Planning for the future Approval of Potential Creation of a New Control Person
There are currently 97,606,354 Common Shares of the Company issued and outstanding. As of the date of this Information Circular, in addition to the Debentures, Mr. Dean, directly and indirectly, now owns and/or controls, in aggregate the following securities (i) 4,265,403 Common Shares, representing 4.4% of the current issued and outstanding number of Common Shares of the Company, (ii) a $33,000 Series A Debenture of the Company, convertible into 471,428 Common Shares and 471,428 warrants, (iii) a $375,250 Series C convertible debenture of the Company, convertible into 1,975,000 Common Shares and 1,975,000 warrants, (iv) 133,334 restricted share units, (v) 2,798,000 options, and (vi) 2,300,000 warrants. Should Mr. Dean convert the convertible debentures,
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exercise the underlying and existing warrants and options and convert the restricted share units, Mr. Dean would own and/or control, directly and indirectly, 22,846,735 Common Shares, representing 19.8% of the issued and outstanding Common Shares of the Company on a partially diluted basis.
Under the policies of the TSX Venture Exchange, a “Control Person” is defined as any person that holds or is one of a combination of persons that holds a sufficient number of securities of a company so as to affect materially the control of the company or that holds more than 20% of the outstanding voting shares of a company.
Considering Mr. Dean may also be interested in providing financing to the Company in the future by the acquisition of Common Shares and/or securities convertible into Common Shares by way of private placement or public offering, any such acquisition of Common Shares or exercise or exchange of convertible securities for Common Shares would likely result in Mr. Dean becoming a Control Person, which would require prior approval of Shareholders.
Convening a meeting of Shareholders to approve the creation of Mr. Dean as a Control Person would entail additional time and expense. Shareholders are therefore being asked to approve the creation of Mr. Dean as a Control Person, pursuant to the conversion of the convertible debentures, the exercise of the underlying and existing warrants and options and the conversion of the restricted share units, or pursuant to future acquisitions of Common Shares and/or securities convertible into Common Shares by way of private placement or public offering, and will be asked to approve the following ordinary resolutions at the Meeting:
"BE IT RESOLVED THAT:
1. The creation of Mr. Steven Dean as a new Control Person, as such term is defined in the policies of the TSX Venture Exchange, of the Company, on such terms as are more particularly described in the Information Circular of the Company dated November 1, 2022 be and is hereby authorized and approved;
2. Any one director or officer of the Company, alone, be and is hereby authorized and directed to execute or cause to be executed, whether under the corporate seal of the Company or otherwise, and to deliver or cause to be delivered, all such documents, agreements or instruments and to do or cause to be done all such acts and things, as in the opinion of such director or officer may be necessary, desirable or useful for the purpose of giving effect to the foregoing resolutions, such determination to be conclusively evidenced by the execution and delivery of any such documents, agreements or instruments or the doing of any such act or thing.
Since the policies of the TSX Venture Exchange require that disinterested shareholder approval be obtained, the foregoing resolutions must be passed by a simple majority of the votes cast by Shareholders who vote in person or by proxy at the Meeting, excluding the votes attached to 4,373,844 Common Shares held by Mr. Steven Dean and his associates and affiliates, as well as 16,900 Common Shares owned or controlled by joint actors (as defined in MI 61-101) of Steven Dean, which he does not own or control on the resolutions approving the creation of Mr. Steven Dean as a Control Person.