EDESA BIOTECH, INC.
10-Ks,20-Fs and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment
No. )
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
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☐
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Preliminary
Proxy Statement
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☐
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Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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☒
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Definitive
Proxy Statement
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☐
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Definitive
Additional Materials
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☐
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Soliciting
Material under §240.14a-12
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Edesa
Biotech, Inc.
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
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☒
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No fee
required.
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☐
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was
determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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☐
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Fee
paid previously with preliminary materials.
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☐
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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Edesa Biotech, Inc.
100 Spy Court
Markham, ON L3R 5H6 Canada
NOTICE OF 2020 ANNUAL GENERAL MEETING OF SHAREHOLDERS
To be held Wednesday, May 13, 2020
To the
Shareholders of Edesa Biotech, Inc.:
Notice
is hereby given that the 2020 Annual General Meeting of
Shareholders (the “
Annual
Meeting
”) of Edesa Biotech, Inc. (the
“
Company
” or
“
Edesa
”) will be
held at 10:00 a.m. (local time) on Wednesday, May 13, 2020, at the
Edesa Biotech Corporate Offices, located at 100 Spy Court, Markham,
ON L3R 5H6.
If you wish to attend the Annual Meeting in
person, you will need to RSVP at least 48 hours prior to the Annual
Meeting (or by 10:00 a.m. EDT on May 11, 2020) to
investors@edesabiotech.com
and please include your name in the subject line of the e-mail. The
following summarizes the matters to be considered and acted
upon:
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1.
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The
election of seven (7) directors, nominated by the Company’s
Board of Directors, to serve until the Company’s annual
meeting of shareholders to be held in 2021 or until their
successors are duly elected and qualified;
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2.
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the
appointment of MNP LLP as the Company’s auditors and
independent registered public accounting firm for the ensuing year;
and
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3.
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such
other business as may properly come before the Annual Meeting or
any adjournments or postponements thereof.
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Only
shareholders of record at the close of business on March 16, 2020
are entitled to receive notice of, and to vote at, the Annual
Meeting and any adjournments or postponements thereof.
Your
vote is important. To assure your representation at the Annual
Meeting, you are urged to sign, date and return the proxy as soon
as possible, or follow the instructions contained in the Notice of
Internet Availability of Proxy Materials to vote by telephone or on
the Internet. You may vote in person at the Annual Meeting even if
you have previously returned a proxy.
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By
Order of the Board of Directors,
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/s/ Pardeep Nijhawan
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Pardeep
Nijhawan, MD
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Director,
Chief Executive Officer and Corporate Secretary
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(Principal
Executive Officer)
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Markham,
ON, Canada
March
23, 2020
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING TO BE HELD ON MAY 13, 2020.
This Proxy
Statement, along with our Annual Report on Form 10-K for the year
ended September 30, 2019, is available at:
http://www.proxyvote.com/.
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TABLE OF CONTENTS
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Page Number
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Edesa Biotech, Inc.
100 Spy Court
Markham, ON L3R 5H6 Canada
PROXY STATEMENT
G
eneral Information Concerning
Voting and Solicitation
This
proxy statement is being furnished to you in connection with the
solicitation by the Board of Directors (the “
Board
”) of Edesa Biotech, Inc., a
British Columbia corporation (“
we
”, “
us
”, “
Edesa
”, or the “
Company
”), of proxies in the
accompanying form to be used at the 2020 Annual General Meeting of
Shareholders of the Company to be held at the Edesa Biotech
Corporate Offices, located at 100 Spy Court, Markham, ON L3R 5H6 at
10:00 a.m. (local time) on Wednesday, May 13, 2020, and at any
adjournments or postponements thereof (the “
Annual Meeting
”).
As a
British Columbia corporation subject to the reporting requirements
of the U.S Securities and Exchange Commission, our proxy disclosure
has been prepared to comply with U.S. proxy disclosure requirements
as allowed under National Instrument 51-102F6.
Our
Board of Directors has fixed March 16, 2020 as the record date for
determining those shareholders entitled to receive notice of, and
to vote at, the Annual Meeting. Only shareholders of record at the
close of business on March 16, 2020 will be entitled to vote at the
Annual Meeting. These materials are first being sent or given to
the shareholders on or about March 31, 2020. This proxy statement
gives you information on the proposals to be presented at the
Annual Meeting so that you can make an informed
decision.
Q
uestions and Answers about
the Proxy Materials and the Annual Meeting
What is included in these materials?
These
materials include:
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This
Proxy Statement for the Annual Meeting; and
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The
Company’s Annual Report on Form 10-K for the year ended
September 30, 2019, as filed with the Securities and Exchange
Commission (the “
SEC
”) on December 12, 2019 (the
“
Annual
Report
”).
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If you
requested printed versions of these proxy materials by mail, these
materials also include the proxy card or voting instruction form
for the Annual Meeting.
Why did I receive a one-page notice in the mail regarding the
Internet availability of proxy materials instead of a full set of
proxy materials?
Pursuant
to rules adopted by the SEC, the Company has elected to provide
access to its proxy materials via the Internet instead of mailing
printed copies. Accordingly, the Company is sending a Notice of
Internet Availability of Proxy Materials (the “
Internet Availability Notice
”) to
the Company’s shareholders. Canadian shareholders will
receive printed copies of the proxy materials unless they elected
to receive proxy materials by email. Most other shareholders will
not receive printed copies of the proxy materials unless they
request them. Instead, instructions on how to access the proxy
materials over the Internet or to request a printed copy may be
found in the Internet Availability Notice. All shareholders will
have the ability to access the proxy materials on the Website
referred to in the Internet Availability Notice or request to
receive a printed or electronic set of the proxy materials.
Shareholders may request to receive proxy materials in printed form
or electronically by email, by telephone, mail or by logging on to
http://www.proxyvote.com/. The Company encourages shareholders to
take advantage of the availability of proxy materials on the
Internet to help reduce the environmental impact of our annual
meetings.
How can I get electronic access to the proxy
materials?
The
Internet Availability Notice will provide you with instructions
regarding how to:
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View
the Company’s proxy materials for the Annual Meeting on the
Internet; and
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Instruct
the Company to send future proxy materials to you electronically by
email.
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Choosing
to receive future proxy materials by email will reduce the
Company’s costs of printing and mailing documents to you,
which will favorably impact the environment. If you choose to
receive future proxy materials by email, you will receive an email
message next year with instructions containing a link to those
materials. Your election to receive proxy materials by email will
remain in effect until you terminate it.
3
What proposals will be voted on at the Annual Meeting?
The
following two proposals will be voted on at the Annual
Meeting:
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The
election of seven (7) directors, nominated by our Board, to serve
until our annual meeting of shareholders to be held in 2021 or
until their successors are duly elected and qualified;
and
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The
appointment of MNP LLP as our auditors and independent registered
public accounting firm for the ensuing year.
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How does the Board recommend that I vote on the
proposals?
Our
Board of Directors unanimously recommends that the shareholders
vote “FOR” each of the nominees for Director and
“FOR” the appointment of MNP LLP as our auditors and
independent registered public accounting firm for the ensuing
year.
Will there be any other items of business on the
agenda?
At
present, management knows of no additional business to be presented
at the Annual Meeting, but if other business is presented, the
persons named in the proxy card and acting under the proxy card as
proxy holders will vote or refrain from voting in accordance with
their best judgment pursuant to the discretionary authority
conferred by the proxy.
Who is entitled to vote at the Annual Meeting?
Only
shareholders of record at the close of business on March 16, 2020
may vote at the Annual Meeting. As of the close of business on
March 16, 2020, there were 8,859,159 common shares outstanding, all
of which are entitled to vote at the Annual Meeting.
How many votes am I entitled to per share?
Each
shareholder is entitled to one (1) vote for each common share held
as of the record date on all matters properly brought before the
Annual Meeting.
What is the difference between holding shares as a shareholder of
record and as a beneficial owner?
Shareholder of Record
. If your shares are registered
directly in your name with our transfer agent, Computershare
Investor Services, Inc., you are considered, with respect to those
shares, the shareholder of record. As a shareholder of record, the
Internet Availability Notice was sent directly to you by the
Company. If you request printed copies of the proxy materials by
mail, you will receive a proxy card.
Beneficial Owner
. If your shares are held in a brokerage
account or by a bank or other nominee, you are considered the
beneficial owner of shares held in street name, and the Internet
Availability Notice was forwarded to you by that organization. The
organization holding your account is considered the shareholder of
record for purposes of voting at the Annual Meeting. As the
beneficial owner, you have the right to instruct that organization
on how to vote the shares held in your account. Those instructions
are contained in a “voting instruction form”. If you
request printed copies of the proxy materials by mail, you will
receive a voting instruction form.
If my shares are held in “street name” by my broker,
will my broker vote my shares for me?
Shares
held in “street name” by a broker or nominee who
indicates on a proxy that it does not have discretionary authority
to vote those shares on a proposal are referred to as “broker
non-votes.” Under current rules, brokers, banks or other
nominees may not vote and have no discretionary authority to vote
shares on the election of directors, executive compensation matters
and other governance matters, or “non-routine” matters,
unless they receive specific voting instructions from their
clients.
Your
bank or broker does not have discretion to vote uninstructed shares
on the proposals in this Proxy Statement, except for Proposal No. 2
to appoint our auditors and independent registered public
accounting firm for the ensuing year.
If you are a beneficial holder and do not provide specific voting
instructions to your broker, the organization that holds your
shares will not be authorized to vote on Proposal No. 1, the
election of directors. Accordingly, for your vote to be counted,
you now will need to communicate your voting decisions to your
broker, bank, or other nominee before the date of the Annual
Meeting. Accordingly, we encourage you to vote promptly, even if
you plan to attend the Annual Meeting.
4
If I am a shareholder of record, how do I vote my
shares?
There
are three ways to vote:
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By Mail
– If you received printed copies of the proxy
materials by mail, you may vote your proxy by filing out the proxy
card and sending it back in the envelope provided.
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By Telephone or the Internet
– We have established
telephone and Internet voting procedures for shareholders of
record. These procedures are designed to authenticate your
identity, to allow you to give your voting instructions and to
confirm that those instructions have been properly recorded. The
toll-free telephone number for telephone voting is 1-800-690-6903.
Please have your proxy card handy when you call. Easy-to-follow
voice prompts will allow you to vote your shares and confirm that
your instructions have been properly recorded. The website for
Internet voting is http://www.proxyvote.com/. As with telephone
voting, you will be able to confirm that your instructions have
been properly recorded. Telephone and Internet voting facilities
for shareholders of record will be available 24 hours a day until
11:59 p.m. Eastern Time, on Tuesday, May 12, 2020.
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In Person
– If you are a shareholder of record, you
may vote in person at the Annual Meeting. The Company will give you
a ballot when you arrive. Due to the limited seating and for
security purposes, if you wish to attend the Annual Meeting in
person, you will be required to RSVP at least 48 hours prior to the
Annual Meeting (or by 10:00 a.m. EDT on May 11, 2020) to
investors@edesabiotech.com with your name in the subject
line.
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If I am a beneficial owner of shares held in street name, how do I
vote my shares?
There
are three ways to vote:
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By Mail
– If you received printed copies of the proxy
materials by mail, you may vote your proxy by filing out the voting
instruction form and sending it back in the envelope provided by
your brokerage firm, bank, broker-dealer or other similar
organization that holds your shares.
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By Telephone or the Internet
–
You may vote by proxy via
telephone by calling 1-800-690-6903. You may vote by proxy via
telephone or the Internet at http://www.proxyvote.com/, as further
set forth in the instructions provided by your brokerage firm,
bank, broker-dealer or other similar organization that holds your
shares.
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In Person
– Shares held in “street name”
may be voted by you in person at the Annual Meeting only if you
obtain a “legal proxy” from the bank, broker or other
agent that holds your shares, which “legal proxy”
grants you the right to vote the shares. You must present that
“legal proxy” to attend the Annual Meeting and to be
entitled to vote in person shares that are held for you in
“street name.”
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What is the proxy card?
The
proxy card enables you to appoint each of Pardeep Nijhawan, a
Director and our Chief Executive Officer and Corporate Secretary,
and Michael Brooks, our President, as your representative at the
Annual Meeting. By completing and returning the proxy card, you are
authorizing these persons to vote your shares at the Annual Meeting
in accordance with your instructions on the proxy card. This way,
your shares will be voted whether or not you attend the Annual
Meeting. Even if you plan to attend the Annual Meeting, it is
strongly recommended that you complete and return your proxy card
before the Annual Meeting date just in case your plans change. If a
proposal comes up for vote at the Annual Meeting that is not on the
proxy card, the proxies will vote your shares, under your proxy,
according to their best judgment.
I share an address with another shareholder and we received only
one paper copy of the proxy materials. How may I obtain an
additional copy of the proxy materials?
As
permitted under SEC rules, we have adopted a procedure called
“householding”. Under this procedure, we deliver a
single copy of the Internet Availability Notice and, if applicable,
the proxy materials to multiple shareholders who share the same
address unless we received contrary instructions from one or more
of the shareholders. This procedure reduces our printing costs,
mailing costs and fees. Shareholders who participate in
householding will continue to be able to access and receive
separate proxy cards. Upon written request, we will deliver
promptly a separate copy of the Internet Availability Notice and,
if applicable, the proxy materials to any shareholder at a shared
address to which we delivered a single copy of any of these
documents. To receive a separate copy of the Internet Availability
Notice and, if applicable, the proxy materials, shareholders may
contact us as follows:
Edesa
Biotech, Inc.
100 Spy Court
Markham, ON L3R 5H6 Canada
Attention:
Corporate Secretary
Shareholders
who hold shares in street name may contact their brokerage firm,
bank, broker-dealer, or other similar organization to request
information about householding.
5
How do I request a paper copy of the proxy materials?
There
are four ways to request a paper copy of the proxy
materials:
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By Mail
: You may obtain a paper copy of the proxy materials
by writing to us at Edesa Biotech, Inc., 100 Spy Court, Markham, ON
L3R 5H6 Canada, Attn: Corporate Secretary.
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By Telephone
: You may obtain a paper copy of the proxy
materials by calling 1-800-579-1639.
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Via the Internet
: You may obtain a paper copy of the proxy
materials by logging on to http://www.proxyvote.com/.
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By Email
: You may obtain a paper copy of the proxy materials
by email at sendmaterial@proxyvote.com. You must provide the
control number from your proxy notice to request a paper copy of
the proxy materials by email.
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Please make your request for a paper copy as instructed above on or
before April 29, 2020 to facilitate timely delivery.
Can I change my vote or revoke my proxy?
You may
change your vote or revoke your proxy at any time prior to the vote
at the Annual Meeting. A proxy may be revoked at any time prior to
its exercise:
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by
submitting a written notice revoking that proxy, addressed to our
Corporate Secretary at our executive offices located at 100 Spy
Court, Markham, ON L3R 5H6 Canada, at any time up to and including
the last business day before the Annual Meeting,
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if you
submitted your proxy by telephone or the Internet, you may change
your vote or revoke your proxy with a later telephone or Internet
proxy, as the case may be, or
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at the
Annual Meeting prior to the taking of a vote.
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Any
shareholder entitled to vote at the Annual Meeting may attend the
meeting and vote in person on any matter presented for a vote to
our shareholders at the meeting, whether or not that shareholder
has previously given a proxy. However, attendance at the Annual
Meeting will not have the effect of revoking a proxy unless you
give written notice of revocation to our Corporate Secretary before
any vote in which the proxy has been given. If you hold your shares
in “street name” and have instructed your broker, bank
or other nominee to vote your shares for you, you must follow
directions received from your broker, bank or other nominee to
change those instructions.
What happens if I do not indicate how to vote my
proxy?
If you
just sign your proxy card without providing further instructions,
your shares will be voted “FOR” all the director
nominees, and “FOR” the appointment of MNP LLP as our
auditors and independent registered public accounting for the
ensuing year.
Is my vote kept confidential?
Proxies,
ballots and voting tabulations identifying shareholders are kept
confidential and will not be disclosed except as may be necessary
to meet legal requirements.
Where do I find the voting results of the Annual
Meeting?
We will
announce voting results at the Annual Meeting. The final voting
results will be tallied by the inspector of election and published
by the Company in a Current Report on Form 8-K, which the Company
is required to file with the SEC within four (4) business days
following the Annual Meeting. The Company is also required to file
on SEDAR a brief description of the proposals voted upon at the
Annual Meeting and the outcome of the votes for such proposals
promptly following the Annual Meeting, which description must
include the percentage of votes for and against such
proposals.
What constitutes a quorum?
Our
Amended and Restated Articles require the representation of at
least one person who is, or who represents by proxy, one or more
shareholders who, in the aggregate, hold at least thirty-three and
one-third percent (33-1/3%) of the issued shares entitled to be
voted at the meeting, in order to establish a quorum for the
transaction of business. Abstentions and “broker
non-votes” will be counted for purposes of determining
whether a quorum is present for the transaction of business at the
Annual Meeting.
What is the vote required for a proposal to pass?
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Proposal No. 1 — Election of directors
: The
affirmative vote of the holders of a majority of shares present in
person or represented by proxy at the Annual Meeting and entitled
to vote is required for approval. With regard to this proposal,
shares which are entitled to vote but abstain from voting on a
matter will be excluded from the vote and will have no effect on
its outcome.
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Proposal No. 2 — Appointment of our auditors and independent
registered public accounting firm
: The affirmative vote of
the holders of a majority of shares present in person or
represented by proxy at the Annual Meeting and entitled to vote is
required for approval. With regard to this proposal, shares which
are entitled to vote but abstain from voting on a matter will be
excluded from the vote and will have no effect on its
outcome.
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Who will pay the costs of soliciting proxies?
The
cost of preparing, assembling, printing and mailing this proxy
statement and the accompanying form of proxy, and the cost of
soliciting proxies relating to the Annual Meeting, will be borne by
the Company. Some banks and brokers have customers who beneficially
own shares listed of record in the names of nominees. We intend to
request banks and brokers to solicit such customers and will
reimburse them for their reasonable out-of-pocket expenses for such
solicitations. If any additional solicitation of the holders of our
outstanding shares is deemed necessary, we (through our directors
and officers) anticipate making such solicitation directly. The
solicitation of proxies by mail may be supplemented by telephone,
email and personal solicitation by officers, directors and regular
employees of the Company, but no additional compensation will be
paid to such individuals.
6
Edesa Biotech, Inc.
100 Spy Court
Markham, ON L3R 5H6 Canada
PROXY STATEMENT
I
NTRODUCTION
2
020 Annual General Meeting of
Shareholders
This
Proxy Statement is being furnished to the holders of our common
shares in connection with the solicitation of proxies for use at
the 2020 Annual General Meeting of Shareholders of the Company (the
“
Annual
Meeting
”). The Annual Meeting is to be held at 10:00
a.m. (local time) on Wednesday, May 13, 2020, at the Edesa Biotech
Corporate Offices, located at 100 Spy Court, Markham, ON L3R 5H6,
and at any adjournment or adjournments thereof. Due to the limited
seating and for security purposes, if you wish to attend the Annual
Meeting in person, you will be required to RSVP at least 48 hours
prior to the Annual Meeting (or by 10:00 a.m. EDT on May 11, 2020)
to investors@edesabiotech.com with your name in the subject
line.
R
ecord Date
The
Board of Directors of the Company (the “
Board
”) has fixed the close of
business on March 16, 2020 (the “
Record Date
”) as the Record Date
for the determination of shareholders entitled to notice of, and to
vote and act at, the Annual Meeting. Only shareholders of record at
the close of business on that date are entitled to notice of, and
to vote and act at, the Annual Meeting.
P
roposals to be Submitted at
the Annual Meeting
At the
Annual Meeting, shareholders will be acting upon the following
proposals:
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1.
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To
elect Lorin Johnson, Sean MacDonald, Pardeep Nijhawan, Frank Oakes,
Paul Pay, Carlo Sistilli, and Peter van der Velden as directors to
serve until the Company’s annual meeting of shareholders to
be held in 2021 or until their successors are duly elected and
qualified;
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2.
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To
appoint MNP LLP as the Company’s auditors and independent
registered public accounting firm for the ensuing year;
and
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3.
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To
conduct such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
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P
rincipal
Offices
The
principal executive offices of the Company are located at 100 Spy
Court, Markham, Ontario, Canada L3R 5H6. The Company’s
telephone number at such address is (289) 800-9600.
I
nformation Concerning
Solicitation and Voting
As of
the Record Date, there were 8,859,159 outstanding common shares,
each share entitled to one (1) vote on each matter to be voted on
at the Annual Meeting. Only holders of common shares on the Record
Date will be entitled to vote at the Annual Meeting. The holders of
common shares are entitled to one (1) vote on all matters presented
at the Annual Meeting for each share held of record. The presence
in person or by proxy of holders of record of at least thirty-three
and one-third percent (33-1/3%) of the shares outstanding and
entitled to vote as of the Record Date shall be required for a
quorum to transact business at the Annual Meeting. If a quorum is
not present, the Annual Meeting may be adjourned until a quorum is
obtained. To be elected, the nominees named in Proposal 1 must
receive the vote of a majority of the votes of the common shares
cast in person or represented by proxy at the Annual Meeting. For
the purposes of election of such director, although abstentions
will count toward the presence of a quorum, they will not be
counted as votes cast and will have no effect on the result of the
vote. “Broker non-votes,” which occur when brokers are
prohibited from exercising discretionary voting authority for
beneficial owners who have not provided voting instructions, will
not be counted for the purpose of determining the number of shares
present in person or by proxy on a voting matter and will have no
effect on the outcome of the vote. Brokers who hold shares in
street name may vote on behalf of beneficial owners with respect to
Proposal 2.
E
xpenses
The
expense of preparing, printing and mailing the Internet
Availability Notice and this Proxy Statement and the proxies
solicited hereby will be borne by the Company. In addition to the
use of the mails, proxies may be solicited by officers, directors
and regular employees of the Company, without additional
remuneration, by personal interviews, telephone, email or facsimile
transmission. The Company will also request brokerage firms,
nominees, custodians and fiduciaries to forward proxy materials to
the beneficial owners of common shares held of record and will
provide reimbursements for the cost of forwarding the material in
accordance with customary charges.
7
A
ttending the Annual
Meeting
Only
shareholders and our invited guests are permitted to attend the
Annual Meeting. Due to the limited seating and for security
purposes, if you wish to attend the Annual Meeting in person, you
will be required to RSVP at least 48 hours prior to the Annual
Meeting (or by 10:00 a.m. EDT on May 11, 2020) to
investors@edesabiotech.com with your name in the subject line. To
gain admittance, you must bring a form of personal identification
to the Annual Meeting, where your name will be verified against our
shareholder list. If a nominee holds your shares and you plan to
attend the Annual Meeting, you should bring a brokerage statement
showing your ownership of the shares as of the record date or a
letter from the nominee confirming such ownership, and a form of
personal identification. If you wish to vote your shares that are
held by a nominee at the meeting, you must obtain a proxy from your
nominee and bring such proxy to the meeting.
S
hareholder Proposals
for 2021 Annual Meeting
Shareholder proposals for inclusion in our proxy statement:
If a shareholder wishes to present a proposal to be included in our
proxy statement and form of proxy for our 2021 annual meeting of
shareholders, the proponent and the proposal must comply with the
proxy proposal submission rules of the SEC and namely, Rule 14a-8
promulgated under the Securities Exchange Act of 1934, as amended
(the “
Exchange
Act
”). One of the requirements is that the proposal
must be received by our Corporate Secretary at our executive
offices in Markham, Ontario, Canada no later than the close of
business on December 1, 2020, which is 120 calendar days before
March 31, 2021, the anniversary date that this proxy statement was
released to shareholders in connection with the 2020 Annual
Meeting. Such proposal must also comply with the applicable
requirements as to form and substance established by the SEC if
those proposals are to be included in the proxy statement and form
of proxy. If the date of next year’s annual meeting is
changed by more than 30 days from the anniversary date of the
Annual Meeting, then the deadline is a reasonable time before we
begin to print and mail proxy materials.
Other shareholder proposals
: The Board has approved an
advance notice policy, which was subsequently approved by our
shareholders at our 2014 annual meeting of shareholders, that
requires advance notice be given to us in certain circumstances
where nominations of persons for election to the Board are made by
our shareholders.
In the
case of an annual meeting of shareholders, notice to the Company
must be made not less than 30 days nor more than 65 days prior to
the date of the annual meeting. However, in the event that the
annual meeting is to be held on a date that is less than 40 days
after the date on which the first public announcement of the date
of the annual meeting was made, notice may be made not later than
the close of business on the tenth day following such public
announcement.
In the
case of a special meeting of shareholders (which is not also an
annual meeting), notice to the Company must be made not later than
the close of business on the fifteenth (15
th
) day following the
day on which the first public announcement of the date of the
special meeting was made.
I
NTEREST OF CERTAIN PERSONS OR
COMPANIES IN MATTERS TO BE ACTED UPON
No
director or executive officer of the Company, or any person who has
held such a position since the beginning of the last completed
financial year of the Company, nor any nominee for election as a
director of the Company, nor any associate or affiliate of the
foregoing persons, has any substantial or material interest, direct
or indirect, by way of beneficial ownership of securities or
otherwise, in any matter to be acted on at the Annual Meeting other
than the election of directors and as may be set out
herein.
ALL PROXIES RECEIVED WILL BE VOTED IN ACCORDANCE WITH THE CHOICES
SPECIFIED ON SUCH PROXIES. PROXIES WILL BE VOTED IN FAVOR OF A
PROPOSAL IF NO CONTRARY SPECIFICATION IS MADE. ALL VALID PROXIES
OBTAINED WILL BE VOTED AT THE DISCRETION OF THE PERSONS NAMED IN
THE PROXY WITH RESPECT TO ANY OTHER BUSINESS THAT MAY COME BEFORE
THE ANNUAL MEETING.
THE BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL OF EACH
OF THE PROPOSALS TO BE SUBMITTED AT THE MEETING.
8
P
ROPOSAL NO. 1
ELECTION OF DIRECTORS
N
ominees for Election as
Directors
Each
director is elected annually to serve until the next annual meeting
of shareholders, or until his or her successor is duly elected.
Upon the recommendation of the Nominating and Corporate Governance
Committee, the Board has nominated Lorin Johnson, Sean MacDonald,
Pardeep Nijhawan, Frank Oakes, Paul Pay, Carlo Sistilli and Peter
van der Velden to hold office until the 2021 annual meeting of
shareholders or until their respective successors have been duly
elected and qualified. In the event that any of the nominees shall
be unable or unwilling to serve as a director, the Board shall
reserve discretionary authority to vote for a substitute or
substitutes. The Board has no reason to believe that any of the
nominees will be unable or unwilling to serve.
I
nformation as to
our Board of Directors and Nominees
|
Name
|
|
Age
|
|
Position(s) Held
|
|
Director Since
|
||
|
Lorin
Johnson, PhD (2)
|
|
67
|
|
Director
|
|
June 7,
2019
|
||
|
Sean
MacDonald (1)(2)(3)
|
|
43
|
|
Chairman
of Board of Directors
|
|
June 7,
2019
|
||
|
Pardeep
Nijhawan, MD
|
|
49
|
|
Director,
Chief Executive Officer and Corporate Secretary
|
|
June 7,
2019
|
||
|
Frank Oakes
|
|
69
|
|
Director
|
|
April
9, 2010
|
||
|
Paul
Pay (1)(2)
|
|
65
|
|
Director
|
|
June 7,
2019
|
||
|
Carlo Sistilli, CPA, CMA (1)(3)
|
|
63
|
|
Director
|
|
June 7,
2019
|
||
|
Peter
van der Velden (3)
|
|
58
|
|
Director
|
|
June 7,
2019
|
||
|
|
|
|
|
|
|
|
||
|
|
(1)
|
Member
of Audit Committee.
|
||||||
|
|
(2)
|
Member
of Compensation Committee.
|
||||||
|
|
(3)
|
Member
of Nominating and Corporate Governance Committee.
|
||||||
There
are no arrangements between our directors and any other person
pursuant to which our directors were nominated or elected for their
positions. There are no family relationships between any of our
directors or executive officers. None of the Company’s
directors or executive officers have been involved, in the past ten
years and in a manner material to an evaluation of such
director’s or officer’s ability or integrity to serve
as a director or executive officer, in any of those “Certain
Legal Proceedings” more fully detailed in Item 401(f) of
Regulation S-K, which include but are not limited to, bankruptcies,
criminal convictions and an adjudication finding that an individual
violated federal or state securities laws.
B
iographies and
Qualifications.
The biographies of our directors and certain
information regarding each director’s experience, attributes,
skills and/or qualifications that led to the conclusion that the
director should be serving as a director of our Company are as
follows:
Lorin Johnson,
PhD
is a seasoned pharmaceutical entrepreneur and
innovator with more than 30 years of experience in building
companies. He has been a member of our board of directors since
June 2019, having previously served as a director of the
company’s principal operating subsidiary, Edesa Biotech
Research, Inc., from its founding in January 2015 to January 2016.
Dr. Johnson is currently the Chief Scientist of Glycyx Pharma
Ventures Ltd., a biopharma investment and development company he
founded in March 2016. Prior to Glycyx, Dr. Johnson co-founded
Salix Pharmaceuticals, Inc., a specialty pharmaceutical company,
and held senior leadership positions prior to its acquisition by
Valeant Pharmaceuticals International, Inc. in April 2015. Earlier
in his career, Dr. Johnson served as Director of Scientific
Operations and Chief Scientist at Scios, Inc. (formerly California
Biotechnology, Inc). In addition to Edesa, he currently serves on
the boards of Innovate Biopharmaceuticals, Inc. (trading symbol
INNT), Glycyx MOR, LTD, Kinisi Therapeutics, Ltd., Intact
Therapeutics, Inc. and ATXA Therapeutics, Ltd. Dr. Johnson has also
held academic positions at Stanford University School of Medicine
where he served as an Assistant Professor of Pathology and at the
University of California, San Francisco. He is the co-author of 76
journal articles and book chapters and is the co-inventor on 23
issued patents. Dr. Johnson holds a PhD from the University of
Southern California and was a Postdoctoral Fellow at the University
of California, San Francisco. Dr. Johnson’s qualifications to
serve on the board of directors include his knowledge of our
business and his significant experience in the pharmaceutical
industry.
Sean MacDonald
has been
our Chairman of the Board since June 2019, having previously served
as a director of the company’s principal operating
subsidiary, Edesa Biotech Research, Inc., since September 2017. Mr.
MacDonald is currently the Head of Business Development for Cosmo
Pharmaceuticals NV, a European gastroenterology focused
pharmaceutical company, a position he has held since April
2019, as well as the chief executive of Corbin
Therapeutics, a Montreal-based biotech company focused on treating
neuroinflammation, a role he has held since October 2018. From
October 2012 to October 2018, Mr. MacDonald held various
operational and executive leadership roles at Pharmascience Inc.,
one of Canada’s largest pharmaceutical companies, including
Vice President of Business Development and Corporate Development.
He received his BSc in Molecular Biology and MBA from the
University of Ottawa. Mr. MacDonald’s qualifications to serve
on the board of directors include his extensive operational
experience and background in the pharmaceutical/biotechnology
industry.
9
Pardeep Nijhawan,
MD,
FRCPC, AGAF has served as our Chief Executive Officer, Corporate
Secretary and a member of our board of directors since June 2019,
having previously founded and led the company’s principal
operating subsidiary, Edesa Biotech Research, Inc., since January
2015. Dr. Nijhawan is a seasoned pharmaceutical entrepreneur with
20 years of experience in cross-functional leadership roles in
finance, marketing, corporate strategy and business development.
Prior to Edesa, in 2002 Dr. Nijhawan founded Medical Futures Inc.,
and served as its CEO. He sold Medical Futures to Tribute
Pharmaceuticals in 2015. Dr. Nijhawan also founded Digestive Health
Clinic in 2000 and led it to become Canada’s largest provider
of private endoscopy services. In 2014, he founded Exzell Pharma, a
specialty Canadian-based pharmaceutical organization that markets
and commercializes approved products. He continues to serve on the
Boards of Exzell Pharma and Digestive Health Clinic. Dr. Nijhawan
received his MD from the University of Ottawa and completed his
internship at Yale University, and his internal medicine residency
and fellowship at the Mayo Clinic. Dr. Nijhawan’s
qualifications to serve on the board of directors include his
extensive executive leadership and experience in the life sciences
industry and his knowledge of our business as its chief
executive.
Frank Oakes
has more than
40 years of executive leadership experience. He has been a director
of the company since April 2010 and served as the Chairman of the
Board until June 2019. From 1999 to 2019, he also served as the
President and Chief Executive Officer of the company’s legacy
operating subsidiary, which he founded. Prior to founding Stellar
Biotechnologies, Inc., he was the Chief Executive Officer of The
Abalone Farm, Inc., where he led the company through the research
and development, capitalization, and commercialization phases of
development to become the largest abalone producer in the United
States at the time. Mr. Oakes has consulted and lectured
around the world. He received his BS degree from California State
Polytechnic University, San Luis Obispo and is a graduate of the
Los Angeles Regional Technology Alliance University’s
management program. Mr. Oakes qualifications to serve on the board
of directors include his extensive operational experience building
companies and management teams and leading a U.S. and Canadian
publicly listed life science company.
Paul Pay
is an executive
with 40 years of experience in the pharmaceutical/biotechnology
industry. He has been a member of our board of directors since June
2019, having previously served as a director of the company’s
principal operating subsidiary, Edesa Biotech Research, Inc., since
its founding in January 2015. From November 2002 to present, he has
led all business development activity at Norgine and is currently
the Chief Business Development Officer and serves as a member of
the company’s executive committee. Prior to joining Norgine,
Mr. Pay held senior management positions at large, specialty and
early-stage pharmaceutical companies, and cofounded a university
spin-out company. His commercial roles have included sales,
marketing, market research, licensing, business development, public
relations, intellectual property and product development. In
addition to Edesa, Mr. Pay is currently a director of Exzell
Pharma, a specialty pharmaceutical company; Arc Medical Design, a
medical device development company and a portfolio company of
Norgine; and Norgine Ltd., an affiliate of Norgine. Mr. Pay is also
the President and CEO of Merus Labs Inc., a Norgine wholly owned
affiliate company. Mr. Pay received a BSC (hons) from the
University of Leeds. Mr. Pay’s qualifications to serve on the
board of directors include his extensive experience in the
pharmaceutical/biotechnology industry and his knowledge of
Edesa’s business.
Carlo Sistilli,
CPA,
CMA
has more than 35 years of financial experience and
has held a variety of executive positions in accounting and finance
during his career. He has been a member of our board of directors
since June 2019, having previously served as a board observer of
the company’s principal operating subsidiary, Edesa Biotech
Research, Inc., since September 2017. Mr. Sistilli has served as
the Chief Financial Officer of Arista Homes since March 2003 to
present. Prior to Arista, Mr. Sistilli was a founder and served as
CFO and a board member of an Internet start-up company in the
automotive sector, and played a key role in taking the company
public on the Alberta Ventures Exchange. Earlier in his career, Mr.
Sistilli was the Controller and a member of the senior management
team of a major regional trust company, which Mr. Sistilli helped
sell to Manulife Financial. In addition to his professional career,
Mr. Sistilli is an officer and a member of the board of directors
of Mother of Mercy Centre. Mr. Sistilli holds a Bachelor of Arts
from York University, with a major in economics, Certified
Management Accountant Designation and a Chartered Professional
Accountant Designation. Mr. Sistilli’s qualifications to
serve on the board of directors include his knowledge of
Edesa’s business and his background in accounting and
finance.
Peter van der Velden
is an
investor and business executive with more than 28 years of
experience in building growth companies. He has been a member of
our board of directors since June 2019, having previously served as
a director of the company’s principal operating subsidiary,
Edesa Biotech Research, Inc., since September 2017. From 2007 to
present, Mr. van der Velden has been the Managing General Partner
of Lumira Ventures, one of Canada’s largest dedicated life
sciences venture capital investors. Mr. van der Velden currently
serves on the boards of Exact Imaging, Medexus Pharmaceuticals
(trading symbol PDDPF) and AmacaThera. His past corporate board
roles include: Milcom Ventures, Spinal Kinetics, Alveolus Inc., CML
Healthcare, First Aid Shot Therapy, Life Sciences Ontario,
Skinstore.com, and Vendorlink.ca. Mr. van der Velden is a past
President and Chairman of the Canadian Venture and Private Equity
Association and currently serves on the board or as an advisor to a
number of industry groups and non-profit organizations. Mr. van der
Velden holds an MBA in Finance and Policy from the Schulich School
of Business, and a MSc in Pathology and BSc (honors) in Life
Sciences from Queen’s University. Mr. van der Velden’s
qualifications to serve on the board of directors include his
extensive operational experience building growth companies and his
knowledge acquired from serving on the boards of other
companies.
V
ote Required
With
regard to the election of directors, votes may be cast
“FOR” or “WITHHOLD.” The affirmative vote
of the holders of a majority of shares present in person or
represented by proxy at the Annual Meeting and entitled to vote is
required for the election of each of the nominees. With regard to
this proposal, shares which are entitled to vote but abstain from
voting on a matter will be excluded from the vote and will have no
effect on its outcome.
R
ecommendation
Our
Board recommends that shareholders vote “FOR” the
election of each of the director nominees identified in Proposal
No. 1.
10
C
orporate Governance
B
oard and Committee
Meetings
Our
Board held 3 meetings in fiscal year 2019 following the completion
of the reverse acquisition and the appointment of all directors
(except for Frank Oakes who served as a director for the full
fiscal year) on June 7, 2019. Each director attended at least 75%
of the aggregate number of meetings of the Board held during the
period for which such director served on our Board, except for
Lorin Johnson and Sean MacDonald who attended 2 of the 3 meetings
following their appointment. Our directors are encouraged, but not
required, to attend annual meetings. Frank Oakes attended our 2019
annual meeting of shareholders (all of our other directors were
appointed following the 2019 annual meeting of shareholders), and
all of our directors are expected to attend this Annual Meeting in
person or by teleconference.
During
fiscal year 2019 following the completion of the reverse
acquisition and the appointment of all committee members, our Audit
Committee held 1 meeting, our Compensation Committee held 3
meetings and our Nominating and Corporate Governance Committee held
no meetings. Each director attended at least 75% of the aggregate
number of meetings of the Committees held during the period for
which such director served on those Committees.
B
oard Leadership
Structure
The positions of our chairman of the board and chief executive
officer are separate. Separating these positions allows our chief
executive officer to focus on our day-to-day business, while
allowing the chairman of the board to lead the board of directors
in its fundamental roles of setting a company’s overall
strategy and providing advice to and independent oversight of
management. Our board of directors recognizes the time, effort and
energy that the chief executive officer must devote to his position
in the current business environment, as well as the commitment
required to serve as our chairman, particularly as the board of
directors’ oversight responsibilities continue to grow. Our
board of directors also believes that this structure ensures a
greater role for the independent directors in the oversight of the
company and active participation of the independent directors in
setting agendas and establishing priorities and procedures for the
work of our board of directors. Our board of directors believes its
administration of its risk oversight function has not affected its
leadership structure.
Although our articles do not require the chairman and chief
executive officer positions to be separate, our board of directors
believes that having separate positions is the appropriate
leadership structure for the Company at this time and demonstrates
our commitment to good corporate governance.
R
ole of Board in Risk
Oversight Process
Our
Board is responsible for overseeing our Company’s risk
management and, either as a whole or through its committees,
regularly discusses with management our major risk exposures, their
potential impact on our business and the steps we take to manage
them.
The Board monitors
the adequacy of information given to directors, communication
between the Board and management and the strategic direction and
processes of the Board and committees.
The risk oversight
process includes receiving regular reports from committees of the
Board and members of senior management to enable our Board to
understand the Company’s risk identification, risk management
and risk mitigation strategies with respect to areas of potential
material risk, including operations, finance, legal, regulatory,
strategic and reputational risk. The Audit Committee discusses with
our independent auditors the major financial risk exposures and the
steps management has taken to monitor and mitigate such
exposures.
D
irector Independence
The
Board evaluates the independence of each nominee for election as a
director of our Company in accordance with the Listing Rules (the
“
Nasdaq Listing
Rules
”) of the Nasdaq Stock Market LLC
(“
Nasdaq
”).
Pursuant to these rules, a majority of our Board must be
“independent directors” within the meaning of the
Nasdaq Listing Rules, and all directors who sit on our Audit
Committee, Compensation Committee and Nominating and Corporate
Governance Committee must also be independent
directors.
The
Nasdaq definition of “independence” includes a series
of objective tests, such as the director or director nominee is
not, and was not during the last three years, an employee of the
Company and has not received certain payments from, or engaged in
various types of business dealings with, the Company. In addition,
as further required by the Nasdaq Listing Rules, the Board has made
a subjective determination as to each independent director that no
relationships exist which, in the opinion of the Board, would
interfere with such individual’s exercise of independent
judgment in carrying out his or her responsibilities as a director.
In making these determinations, the Board reviewed and discussed
information provided by the directors with regard to each
director’s business and personal activities as they may
relate to the Company and its management.
As a
result, the Board of Directors has affirmatively determined that
Lorin Johnson, Sean
MacDonald, Paul Pay, Carlo Sistilli and Peter van der Velden are
“independent directors.”
This means that our
Board of Directors is composed of a majority of independent
directors as required by Nasdaq. The Board of Directors has also
affirmatively determined that all members of our Audit Committee,
Compensation Committee, and Nominating and Corporate Governance
Committee are independent directors.
11
C
ode of Ethics and Business Conduct
and Insider Trading Policy
We have
adopted a Code of Ethics and Business Conduct that applies to all
of our directors, officers, and employees, including our principal
executive office, principal financial officer, principal accounting
officer or controller, or persons performing similar functions. A
copy of our Code of Ethics and Business Conduct is available on the
Investor Relations section of our website at
edesabiotech.com/investors/governance, in the Corporate Governance
section, under the Governance Documents section. We intend to
satisfy the SEC’s disclosure requirements regarding
amendments to, or waivers of, our Code of Ethics and Business
Conduct by posting such information on our website. Copies of our
Code of Ethics and Business Conduct may be obtained, free of
charge, by writing to our Corporate Secretary, Edesa Biotech, Inc.,
100 Spy Court, Markham, ON Canada L3R 5H6.
I
nformation about
our Board Committees
Our Board of Directors has appointed an Audit Committee, a
Compensation Committee, and a Nominating and Corporate Governance
Committee. The Board of Directors has determined that each director
who serves on these committees is “independent,” as
that term is defined by the listing rules of Nasdaq and rules of
the Securities and Exchange Commission. The Board of Directors has
adopted written charters for its Audit Committee, Compensation
Committee, and Nominating and Corporate Governance Committee.
Copies of these charters are available on our website
at
edesabiotech.com/investors/governance
.
A
udit Committee
Composition of the Audit Committee
Our Audit Committee is composed of Sean MacDonald, Paul Pay and
Carlo Sistilli (chair). The purpose of the Audit Committee is to
oversee our accounting and financial reporting processes and the
audits of our financial statements. In that regard, the Audit
Committee assists the Board in monitoring: (a) the integrity of our
financial statements; (b) our independent auditor’s
qualifications, independence, and performance; (c) the performance
of our system of internal controls, financial reporting, and
disclosure controls; and (d) our compliance with legal and
regulatory requirements. To fulfill this obligation and perform its
duties, the Audit Committee maintains effective working
relationships with the Board, management, and our independent
auditor.
Carlo Sistilli is the Chair of our Audit Committee and has
extensive financial experience. He
holds a Bachelor of Arts from York University, an
Economics Major, Certified Management Accountant Designation and a
Chartered Professional Accountant Designation.
He
has held a variety of executive positions in
accounting and finance during the past 35 years
. The Board has determined that
Mr. Sistilli is an “audit committee financial
expert” as defined in Item 407(d)(5)(ii) of Regulation
S-K.
Relevant Education and Experience
A full
description of the education and experience of the current members
of the Audit Committee is available under the section entitled
“
Information as to our Board
of Directors and Nominees - Biographies and
Qualifications
” detailed above.
Audit Committee Oversight
Additional
information regarding the audit committee is contained in Item 10
of our Annual Report on Form 10-K, as filed with the SEC on
December 12, 2019 and our Annual Information Form for the
nine-month period ended September 30, 2019 as filed on
SEDAR.
C
ompensation
Committee
Our Compensation Committee is composed of Lorin Johnson, Sean
MacDonald and Paul Pay (chair). The purpose of the Compensation
Committee is to assist the Board’s oversight relating to
compensation, including the approval of compensation for our Chief
Executive Officer and our other named executive officers. It has
overall responsibility for evaluating, and recommending to the
independent members of the Board for approval, our compensation
plans, policies and programs as such plans, policies and programs
affect executive officers.
The
Compensation Committee also reviews the Company’s incentive
compensation arrangements to determine whether they encourage
excessive risk-taking, reviews and discusses, at least annually,
the relationship between risk management policies and practices and
compensation, and evaluates compensation policies and practices
that could mitigate any such risk.
All
compensation decisions are made with consideration of the
Compensation Committee’s guiding principles to provide
competitive compensation for the purpose of attracting and
retaining talented executives and employees and of motivating our
employees to achieve improved company performance, which ultimately
benefits our shareholders. The Compensation Committee has the
authority to retain and terminate any advisors, including
independent counsel, compensation consultants and other advisors to
assist as needed, and has authority to approve the advisors’
fees, which will be paid by the Company, and the other terms and
conditions of their engagement. The Compensation Committee
considers input and recommendations from our Chief Executive
Officer, who shall not be present during any committee
deliberations with respect to his compensation, in connection with
its review of our Company’s compensation programs and its
annual review of the performance of the other executive
officers.
12
Our Nominating and Corporate Governance Committee is composed of
Sean MacDonald, Carlo Sistilli and Peter van der Velden (chair).
The purpose of the Nominating and Corporate Governance Committee is
to identify individuals qualified to become Board members;
recommend to the Board individuals to serve as directors; advise
the Board with respect to Board composition, procedures and
committees; develop, recommend to the Board and annually review a
set of corporate governance principles applicable to the Company;
and oversee any related matters required by the federal securities
laws.
Process for Identifying and Evaluating Potential Director
Nominees
. The Nominating and Corporate Governance Committee
will identify, evaluate and recommend candidates to become members
of our Board with the goal of creating a Board that, as a whole,
consists of individuals with various and relevant career
experience, industry knowledge and experience, and financial
expertise. It will consider persons identified by its members,
management, shareholders, investment bankers and others for
nomination to the Board. Candidates, whether identified by the
Nominating and Corporate Governance Committee or proposed by
shareholders, will be reviewed in the context of the current
composition of our Board, our operating requirements and the
long-term interests of our shareholders. Although the Nominating
and Corporate Governance Committee does not have a formal diversity
policy concerning membership of the Board, it does consider
diversity in its broadest sense when evaluating candidates,
including persons diverse in gender, ethnicity, experience, and
background.
Process for Shareholder Nominations.
The Board has approved
an advance notice policy, which was subsequently approved by our
shareholders at our 2014 annual meeting of shareholders, that
requires advance notice be given to us in certain circumstances
where nominations of persons for election to the Board are made by
our shareholders. Shareholders who wish to recommend a candidate
for election to the Board should send their letters to our
Corporate Secretary at 100 Spy Court, Markham, ON Canada L3R
5H6.
In the
case of an annual meeting of shareholders, notice to the Company
must be made not less than 30 days nor more than 65 days prior to
the date of the annual meeting. However, in the event that the
annual meeting is to be held on a date that is less than 40 days
after the date on which the first public announcement of the date
of the annual meeting was made, notice may be made not later than
the close of business on the tenth day following such public
announcement.
In the
case of a special meeting of shareholders (which is not also an
annual meeting), notice to the Company must be made not later than
the close of business on the fifteenth day following the day on
which the first public announcement of the date of the special
meeting was made.
Each of
the nominees up for election at the Annual Meeting was recommended
to the Board by the Nominating and Corporate Governance
Committee.
S
hareholder Communications with the
Board of Directors
If you
wish to communicate with the Board, you may send your communication
in writing to our Corporate Secretary at our executive offices
located at 100 Spy Court, Markham, ON Canada L3R 5H6. Please
include your name and address in the written communication and
indicate whether you are a shareholder. Our Corporate Secretary
will review any communication received from a shareholder, and all
material communications from shareholders will be forwarded to the
appropriate director or directors or committee of the Board based
on the subject matter.
E
xecutive
Officers
Set
forth below is certain information with respect to the names, ages,
and positions of our executive officers as of March 20, 2020.
Biographical information pertaining to Dr. Pardeep Nijhawan, who is
a director and an executive officer, may be found in the above
section entitled “
Information as to our Board of Directors and
Nominees - Biographies and Qualifications
.” The
executive officers serve at the pleasure of our Board of
Directors.
|
Name
|
|
Age
|
|
Position(s) Held
|
|
Date of Appointment
|
|
Pardeep
Nijhawan, MD
|
|
49
|
|
Director,
Chief Executive Officer and Corporate Secretary
|
|
June 7,
2019
|
|
Kathi
Niffenegger, CPA
|
|
62
|
|
Chief
Financial Officer
|
|
November
1, 2013
|
|
Michael
Brooks, PhD
|
|
41
|
|
President
|
|
June 7,
2019
|
13
Kathi Niffenegger, CPA
has served as our Chief Financial
Officer since 2013. She also previously served as the
company’s Corporate Secretary from 2013 to June 2019.
Ms. Niffenegger has more than 30 years of experience in
accounting and finance in a range of industries, and has led audits
of manufacturing, pharmaceutical and governmental grant clients.
She has also developed specialized expertise in cost accounting
systems and internal controls. Prior to joining the company, she
held positions of increasing responsibility in the audit division
of Glenn Burdette CPAs and served most recently as technical
partner. Earlier in her career, she was the Chief Financial Officer
of Martin Aviation. Ms. Niffenegger holds a B.S. degree in
Business Administration, Accounting from California State
University, Long Beach. She is a member of the American Institute
of Certified Public Accountants (AICPA) and holds the Chartered
Global Management Accountant (CGMA) designation.
Michael Brooks, PhD
was appointed President of Edesa in June
2019, having served as Vice President of Corporate Development and
Strategy for the company’s principal operating subsidiary,
Edesa Biotech Research, Inc., since July 2015. Prior to joining
Edesa, Dr. Brooks held positions of increasing responsibility at
Cipher Pharmaceuticals Inc from 2010 to 2015 and served most
recently there as Director of Business Development. Prior to
joining Cipher, Dr. Brooks was a Post-Doctoral fellow at the
University of Toronto. Dr. Brooks holds a Hons B.Sc. degree in
Microbiology and a PhD in Molecular Genetics from the University of
Toronto. Dr. Brooks received his MBA degree from the Rotman School
of Management where he was a Canadian Institute for Health Research
(CIHR) Science-to-Business Scholar.
E
xecutive Compensation
As an
emerging growth company under SEC rules and the JOBS Act and as a
Smaller Reporting Company, we may provide scaled disclosure
in Item 402 paragraphs (m) through
(r)
. Our proxy disclosure has been prepared to comply with
those U.S. requirements as allowed under National Instrument
51-102F6.
Named Executive Officers
For the
purposes of this proxy statement, a named executive officer (NEO)
of the Company means each of the following
individuals:
|
(i)
|
All
individuals serving as the Company’s principal executive
officer or acting in a similar capacity during the last completed
fiscal year (PEO), regardless of compensation level;
|
|
(ii)
|
the
Company’s two most highly compensated executive officers
other than the PEO who were serving as executive officers at the
end of the last completed fiscal year; and
|
|
(iii)
|
Up to
two additional individuals for whom disclosure would have been
provided under (ii) above but for the fact that the individual was
not serving as an executive officer of the Company at the end of
the last completed fiscal year.
|
Our named executive officers for
the
nine-month period
ended September 30,
2019
were Pardeep
Nijhawan, MD, Director, Chief Executive Officer and Corporate
Secretary; Kathi Niffenegger, CPA, Chief Financial Officer; and
Michael Brooks, PhD, President.
S
ummary Compensation
Table
The following table sets forth information regarding the
compensation awarded to, earned by or paid to the named executive
officers for the nine-month period ended September 30, 2019 and
year ended December 31, 2018.
|
Name and Principal Position
|
|
Fiscal Year
|
|
|
Salary ($)
|
|
|
Bonus ($)
|
|
|
Option Awards($) (1)
|
|
|
All Other Compensation ($)
|
|
|
Total ($)
|
||||||
|
Pardeep
Nijhawan, MD
|
|
|
2019
|
|
|
$
|
105,461
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
24,571
|
(2)
|
|
$
|
130,032
|
|
Director,
Chief Executive
|
|
|
2018
|
|
|
|
27,116
|
|
|
|
-
|
|
|
|
1,594
|
|
|
|
32,415
|
(2)
|
|
|
61,125
|
|
Officer
and Corporate Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathi
Niffenegger, CPA
|
|
|
2019
|
(3)
|
|
|
63,604
|
|
|
|
53,750
|
|
|
|
-
|
|
|
|
5,000
|
(4)
|
|
|
122,354
|
|
Chief
Financial Officer
|
|
|
2018
|
(3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
Brooks, PhD
|
|
|
2019
|
|
|
|
158,114
|
|
|
|
37,243
|
|
|
|
-
|
|
|
|
11,897
|
(5)
|
|
|
207,254
|
|
President
|
|
|
2018
|
|
|
|
170,445
|
|
|
|
51,706
|
|
|
|
1,594
|
|
|
|
7,280
|
(5)
|
|
|
231,025
|
|
(1)
|
The
amounts shown in this column represent the aggregate grant date
fair value of the share option awards computed in accordance with
Financial Accounting Standards Board (FASB) Accounting Standards
Codification 718, not the actual amounts paid to or realized by the
named executive officers
during the covered fiscal year. The
assumptions used in determining grant date fair value of these
awards are set forth in Note 6 to our audited consolidated
financial statements for the nine-month period ended September 30,
2019 included in our Annual Report.
|
|
(2)
|
Represents
(i) $23,884 in car allowance and (ii) $687 in health insurance in
2019 and (i) $32,415 in car allowance in 2018.
The compensation was
paid in Canadian dollars and was converted to US dollars using the
average foreign exchange rate for the year from
oanada.com.
|
|
(3)
|
Ms.
Niffenegger was our Chief Financial Officer prior to our business
combination with Edesa Research (as described below under the
heading “Change in Control”) and her compensation
during that time is not reflected in
our audited consolidated financial
statements included in our Annual Report
. In 2019 prior to
our business combination on June 7, 2019, she received salary of
$97,599, bonus of $53,725 and other compensation of (i) $6,775 in
health insurance and (ii) $4,540 in 401(k) company contributions.
During fiscal 2018 she received salary of $208,637, bonus of
$60,512 and other compensation of (i) $12,962 in health insurance
and (ii) $6,077 in 401(k) company contributions.
|
|
(4)
|
Represents
(i) $3,719 in health insurance and (ii) $1,281 in 401(k) company
contributions.
|
|
(5)
|
Represents
(i) $9,698 in car allowance and (ii) $2,199 in health insurance in
2019 and (i) $5,094 in car allowance and (ii) $2,186 in health
insurance in 2018.
The compensation was
paid in Canadian dollars and was converted to US dollars using the
average foreign exchange rate for the year from
oanda.com.
|
14
E
mployment Agreements
Prior to the completion of our business combination with Edesa
Research, Edesa Research had employment agreements in effect with
Dr. Pardeep Nijhawan and Dr. Michael Brooks which are described
below. Upon completion of our business combination transaction with
Edesa Research, Dr. Nijhawan and Dr. Brooks each entered into new
employment agreements with us which are also described below, and
the old employment agreements were terminated.
Terminated Employment Agreement with Dr. Pardeep
Nijhawan
On August 1, 2017, Edesa Research entered into an employment
agreement with Dr. Pardeep Nijhawan which was to continue
indefinitely until terminated in accordance with its terms. The
employment agreement provided that during the term of the
agreement, Dr. Nijhawan was to serve as Edesa Research’s
Chief Executive Officer. In consideration for his services to Edesa
Research, Dr. Nijhawan received a base salary of C$35,000 per annum
and was eligible for coverage under Edesa Research’s standard
benefit programs. The agreement was terminable by Edesa Research
(i) for cause without notice or severance pay or (ii) without
cause, in which case Edesa Research was to provide 18 months’
notice of termination or pay in lieu of notice (based on Dr.
Nijhawan’s base salary) and benefits for up to 18 months
following the provision of notice of termination. In addition, upon
a termination by Edesa Research without cause, all options on a
pro-rated basis were to be deemed vested on the business day
immediately preceding the termination date and would remain
exercisable for a period of 180 days. Dr. Nijhawan could resign
from his employment at any time by providing two weeks advance
notice to Edesa Research.
New Employment Agreement with Pardeep Nijhawan
On June 14, 2019 but effective as of June 7, 2019, we entered into
an employment agreement with Pardeep Nijhawan, MD. Pursuant to the
employment agreement, Dr. Nijhawan will serve as our Chief
Executive Officer for an indefinite term until Dr. Nijhawan’s
employment is terminated in accordance with the agreement. As
compensation for his services to us, Dr. Nijhawan will receive a
base salary of $300,000 per year and be eligible to receive
a
target annual bonus of
40% of his base salary, subject to achieving corporate and personal
targets to be determined by us.
Dr. Nijhawan
will also receive an automobile allowance of
$2,700 per month and be eligible to participate in our group
insured benefits program, as may be in effect from time-to time for
our employees generally, and executive employees
specifically.
Dr. Nijhawan
is also eligible for future share and/or option grants, as
determined by our Compensation Committee,
commensurate with
Dr. Nijhawan
’s position and any business milestones
which may be established by the Compensation Committee
and
subject to
availability of shares and/or options for grant under our Equity
Incentive Compensation Plan.
If Dr. Nijhawan’s employment with us is terminated for
“Cause” (as such term is defined in the employment
agreement), subject to applicable law, our only obligation shall be
to provide Dr. Nijhawan with his base salary and vacation pay
earned through the date of termination and all of Dr.
Nijhawan’s vested or non-vested stock options which have not
been exercised by Dr. Nijhawan as of the date of termination will
be automatically extinguished. If Dr. Nijhawan is terminated by us
without “Cause”, our only obligation shall be to
provide Dr. Nijhawan with (i) a lump sum payment equal to Dr.
Nijhawan’s then current base salary for twenty-four months
(the “Severance Period”), (ii) a lump sum payment of
the annual bonus to which Dr. Nijhawan is entitled for the fiscal
year immediately preceding the date of termination, if such bonus
has not already been paid, (iii) a lump sum payment equal to Dr.
Nijhawan’s annual bonus entitlement, prorated over Dr.
Nijhawan’s length of service in the fiscal year in which his
employment is terminated, calculated in accordance with the terms
of the employment agreement; (iv) payment of Dr. Nijhawan’s
annual bonus entitlement during the full Severance Period,
calculated in accordance with the terms of the employment
agreement, (v) continuation of Dr. Nijhawan’s benefits and
car allowance and any other benefit required to be maintained by
law in accordance with the terms of the employment agreement and
(vi) subject to applicable law, all stock options granted to Dr.
Nijhawan shall be exercisable in accordance with the terms of the
applicable stock option plan. Dr. Nijhawan may resign from his
employment at any time by providing us with a minimum of sixty days
advance notice, in writing. Dr. Nijhawan’s notice may be
waived by us, subject only to providing Dr. Nijhawan with payment
of his base salary and continuation of benefits until the end of
the notice period. If Dr. Nijhawan resigns from his employment,
subject to applicable law, (i) all non-vested stock options and all
vested stock options held by Dr. Nijhawan which have not been
exercised by Dr. Nijhawan as of the date of termination shall be
automatically extinguished and (ii) Dr. Nijhawan shall not be
entitled to any bonus or pro rata bonus payment not already paid on
or before the date of termination.
During the term of Dr. Nijhawan’s employment with us and for
twelve months following the cessation of Dr. Nijhawan’s
employment with us, Dr. Nijhawan is prohibited from competing with
our business in North America. In addition, for twenty-four months
following the cessation of Dr. Nijhawan’s employment with us,
Dr. Nijhawan is prohibited from soliciting customers or prospective
customers for any purpose competitive with our business,
encouraging any customer to cease doing business with us and
soliciting the employment or engagement of certain of our
employees.
15
Terminated Employment Agreement with Michael Brooks
On August 28, 2017, Edesa Research entered into an employment
agreement with Michael Brooks which was to continue indefinitely
until terminated in accordance with its terms. The employment
agreement provided that during the term of the agreement, Dr.
Brooks was to serve as Edesa Research’s Vice President
Corporate Development and Strategy. In consideration for his
services to Edesa Research, Dr. Brooks received a base salary of
C$220,000 per annum and was eligible for coverage under Edesa
Research’s standard benefit programs. In addition, subject to
achievement of bonus criteria established by Edesa Research, Dr.
Brooks was eligible to receive an annual bonus award of up to 30%
of his base salary.
The agreement was terminable by Edesa Research (i) for cause
without notice or severance pay or (ii) without cause, in which
case Edesa Research was to provide 12 months notice of termination
or pay in lieu of notice (based on Dr. Brooks’s base salary)
and benefits for up to 12 months following the provision of notice
of termination. In addition, upon a termination by Edesa Research
without cause, Dr. Brooks was entitled to a pro-rated bonus
covering any year or partial actively worked from the time of the
past applicable bonus period through to the termination date of Dr.
Brooks employment and all options on a pro-rated basis would be
deemed to be vested on the business day immediately preceding the
termination date and would remain exercisable for a period of 180
days. In the event Dr. Brook’s employment was terminated in
connection with a change of control event, any unvested options or
other equity awards then held by Dr. Brooks would be deemed to be
vested on the business day immediately preceding the termination
date and were to remain exercisable for a period of 180 days. Dr.
Brooks could also resign from his employment at any time by
providing two weeks advance notice to Edesa Research. During the
term of his employment and for a period of 12 months thereafter,
Dr. Brooks was subject to certain non-solicitation provisions
relating to Edesa Research’s employees, customers,
prospective customers and suppliers. In addition, the agreement
provided that, subject to certain exceptions, Dr. Brooks could not
compete with the business of Edesa Research during the employment
period and any notice period (or period paid in lieu of
notice).
New Employment Agreement with Michael Brooks
On June 14, 2019 but effective as of June 7, 2019, we entered into
an employment agreement with Michael Brooks, PhD. Pursuant to the
employment agreement, Dr. Brooks will serve as our President for an
indefinite term until Dr. Brooks’ employment is terminated in
accordance with the agreement. As compensation for his services to
us, Dr. Brooks will receive a base salary of $275,000 per year and
be eligible to receive a
target annual bonus of 40% of his base salary,
subject to achieving corporate and personal targets to be
determined by us. Dr. Brooks will also receive an automobile
allowance of $2,000 per month and be eligible to participate in our
group insured benefits program, as may be in effect from time-to
time for our employees generally, and executive employees
specifically.
Dr. Brooks
is also eligible for future share and/or option grants, as
determined by our Compensation Committee,
commensurate with Dr. Brooks’ position and
any business milestones which may be established by the
Compensation Committee and
subject to availability of shares and/or
options for grant under our Equity Incentive Compensation
Plan.
If Dr. Brooks’ employment with us is terminated for
“Cause” (as such term is defined in the employment
agreement), subject to applicable law, our only obligation shall be
to provide Dr. Brooks with his base salary and vacation pay earned
through the date of termination and all of Dr. Brooks’ vested
or non-vested stock options which have not been exercised by Dr.
Brooks as of the date of termination will be automatically
extinguished. If Dr. Brooks is terminated by us without
“Cause”, our only obligation shall be to provide Dr.
Brooks with (i) a lump sum payment equal to Dr. Brooks’ then
current base salary for twelve months plus one additional month for
every completed year of service since September 2015, not to exceed
an aggregate of twenty-four months (the “Severance
Period”), (ii) a lump sum payment of the annual bonus to
which Dr. Brooks is entitled for the fiscal year immediately
preceding the date of termination, if such bonus has not already
been paid, (iii) a lump sum payment equal to Dr. Brooks’
annual bonus entitlement, prorated over Dr. Brooks’ length of
service in the fiscal year in which his employment is terminated,
calculated in accordance with the terms of the employment
agreement; (iv) payment of Dr. Brooks’ annual bonus
entitlement during the full Severance Period, calculated in
accordance with the terms of the employment agreement, (v)
continuation of Dr. Brooks’ benefits and car allowance and
any other benefit required to be maintained by law in accordance
with the terms of the employment agreement and (vi) subject to
applicable law, all stock options granted to Dr. Brooks shall be
exercisable in accordance with the terms of the applicable stock
option plan. If Dr. Brooks’ employment is terminated or
“constructively terminated” (as such term is defined in
the employment agreement) by us without “Cause” upon or
within a twelve month period following a Change of Control (as such
term is defined in the employment agreement), Dr. Brooks shall be
entitled to the payments and benefits provided as described in
clauses (ii) to (vi) above, plus a change of control payment equal
to twenty-four months of the his then current base salary. Dr.
Brooks may resign from his employment at any time by providing us
with a minimum of sixty days advance notice, in writing. Dr.
Brooks’ notice may be waived by us, subject only to providing
Dr. Brooks with payment of his base salary and continuation of
benefits until the end of the notice period. If Dr. Brooks resigns
from his employment, subject to applicable law, (i) all non-vested
stock options and all vested stock options held by Dr. Brooks which
have not been exercised by Dr. Brooks as of the date of termination
shall be automatically extinguished and (ii) Dr. Brooks shall not
be entitled to any bonus or pro rata bonus payment not already paid
on or before the date of termination.
During
the term of Dr. Brooks’ employment with us and for twelve
months following the cessation of Dr. Brooks' employment with us,
Dr. Brooks is prohibited from competing with our business in North
America. In addition, for twenty-four months following the
cessation of Dr. Brooks' employment with us, Dr. Brooks is
prohibited from soliciting customers or prospective customers for
any purpose competitive with our business, encouraging any customer
to cease doing business with us and soliciting the employment or
engagement of certain of our employees.
16
New Employment Agreement with Kathi Niffenegger
On June 7, 2019, we entered into an employment agreement with Ms.
Niffenegger. Pursuant to the employment agreement, Ms. Niffenegger
will serve as our Chief Financial Officer. Both Ms. Niffenegger and
we have the right to terminate the employment relationship at any
time, with or without cause. As compensation for her services to
us, Ms. Niffenegger will receive a base salary of $215,000 per
year, a discretionary bonus in an amount up to 25% of her base
salary based on her performance and the company’s
performance, a one-time hiring and retention bonus of $53,750 which
is subject to partial claw back if Ms. Niffenegger voluntary
terminates her employment prior to March 1, 2020 and such other
employee benefits as are generally provided to similarly situated
employees of the company. Ms. Niffenegger may be eligible for
future share and/or option grants in accordance with our executive
compensation policy as in effect from time to time as determined by
our Compensation Committee subject to availability of shares and/or
options for grant under our Equity Incentive Compensation
Plan.
If Ms. Niffenegger’s employment with us is terminated for
“Cause” (as such term is defined in the employment
agreement) or if Ms. Niffenegger resigns from her employment at any
time, our only obligation shall be to provide Ms. Niffenegger with:
(i) her accrued salary through and including her last day of
employment (the “Separation Date”); (ii) reimbursement
of any reimbursable expenses properly incurred through and
including the Separation Date; and (iii) any benefit required under
applicable law. If we terminates Ms. Niffenegger’s employment
without “Cause” or if Ms. Niffenegger’s
employment with us is “constructively terminated” (as
such term is defined in the employment agreement) our only
obligations shall be: (a) to provide Ms. Niffenegger with the same
payments and benefits as would be provided if we had terminated her
employment for Cause; and (b) subject to Ms. Niffenegger’s
execution of a release in our favor, Ms. Niffenegger will also be
paid, as severance, an amount equal to twelve months of her base
salary at her then-current rate. In the event that Ms.
Niffenegger’s employment is terminated or constructively
terminated by us without Cause upon or within a twelve month period
following a Change of Control (as defined in the employment
agreement), Ms. Niffenegger shall be entitled to the payments and
benefits as though she was terminated without “Cause”,
plus an additional change of control payment equal to twelve months
of her base salary.
During the term of Ms. Niffenegger’s employment with us, Ms.
Niffenegger is prohibited from competing with our business. In
addition, while Ms. Niffenegger is employed by us and for a period
of one year thereafter, Ms. Niffenegger is prohibited from
soliciting for employment certain of our employees.
O
utstanding Equity Awards
at 2019 Fiscal Year-End
The following table summarizes the equity awards made to our named
executive officers that were outstanding at September 30,
2019.
|
|
|
|
Option
Awards
|
|||
|
Name
|
Award
grant date
|
Number
of securities underlying unexercised options (#)
exercisable
|
Number
of securities underlying unexercised options (#) unexercisable
(1)
|
|
Option
exercise prices ($)
|
Option
expiration date
|
|
Pardeep Nijhawan,
MD
|
9/26/17
|
32,977
|
14,513
|
(2)
|
C
$
2.16
|
9/26/27
|
|
|
12/28/18
|
-
|
1,620
|
(2)
|
C
$
2.16
|
12/28/28
|
|
|
|
|
|
|
|
|
|
Kathi Niffenegger,
CPA
|
12/19/12
|
119
|
-
|
|
C
$
105.00
|
12/19/19
|
|
|
5/14/13
|
214
|
-
|
|
C
$
243.60
|
5/14/20
|
|
|
11/1/13
|
238
|
-
|
|
$
768.60
|
11/1/20
|
|
|
11/12/14
|
214
|
-
|
|
C
$
638.40
|
11/12/21
|
|
|
12/22/15
|
238
|
-
|
|
$
304.08
|
12/22/22
|
|
|
12/20/16
|
238
|
-
|
|
$
85.26
|
12/20/23
|
|
|
3/12/18
|
833
|
-
|
|
$
35.28
|
3/12/25
|
|
|
|
|
|
|
|
|
|
Michael Brooks,
PhD
|
8/28/17
|
136,416
|
-
|
|
C
$
2.16
|
8/28/27
|
|
|
9/26/17
|
16,875
|
7,424
|
(2)
|
C
$
2.16
|
9/26/27
|
|
|
12/28/18
|
-
|
1,620
|
(2)
|
C
$
2.16
|
12/28/28
|
|
(1)
|
Our
options vesting policy is described in the Outstanding Equity
Awards Narrative Disclosure section.
|
|
(2)
|
The option will vest over a period of three years, with one-third
vesting on the first anniversary of the date of grant and the
remainder vesting on a pro-rata basis monthly
thereafter
.
|
17
O
utstanding Equity Awards Narrative
Disclosure
Equity Incentive Compensation Plan
We adopted an Equity Incentive Compensation Plan in 2019 (the
“2019 Plan”) which amended and restated our 2017
Incentive Compensation Plan (the “2017 Plan”). Under
the 2019 Plan, we are authorized to grant
options, restricted
shares and restricted share units (RSUs) to any of our officers,
directors, employees, and consultants and those of our subsidiaries
and other designated affiliates. The number of shares available for
issuance under the 2019 Plan is 1,153,147, including shares
available for the exercise of outstanding options under the 2017
Plan. The purpose of the 2019 Plan is to advance the interests of
the Company by encouraging equity participation through the
acquisition of common shares of the Company. The 2019 Plan is to be
administered by the Compensation Committee of our Board of
Directors, except to the extent (and subject to the limitations set
forth in the 2019 Plan) the Board elects to administer the 2019
Plan, in which case the 2019 Plan shall be administered by only
those members of the Board who are “independent”
members of the Board. The administrator of the 2019 Plan has the
power to, among other things:
|
●
|
allot
common shares for issuance in connection with the exercise of
options;
|
|
●
|
grant
options, restricted shares or restricted share units;
|
|
●
|
amend,
suspend, terminate or discontinue the plan; and
|
|
●
|
delegate
all or a portion of its administrative powers as it may determine
to one or more committees.
|
Options to purchase 319,645 common shares at prices ranging from
C$2.16 to C$638.40 and $35.28 to $768.60 are outstanding at
September 30, 2019. No restricted shares or restricted share units
have been granted as of September 30, 2019.
There were no options granted during the nine-month period ended
September 30, 2019 to directors, officers, employees or consultants
under the 2019 Plan.
Options Vesting Policy
Vesting requirements for option awards are determined by the
Compensation Committee or independent directors of the board.
Outstanding options granted by Stellar Biotechnologies
before
the completion of our
business combination became fully vested on June 7, 2019.
Options granted by Edesa
Research generally vested one-third upon the first anniversary of
the date of grant and monthly thereafter until the third
anniversary of the date of grant. The options granted by Edesa
Research on August 28, 2017 were fully vested upon grant
date.
Executive officers and employees of our California subsidiary are
eligible to receive the company’s non-elective contribution
of 3% of eligible compensation under a 401(k) plan to provide
retirement benefits. Any Company contributions we made to the plan
for our named executive officers are reflected in the “All
Other Compensation” column of the Summary Compensation Table
above.
Other than the funds contributed under our 401(k) plan, no other
funds were set aside or accrued by us during the nine-month period
ended September 30, 2019 or in the year ended December 31, 2018 to
provide pension, retirement or similar benefits for our named
executive officers.
18
D
irector Compensation
The following table sets forth information regarding the
compensation of our non-employee directors for the nine-month
period ended September 30, 2019.
|
Name
|
Fees
Earned or Paid in Cash($)
|
|
Option
Awards($) (1)
|
All
Other Compensation($)
|
Total ($)
|
|
Lorin Johnson,
PhD
|
$
10,608
|
|
$
-
|
$
-
|
$
10,608
|
|
Sean
MacDonald
|
15,833
|
(1)
|
-
|
-
|
15,833
|
|
Frank Oakes
(2)
|
9,500
|
|
-
|
-
|
9,500
|
|
Paul
Pay
|
23,238
|
(3)
|
-
|
-
|
23,238
|
|
Carlo Sistilli,
CPA, CMA
|
13,775
|
(1)
|
-
|
|
13,775
|
|
Peter van der
Velden
|
11,875
|
(1)(4)
|
-
|
-
|
11,875
|
|
(1)
|
The compensation was paid in Canadian dollars and was converted to
US dollars using the average foreign exchange rate for the year
from oanda.com.
|
|
|
|
|
(2)
|
Mr. Oakes was our Chief Executive Officer prior to our business
combination with Edesa Research and his compensation during that
time is not reflected in our audited consolidated financial
statements included in this Annual Report. In the nine-month period
ended September 30, 2019 prior to our business combination on June
7, 2019, he received salary of $120,269 and other compensation of
(i) $9,752 in health insurance and (ii) $3,608 in 401(k) company
contributions. During fiscal 2018 he received salary of $264,813,
bonus of $50,000 and other compensation of (i) $20,197 in health
insurance and (ii) $8,100 in 401(k) company
contributions.
|
|
(3)
|
Includes $9,780 for board services rendered to Edesa Research prior
to our business combination on June 7, 2019. The compensation was
paid in British pounds and was converted to US dollars using the
average foreign exchange rate for the year from
oanda.com.
|
|
(4)
|
Fees of $10,870 and $1,005 were paid to Lumira Capital II, L.P. and
Lumira Capital II (International), L.P., respectively, as
compensation for Mr. van der Velden’s services on our board
of directors.
|
O
utstanding Equity Awards at September
30, 2019
The following table summarizes the equity awards made to our
directors that were outstanding at September 30, 2019.
|
Name
|
Outstanding
Options (#)
|
|
Lorin Johnson,
PhD
|
-
|
|
Sean
MacDonald
|
-
|
|
Frank
Oakes
|
952
|
|
Paul
Pay
|
32,399
|
|
Carlo Sistilli,
CPA, CMA
|
-
|
|
Peter van der
Velden
|
-
|
19
N
arrative to Director
Compensation Table
Non-Employee Director Compensation Policy
The board adopted a compensation policy effective upon completion
of our business combination on June 7, 2019. As compensation for
their services on the board of directors, each non-executive board
member will receive annual base remuneration of $30,000 and the
Chairman of the Board will receive annual remuneration of $50,000,
inclusive of compensation for his services on committees of the
board of directors. Each member of the Company’s Audit
Committee will receive annual remuneration of $5,000, and the Chair
of the Audit Committee will receive $10,000 annually for his
services. Each member of the Company’s Compensation Committee
and Nominating and Corporate Governance Committee will receive
annual remuneration of $3,500 for each committee on which they
serve, and the Chairs of each of the Compensation Committee and
Nominating and Corporate Governance Committee shall receive $7,500
annually for their services. The Chief Executive Officer will not
receive any additional compensation for his services on the board
of directors.
S
ecurities Authorized
for Issuance Under Equity Compensation Plans
Equity Compensation Plan Information
The following table provides certain information as of September
30, 2019 about our common shares that may be issued under our
equity compensation plans, which consists of our 2017 Incentive
Compensation Plan in effect at September 30, 2019:
|
Plan category
|
Number
of securities to be issued upon exercise of outstanding options,
warrants and rights
|
Weighted-average
exercise price of outstanding options, warrants and
rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|
|
(a)
|
(b)
|
(c)(1)
|
|
Equity compensation
plans approved by security holders
|
319,645
|
$
3.38
|
33,502
|
|
Equity compensation
plans not approved by security holders
|
N/A
|
N/A
|
N/A
|
|
Total
|
319,645
|
$
3.38
|
33,502
|
(1)
On
October 22, 2019, a majority of the shareholders of Edesa adopted
the 2019 Equity Incentive Compensation Plan which increased the
number of securities available for future issuance under our equity
compensation plan by 800,000 common shares.
P
olicies and Procedures for
Review of Related Party Transactions
The
Audit Committee reviews, approves and oversees any transaction
between us and any “related person” (as defined in Item
404 of Regulation S-K) and any other potential conflict of interest
situations, on an ongoing basis. Under these policies and
procedures, the Audit Committee is to be informed of transactions
subject to review before their implementation. The procedures
establish our practices for obtaining and reporting information to
the Audit Committee regarding such transactions on a periodic and
an as-needed basis. The policy provides that such transactions are
to be submitted for approval before they are initiated but also
provides for ratification of such transactions. No director who is
interested in a transaction may participate in the Audit
Committee’s determinations as to the appropriateness of such
transaction.
R
elated Party
Transactions
Lease Agreement
In January 2017, Edesa Research entered into a lease agreement with
a company related to Pardeep Nijhawan, our Chief Executive Officer,
for executive office space which serves as our head office through
December 2022, with the option to extend the lease for an
additional two years. Monthly rents range from C$8,320 to C$9,020
plus HST. Rents of approximately $58,000 and $79,000 were incurred
in the nine-month period ended September 30, 2019 and the year
ended December 31, 2018, respectively, of which approximately
$14,000 was payable at December 31, 2018. No rent was payable at
September 30, 2019.
Patent Royalty Agreement
In August 2002, our California subsidiary entered into an agreement
with Frank Oakes, a director, where he would receive royalty
payments in exchange for the assignment of his rights to U.S.
Patent No. 6,852,338 to Stellar Biotechnologies, Inc. The royalty
is 5% of gross receipts from products using this invention in
excess of $500,000 annually. Patent royalties of approximately
$20,000 were incurred in the nine-month period ended September 30,
2019 and royalties payable of approximately $23,000 were
outstanding at September 30, 2019. No patent royalties were
incurred or payable for the year ended December 31,
2018.
20
S
ection 16(a) Beneficial
Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires that our directors,
executive officers, and beneficial owners of more than ten percent
of our common shares file reports with the SEC on their initial
beneficial ownership of our common shares and any subsequent
changes. To our knowledge, based solely on a review of copies of
such reports filed electronically with the Securities and
Exchange Commission during the Company’s nine-month period
ended September 30, 2019, during such period, each of our
directors, executive officers, and beneficial owners of more than
ten percent of our common shares filed on a timely basis all
reports required by Section 16(a) of the Exchange Act, except for
one report on Form 4 reporting one transaction that was filed late
by Frank Oakes.
S
ecurity
Ownership of Certain Beneficial Owners and Management
The following tables sets forth certain information as of March 20,
2020, with respect to the beneficial ownership of our common shares
by: (1) all of our directors; (2) our named executive officers
listed in the Summary Compensation Table; (3) all of directors and
executive officers as a group; and (4) each person known by us to
beneficially own more than 5% of our outstanding common
shares.
We have determined beneficial ownership in accordance with the
rules of the SEC, based on a review of filings with the SEC and
information known to us. Except as indicated by the footnotes
below, we believe, based on the information furnished to us, that
the persons and entities named in the table below have sole voting
and investment power with respect to all common shares that they
beneficially own, subject to applicable community property
laws.
Common shares subject to options or warrants currently exercisable
or exercisable within 60 days of March 20, 2020 are deemed
outstanding for computing the share ownership and percentage of the
person holding such options and warrants, but are not deemed
outstanding for computing the percentage of any other person. The
percentage ownership of our common shares of each person or entity
named in the following table is based on 8,859,159 common shares
outstanding as of March 20, 2020.
Directors and Officers
|
Name
and Address of Beneficial Owner (1)
|
Amount
and Nature of Beneficial Ownership
|
|
Percent
of Shares Beneficially Owned
|
|
Lorin Johnson,
PhD
|
23,573
|
(2
)
|
*
|
|
Sean
MacDonald
|
18,763
|
(3
)
|
*
|
|
Pardeep Nijhawan,
MD
|
2,938,294
|
(4
)
|
33.0
%
|
|
Frank
Oakes
|
14,252
|
(5
)
|
*
|
|
Paul
Pay
|
39,575
|
(6
)
|
*
|
|
Carlo Sistilli,
CPA, CMA
|
9,875
|
(7
)
|
*
|
|
Peter van der
Velden
|
2,182,746
|
(8
)
|
24.6
|
|
Michael Brooks,
PhD
|
190,186
|
(9
)
|
2.1
|
|
Kathi Niffenegger,
CPA
|
38,940
|
(10
)
|
*
|
|
|
|
|
|
|
All
directors and executive officers as a group (9
persons)
|
5,456,204
|
(11
)
|
61.4
%
|
*
Percentage of shares beneficially owned does not exceed one
percent.
|
(1)
|
Unless
otherwise indicated, the address of each beneficial owner is c/o
Edesa Biotech, Inc., 100 Spy Court, Markham, ON Canada L3R
5H6.
|
|
(2)
|
Consists of (i) 8,524 Common Shares, (ii) 6,393 Common Shares
issuable upon exercise of Class A Warrants, (iii)
4,262 Common Shares issuable upon exercise of Class B
Warrants and (iv) 4,394 Common Shares issuable upon exercise of
options that are exercisable within sixty days of March 20,
2020.
|
|
(3)
|
Consists of (i) 14,369 Common Shares and (ii) 4,394 Common Shares
issuable upon exercise of options exercisable within sixty days of
March 20, 2020.
|
|
(4)
|
Consists of A(i) 537,312 Common Shares and (ii) 44,294 Common
Shares issuable upon exercise of options exercisable within sixty
days of March 20, 2020 held by Pardeep Nijhawan; B(i) 2,121,024
Common Shares, (ii) 6,942 Common Shares issuable upon exercise
of Class A Warrants and (iii) 4,628 Common Shares
issuable upon exercise of Class B Warrants held by Pardeep
Nijhawan Medicine Professional Corporation for which Pardeep
Nijhawan has sole voting and
dispositive power over
all such shares and C(i)
224,094 Common Shares held by The Digestive
Health Clinic Inc. for which Pardeep Nijhawan has sole voting
and
dispositive power over
all such shares.
|
|
(5)
|
Consists of (A)(i) 6,165 Common Shares and (ii) 5,346 Common Shares
issuable upon exercise of options that are exercisable within sixty
days of March 20, 2020 held by Frank Oakes and (B)(i) 1,218 Common
Shares, (ii) 914 Common Shares issuable upon exercise
of Class A Warrants and (iii) 609 Common Shares issuable
upon exercise of Class B Warrants held by Frank and Dorothy
Oakes Family Trust for which each of Frank Oakes and Dorothy Oakes,
as trustees, have voting and
dispositive power over
all such shares
.
|
|
(6)
|
Consists of (i) 2,436 Common Shares, (ii) 1,827 Common Shares
issuable upon exercise of Class A Warrants, (iii)
1,218 Common Shares issuable upon exercise of Class B
Warrants and
(iv)
34,094
Common Shares
issuable upon exercise of options exercisable within sixty days of
March 20, 2020.
|
21
(7)
Consists of (A) 4,394 Common Shares issuable upon exercise of
options exercisable within sixty days of March 20, 2020 held by
Carlo Sistilli and (B)(i) 2,436 Common Shares, (ii) 1,827 Common
Shares issuable upon exercise of Class A Warrants and (iii) 1,218
Common Shares issuable upon exercise of Class B Warrants held by
York-Cav Enterprises Inc for which Carlo Sistilli, as President and
Director, has sole voting and
dispositive power over
all such shares.
(8)
Consists of (A) 4,394 Common Shares issuable upon exercise of
options exercisable within sixty days of March 20, 2020 held by
Peter van der Velden; B(i) 1,833,066 Common Shares, (ii) 96,542
Common Shares issuable upon exercise of Class A Warrants and (iii)
64,362 Common Shares issuable upon exercise of Class B
Warrants
held by Lumira Capital
II, L.P. and
(C)(i) 169,502
Common Shares, (ii) 8,928 Common Shares issuable upon exercise of
Class A Warrants and (iii) 5,952 Common Shares issuable upon
exercise of Class B Warrants
held by Lumira Capital
II (International), L.P., an affiliate of Lumira Capital II,
L.P.
Lumira Capital GP,
L.P., the general partners of which are Lumira GP Inc. and Lumira
GP Holdings Co., is the general partner of each of Lumira Capital
II, L.P. and Lumira Capital II (International), L.P. Each of Lumira
Capital II, L.P. and Lumira Capital II (International), L.P. is
managed by Lumira Capital Investment Management Inc. Each of Lumira
Capital GP, L.P., Lumira GP Inc., Lumira GP Holdings Co. and Lumira
Capital Investment Management Inc. may be deemed to beneficially
own the shares held by Lumira Capital II, L.P. and Lumira Capital
II (International), L.P.
and
such entities control voting and investment power over such shares
through an investment committee of the Lumira group.
Peter van
der Velden is an executive officer of Lumira GP Inc., Lumira GP
Holdings Co. and Lumira Capital Investment Management
Inc.
|
(9)
|
Consists of (i)1,827 Common Shares, (ii) 1,371 Common Shares
issuable upon exercise of Class A Warrants, (iii)
914 Common Shares issuable upon exercise of Class B
Warrants and (iv) 186,074 Common Shares issuable upon exercise of
options exercisable within sixty days of March 20,
2020.
|
|
(10)
|
Consists of (A) 36,199 Common Shares issuable upon exercise of
options that are exercisable within sixty days of March 20, 2020
held by Kathi Niffenegger and (B) (i) 1,218 Common Shares, (ii)
914 Common Shares issuable upon exercise of Class A
Warrants and (iii) 609 Common Shares issuable upon exercise
of Class B Warrants held by the Kathi Niffenegger Trust for
which Kathi Niffenegger, as trustee, has sole voting
and
dispositive power over
all such shares.
|
|
(11)
|
Consists of (i) 4,923,191 Common Shares, (ii) 125,658 Common
Shares issuable upon exercise of Class A Warrants, (iii)
83,772 Common Shares issuable upon exercise of Class B
Warrants and (i) 323,583 Common Shares issuable upon exercise of
options that are exercisable within sixty days of March 20,
2020.
|
Shareholders Known by Us to Own 5% or More of Our Common
Shares
|
Name and Address
of Beneficial Owner
|
Amount and
Nature of Beneficial Ownership
|
Percent of
Shares Beneficially Owned
|
|
10379085
Canada Inc. (1)
|
710,375
|
8.0
%
|
|
Inveready
(2)
|
531,986
|
6.0
%
|
|
Lumira
Capital II, L.P. (3)
|
2,178,352
|
24.6
%
|
(1)
Consists of (i) 690,843 Common Shares, (ii) 11,719
Common Shares issuable upon exercise of Class A Warrants and (iii)
7,813 Common Shares issuable upon exercise of Class B
Warrants
. Voting and investment
power over the shares held by 10379085 Canada Inc. is exercised by
an investment committee of PCRI Inc., the parent of 10379085 Canada
Inc.
The address of the
shareholder is 6111 vie. Royalmount Ave., Montreal, Quebec, Canada,
H4P 2T4.
(2)
Consists of 531,986
Common Shares. Voting and investment power over the shares held by
Inveready Innvierte Biotech II, S.C.R. S.A is exercised by its
board of directors.
The address
of the shareholder is c/o Inveready Technology Investment Group,
C/dels Cavaliers, 50, Barcelona, 08034, Spain.
(3)
Consists of A(i) 1,833,066 Common Shares, (ii)
96,542 Common Shares issuable upon exercise of Class A Warrants and
(iii) 64,362 Common Shares issuable upon exercise of Class B
Warrants
held by Lumira Capital
II, L.P. and
(B)(i) 169,502
Common Shares, (ii) 8,928 Common Shares issuable upon exercise
of Class A Warrants and (iii) 5,952 Common Shares
issuable upon exercise of Class B
Warrants
held by Lumira Capital
II (International), L.P., an affiliate of Lumira Capital II,
L.P.
Lumira Capital GP, L.P.,
the general partners of which are Lumira GP Inc. and Lumira GP
Holdings Co., is the general partner of each of Lumira Capital II,
L.P. and Lumira Capital II (International), L.P. Each of
Lumira Capital II, L.P. and Lumira Capital II (International), L.P.
is managed by Lumira Capital Investment Management
Inc. Each of Lumira Capital GP, L.P., Lumira GP Inc.,
Lumira GP Holdings Co. and Lumira Capital Investment Management
Inc. may be deemed to beneficially own the shares held by Lumira
Capital II, L.P. and Lumira Capital II (International),
L.P and such entities control voting and investment power over
such shares through an investment committee of the Lumira
group. The address of each entity listed in this note is
141 Adelaide Street West, Suite 770, Toronto, Ontario, Canada M5H
3L5.
22
C
hange of
Control
On June 7, 2019, we completed a business combination with Edesa
Biotech Research, Inc., formerly known as Edesa Biotech Inc.
(“Edesa Research”), a company organized under the laws
of the province of Ontario, in accordance with the terms of a Share
Exchange Agreement, dated March 7, 2019, by and among the Company,
Edesa Research and the shareholders of Edesa Research. At the
closing of the transaction, we acquired the entire issued share
capital of Edesa Research, with Edesa Research becoming a wholly
owned subsidiary of ours. Also on June 7, 2019, in connection with
and following the completion of the reverse acquisition, we
effected a 1-for-6 reverse split of our Common Shares and changed
our name to “Edesa Biotech, Inc.” At the closing of the
transaction, the Edesa Research shareholders exchanged their shares
for 88% of our outstanding shares on a fully diluted basis.
Following the closing, our primary business is the business
conducted by Edesa Research, which is a biopharmaceutical company
focused on the development of innovative therapeutics for
dermatological and gastrointestinal indications with clear unmet
medical needs.
At the closing of the transaction, the Edesa Research shareholders
received 6,249,780 of our Common Shares in exchange for the capital
shares of Edesa Research and the holders of unexercised Edesa
Research share options immediately prior to the closing of the
transaction were issued replacement share options
(“Replacement Options”) to purchase an aggregate of
297,422 of our Common Shares. On July 26, 2019, pursuant to
the post-closing adjustment contemplated by the Share Exchange
Agreement, we issued an additional 366,234 of our Common Shares to
the Edesa Research shareholders and the holders of unexercised
Edesa Research stock options immediately prior to the closing of
the transaction were issued 17,701 additional Replacement Options
to purchase our Common Shares. Following the completion of the
transactions contemplated by the Share Exchange Agreement and the
Reverse Split, there were approximately 7,504,468, of our Common
Shares issued and outstanding and approximately 7,876,292 of our
Common Shares outstanding on a fully-diluted basis, and the former
Edesa Research shareholders and option holders owned approximately
6,931,137 of our Common Shares on a fully-diluted basis, or 88% of
our Common Shares on a fully-diluted basis, and our shareholders
and option holders prior to the transactions contemplated by the
Exchange Agreement owned approximately 945,155 of our Common Shares
on a fully-diluted basis, or 12% of our Common Shares on a
fully-diluted basis.
This Audit Committee Report shall not be deemed to be
“soliciting material” or to be filed with the SEC or
subject to Regulation 14A or 14C under the Exchange Act, or to the
liabilities of Section 18 of the Exchange Act. Notwithstanding
anything to the contrary set forth in any of our previous filings
under the Securities Act of 1933, as amended (the Securities Act),
or the Exchange Act that might incorporate future filings,
including this proxy statement, in whole or in part, this report
shall not be incorporated by reference into any such
filings.
The Audit Committee reviews our financial reporting process on
behalf of our Board of Directors. Management has the primary
responsibility for the financial statements and the reporting
process. Our independent auditors are responsible for expressing an
opinion on the conformity of our audited financial statements to
accounting principles generally accepted in the United States of
America.
In this context, the Audit Committee has reviewed and discussed our
audited financial statements with management and the independent
auditors. The Audit Committee has discussed with the independent
auditors the matters required to be discussed by Auditing Standard
No. 1301 (Communication with Audit Committees) as adopted by the
Public Company Accounting Oversight Board (the PCAOB). In addition,
the Audit Committee has received the written disclosures and the
letter from the independent auditors required by the applicable
requirements of the PCAOB regarding the independent auditor’s
communications with the Audit Committee concerning independence,
and has discussed with the independent auditor the independent
auditor’s independence. In addition, the Audit Committee has
considered whether the independent auditor’s provision of
non-audit services to us is compatible with the auditor’s
independence.
In reliance on the reviews and discussions referred to above, the
Audit Committee recommended to the Board of Directors that our
audited financial statements be included in our Annual Report on
Form 10-K for the nine-month period ended September 30, 2019, for
filing with the SEC.
The foregoing report has been furnished by the members of the Audit
Committee.
Carlo Sistilli, Chairman
Sean
MacDonald
Paul Pay
23
APPOINTMENT OF AUDITORS AND INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The
Audit Committee has selected MNP LLP as our auditors and
independent registered public accounting firm for the year ending
September 30, 2020, and the Board has approved such appointment.
The Board has directed that a resolution to appoint MNP LLP as our
auditors and independent registered public accounting firm for the
ensuing year, be presented to our shareholders for approval at the
Annual Meeting.
Representatives
of MNP LLP are expected to be available at the Annual Meeting, will
have an opportunity to make a statement if they so desire and will
be available to respond to appropriate questions.
I
ndependent Registered
Public Accounting Firm Fees and Services
The following table shows the aggregate fees paid or accrued for
audit and other services provided for the nine-month period ended
September 30, 2019 and year ended December 31, 2018 rendered by MNP
LLP.
Principal Accountant Fees and Services
|
Type
of Service
|
Nine-Month
Period 2019
|
Year
Ended 2018
|
|
|
|
|
|
Audit
Fees
|
$
143,095
|
$
88,260
|
|
Tax
Fees
|
14,254
|
14,175
|
|
Total
|
$
157,349
|
$
102,435
|
Audit Fees
consisted of fees
incurred for professional services rendered for audits of the
nine-month period ended September 30, 2019 and year ended December
31, 2018 and include procedures related to registrations and
offerings.
Tax Fees
consisted of fees
incurred for professional services rendered for tax compliance
related to tax returns during the nine-month period ended September
30, 2019 and year ended December 31, 2018.
P
re-Approval Policies
and Procedures
The Audit Committee is directly responsible for the appointment,
compensation and oversight of our auditors. It has established
procedures for the receipt, retention, and treatment of complaints
received by us regarding accounting, internal accounting controls,
or auditing matters, and the confidential, anonymous submission by
our employees of concerns regarding questionable accounting or
auditing matters. The Audit Committee also has the authority and
the funding to engage independent counsel and other outside
advisors.
The Audit Committee pre-approves all audit and permissible
non-audit services provided by the independent registered public
accounting firm. These services may include audit services,
audit-related services, tax services and other services.
Pre-approval is generally provided for up to one year, and any
pre-approval is detailed as to the particular service or category
of services and is generally subject to an amount or range of
estimated fees. All proposed engagements of the auditor for
audit and permitted non-audit services are submitted to the Audit
Committee for approval. Our auditors are required to periodically
report to the Audit Committee regarding the extent of services
provided by the independent registered public accounting firm in
accordance with the pre-approval, and the fees for the services
performed to date. The Audit Committee may also pre-approve
particular services on a case-by-case basis. The Audit Committee
approved 100% of the audit and non-audit services performed by our
independent registered public accounting firm for the nine-month
period ended September 30, 2019.
C
hanges In and Disagreements
with Accountants on Accounting and Financial
Disclosure
Upon the completion of our business combination with Edesa Research
on June 7, 2019, the audit committee of our Board of Directors
approved the engagement of MNP LLP as our independent registered
public accounting firm and Moss Adams LLP ("Moss Adams") resigned
as our independent registered public accounting firm.
The reports
of Moss Adams on the Company’s financial statements for each
of the two fiscal years ended September 30, 2018 and
September 30, 2017 did not contain an adverse opinion or a
disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope or accounting
principles.
During the years ended September 30, 2018 and 2017, and through the
subsequent interim period through June 7, 2019, (i) there were
no
“disagreements”
(as that term is defined in Item 304(a)(1)(iv) of
Regulation S-K and related instructions)
between us and Moss Adams on any matter of
accounting principles or practices, financial statement disclosure
or auditing scope or procedure, which disagreements, if not
resolved to the satisfaction of Moss Adams, would have caused Moss
Adams to make reference to the subject matter of the disagreements
in connection with its reports and (ii) there were no
“reportable events,” as described in Item 304(a)(1)(v)
of Regulation S-K of the SEC promulgated under the Exchange
Act.
V
ote
Required
With
regard to the appointment of our auditors and independent
registered public accounting firm, votes may be cast
“FOR” or “WITHHOLD.” The affirmative vote
of the holders of a majority of the shares present in person or
represented by proxy and entitled to vote at the Annual Meeting is
required to appoint MNP LLP as our auditors and independent
registered public accounting firm for the ensuing year. With regard
to this proposal, shares which are entitled to vote but abstain
from voting on a matter will be excluded from the vote and will
have no effect on its outcome.
R
ecommendation
The
Board recommends that shareholders vote “FOR” Proposal
No. 2.
24
O
THER INFORMATION
H
OUSEHOLDING OF
MATERIALS
Some
banks, brokers, and other nominee record holders may be
participating in the practice of “householding” proxy
statements and annual reports. This means that only one copy of
these proxy materials may have been sent to multiple shareholders
in each household. We will promptly deliver a separate copy of
these proxy materials to any shareholder upon written or verbal
request to us at our executive offices at 100 Spy Court, Markham,
ON L3R 5H6 Canada, telephone: (289) 800-9600. Any shareholder who
wants to receive separate copies of proxy materials in the future,
or any shareholder who is receiving multiple copies and would like
to receive only one (1) copy per household, should contact that
shareholder’s bank, broker, or other nominee record holder,
or that shareholder may contact us at the address and phone number
set forth above.
W
HERE YOU CAN FIND MORE
INFORMATION
Our
Annual Report on Form 10-K for
the
nine-month period
ended September 30,
2019
, which was made available to shareholders with or
preceding this proxy statement, contains financial and other
information about our Company, but is not incorporated into this
proxy statement and is not to be considered a part of these proxy
soliciting materials or subject to Regulations 14A or 14C or to the
liabilities of Section 18 of the Exchange Act.
Through
our website, http://www.edesabiotech.com, we make available free of
charge all of our SEC filings, including our proxy statements, our
Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q,
and our Current Reports on Form 8-K, as well as Form 3, Form 4, and
Form 5 of our directors, officers, and principal shareholders,
together with amendments to these reports filed or furnished
pursuant to Sections 13(a), 15(d), or 16 of the Exchange Act. We
will also provide upon written request, without charge to each
shareholder of record as of the record date, a copy of our Annual
Report on Form 10-K
for
the
nine-month period
ended September 30,
2019
, as filed with the SEC. Any exhibits listed in the
Annual Report on Form 10-K, as amended, also will be furnished,
upon request, at the actual expense we incur in furnishing such
exhibits. Any such requests should be directed to our Corporate
Secretary at our executive offices at 100 Spy Court, Markham, ON
L3R 5H6 Canada, telephone: (289) 800-9600.
O
THER BUSINESS
The
Board knows of no other business to be acted upon at the Annual
Meeting. However, if any other business properly comes before the
Annual Meeting, it is the intention of the persons named in the
proxy to vote on such matters in accordance with their best
judgment.
|
|
By
Order of the Board of Directors,
|
|
|
|
|
|
/s/ Pardeep Nijhawan
|
|
|
Pardeep
Nijhawan, MD
|
|
|
Director,
Chief Executive Officer and Corporate Secretary
|
|
|
(Principal
Executive Officer)
|
Markham,
ON, Canada
March
23, 2020
25
TABLE OF CONTENTS
General Information Concerning Voting and SolicitationQuestions and Answers about the Proxy Materials and the Annual MeetingINTRODUCTION2020 Annual Meeting of ShareholdersRecord DateProposals to be Submitted at the Annual MeetingPrincipal OfficesInformation Concerning Solicitation and VotingExpensesAttending the Annual MeetingShareholder Proposals for 2021 Annual MeetingINTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPONPROPOSAL NO. 1 ELECTION OF DIRECTORSNominees for Election as DirectorsInformation as to our Board of Directors and NomineesBiographies and QualificationsVote RequiredRecommendationCorporate GovernanceBoard and Committee MeetingsBoard Leadership StructureRole of Board in Risk Oversight ProcessDirector IndependenceCode of Ethics and Business Conduct and Insider Trading PolicyInformation about our Board CommitteesAudit CommitteeCompensation CommitteeNominating and Corporate Governance CommitteeShareholder Communications with the Board of DirectorsExecutive OfficersExecutive CompensationSummary Compensation TableEmployment AgreementsOutstanding Equity Awards at 2019 Fiscal Year-EndOutstanding Equity Awards Narrative DisclosureRetirement BenefitsDirector CompensationOutstanding Equity Awards at September 30, 2019Narrative to Director Compensation TableSecurities Authorized for Issuance Under Equity Compensation PlansPolicies and Procedures for Review of Related TransactionsRelated Party TransactionsSection 16(a) Beneficial Ownership Reporting ComplianceSecurity Ownership of Certain Beneficial Owners and ManagementChange of ControlAudit Committee ReportPROPOSAL NO. 2 APPOINTMENT OF AUDITORS AND INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMIndependent Registered Public Accounting Firm Fees and ServicesPre-Approval Policies and ProceduresChanges In and Disagreements with Accountants on Accounting and Financial DisclosureVote RequiredRecommendationOTHER INFORMATIONHOUSEHOLDING OF MATERIALSWHERE YOU CAN FIND MORE INFORMATIONOTHER BUSINESS