of the outstanding stock entitled to vote is required to
approve a proposed amendment to the certificate of incorporation, following the adoption of the amendment by the board of directors of the corporation, provided that the certificate of incorporation may provide for a greater vote. Under the
DGCL, holders of outstanding shares of a class or series are entitled to vote separately on an amendment to the certificate of incorporation if the amendment would have certain consequences, including changes that adversely affect the
rights and preferences of such class or series.
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Under the QBCA, amendments to the articles generally require the approval of not less than two-thirds of the votes cast by shareholders
entitled to vote on the resolution. Specified amendments may also require the separate approval of other classes of shares. If the amendment is of a nature affecting a particular class or series in a manner requiring a separate class or
series vote, that class or series is entitled to vote on the amendment whether or not it otherwise carries the right to vote.
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Amendment of Bylaws
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Under the DGCL, after a corporation has received any payment for any of its stock, the power to adopt, amend or repeal bylaws shall be
vested in the stockholders entitled to vote; provided, however, that any corporation may, in its certificate of incorporation, provide that bylaws may be adopted, amended or repealed by the board of directors. The fact that such power has
been conferred upon the board of directors shall not divest the stockholders of the power nor limit their power to adopt, amend or repeal the bylaws.
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Under the QBCA, the directors may, by resolution, make, amend or repeal any bylaws that regulates the business or affairs of the
corporation. Where the directors make, amend or repeal a bylaw, they are required under the QBCA to submit that action to the shareholders at the next meeting of shareholders and the shareholders may ratify, reject or amend that action by
simple majority, or ordinary resolution. If the action is rejected by shareholders, or the directors of a corporation do not submit the action to the shareholders at the next meeting of shareholders, the action in respect of the bylaws will
cease to be effective, and no subsequent resolution of the directors to make, amend or repeal a bylaw having substantially the same purpose or effect will he effective until it is confirmed.
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Votes on Amalgamations, Mergers, Consolidations and Sales of Assets
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The DGCL provides that, unless otherwise provided in the certificate of incorporation or bylaws, the adoption of a merger agreement
requires the approval of a majority of the outstanding stock of the corporation entitled to vote thereon.
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Under the QBCA, certain extraordinary corporate actions, such as amalgamations (other than with certain affiliated corporations),
continuances and sales, leases or exchanges of the property of a corporation if as a result of such alienation the corporation would be unable to retain a significant part of its business activities, and other extraordinary corporate
actions such as liquidations, dissolutions and (if ordered by a court) arrangements, are required to be approved by “special resolution.”
A “special resolution” is a resolution passed by not less than two-thirds of the votes cast by the shareholders who voted in respect of
the resolution or signed by all shareholders entitled to vote on the resolution. In specified cases, a special resolution to approve the extraordinary corporate action is also required to be approved separately by the holders of a class or
series of shares, including in certain cases a class or series of shares not otherwise carrying voting rights.
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Dissenter’s Rights of Appraisal
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Under the DGCL, a stockholder of a Delaware corporation generally has the right to dissent flume, merger or consolidation in which the
Delaware corporation is participating, subject to specified procedural requirements, including that such dissenting stockholder does not vote in favor of the merger or consolidation. However, the DGCL does not confer appraisal rights, in
certain circumstances, including if the dissenting stockholder owns shares traded on a national securities exchange and will receive publicly traded shares in the merger or consolidation. Under the DGCL, a stockholder asserting appraisal
rights does not receive any payment for his or her shares until the court determines the fair value or the parties otherwise agree to a value. The costs of the proceeding may be determined by the court and assessed against the parties as
the court deems equitable under the circumstances.
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The QBCA provides that shareholders of a corporation are entitled to exercise dissent rights (called “the right to demand the repurchase
of shares”) and to be paid the fair value of their shares in connection with specified matters, including:
•amalgamation with another corporation (other than with
certain affiliated corporations);
•amendment to the corporation’s articles to add, change
or remove any provisions restricting or constraining the transfer of shares;
•amendment to the corporation’s articles to add, change
or remove any restriction upon the businesses or businesses that the corporation may carry on;
•continuance under the laws of another jurisdiction;
•alienation of the property of the corporation or of its
subsidiaries if, as a result of such alienation, the corporation is unable to retain a significant part of its business activity;
•a court order permitting a shareholder to exercise his
right to demand the repurchase of his shares in connection with an application to the court for an order approving an arrangement proposed by the corporation;
•certain amendments to the articles of a corporation
which require a separate class or series vote by a holder of shares of any class or series.
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Oppression Remedy
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The DGCL does not provide for a similar remedy.
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The QBCA provides an oppression remedy (called “rectification of abuse of power or iniquity”) that enables a court to make any order,
whether interim or final, to rectify matters that are oppressive or unfairly prejudicial to the interests of any securityholder, director or officer of the corporation if an application is made to a court by an “applicant”. An “applicant”
with respect to a corporation means any of the following:
•a present or former registered holder or beneficiary of
securities of the corporation or any of its affiliates;
•a present or former officer or director of the
corporation or any of its affiliates; and
•any other person who in the discretion of the court has
the interest required to make the application.
The oppression remedy provides the court with very broad and flexible powers to intervene in corporate affairs to protect shareholders
and other complainants. While conduct that is in breach of fiduciary duties of directors or that is contrary to the legal right of a complainant will normally trigger the court’s jurisdiction under the oppression remedy, the exercise of
that jurisdiction does not depend on a finding of a breach of those legal and equitable rights.
Furthermore, the court may order a corporation to pay the interim expenses of an applicant seeking an oppression remedy, but the
applicant may be held accountable for interim costs on final disposition of the complaint (as in the case of a derivative action as described in “Shareholder Derivative Actions” below).
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Shareholder Derivative Actions
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Under the DGCL, stockholders may bring derivative actions on behalf of, and for the benefit of the corporation. The plaintiff in a
derivative action on behalf of the corporation either must be or have been a stockholder of the corporation at the time of the transaction or must be a stockholder who became a stockholder by operation of law in the transaction regarding
which the stockholder complains. A stockholder may not sue derivatively on behalf of the corporation unless the stockholder first makes demand on the corporation that it bring suit and the demand is refused, unless it is shown that making
the demand would have been a futile act.
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Under the QBCA, a shareholder of a corporation may apply to a Québec court for leave to bring an action in the name of, and on behalf
of, the corporation or any subsidiary, or to intervene in an existing action to which the corporation or any of its subsidiaries is a party, for the purpose of prosecuting, defending or discontinuing an action on behalf of the corporation
or its subsidiary. Under the QBCA, no action may be brought and no intervention in an action may be made unless a court is satisfied that:
•the shareholder has given the required 14-day notice to
the directors of the corporation or the subsidiary of the shareholder’s intention to apply to the court if the directors do not bring, diligently prosecute or defend or discontinue the action;
•the shareholder is acting in good faith; and
•it appears to be in the interests of the corporation or
the relevant subsidiary that the action be brought, prosecuted, defended or discontinued.
Under the QBCA, the court in a derivative action may make any order it thinks fit. In addition, under the QBCA, a court may order the
corporation or its relevant subsidiary to pay the shareholder’s interim costs, including reasonable legal fees and disbursements.
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Anti-Takeover and Ownership Provisions
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Unless an issuer opts out of the provisions of Section 203 of the DGCL, Section 203 generally prohibits a public Delaware corporation
from engaging in a “business combination” with a holder of 15% or more of the corporation’s voting stock (as defined in Section 203), referred to as an interested stockholder, for a period of three years after the date of the transaction in
which the interested stockholder became an interested stockholder, except as otherwise provided in Section 203. For these purposes, the term “business combination” includes mergers, assets sales and other similar transactions with an
interested stockholder.
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While the QBCA does not contain specific anti- takeover provisions with respect to “business combinations,” rules and policies of
certain Canadian securities regulatory authorities, including Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions, or Multilateral Instrument 61-101, contain requirements in connection with,
among other things, ‘related party transactions” and “business combinations”, including, among other things, any transaction by which an issuer directly or indirectly engages in the following with a related party: acquires, sells, leases or
transfers an asset, acquires the related party, acquires or issues treasury securities, amends the terms of a security if the security is owned by the related party or assumes or becomes subject to a liability or takes certain other actions
with respect to debt.
The term “related party” includes directors, senior officers and holders of more than 10% of the voting rights attached to all
outstanding voting securities of the issuer or holders of a sufficient number of any securities of the issuer to materially affect control of the issuer.
Multilateral Instrument 61-101 requires, subject to certain exceptions, the preparation of a formal valuation relating to certain
aspects of the transaction and more detailed disclosure in the proxy material sent to security holders in connection with a related party transaction including related to the valuation. Multilateral Instrument 61-101 also requires, subject
to certain exceptions, that an issuer not engage in a related party transaction unless the shareholders of the issuer, other than the related parties, approve the transaction by a simple majority of the votes cast.
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our Annual Report on Form 10-K for the year ended March 31, 2023, filed on June 23, 2023;
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our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 filed on August 11, 2023;
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our Current Reports on Form 8-K as filed with the Commission on April 5, 2023, May 11, 2023, July 5, 2023, July 7, 2023 and July
24, 2023, September 26, 2023 and October 11, 2023, to the extent “filed” and not “furnished” pursuant to Section 13(a) of the Exchange Act; and
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the description of our common shares set forth in our registration statement on Form F-1 (File No. 333-220755) filed with the SEC
on September 29, 2017 and declared effective on December 19, 2017 and our Form 8-A filed with the SEC on January 4, 2013, as updated by the description of our common shares filed as Exhibit 4.6 to our Annual Report on Form 10-K for the
year ended March 31, 2022, filed with the Commission on June 21, 2022, including any amendment or report filed for the purpose of updating that description.
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