Filed Pursuant to Rule 424(b)(5)
Registration No. 333-228926
PROSPECTUS SUPPLEMENT
(to the Prospectus dated January 30, 2019)
91,315,790 Common Shares
We are offering 91,315,790 of our common shares in this
offering.
Our common shares are listed on the NYSE American under the symbol
“ZOM.” On February 8, 2021, the last reported sale price of our
common shares on the NYSE American was $2.70 per share. The trading
price of our common shares has recently increased significantly. On
December 31, 2020, the last reported sale price of our common
shares on the NYSE American was $0.231 per share.
We are an “emerging growth company” as that term is used in the
Jumpstart Our Business Startups Act of 2012, and, as such, we have
elected to take advantage of certain reduced public company
reporting requirements for this prospectus supplement and future
filings.
You should read this prospectus supplement and the accompanying
base prospectus, together with additional information described
under the heading “Where You Can Find More Information,” carefully
before you invest in any of our securities.
The offering is being underwritten on a firm commitment basis. The
underwriter may offer the common shares from time to time to
purchasers directly or through agents, or through brokers in
brokerage transactions on NYSE American, or to dealers in
negotiated transactions or in a combination of such methods of
sale, or otherwise, at fixed price or prices, which may be changed,
or at market prices prevailing at the time of sale, at prices
related to such prevailing market prices.
Investing in our securities involves a high degree of risk. See
“Risk Factors” beginning on page S-6 of this prospectus supplement
for a discussion of information that should be considered in
connection with an investment in our securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus supplement is truthful
or complete. Any representation to the contrary is a criminal
offense.
| |
|
Per Share |
|
Total |
| Public offering price |
|
$ |
1.90 |
|
|
$ |
173,500,001 |
|
| Underwriting discounts and commissions
(1) |
|
$ |
0.133 |
|
|
$ |
12,145,000 |
|
| Proceeds, before expenses, to us |
|
$ |
1.767 |
|
|
$ |
161,355,001 |
|
|
(1) |
See “Underwriting” beginning on
page S-22 of this prospectus supplement for additional information
regarding underwriting compensation. |
We have granted the underwriter an option for a period of 30 days
from the date of this prospectus to purchase up to 13,697,368
additional common shares at the public offering price per share set
forth above, less underwriting discounts and commissions. If the
underwriter exercise the option in full, the total underwriting
discounts and commissions payable by us will be $13,966,750, and
the total proceeds to us, before expenses, will be approximately
$185,558,250.
We expect that delivery of the shares being offered pursuant to
this prospectus supplement and the accompanying base prospectus
will be made on or about February 11, 2021, subject to satisfaction
of customary closing conditions.
H.C. Wainwright &
Co.
The date of this prospectus supplement is February 8,
2021.
TABLE OF CONTENTS
Prospectus Supplement
Base Prospectus
ABOUT THIS PROSPECTUS
SUPPLEMENT
This prospectus supplement and the accompanying base prospectus are
part of a registration statement that we filed with the Securities
and Exchange Commission (the “SEC”) utilizing a “shelf”
registration process. Each time we conduct an offering to sell
securities under the accompanying base prospectus we will provide a
prospectus supplement that will contain specific information about
the terms of that offering, including the price, the amount of
securities being offered and the plan of distribution. The shelf
registration statement was initially filed with the SEC on December
20, 2018 and was declared effective by the SEC on January 30, 2019.
This prospectus supplement describes the specific details regarding
this offering and may add, update or change information contained
in the accompanying base prospectus. The accompanying base
prospectus provides general information about us and our
securities, some of which, such as the section entitled “Plan of
Distribution,” may not apply to this offering. This prospectus
supplement and the accompanying base prospectus are an offer to
sell only the securities offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. We
are not making offers to sell or solicitations to buy our
securities in any jurisdiction in which an offer or solicitation is
not authorized or in which the person making that offer or
solicitation is not qualified to do so or to anyone to whom it is
unlawful to make an offer or solicitation.
If information in this prospectus supplement is inconsistent with
the accompanying base prospectus or the information incorporated by
reference with an earlier date, you should rely on this prospectus
supplement. This prospectus supplement, together with the
accompanying base prospectus and the documents incorporated by
reference into this prospectus supplement and the accompanying base
prospectus, include all material information relating to this
offering. We have not, and the underwriter has not, authorized
anyone to provide you with different or additional information and
you must not rely on any unauthorized information or
representations. You should assume that the information appearing
in this prospectus supplement, the accompanying base prospectus and
the documents incorporated by reference in this prospectus
supplement and the accompanying base prospectus is accurate only as
of the respective dates of those documents. Our business, financial
condition, results of operations and prospects may have changed
since those dates. You should carefully read this prospectus
supplement, the accompanying base prospectus and the information
and documents incorporated by reference herein and therein before
making an investment decision. See “Where You Can Find More
Information” in this prospectus supplement and in the accompanying
base prospectus.
We have not, and the underwriter has not, authorized anyone to
provide you with information that is different from that contained
in this prospectus supplement, the accompanying base prospectus or
in any free writing prospectus we may authorize to be delivered or
made available to you. When you make a decision about whether to
invest in our securities, you should not rely upon any information
other than the information in this prospectus supplement, the
accompanying base prospectus or in any free writing prospectus that
we may authorize to be delivered or made available to you. Neither
the delivery of this prospectus supplement and the accompanying
base prospectus nor the sale of our securities means that the
information contained in this prospectus supplement, the
accompanying base prospectus or any free writing prospectus is
correct after the date of the respective dates of such documents.
This prospectus supplement and the accompanying base prospectus are
not an offer to sell or the solicitation of an offer to buy our
securities in any circumstances under which the offer or
solicitation is unlawful.
For investors outside the United States: We have not, and the
underwriter has not, taken any action that would permit this
offering or possession or distribution of this prospectus
supplement or the accompanying base prospectus in any jurisdiction
where action for that purpose is required, other than in the United
States. Persons outside the United States who come into possession
of this prospectus supplement or the accompanying base prospectus
must inform themselves about, and observe any restrictions relating
to, the offering of the securities covered hereby and the
distribution of this prospectus supplement and the accompanying
base prospectus outside the United States. This offering is not
available to a resident of Canada or a person or company in Canada.
See “Plan of Distribution.”
This prospectus supplement and the accompanying base prospectus
contain summaries of certain provisions contained in some of the
documents described herein, but reference is made to the actual
documents for complete information. All of the summaries are
qualified in their entirety by the full text of the actual
documents, some of which have been filed or will be filed and
incorporated by reference herein. See “Where You Can Find More
Information” in this prospectus supplement. We further note that
the representations, warranties and covenants made by us in any
agreement that is filed as an exhibit to any document that is
incorporated by reference into this prospectus supplement or the
accompanying base prospectus were made solely for the benefit of
the parties to such agreement, including, in some cases, for the
purpose of allocating risk among the parties to such agreements,
and should not be deemed to be a representation, warranty or
covenant to you. Moreover, such representations, warranties or
covenants were accurate only as of the date when made. Accordingly,
such representations, warranties and covenants should not be relied
on as accurately representing the current state of our affairs.
This prospectus supplement and the accompanying base prospectus
contain and incorporate by reference certain market data and
industry statistics and forecasts that are based on studies
sponsored by us, independent industry publications and other
publicly available information. Although we believe these sources
are reliable, estimates as they relate to projections involve
numerous assumptions, are subject to risks and uncertainties, and
are subject to change based on various factors, including those
discussed under “Risk Factors” in this prospectus supplement and
the accompanying base prospectus and under similar headings in the
documents incorporated by reference herein and therein.
Accordingly, investors should not place undue reliance on this
information.
All references in this prospectus supplement and the accompanying
base prospectus to “Zomedica,” the “Company,” “we,” “us,” or “our”
mean Zomedica Corp. and its subsidiaries unless we state otherwise,
or the context otherwise indicates. Unless otherwise noted herein,
all references to “CDN$,” “CAD$,” or “Canadian dollars” are to the
currency of Canada and “$,” “dollars,” “US$,” “United States
dollars,” or “U.S. dollars” are to the currency of the United
States. This prospectus supplement, the accompanying base
prospectus and the information incorporated by reference herein and
therein contain references to trademarks, service marks and trade
names owned by us or other companies. Solely for convenience,
trademarks, service marks and trade names referred to in this
prospectus supplement, the accompanying base prospectus and the
information incorporated by reference herein and therein, including
logos, artwork, and other visual displays, may appear without the ®
or ® symbols, but such references are not intended to
indicate, in any way, that we will not assert, to the fullest
extent under applicable law, our rights or the rights of the
applicable licensor to these trademarks, service marks and trade
names. We do not intend our use or display of other companies’
trade names, service marks or trademarks to imply a relationship
with, or endorsement or sponsorship of us by, any other companies.
Other trademarks, trade names and service marks appearing in this
prospectus supplement, the accompanying base prospectus and the
documents incorporated by reference herein and therein are the
property of their respective owners.
SUMMARY
This summary highlights information contained elsewhere in this
prospectus supplement, the accompanying base prospectus and the
documents incorporated by reference herein and therein. This
summary does not contain all of the information that you should
consider before deciding to invest in our securities. You should
read this entire prospectus supplement and the accompanying base
prospectus carefully, including the section entitled “Risk Factors”
beginning on page S-6 and our consolidated financial statements and
the related notes and the other information incorporated by
reference into this prospectus supplement and the accompanying base
prospectus before making an investment decision.
Our Company
We are a veterinary health company creating products for companion
animals by focusing on the unmet needs of clinical veterinarians.
We expect that our product portfolio will include innovative
diagnostics and medical devices that emphasize patient health and
practice health. With a team that includes clinical veterinary
professionals, our goal is to provide veterinarians the opportunity
to increase productivity and grow revenue while better serving the
animals in their care.
Our strategic focus is on the final development and
commercialization of our TRUFORMA® diagnostic biosensor
platform and the first five assays for the detection of thyroid
disorders in dogs and cats and adrenal disorders in dogs. The
TRUFORMA® platform uses Bulk Acoustic Wave (BAW)
technology to provide a non-optical and fluorescence free detection
system for use at the point-of-care. We believe that BAW technology
will enable precise and repeatable test results at the
point-of-care during a typical veterinary appointment. The
TRUFORMA® platform is being developed together with
Qorvo Biotechnologies, LLC, or Qorvo Biotech.
Recent Developments
During the period beginning on December 1, 2020 and ending on
February 5, 2021, investors have exercised certain of our
outstanding warrants to purchase 277,818,611 of our common shares
for gross proceeds of $44,576,147 (such exercises, the “Warrant
Exercises”). After giving effect to the Warrant Exercises, we had
cash and cash equivalents of approximately $92.0 million as of
February 5, 2021.
Corporate Information
Zomedica Corp. (formerly, Wise Oakwood Ventures Inc.) was
originally incorporated as Wise Oakwood Ventures Inc. on January 7,
2013 under the Business Corporations Act (Alberta). On
October 28, 2013, we completed our initial public offering in
Canada and became classified as a Capital Pool Company, as defined
under the rules of the TSX Venture Exchange (“TSX-V”). On April 21,
2016, we changed our name to Zomedica Pharmaceuticals Corp. and
consolidated our common shares on a one-for-two and one-half basis.
ZoMedica Pharmaceuticals Inc. (“ZoMedica Inc.”) was incorporated on
May 14, 2015 under the Canada Business Corporations Act. On
April 21, 2016, we completed a qualifying transaction (the
“Qualifying Transaction”) under TSX-V Policy 2.4 – Capital Pool
Companies, consisting of a three-cornered amalgamation among
our Company, ZoMedica Inc. and our wholly-owned subsidiary. Under
the Qualifying Transaction, ZoMedica Inc. and our subsidiary were
amalgamated to form Zomedica Pharmaceuticals Ltd. (“Zomedica
Ltd.”). As consideration for the amalgamation, shareholders of
ZoMedica Inc. became the owners of 97.6% (non-diluted) of our
common shares, and ZoMedica Ltd. became our wholly-owned
subsidiary. Subsequent to the Qualifying Transaction, Zomedica Ltd.
was vertically amalgamated into our Company. On October 2, 2020, we
changed our name to Zomedica Corp. We have one wholly- owned
subsidiary, Zomedica, Inc., a Delaware company. Our principal
executive offices are located at 100 Phoenix Drive, Suite 125, Ann
Arbor, MI 48108, and our telephone number is (734) 369-2555. Our
website address is www.zomedica.com. We have not incorporated by
reference into this prospectus supplement or the accompanying base
prospectus the information on our website, and you should not
consider it to be a part of such documents.
Implications of Being an Emerging Growth Company
As a company with less than $1.07 billion in revenue during our
last fiscal year, we qualify as an “emerging growth company” as
defined in the Jumpstart Our Business Startups Act of 2012, or the
JOBS Act. An “emerging growth company” may take advantage of
reduced reporting requirements that are otherwise applicable to
public companies. These provisions include, but are not limited
to:
| |
• |
not
being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act; |
| |
• |
reduced disclosure obligations regarding
executive compensation in our periodic reports, proxy statements
and registration statements; and |
| |
• |
exemptions from the requirements of holding a
non-binding advisory vote on executive compensation and shareholder
approval of any golden parachute payments not previously
approved. |
We may take advantage of these provisions until December 31, 2022.
However, if certain events occur prior to December 31, 2022,
including if we become a “large accelerated filer,” our annual
gross revenues exceed $1.07 billion or we issue more than $1.0
billion of non-convertible debt in any three-year period, we will
cease to be an emerging growth company before such date.
In addition, the JOBS Act provides that an emerging growth company
may delay adopting new or revised accounting standards until such
time as those standards apply to private companies. We have
irrevocably elected not to avail ourselves of this exemption and,
therefore, we will be subject to the same new or revised accounting
standards as other public companies that are not emerging growth
companies.
The Offering
| Common shares offered by us |
91,315,790 shares. |
| |
|
| |
|
| Common shares outstanding
after this offering |
933,185,839 shares (or up to 946,883,207 shares
if the underwriter exercises its option to purchase additional
shares in full). |
| |
|
| Option to purchase additional
shares |
We
have granted the underwriter an option for a period of up to 30
days from the closing date of this offering to purchase up to an
aggregate of 13,697,368 additional common shares at the public
offering price per share, set forth on the cover page of this
prospectus supplement, less underwriting discounts and
commissions. |
| |
|
| Use of proceeds |
We
intend to use the net proceeds from this offering for the continued
development of our diagnostic platforms, including making milestone
payments, if any, as they come due, under our existing license and
collaboration agreements, for strategic acquisitions if and when
they become available, and other general corporate and working
capital purposes. We may also use a portion of the net proceeds
from this offering to repurchase some or all of our outstanding
Series 1 Preferred Shares, although no agreement has been reached
with respect to the terms or conditions of any such repurchase. See
“Use of Proceeds” on page S-11. |
| Risk factors |
Investing in our securities involves a high
degree of risk. Before making an investment decision, you should
carefully review and consider all of the information set forth in
this prospectus supplement, the accompanying base prospectus and
the documents incorporated by reference herein and therein,
including the risks and uncertainties described under “Risk
Factors” beginning on page S-6 of this prospectus supplement and
the risk factors incorporated by reference into this prospectus
supplement and the accompanying base prospectus. |
| |
|
| NYSE American symbol |
“ZOM.” |
The number of common shares expected to be outstanding after this
offering is based on 841,870,049 common shares outstanding as of
February 5, 2021, and excludes, as of that date, the following:
| |
• |
35,620,500 common shares issuable upon the
exercise of outstanding options with a weighted average exercise
price of approximately $0.23 per share; |
| |
• |
2,187,002 common shares issuable upon the
exercise of outstanding warrants with a weighted average exercise
price of approximately $0.16 per share; and |
| |
• |
48,566,504 common shares available for future
issuance under our equity incentive plan. |
RISK FACTORS
An investment in our securities involves a high degree of risk.
Before deciding whether to invest in our securities, you should
consider carefully the risks and uncertainties described below and
under the section captioned "Risk Factors" contained in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2019
filed with the SEC on February 26, 2020 and our Quarterly Reports
on Form 10-Q for the fiscal quarters ended March 31, 2020, June 30,
2020 and September 30, 2020, filed with the SEC on May 11, 2020,
August 10, 2020 and November 12, 2020, respectively, and other
filings we make with the SEC from time to time, which are
incorporated by reference herein in their entirety, together with
other information in this prospectus supplement, the accompanying
base prospectus and the information incorporated by reference
herein and therein. If any of these risks actually occurs, our
business, financial condition, results of operations or cash flow
could suffer materially. In such event, the trading price of our
common shares could decline, and you might lose all or part of your
investment.
Risks Relating to This Offering
The trading price of our common shares has recently increased
significantly to a level that we do not believe is consistent with
any recent change in our financial condition or results of
operations. If the trading price of our common shares decreases
rapidly, investors purchasing our common shares in this offering
could lose a significant portion of their investment.
The trading price of our common shares has recently increased
significantly. On December 31, 2020, the last reported sale price
of our common shares on the NYSE American was $0.231 per share. We
believe that the sharp increase in the trading price of our common
shares is the result of a number of factors outside our control,
including social media posts that have drawn attention to our
company and increased trading in our common shares by retail
investors. These social media posts were not sponsored or endorsed
by us. There has been no recent change in our financial condition
or results of operations that is consistent with the increase in
the trading price of our common shares. The recent increase in the
trading price of our common shares may not be sustained. In the
event of a rapid decrease in the trading price of our common
shares, investors purchasing our common shares in this offering
could lose a significant portion of their investment.
You will suffer immediate and substantial dilution of your
investment as a result of this offering.
Because the public offering price per common share is higher than
the pro forma as adjusted net tangible book value per common share
after giving effect to this offering, you will suffer substantial
dilution in the net tangible book value of the common shares you
purchase in this offering. For a further description of the
dilution that investors in this offering will experience, see
“Dilution.” Investors in this offering will also be subject to
increased dilution upon the exercise of outstanding stock options
and warrants.
Sales of our common shares by shareholders may have an
adverse effect on the then prevailing market price of our common
shares.
Sales of a substantial number of our common shares in the public
market following this offering could cause the market price of our
common shares to decline and could impair our ability to raise
capital through the sale of additional equity securities. We cannot
predict the effect that future sales of our common shares or other
equity-related securities would have on the market price of our
common shares.
Management will have broad discretion as to the use of
proceeds from this offering and may not use them
effectively.
Our management will have broad discretion as to the application of
the net proceeds from this offering and our shareholders will not
have the opportunity as part of their investment decisions to
assess whether the net proceeds are being used appropriately. You
may not agree with our decisions, and our use of the proceeds may
not yield any return on your investment. Because of the number and
variability of factors that will determine our use of the net
proceeds from this offering, their ultimate use may vary
substantially from their currently intended use. Our failure to
apply the net proceeds of this offering effectively could
compromise our ability to pursue our growth strategy and we might
not be able to yield a significant return, if any, in our
investment of these net proceeds. You will not have the opportunity
to influence our decisions on how to use our net proceeds from this
offering.
We have not paid dividends on our common shares in the past
and have no plans to pay dividends in the foreseeable
future.
We intend to reinvest any future earnings to develop and
commercialize our product candidates and to fund our operations. We
do not expect to pay cash dividends on our common shares for the
foreseeable future. We cannot assure you that we would, at any
time, generate sufficient surplus cash that would be available for
distribution to the holders of our common shares as a dividend.
Therefore, you should not expect to receive cash dividends on the
common shares we are offering.
We are subject to the continued listing requirements of the
NYSE American. If we are unable to comply with such requirements,
our common shares would be delisted from the NYSE American, which
would limit investors’ ability to effect transactions in our common
shares and subject us to additional trading
restrictions.
Our common shares are currently listed on the NYSE American. In
order to maintain our listing, we must maintain certain share
prices, financial and share distribution targets, including
maintaining a minimum amount of shareholders’ equity and a minimum
number of public shareholders. In addition to these objective
standards, the NYSE American may delist the securities of any
issuer if, in its opinion, the issuer’s financial condition and/or
operating results appear unsatisfactory; if it appears that the
extent of public distribution or the aggregate market value of the
security has become so reduced as to make continued listing on the
NYSE American inadvisable; if the issuer sells or disposes of
principal operating assets or ceases to be an operating company; if
an issuer fails to comply with the NYSE American’s listing
requirements; if an issuer’s common stock sells at what the NYSE
American considers a “low selling price” (generally trading below
$0.20 per share for an extended period of time); or if any other
event occurs or any condition exists which makes continued listing
on the NYSE American, in its opinion, inadvisable. Although the
trading price of our common shares on the date of this report
exceeded $0.20 per share, during the fiscal year ended December 31,
2020, the trading price of our common shares was well below $0.20
for a significant period of time. We received a deficiency
letter from the NYSE American indicating that we were not in
compliance with the listing requirements, because our common shares
had been selling for a low price per share for a substantial period
time. Such deficiency was resolved in January 2021.
If the NYSE American delists our common shares from trading on its
exchange and we are not able to list our securities on another
national securities exchange, we expect our common shares would
qualify to be quoted on an over-the-counter market. If this were to
occur, we could face significant material adverse consequences,
including:
| |
• |
a limited availability of market
quotations for our securities; |
| |
• |
reduced liquidity for our
securities; |
| |
• |
a determination that our common
shares are a “penny stock” which will require brokers trading in
our common shares to adhere to more stringent rules and possibly
result in a reduced level of trading activity in the secondary
trading market for our securities; |
| |
• |
a limited amount of news and
analyst coverage; and |
| |
• |
a decreased ability to issue
additional securities or obtain additional financing in the
future. |
The National Securities Markets Improvement Act of 1996, which is a
federal statute, prevents or preempts the states from regulating
the sale of certain securities, which are referred to as “covered
securities.” Because our common shares are listed on the NYSE
American, our common shares qualify as covered securities under
such statute. Although the states are preempted from regulating the
sale of our securities, the federal statute does allow the states
to investigate companies if there is a suspicion of fraud, and, if
there is a finding of fraudulent activity, then the states can
regulate or bar the sale of covered securities in a particular
case. If we were no longer listed on the NYSE American, our
securities would not be covered securities and we would be subject
to regulation in each state in which we offer our securities.
If our common shares become subject to the penny stock rules,
it would become more difficult to trade our shares.
The SEC has adopted rules that regulate broker-dealer practices in
connection with transactions in penny stocks. Penny stocks are
generally equity securities with a price of less than $5.00, other
than securities registered on certain national securities exchanges
or authorized for quotation on certain automated quotation systems,
provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or
system. If we are unable to maintain the listing of our common
shares on the NYSE American or another national securities exchange
and if the price of our common shares is less than $5.00, our
common shares will be deemed a penny stock. The penny stock rules
require a broker-dealer, before a transaction in a penny stock not
otherwise exempt from those rules, to deliver a standardized risk
disclosure document containing specified information. In addition,
the penny stock rules require that before effecting any transaction
in a penny stock not otherwise exempt from those rules, a
broker-dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive
(i) the purchaser’s written acknowledgment of the receipt of a risk
disclosure statement; (ii) a written agreement to transactions
involving penny stocks; and (iii) a signed and dated copy of a
written suitability statement. These disclosure requirements may
have the effect of reducing the trading activity in the secondary
market for our common shares, and therefore stockholders may have
difficulty selling their shares.
We may in the future implement the reduction in the stated
capital account applicable to our common shares that has been
approved by shareholders, and if we do, there may be an adverse
effect on holders of common shares or the Company in connection
with certain transactions, unless we are able to add back some or
all of the stated capital reduction to the stated capital account
at that time.
At the Company’s annual and special meeting of shareholders held on
September 25, 2020, the shareholders approved a special resolution
under the Business Corporations Act (Alberta), or ABCA, authorizing
the reduction of the stated capital account applicable to the
common shares to US $1.00 in the aggregate without payment to the
shareholders. The special resolution provided that the reduction
would be effective upon the date determined by any director or
officer of the Company. As of the date hereof, the reduction has
yet to be implemented. However, it could be implemented in the
future, and if it is implemented, the reduction is expected to
apply to the entire stated capital account applicable to the common
shares at that time, including stated capital referenceable to
common shares issued after the date of the meeting where the
special resolution was approved. As disclosed in the proxy circular
prepared in connection with the annual and special meeting, the
stated capital reduction is not expected to result in any immediate
Canadian tax consequences to shareholders, and should not
constitute a taxable event to shareholders under United States tax
requirements. However, the reduction in stated capital could have
future Canadian federal income tax consequences to shareholders or
the Company, in connection with certain transactions, including a
repurchase of the common shares by the Company or certain
reorganization transactions The Company currently intends that, if
the stated capital reduction is implemented, the amount of the
reduction will be added back to the stated capital account (or the
portion thereof that is permitted to be added back under Canadian
federal income tax legislation will be so added) in the future in
accordance with procedures contained in the ABCA. Such add back
would be intended to be effected prior to implementation of any
transaction where the previous reduction of stated capital could
have an adverse impact on shareholders or the Company. However,
there can be no assurance that the Company will be able to effect
the add back, or that the amount added back will avoid any adverse
tax consequences to shareholders or the Company.
We believe that we will be a “passive foreign investment
company,” or PFIC, for the current taxable year, which could
subject certain U.S. investors to materially adverse U.S. federal
income tax consequences.
We believe we were classified as a PFIC during our taxable year
ended December 31, 2020, and based on current business plans and
financial expectations, we believe we may be a PFIC for the current
and future taxable years. If we are a PFIC for any year in which
you hold common shares and you are a U.S. Holder (as defined below,
in “Material United States Federal Income Tax Considerations”),
then you generally will be required to treat any gain realized upon
a disposition of such common shares, or any so-called “excess
distribution” received on your common shares, as ordinary income,
and to pay an interest charge on a portion of such gain or
distribution. In certain circumstances, the sum of the tax and the
interest charge may exceed the total amount of proceeds you realize
on the disposition or the amount of the excess distribution you
receive. Subject to certain limitations, these tax consequences may
be mitigated if you make a timely and effective Qualified Electing
Fund election, or QEF Election, or a mark-to-market election, or
Mark-to-Market Election. Subject to certain limitations, such
elections may be made with respect to our common shares. If you are
a U.S. Holder and make a timely and effective QEF Election, you
generally must report on a current basis your share of our net
capital gain and ordinary earnings for any year in which we are a
PFIC, whether or not we distribute any amount to you, thus giving
rise to so-called “phantom income” and to a potential tax
liability. However, U.S. Holders should be aware that we do not
intend to satisfy the record keeping requirements that apply to a
“qualified electing fund,” or supply U.S. Holders with information
that such U.S. Holders require to report under the QEF Election
rules, in the event that we are a PFIC and a U.S. Holder wishes to
make a QEF Election. Thus, if you are a U.S. Holder, you may not be
able to make a QEF Election. If you are a U.S. Holder and make a
timely and effective Mark-to-Market Election, you generally must
include as ordinary income each year the excess of the fair market
value of your common shares over your tax basis therein, thus also
possibly giving rise to phantom income and a potential tax
liability. Ordinary loss generally is recognized only to the extent
of net mark-to-market gains previously included in income. This
paragraph is qualified in its entirety by the discussion below
under the heading “Material United States Federal Income Tax
Considerations.” Each potential investor who is a U.S. taxpayer
should consult its own tax advisors regarding the PFIC rules and
the U.S. federal income tax consequences of the acquisition,
ownership, and disposition of our common shares.
If the Internal Revenue Service determines that we are not a
PFIC and you previously paid taxes pursuant to a QEF Election or a
Mark-to- Market Election, you may pay more taxes than you legally
owe.
If the Internal Revenue Service, or the IRS, makes a determination
that we are not a PFIC and you previously paid taxes pursuant to a
QEF Election or Mark-to-Market Election, then you may have paid
more taxes than you legally owed due to such election. If you do
not, or are unable to, file a refund claim before the expiration of
the applicable statute of limitations, you will not be able to
claim a refund for those taxes.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying base prospectus and
the documents we have filed with the SEC that are incorporated by
reference herein and therein contain forward-looking statements, or
forward-looking information, as defined under applicable Canadian
securities laws (collectively, “forward-looking statements”). In
some cases, you can identify these statements by forward-looking
words such as “may,” “might,” “will,” “should,” “expects,” “plans,”
“anticipates,” “believes,” “estimates,” “predicts,” “potential” or
“continue,” the negative or plural of these words and other
comparable terminology. Forward-looking statements in this
prospectus supplement include, but are not limited to, statements
about:
| |
• |
the
success, cost and timing of our research and development
activities, validation studies and pivotal trials, including with
respect to our lead product, TRUFORMA®; |
| |
• |
our
ability to obtain and maintain any required approvals from the USDA
Center for Veterinary Biologics for our proposed and future
diagnostic products, to the extent applicable; |
| |
• |
our ability to obtain funding for
our operations; |
| |
• |
the ability of our contract
research organizations to appropriately conduct our safety studies
and certain development activities; |
| |
• |
the
ability of our contract manufacturing organizations to manufacture
and supply our products; |
| |
• |
our plans to develop and
commercialize our planned and future products; |
| |
• |
the
expected impact of the novel coronavirus pandemic on our
operations, including the development and commercialization of our
TRUFORMA® platform and the five initial
assays; |
| |
• |
our ability to develop and commercialize products that can compete
effectively;
|
| |
• |
the size and growth of the
veterinary diagnostics and medical device markets; |
| |
• |
our ability to obtain and
maintain intellectual property protection for our current and
future product candidates; |
| |
• |
regulatory developments in the
United States; |
| |
• |
the loss of key scientific or
management personnel; |
| |
• |
our expectations regarding the
period during which we will be an “emerging growth company” under
the JOBS Act; |
| |
• |
the accuracy of our estimates
regarding expenses, future revenues, capital requirements and needs
for additional financing; |
| |
• |
risks related to our Series 1
preferred shares; |
| |
|
|
| |
• |
our ability to maintain the listing of our common shares on the
NYSE American exchange; and
|
| |
|
|
| |
• |
our status as a “passive foreign
investment company” for U.S. federal income tax
purposes. |
These forward-looking statements, which are subject to risks,
uncertainties and assumptions about us, may include projections of
our future financial performance, our anticipated growth strategies
and anticipated trends in our business. These statements are only
predictions based on our current expectations and projections about
future events. There are important factors that could cause our
actual results, level of activity, performance or achievements to
differ materially from the results, level of activity, performance
or achievements expressed or implied by the forward-looking
statements, including those factors discussed under the caption
entitled “Risk Factors” in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2019 filed with the SEC on February
26, 2020, our Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 2020, May 30, 2020 and September 30, 2020,
filed with the SEC on May 11, 2020, August 10, 2020 and November
12, 2020, respectively and other filings we make with the SEC from
time to time.
Although we believe the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, level of activity, performance or achievements.
Moreover, neither we nor any other person assumes responsibility
for the accuracy and completeness of any of these forward-looking
statements. We are under no duty to update any of these
forward-looking statements after the date of this prospectus
supplement to conform our prior statements to actual results or
revised expectations.
USE OF PROCEEDS
We estimate that the net proceeds from the sale of the common
shares offered in this offering will be approximately $161.1
million, or approximately $185.3 million if the underwriter
exercises in full its option to purchase additional common shares,
after deducting the underwriting discounts and commissions and
estimated offering expenses payable by us.
We intend to use the net proceeds from this offering for the
continued development of our diagnostic platforms, including making
milestone payments, if any and as they come due, under our existing
license and collaboration agreements, for strategic acquisitions if
and when they become available, and other general corporate and
working capital purposes. We may also use a portion of the net
proceeds from this offering to repurchase some or all of our
outstanding Series 1 Preferred Shares, although no agreement has
been reached with respect to the terms or conditions of any such
repurchase. We have not determined the amount of net proceeds to be
used specifically for any such purposes. As a result, management
will retain broad discretion over the allocation of the net
proceeds. Pending the uses described above, we intend to invest the
net proceeds from this offering in short-term, investment-grade
interest-bearing securities such as money market accounts,
certificates of deposit, commercial paper, and guaranteed
obligations of the U.S. government.
DILUTION
If you purchase common shares in this offering, you will experience
dilution to the extent of the difference between the public
offering price per common share in this offering and our pro forma
as adjusted net tangible book value per share immediately after
this offering . Net tangible book value per share is equal to the
amount of our total tangible assets, less total liabilities,
divided by the number of outstanding common shares. As of September
30, 2020 our historical net tangible book value was approximately
$53.0 million, or approximately $0.094 per share.
After giving effect to the Warrant Exercises, our pro forma
tangible net book value as of September 30, 2020 would have been
approximately $97.5 million, or approximately $0.116 per common
share, an increase of approximately $0.022 per common share.
After giving effect to the sale by us of 91,315,790 common shares
in this offering and after deducting underwriting discounts and
commissions and estimated offering expenses payable by us, our pro
forma as adjusted net tangible book value as of September 30, 2020
would have been approximately $258.6 million, or approximately
$0.277 per share. This represents an immediate increase in pro
forma as adjusted net tangible book value of $0.161 per common
share to existing shareholders and an immediate dilution of
approximately $1.623 per common share to new investors purchasing
common shares in this offering. The following table illustrates
this per share dilution:
| Public offering price per share |
|
|
|
|
|
$ |
1.90 |
|
| Historical net tangible book value per share as of September
30, 2020 |
|
$ |
0.094 |
|
|
|
|
|
| Pro forma increase in net tangible
book value per share attributable to the Warrant Exercises |
|
|
0.116 |
|
|
|
|
|
| Increase in pro
forma net tangible book value per share after giving effect to this
offering |
|
|
0.161 |
|
|
|
|
|
| Pro forma as
adjusted net tangible book value per share after giving effect to
this offering |
|
|
|
|
|
$ |
0.277 |
|
| Dilution per
share to new investors |
|
|
|
|
|
$ |
1.623 |
|
If the underwriter exercises in full its option to purchase
13,697,368 additional common shares, the pro forma as adjusted
net tangible book value per share after this offering would be
$0.30 per share, and the dilution in pro forma net tangible book
value per share to new investors purchasing common shares in this
offering would be $1.60 per share.
The foregoing discussion and table do not take into account further
dilution to new investors that could occur upon the exercise of
outstanding options or warrants having a per share exercise price
less than the per share offering price to the public in this
offering. In addition, we may choose to raise additional capital
due to market conditions or strategic considerations even if we
believe we have sufficient funds for our current or future
operating plans. To the extent that additional capital is raised
through the sale of equity or convertible debt securities, the
issuance of these securities could result in further dilution to
our stockholders.
The table and discussion above are based on 564,051,438 common
shares outstanding as of September 30, 2020 (841,870,049 common
shares outstanding on a pro forma basis after giving effect to the
Warrant Exercises), and excludes as of such date the following:
| |
• |
13,024,640 common shares issuable
upon the exercise of outstanding options with a weighted average
exercise price of approximately $0.72 per share; |
| |
• |
280,005,613 common shares
(2,187,002 shares on a pro forma basis after giving effect to the
Warrant Exercises) issuable upon the exercise of
outstanding warrants with a weighted average exercise price of
approximately $0.16 per share; and |
| |
• |
43,380,503 common shares
available for future issuance under our equity incentive
plan. |
DESCRIPTION OF THE SECURITIES WE ARE OFFERING
Capital Shares
For a description of our capital shares, please see the Description
of Securities included as Exhibit 4.1 to our Annual Report on Form
10-K for the year ended December 31, 2019, filed with the SEC on
February 26, 2020, which is incorporated by reference herein. See
“Where You Can Find More Information.”
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes the material U.S. federal income
tax consequences to U.S. Holders (as defined below) of acquiring,
owning, and disposing of our common shares.
Scope of this Summary
Tax Consequences Not Addressed
This summary does not address all potential U.S. federal income tax
considerations that may be relevant to a particular U.S. Holder. In
addition, this summary does not take into account the individual
facts and circumstances that may affect the U.S. federal income tax
consequences to a particular U.S. Holder, including specific tax
consequences under an applicable income tax treaty. Accordingly,
this summary is not intended to be, and should not be construed as,
legal or U.S. federal income tax advice with respect to any U.S.
Holder. This summary does not address any U.S. federal net
investment income, U.S. federal alternative minimum, U.S. federal
estate and gift, U.S. state and local, or non-U.S. tax
considerations. Except as specifically set forth below, this
summary does not discuss tax reporting requirements that may be
applicable to any particular U.S. Holder. Each prospective U.S.
Holder should consult its own tax advisors regarding the tax
consequences of acquiring, owning, and disposing of our common
shares acquired pursuant to this prospectus supplement and the
accompanying base prospectus.
Authorities
This summary is based upon the provisions of the Code, the Treasury
Regulations (whether final, temporary, or proposed) promulgated
thereunder, the Convention Between Canada and the United States of
America with Respect to Taxes on Income and on Capital, signed
September 26, 1980, as amended (the “Canada-U.S. Tax Convention”),
and administrative rulings and judicial decisions interpreting the
Code and the Treasury Regulations, all as currently in effect, and
all subject to differing interpretations or change, possibly on a
retroactive basis. We have not sought, and will not seek, a ruling
from the IRS regarding any matter discussed herein, and no
assurance can be given that the IRS would not assert, or that a
court would not sustain, a position that is different from, and
contrary to, the positions taken in this summary. This summary does
not discuss the potential effects, whether adverse or beneficial,
of any proposed legislation that, if enacted, could be applied on a
retroactive or prospective basis.
U.S. Holders
For purposes of this summary, the term “U.S. Holder” means a
beneficial owner of common shares acquired pursuant to this
prospectus supplement and the accompanying base prospectus that is
for U.S. federal income tax purposes:
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· |
an
individual who is a citizen or resident of the United States (as
determined under U.S. federal income tax rules); |
| |
· |
a
corporation (or other entity treated as a corporation for U.S.
federal income tax purposes) created or organized in or under the
laws of the United States or of any political subdivision of the
United States; |
| |
· |
an
estate, the income of which is subject to U.S. federal income
taxation regardless of its source; or |
| |
· |
a
trust that (i) is subject to the primary supervision of a court
within the United States and the control of one or more U.S.
persons for all substantial decisions or (ii) has a valid election
in effect under applicable Treasury Regulations to be treated as a
U.S. person. |
Certain U.S. Holders Not Addressed
This summary does not address the U.S. federal income tax
considerations applicable U.S. Holders that are subject to special
provisions under the Code, including, but not limited to, U.S.
Holders that:
| |
· |
are
tax-exempt organizations, qualified retirement plans, individual
retirement accounts, or other tax-deferred accounts; |
| |
· |
are
financial institutions, underwriters, insurance companies, real
estate investment trusts, or regulated investment
companies; |
| |
· |
are
broker-dealers, dealers, or traders in securities or currencies
that elect to apply a mark-to-market accounting method; |
| |
· |
have
a “functional currency” other than the U.S. dollar; |
| |
· |
own
common shares as part of a straddle, hedging transaction,
conversion transaction, constructive sale, or other arrangement
involving more than one position; |
| |
· |
acquired common shares in connection with the
exercise of employee stock options or otherwise as compensation for
services; |
| |
· |
hold
common shares other than as a capital asset within the meaning of
Section 1221 of the Code (generally, property held for investment
purposes); |
| |
· |
own,
have owned, or will own (directly, indirectly, or by attribution)
10% or more of the total combined voting power or total value of
our outstanding shares; |
| |
· |
are
subject to special tax accounting rules with respect to our common
shares; |
| |
· |
are
partnerships or other “pass through” entities for U.S. federal
income tax purposes (or investors in such partnerships or
entities); |
| |
· |
are
U.S. expatriates or former long-term residents of the United
States; or |
| |
· |
are
subject to taxing jurisdictions other than, or in addition to, the
United States. |
U.S. Holders that are subject to special provisions under the Code,
including, but not limited to, U.S. Holders described immediately
above, should consult their own tax advisors regarding the U.S.
federal income, U.S. net investment income, U.S. federal
alternative minimum, U.S. federal estate and gift, U.S. state and
local, and non-U.S. tax consequences of acquiring, owning, and
disposing of our common shares.
The following summary is not a substitute for careful tax
planning and advice. U.S. Holders of common shares are urged to
consult their own tax advisors concerning the U.S. federal income
tax consequences of the issues discussed herein, in light of their
particular circumstances, as well as any considerations arising
under the laws of any foreign, state, local, or other taxing
jurisdiction.
PFIC Status and Related Tax Consequences
Status as a PFIC
We believe we were classified as a PFIC during our taxable year
ended December 31, 2020, and based on current business plans and
financial expectations, we believe we will continue to be a PFIC
for the current and future taxable years. As a result, certain
potentially adverse rules may affect the U.S. federal income tax
consequences to a U.S. Holder of acquiring, owning, and disposing
of our common shares. No opinion of legal counsel or ruling from
the IRS concerning our status as a PFIC has been obtained or is
currently planned to be requested. The determination of whether any
corporation was, or will be, a PFIC for a taxable year depends, in
part, on the application of complex U.S. federal income tax rules,
which are subject to differing interpretations. In addition,
whether any corporation will be a PFIC for any taxable year depends
on the assets and income of such corporation calculated on an
annual basis and, as a result, cannot be predicted with certainty
as of the date of this prospectus supplement. Each U.S. Holder
should consult its own tax advisors regarding our PFIC status.
A foreign corporation generally will be classified as a PFIC under
Section 1297 of the Code in any taxable year in which either of the
following tests is met:
| |
· |
at
least 75% of its gross income is “passive income,” or the PFIC
Income Test; or |
| |
· |
at
least 50% of the gross value of its assets is attributable to
assets that produce, or are held for the production of, passive
income, based on the quarterly average of the fair market value of
such assets, or the PFIC Asset Test. |
For this purpose, passive income generally includes, among other
things, dividends, interest, rents, royalties, gains from the
disposition of passive assets and gains from commodities and
securities transactions. Passive assets include cash and liquid
securities, even if used as working capital.
If we are a PFIC for any taxable year during which a U.S. Holder
owns common shares, such U.S. Holder will be subject to different
taxation rules with respect to an investment in our common shares,
depending on whether such U.S. Holder makes an election to treat us
as a “qualified electing fund” under Section 1295 of the Code, or a
QEF Election, or makes a mark-to-market election under Section 1296
of the Code, or a Mark-to-Market Election. A U.S. Holder that does
not make either election is referred to in this summary as a
“Non-Electing U.S. Holder.”
Default PFIC Rules
A Non-Electing U.S. Holder will be subject to the rules of Section
1291 of the Code. Pursuant to these rules, distributions are
divided into two categories, “excess distributions” and others. An
excess distribution is the amount received in a taxable year that
exceeds 125% of the average annual distributions paid on our common
shares in the three preceding taxable years. Any gain realized on
the sale, exchange or other disposition of our common shares is
also considered an excess distribution. Under these rules:
| |
· |
the
excess distribution is allocated ratably over the holding period
(on a daily basis) for the common shares; |
| |
· |
the
amount allocated to prior taxable years is subject to tax at the
highest rate of tax applicable to ordinary income in each such
year; |
| |
· |
an
interest charge for the deemed tax deferral is imposed with respect
to the resulting tax attributable to each such prior taxable year
(a taxpayer that is not a corporation must treat any such interest
paid as “personal interest,” which is not deductible);
and |
| |
· |
the
amount allocated to the current taxable year is taxed as ordinary
income and would not be “qualified dividend income” or long- term
capital gain (see “U.S. Federal Income Tax Consequences of the
Ownership and Disposition of Common Shares - Sale or Other Taxable
Disposition of Common Shares” below). |
To the extent a distribution on our common shares does not
constitute an excess distribution to a Non-Electing U.S. Holder,
such Non-Electing U.S. Holder generally will be required to include
the amount of such distribution in gross income as a dividend to
the extent of our current or accumulated earnings and profits (as
determined for U.S. federal income tax purposes) that are not
allocated to excess distributions, and will not be eligible for the
reduced rates applicable to “qualified dividend income” with
respect to such distribution.
Although a determination as to our PFIC status will be made
annually, an initial determination that we are a PFIC will
generally apply for subsequent years to a Non-Electing U.S. Holder
who held common shares while we are a PFIC, whether or not we meet
the PFIC Income Test or PFIC Asset Test in those subsequent years.
Non-Electing U.S. Holders are encouraged to consult their tax
advisors regarding the application of the PFIC rules to their
specific situation.
QEF Election
A U.S. Holder that makes a timely and effective QEF Election with
respect to our common shares acquired pursuant to this offering,
referred to in this disclosure as an “Electing U.S. Holder,” will
not be subject to the default PFIC tax, or Section 1291, and
interest charge rules discussed above with respect to such commons
shares. Instead, an Electing U.S. Holder must include in income
such shareholder’s pro rata share of our ordinary earnings and net
capital gain, if any, for our taxable year that ends with or within
the taxable year of the Electing U.S. Holder. The amount so
included in income generally will be treated as ordinary income to
the extent of such Electing U.S. Holder’s allocable share of the
PFIC’s ordinary earnings and as long-term capital gain to the
extent of such Electing U.S. Holder’s allocable share of the PFIC’s
net capital gains. No portion of any such inclusion of ordinary
earnings will be eligible to be treated as “qualified dividend
income.” If an Electing U.S. Holder is an individual, any such net
capital gain inclusions would be eligible for taxation at the
preferential capital gain tax rates. Such income inclusions
generally will be treated as income from sources outside the United
States for foreign tax credit purposes.
An Electing U.S. Holder will be subject to U.S. federal income tax
on such income inclusions for each taxable year in which we are a
PFIC, regardless of whether such amounts are actually distributed
to such Electing U.S. Holder. However, an Electing U.S. Holder may,
subject to certain limitations, elect to defer payment of current
U.S. federal income tax on such amounts, subject to an interest
charge. If an Electing U.S. Holder is not a corporation, any such
interest will be treated as non-deductible “personal interest.”
Any net operating loss or net capital loss of a PFIC will not pass
through to the Electing U.S. Holder and will not offset any
ordinary earnings or net capital gain of a PFIC recognized by the
Electing U.S. Holder in subsequent years (although such losses
would ultimately reduce the gain, or increase the loss, recognized
by the Electing U.S. Holder on its disposition of the common
shares).
An Electing U.S. Holder generally (i) may receive a tax-free
distribution from us to the extent that such distribution
represents our earnings and profits that were previously included
in income by the Electing U.S. Holder because of such QEF Election
and (ii) will adjust such Electing U.S. Holder’s tax basis in the
common shares to reflect the amount included in income or allowed
as a tax-free distribution because of such QEF Election. In
addition, an Electing U.S. Holder generally will recognize capital
gain or loss on the sale, exchange, or other taxable disposition of
common shares.
If a U.S. Holder does not make a timely and effective QEF Election
for the first year in the U.S. Holder’s holding period for the
common shares, the U.S. Holder may still be able to make a timely
and effective QEF Election in a subsequent year if such U.S. Holder
meets certain requirements and makes a “purging election” pursuant
to Section 1291(d) of the Code recognizing gain as if its common
shares were sold for their fair market value on the day the QEF
Election is effective (which will be taxed under the default rules
of Section 1291 of the Code discussed above). If a U.S. Holder
makes a QEF Election but does not make a “purging election,” then
such U.S. Holder shall not be subject to the QEF Election rules and
shall continue to be subject to tax under the rules of Section 1291
discussed above with respect to its common shares. If a U.S. Holder
owns PFIC stock indirectly through another PFIC, separate QEF
Elections must be made for the PFIC in which the U.S. Holder is a
direct shareholder and the subsidiary PFIC for the QEF rules to
apply to both PFICs.
A QEF Election will apply to the taxable year for which such QEF
Election is timely made and to all subsequent taxable years, unless
such QEF Election is invalidated or terminated or the IRS consents
to revocation of such QEF Election. If a U.S. Holder makes a QEF
Election and, in a subsequent taxable year we cease to be a PFIC,
the QEF Election will remain in effect (although it will not be
applicable) during those taxable years in which we are not a PFIC.
Accordingly, if we become a PFIC in another subsequent taxable
year, the QEF Election will be effective and the Electing U.S.
Holder will be subject to the QEF rules described above during any
subsequent taxable year in which the Company qualifies as a
PFIC.
A U.S. Holder may make a timely QEF Election with respect to its
ownership of our common shares by filing one copy of IRS Form 8621,
including a PFIC Annual Information Statement, to a timely filed
United States federal income tax return for the first year in which
it holds our common shares. However, U.S. Holders should be aware
that we do not intend to satisfy the record keeping requirements
that apply to a “qualified electing fund,” or supply U.S. Holders
with information that such U.S. Holders require to report under the
QEF Election rules. Thus, if you are a U.S. Holder, you may not be
able to make a QEF Election.
Mark-to-Market Election
Alternatively, if our common shares are “marketable stock,” a U.S.
Holder generally would be permitted to make a Mark-to-Market
Election. Generally, stock will be considered “marketable stock” if
it is “regularly traded” on a “qualified exchange” within the
meaning of applicable Treasury Regulations. A class of stock is
“regularly traded” on an exchange during any calendar year in which
such class of stock is traded, other than in de minimis
quantities, on at least 15 days during each calendar quarter. A
“qualified exchange” includes: (i) a national securities exchange
that is registered with the Securities and Exchange Commission,
(ii) the national market system established pursuant to section 11A
of the Securities and Exchange Act of 1934, or (iii) a foreign
securities exchange that is regulated or supervised by a
governmental authority of the country in which the market is
located, provided that (a) such foreign exchange has trading
volume, listing, financial disclosure, and surveillance
requirements, and meets other requirements and the laws of the
country in which such foreign exchange is located, together with
the rules of such foreign exchange, ensure that such requirements
are actually enforced and (b) the rules of such foreign exchange
effectively promote active trading of listed stocks.
A U.S. Holder that makes a Mark-to-Market Election with respect to
common shares generally will not be subject to the rules of Section
1291 of the Code discussed above with respect to such shares.
However, if a U.S. Holder does not make a Mark-to-Market Election
beginning in the first taxable year of such U.S. Holder’s holding
period for the common shares for which we are a PFIC and such U.S.
Holder has not made a timely QEF Election, the rules of Section
1291 of the Code discussed above will apply to certain dispositions
of, and distributions on, the common shares.
If a Mark-to-Market Election is made, the U.S. Holder generally
would include as ordinary income in each taxable year the excess,
if any, of the fair market value of the common shares at the end of
the taxable year over such U.S. Holder’s adjusted tax basis in the
common shares. The U.S. Holder would also be permitted an ordinary
loss in respect of the excess, if any, of the U.S. Holder’s
adjusted tax basis in the common shares over their fair market
value at the end of the taxable year, but only to the extent of the
net amount previously included in income as a result of the
Mark-to-Market Election. A U.S. Holder’s tax basis in the common
shares would be adjusted to reflect the amount included in gross
income or allowed as a deduction because of the Mark-to-Market
Election. Gain realized on the sale, exchange, or other disposition
of the common shares would be treated as ordinary income, and any
loss realized on the sale, exchange, or other disposition of the
common shares would be treated as ordinary loss to the extent that
such loss does not exceed the net mark-to-market gains previously
included in income by the U.S. Holder. Losses that exceed this
limitation are subject to the rules generally applicable to losses
provided in the Code and Treasury Regulations (see “U.S. Federal
Income Tax Consequences of the Ownership and Disposition of Common
Shares - Sale or Other Taxable Disposition of Common Shares”
below). Amounts treated as ordinary income are not eligible for the
preferential tax rates applicable to “qualified dividend income” or
long-term capital gains.
A U.S. Holder makes a Mark-to-Market Election by attaching a
completed IRS Form 8621 to a timely filed United States federal
income tax return. A Mark-to-Market Election applies to the taxable
year in which such Mark-to-Market Election is made and to each
subsequent taxable year, unless the common shares cease to be
marketable stock or the IRS consents to revocation of such
election. Each U.S. Holder should consult its own tax advisors
regarding the availability of, and procedure for making, a
Mark-to-Market Election.
Other PFIC Rules
Under Section 1291(f) of the Code, the IRS has issued proposed
Treasury Regulations that, subject to certain exceptions, would
cause a U.S. Holder that had not made a timely QEF Election to
recognize gain (but not loss) upon certain transfers of common
shares that would otherwise be tax-deferred (e.g., gifts and
exchanges pursuant to corporate reorganizations). However, the
specific U.S. federal income tax consequences to a U.S. Holder may
vary based on the manner in which common shares are
transferred.
If finalized in their current form, the proposed Treasury
Regulations applicable to PFICs would be effective for transactions
occurring on or after April 1, 1992. Because the proposed Treasury
Regulations have not yet been adopted in final form, they are not
currently effective, and there is no assurance that they will be
adopted in the form and with the effective date proposed.
Nevertheless, the IRS has announced that, in the absence of final
Treasury Regulations, taxpayers may apply reasonable
interpretations of the Code provisions applicable to PFICs and that
it considers the rules set forth in the proposed Treasury
Regulations to be reasonable interpretations of those Code
provisions. The PFIC rules are complex, and the implementation of
certain aspects of the PFIC rules requires the issuance of Treasury
Regulations which in many instances have not been promulgated and
which, when promulgated, may have retroactive effect. U.S. Holders
should consult their own tax advisors about the potential
applicability of the proposed Treasury Regulations.
Certain additional adverse rules may apply with respect to a U.S.
Holder if we are a PFIC, regardless of whether such U.S. Holder
makes a QEF Election. For example, under Section 1298(b)(6) of the
Code, a U.S. Holder that uses our common shares as security for a
loan will, except as may be provided in Treasury Regulations, be
treated as having made a taxable disposition of such common
shares.
Special rules also apply to the amount of foreign tax credit that a
U.S. Holder may claim on a distribution from a PFIC. Subject to
such special rules, foreign taxes paid with respect to any
distribution by a PFIC are generally eligible for the foreign tax
credit. The rules relating to distributions by a PFIC and their
eligibility for the foreign tax credit are complicated, and a U.S.
Holder should consult with their own tax advisor regarding the
availability of the foreign tax credit with respect to
distributions by a PFIC.
Lastly, if we are not treated as a PFIC, and you paid taxes as if
we were a PFIC, then you may be able to claim a refund for taxes
you paid in excess of the taxes you actually owed. If you do not
timely make such a refund claim, then your refund will be
disallowed and you will bear more taxes than you actually owe.
The rules dealing with PFICs and with the QEF and Mark-to-Market
Election are very complex and are affected by various factors in
addition to those described above. Prospective investors should
consult their own tax advisors regarding the application of the
PFIC rules to our common shares.
U.S. Federal Income Tax Consequences of the Ownership and
Disposition of Common Shares
The following discussion describes the general rules applicable to
the ownership and disposition of the common shares but is subject
in its entirety to the special rules described above under the
heading “PFIC Status and Related Tax Consequences.”
Distributions
The gross amount of any distribution (including amounts, if any,
withheld in respect of Canadian withholding tax) actually or
constructively received by a U.S. Holder with respect to our common
shares will be taxable to the U.S. Holder as a dividend to the
extent of our current or accumulated earnings and profits as
determined under U.S. federal income tax principles. Distributions
to a U.S. Holder in excess of earnings and profits will be treated
first as a return of capital that reduces a U.S. Holder’s tax basis
in such common shares (thereby increasing the amount of gain or
decreasing the amount of loss that a U.S. Holder would recognize on
a subsequent disposition of our common shares), and then as gain
from the sale or exchange of such common shares (see “Sale or Other
Taxable Disposition of Common Shares”). The amount of any
distribution of property other than cash will be the fair market
value of that property on the date of distribution. In the event we
make distributions to holders of common shares, we may or may not
calculate our earnings and profits under U.S. federal income tax
principles. If we do not do so, any distribution may be required to
be regarded as a dividend, even if that distribution would
otherwise be treated as a non-taxable return of capital or as
capital gain. The amount of the dividend will generally be treated
as foreign-source dividend income to U.S. Holders.
To the extent that we are a “qualified foreign corporation,” the
common shares on which the dividend is paid are held for a minimum
holding period, and other requirements are satisfied, non-corporate
U.S. Holders, including individuals, may be eligible for the
preferential U.S. federal rate on “qualified dividend income.” A
“qualified foreign corporation” includes a foreign corporation that
is not a PFIC in the year of the distribution or in the prior
taxable year and that is eligible for the benefits of an income tax
treaty with the United States that contains an exchange of
information provision and has been determined by the United States
Treasury Department to be satisfactory for purposes of the
legislation (such as the Canada-U.S. Tax Convention).
Distributions to U.S. Holders generally will not be eligible for
the “dividends received deduction” generally allowed to U.S.
corporations in respect of dividends received from other U.S.
corporations.
Sale or Other Taxable Disposition of Common Shares
A U.S. Holder will recognize gain or loss on the sale or other
taxable disposition of a common share in an amount equal to the
difference, if any, between the amount of cash plus the fair market
value of any property received and such U.S. Holder’s tax basis in
the common shares sold or otherwise disposed of. If the U.S. Holder
receives Canadian dollars in the transaction, the amount realized
will be the U.S. dollar value of the Canadian dollars received,
which is determined for cash basis taxpayers on the settlement date
for the transaction and for accrual basis taxpayers on the trade
date (although accrual basis taxpayers can also elect the
settlement date). Subject to the PFIC rules discussed above, gain
or loss recognized on such sale or other taxable disposition
generally will be a capital gain or loss, which will be long-term
capital gain or loss if the security is held for more than one
year.
Preferential tax rates currently apply to long-term capital gain of
a U.S. Holder that is an individual, estate, or trust. There are
currently no preferential tax rates for long-term capital gain of a
corporate U.S. Holder. Deductions for capital losses are subject to
significant limitations under the Code. The gain or loss will
generally be U.S.-source gain or loss for foreign tax credit
purposes.
Additional Considerations
Receipt of Foreign Currency
The amount of any distribution paid to a U.S. Holder in foreign
currency, or on the sale, exchange, or other taxable disposition of
common shares, generally will be equal to the U.S. dollar value of
such foreign currency based on the exchange rate applicable on the
date of receipt (regardless of whether such foreign currency is
converted into U.S. dollars at that time). If the foreign currency
received is not converted into U.S. dollars on the date of receipt,
a U.S. Holder will have a tax basis in the foreign currency equal
to its U.S. dollar value on the date of receipt. Any U.S. Holder
who converts or otherwise disposes of the foreign currency after
the date of receipt may have a foreign currency exchange gain or
loss that would be treated as ordinary income or loss, and
generally will be U.S.-source income or loss for foreign tax credit
purposes. Different rules apply to U.S. Holders who use the accrual
method of tax accounting. Each U.S. Holder should consult its own
U.S. tax advisors regarding the U.S. federal income tax
consequences of receiving, owning, and disposing of foreign
currency.
Foreign Tax Credit
Subject to the PFIC rules discussed above, a U.S. Holder that pays
(whether directly or through withholding) Canadian income tax with
respect to dividends paid on the common shares generally will be
entitled, at the election of such U.S. Holder, to receive either a
deduction or a credit for such Canadian income tax paid. Generally,
a credit will reduce a U.S. Holder’s U.S. federal income tax
liability on a dollar-for-dollar basis, whereas a deduction will
reduce a U.S. Holder’s income that is subject to U.S. federal
income tax. This election is made on a year-by-year basis and
applies to all creditable foreign taxes paid (whether directly or
through withholding) by a U.S. Holder during a year.
Complex limitations apply to the foreign tax credit, including the
general limitation that the credit cannot exceed the proportionate
share of a U.S. Holder’s U.S. federal income tax liability that
such U.S. Holder’s foreign- source taxable income bears to such
U.S. Holder’s worldwide taxable income. In applying this
limitation, a U.S. Holder’s various items of income and deduction
must be classified, under complex rules, as either “foreign-source”
or “U.S.-source.” Generally, dividends paid by a foreign
corporation (including constructive dividends) should be treated as
foreign-source for this purpose, and gains recognized on the sale
of stock of a foreign corporation by a U.S. Holder should be
treated as U.S.-source for this purpose, except as otherwise
provided in an applicable income tax treaty, and if an election is
properly made under the Code. However, the amount of a distribution
that is treated as a “dividend” may be lower for U.S. federal
income tax purposes than it is for Canadian federal income tax
purposes, resulting in a reduced foreign tax credit allowance to a
U.S. Holder. In addition, this limitation is calculated separately
with respect to specific categories of income. The foreign tax
credit rules are complex, and each U.S. Holder should consult its
own U.S. tax advisors regarding the foreign tax credit rules.
Information Reporting and Backup Withholding
Under U.S. federal income tax law, certain categories of U.S.
Holders must file information returns with respect to their
investment in, or involvement in, a foreign corporation. For
example, certain U.S. Holders who hold certain “specified foreign
financial assets” that exceed certain thresholds are required to
report information relating to such assets. The definition of
“specified foreign financial assets” generally includes not only
financial accounts maintained in foreign financial institutions,
but also, unless held in accounts maintained by a financial
institution, any stock or security issued by a non-U.S. person, any
financial instrument or contract held for investment that has an
issuer or counterparty other than a U.S. person, and any interest
in a foreign entity. U.S. Holders may be subject to these reporting
requirements unless their common shares are held in an account at
certain financial institutions. Significant penalties may apply for
failure to satisfy applicable reporting obligations.
Distributions paid with respect to common shares and proceeds from
a sale, exchange, or redemption of common shares made within the
United States or through certain U.S.-related financial
intermediaries may be subject to information reporting to the IRS
and possible U.S. backup withholding (at a rate of 24%). Backup
withholding will not apply, however, to a U.S. Holder who furnishes
a correct U.S. taxpayer identification number and makes any other
required certification on IRS Form W-9 or that is a corporation or
other entity that is otherwise exempt from backup withholding. Each
U.S. Holder should consult its own tax advisors regarding the
application of the U.S. information reporting and backup
withholding rules. Backup withholding is not an additional tax.
Amounts withheld as backup withholding may be credited against a
holder’s U.S. federal income tax liability, and such holder may
obtain a refund of any excess amounts withheld under the backup
withholding rules by filing an appropriate claim for refund with
the IRS and furnishing any required information in a timely
manner.
The discussion of reporting requirements set forth above is not
intended to constitute a complete description of all reporting
requirements that may apply to a U.S. Holder. A failure to satisfy
certain reporting requirements may result in an extension of the
time period during which the IRS can assess a tax and, under
certain circumstances, such an extension may apply to assessments
of amounts unrelated to any unsatisfied reporting requirement. U.S.
Holders should consult with their own tax advisors regarding their
reporting obligations, if any, as a result of their acquisition,
ownership, or disposition of our common shares.
CERTAIN CANADIAN FEDERAL INCOME
TAX CONSEQUENCES
The following summarizes the principal Canadian federal income tax
consequences applicable to the holding and disposition of common
shares and pre-funded warrants by a holder who is not, and is not
deemed to be, a resident of Canada for the purposes of the
Income Tax Act (Canada) (the "Tax Act"), and who holds such
common shares solely as capital property and does not use or hold,
and is not deemed to use or hold, the common shares in connection
with carrying on a business in Canada, referred to in this summary
as a "U.S. Holder". This summary is not applicable to a U.S. Holder
that is an insurer carrying on an insurance business in Canada and
elsewhere This summary is based on the current provisions of the
Tax Act, the regulations thereunder, all amendments thereto
publicly proposed by the government of Canada, the published
administrative practices of the Canada Revenue Agency, and the
current provisions of the Convention Between Canada and the United
States of America with Respect to Taxes on Income and on Capital,
signed September 26, 1980, as amended (the "Canada-U.S. Tax
Convention"). Except as otherwise expressly provided, this summary
does not take into account any provincial, territorial or foreign
(including without limitation, any United States) tax law or
treaty. It has been assumed that all currently proposed amendments
will be enacted substantially as proposed and that there is no
other relevant change in any governing law or practice, although no
assurance can be given in these respects.
Each U.S. Holder is advised to obtain tax and legal advice
applicable to such U.S. Holder’s particular circumstances.
Dividends
Every U.S. Holder is liable to pay a Canadian withholding tax on
every dividend that is or is deemed to be paid or credited to the
U.S. Holder on the U.S. Holder’s common shares. The statutory rate
of withholding tax is 25% of the gross amount of the dividend paid.
The Canada-U.S. Tax Convention reduces the statutory rate with
respect to dividends paid to a U.S. Holder, if that U.S. Holder is
eligible for benefits under the Canada-U.S. Tax Convention. Where
applicable, the general rate of withholding tax under the
Canada-U.S. Tax Convention is 15% of the gross amount of the
dividend, but if the U.S. Holder is a company that owns at least
10% of the voting stock of the Company and beneficially owns the
dividend, the rate of withholding tax is 5% for dividends paid or
credited to such corporate U.S. Holder. The Company is required to
withhold the applicable tax from the dividend payable to the U.S.
Holder, and to remit the tax to the Receiver General of Canada for
the account of the U. S. Holder.
Disposition of Common Shares
A U.S. Holder generally will not be subject to tax under the Tax
Act in respect of a capital gain realized on the disposition or
deemed disposition of a common share unless such securities
constitute "taxable Canadian property" of the U.S. Holder for
purposes of the Tax Act and the gain is not exempt from tax
pursuant to the terms of the Canada-U.S. Tax Convention.
Provided that the common shares are listed on a "designated stock
exchange" for purposes of the Tax Act (which currently includes the
NYSE American) at the time of disposition, the common shares
generally will not constitute "taxable Canadian property" of a U.S.
Holder, unless at any time during the 60 month period immediately
preceding the disposition: (i) the U.S. Holder, persons with whom
the U.S. Holder did not deal at "arm’s length" for the purposes of
the Tax Act, partnerships in which the U.S. Holder or a person with
whom the U.S. Holder did not deal at “arm’s length” for the
purposes of the Tax Act holds a membership interest directly or
indirectly through one or more partnerships, or the U.S. Holder
together with all such persons, owned 25% or more of the issued
shares of any class of the Company and; (ii) more than 50% of the
fair market value of the common shares was derived directly or
indirectly from one or any combination of real or immovable
property situated in Canada, "Canadian resource properties" (as
defined in the Tax Act), "timber resource properties" (as defined
in the Tax Act), or options in respect of, or interests in, or for
civil law rights in, such property whether or not such property
exists. Notwithstanding the foregoing, the common shares may
otherwise in certain circumstances be deemed to be taxable Canadian
property to a U.S. Holder for the purposes of the Tax Act
Even if a common share is considered to be "taxable Canadian
property" to a U.S. Holder, the U.S. Holder may be exempt from tax
under the Tax Act if such securities are "treaty-protected
property" for the purposes of the Tax Act. Common shares owned by a
U.S. Holder will generally be "treaty-protected property" if the
gain from the disposition of such securities would, because of the
Canada-U.S. Tax Convention, be exempt from tax under Part I of the
Tax Act.
U.S. Holders who may hold common shares as "taxable Canadian
property" should consult their own tax advisors.
UNDERWRITING
Pursuant to the underwriting agreement dated February 8, 2021 with
H.C. Wainwright & Co., LLC (“Wainwright”), we
have agreed to issued and sell, and the underwriter has agreed to
purchase, the number of common shares listed opposite its name
below, less the underwriting discount, on the closing date, subject
to the terms and conditions contained in the underwriting
agreement. The underwriting agreement provides that the obligations
of the underwriter is subject to certain customary conditions
precedent, representations and warranties contained therein.
|
Underwriter |
|
Number of
Shares |
| H.C.
Wainwright & Co., LLC |
|
|
91,315,790 |
|
| Total |
|
|
91,315,790 |
|
Pursuant to the underwriting agreement, the underwriter has agreed
to purchase all of the common shares sold under the underwriting
agreement if any of these common shares are purchased, other than
those shares covered by the underwriter’s option to purchase
additional common shares described below. The underwriter has
advised us that they do not intend to confirm sales to any account
over which it exercises discretionary authority.
Discounts, Commissions and Expenses
The underwriter may offer the common shares from time to time to
purchasers directly or through agents, or through brokers in
brokerage transactions on the NYSE American, or to dealers in
negotiated transactions or in a combination of such methods of
sale, or otherwise, at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated
prices, subject to receipt and acceptance by it and subject to its
right to reject any order in whole or in part. The difference
between the price at which the underwriter purchases shares from us
and the price at which the underwriter resells such shares may be
deemed underwriting compensation. If the underwriter effects such
transactions by selling common shares to or through dealers, such
dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriter and/or purchasers
of common shares for whom they may act as agents or to whom they
may sell as principal.
The underwriter is offering the shares, subject to prior sale,
when, as and if issued to and accepted by it, subject to approval
of legal matters and other conditions specified in the underwriting
agreement. The underwriter reserves the right to withdraw, cancel
or modify offers to the public and to reject orders in whole or in
part.
We have granted to the underwriter an option to purchase up to an
additional 13,697,368 common shares (up to 15% of the common shares
in this offering) at the public offering price, less the
underwriting discount. The option is exercisable for 30 days
from the date of this prospectus supplement.
Any shares sold by the underwriter to securities dealers will be
sold at the public offering price less a selling concession not in
excess of $0.0855 per share.
We have granted the underwriter a right first refusal to act as our
sole book-running manager, sole underwriter or sole placement agent
for certain future capital raising transactions undertaken by us
until December 31, 2021, provided that this offering is
consummated.
The following table shows the public offering price, underwriting
discount and proceeds, before expenses, to us. These amounts are
shown assuming both no exercise and full exercise of the
underwriter’s option to purchase additional shares.
|
Per Share |
|
Total
Without
Option |
|
Total
with
Option |
| Public offering price |
|
$ |
173,500,001 |
|
|
$ |
199,525,000 |
|
| Underwriting discounts and commissions
payable by us |
|
$ |
12,145,000 |
|
|
$ |
13,966,750 |
|
| Proceeds, before expenses, to us |
|
$ |
161,355,001 |
|
|
$ |
185,558,250 |
|
We have agreed to reimburse the expenses of the underwriter in
the non-accountable sum of $35,000 in connection with this
offering, reimburse the expenses of the underwriter, including its
legal fees, up to $100,000 in connection with this offering, and
$15,950 for the clearing expenses of the underwriter in connection
with this offering. We estimate that the total expenses of the
offering, excluding underwriting discounts and commissions, will be
approximately $300,000 and is payable by us.
Other Relationships
From time to time, Wainwright may provide in the future various
advisory, investment and commercial banking and other services to
us in the ordinary course of business, for which they have received
and may continue to receive customary fees and commissions.
However, except as disclosed in this prospectus supplement, we have
no present arrangements with Wainwright for any further services.
Wainwright acted as our exclusive placement agent for our February
2020 registered direct offering and received cash compensation of
approximately $270,000, warrants to purchase up to 1,041,667 common
shares at an exercise price of $0.15 per share, and an 8-month
right of first refusal in connection therewith. Wainwright also
acted as our exclusive placement agent for our April 2020
registered direct offering and received cash compensation of
approximately $428,000, warrants to purchase up to 1,666,667 common
shares at an exercise price of $0.15 per share, and an 8-month
right of first refusal in connection therewith. In addition,
Wainwright also acted as our exclusive placement agent for our May
2020 registered direct offering and received cash compensation of
approximately $1,599,903 in connection therewith. Wainwright also
acted as our exclusive placement agent for our July 2020 registered
direct offering and received cash compensation of approximately
$2,099,825 in connection therewith.
Lock-up Agreement
We have agreed with Wainwright to be subject to a lock-up period of
60 days following the date of closing of the offering pursuant to
this prospectus supplement and the accompanying base prospectus.
This means that, during the applicable lock-up period, we may not
issue, enter into any agreement to issue or announce the issuance
or proposed issuance of any common shares or their equivalents,
subject to certain exceptions. The underwriter may waive the terms
of these lock-up agreements in its sole discretion and without
notice.
In addition, subject to certain circumstances, each of our
directors and executive officers has entered into
a lock-up agreement with the underwriter. Under
the lock-up agreements, the directors and executive
officers may not, directly or indirectly, offer, sell, contract to
sell, hypothecate, pledge, establish an open “put equivalent
position” (within the meaning of Rule 16a-1(h) under the
Exchange Act), or otherwise dispose of, or enter into any
transaction which is designed to or could be expected to result in
the disposition of, of our common shares or securities convertible
into or exchangeable for our common shares, unless such directors
and executive officers obtain prior written consent of the
underwriter for a period of 60 days from the date of this
prospectus supplement.
Transfer Agent
The transfer agent and registrar for our common shares is AST Trust
Company (Canada). Our transfer agent’s address is 1 Toronto Street,
Suite 1200, Toronto, Ontario M5C 2VC and its telephone number is
(416) 682-3844. Our co-transfer agent is American Stock Transfer
& Trust Company LLC.
Listing
Our common shares are listed on NYSE American under the symbol
“ZOM” and are not listed on any other exchange.
Indemnification
We have agreed to indemnify Wainwright and specified other persons
against certain liabilities relating to or arising out of
Wainwright’s activities under the engagement letter and
underwriting agreement and to contribute to payments that
Wainwright may be required to make in respect of such
liabilities.
Price Stabilization, Short Positions and Penalty Bids
In connection with this offering, the underwriter may engage in
stabilizing transactions, overallotment transactions, syndicate
covering transactions and penalty bids in connection with our
common shares.
Stabilizing transactions permit bids to purchase common shares so
long as the stabilizing bids do not exceed a specified maximum.
Overallotment transactions involve sales by the underwriter of
common shares in excess of the number of shares the underwriter is
obligated to purchase. This creates a syndicate short position
which may be either a covered short position or a naked short
position. In a covered short position, the number of shares
over-allotted by the underwriter is not greater than the number of
shares that it may purchase in the overallotment option. In a naked
short position, the number of shares involved is greater than the
number of shares in the overallotment option. The underwriter may
close out any short position by exercising its overallotment option
and/or purchasing shares in the open market.
Syndicate covering transactions involve purchases of common shares
in the open market after the distribution has been completed in
order to cover syndicate short positions. Such a naked short
position would be closed out by buying securities in the open
market. A naked short position is more likely to be created if the
underwriter is concerned that there could be downward pressure on
the price of the securities in the open market after pricing that
could adversely affect investors who purchase in the offering.
Penalty bids permit the underwriter to reclaim a selling concession
from a syndicate member when the securities originally sold by the
syndicate member are purchased in a stabilizing or syndicate
covering transaction to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and
penalty bids may have the effect of raising or maintaining the
market price of our common shares or preventing or retarding a
decline in the market price of our common shares. As a result, the
price of our common shares in the open market may be higher than it
would otherwise be in the absence of these transactions. Neither we
nor the underwriter make any representation or prediction as to the
effect that the transactions described above may have on the price
of our common shares. These transactions may be effected on the
NYSE American, in the over-the-counter market or
otherwise and, if commenced, may be discontinued at any time.
Electronic Distribution
A prospectus in electronic format may be made available on the
websites maintained by the underwriter, if any, participating in
this offering and the underwriter may distribute prospectuses
electronically. Other than the prospectus in electronic format, the
information on these websites is not part of this prospectus or the
registration statement of which this prospectus forms a part,
has not been approved or endorsed by us or the underwriter, and
should not be relied upon by investors.
Canadian Securities Matters
The common shares are being distributed pursuant to a prospectus
exemption under applicable Canadian securities laws on the basis
that the common shares are being distributed outside Canada. The
underwriter has agreed not to engage in any solicitation or sale of
common shares to a person or company who is a resident of Canada or
a person or company in Canada.
LEGAL MATTERS
The validity of the common shares offered hereby has been passed
upon for us by Fasken Martineau DuMoulin LLP, Calgary, Alberta.
Ellenoff Grossman & Schole LLP, New York, New York is acting as
counsel to the underwriter in connection with this offering.
EXPERTS
The consolidated financial statements incorporated in this
prospectus supplement by reference from our Annual Report on Form
10-K have been audited by MNP LLP, an independent registered public
accounting firm, as stated in their report, which is incorporated
herein by reference. Such consolidated financial statements have
been incorporated herein by reference in reliance on the report of
such firm given upon their authority as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE
INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. The SEC maintains a website, at
http://www.sec.gov, that contains registration statements, reports,
proxy information statements and other information regarding
registrants that file electronically with the SEC, including us.
Our website address is http://www.zomedica.com. We have not
incorporated by reference into this prospectus supplement or the
accompanying base prospectus the information on our website, and
you should not consider it to be a part of this document.
The SEC allows us to “incorporate by reference” information that we
file with it into this prospectus supplement, which means that we
can disclose important information to you by referring you to those
documents. The information incorporated by reference is an
important part of this prospectus supplement. The information
incorporated by reference is considered to be a part of this
prospectus supplement, and information that we file later with the
SEC will automatically update and supersede information contained
in this prospectus supplement.
We incorporate by reference the documents listed below that we have
previously filed with the SEC, each of which has Exchange Act File
No. 000-38298 unless otherwise noted:
| |
• |
our Definitive Proxy Statement on
Schedule 14A, filed with the SEC on August 14, 2020; |
| |
• |
our Annual Report on Form 10-K
for the fiscal year ended December 31, 2019, filed with the SEC on
February 26, 2020; |
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• |
our Quarterly Reports on Form
10-Q for the quarters ended March 31, 2020, June 30, 2020 and
September 30, 2020, filed with the SEC on May 11, 2020, August 10,
2020 and November 12, 2020, respectively; |
| |
• |
our
Current Reports on Form 8-K filed with the SEC on January 22, 2020,
February 13, 2020, March 17, 2020, April 1, 2020, April 7, 2020,
April 8, 2020, April 13, 2020, April 22, 2020, April 24, 2020, June
17, 2020 (as amended by the 8-K/A filed with the SEC on July 1,
2020), July 6, 2020, July 10, 2020, July 29, 2020, August 4, 2020,
August 7, 2020, August 27, 2020, September 8, 2020, September 28,
2020, October 6, 2020, November 16, 2020, December 16,
2020, December 23, 2020, January 5, 2021 and January 19,
2021; and |
| |
• |
the
description of our common shares as set forth in our Registration
Statement on Form 8-A filed with the SEC on November 15, 2017,
including any amendments thereto or reports filed for the purposes
of updating this description, including the Description of
Securities filed as Exhibit 4.1 to our Annual Report. |
All reports and other documents that we file with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this prospectus supplement but prior to the termination of
the offering of the securities hereunder will also be considered to
be incorporated by reference into this prospectus supplement from
the date of the filing of these reports and documents, and will
supersede the information herein; provided, however, that
all reports, exhibits and other information that we “furnish” to
the SEC will not be considered incorporated by reference into this
prospectus supplement. Any statement contained in a document
incorporated by reference in this prospectus supplement shall be
deemed to be modified or superseded to the extent that a statement
contained herein or in any other subsequently filed document that
also is incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this prospectus supplement or the registration
statement.
We will provide you without charge, upon your oral or written
request, with a copy of any or all reports, proxy statements and
other documents we file with the SEC, as well as any or all of the
documents incorporated by reference in this prospectus supplement
or the registration statement (other than exhibits to such
documents unless such exhibits are specifically incorporated by
reference into such documents). Requests for such copies should be
directed to:
Zomedica Corp.
100 Phoenix Drive, Suite 125
Ann Arbor, Michigan 48108
(734) 369-2555
PROSPECTUS
$300,000,000
Common Shares
Preferred Shares
Warrants
Debt Securities
Subscription Rights
Units
We
may offer and sell an indeterminate number of our common shares,
preferred shares, warrants, debt securities and subscription rights
from time to time under this prospectus. We may offer these
securities separately or as units, which may include combinations
of the securities. We will describe in a prospectus supplement the
securities we are offering and selling, as well as the specific
terms of the securities.
We
may offer these securities in amounts, at prices and on terms
determined at the time of offering. We may sell the securities
directly to you, through agents we select, or through underwriters
and dealers we select. If we use agents, underwriters or dealers to
sell the securities, we will name them and describe their
compensation in a prospectus supplement.
Our
common shares are listed on the NYSE American and the TSX Venture
Exchange under the symbol “ZOM.” On December 19, 2018, the last
reported closing sale price of our common shares on the NYSE
American was $1.18 per share. We have not yet determined whether
the other securities that may be offered by this prospectus will be
listed on any exchange, inter-dealer quotation system or
over-the-counter market. If we decide to seek the listing of any
such securities upon issuance, the prospectus supplement relating
to those securities will disclose the exchange, quotation system or
market on which the securities will be listed.
We
are an “emerging growth company” as that term is used in the
Jumpstart Our Business Startups Act of 2012, as amended, or the
JOBS Act, and, as such, we have elected to comply with certain
reduced public company reporting requirements. See “Prospectus
Summary – Implications of Being an Emerging Growth Company” in this
prospectus for more information.
Investing in our securities involves certain risks. See “Risk
Factors” in our most recent Annual Report on Form 10-K as such risk
factors may be updated in our subsequent reports filed with the
Securities and Exchange Commission, which are incorporated by
reference herein, and as may be amended, supplemented or superseded
from time to time by other reports we file with the Securities and
Exchange Commission.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is January 30, 2019
TABLE OF
CONTENTS
ABOUT THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission (the “SEC”) utilizing a
“shelf” registration process. Under this shelf process, we may sell
any combination of the securities described in this prospectus in
one or more offerings. This prospectus provides you with a general
description of the securities we may offer. Each time we sell
securities, we will provide a prospectus supplement that will
contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with additional information
described under the heading “Where You Can Find More
Information.”
We
have not authorized anyone to provide any information other than
that contained or incorporated by reference in this prospectus or
in any free writing prospectus prepared by or on behalf of us or to
which we have referred you. We take no responsibility for, and can
provide no assurance as to the reliability of, any other
information that others may give you. We are not making an offer of
these securities in any state where the offer is not permitted. You
should not assume that the information contained in or incorporated
by reference in this prospectus or any prospectus supplement or in
any such free writing prospectus is accurate as of any date other
than their respective dates.
Unless the context provides otherwise, references herein to “we,”
“our,” “us,” “our company” and “Zomedica” refer to Zomedica Corp.
together with, where applicable, our consolidated subsidiary,
Zomedica Inc., a Delaware corporation.
Unless otherwise noted herein, all references to “CDN$,” “CAD$,” or
“Canadian dollars” are to the currency of Canada and “$,”
“dollars,” “US$,” “United States dollars,” or “U.S. dollars” are to
the currency of the United States.
CAUTIONARY NOTE ON FORWARD-LOOKING
STATEMENTS
This
prospectus, including the documents incorporated by reference
herein, contains forward-looking statements. In some cases, you can
identify these statements by forward-looking words such as “may,”
“might,” “will,” “should,” “expects,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” “potential” or “continue,” the
negative or plural of these words and other comparable terminology.
These forward-looking statements, which are subject to risks,
uncertainties and assumptions about us, may include projections of
our future financial performance, our anticipated growth strategies
and anticipated trends in our business. These statements are only
predictions based on our current expectations and projections about
future events. There are important factors that could cause our
actual results, level of activity, performance or achievements to
differ materially from the results, level of activity, performance
or achievements expressed or implied by the forward-looking
statements, including those factors discussed under the caption
entitled “Risk Factors” in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2017, as modified under the caption
“Risk Factors” in our Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 2018.
Although we believe the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, level of activity, performance or achievements.
Moreover, neither we nor any other person assumes responsibility
for the accuracy and completeness of any of these forward-looking
statements. We are under no duty to update any of these
forward-looking statements after the date of this prospectus to
conform our prior statements to actual results or revised
expectations.
PROSPECTUS SUMMARY
Our Company
We
are a development stage veterinary diagnostic and pharmaceutical
company creating products for companion animals (canine, feline,
and equine) by focusing on the unmet needs of clinical
veterinarians. We believe that we have identified and are
developing diagnostics and therapeutics that have the potential to
significantly improve the diagnosis and treatment of various
diseases affecting companion animals. We believe that there are
significant unmet medical needs for pets, and that the pet
diagnostic and therapeutic segments of the animal health industry
are likely to grow substantially as new diagnostic tools and
treatments are identified, developed, and marketed specifically for
companion animals.
Together with our strategic partners, we are developing a Bulk
Acoustic Wave sensor-based veterinary point-of-care diagnostic
platform for diagnosis and treatment management of disorders such
as thyroid and adrenal abnormalities, a Raman spectroscopy-based
point-of-care diagnostic platform for the detection of pathogens,
and liquid biopsy assays for the detection of cancer and related
consumables. The regulatory pathway to obtain pre-market regulatory
approval of companion animal diagnostics is significantly shorter
than for similar diagnostic products intended for human use. In
certain cases, pre-market regulatory approval may be unnecessary,
depending on the intended use of the diagnostic.
We
also have identified a number of drugs that have proven safe and
effective in humans that we are developing for use in canines and
felines. We believe this development approach enables us to reduce
the risks associated with obtaining regulatory approval for
unproven product candidates and shortens the development timeline
necessary to bring our product candidates to market. We have four
drug product candidates in early development and have identified
several other potential product candidates for further
investigation.
In
addition, we are investigating the development of alternative drug
delivery technologies for our drug product candidates. Many of the
human-approved therapeutics used in companion animals are only
available in pill or injectable form. However, it can be difficult
to give a companion animal an injection or to assure that the
animal has swallowed a pill. As a result, we believe that
compliance with treatment regimens is a significant problem for
veterinarians and pet owners. The challenges associated with
medicating pets are unique, and we believe that developing product
candidates that can be easily taken by the pet or easily
administered by pet owners will help increase compliance.
Corporate
Information
Zomedica Pharmaceuticals Corp. (formerly, Wise Oakwood Ventures
Inc.) was originally incorporated as Wise Oakwood Ventures Inc. on
January 7, 2013 under the Business Corporations
Act (Alberta) (“ABCA”). On October 28, 2013, we completed
our initial public offering in Canada and became classified as a
Capital Pool Company, as defined under the rules of the TSX Venture
Exchange, or TSX-V. On April 21, 2016, we changed our name to
Zomedica Pharmaceuticals Corp. and consolidated our common shares
on a one-for-two and one-half basis. ZoMedica Pharmaceuticals Inc.,
or ZoMedica Inc., was incorporated on May 14, 2015 under
the ABCA. On April 21, 2016, we completed a qualifying
transaction, or the Qualifying Transaction, under TSX-V Policy 2.4
– Capital Pool Companies, consisting of a
three-cornered amalgamation among our company, ZoMedica Inc. and
our wholly-owned subsidiary. Under the Qualifying Transaction,
ZoMedica Inc. and our subsidiary were amalgamated to form Zomedica
Pharmaceuticals Ltd., or Zomedica Ltd. As consideration for the
amalgamation, shareholders of ZoMedica Inc. became the owners of
97.6% (non-diluted) of our common shares, and ZoMedica Ltd. became
our wholly-owned subsidiary. Subsequent to the Qualifying
Transaction, Zomedica Ltd. was vertically amalgamated into our
company. We have one wholly-owned subsidiary, Zomedica
Pharmaceuticals, Inc., a Delaware company. Our principal executive
offices are located at 100 Phoenix Drive, Suite 190, Ann Arbor, MI
48108, and our telephone number is (734) 369-2555. Our website
address is www.zomedica.com. We have not incorporated by reference
into this prospectus the information on our website, and you should
not consider it to be a part of this document.
Implications of Being an Emerging Growth Company
As a
company with less than $1.07 billion in revenue during our last
fiscal year, we qualify as an “emerging growth company” as defined
in the Jumpstart Our Business Startups Act, or JOBS Act, enacted in
April 2012. An “emerging growth company” may take advantage of
reduced reporting requirements that are otherwise applicable to
public companies. These provisions include, but are not limited
to:
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not
being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act; |
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reduced disclosure obligations regarding
executive compensation in our periodic reports, proxy statements
and registration statements; and |
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exemptions from the requirements of holding a
non-binding advisory vote on executive compensation and shareholder
approval of any golden parachute payments not previously
approved. |
We
may take advantage of these provisions until December 31, 2022.
However, if certain events occur prior to December 31, 2022,
including if we become a “large accelerated filer,” our annual
gross revenues exceed $1.07 billion or we issue more than $1.0
billion of non-convertible debt in any three-year period, we will
cease to be an emerging growth company before such date.
In
addition, the JOBS Act provides that an emerging growth company may
delay adopting new or revised accounting standards until such time
as those standards apply to private companies. We have irrevocably
elected not to avail ourselves of this exemption and, therefore, we
will be subject to the same new or revised accounting standards as
other public companies that are not emerging growth companies.
RISK FACTORS
You
should carefully consider all of the information in this prospectus
and, in particular, you should evaluate the specific risk factors
incorporated by reference herein and included or incorporated by
reference in any applicable prospectus supplement.
USE OF PROCEEDS
Unless otherwise indicated in a prospectus supplement, the net
proceeds from the sale of the securities will be used for working
capital and general corporate purposes. When particular securities
are offered, the prospectus supplement relating to that offering
will set forth our intended use of the net proceeds received from
the sale of those securities we sell. Pending the application of
the net proceeds for these purposes, we expect to invest the
proceeds in short-term, interest-bearing instruments or other
investment-grade securities.
DESCRIPTION OF COMMON
SHARES
The
following is a summary of the rights of our common shares as set
forth in our Articles of Incorporation, as amended, and By-laws,
which are included as exhibits to the registration statement
relating to this offering filed by us with the SEC. This summary
does not purport to be complete and is qualified in its entirety by
the full text of our aforementioned constating documents and by
applicable law.
Our
authorized capital consists of an unlimited number of common shares
without nominal or par value and an unlimited number of preferred
shares without nominal or par value, which are issuable in
series.
As
of September 30, 2018, 94,596,209 common shares were issued and
outstanding as fully paid and non-assessable shares. No preferred
shares had been issued as of that date and accordingly, none were
issued and outstanding. In addition, as of September 30, 2018, we
had outstanding options to purchase an aggregate of 3,687,004
common shares outstanding with a weighted average exercise price of
$1.33 per share.
The
additional shares of our authorized stock available for issuance
may be issued at times and under circumstances so as to have a
dilutive effect on earnings per share and on the equity ownership
of the holders of our common shares. The ability of our board of
directors to issue additional shares could enhance the board’s
ability to negotiate on behalf of the shareholders in a take-over
situation but could also be used by the board of directors to make
a change-in-control more difficult, thereby denying shareholders
the potential to sell their shares at a premium and entrenching
current management.
Dividend
Rights
Subject to any rights,
privileges, restrictions and conditions which may apply to any
series of preferred shares that are issued, holders of our common
shares are entitled to receive dividends, if, as and when declared
by the board of directors.
Voting Rights
The
holders of the common shares are entitled to receive notice of and
attend any meeting of our shareholders and are entitled to cast one
vote for each common share held.
No Preemptive, Conversion or Redemption Rights
Holders of our common shares are not entitled to preemptive rights
and our common shares are not subject to conversion or
redemption.
Rights upon Liquidation
On
the winding-up, liquidation or dissolution of our company or upon
the happening of any other event giving rise to a distribution of
our assets other than by way of dividend amongst our shareholders
for the purposes of winding-up our affairs, subject to any rights,
privileges, restrictions and conditions which may have been
determined by the directors to attach to any series of preferred
shares, the holders of all common shares shall be entitled to
participate pari passu.
Action Necessary to
Change the Rights of Holders of our Shares
Under the Business Corporations Act (Alberta) (“ABCA”),
a company can amend its articles and governing documents via a
special resolution of its shareholders. A “special
resolution” is a resolution passed by a majority of
not less than two-thirds of the votes cast by the shareholders who
voted in respect of that resolution or signed by all the
shareholders entitled to vote on that resolution. Items that can be
amended via special resolution include (but are not limited to): a
change in our name; changing any maximum number of shares that we
are authorized to issue; creating new classes of shares; reducing
or increasing our stated capital; changing the designation of our
shares to add, change or remove any rights, privileges,
restrictions and conditions, including rights to accrued dividends,
in respect of all or any of our shares, whether issued or unissued;
dividing a class of shares, whether issued or unissued, into series
and fixing the number of shares in each series and the rights,
privileges, restrictions and conditions thereof; authorizing the
directors to divide any class of unissued shares into series and to
fix the number of shares in each series and the rights, privileges,
restrictions and conditions thereof; authorizing the directors to
change the rights, privileges, restrictions and conditions attached
to unissued shares of any series; or adding, changing or removing
restrictions on the issue, transfer or ownership of shares.
Shareholder Meetings
Under the ABCA: (1) We must hold an annual meeting of shareholders
not later than 15 months after holding the last preceding annual
meeting; (2) the directors may at any time call a special meeting
of shareholders; and (3) the holders of not less than 5% of our
issued shares that carry the right to vote at a meeting sought to
be held may requisition the directors to call a meeting of
shareholders for the purposes stated in the requisition. The most
recent annual meeting of our shareholders was held on August 15,
2018.
The
ABCA requires that notice of the time and place of a meeting of
shareholders shall be sent not less than 21 days and not more than
50 days before the meeting: (1) to each shareholder on record that
is entitled to vote at the meeting; (2) to each director; and (3)
to our auditor.
We
also comply with certain continuous disclosure obligations of a
reporting issuer in Canada respecting shareholder meetings, in
addition to the rules and policies of the TSX-V.
Certain Take-over Bid Requirements
Canadian laws applicable to us provide for early warning disclosure
requirements and for take-over bid rules for bids made to security
holders in various jurisdictions in Canada, a summary of which is
set forth below.
In
Canada, securities laws are a matter of provincial/territorial
jurisdiction and, as a result, bids are governed by applicable
corporate and securities legislation in each province or territory
in addition to policy and instruments implemented by Canadian
Securities Administrators.
Under the laws of the Provinces of Alberta and British Columbia,
the jurisdictions in Canada in which we are a reporting issuer (as
defined under provincial securities law), when any person (an
“offeror”) acquires, except pursuant to a formal take-over bid,
beneficial ownership of, or the power to exercise control or
direction over, or securities convertible into, voting or equity
securities of any class of a reporting issuer that, together with
such offeror’s securities of that class, would constitute 10% or
more of the outstanding securities of that class, the offeror must
immediately (i) issue and file a press release announcing the
acquisition and (ii) file a report of such acquisition with the
applicable securities regulatory authorities within two business
days of the acquisition. Once an offeror has filed such report, the
offeror is required to issue further press releases and file
further reports each time that the offeror, or any person acting
jointly or in concert with the offeror, acquires beneficial
ownership of, or the power to exercise control or direction over,
or securities convertible into, an additional 2% or more of the
outstanding securities of the applicable class and upon a change in
any other material fact set out in previous reports. Certain
institutional investors may elect an alternative monthly reporting
system.
In
Alberta, British Columbia and other Canadian jurisdictions, a
take-over bid is generally defined as an offer to acquire
outstanding voting or equity securities of a class made to any
holder in the jurisdiction of securities subject to the offer to
acquire, if the securities subject to the offer to acquire,
together with securities held by the offeror and any person acting
jointly or in concert with the offeror, constitute in aggregate 20%
or more of the outstanding securities of that class of securities
at the date of the offer to acquire. Subject to limited exemptions,
a take-over bid must generally be made to all holders of securities
of the class that is subject to the bid who are in the jurisdiction
and must allow such security holders 105 days to accept the bid.
Unless exemptions are available, the offeror must deliver to the
security holders a take-over bid circular which describes the terms
of the take-over bid and the directors of the reporting issuer must
deliver a directors’ circular not later than 15 days after the date
of the bid, either making or declining to make a recommendation to
security holders to accept or reject the bid and the reasons for
their making or not making a recommendation. Whilst provincial
securities laws in Canada only regulate offers to residents of the
particular province, the Canadian Securities Administrators have
adopted a policy whereby they may issue a cease trade order against
a company if a take-over bid is not made to all Canadian security
holders. It should be noted that one exemption from the
aforementioned provisions is in the case of a “foreign take-over
bid”. Such an exemption may be available where (among other
criteria): (a) security holders whose last address as shown on the
books of the offeree issuer is in Canada hold less than 10% of the
outstanding securities of the class subject to the bid at the
commencement of the bid; (b) the offeror reasonably believes that
security holders in Canada beneficially own less than 10% of the
outstanding securities of the class subject to the bid at the
commencement of the bid; (c) the published market on which the
greatest volume of trading in securities of that class occurred
during the 12 months immediately preceding the commencement of the
bid was not in Canada; (d) security holders in the local
jurisdiction are entitled to participate in the bid on terms at
least as favourable as the terms that apply to the general body of
security holders of the same class; (e) at the same time as
material relating to the bid is sent by or on behalf of the offeror
to security holders of the class that is subject to the bid, the
material is filed and sent to security holders whose last address
as shown on the books of the offeree issuer is in the local
jurisdiction. For a complete description of the foreign take-over
bid exemption, readers are referenced to Multilateral Instrument
62-104 – Take-over Bids and Issuer Bids, issued by the
Canadian Securities Administrators.
Transfer Agent and Registrar
The
transfer agent and registrar for our common shares is AST Trust
Company (Canada). Our transfer agent’s address is 1 Toronto Street,
Suite 1200, Toronto, Ontario M5C 2VC and its telephone number is
(416) 682-3844.
Our
co-transfer agent is American Stock Transfer & Trust
Company.
Listing
Our
common shares are listed on the NYSE American and the TSX Venture
Exchange under the symbol “ZOM.”
DESCRIPTION OF PREFERRED
SHARES
Our
board of directors is authorized, subject to limitations imposed by
the ABCA and our Articles of Amalgamation, to issue an unlimited
number of preferred shares in one or more series, without
shareholder approval, unless shareholder approval is required by
applicable law or by the rules of a stock exchange or quotation
system on which any series of our preferred shares may be listed or
quoted. Our board is authorized to establish from time to time the
number of shares to be included in each series and to fix the
rights, preferences and privileges of the shares of each wholly
unissued series and any of its qualifications, limitations or
restrictions.
This
prospectus describes certain general terms and provisions of our
preferred shares. When we offer to sell a particular series of
preferred shares, we will describe the specific terms of the
securities in a supplement to this prospectus. The prospectus
supplement will also indicate which terms and provisions described
in this prospectus apply to the particular series of preferred
shares. The terms of the preferred shares will be determined by a
resolution of the directors, following which we shall file Articles
of Amendment with the Corporate Registry of the Province of
Alberta. The series of preferred shares will become effective upon
the issuance by the foregoing Registry of a Certificate of
Amendment. Copies of the Articles and Certificate of Amendment
(which will include a complete description of such share capital
terms), will be posted under our corporate profile on
www.sedar.com.
The
prospectus supplement will describe the terms of any preferred
shares being offered, including:
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the
number of shares and designation or title of the
shares; |
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any
liquidation preference per share; |
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any
redemption, repayment or sinking fund provisions; |
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any
dividend rate or rates and the dates of payment (or the method for
determining the dividend rates or dates of payment); |
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· |
any
restriction on the repurchase or redemption of shares by us while
there is any arrearage in the payment of dividends or sinking fund
installments; |
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if
other than the currency of the United States, the currency or
currencies, including composite currencies, in which the preferred
stock is denominated and/or in which payments will or may be
payable; |
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whether the preferred shares are convertible or
exchangeable and, if so, the securities or rights into which the
preferred shares are convertible or exchangeable, and the terms and
conditions of conversion or exchange; |
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· |
the
place or places where dividends and other payments on the preferred
shares will be payable; and |
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· |
any
additional voting, dividend, liquidation, redemption and other
rights, preferences, privileges, limitations and
restrictions. |
All
preferred shares offered will be fully paid and non-assessable. Any
preferred shares that are issued will have priority over our common
shares with respect to dividend or liquidation rights or both.
The
transfer agent for each series of preferred shares will be
described in the relevant prospectus supplement.
DESCRIPTION OF WARRANTS
We
may issue warrants to purchase our debt or equity securities or
securities of third parties or other rights, including rights to
receive payment in cash or securities based on the value, rate or
price of one or more specified commodities, currencies, securities
or indices, or any combination of the foregoing. Warrants may be
issued independently or together with any other securities and may
be attached to, or separate from, such securities. Each series of
warrants will be issued under a separate warrant agreement to be
entered into between us and a bank, trust company or other
financial institution, as warrant agent, or we may issue warrants
directly to investors. A description of the terms and material
provisions of any warrants we may issue will be set forth in the
applicable prospectus supplement.
The
applicable prospectus supplement will describe the following terms
of any warrants in respect of which this prospectus is being
delivered:
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the
title of such warrants; |
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the
aggregate number of such warrants; |
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the
price or prices at which such warrants will be issued; |
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the
currency or currencies in which the price of such warrants will be
payable; |
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· |
the
securities or other rights, including rights to receive payment in
cash or securities based on the value, rate or price of one or more
specified commodities, currencies, securities or indices, or any
combination of the foregoing, purchasable upon exercise of such
warrants; |
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the
price at which and the currency or currencies in which the
securities or other rights purchasable upon exercise of such
warrants may be purchased; |
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the
date on which the right to exercise such warrants shall commence
and the date on which such right shall expire; |
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if
applicable, the minimum or maximum amount of such warrants which
may be exercised at any one time; |
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provision for changes to or adjustments in the
exercise price of such warrants, if any; |
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if
applicable, the designation and terms of the securities with which
such warrants are issued and the number of such warrants issued
with each such security; |
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if
applicable, the date on and after which such warrants and the
related securities will be separately transferable; |
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information with respect to book-entry
procedures, if any; |
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if
applicable, a discussion of any material United States Federal
income tax or foreign income tax considerations; and |
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any
other terms of such warrants, including terms, procedures and
limitations relating to the exchange and exercise of such
warrants. |
DESCRIPTION OF DEBT
SECURITIES
This
prospectus describes certain general terms and provisions of debt
securities that we may offer. The debt securities may be issued
pursuant to, in the case of senior debt securities, a senior
indenture, and in the case of subordinated debt securities, a
subordinated indenture, in each case in the forms filed as exhibits
to this registration statement, which we refer to as the
“indentures.” The indentures will be entered into between us and a
trustee to be named prior to the issuance of any debt securities,
which we refer to as the “trustee.” The indentures will not limit
the amount of debt securities that can be issued thereunder and
will provide that the debt securities may be issued from time to
time in one or more series pursuant to the terms of one or more
securities resolutions or supplemental indentures creating such
series.
We
have summarized below the material provisions of the indentures and
the debt securities or indicated which material provisions will be
described in the related prospectus supplement for any offering of
debt securities. These descriptions are only summaries, and you
should refer to the relevant indenture for the particular offering
of debt securities itself which will describe completely the terms
and definitions of the offered debt securities and contain
additional information about the debt securities.
All
references in this section, “Description of Debt Securities,” to
“Zomedica,” the “Company”, “we”, “us”, “our”, the “registrant” or
similar words are solely to Zomedica Pharmaceuticals Corp., and not
to its subsidiaries.
Terms
When
we offer to sell a particular series of debt securities, we will
describe the specific terms of the securities in a prospectus
supplement. The prospectus supplement will set forth the following
terms, as applicable, of the debt securities offered thereby:
| |
· |
the
designation, aggregate principal amount, currency or composite
currency and denominations; |
| |
· |
the
price at which such debt securities will be issued and, if an index
formula or other method is used, the method for determining amounts
of principal or interest; |
| |
· |
the
maturity date and other dates, if any, on which principal will be
payable; |
| |
· |
whether or not the debt securities will be
secured or unsecured, and the terms of any secured
debt; |
| |
· |
whether the debt securities rank as senior debt,
senior subordinated debt, subordinated debt or any combination
thereof, and the terms of any subordination; |
| |
· |
the
interest rate (which may be fixed or variable), if any; |
| |
· |
the
date or dates from which interest will accrue and on which interest
will be payable, and the record dates for the payment of
interest; |
| |
· |
the
manner of paying principal and interest; |
| |
· |
the
place or places where principal and interest will be
payable; |
| |
· |
the
terms of any mandatory or optional redemption by us or any third
party including any sinking fund; |
| |
· |
the
terms of any conversion or exchange; |
| |
· |
the
terms of any redemption at the option of holders or put by the
holders; |
| |
· |
any
tax indemnity provisions; |
| |
· |
if
the debt securities provide that payments of principal or interest
may be made in a currency other than that in which debt securities
are denominated, the manner for determining such
payments; |
| |
· |
the
portion of principal payable upon acceleration of a Discounted Debt
Security (as defined below); |
| |
· |
whether and upon what terms debt securities may
be defeased; |
| |
· |
any
events of default or covenants in addition to or in lieu of those
set forth in the indentures; |
| |
· |
provisions for electronic issuance of debt
securities or for debt securities in uncertificated form;
and |
| |
· |
any
additional provisions or other special terms not inconsistent with
the provisions of the indentures, including any terms that may be
required or advisable under United States or other applicable laws
or regulations, or advisable in connection with the marketing of
the debt securities. |
Debt
securities of any series may be issued as registered debt
securities or uncertificated debt securities, in such denominations
as specified in the terms of the series.
Securities may be issued under the indentures as Discounted Debt
Securities to be offered and sold at a substantial discount from
the principal amount thereof. Special United States federal income
tax and other considerations applicable thereto will be described
in the prospectus supplement relating to such Discounted Debt
Securities. “Discounted Debt Security” means a security where the
amount of principal due upon acceleration is less than the stated
principal amount.
We
are not obligated to issue all debt securities of one series at the
same time and, unless otherwise provided in the prospectus
supplement, we may reopen a series, without the consent of the
holders of the debt securities of that series, for the issuance of
additional debt securities of that series. Additional debt
securities of a particular series will have the same terms and
conditions as outstanding debt securities of such series, except
for the date of original issuance and the offering price, and will
be consolidated with, and form a single series with, such
outstanding debt securities.
Ranking
The
senior debt securities will rank equally with all of our other
senior and unsubordinated debt. Our secured debt, if any, will be
effectively senior to the senior debt securities to the extent of
the value of the assets securing such debt. The subordinated debt
securities will be subordinate and junior in right of payment to
all of our present and future senior indebtedness to the extent and
in the manner described in the prospectus supplement and as set
forth in the board resolution, officer’s certificate or
supplemental indenture relating to such offering.
We
have only a stockholder’s claim on the assets of our subsidiaries.
This stockholder’s claim is junior to the claims that creditors of
our subsidiaries have against our subsidiaries. Holders of our debt
securities will be our creditors and not creditors of any of our
subsidiaries. As a result, all the existing and future liabilities
of our subsidiaries, including any claims of their creditors, will
effectively be senior to the debt securities with respect to the
assets of our subsidiaries. In addition, to the extent that we
issue any secured debt, the debt securities will be effectively
subordinated to such secured debt to the extent of the value of the
assets securing such secured debt.
The
debt securities will be obligations exclusively of Zomedica
Pharmaceuticals Corp. To the extent that our ability to service our
debt, including the debt securities, may be dependent upon the
earnings of our subsidiaries, our ability to do so will be
dependent on the ability of our subsidiaries to distribute those
earnings to us as dividends, loans or other payments.
Certain Covenants
Any
covenants that may apply to a particular series of debt securities
will be described in the prospectus supplement relating
thereto.
Successor Obligor
The
indentures provide that, unless otherwise specified in the
securities resolution or supplemental indenture establishing a
series of debt securities, we shall not consolidate with or merge
into, or transfer all or substantially all of our assets to, any
person in any transaction in which we are not the survivor,
unless:
| |
· |
the
person is organized under the laws of the United States or a
jurisdiction within the United States; |
| |
· |
the
person assumes by supplemental indenture all of our obligations
under the relevant indenture, the debt securities and any
coupons; |
| |
· |
immediately after the transaction no Default (as
defined below) exists; and |
| |
· |
we
deliver to the trustee an officers’ certificate and opinion of
counsel stating that the transaction complies with the foregoing
requirements. |
In
such event, the successor will be substituted for us, and
thereafter all of our obligations under the relevant indenture, the
debt securities and any coupons will terminate.
Exchange of Debt Securities
Registered debt securities may be exchanged for an equal aggregate
principal amount of registered debt securities of the same series
and date of maturity in such authorized denominations as may be
requested upon surrender of the registered debt securities at an
agency of the Company maintained for such purpose and upon
fulfillment of all other requirements of such agent.
Default and Remedies
Unless the securities resolution or supplemental indenture
establishing the series otherwise provides (in which event the
prospectus supplement will so state), an “Event of Default” with
respect to a series of debt securities will occur if:
| |
(1) |
we
default in any payment of interest on any debt securities of such
series when the same becomes due and payable and the default
continues for a period of 30 days; |
| |
(2) |
we
default in the payment of the principal and premium, if any, of any
debt securities of such series when the same becomes due and
payable at maturity or upon redemption, acceleration or otherwise
and such default shall continue for five or more days; |
| |
(3) |
we
default in the performance of any of our other agreements
applicable to the series and the default continues for 30 days
after the notice specified below; |
| |
(4) |
a
court of competent jurisdiction enters an order or decree under any
Bankruptcy Law (as defined below) that: |
| |
(A) |
is
for relief against us in an involuntary case, |
| |
(B) |
appoints a Custodian (as defined below) for us or
for all or substantially all of our property, or |
| |
(C) |
orders the liquidation of us, and the order or
decree remains unstayed and in effect for 90 days; |
| |
(5) |
we
pursuant to or within the meaning of any Bankruptcy
Law: |
| |
(A) |
commence a voluntary case, |
| |
(B) |
consent to the entry of an order for relief
against us in an involuntary case, |
| |
(C) |
consent to the appointment of a Custodian for us
or for all or substantially all of our property, or |
| |
(D) |
make
a general assignment for the benefit of our creditors;
or |
| |
(6) |
there
occurs any other Event of Default provided for in such
series. |
The
term “Bankruptcy Law” means the applicable law as prescribed under
the governing indenture, being: (i) in the United States, Title 11
of the United States Code or any similar Federal or State law for
the relief of debtors; or (ii) in Canada, the Bankruptcy and
Insolvency Act (Canada). The term “Custodian” means any
receiver, trustee, assignee, liquidator or a similar official under
any Bankruptcy Law.
“Default” means any event which is, or after notice or passage of
time would be, an Event of Default. A Default under subparagraph
(3) above is not an Event of Default until the trustee or the
holders of at least 25% in principal amount of the series notify us
of the Default and we do not cure the Default within the time
specified after receipt of the notice.
The
trustee may require indemnity satisfactory to it before it enforces
the indentures or the debt securities of the series. Subject to
certain limitations, holders of a majority in principal amount of
the debt securities of the series may direct the trustee in its
exercise of any trust or power with respect to such series. Except
in the case of Default in payment on a series, the trustee may
withhold from securityholders of such series notice of any
continuing Default if the trustee determines that withholding
notice is in the interest of such Securityholders. We are required
to furnish the trustee annually a brief certificate as to our
compliance with all conditions and covenants under the
indentures.
The
indentures do not have cross-default provisions. Thus, a default by
us on any other debt, including any other series of debt
securities, would not constitute an Event of Default.
Amendments and Waivers
The
indentures and the debt securities or any coupons of the series may
be amended, and any Default may be waived as follows:
Unless the securities resolution or supplemental indenture
otherwise provides (in which event the applicable prospectus
supplement will so state), the debt securities and the indentures
may be amended with the consent of the holders of a majority in
principal amount of the debt securities of all series affected
voting as one class. Unless the securities resolution or
supplemental indenture otherwise provides (in which event the
applicable prospectus supplement will so state), a Default other
than a Default in payment on a particular series may be waived with
the consent of the holders of a majority in principal amount of the
debt securities of the series. However, without the consent of each
securityholder affected, no amendment or waiver may:
| |
· |
change the fixed maturity of or the time for
payment of interest on any debt security; |
| |
· |
reduce the principal, premium or interest payable
with respect to any debt security; |
| |
· |
change the place of payment of a debt security or
the currency in which the principal or interest on a debt security
is payable; |
| |
· |
change the provisions for calculating any
redemption or repurchase price with respect to any debt
security; |
| |
· |
reduce the amount of debt securities whose
holders must consent to an amendment or waiver; |
| |
· |
make
any change that materially adversely affects the right to convert
any debt security; |
| |
· |
waive
any Default in payment of principal of or interest on a debt
security; or |
| |
· |
adversely affect any holder’s rights with respect
to redemption or repurchase of a debt security. |
Without the consent of any securityholder, the indentures or the
debt securities may be amended to:
| |
· |
provide for assumption of our obligations to
securityholders in the event of a merger or consolidation requiring
such assumption; |
| |
· |
to
cure any ambiguity, omission, defect or inconsistency; |
| |
· |
to
conform the terms of the debt securities to the description thereof
in the prospectus and prospectus supplement offering such debt
securities; |
| |
· |
to
create a series and establish its terms; |
| |
· |
to
provide for assumption of our obligations to securityholders in the
event of a merger or consolidation requiring such
assumption; |
| |
· |
to
make any change that does not adversely affect the rights of any
securityholder; |
| |
· |
to
add to our covenants; or |
| |
· |
to
make any other change to the indentures so long as no debt
securities are outstanding. |
Conversion Rights
Any
securities resolution or supplemental indenture establishing a
series of debt securities may provide that the debt securities of
such series will be convertible at the option of the holders
thereof into or for our common shares or other equity or debt
instruments. The securities resolution or supplemental indenture
may establish, among other things, (1) the number or amount of
shares of common stock or other equity or debt instruments for
which $1,000 aggregate principal amount of the debt securities of
the series is convertible, as may be adjusted pursuant to the terms
of the relevant indenture and the securities resolution; and (2)
provisions for adjustments to the conversion rate and limitations
upon exercise of the conversion right. The indentures provide that
we will not be required to make an adjustment in the conversion
rate unless the adjustment would require a cumulative change of at
least 1% in the conversion rate. However, we will carry forward any
adjustments that are less than 1% of the conversion rate and take
them into account in any subsequent adjustment of the conversion
rate.
Legal Defeasance and Covenant Defeasance
Debt
securities of a series may be defeased in accordance with their
terms and, unless the securities resolution or supplemental
indenture establishing the terms of the series otherwise provides,
as set forth below. We at any time may terminate as to a series all
of our obligations (except for certain obligations, including
obligations with respect to the defeasance trust and obligations to
register the transfer or exchange of a debt security, to replace
destroyed, lost or stolen debt securities and coupons and to
maintain paying agencies in respect of the debt securities) with
respect to the debt securities of the series and any related
coupons and the relevant indenture, which we refer to as legal
defeasance. We at any time may terminate as to a series our
obligations with respect to any restrictive covenants which may be
applicable to a particular series, which we refer to as covenant
defeasance.
We
may exercise our legal defeasance option notwithstanding our prior
exercise of our covenant defeasance option. If we exercise our
legal defeasance option, a series may not be accelerated because of
an Event of Default. If we exercise our covenant defeasance option,
a series may not be accelerated by reference to any covenant which
may be applicable to a series.
To
exercise either defeasance option as to a series, we must (1)
irrevocably deposit in trust with the trustee (or another trustee)
money or U.S. Government Obligations (as defined below), deliver a
certificate from a nationally recognized firm of independent
accountants expressing their opinion that the payments of principal
and interest when due on the deposited U.S. Government Obligations,
without reinvestment, plus any deposited money without investment
will provide cash at such times and in such amounts as will be
sufficient to pay the principal and interest when due on all debt
securities of such series to maturity or redemption, as the case
may be; and (2) comply with certain other conditions. In
particular, we must obtain an opinion of tax counsel that the
defeasance will not result in recognition of any gain or loss to
holders for federal income tax purposes.
“U.S. Government Obligations” means direct obligations of the
United States or any agency or instrumentality of the United
States, the payment of which is unconditionally guaranteed by the
United States, which, in either case, have the full faith and
credit of the United States pledged for payment and which are not
callable at the issuer’s option, or certificates representing an
ownership interest in such obligations.
Regarding the Trustee
Unless otherwise indicated in a prospectus supplement, the trustee
will also act as depository of funds, transfer agent, paying agent
and conversion agent, as applicable, with respect to the debt
securities. We may remove the trustee as the trustee under a given
indenture with or without cause if we so notify the trustee three
months in advance and if no Default occurs during the three-month
period. The indenture trustee may also provide additional unrelated
services to us as a depository of funds, registrar, trustee and
similar services.
Governing Law
The
indentures and the debt securities will be governed by New York
law, except to the extent that the Trust Indenture Act of 1939 is
applicable.
DESCRIPTION OF SUBSCRIPTION
RIGHTS
We
may issue subscription rights to purchase our common shares,
preferred shares or debt securities. These subscription rights may
be offered independently or together with any other security
offered hereby and may or may not be transferable by the
shareholder receiving the subscription rights in such offering. In
connection with any offering of subscription rights, we may enter
into a standby arrangement with one or more underwriters or other
purchasers pursuant to which the underwriters or other purchasers
may be required to purchase any securities remaining unsubscribed
for after such offering.
The
prospectus supplement relating to any subscription rights we offer,
if any, will, to the extent applicable, include specific terms
relating to the offering, including some or all of the
following:
| |
· |
the
price, if any, for the subscription rights; |
| |
· |
the
exercise price payable for our common shares, preferred shares or
debt securities upon the exercise of the subscription
rights; |
| |
· |
the
number of subscription rights to be issued to each
shareholder; |
| |
· |
the
number and terms of our common shares, preferred shares or debt
securities which may be purchased per each subscription
right; |
| |
· |
the
extent to which the subscription rights are
transferable; |
| |
· |
any
other terms of the subscription rights, including the terms,
procedures and limitations relating to the exchange and exercise of
the subscription rights; |
| |
· |
the
date on which the right to exercise the subscription rights shall
commence, and the date on which the subscription rights shall
expire; |
| |
· |
the
extent to which the subscription rights may include an
over-subscription privilege with respect to unsubscribed securities
or an over-allotment privilege to the extent the securities are
fully subscribed; and |
| |
· |
if
applicable, the material terms of any standby underwriting or
purchase arrangement which may be entered into by us in connection
with the offering of subscription rights. |
DESCRIPTION OF UNITS
We
may issue units comprised of one or more of the other classes of
securities described in this prospectus in any combination. Each
unit will be issued so that the holder of the unit is also the
holder of each security included in the unit. Thus, the holder of a
unit will have the rights and obligations of a holder of each
included security. The units may be issued under unit agreements to
be entered into between us and a unit agent, as detailed in the
prospectus supplement relating to the units being offered. The
prospectus supplement will describe:
| |
· |
the
designation and terms of the units and of the securities comprising
the units, including whether and under what circumstances those
securities may be held or transferred separately; |
| |
· |
any
provisions for the issuance, payment, settlement, transfer or
exchange of the units or of the securities comprising the
units; |
| |
· |
the
terms of the unit agreement governing the units; |
| |
· |
United States federal income tax and/or foreign
income tax considerations relevant to the units; and |
| |
· |
whether the units will be issued in fully
registered global form. |
FORMS OF SECURITIES
Each
debt security and, to the extent applicable, warrant, subscription
right and unit, will be represented either by a certificate issued
in definitive form to a particular investor or by one or more
global securities representing the entire issuance of securities.
Certificated securities in definitive form and global securities
will be issued in registered form. Definitive securities name you
or your nominee as the owner of the security, and in order to
transfer or exchange these securities or to receive payments other
than interest or other interim payments, you or your nominee must
physically deliver the securities to the trustee, registrar, paying
agent or other agent, as applicable. Global securities name a
depositary or its nominee as the owner of the debt securities or
warrants represented by these global securities. The depositary
maintains a computerized system that will reflect each investor’s
beneficial ownership of the securities through an account
maintained by the investor with its broker/dealer, bank, trust
company or other representative, as we explain more fully
below.
Global Securities
Registered Global Securities. We may issue the registered
debt securities and, to the extent applicable, warrants,
subscription rights and units in the form of one or more fully
registered global securities that will be deposited with a
depositary or its nominee identified in the applicable prospectus
supplement and registered in the name of that depositary or
nominee. In those cases, one or more registered global securities
will be issued in a denomination or aggregate denominations equal
to the portion of the aggregate principal or face amount of the
securities to be represented by registered global securities.
Unless and until it is exchanged in whole for securities in
definitive registered form, a registered global security may not be
transferred except as a whole by and among the depositary for the
registered global security, the nominees of the depositary or any
successors of the depositary or those nominees.
If
not described below, any specific terms of the depositary
arrangement with respect to any securities to be represented by a
registered global security will be described in the prospectus
supplement relating to those securities. We anticipate that the
following provisions will apply to all depositary arrangements.
Ownership of beneficial interests in a registered global security
will be limited to persons, called participants, that have accounts
with the depositary or persons that may hold interests through
participants. Upon the issuance of a registered global security,
the depositary will credit, on its book-entry registration and
transfer system, the participants’ accounts with the respective
principal or face amounts of the securities beneficially owned by
the participants. Any dealers, underwriters or agents participating
in the distribution of the securities will designate the accounts
to be credited. Ownership of beneficial interests in a registered
global security will be shown on, and the transfer of ownership
interests will be effected only through, records maintained by the
depositary, with respect to interests of participants, and on the
records of participants, with respect to interests of persons
holding through participants. The laws of some states may require
that some purchasers of securities take physical delivery of these
securities in definitive form. These laws may impair your ability
to own, transfer or pledge beneficial interests in registered
global securities.
So
long as the depositary, or its nominee, is the registered owner of
a registered global security, that depositary or its nominee, as
the case may be, will be considered the sole owner or holder of the
securities represented by the registered global security for all
purposes under the applicable indenture or warrant agreement.
Except as described below, owners of beneficial interests in a
registered global security will not be entitled to have the
securities represented by the registered global security registered
in their names, will not receive or be entitled to receive physical
delivery of the securities in definitive form and will not be
considered the owners or holders of the securities under the
applicable indenture or warrant agreement. Accordingly, each person
owning a beneficial interest in a registered global security must
rely on the procedures of the depositary for that registered global
security and, if that person is not a participant, on the
procedures of the participant through which the person owns its
interest, to exercise any rights of a holder under the applicable
indenture or warrant agreement. We understand that under existing
industry practices, if we request any action of holders or if an
owner of a beneficial interest in a registered global security
desires to give or take any action that a holder is entitled to
give or take under the applicable indenture or warrant agreement,
the depositary for the registered global security would authorize
the participants holding the relevant beneficial interests to give
or take that action, and the participants would authorize
beneficial owners owning through them to give or take that action
or would otherwise act upon the instructions of beneficial owners
holding through them.
Principal, premium, if any, and interest payments on debt
securities and any payments to holders with respect to warrants
represented by a registered global security registered in the name
of a depositary or its nominee will be made to the depositary or
its nominee, as the case may be, as the registered owner of the
registered global security. None of Zomedica, the trustees, the
warrant agents or any other agent of Zomedica, agent of the
trustees or agent of the warrant agents will have any
responsibility or liability for any aspect of the records relating
to payments made on account of beneficial ownership interests in
the registered global security or for maintaining, supervising or
reviewing any records relating to those beneficial ownership
interests.
We
expect that the depositary for any of the securities represented by
a registered global security, upon receipt of any payment of
principal, premium, interest or other distribution of underlying
securities or other property to holders on that registered global
security, will immediately credit participants’ accounts in amounts
proportionate to their respective beneficial interests in that
registered global security as shown on the records of the
depositary. We also expect that payments by participants to owners
of beneficial interests in a registered global security held
through participants will be governed by standing customer
instructions and customary practices, as is now the case with the
securities held for the accounts of customers in bearer form or
registered in “street name,” and will be the responsibility of
those participants.
If
the depositary for any of these securities represented by a
registered global security is at any time unwilling or unable to
continue as depositary or ceases to be a clearing agency registered
under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and a successor depositary registered as a
clearing agency under the Exchange Act is not appointed by us
within 90 days, we will issue securities in definitive form in
exchange for the registered global security that had been held by
the depositary. Any securities issued in definitive form in
exchange for a registered global security will be registered in the
name or names that the depositary gives to the relevant trustee or
warrant agent or other relevant agent of ours or theirs. It is
expected that the depositary’s instructions will be based upon
directions received by the depositary from participants with
respect to ownership of beneficial interests in the registered
global security that had been held by the depositary.
PLAN OF DISTRIBUTION
We
may sell the securities being offered hereby in the following
manner or any manner specified in a prospectus supplement:
| |
· |
directly to purchasers; |
| |
· |
through underwriters; and |
The prospectus supplement will set forth the terms of the offering
of such securities, including:
| |
· |
the
name or names of any underwriters, dealers or agents and the
amounts of securities underwritten or purchased by each of
them; |
| |
· |
the
initial public offering price of the securities and the proceeds to
us and any discounts, commissions or concessions allowed or
reallowed or paid to dealers; and |
| |
· |
any
securities exchanges on which the securities may be
listed. |
We
may directly solicit offers to purchase securities, or agents may
be designated to solicit such offers. We will, in the prospectus
supplement relating to such offering, name any agent that could be
viewed as an underwriter under the Securities Act, and describe any
commissions that we must pay. Any such agent will be acting on a
best efforts basis for the period of its appointment or, if
indicated in the applicable prospectus supplement, on a firm
commitment basis. Agents, dealers and underwriters may be customers
of, engage in transactions with, or perform services for us in the
ordinary course of business.
If
any underwriters or agents are utilized in the sale of the
securities in respect of which this prospectus is delivered, we
will enter into an underwriting agreement or other agreement with
them at the time of sale to them, and we will set forth in the
prospectus supplement relating to such offering the names of the
underwriters or agents and the terms of the related agreement with
them.
If a
dealer is utilized in the sale of the securities in respect of
which the prospectus is delivered, we will sell such securities to
the dealer, as principal. The dealer may then resell such
securities to the public at varying prices to be determined by such
dealer at the time of resale.
Remarketing firms, agents, underwriters and dealers may be entitled
under agreements which they may enter into with us to
indemnification by us against certain civil liabilities, including
liabilities under the Securities Act, and may be customers of,
engage in transactions with or perform services for us in the
ordinary course of business.
In
order to facilitate the offering of the securities, any
underwriters may engage in transactions that stabilize, maintain or
otherwise affect the price of the securities or any other
securities the prices of which may be used to determine payments on
such securities. Specifically, any underwriters may overallot in
connection with the offering, creating a short position for their
own accounts. In addition, to cover overallotments or to stabilize
the price of the securities or of any such other securities, the
underwriters may bid for, and purchase, the securities or any such
other securities in the open market. Any of these activities may
stabilize or maintain the market price of the securities above
independent market levels. Any such underwriters are not required
to engage in these activities and may end any of these activities
at any time.
Any
underwriter, agent or dealer utilized in the initial offering of
any securities issued hereunder will not confirm sales to accounts
over which it exercises discretionary authority without the prior
specific written approval of its customer.
CERTAIN U.S. AND CANADIAN FEDERAL
INCOME TAX CONSIDERATIONS
Information regarding material Canadian and U.S. federal income tax
consequences to persons investing in the Securities offered by this
Prospectus will be set forth in an applicable Prospectus
Supplement. You are urged to consult your own tax advisors prior to
any acquisition of our Securities.
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus supplement,
the validity of any common shares or preferred shares offered
hereby will be passed upon for us by Tingle Merrett LLP, Calgary,
Alberta, Canada. Partners and associates of Tingle Merrett LLP own
or exert control or direction over an aggregate of 1,300,000 common
shares. Unless otherwise indicated in the applicable prospectus
supplement, the validity of the other securities offered hereby
will be passed upon for us by Lowenstein Sandler LLP, New York, New
York. Lowenstein Sandler LLP owns 43,613 common shares.
EXPERTS
The
consolidated financial statements incorporated in this prospectus
by reference from our Annual Report on Form 10-K have been audited
by MNP LLP, an independent registered public accounting firm, as
stated in their report which is incorporated herein by reference.
Such consolidated financial statements have been incorporated
herein by reference in reliance on the report of such firm, given
upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE
INFORMATION
We
file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read or obtain a copy of
these reports at the SEC’s public reference room at 100 F Street,
N.E., Washington, D.C. 20549, on official business days during the
hours of 10:00 am to 3:00 pm. You may obtain information on the
operation of the public reference room and its copy charges by
calling the SEC at 1-800-SEC-0330. The SEC maintains a website, at
http://www.sec.gov, that contains registration statements,
reports, proxy information statements and other information
regarding registrants that file electronically with the SEC,
including us. Our website address is
http://www.zomedica.com. We have not incorporated by
reference into this prospectus the information on our website, and
you should not consider it to be a part of this document.
The
SEC allows us to “incorporate by reference” information that we
file with it into this prospectus, which means that we can disclose
important information to you by referring you to those documents.
The information incorporated by reference is an important part of
this prospectus. The information incorporated by reference is
considered to be a part of this prospectus, and information that we
file later with the SEC will automatically update and supersede
information contained in this prospectus and any accompanying
prospectus supplement.
We
incorporate by reference the documents listed below that we have
previously filed with the SEC, each of which has Exchange Act File
No. 000-38298 unless otherwise noted:
| · |
our Annual Report on Form 10-K for the fiscal
year ended December 31, 2017, filed with the SEC on February 28,
2018; |
| · |
our Quarterly Reports on Form 10-Q for the
quarters ended March 31, 2018, June 30, 2018 and September 30,
2018, which were filed with the SEC on May 15, 2018, August 9, 2018
and November 13, 2018, respectively; |
| · |
our definitive Proxy Statement on Schedule 14A
filed with the SEC on July 5, 2018; |
| · |
our Current Reports on Form 8-K filed with the
SEC on May 10, 2018, May 15, 2018 (excluding materials furnished
under Item 2.02 and the related exhibit), June 15, 2018, June 19,
2018, June 29, 2018, August 15, 2018, November 28, 2018, and
December 20, 2018; and |
| · |
the description of our common shares as set forth
in our Registration Statement on Form 8-A filed with the SEC on
November 15, 2017, including any amendments thereto or reports
filed for the purposes of updating this description. |
All
reports and other documents that we file with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this prospectus but prior to the termination of the
offering of the securities hereunder will also be considered to be
incorporated by reference into this prospectus from the date of the
filing of these reports and documents, and will supersede the
information herein; provided, however, that all reports,
exhibits and other information that we “furnish” to the SEC will
not be considered incorporated by reference into this prospectus.
Any statement contained in a document incorporated by reference in
this prospectus or any prospectus supplement shall be deemed to be
modified or superseded to the extent that a statement contained
herein, therein or in any other subsequently filed document that
also is incorporated by reference herein or therein modifies or
supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus or any prospectus
supplement.
We
will provide you without charge, upon your oral or written request,
with a copy of any or all reports, proxy statements and other
documents we file with the SEC, as well as any or all of the
documents incorporated by reference in this prospectus or the
registration statement (other than exhibits to such documents
unless such exhibits are specifically incorporated by reference
into such documents). Requests for such copies should be directed
to:
Zomedica Pharmaceuticals Corp.
100
Phoenix Drive, Suite 190
Ann
Arbor, Michigan 48108
(734)
369-2555
91,315,790 Common
Shares
PROSPECTUS
SUPPLEMENT
H.C. Wainwright &
Co.
February 8, 2021
