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NOTICE OF ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS
fsd_ex991.htm EXHIBIT 99.1
ANNUAL GENERAL AND SPECIAL MEETING OF THE SHAREHOLDERS TO BE HELD ON
MANAGEMENT INFORMATION CIRCULAR
DATED: JUNE 10, 2024
199 Bay St., Suite 4000
Toronto, Ontario M5L 1A9
NOTICE OF ANNUAL GENERAL AND SPECIAL
MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the annual general and special meeting of the shareholders ("Shareholders") of FSD Pharma Inc. (the "Company") will be held in person at the offices of Garfinkle Biderman LLP, 1 Adelaide Street East, Suite 801, Toronto Ontario M5C 2V9 on Monday, July 22, 2024 at 1:00 p.m. (Toronto/New York time) subject to any adjournments or postponements thereof (the "Meeting"), for the following purposes:
| 1. | to receive and consider the audited consolidated annual financial statements of the Company for the financial years ended December 31, 2023 and 2022, together with the reports of the auditor thereon (the " Financial Statements "); |
| 2. | to elect directors to the board of directors of the Company (the " Board ") for the ensuing year, as more particularly set forth in the accompanying management information circular dated July 10, 2024, and prepared for the purpose of the Meeting (the " Circular "); |
| 3. | to re-appoint MNP LLP as the auditor of the Company for the ensuing year and to authorize the Board to fix the remuneration of the auditor, as more particularly set forth in the Circular; |
| 4. | to consider and, if deemed advisable, to pass with or without variation, a special resolution providing for the consolidation of the Company's issued and outstanding class A multiple voting shares (the " MVS ") and class B subordinate voting shares (the " Class B Subordinate Voting Shares ") at such a consolidation ratio to be determined by the Board, in its sole discretion, at such a consolidation ratio, of up to one hundred (100) pre-consolidation MVS and Class B Subordinate Voting Shares for one (1) post-consolidation MVS and Class B Subordinate Voting Shares; |
| 5. | to consider and, if deemed advisable, to pass, with or without variation, a special resolution approving a change in the name of the Company to be such name as determined by the Board in its sole discretion; |
| 6. | the holders of Class B Subordinate Voting Shares, exclusive of Class B Subordinate Voting Shares held by holders of MVS, will be asked to consider and, if deemed advisable, to pass, with or without variation, a special resolution approving and ratifying the Company's articles of amendment which were filed on February 3, 2020, expanding the definition of "Permitted Holders" under the Company's articles, as further described in the Circular; |
| 7. | the holders of Class B Subordinate Voting Shares, exclusive of Class B Subordinate Voting Shares held by holders of MVS, will be asked to consider and, if deemed advisable, to pass, with or without variation, an ordinary resolution authorizing the Board to approve, in its sole discretion, the issuance of additional MVS up to the maximum number permitted by the applicable regulatory authorities, as further described in the Circular; and |
| 8. | to transact such further and other business as may properly be brought before the Meeting or any adjournment(s) thereof. |
The specific details of the foregoing matters to be put before the Meeting, as well as further information with respect to voting by proxy, are set forth in the Circular.
The record date for the determination of Shareholders entitled to receive notice of and to vote at the Meeting is June 12, 2024 (the "Record Date"). Shareholders whose names have been entered in the register of Shareholders at the close of business on the Record Date will be entitled to receive notice of and to vote at the Meeting.
Only registered Shareholders ("Registered Shareholders") and duly appointed proxyholders (including non-registered (beneficial) Shareholders who have appointed themselves as proxyholder) will be entitled to attend, participate and vote at the Meeting.
This notice of meeting ("Notice of Meeting") should be read together with the Circular and form of proxy (the "Form of Proxy") or a voting instruction form ("VIF"), as applicable.
This year, the Company has elected to use for the Meeting the notice-and-access provisions under National Instrument 54- 101 - Communication with Beneficial Owners of Securities of a Reporting Issuer ("NI 54- 101") and National Instrument 51- 102 - Continuous Disclosure Obligations (together with NI 54-101, the "Notice-and-Access Provisions") of the Canadian Securities Administrators (the "CSA"). The Notice-and- Access Provisions are a set of rules developed by the CSA that reduce the volume of materials that must be physically mailed to the Shareholders by allowing the Company to post its Circular and any additional materials online. Shareholders who would like more information about the Notice-and-Access Provisions may contact the Company's transfer agent, Marrelli Trust Company Limited, at 1 (416) 361-0737 or over e-mail at info@marrellitrust.ca. Please see the section entitled "Notice-and-Access" in the accompanying Circular.
The Circular and all additional materials have been posted under the Company's SEDAR+ profile at www.sedarplus.ca and https://www.fsdpharma.com/financial-results. All Shareholders of record as of the Record Date, will receive a notice and access notification containing instructions on how to access the Circular and all additional materials.
Shareholders are reminded to carefully review the Circular and any additional materials prior to voting on the matters being transacted at the Meeting. Copies of: (i) this Notice of Meeting; (ii) the Circular; (iii) the Form of Proxy or VIF; and (iv) the Financial Statements and accompanying management discussion an analysis, may be obtained free of charge by emailing info@marrellitrust.ca or info@fsdpharma.com, or by calling 1-844-682-5888 within North America or 1-416-361-0737 outside of North America. In order to ensure that a paper copy of the Circular and additional materials can be delivered and additional materials can be delivered to a Shareholder in time for such Shareholder to review the Circular and return a Form of Proxy (or a VIF) prior to the deadline to receive proxies, it is strongly suggested that Shareholders ensure their request is received no later than July 2, 2024.
If you are not a Registered Shareholder and receive these materials through your broker or through another intermediary, please complete and return the voting instruction form in accordance with the instructions provided to you by your broker or by the other intermediary.
Voting and Attending the Meeting
Shareholders are entitled to vote at the Meeting either in person or by proxy, as described in the Circular under the heading "General Proxy Information". Only Registered Shareholders, or the persons they duly appoint as their proxies, are entitled to attend and vote at the Meeting. For information with respect to Shareholders who own their shares in the capital of the Company through an intermediary, see "General Proxy Information" and "Beneficial Shareholders" in the Circular.
Dated at Toronto, Ontario this 10th day of June, 2024. BY ORDER OF THE BOARD
(signed) "Anthony Durkacz" Anthony Durkacz
Co-Founder, Co-Executive Chairman & Director
MANAGEMENT INFORMATION CIRCULAR
This management information circular (the "Circular") is furnished in connection with the solicitation of proxies by the management ("Management") of FSD Pharma Inc. (the "Company"). The form of proxy which accompanies this Circular (the "Form of Proxy") is for use at the annual general and special meeting of the shareholders of the Company ("Shareholders") to be held in held in person at the offices of Garfinkle Biderman LLP, 1 Adelaide Street East, Suite 801, Toronto Ontario, M5C 2V9, on Monday, July 22, 2024 at 1:00 p.m. (Toronto/New York time) subject to any adjournments or postponements thereof (the "Meeting").
The class B subordinate voting shares of the Company ("Class B Subordinate Voting Shares") are traded on the Canadian Securities Exchange (the "CSE") and on the NASDAQ Capital Market ("NASDAQ") under the symbol "HUGE". The Class B Subordinate Voting Shares are also listed and posted for trading on the B rse Frankfurt, or Frankfurt Stock Exchange ("FSE"), under "WKN: A2JM6M" and the trading symbol "0K9A".
Unless otherwise specified, in this Circular, (i) all information provided is current as of June 10, 2024, (ii) references to "$" or "US$" mean U.S. dollars, and all references to "C$" mean Canadian dollars, (iii) "Beneficial Shareholders" means Shareholders who do not hold Shares (as defined herein) in their own name, and (iv) "Intermediaries" refers to brokers, investment firms, clearing houses and similar entities that own securities on behalf of Beneficial Shareholders. For the convenience of the reader, in this Circular, unless otherwise indicated, translations from Canadian dollars into U.S. dollars were made at the rate of C$1.00 to US$0.7410, which is the average rate for the 2023 fiscal year, (2022 average rate: C$1.00=US$0.7688). Such U.S. dollar amounts are not necessarily indicative of the amounts of U.S. dollars that could actually have been purchased upon exchange of Canadian dollars at the dates indicated.
The Company will use the Notice-and-Access Provisions (as defined below) to conduct the solicitation of proxies in connection with the Circular. It is expected that the solicitation will be primarily by mail, but proxies may also be solicited personally, by telephone or email by directors, officers and/or employees of the Company without special compensation. The cost of any such solicitation will be borne by the Company. Arrangements have been made with brokerage houses and other securities intermediaries, clearing agencies, custodians, nominees and fiduciaries to forward solicitation materials to the beneficial Shareholders of record as of June 12, 2024 (the "Record Date").
The Company has elected to deliver the materials in respect of the Meeting pursuant to the notice-and- access provisions (the "Notice-and-Access Provisions") concerning the delivery of proxy-related materials to Shareholders, found 9.1(1) of National Instrument 51-102 - Continuous Disclosure Obligations, in the case of registered Shareholders ("Registered Shareholders"), and section 2.7.1 of National Instrument 54- 101 - Communication with Beneficial Owners of Securities of a Reporting Issuer ("NI 54-101"), in the case of Beneficial Shareholders. The Notice-and-Access Provisions are a set of rules that reduce the volume of proxy-related materials that must be physically mailed to shareholders by allowing issuers to deliver meeting materials to shareholders electronically by providing Shareholders with access to these materials online.
The use of the Notice-and-Access Provisions reduces paper waste and mailing costs to the Company. In order for the Company to utilize the Notice-and-Access Provisions to deliver proxy-related materials by posting this Circular and other related materials electronically on a website that is not the SEDAR Plus ("SEDAR+"), the Company must send the accompanying notice of meeting ("Notice of Meeting") to Shareholders, including Beneficial Shareholders, indicating that the proxy-related materials have been posted and explaining how a Shareholder can access them or obtain a paper copy of those materials from the Company.
In accordance with the Notice-and-Access Provisions, the Notice of Meeting and the Form of Proxy or voting instruction form (the "VIF"), as applicable, have been sent to all Shareholders informing them that this Circular, the Notice of Meeting, annual audited consolidated financial statements of the Company for the year ended December 31, 2023 (the "Annual Financial Statements") and management's discussion and analysis of the Company's results of operations and financial condition for the year ended December 31, 2023 (the "MD&A") are available online and explaining how this Circular may be accessed, in addition to outlining relevant dates and matters to be discussed at the Meeting. The Circular, the Notice of Meeting, Annual Financial Statements and MD&A have been posted in full online at https://www.fsdpharma.com/financial-results and under the Company's SEDAR+ profile at www.sedarplus.ca.
Shareholders who would like more information about the Notice-and-Access Provisions should review the "Notice-and-Access" section included in this Circular or may contact the transfer agent, Marrelli Trust Company Limited ("MTCL" or the "Transfer Agent") at: info@marrellitrust.ca up to and including the date of the Meeting, including any adjournment thereof.
The Company will deliver copies of the proxy-related materials to the Intermediaries for onward distribution to the Non-Objecting Beneficial Owners ("NOBOs"). The Company will assume costs for the Intermediaries to deliver to Objecting Beneficial Owners ("OBOs") the proxy-related materials and Form 54-101F7 - Request for Voting Instructions Made by Intermediary of NI 54-101.
Any Shareholder who wishes to receive a paper copy of this Circular free of charge must contact MTCL toll-free at 1-844-682-5888 within North America or 1-416-361-0737 outside of North America. and provide your Voter ID, or you may electronically submit a request by emailing info@marrellitrust.ca up to the date of the Meeting or any adjournment thereof, or thereafter by contacting MTCL, c/o Marrelli Transfer Services Corp. at 82 Richmond Street East, Toronto, ON M5C 1P1. In order to ensure that paper copies of the materials can be delivered to a requesting Shareholder in time for such Shareholder to review materials and return Form of Proxy or VIF prior to the deadline to receive proxies, it is strongly suggested that Shareholders ensure their request is received no later than July 2, 2024.
Solicitation of Proxies
The solicitation of proxies will be made primarily by mail, subject to the use of Notice-and-Access Provisions (as defined below) in relation to the delivery of the Circular, and may be supplemented by telephone or other personal contact by the directors, officers and employees of the Company. Directors,
officers and employees of the Company will not receive any extra compensation for such activities. The Company may also retain, and pay a fee to, one or more professional proxy solicitation firms to solicit proxies from the shareholders of the Company in favour of the matters set forth in the Notice of Meeting. The Company may pay brokers or other persons holding class A multiple voting shares ("MVS" and the holders thereof the "MVS Holders") or Class B Subordinate Voting Shares (and together with the MVS the "Shares" and together with the MVS Holders, the "Shareholders") of the Company in their own names, or in the names of nominees, for their reasonable expenses for sending forms of proxy and this Circular to beneficial owners of Shares and obtaining proxies therefrom. The cost of any such solicitation will be borne by the Company.
No person is authorized to give any information or to make any representation other than those contained herein and, if given or made, such information or representation should not be relied upon as having been authorized by the Company. The delivery of this Circular shall not, under any circumstances, create an implication that there has not been any change in the information set forth herein since the date hereof.
A registered Shareholder of the Company may vote in person at the Meeting or may appoint another person to represent such Shareholder as proxy and to vote the Shares of such Shareholder at the Meeting. Only registered Shareholders of the Company, or the persons they appoint as their proxies, are entitled to attend and vote at the Meeting. For information with respect to Shareholders who own their Shares beneficially through an intermediary, see "Beneficial Shareholders" below.
Appointment and Revocation of Proxies
The persons named in the form of proxy accompanying this Circular are directors and/or officers of the Company. A Shareholder of the Company has the right to appoint a person (who need not be a Shareholder of the Company) other than the persons whose names appear in such form of proxy to attend and act for and on behalf of such Shareholder at the Meeting and at any adjournment hereof. Such right may be exercised by either striking out the names of the persons specified in the form of proxy and inserting the name of the person to be appointed in the blank space provided in the form of proxy or by completing another proper form of proxy and, in either case, delivering the completed and executed form of proxy to the Transfer Agent c/o Marrelli Transfer Services Corp. at 82 Richmond Street East, Toronto, ON M5C 1P1 or fax by sending your voting instructions to 416-360- 7812; or by emailing info@marrellitrust.ca in time for use at the Meeting in the manner specified in the Notice of Meeting or by depositing the completed and executed form of proxy with the chairman of the Meeting prior to the commencement of the Meeting or any adjournment thereof.
A registered Shareholder of the Company who has given a proxy may revoke the proxy at any time prior to its use by: (a) depositing an instrument in writing, including another completed form of proxy, executed by such registered Shareholder or by his or her attorney authorized in writing or by electronic signature or, if the registered Shareholder is a Company or other similar entity, by an authorized officer or attorney thereof (i) at the registered office of the Company, located at 199 Bay St., Suite 4000 Toronto, Ontario M5L 1A9, at any time prior to 1:00 p.m. (Toronto/New York time) on the second to last business day preceding the day of the Meeting, (ii) with the Transfer Agent, c/o Marrelli Transfer Services Corp. at 82 Richmond Street East, Toronto, ON M5C 1P1 at any time prior to 1:00 p.m. (Toronto/New York time) on the second to last business day preceding the day of the Meeting, or (iii) with the chairman of the Meeting on the day of the Meeting; (b) transmitting, by telephonic or electronic means, a revocation that complies with clauses (i), (ii) or (iii) above and that is signed by electronic signature, provided that the means of electronic signature permits a reliable determination that the document was created or communicated by or on behalf of such registered Shareholder or by or on behalf of his or her attorney, as the case may be; or (c) in any other manner permitted by law including attending the Meeting in person.
Exercise of Discretion by Proxies
The Shares represented by an appropriate form of proxy will be voted on any ballot that may be conducted at the Meeting, or at any adjournment thereof, in accordance with the instructions contained on the form of proxy. In the absence of instructions, such Shares will be voted in favour of each of the matters referred to in the Notice of Meeting.
The enclosed form of proxy, when properly completed and signed, confers discretionary authority upon the persons named therein to vote on any amendments to or variations of the matters identified in the Notice of Meeting and on other matters, if any, which may properly be brought before the Meeting or any adjournment thereof. At the date hereof, management of the Company knows of no such amendments or variations or other matters to be brought before the Meeting. However, if any other matters which are not now known to management of the Company should properly be brought before the Meeting, or any adjournment thereof, the Shares represented by such proxy will be voted on such matters in accordance with the judgment of the person named as proxy thereon.
The form of proxy must be signed by the Shareholder of the Company or the duly appointed attorney thereof authorized in writing or, if the Shareholder of the Company is a Company or other similar entity, by an authorized officer of such entity. A form of proxy signed by the person acting as attorney of the Shareholder of the Company or in some other representative capacity, including an officer of a Company which is a Shareholder of the Company, should indicate the capacity in which such person is signing and the form of proxy should be accompanied by the appropriate instrument evidencing the qualification and authority to act of such person, unless such instrument has previously been filed with the Company. A Shareholder of the Company or his or her attorney may sign the form of proxy or a power of attorney authorizing the creation of a proxy by electronic signature provided that the means of electronic signature permits a reliable determination that the document was created or communicated by or on behalf of such Shareholder or by or on behalf of his or her attorney, as the case may be.
Beneficial Shareholders
Only registered Shareholders of the Company, or the persons they appoint as their proxies, are entitled to attend and vote at the Meeting. The Shares of a Beneficial Shareholder will generally be registered in the name of either:
| (a) | an intermediary (an " Intermediary ") with whom the Beneficial Shareholder deals in respect of the Shares (including, among others, banks, trust companies, securities dealers or brokers, trustees or administrators of a self-administered registered retirement savings plan, registered retirement income fund, registered education savings plan and similar plans); or | |
| (b) | a clearing agency (such as The Canadian Depository for Securities Limited in Canada or The Depository Trust Company in the United States) or its nominee of which the Intermediary is a participant. |
In accordance with the requirements of National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer published by the Canadian Securities Administrators, the Company has distributed copies of the Notice of Meeting, this Circular and the form of proxy (collectively, the "Meeting Materials") directly to Beneficial Shareholders utilizing the Notice-and-Access Provisions. Intermediaries often use service companies to forward the Meeting Materials to Beneficial Shareholders. Generally, Beneficial Shareholders who have not waived the right to receive Meeting Materials will either receive:
| (c) | Voting Instruction Form : a voting instruction form which is not signed by the Intermediary and which, when properly completed and signed by the Beneficial Shareholder and returned to the Intermediary or its service company, will constitute voting instructions which the Intermediary must follow. Typically, the voting instruction form will consist of a one page pre-printed form. Sometimes, instead of the one page pre-printed form, the voting instruction form will consist of a regular printed proxy form accompanied by a page of instructions which contains a removable label with a bar-code and other information. In order for the form of proxy to validly constitute a voting instruction form, the Beneficial Shareholder must remove the label from the instructions and affix it to the form of proxy, properly complete and sign the form of proxy and submit it to the Intermediary or its service company in accordance with the instructions of the Intermediary or its service company; or | |
| (d) | Form of Proxy : a form of proxy which has already been signed by the Intermediary (typically by a facsimile, stamped signature), which is restricted as to the number of Shares beneficially owned by the Beneficial Shareholder but which is otherwise not completed by the Intermediary. Because the Intermediary has already signed the form of proxy, this form of proxy is not required to be signed by the Beneficial Shareholder when submitting the proxy. In this case, the Beneficial Shareholder who wishes to submit a proxy should properly complete the form of proxy and deposit it with the Transfer Agent, c/o Marrelli Transfer Services Corp., at 82 Richmond Street East, Toronto, ON M5C 1P1 or fax by sending your voting instructions to 416-360-7812; or by emailing info@marrellitrust.ca . |
In either case, the purpose of these procedures is to permit Beneficial Shareholders to direct the voting of the Shares they beneficially own. Should a Beneficial Shareholder who receives either a voting instruction form or a form of proxy wish to attend the Meeting and vote in person (or have another person attend and vote on behalf of the Beneficial Shareholder), the Beneficial Shareholder should strike out the names of the persons named in the form of proxy and insert the Beneficial Shareholder's (or such other person's) name in the blank space provided or, in the case of a voting instruction form, follow the directions indicated on the form.
Beneficial Shareholders should carefully follow the instructions of their Intermediaries and their service companies, including those instructions regarding when and where the voting instruction form or the form of proxy is to be delivered.
A Beneficial Shareholder who has submitted a proxy may revoke it by contacting the Intermediary through which the Shares of such Beneficial Shareholder are held and following the instructions of the Intermediary respecting the revocation of proxies.
The solicitation of proxies and the matters to be voted on, as contemplated in this Circular, involve securities of an issuer located in Canada and are being effected in accordance with the corporate laws of the Province of Ontario, Canada and securities laws of the provinces of Canada. As a "foreign private issuer", as defined in Rule 405 under the 1933 Act and Rule 3b-4 under the Exchange Act, the proxy solicitation rules under the Exchange Act, including, but not limited to, Section 14(a) and Regulation 14A thereunder, are not applicable to the Company or this solicitation, and this Circular has been prepared in accordance with the disclosure requirements under the securities laws of the provinces of Canada in which the Company is a reporting issuer. Shareholders should be aware that disclosure requirements under the securities laws of such provinces of Canada may be different from the disclosure requirements under United States securities laws or other jurisdictions.
As a foreign private issuer, we are exempt under the U.S. Securities Exchange Act of 1934, as amended ("Exchange Act"), from, among other things, certain rules prescribing the furnishing and content of proxy statements, and our directors, executive officers and principal shareholders are exempt from the reporting and short-swing profit recovery provisions under Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the U.S. Securities and Exchange Commission ("SEC") as frequently or as promptly as U.S. companies with securities registered under the Exchange Act, including the filing of quarterly reports on Form 10-Q or current reports on Form 8-K. However, we file our Annual Report on Form 20-F with the Securities and Exchange Commission ("SEC"), which contains our audited consolidated financial statements and the related notes in accordance with International Financial Reporting Standards (as issued by the International Accounting Standards Board. We also furnish quarterly reports on Form 6- K to the SEC which contain our unaudited interim condensed consolidated financial statements for each fiscal quarter of each fiscal year prepared in accordance with the International Financial Accounting Standards. These reports can be accessed electronically through EDGAR at www.sec.gov. As noted, we also file reports statements and other information with the Canadian Securities Administrators and these can be accessed electronically on SEDAR+ at www.sedarplus.ca.
Annual Financial Statements and information included or incorporated by reference in this Circular have been prepared in accordance with International Financial Reporting Standards, and are subject to auditing and auditor independence standards in Canada, and thus may not be comparable to financial statements and information that are prepared in accordance with generally accepted accounting principles in the United States.
Except as otherwise prescribed by the OBCA, at a meeting of the Shareholders, each Class B Subordinate Voting Share entitles the holder thereof to one vote and each MVS entitles the holder thereof to 276,660 votes on all matters.
The MVS and Class B Subordinate Voting Shares rank pari passu with respect to the payment of dividends, return of capital and distribution of assets in the event of the liquidation, dissolution or winding up of the Company. In the event of the liquidation, dissolution or winding-up of the Company or any other distribution of its assets among its shareholders for the purpose of winding-up its affairs, whether voluntarily or involuntarily, the holders of MVS and the holders of Class B Subordinate Voting Shares are entitled to participate equally, share for share, subject always to the rights of the holders of any class of shares ranking senior to the MVS and the Class B Subordinate Voting Shares, in the remaining property and assets of the Company available for distribution to shareholders, without preference or distinction among or between the MVS and the Class B Subordinate Voting Shares.
Holders of MVS and Class B Subordinate Voting Shares are entitled to receive, subject always to the rights of the holders of any class of shares ranking senior to the MVS and Class B Subordinate Voting Shares, dividends out of the assets of the Company legally available for the payment of dividends at such times and in such amount and form as the Board may from time to time determine and the Company will pay dividends thereon on a pari passu basis, if, as and when declared by the Board.
The Class B Subordinate Voting Shares are not convertible into any other class of shares. Each outstanding MVS may, at any time at the option of the holder, be converted into one Class B Subordinate Voting Share. Upon the first date that any MVS is transferred by a holder, other than to a permitted holder, the permitted holder which held such MVS until such date, without any further action, shall automatically be deemed to have exercised his, her or its rights to convert such MVS into a fully paid and non-assessable Class B Subordinate Voting Shares.
Subdivision or Consolidation
No subdivision or consolidation of the MVS or the Class B Subordinate Voting Shares may be carried out unless, at the same time, the MVS or the Class B Subordinate Voting Shares, as the case may be, are subdivided or consolidated in the same manner and on the same basis.
Change of Control Transactions
The holders of Class B Subordinate Voting Shares are entitled to participate on an equal basis with holders of MVS in the event of a "Change of Control Transaction" requiring approval of the holders of MVS and Class B Subordinate Voting Shares under the OBCA, unless different treatment of the shares of each such class is approved by a majority of the votes cast by the holders of outstanding MVS and by a majority of the votes cast by the holders of outstanding Class B Subordinate Voting Shares each voting separately as a class.
Proposals to Amend the Articles of Amendment
Neither the holders of the MVS nor the holders of the Class B Subordinate Voting Shares are entitled to vote separately as a class upon a proposal to amend the Company's articles (the "Articles") in the case of an amendment referred to in paragraph (a) or (e) of subsection 170(1) of the OBCA.
Neither the holders of the MVS nor the holders of the Class B Subordinate Voting Shares shall be entitled to vote separately as a class upon a proposal to amend the Articles in the case of an amendment referred to in paragraph (b) of subsection 170(1) of the OBCA unless such exchange, reclassification or cancellation:
(a) affects only the holders of that class; or (b) affects the holders of MVS and Class B Subordinate Voting Shares differently, on a per share basis, and such holders are not otherwise entitled to vote separately as a class under any applicable law in respect of such exchange, reclassification or cancellation.
Take-Over Bid Protection
Under applicable Canadian law, an offer to purchase MVS would not necessarily require that an offer be made to purchase Class B Subordinate Voting Shares. In accordance with the rules of the CSE designed to ensure that, in the event of a take-over bid, the holders of Class B Subordinate Voting Shares will be entitled to participate on an equal footing with holders of MVS, the holders of not less than 80% of the outstanding MVS have entered into a coattail agreement dated May 24, 2018 with the Company and Computershare Trust Company of Canada (the "Coattail Agreement"). The Coattail Agreement contains provisions customary for dual-class, publicly-traded corporations designed to prevent transactions that otherwise would deprive the holders of Class B Subordinate Voting Shares of rights under the take-over bid provisions of applicable Canadian securities legislation to which they would have been entitled if the MVS had been Class B Subordinate Voting Shares.
The undertakings in the Coattail Agreement do not apply to prevent a sale of MVS by a party to the Coattail Agreement if concurrently an offer is made to purchase Class B Subordinate Voting Shares that:
| a) | offers a price per Class B Subordinate Voting Shares at least as high as the highest price per share paid or required to be paid pursuant to the take-over bid for the MVS; | |
| b) | provides that the percentage of outstanding Class B Subordinate Voting Shares to be taken up (exclusive of shares owned immediately prior to the offer by the offeror or persons acting jointly or in concert with the offeror) is at least as high as the percentage of outstanding MVS to be sold (exclusive of MVS owned immediately prior to the offer by the offeror and persons acting jointly or in concert with the offeror); | |
| c) | has no condition attached other than the right not to take up and pay for Class B Subordinate Voting Shares tendered if no shares are purchased pursuant to the offer for MVS; and | |
| d) | is in all other material respects identical to the offer for MVS. |
In addition, the Coattail Agreement does not prevent the sale of MVS by a holder thereof to a permitted holder, provided such sale does not or would not constitute a take-over bid or, if so, is exempt or would be exempt from the formal bid requirements (as defined in applicable securities legislation). The conversion of MVS into Class B Subordinate Voting Shares, shall not, in of itself constitute a sale of MVS for the purposes of the Coattail Agreement.
Under the Coattail Agreement, any sale of MVS (including a transfer to a pledgee as security) by a holder of MVS party to the Coattail Agreement is conditional upon the transferee or pledgee becoming a party to the Coattail Agreement, to the extent such transferred MVS are not automatically converted into Class B Subordinate Voting Shares in accordance with the Articles.
The Coattail Agreement contains provisions for authorizing action by the trustee to enforce the rights under the Coattail Agreement on behalf of the holders of the Class B Subordinate Voting Shares. The obligation of the trustee to take such action will be conditional on the Company or holders of the Class B Subordinate Voting Shares providing such funds and indemnity as the trustee may require. No holder of Class B Subordinate Voting Shares has the right, other than through the trustee, to institute any action or proceeding or to exercise any other remedy to enforce any rights arising under the Coattail Agreement unless the trustee fails to act on a request authorized by holders of not less than 10% of the outstanding Class B Subordinate Voting Shares and reasonable funds and indemnity have been provided to the trustee.
The Coattail Agreement may not be amended, and no provision thereof may be waived, unless, prior to giving effect to such amendment or waiver, the following have been obtained: (a) the consent of the CSE and any other applicable securities regulatory authority in Canada and (b) the approval of at least 662/3% of the votes cast by holders of Class B Subordinate Voting Shares represented at a meeting duly called for the purpose of considering such amendment or waiver, excluding votes attached to Class B Subordinate Voting Shares held directly or indirectly by holders of MVS, their affiliates and related parties and any persons who have an agreement to purchase MVS on terms which would constitute a sale for purposes of the Coattail Agreement other than as permitted thereby.
No provision of the Coattail Agreement limits the rights of any holders of Class B Subordinate Voting Shares under applicable law.
The Board has fixed the close of business on June 12, 2024, as the Record Date for the determination of shareholders of the Company entitled to notice of, and to vote at, the Meeting and any adjournment thereof. Shareholders at the close of business on the Record Date are entitled to receive notice of the Meeting and to vote thereat or at any adjournments or postponements thereof on the basis of 276,660 votes for each MVS held and one vote for each Class B Subordinate Voting Shares held, except to the extent that: (i) a Registered Shareholder has transferred the ownership of any Shares subsequent to the Record Date; and (ii) the transferee of those Shares produces properly endorsed share certificates, or otherwise establishes that he, she or it owns the Shares and demands, not later than 10 days before the Meeting, that his, her or its name be included on the list of persons entitled to vote at the Meeting, in which case, the transferee shall be entitled to vote such Shares at the Meeting. The transfer books will not be closed.
The authorized capital of the Company consists of an unlimited number of MVS and an unlimited number of Class B Subordinate Voting Shares. As of the Record Date, there were 72 MVS issued and outstanding and 45,009,622 Class B Subordinate Voting Shares issued and outstanding. As of the Record Date, the Class B Subordinate Voting Shares represented approximately 69.32% and the MVS represent approximately 30.68%, of the voting rights attaching to all Shares.
The following table sets out the information regarding ownership of the MVS and Class B Subordinate Voting Shares owned by each person who, to the knowledge of the Company, beneficially owns, controls, or directs, indirectly or directly, more than 10% of the issued and outstanding MVS or Class B Subordinate Voting Shares as of the date of this Circular.
| Name | Number of MVS Owned (1) | Number of Class B Subordinate Voting Shares Owned (2) | Percentage of Voting Shares Owned (MVS & Class B Subordinate Voting Shares) |
| Anthony Durkacz (3) | 36 | 1,623,165 | 17.84% |
| Zeeshan Saeed (4) | 36 | 2,741,146 | 19.56% |
| (1) | Each MVS has 276,660 votes per share, and each Class B Subordinate Voting Share has one vote per share. Except as required by the OBCA, the holders of the MVS and holders of the Class B Subordinate Voting Shares vote together as a single class on all matters at meetings of the Shareholders, unless otherwise required to do so pursuant to the OBCA. | |
| (2) | Information regarding shareholdings has been provided by the respective holders or is based on publicly available data and not independently verified by the Company. | |
| (3) | The reported number of MVS consists of shares held by Fortius Research and Trading Corporation (" Fortius "), as to which Mr. Durkacz, who controls Fortius, has shared voting and dispositive power. The reported number of Class B Subordinate Voting Shares consists of (a) the following shares as to which Mr. Durkacz has sole voting and dispositive power: 975,122 outstanding Class B Subordinate Voting Shares and (b) the following shares as to which Mr. Durkacz has shared voting and dispositive power: (i) 106,043 outstanding Class B Subordinate Voting Shares held by Fortius, (ii) 42,000 outstanding Class B Subordinate Voting Shares held by Jacqueline Burns, the spouse of Mr. Durkacz. The reported number of Class B Subordinate Voting Shares does not include 373,671 outstanding Class B Subordinate Voting Shares held by First Republic, of which Mr. Durkacz is a director, Executive Vice President and majority stockholder. Mr. Durkacz does not have or share voting or investment power over the Class B Subordinate Voting Shares held by First Republic. | |
| (4) | Mr. Saeed is the registered owner of 1,800,115 Class B Subordinate Voting Shares and Xorax Family Trust, a trust of which Mr. Saeed is a beneficiary (" Xorax "), is the registered owner of 24 MVS and the registered owner of 441,031 of the Class B Subordinate Voting Shares. The reported number of MVS consists of 36 MVS held by Xorax, of which Mr. Zeeshan Saeed has shared voting and dispositive power. The reported number of Class B Subordinate Voting Shares consists of the following shares as to which Mr. Zeeshan Saeed (a) has sole voting and dispositive power: (i) 1,800,115 outstanding Class B Subordinate Voting Shares and (b) has shared voting and dispositive power: (i) 36 Class B Subordinate Voting Shares issuable upon conversion of MVS held by Xorax and (ii) 441,031 outstanding Class B Subordinate Voting Shares held by Xorax. |
1. Annual Financial Statements
The Annual Financial Statements, together with the report of the auditors thereon, are available under the Company's profile on SEDAR+ at www.sedarplus.ca. At the Meeting, the Company will submit to the Shareholders the Annual Financial Statements and the report of the auditors thereon. No formal action will be taken at the Meeting to approve the Annual Financial Statements.
2. Election of Directors
The current term of office of each sitting director ends at the close of the Meeting, but each director can be re-elected to hold office until the next annual meeting of Shareholders. At the Meeting, the Shareholders will be asked to consider a resolution electing a Board of seven (7) directors for a term that will expire upon the earlier of the next annual meeting of Shareholders or upon their successor being duly elected or appointed, unless his or her office is earlier vacated (the "Proposed Nominees"). All Proposed Nominees have indicated their willingness to stand for election. The Company does not contemplate that any of such Proposed Nominees will be unable to serve as directors; however, if for any reason any of the Proposed Nominees do not stand for election or are unable to serve as such, proxies held by such directors or officers of the Company stated in the proxy as proxyholder to vote a Shareholder's Shares at the Meeting ("Management Designees") will be voted for another nominee in their discretion unless the Shareholder has specified in his or her Form of Proxy or VIF that his or her Shares are to be withheld from voting in the election of directors. Each director elected will hold office until the next annual meeting of Shareholders or until his or her successor is duly elected or appointed, all as the case may be, unless his or her office is earlier vacated in accordance with the constating documents of the Company or the provisions of the OBCA to which the Company is subject.
Unless otherwise instructed, it is the intention of the Management Designees, if named as proxy, to vote for the election of the Proposed Nominees as listed on the following pages. If for any reason, at the time of the Meeting any of the Proposed Nominees are unable to serve, and unless otherwise specified in the proxy, it is intended that the Management Designees will vote in their discretion for a substitute nominee or nominees.
The Board unanimously recommends that Shareholders vote FOR the election of the Proposed Nominees.
In order for the resolution appointing the Proposed Nominees to be effective, the election of the Proposed Nominees must be approved by at least a majority of the votes cast by the Shareholders present virtually or by proxy at the Meeting.
See below for detailed information concerning the Proposed Nominees.
The following table sets out the names of the Proposed Nominees for individual election as directors of the Company, each of the Proposed Nominee's province or state and country in which they are ordinarily resident, all offices held by each Proposed Nominee of the Company, their principal occupation or employment, the number of securities of the Company beneficially owned, directly or indirectly, or over which control or direction is exercised by them and committee membership:
| Name, Residence and Position with the Company | Director Since (1) | Principal Occupation, Business or Employment | Number of the voting securities held as at the date of this Circular |
| Anthony Durkacz Ontario, Canada (5) Co-Executive Chairman and Director | June 18, 2018 | Mr. Durkacz's present principal occupation is his role as the Company's Co-Executive Chairman and Director. Mr. Durkacz is also a Director and the Executive Vice-President of First Republic Capital Corporation, an exempt market dealer in micro-cap financing, since 2014. In addition, Mr. Durkacz is the CEO, director and chairman of the board of directors of Stock Trend Capital Inc. (formerly, World Class Extractions Inc.), an investment issuer primarily focused on the cannabis industry. | 36 MVS 1,484,398 Class B Subordinate Voting Shares (2) |
| Zeeshan Saeed (3)(4)(5) Ontario, Canada CEO, Co-Executive Chairman and Director | May 24, 2018 | Mr. Saeed's present principal occupation is his role as the Company's Chief Executive Officer, Co-Executive Chairman and Director. Previously, Mr. Saeed served as President of the Company from May 2019 to January 2021 and as a Director from May 2018 to January 2021. He was re-elected as a director of the Company on May 14, 2021 and re-appointed as President of the Company on July 27, 2021, which position he held until July 4, 2023, when he was appointed as Chief Executive Officer of the Company. | 36 MVS 2,241,146 Class B Subordinate Voting Shares (6) |
| Dr. Lakshmi P. Kotra Ontario, Canada Director | November 25, 2022 | Dr. Lakshmi P. Kotra has served as the CEO of Lucid Psycheceuticals Inc. since September 2020, which he co-founded in 2020. Dr. Kotra also leads a research group and drug discovery | Nil MVS 1,422,197 Class B Subordinate Voting Shares(7)(8) |
| program with multiple portfolios at the Leslie Dan Faculty of Pharmacy, University of Toronto, since 2000, and at the University Health Network since 2006. | |||
| Adnan Bashir (3)(5)(10) Ontario, Canada Director | June 1, 2021 | Mr. Bashir's present principal occupation is his role as the founder and President of 58Northwest Inc., a management consulting and marketing services company, which he has held since 2018. | Nil MVS 114,600 Class B Subordinate Voting Shares(11)(12) |
| Dr. Sanjiv Chopra Massachusetts, USA Director | January 29, 2024 | Sanjiv Chopra, MD, is Professor of Medicine and served as Faculty Dean for Continuing Medical Education at Harvard Medical School for 12 years. He serves as a Marshall Wolf Distinguished Clinician Educator Brigham and Women's Hospital. | Nil MVS Nil Class B Subordinate Voting Shares |
| Michael (Zappy) Zapolin (9)(10) Massachusetts, USA Director | June 29, 2023 | Mr. Zapolin principal occupation and employment over the past five years is a Marketing Executive at Zapability LLC since November 2015 to present. | Nil MVS Nil Class B Subordinate Voting Shares (14) |
| Dr. Eric Hoskins (3)(10) (13) Ontario, Canada Director | June 29, 2023 | Dr. Hoskins is a Partner at Maverix Private Equity since December 2018 to present, a private equity firm. | Nil MVS Nil Class B Subordinate Voting Shares (15) |
| 1. | Information has been furnished by the respective nominees individually. | |
| 2. | As of the date of this Circular, Mr. Durkacz also holds: (i) Nil PSUs (as defined herein); (ii) 500,000 Options (as defined herein); (iii) Nil RSUs (as defined herein); and (iv) Nil share purchase warrants to purchase Class B Subordinate Voting Shares (" Warrants "). | |
| 3. | Member of the Compensation, Nominating and Governance Committee (as defined herein). | |
| 4. | Chair of the Compensation, Nominating and Governance Committee. | |
| 5. | Member of the Disclosure Committee (as defined herein). | |
| 6. | As of the date of this Circular, Mr. Saeed also holds: (i) Nil PSUs; (ii) 500,000 Options; (iii) Nil RSUs; and (iv) Nil Warrants. | |
| 7. | Dr. Kotra is the registered owner of 515,797 Class B Subordinate Voting Shares, ILace Therapeutics International Inc., a company controlled by Dr. Kotra, is the registered owner of 865,200 Class B Subordinate Voting Shares, and Kotra Trust, a trust of which Dr. Kotra is a beneficiary, is the registered owner of 41,200 Class B Subordinate Voting Shares. | |
| 8. | As of the date of this Circular, Dr. Kotra also holds: (i) Nil PSUs; (ii) 500,000 Options; (iii) Nil RSUs; and (iv) Nil Warrants. | |
| 9. | Chair of the Disclosure Committee. | |
| 10. | Member of the Audit Committee (as defined herein). | |
| 11. | Mr. Bashir is the registered owner of 114,407 Class B Subordinate Voting Shares, 58Northwest Inc., a company controlled by Mr. Bashir is the registered owner of 98 Class B Subordinate Voting Shares, and 95 Class B Subordinate Voting Shares are held by Mr. Bashir through a Tax-Free Savings Account. | |
| 12. | As of the date of this Circular, Mr. Bashir also holds: (i)100,000 PSUs; (ii) Nil Options; (iii) Nil RSUs; and (iv) Nil Warrants. | |
| 13. | Chair of the Audit Committee. | |
| 14. | As of the date of this Circular, Mr. Zapolin also holds: (i) Nil PSUs; (ii) Nil Options; (iii) Nil RSUs; and (iv) 500,000 Warrants. | |
| 15. | As of the date of this Circular, Dr. Hoskins also holds: (i) Nil PSUs; (ii) Nil Options; (iii) Nil RSUs; and (iv) 500,000 Warrants. |
Biographies of Proposed Nominees
Anthony Durkacz | Co-Executive Chairman and Director
Mr. Durkacz has served as the Company's Executive Co-Chairman since May 2021 and has served as a member of the Board since June 2018. Mr. Durkacz is also a director and the Executive Vice-President of First Republic Capital Corporation, and has served in these roles since 2014. In addition, Mr. Durkacz is the Chairman and CEO of Stock Trend Capital Inc. (formerly, World Class Extractions Inc.) (CSE: PUMP; OTCQB: WCEXF) and has served in that role since 2018.
Prior to co-founding the Company, from January 2013 to December 2013, Mr. Durkacz was President of Capital Ideas Investor Relations. He previously served as the Chief Financial Officer ("CFO") and a director of Snipp Interactive Inc. (TSXV: SPN.V), a global marketing solutions company that provides a modular software-as-a-service technology suite from January 2011 to January 2013. Mr. Durkacz was instrumental in the financing and public listing of Snipp Interactive Inc. with operations in Canada, the United States, Mexico and India. From 2006 to 2009, he served as the Chief Operating Officer ("COO") and CFO of MKU Canada Inc. and engaged in mergers and acquisitions of companies around the world.