Special Meeting MATTERS TO BE ACTED UPON AT THE MEETING CONSOLIDATION OF COMMON SHARES
At the Meeting, shareholders will be asked to consider for approval, with or without amendment, a special resolution (the "Share Consolidation Resolution") to authorize the Company to amend its articles to consolidate the outstanding Common Shares based on a ratio of one post-consolidation Common Share for up to every ten (10) pre-consolidation Common Shares (the "Share Consolidation") held, with the precise share consolidation ratio and timing of implementation of the Share Consolidation to be determined by the Board, in its sole discretion. The Share Consolidation Resolution will confer discretion on the Board to implement the Share Consolidation until March 31, 2022.
If the Share Consolidation Resolution is approved, the Share Consolidation would only be implemented, if at all, upon a determination by the Board that it is in the best interests of the Company and its shareholders, at that time. The Board's determination as to the specific ratio will be based primarily on the trading price of the Common Shares on the TSX at the given time and expected stability of the trading price of the Common Shares following the Share Consolidation.
Background and Reasons for the Share Consolidation
The Board is seeking authority to implement the Share Consolidation because it believes that the resultant increase to the trading price of the Common Shares from effecting the Share Consolidation could potentially, and principally, (i) broaden the pool of investors that may consider investing or be able to invest in the Company, and (ii) enable the Company to satisfy certain minimum trading price requirements of senior stock exchanges in the United States for a potential listing of the Company's Common Shares.
The Company anticipates that the Share Consolidation may result in certain additional ancillary benefits. Achieving a higher market price for the Common Shares through the Share Consolidation could enhance the Company's comparability against its peers on per share metrics, as well as minimizing price volatility of the Common Shares. The Share Consolidation may also make the Common Shares eligible for inclusion in certain stock market indices which have minimum share price requirements which could in turn attract investments from index tracking funds. It could also attract investors whose internal investment policies prohibit or discourage them from purchasing stocks trading below a certain minimum price. The Share Consolidation may also increase analyst and broker interest as policies governing analysts and brokers may discourage following or recommending companies with lower stock prices. In addition, many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in lower-priced stocks or tend to discourage individual brokers from recommending lower-priced stocks to their customers, in part because processing of trades in lower-priced stocks may be economically unattractive.