P. Peter Pascali, President and Chief Executive Officer of
PyroGenesis Canada Inc. (“
PyroGenesis”), has filed
an updated early warning report with respect to his shareholdings
in PyroGenesis in connection with Mr. Pascali’s acquiring 2,000
convertible debenture units of PyroGenesis (the
“
Convertible Debenture
Units”) at a price of $1,000.00 per Convertible
Debenture Unit (the “
Transaction”) under a
brokered private placement of PyroGenesis that closed on July 21,
2023 (the “
Closing Date”). Each
Convertible Debenture Unit is comprised of $1,000.00 principal
amount of 10.0% unsecured convertible debentures (each, a
“
Convertible Debenture”) and
1,000 warrants (each, a “
Convertible
Debenture Unit
Warrant”) to purchase common shares of PyroGenesis
(“
Common Shares”).
The Convertible Debentures are governed by the
terms of a convertible debenture indenture dated the Closing Date
(the “Convertible Debenture Indenture”). The
principal amount of each Convertible Debenture is convertible into
Common Shares (the “Convertible
Debenture Shares”) at the option
of the holder, at a conversion price of $1.005 per Convertible
Debenture Shares (the “Conversion Ratio”), subject
to the terms and conditions of, and certain adjustments in certain
circumstances as provided for in the Convertible Debenture
Indenture. Each Convertible Debenture Unit Warrant entitles the
holder thereof to purchase one Common Share (each, a
“Convertible Debenture Unit Warrant Share”) for a
period of 24 months after the Closing Date at a price of $1.25 per
Convertible Debenture Unit Warrant Share.
The 2,000 Convertible Debenture Units acquired
by Mr. Pascali are comprised of $2,000,000 Convertible Debentures
and 2,000,000 Convertible Debenture Unit Warrants. The $2,000,000
Convertible Debentures are convertible, based on the Conversion
Ratio, into 1,990,049 common shares in the share capital of
PyroGenesis (“Common
Shares”).
Mr. Pascali, as of the Closing Date and prior to
completion of the Transaction, (i) beneficially owned and
controlled 66,642,941 Common Shares (representing 37.26% of the
issued and outstanding Common Shares), (ii) controlled 5,636,000
Common Shares beneficially owned by 8339856 Canada Inc. (the
“Holdco”) (representing 3.15% of the issued and
outstanding Common Shares), (iii) controlled 3,818,957 Common
Shares beneficially owned by Fiducie de Crédit Mellon Trust (the
“Trust”) (representing 2.13% of the issued and
outstanding Common Shares), and (iv) controlled 4,000,000 Common
Shares beneficially owned by The 2% Solution Foundation (the
“Foundation”) (representing 2.24% of the issued
and outstanding Common Shares). This represents, in aggregate (the
“Total Ownership”), 80,097,898 Common Shares, or
44.78% of the issued and outstanding Common Shares.
In addition, Mr. Pascali as of the Closing Date
and prior to completion of the Transaction (i) beneficially owned
and controlled options issued under PyroGenesis’ share-based
compensation plans (which include PyroGenesis’ Option Plan and the
PyroGenesis’ Long Term Incentive Plan) to acquire 4,270,000 Common
Shares at a weighted average price of $3.75 per share (of which
3,970,000 are currently vested (the “Vested
Options”) and 300,000 are unvested and will vest in
accordance with the plans (the “Unvested
Options”)), and (ii) beneficially owned and controlled
2,500,000 warrants to acquire 2,500,000 Common Shares
(“Pre-Closing Warrants”).
Assuming the exercise of all the Vested Options
and of all the Pre-Closing Warrants, an aggregate of 3,970,000 and
2,500,000 Common Shares would be issued, respectively, and the
Total Ownership would increase to 84,067,898 Common Shares, or
45.98% of the issued and outstanding Common Shares (based on the
number of Common Shares issued and outstanding as of the Closing
Date and after giving effect to the issuance of the 3,970,000 and
2,500,000 Common Shares issuable under such options and warrants,
respectively). Of such Total Ownership of 84,067,898 Common Shares,
(i) 70,612,941 Common Shares would be beneficially owned and
controlled by Mr. Pascali, (ii) 5,636,000 Common Shares would be
controlled by Mr. Pascali and beneficially owned by the Holdco,
(iii) 3,818,957 Common Shares would be controlled by Mr. Pascali
and beneficially owned by the Trust, and (iv) 4,000,000 Common
Shares would be controlled by Mr. Pascali and beneficially owned by
the Foundation.
Assuming the exercise or conversion, as
applicable, of the Vested Options, the Pre-Closing Warrants, the
Convertible Debentures and the Convertible Debenture Unit Warrants,
an aggregate of 3,970,000, 2,500,000, 1,990,049 and 2,000,000
Common Shares would be issued, respectively, and the Total
Ownership would increase to 90,557,947 Common Shares, or 47.83% of
the issued and outstanding Common Shares (based on the number of
Common Shares issued and outstanding as of the Closing Date and
after giving effect to the issuance of the Common Shares underlying
the Vested Options, the Pre-Closing Warrants, the Convertible
Debentures and the Convertible Debenture Unit Warrants). Of such
Total Ownership of 90,557,947 Common Shares, (i) 77,102,990 Common
Shares would be beneficially owned and controlled by Mr. Pascali,
(ii) 5,636,000 Common Shares would be controlled by Mr. Pascali and
beneficially owned by the Holdco, (iii) 3,818,957 Common Shares
would be controlled by Mr. Pascali and beneficially owned by the
Trust, and (iv) 4,000,000 Common Shares would be controlled by Mr.
Pascali and beneficially owned by the Foundation.
Assuming the exercise of the Vested Options, the
Unvested Options, the Pre-Closing Warrants, the Convertible
Debentures and the Convertible Debenture Unit Warrants, an
aggregate of 3,970,000, 300,000 2,500,000, 1,990,049 and 2,000,000
Common Shares would be issued, respectively, and the Total
Ownership would increase to 90,857,947 Common Shares, or 47.91% of
the issued and outstanding Common Shares (based on the number of
Common Shares issued and outstanding as of the Closing Date and
after giving effect to the issuance of the Common Shares underlying
the Vested Options, the Unvested Options, the Pre-Closing Warrants,
the Convertible Debentures and the Convertible Debenture Unit
Warrants). Of such Total Ownership of 90,857,947 Common Shares, (i)
77,402,990 Common Shares would be beneficially owned and controlled
by Mr. Pascali, (ii) 5,636,000 Common Shares would be controlled by
Mr. Pascali and beneficially owned by the Holdco, (iii) 3,818,957
Common Shares would be controlled by Mr. Pascali and beneficially
owned by the Trust, and (iv) 4,000,000 Common Shares would be
controlled by Mr. Pascali and beneficially owned by the
Foundation.
The Trust, the Holdco and the Foundation may be
considered to be joint actors with Mr. Pascali. Mr. Pascali is a
(i) trustee, executive officer and beneficiary of the Trust, (ii)
director, executive officer and the sole shareholder of the Holdco,
and (iii) director of the Foundation.
Mr. Pascali and any joint actor may, from time
to time, acquire or dispose of ownership or control or direction
over some or all of the securities of PyroGenesis depending on a
number of factors.
For further information, including regarding the early
warning report, including a copy of same (which is available under
PyroGenesis’ SEDAR profile at www.sedar.com), please
contact:
P. Peter Pascali, President and Chief Executive Officer of
PyroGenesis, at 514-937-0002. The address of the head office of
PyroGenesis is 1744 William Street, Suite 200, Montreal, Quebec,
H3J 1R4.
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