RE:Enjoy your weekend On February 17, 2023, the Company received a motion from the securities regulatory authority in the Province of Qubec, filed with the Superior Court of Qubec, pursuant to which the AMF is asking the Court to determine whether
certain documents previously requested by the AMF from the Company are subject to solicitor-client privilege.
The motion was filed by the AMF in connection with an investigation being conducted in the context of applicable securities laws. The
Company understands the AMF is investigating certain actions taken by the President and Chief Executive Officer of the Company, Mr. P. Peter Pascali, in connection with a settlement agreement entered into on April 30, 2018, between the Company and Phoenix Haute Technology Inc. (“Phoenix”), a company controlled by the father of Mr. P. Peter Pascali, and
ancillary transactions.
Pursuant to the terms of a board-approved settlement agreement, and as further disclosed in the annual information form of the Company for the year ended December 31, 2020, available under the Company’s profile on
SEDAR at www.sedar.com, under “Interest of Management and Others in Material Transactions – Settlement of Claim”, the Company issued $3.7 million of units comprised of common shares and warrants to Phoenix in 2018, to settle a $5.5 million claim of Phoenix with respect to the unpaid portion of the consideration payable by the Company to Phoenix for an acquisition of intellectual property rights completed in 2011.
To the Company’s knowledge, the investigation of the AMF does not involve any allegations of wrongdoing by the Company. The AMF has neither announced any proceedings nor
filed any charges. The Company believes that no corporate or securities laws have been breached but cannot predict whether any enforcement action will result from the investigation.