investclub wrote: THERALASE TECHNOLOGIES INC.
Minimum: $7,500,000 ( Units)
Maximum: $15,000,000 ( Units)
Price: $ per Unit
This preliminary short form prospectus (“Prospectus”) qualifies the distribution (“Offering”), on a commercially reasonable “best-efforts” agency basis, of a minimum (“Minimum Offering”) of units of Theralase Technologies Inc. (“Theralase” or “Corporation”) and a maximum (“Maximum Offering”) of units of Theralase (the “Units”), at a price of $ per Unit (“Offering Price”). Each Unit consists of one common share of the Corporation (a “Unit Share”) and of one common share purchase warrant (“Warrant”). Each Warrant entitles the holder thereof to purchase one common share of the Corporation (“Warrant Share”) at an exercise price of $ per Warrant Share, subject to adjustment, at any time up to 60 months following the initial Closing Date (as defined herein) of the Offering.
The Offering Price was determined by arm’s length negotiations between the Corporation and Mackie Research Capital Corporation (“MRCC”). Pursuant to the terms of an agency agreement (“Agency Agreement”) to be entered into between the Corporation and MRCC as agent (“Agent”) and Maxim Group LLC, a United States registered broker-dealer appointed by the Agent to act as sub-agent for any sales in the United States (“U.S. SubAgent”), the Units will be issued and sold in each of the provinces of Canada, except Qubec by the Agent and may also be offered for sale in the United States or to, or for the account or benefit of, U.S. Persons that are “qualified institutional buyers” (“Qualified Institutional Buyers”) within the meaning of Rule 144A (“Rule 144A”) under the
U.S. Securities Act, by or through the U.S. Sub-Agent. All sales in Canada will be made by the Agent. The U.S. SubAgent is not registered as a broker-dealer in any Canadian jurisdiction and, accordingly, will not, directly or indirectly, solicit offers to purchase or sell the Units in Canada. See “Plan of Distribution”.
The outstanding common shares of Theralase (“Common Shares”) trade on the TSX Venture Exchange (“TSXV”) under the symbol “TLT” and on the OTCQB marketplace under the symbol “TLTFF”. On June 24, 2019, the last trading day prior to the date of this Prospectus, the closing price of the Common Shares on the TSXV was $0.50 and on the OTCQB marketplace was US$0.39. The Corporation has applied to list (i) the Unit Shares (including any Over-Allotment Shares (as defined herein) issuable upon exercise of the Over-Allotment Option (as defined herein) and any Compensation Option Shares (as defined herein) issuable upon exercise of the Compensation Options (as defined herein)), (ii) the Warrants (including any Over-Allotment Warrants (as defined herein) issuable upon exercise of the Over-Allotment Option and any Compensation Option Warrants (as defined herein) issuable upon exercise of the Compensation Options), and (iii) the Warrant Shares, if and when issued, on the TSXV. Listing is subject to the approval of the TSXV in accordance with its applicable listing requirements. There is currently no market through which the Warrants may be sold and purchasers may not be able to resell such Warrants purchased under this Prospectus. This may affect the pricing of the Warrants in the secondary market, the transparency and availability of trading prices, the liquidity of the Warrants, and the extent of issuer regulation. See “Risk Factors”.
An investment in the securities offered hereunder is speculative and involves a high degree of risk. The Corporation has a history of negative operating cash flows and it is highly dependent on the continued availability of financing to fund operating activities. If the Minimum Offering or Maximum Offering is completed, it is expected that the Corporation will have sufficient capital to fund operating activities for approximately 19.7 months or 29.4 months, respectively, and that the Corporation will need to raise additional capital to fund continued operations beyond that time period. The risk factors identified in this Prospectus and the documents incorporated by reference herein should be carefully reviewed and evaluated by prospective investors before purchasing the securities being offered hereunder. See “Use of Proceeds” in this Prospectus and “Risk Factors” in this Prospectus and in the AIF (as defined herein) incorporated by reference herein.
Price to the Public
Agent’s Commission(1)
Net Proceeds to Theralase(2)
Per Unit ................................................................ $ $ $
Minimum Offering ................................................................ $7,500,000 $450,000 $7,050,000
Maximum Offering(3) ................................ $15,000,000 $900,000 $14,100,000
_____________ Notes: (1) In consideration of the services rendered by the Agent in connection with the Offering, the Corporation has agreed to pay the Agent a cash fee equal to 6% of the gross proceeds of the Offering (including in respect of any exercise of the OverAllotment Option (as defined herein), if any) (“Agent’s Commission”), subject to a reduced fee of 3% for Units sold by the Agent to certain purchasers designated by the Corporation (“President’s List”). The Corporation has also agreed to grant the Agent non-transferable compensation options (“Compensation Options”) exercisable at any time up to 60 months following the initial Closing Date (as defined herein) to purchase that number of Units (“Compensation Option Units”) at the Offering Price per Compensation Option Unit equal to 4% of the aggregate number of Units sold under the Offering, including any Units sold pursuant to the exercise of the Over-Allotment Option, excluding President’s List purchasers, for which the Agent will receive that number of Compensation Option Units equal to 2% of the Units sold to such purchasers, including the corresponding portion of the Over-Allotment Option. Each Compensation Option Unit will entitle the holder thereof to acquire one Common Share (“Compensation Option Share”) and one Warrant (“Compensation Option Warrant”) on the same terms (including the exercise price and expiry date of the Compensation Option Warrants) as the Unit Shares and Warrants issued pursuant to the Offering. See “Plan of Distribution”. This Prospectus also qualifies the distribution of Compensation Options.