Consolidation?This was news to myself.
Item #4 of the Special Meeting
At the Meeting, Shareholders will be asked to consider and, if deemed advisable, to approve with or without variation, a special resolution in the form set out below (the “Consolidation Resolution”), to allow for the amendment to the Articles to effect the Consolidation of the Company’s issued and outstanding Common Shares on the basis of one (1) post-Consolidation Common Share for between five (5) and seven (7) pre-Consolidation Common Shares, as determined by the Board at its sole discretion. Required Approvals and Effective Date The ability of the Board to effect the Consolidation is subject to the approval of Shareholders at the Meeting and the acceptance of the TSX Venture Exchange (the “TSXV”). 14 The Consolidation must be passed by a “special resolution” of Shareholders. A “special resolution” is a resolution passed by a majority of not less than two-thirds of the votes cast by Shareholders (in person or by proxy). Assuming approval of the Consolidation is obtained from Shareholders and the TSXV, the Board expects to proceed with the Consolidation after the date of the Meeting. The Consolidation will take effect on a date to be coordinated with the TSXV. The Company will announce by news release the effective date of the Consolidation. Notwithstanding the foregoing, even if the Consolidation Resolution is approved by Shareholders at the Meeting, the Board may elect not to proceed with the Consolidation, at its sole discretion. The Board will continue to assess market conditions and the interests of the Company and Shareholders before proceeding to effect the Consolidation, if at all. Principal Reasons for Effecting the Consolidation Management of the Company has recommended to the Board that the Company undertake a Consolidation to reduce the number of Common Shares outstanding. The Company believes an increased Common Share price will allow it to attract additional investors who have minimum share price thresholds for equity investments. As at July 9, 2020, the last trading day prior to the date of this Circular, the closing price of the Common Shares on the TSXV was $0.135. With guidance from financial advisors, the Company believes a total Common Share count in the range of 50,000,000 to 100,000,000 will better position the Company for future investment by North American institutional investors while maintaining appropriate trading liquidity. The current Common Share count arose through a merger with an Australian company, where higher outstanding shares are more common. Principal Effects of the Consolidation On July 10, 2020, the Company had 387,347,114 Common Shares issued and outstanding. Should the Board proceed with the maximum allowable Consolidation on the basis of one (1) post-Consolidation Common Share for every seven (7) pre-Consolidation Common Shares, the number of post-Consolidation Common Shares issued and outstanding will be approximately 55,335,302 (on a non-diluted basis).