TIDMMXC
RNS Number : 7346E
MGC Pharmaceuticals Limited
09 July 2021
MGC Pharmaceuticals Ltd.
Notice of Meeting
09 July 2021
ASX, LSE: MXC
MGC Pharmaceuticals Ltd (ASX, LSE: MXC, 'MGC Pharma' or 'the
Company') is pleased to provide a copy of its Notice of Meeting to
convene a shareholder meeting at 4:00pm AWST on Thursday the 12(th)
of August 2021 at 1202 Hay Street, West Perth, WA 6005.
The purpose of the meeting is to seek shareholder approval for
the issue of the following securities in the Company:
-- Share Consideration in relation to the acquisition of MediCaNL Inc in April 2021.
-- Performance Rights to Related Parties as part of the Company's Incentive Plan.
-- Ratification of the issue of Shares to Cannvalate Pty Ltd in
accordance with the terms of a Service Agreement.
--Ends--
Authorised for release by the Chair, for further information
please contact:
MGC Pharmaceuticals UK PR Advisors - Tavistock
Ltd Tim Pearson
Roby Zomer +44 207 920 3150
CEO & Managing Director Tim.Pearson@tavistock.co.uk
+61 8 6382 3390
info@mgcpharma.com.au
UK Broker - Turner Pope Australian IR Advisors - Media
Andy Thacker & Capital Partners
+44 203 657 0050 Rod Hinchcliffe
info@turnerpope.com +61 412 277 377
Rod.Hinchcliffe@mcpartners.com.au
About MGC Pharma
MGC Pharmaceuticals Ltd (LSE: MXC, ASX: MXC) is a European based
bio-pharma company developing and supplying affordable standardised
phytocannabinoid derived medicines to patients globally. The
Company's founders were key figures in the global medical cannabis
industry and the core business strategy is to develop and supply
high quality phytocannabinoid derived medicines for the growing
demand in the medical markets in Europe, North America and
Australasia. MGC Pharma has a robust product offering targeting two
widespread medical conditions - epilepsy and dementia - and has
further products in the development pipeline.
Employing its 'Nature to Medicine' strategy, MGC Pharma has
partnered with renowned institutions and academia to optimise
cultivation and the development of targeted phytocannabinoid
derived medicines products prior to production in the Company's
EU-GMP Certified manufacturing facility.
MGC Pharma has a number of research collaborations with world
renowned academic institutions, and including recent research
highlighting the positive impact of using specific phytocannabinoid
formulations developed by MGC Pharma in the treatment of
glioblastoma, the most aggressive and so far therapeutically
resistant primary brain tumour.
MGC Pharma has a growing patient base in Australia, the UK,
Brazil and Ireland and has a global distribution footprint via an
extensive network of commercial partners meaning that it is poised
to supply the global market.
Follow us through our social media channels
Twitter: @MGC_Pharma
Facebook: @mgcpharmaceuticals
LinkedIn: MGC Pharmaceuticals Ltd.
Instagram: @mgc_pharma
9 July 2021
LETTER TO SHAREHOLDERS - UPCOMING GENERAL MEETING
Dear Shareholder,
MGC Pharmaceuticals Ltd (Company) is convening a General Meeting
of shareholders on Thursday 12 August 2021 at 4:00pm (AWST) at 1202
Hay Street, West Perth, WA 6005.
In accordance with the Australian Securities and Investments
Commission's 'no action' position announced on 29 March 2021 via
Media Release 21-061, the Company will not be dispatching physical
copies of the Notice of General Meeting, accompanying Explanatory
Statement and Schedules (Notice of General Meeting) to
shareholders.
A copy of the Company's Notice of General Meeting released to
the ASX on Friday, 9 July 2021 is available to view on the
Company's Website at
https://mgcpharma.com.au/investor-centre/asx-announcements/
The Company plans to conduct a physical meeting on Thursday 12
August 2021, at 1202 Hay Street West Perth, WA 6005, at 4:00pm
(AWST) and will also provide a Webinar Facility for Shareholders to
view the meeting should you be unable to attend the meeting in
person. Details of the Webinar, including detailed instructions on
how to access the webinar will be made available to Shareholders on
the Company's Website at
https://mgcpharma.com.au/investor-centre/asx-announcements/ as well
as being released onto the ASX's Announcement Platform prior to the
meeting. The Webinar information once released on the ASX's
Announcement Platform will be available to view by navigating to
the ASX's Announcement Search function found at the following URL:
https://www.asx.com.au/asx/v2/statistics/announcements.do and
entering the Company's ASX Code "MXC" in the "Search by ASX Code"
field to search for the Company's ASX Announcements.
The directors still strongly encourage all shareholders to lodge
a directed proxy form prior to the meeting. If you have nominated
an email address and have elected to receive electronic
communications from the Company, you will also receive an email to
your nominated email address with a link to an electronic copy of
the important meeting documents.
If you have not elected to receive notices by email, a copy of
your personalised proxy form is enclosed for your convenience.
Proxy votes can be lodged with the Company's Share Registry,
Computershare Investor Services Pty Ltd online by using the
following options:
Online At www.investorvote.com.au
By mail Share Registry - Computershare Investor Services Pty
Limited, GPO Box
242, Melbourne Victoria 3001, Australia
By fax 1800 783 447 (within Australia)
+61 3 9473 2555 (outside Australia)
By mobile Scan the QR code on your proxy form and follow the prompts
Custodian Voting For Intermediary Online subscribers only (custodians) please visit www.intermediaryonline.com to submit your voting intentions
Your sincerely,
David Lim
Company Secretary
MGC Pharmaceuticals Ltd
ACn 116 800 269
NOTICE OF GENERAL MEETING
Notice is given that the Meeting will be held at:
TIME : 4:00pm (AWST)
DATE : Thursday, 12 August 2021
PLACE : 1202 Hay Street
WEST PERTH WA 6005
and via Video Conference
The business of the Meeting affects your shareholding and your
vote is important.
This Notice of Meeting should be read in its entirety. If Shareholders
are in doubt as to how they should vote, they should seek advice
from their professional advisers prior to voting.
The Directors have determined pursuant to Regulation 7.11.37
of the Corporations Regulations 2001 (Cth) that the persons
eligible to vote at the Meeting are those who are registered
Shareholders at 5:00pm (WST) on Tuesday, 10 August 2021.
business of the meeting
AGA
Resolution 1 - Ratification of prior issue of Shares - part
consideration for the acquisition of medicanl
To consider and, if thought fit, to pass, with or without
amendment, the following resolution as an ordinary resolution:
"That, for the purposes of ASX Listing Rule 7.4 and for all
other purposes, Shareholders ratify the issue of 26,884,731 Shares
on the terms and conditions set out in the Explanatory
Statement."
A voting exclusion statement applies to this Resolution. Please
see below.
Resolution 2 - APPROvAL TO ISSUE deferred CONSIDERATION shares
for acquisition of medicanl
To consider and, if thought fit, to pass, with or without
amendment, the following resolution as an ordinary resolution:
"That, for the purposes of Listing Rule 7.1 and for all other
purposes, approval is given for the Company to issue 17,923,153
Shares, on the terms and conditions set out in the Explanatory
Statement."
A voting exclusion statement applies to this Resolution. Please
see below.
Resolution 3 - Issue of PERFORMANCE RIGHTS to Roby Zomer
To consider and, if thought fit, to pass, the following
resolution as an ordinary resolution:
"That, for the purposes of section 195(4) and section 208 of the
Corporations Act, Listing Rule 10.14 and for all other purposes,
approval is given for the Company to issue up to 27,400,000
Performance Rights to Roby Zomer (or his nominee/s) under the
Incentive Plan on the terms and conditions set out in the
Explanatory Statement."
A voting exclusion statement and voting prohibition statement
applies to this Resolution. Please see below.
Resolution 4 - Issue of Performance Rights to Brett Mitchell
To consider and, if thought fit, to pass, the following
resolution as an ordinary resolution:
"That, for the purposes of section 195(4) and section 208 of the
Corporations Act, Listing Rule 10.14 and for all other purposes,
approval is given for the Company to issue up to 27,400,000
Performance Rights to Brett Mitchell (or his nominee/s) under the
Incentive Plan on the terms and conditions set out in the
Explanatory Statement."
A voting exclusion statement and voting prohibition statement
applies to this Resolution. Please see below.
Resolution 5 - Issue of Performance Rights to Nativ Segev
To consider and, if thought fit, to pass, the following
resolution as an ordinary resolution:
"That, for the purposes of section 195(4) and section 208 of the
Corporations Act, Listing Rule 10.14 and for all other purposes,
approval is given for the Company to issue up to 2,100,000
Performance Rights to Nativ Segev (or his nominee/s) under the
Incentive Plan on the terms and conditions set out in the
Explanatory Statement."
A voting exclusion statement and voting prohibition statement
applies to this Resolution. Please see below.
Resolution 6 - Issue of Performance Rights to Stephen Parker
To consider and, if thought fit, to pass, the following
resolution as an ordinary resolution:
"That, for the purposes of section 195(4) and section 208 of the
Corporations Act, Listing Rule 10.14 and for all other purposes,
approval is given for the Company to issue up to 2,600,000
Performance Rights to Stephen Parker (or his nominee/s) under the
Incentive Plan on the terms and conditions set out in the
Explanatory Statement."
A voting exclusion statement and voting prohibition statement
applies to this Resolution. Please see below.
Resolution 7 - Issue of Performance Rights to Ross Walker
To consider and, if thought fit, to pass, the following
resolution as an ordinary resolution:
"That, for the purposes of section 195(4) and section 208 of the
Corporations Act, Listing Rule 10.14 and for all other purposes,
approval is given for the Company to issue up to 2,100,000
Performance Rights to Ross Walker (or his nominee/s) under the
Incentive Plan on the terms and conditions set out in the
Explanatory Statement."
A voting exclusion statement and voting prohibition statement
applies to this Resolution. Please see below.
Resolution 8 - Issue of Performance Rights to Evan Hayes
To consider and, if thought fit, to pass, the following
resolution as an ordinary resolution:
"That, for the purposes of section 195(4) and section 208 of the
Corporations Act, Listing Rule 10.14 and for all other purposes,
approval is given for the Company to issue up to 2,600,000
Performance Rights to Evan Hayes (or his nominee/s) under the
Incentive Plan on the terms and conditions set out in the
Explanatory Statement."
A voting exclusion statement and voting prohibition statement
applies to this Resolution. Please see below.
Resolution 9 - Ratification of prior issue of Shares to
cannvalate Pty Ltd
To consider and, if thought fit, to pass, with or without
amendment, the following resolution as an ordinary resolution:
"That, for the purposes of ASX Listing Rule 7.4 and for all
other purposes, Shareholders ratify the issue of 8,804,103 Shares
on the terms and conditions set out in the Explanatory
Statement."
A voting exclusion statement applies to this Resolution. Please
see below.
Dated: 7 July 2021
By order of the Board
David Lim
Company Secretary
Voting Exclusion Statements
In accordance with Listing Rule 14.11, the Company will
disregard any votes cast in favour of the resolution set out below
by or on behalf of the following persons:
Resolution 1 - Ratification A person who participated in the issue
of Prior Issue of Shares (namely, each of the Sellers) or any
- Part Consideration for associates of those persons.
the Acquisition of MediCaNL
Resolution 2 - Approval A person who is expected to participate
to issue Deferred Consideration in, or who will obtain a material benefit
Shares for Acquisition as a result of, the proposed issue
of MediCaNL (except a benefit solely by reason
of being a holder of ordinary securities
in the Company) (namely, each of the
Sellers) or an associate of that person
(or those persons).
-------------------------------------------
Resolutions 3 to 8 - Issue Any person referred to in Listing Rule
of Performance Rights 10.14.1, 10.14.2 or 10.14.3 who is
to Related Parties eligible to participate in the employee
incentive scheme in question (including
the Related Parties) or an associate
of that person or those persons.
-------------------------------------------
Resolution 9 - Ratification A person who participated in the issue
of Prior Issue of Shares (namely, Cannvalate) or any associates
to Cannvalate of those persons.
-------------------------------------------
However, this does not apply to a vote cast in favour of the
Resolution by:
(a) a person as a proxy or attorney for a person who is entitled
to vote on the Resolution, in accordance with the directions given
to the proxy or attorney to vote on the Resolution in that way;
or
(b) the Chair as proxy or attorney for a person who is entitled
to vote on the Resolution, in accordance with a direction given to
the Chair to vote on the Resolution as the Chair decides; or
(c) a holder acting solely in a nominee, trustee, custodial or
other fiduciary capacity on behalf of a beneficiary provided the
following conditions are met:
(i) the beneficiary provides written confirmation to the holder
that the beneficiary is not excluded from voting, and is not an
associate of a person excluded from voting, on the resolution;
and
(ii) the holder votes on the resolution in accordance with
directions given by the beneficiary to the holder to vote in that
way.
Voting Prohibition Statements
Resolutions 3 to 8 - In accordance with section 224 of the
Issue of Performance Corporations Act, a vote on this Resolution
Rights to Related Parties must not be cast (in any capacity) by
or on behalf of a related party of the
Company to whom the Resolution would
permit a financial benefit to be given,
or an associate of such a related party
(Excluded Party). However, the above
prohibition does not apply if the vote
is cast by a person as proxy appointed
by writing that specifies how the proxy
is to vote on the Resolution and it
is not cast on behalf of an Excluded
Party.
In accordance with section 250BD of
the Corporations Act, a person appointed
as a proxy must not vote, on the basis
of that appointment, on this Resolution
if:
(a) the proxy is either:
(i) a member of the Key Management Personnel;
or
(ii) a Closely Related Party of such
a member; and
(b) the appointment does not specify
the way the proxy is to vote on this
Resolution.
Provided the Chair is not an Excluded
Party, the above prohibition does not
apply if:
(a) the proxy is the Chair; and
(b) the appointment expressly authorises
the Chair to exercise the proxy even
though this Resolution is connected
directly or indirectly with remuneration
of a member of the Key Management Personnel.
Voting by proxy
To vote by proxy, please complete and sign the enclosed Proxy
Form and return by the time and in accordance with the instructions
set out on the Proxy Form.
In accordance with section 249L of the Corporations Act,
Shareholders are advised that:
-- each Shareholder has a right to appoint a proxy;
-- the proxy need not be a Shareholder of the Company; and
-- a Shareholder who is entitled to cast two (2) or more votes
may appoint two (2) proxies and may specify the proportion or
number of votes each proxy is appointed to exercise. If the member
appoints two (2) proxies and the appointment does not specify the
proportion or number of the member's votes, then in accordance with
section 249X(3) of the Corporations Act, each proxy may exercise
one-half of the votes.
Shareholders and their proxies should be aware that:
-- if proxy holders vote, they must cast all directed proxies as directed; and
-- any directed proxies which are not voted will automatically
default to the Chair, who must vote the proxies as directed.
Voting in person
To vote in person, attend the Meeting at the time, date and
place set out above.
Depositary Interest holders
Persons Entitled to Vote
The Form of Instruction (accompanying this Notice of Meeting)
must be signed by the depositary interest holder or an attorney
duly authorised in writing and deposited at the office of the
Depositary, Computershare Investor Services PLC, located at The
Pavilions, Bridgewater Road, Bristol BS99 6ZY by 4.00 pm GMT on
Thursday, 5 August 2021. Any Form of Instruction received after
that time will not be valid for the Meeting.
CREST Voting
Holders of Depositary Interests in CREST may transmit voting
instructions by utilising the CREST voting service in accordance
with the procedures described in the CREST Manual. CREST personal
members or other CREST sponsored members, and those CREST members
who have appointed a voting service provider, should refer to their
CREST sponsor or voting service provider, who will be able to take
appropriate action on their behalf.
In order for instructions made using the CREST voting service to
be valid, the appropriate CREST message (a "CREST Voting
Instruction") must be properly authenticated in accordance with
Euroclear's specifications and must contain the information
required for such instructions, as described in the CREST Manual
(available via www.euroclear.com ).
To be effective, the CREST Voting Instruction must be
transmitted so as to be received by the Company's agent (3RA50) no
later than 4.00 p.m. (GMT) on Thursday, 5 August 2021.
For this purpose, the time of receipt will be taken to be the
time (as determined by the timestamp applied to the CREST Voting
Instruction by the CREST applications host) from which the
Company's agent is able to retrieve the CREST Voting Instruction by
enquiry to CREST in the manner prescribed by CREST. Holders of
Depositary Interests in CREST and, where applicable, their CREST
sponsors or voting service providers should note that Euroclear
does not make available special procedures in CREST for any
particular messages. Normal system timings and limitations will
therefore apply in relation to the transmission of CREST Voting
Instructions. It is the responsibility of the Depositary Interest
holder concerned to take (or, if the Depositary Interest holder is
a CREST personal member or sponsored member or has appointed a
voting service provider, to procure that the CREST sponsor or
voting service provider takes) such action as shall be necessary to
ensure that a CREST Voting Instruction is transmitted by means of
the CREST voting service by any particular time. In this
connection, Depositary Interest holders and, where applicable,
their CREST sponsors or voting service providers are referred, in
particular, to those sections of the CREST Manual concerning
practical limitations of the CREST system and timings.
Should you wish to discuss the matters in this Notice of Meeting
please do not hesitate to contact the Company Secretary on +61 8
6382 3390.
EXPLANATORY STATEMENT
This Explanatory Statement has been prepared to provide
information which the Directors believe to be material to
Shareholders in deciding whether or not to pass the
Resolutions.
1. Background to resolutions 1 and 2
On 22 April 2021, the Company announced that it had entered into
an agreement with the shareholders of MediCaNL Inc (MediCaNL) , to
acquire 100% of the issued share capital of MediCaNL (Acquisition).
MediCaNL is the holding company of MediCaNL Israel 2019 Ltd, a
private Israeli company operating in and providing specialist
services to the pharmaceutical sector for development of new
medicines. MediCaNL offers clinical and preclinical trial services,
as well as assistance with clinical trials in the form of research
data from past studies of all Phase I to IV using a variety of
treatment methods.
In consideration for the Acquisition, the Company agreed to
issue the shareholders of MediCaNL (together, the Sellers) a total
of 89,615,764 Shares (representing consideration of $6 million,
based on a deemed issue price of $0.067 per Share), pro-rata to
their existing holding in the issued capital of MediCaNL as
follows:
30% of the Shares (26,884,731 Shares) were issued at settlement
of the Acquisition on 10 May 2021 (Settlement), under the Company's
Listing Rule 7.1 placement capacity. Pursuant to Resolution 1 of
this Notice, the Company is seeking Shareholder approval to ratify
this prior issue for the purposes of Listing Rule 7.4; and
70% of the Shares (62,731,033 Shares) will be issued as
follows:
20% of the Shares (17,923,153 Shares) on the date which is 4
months from Settlement, subject to Shareholder approval pursuant to
Resolution 2;
20% of the Shares (17,923,153 Shares) on the date which is 7
months from Settlement, subject to Shareholder approval, proposed
to be sought at the Company's Annual General Meeting in November
2021;
20% of the Shares (17,923,153 Shares) on the date which is 10
months from Settlement, subject to Shareholder approval, proposed
to be sought at the Company's Annual General Meeting in November
2021; and
10% of the Shares (8,961,574) on the date which is 13 months
from Settlement, subject to Shareholder approval at a date to be
confirmed.
(the Deferred Consideration).
There were no Board or senior management changes to the Company
as a result of the Acquisition.
Otherwise, the Acquisition agreement contained customary terms
(including representations and warranties and standard
confidentiality provisions).
The Acquisition will deliver significant ongoing cost savings to
the Company, as MGC Pharma will be undertaking one Phase III and
two Phase II clinical trials on three different products in 2021,
along with two Phase I clinical trials planned for H2 calendar
2021. In the usual course of business, MGC Pharma would be paying a
significant premium to a third-party provider to manage and operate
its clinical trial program. In order to maximise financial returns
to Shareholders, MGC Pharma will be significantly reducing the
operating costs for conducting clinical trials to deliver material
overall cost savings in the near term and future years.
2. Resolution 1 - ratification of prior issue of Shares - part
consideration for the acquisition of medicanl
General
On 10 May 2021, the Company issued 26,884,731 Shares to the
Sellers as part consideration for the Acquisition.
Broadly speaking, and subject to a number of exceptions, Listing
Rule 7.1 limits the amount of equity securities that a listed
company can issue without the approval of its shareholders over any
12 month period to 15% of the fully paid ordinary shares it had on
issue at the start of that period.
This issue of Shares does not fit within any of the exceptions
set out in Listing Rule 7.2 and, as it has not yet been approved by
Shareholders, it effectively uses up part of the 15% limit in
Listing Rule 7.1, reducing the Company's capacity to issue further
equity securities without Shareholder approval under Listing Rule
7.1 for the 12 month period following the date of issue.
Listing Rule 7.4 allows the shareholders of a listed company to
approve an issue of equity securities after it has been made or
agreed to be made. If they do, the issue is taken to have been
approved under Listing Rule 7.1 and so does not reduce the
company's capacity to issue further equity securities without
shareholder approval under that rule.
The Company wishes to retain as much flexibility as possible to
issue additional equity securities in the future without having to
obtain Shareholder approval for such issues under Listing Rule 7.1.
Accordingly, the Company is seeking Shareholder ratification
pursuant to Listing Rule 7.4 for the issue of the Shares.
Resolution 1 seeks Shareholder ratification pursuant to ASX
Listing Rule 7.4 for the issue of those Shares.
Technical information required by Listing Rule 14.1A
If Resolution 1 is passed, the Shares will be excluded in
calculating the Company's combined 25% limit in Listing Rules 7.1
and 7.1A, effectively increasing the number of equity securities
the Company can issue without Shareholder approval over the 12
month period following the date of issue of the Shares.
If Resolution 1 is not passed, the Shares will be included in
calculating the Company's combined 25% limit in Listing Rules 7.1
and 7.1A, effectively decreasing the number of equity securities
that the Company can issue without Shareholder approval over the 12
month period following the date of issue of the Shares.
Technical information required by Listing Rule 7.5
Pursuant to and in accordance with Listing Rule 7.5, the
following information is provided in relation to Resolution 1:
the Shares were issued to the Sellers, pro-rata to their
existing shareholding in MediCaNL, as set out below:
Seller Holding ratio
/ Consideration
Shares ratio
(%)
Nadya Lisovoder (founder) 75.00 %
-----------------
KW Capital Partners Limited 12.86%
-----------------
Rivka Stern Youdkevich 3.50 %
-----------------
Roy Kait 2.50 %
-----------------
Hannan Fleiman 1.43 %
-----------------
EMMCAP CORP 1.43%
-----------------
Fortius Research & Trading Corporation 1.43%
-----------------
Bezalel Partners Llc 0.71%
-----------------
Mackie Research Capital Corp.
ITF 1745574 Ontario Ltd 0.71%
-----------------
Guy Gershoni 0.43%
-----------------
Total 100.00%
-----------------
in accordance with paragraph 7.4 of ASX Guidance Note 21, the
Company confirms that none of the recipients were:
related parties of the Company, members of the Company's Key
Management Personnel, substantial holders of the Company, advisers
of the Company or an associate of any of these parties. However, it
is noted that Ms Lisovoder is currently the Company's CRO and is
contracted by the Company via MediCaNL on an as needs basis,
running the Company's clinical programs; and
holds more than 1% of the issued capital of the Company, other
than Ms Lisovoder, who currently holds 0.87% of the issued capital
of the Company (which will increase to approximately 2.88%
following the issue of the Deferred Consideration Shares);
26,884,731 Shares were issued and the Shares issued were all
fully paid ordinary shares in the capital of the Company issued on
the same terms and conditions as the Company's existing Shares;
the Shares were issued on 10 May 2021;
the Shares were issued at a deemed issue price of $0.067, as
part consideration for the Acquisition; The Company has not and
will not receive any other consideration for the issue of the
Shares;
the Shares were issued to the Sellers under the share sale
agreement pertaining to the Acquisition. A summary of the material
terms of this agreement is set out in Section 1 above.
3. ResolutioN 2 - APPROVAL TO ISSUE deferred CONSIDERATION
shares for acquisition of medicanl
General
Under Resolution 2, the Company is seeking approval for the
issue of 17,923,153 Shares to the Sellers, under the first tranche
of the Deferred Consideration.
Listing Rule 7.1
Broadly speaking, and subject to a number of exceptions, Listing
Rule 7.1 limits the amount of equity securities that a listed
company can issue without the approval of its shareholders over any
12 month period to 15% of the fully paid ordinary shares it had on
issue at the start of that period.
The proposed issue of the Shares does not fit within any of the
exceptions set out in Listing Rule 7.2. The Company wishes to
retain as much flexibility as possible to issue additional equity
securities in the future without having to obtain Shareholder
approval under Listing Rule 7.1. Accordingly, the Company is
seeking Shareholder approval pursuant to Listing Rule 7.1 so that
it does not use up any of its 15% placement capacity under Listing
Rule 7.1.
Technical information required by Listing Rule 14.1A
If Resolution 2 is passed, the Company will be able to proceed
with the issue of the Shares. In addition, the issue of the Shares
will be excluded from the calculation of the number of equity
securities that the Company can issue without Shareholder approval
under Listing Rule 7.1.
If Resolution 2 is not passed, the issue of the Shares can still
proceed but it will reduce, to that extent, the Company's capacity
to issue equity securities without Shareholder approval under
Listing Rule 7.1 for 12 months following the issue.
Resolution 2 seeks Shareholder approval for the purposes of
Listing Rule 7.1 for the issue of the Shares.
Technical information required by Listing Rule 7.1
Pursuant to and in accordance with Listing Rule 7.3, the
following information is provided in relation to Resolution 2 :
the Shares will be issued to the Sellers pro-rata to their
existing holding in MediCaNL (as detailed in Section 2.3(a)
above):
in accordance with paragraph 7.2 of ASX Guidance Note 21, the
Company confirms that:
none of the recipients will be related parties of the Company,
members of the Company's Key Management Personnel, substantial
holders of the Company, advisers of the Company or an associate of
any of these parties. However, it is noted that Ms Lisovoder is
currently the Company's CRO and is contracted by the Company via
MediCaNL on an as needs basis, running the Company's clinical
programs; and
none of the recipients, other than Ms Nadya Lisovoder (refer to
Section 2.3(b)(ii) above), will be issued more than 1% of the
issued capital of the Company;
the number of Shares to be issued is 17,923,153. T he Shares
issued will be fully paid ordinary shares in the capital of the
Company issued on the same terms and conditions as the Company's
existing Shares ;
the Shares will be issued within 3 months of the date of the
Meeting and it is intended that the issue of the Shares will occur
as detailed in Section 1 above;
the Shares will be issued at a deemed issue price of $0.067, as
part consideration for the Acquisition;
the Shares will be issued to the Sellers under the share sale
agreement pertaining to the Acquisition. A summary of the material
terms of this agreement is set out in Section 1 above.
the Shares are not being issued under, or to fund, a reverse
takeover.
4. Resolutions 3 to 8 - Issue of PERFORMANCE RIGHTS to Related parties
General
As foreshadowed in its announcements on 25 February 2021 and 9
April 2021, the Company has agreed, subject to obtaining
Shareholder approval, to issue up to a total of 64,200,000
Performance Rights to the Directors set out in the table below (or
their respective nominee/s) (Related Parties) pursuant to its
Employee Securities Incentive Plan, which was last approved by
Shareholders on 31 March 2021 (Incentive Plan):
Resolution Director Maximum Performance Rights to
be issued
3 Roby Zomer 27,400,000 Performance Rights,
comprising:
* 7,500,000 Class A;
* 17,500,000 Class B; and
* 2,400,000 Class C.
--------------- ------------------------------------
4 Brett Mitchell 27,400,000 Performance Rights,
comprising:
* 7,500,000 Class A;
* 17,500,000 Class B; and
* 2,400,000 Class C.
--------------- ------------------------------------
5 Nativ Segev 2,100,000 Performance Rights,
comprising:
* 450,000 Class A;
* 1,050,000 Class B; and
* 600,000 Class C.
--------------- ------------------------------------
6 Stephen Parker 2,600,000 Performance Rights,
comprising:
* 600,000 Class A;
* 1,400,000 Class B; and
* 600,000 Class C.
--------------- ------------------------------------
7 Ross Walker 2,100,000 Performance Rights,
comprising:
* 450,000 Class A;
* 1,050,000 Class B; and
* 600,000 Class C.
--------------- ------------------------------------
8 Evan Hayes 2,600,000 Performance Rights,
comprising:
* 600,000 Class A;
* 1,40,000 Class B; and
* 600,000 Class C.
--------------- ------------------------------------
TOTAL 64,200,000 Performance Rights,
comprising:
* 17,100,000 Class A;
* 39,900,000 Class B; and
* 7,200,000 Class C.
--------------- ------------------------------------
The Performance Rights will vest and convert into Shares,
subject to the satisfaction of the following conditions:
(a) Class A: if and once the price per share of the Company, at
any time prior to or on 1 April 2022, has a 10-trading day volume
weighted average price (VWAP) equal to or exceeding $0.0875 (being
125% of the VWAP during the 10 trading days before 1 April 2021),
and the Participant remaining a Director as at 1 April 2022;
(b) Class B: if and once the price per share of the Company, at
any time prior to or on 1 April 2023, has a 10-trading day VWAP
equal to or exceeding $0.105 (being 150% of the VWAP during the 10
trading days before 1 April 2021), and the Participant remaining a
Director as at 1 April 2022;
(c) Class C:
(i) 18 months continued service up to 30 June 2021; or
(ii) if employment commenced after 1 January 2020, continued
employment from the commencement date until 30 June 2021,
and will otherwise be issued on the terms and conditions set out
in Schedule 2.
The Performance Rights will be issued under the Incentive Plan
but will not be issued in reliance of ASIC Class Order 14/1000
Employee incentive schemes: Listed bodies.
No disclosure document is required to be issued to the
recipients of the Performance Rights as the offer is exempt under
section 708(12) of the Corporations Act.
Resolutions 3 to 8 seek the requisite Shareholder approval for
the issue of the Performance Rights to each of the Directors in the
amounts set out above.
4.2 Chapter 2E of the Corporations Act
Chapter 2E of the Corporations Act requires that for a public
company, or an entity that the public company controls, to give a
financial benefit to a related party of the public company, the
public company or entity must:
(d) obtain the approval of the public company's members in the
manner set out in sections 217 to 227 of the Corporations Act;
and
(e) give the benefit within 15 months following such approval,
unless the giving of the financial benefit falls within an
exception set out in sections 210 to 216 of the Corporations
Act.
The issue of the Performance Rights to the Related Parties
constitutes giving a financial benefit and each of the Related
Parties is a related party of the Company by virtue of being a
Director.
As the Performance Rights are proposed to be issued to all of
the Directors, the Directors are unable to form a quorum to
consider whether one of the exceptions set out in sections 210 to
216 of the Corporations Act applies to the issue of the Performance
Rights. Accordingly, Shareholder approval for the issue of
Performance Rights to the Related Parties is sought in accordance
with Chapter 2E of the Corporations Act.
4.3 Listing Rule 10.14
Listing Rule 10.14 provides that an entity must not permit any
of the following persons to acquire equity securities under an
employee incentive scheme without the approval of the holders of
its ordinary securities:
10.14.1 a director of the entity;
10.14.2 an associate of a director of the entity; or
10.14.3 a person whose relationship with the entity or
a person referred to in Listing Rules 10.14.1
to 10.14.2 is such that, in ASX's opinion, the
acquisition should be approved by security holders.
The issue of Performance Rights to the Related Parties falls
within Listing Rule 10.14.1 and therefore requires the approval of
Shareholders under Listing Rule 10.14.
Resolutions 3 to 8 seek the required Shareholder approval for
the issue of the Performance Rights under and for the purposes of
Chapter 2E of the Corporations Act and Listing Rule 10.14.
4.4 Technical information required by Listing Rule 14.1A
If Resolutions 3 to 8 are passed, the Company will be able to
proceed with the issue of the Performance Rights to the Related
Parties under the Incentive Plan within three years after the date
of the Meeting (or such later date as permitted by any ASX waiver
or modification of the Listing Rules). As approval pursuant to
Listing Rule 7.1 is not required for the issue of the Performance
Rights (because approval is being obtained under Listing Rule
10.14), the issue of the Performance Rights will not use up any of
the Company's 15% annual placement capacity.
If Resolution 3 to 8 are not passed, the Company will not be
able to proceed with the issue of the Performance Rights to the
Related Parties.
4.5 Technical information required by Listing Rule 10.15 and
section 219 of the Corporations Act
Pursuant to and in accordance with the requirements of Listing
Rule 10.15 and section 219 of the Corporations Act, the following
information is provided in relation to Resolutions 3 to 8 :
(a) the Performance Rights will be issued to the following persons:
(i) Roby Zomer (or his nominee) pursuant to Resolution 3;
(ii) Brett Mitchell (or his nominee) pursuant to Resolution 4;
(iii) Nativ Segev (or his nominee) pursuant to Resolution 5;
(iv) Stephen Parker (or his nominee) pursuant to Resolution 6;
(v) Ross Walker (or his nominee) pursuant to Resolution 7; and
(vi) Evan Hayes (or his nominee) pursuant to Resolution 8,
each of whom falls within the category set out in Listing Rule
10.14.1 by virtue of being a Director;
(b) the maximum number of Performance Rights to be issued to the
Related Parties (being the nature of the financial benefit proposed
to be given) is set out in Section 4.1 above;
(c) as at the date of this Notice of Meeting, 35,242,308
convertible securities have previously been issued under the
Incentive Plan, as lodged with the ASX in an Appendix 3G on 14 May
2021. The Incentive Plan was approved by Shareholders at the
Company's most recent general meeting held on 31 March 2021;
(d) a summary of the material terms and conditions of the
Performance Rights is set out in Schedule 2;
(e) The Company has chosen to issue Performance Rights to the
Related Parties for the following reasons:
(i) the Performance Rights are unquoted, therefore, the issue of
the Performance Rights has no immediate dilutionary impact on
Shareholders;
(ii) to reward, retain and incentivise the Related Parties for
their ongoing commitment to the performance and future success of
the Company;
(iii) to motivate the Board in creating shareholder value; and
(iv) it is not considered that there are any significant
opportunity costs to the Company or benefits foregone by the
Company in issuing the Performance Rights on the terms
proposed;
(f) the number of Performance Rights to be issued to each of the
Related Parties has been determined based upon a consideration
of:
(i) current market standards and/or practices of other ASX
listed companies of a similar size and stage of development to the
Company;
(ii) the remuneration of the Related Parties; and
(iii) incentives to ensure continuity of service of the Related
Parties who have appropriate knowledge and expertise, while
maintaining the Company's cash reserves.
The Company does not consider that there are any significant
opportunity costs to the Company or benefits foregone by the
Company in issuing the Performance Rights upon the terms
proposed;
(g) the total remuneration package for each of the Related
Parties for the previous financial year and the proposed total
remuneration package for the current financial year are set out
below:
Related Party Previous Current Financial
Financial Year
Year
Roby Zomer $439,986(2) $491,730(3)
------------ ------------------
Brett Mitchell $351,988(4) $474,582(5)
------------ ------------------
Nativ Segev $265,520(6) $144,792(7)
------------ ------------------
Ross Walker $52,000 $84,792(8)
------------ ------------------
Stephen Parker $60,608 $87,856(9)
------------ ------------------
Evan Hayes(1) N/A $84,856(10)
------------ ------------------
Notes:
1. Appointed on 1 September 2020.
2. Including $30,000 in performance bonus, $91,456 in
share-based payments and $28,211 in other payments. An amount of
$58,521 in share-based payments has been deducted from this total
and included in 2019 as a prior-year restatement.
3. Comprising salary of $259,445, a cash bonus of $50,000 and
share-based payments of $165,137 (including an increase of
$149,602, being the value of the Performance Rights).
4. Including $30,000 in performance bonus and $91,456 in
share-based payments. An amount of $58,521 in share-based payments
has been deducted from this total and included in 2019 as a
prior-year restatement.
5. Comprising salary of $276,593, a cash bonus of $50,000 and
share-based payments of $165,137 (including an increase of
$149,602, being the value of the Performance Rights).
6. Including $30,000 in performance bonus and $53,722 other
payments. In addition. $58,521 in share-based payments has been
deducted from this total and included in 2019 as a prior-year
restatement.
7. Comprising Directors' fees of $48,000, a service fee of
$60,000 and share-based payments of $36,792, being the value of the
Performance Rights.
8. Comprising Directors' fees of $48,000 and share-based
payments of $36,792, being the value of the Performance Rights.
9. Comprising Directors' fees of $51,000 and share-based
payments of $36,792, being the value of the Performance Rights.
10. Comprising Directors' fees of $48,000 and share-based
payments of $36,792, being the value of the Performance Rights.
(h) the value of the Performance Rights and the pricing
methodology is set out in Schedule 3;
(i) the Performance Rights will be issued to the Related Parties
no later than 3 years after the date of the Meeting (or such later
date as permitted by any ASX waiver or modification of the Listing
Rules) and it is anticipated the Performance Rights will be issued
on one date;
(j) the issue price of the Performance Rights will be nil, as
such no funds will be raised from the issue of the Performance
Rights;
(k) the purpose of the issue of the Performance Rights is to
reward, retain and incentivise the Related Parties for their
ongoing commitment to the performance and future success of the
Company;
(l) a summary of the material terms and conditions of the
Incentive Plan is set out in Schedule 1;
(m) no loans are being made to the Related Parties in connection
with the acquisition of the Performance Rights;
(n) details of any Performance Rights issued under the Incentive
Plan will be published in the annual report of the Company relating
to the period in which they were issued, along with a statement
that approval for the issue was obtained under Listing Rule
10.14;
(o) any additional persons covered by Listing Rule 10.14 who
become entitled to participate in an issue of Performance Rights
under the Incentive Plan after Resolution 3 to 8 is approved and
who were not named in this Notice will not participate until
approval is obtained under Listing Rule 10.14;
(p) the relevant interests of the Related Parties in securities
of the Company as at the date of this Notice are set out below:
Director Shares(1) Options Performance
Rights
Brett Mitchell 30,405,004 10,055,554(2) 5,000,000
----------- -------------- ------------
Nativ Segev 53,000,001 Nil Nil
----------- -------------- ------------
Roby Zomer 33,000,001 Nil 5,000,000
----------- -------------- ------------
Ross Walker 4,370,370 185,185(3) Nil
----------- -------------- ------------
Stephen Parker 282,316 Nil Nil
----------- -------------- ------------
Evan Hayes Nil Nil Nil
----------- -------------- ------------
Notes:
1. Fully paid ordinary shares in the capital of the Company (ASX: MXC).
2. Comprising:
(a) 555,554 Quoted Options exercisable at $0.045 each on or before 31 August 2021(ASX: MXCOE);
(b) 5,000,000 Unquoted Options exercisable at $0.15 on or before 30 June 2021;
(c) 1,500,000 Unquoted Options exercisable at $0.05 on or before 31 August 2023;
(d) 1,500,000 Unquoted Options exercisable at $0.06 on or before 31 August 2023; and
(e) 1,500,000 Unquoted Options exercisable at $0.07 on or before 31 August 2023.
3. Comprising 185,185 Quoted Options exercisable at $0.045 each
on or before 31 August 2021(ASX: MXCOE).
(q) if the milestones attaching to the Performance Rights issued
to the Related Parties are met and the Performance Rights are
converted, a total of 64,200,000 Shares would be issued. This will
increase the number of Shares on issue from 2, 319,484,077 (being
the total number of Shares on issue as at the date of this Notice)
to 2,383,684,077 (assuming that no further Shares are issued) with
the effect that the shareholding of existing Shareholders would be
diluted by an aggregate of 2.70 % , comprising:
(i) 1.15 % by Roby Zomer;
(ii) 1.15 % by Brett Mitchell;
(iii) 0.09 % by Nativ Segev;
(iv) 0.11 % by Stephen Parker;
(v) 0.09 % by Ross Walker; and
(vi) 0.11 % by Evan Hayes;
(r) the trading history of the Shares on ASX in the 12 months
before the date of this Notice is set out below:
Price Date
Highest $ 0.125 19 February 2021
-------- -----------------
Lowest $ 0.020 4 November 2020
-------- -----------------
Last $0.022 6 July 2021
-------- -----------------
(s) each Director has a material personal interest in the
outcome of Resolutions 3 to 8 on the basis that all of the
Directors (or their nominees) are to be issued Performance Rights
should Resolutions 3 to 8 be passed. For this reason, the Directors
do not believe that it is appropriate to make a recommendation
on
Resolutions 3 to 8 of this Notice; and
(t) the Board is not aware of any other information that is
reasonably required by Shareholders to allow them to decide whether
it is in the best interests of the Company to pass Resolutions 3 to
8 .
5. Resolution 9 - ratification of prior issue of Shares - Cannvalate Pty Ltd
5.1 General
On 14 June 2021, the Company issued 8,804,103 Shares to
Cannvalate Pty Ltd in satisfaction of $260,550 of accrued fees
relating to data collection services on patients using the
Company's cannabinoid products. The number of Shares was calculated
by dividing the value of the accrued fees ($260,550) by the 30 Day
volume weighted average price per Share as traded on the ASX for
the relevant month in which the fee was accrued.
The Shares were issued under the Company's existing Listing Rule
7.1 placement capacity.
Resolution 9 seeks Shareholder ratification pursuant to Listing
Rule 7.4 for the issue of these Shares.
5.2 ASX Listing Rules 7.1 and 7.4
A summary of Listing Rule 7.1 is set out in section 3.2 above
and a summary of Listing Rule 7.4 is included at section 2.1
above.
The Company wishes to retain as much flexibility as possible to
issue additional equity securities in the future without having to
obtain Shareholder approval for such issues under Listing Rule 7.1.
Accordingly, the Company is seeking Shareholder ratification
pursuant to Listing Rule 7.4 for the prior issue of the Shares.
By ratifying this issue, the Company will retain the flexibility
to issue equity securities in the future up to the 15% annual
placement capacity set out in ASX Listing Rule 7.1 without the
requirement to obtain prior Shareholder approval.
5.3 Technical information required by Listing Rule 14.1A
If Resolution 9 is passed, the Shares will be excluded in
calculating the Company's combined 25% limit in Listing Rules 7.1
and 7.1A, effectively increasing the number of equity securities
the Company can issue without Shareholder approval over the 12
month period following the date of issue of the Shares.
If Resolution 9 is not passed, the Shares will be included in
calculating the Company's combined 25% limit in Listing Rules 7.1
and 7.1A, effectively decreasing the number of equity securities
that the Company can issue without Shareholder approval over the 12
month period following the date of issue of the Shares.
5.4 Technical information required by Listing Rule 7.5
Pursuant to and in accordance with Listing Rule 7.5, the
following information is provided in relation to Resolution 9:
(a) 8,804,103 Shares were issued to Cannvalate Pty Ltd;
(b) the Shares were all fully paid ordinary shares in the
capital of the Company issued on the same terms and conditions as
the Company's existing Shares;
(c) the Shares were issued on 14 June 2021 ;
(d) the Shares were issued in consideration for accrued fees
relating to data collection services provided for the Company. The
Company has not and will not receive any other consideration for
the issue of the Shares; and
(e) the Shares were not issued under an agreement.
6. Glossary
$ means Australian dollars.
Acquisition means the Company's acquisition of 100% of the
issued capital in MediCaNL as announced to the ASX on 22 April
2021.
ASIC means the Australian Securities & Investments
Commission.
Associated Body Corporate means
(a) a related body corporate (as defined in the Corporations Act) of the Company;
(b) a body corporate which has an entitlement to not less than
20% of the voting Shares of the Company; and
(c) a body corporate in which the Company has an entitlement to
not less than 20% of the voting shares.
ASX means ASX Limited (ACN 008 624 691) or the financial market
operated by ASX Limited, as the context requires.
Board means the current board of directors of the Company.
Business Day means Monday to Friday inclusive, except New Year's
Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any
other day that ASX declares is not a business day.
Chair means the chair of the Meeting.
Closely Related Party of a member of the Key Management
Personnel means:
(a) a spouse or child of the member;
(b) a child of the member's spouse;
(c) a dependent of the member or the member's spouse;
(d) anyone else who is one of the member's family and may be
expected to influence the member, or be influenced by the member,
in the member's dealing with the entity;
(e) a company the member controls; or
(f) a person prescribed by the Corporations Regulations 2001
(Cth) for the purposes of the definition of 'closely related party'
in the Corporations Act.
Company means MGC Pharmaceuticals Ltd (ACN 116 800 269).
Constitution means the Company's constitution.
Corporations Act means the Corporations Act 2001 (Cth).
Deferred Consideration has the meaning given in Section 1 of the
Explanatory Statement.
Directors means the current directors of the Company.
Explanatory Statement means the explanatory statement
accompanying the Notice.
General Meeting or Meeting means the meeting convened by the
Notice.
Incentive Plan means the Employee Securities Incentive Plan
approved by Shareholders on 31 March 2021.
Key Management Personnel has the same meaning as in the
accounting standards issued by the Australian Accounting Standards
Board and means those persons having authority and responsibility
for planning, directing and controlling the activities of the
Company, or if the Company is part of a consolidated entity, of the
consolidated entity, directly or indirectly, including any director
(whether executive or otherwise) of the Company, or if the Company
is part of a consolidated entity, of an entity within the
consolidated group.
Listing Rules means the Listing Rules of ASX.
MediCaNL means MediCaNL Inc, a company registered and acting
under the law of Ontario, Canada , registered number 002863236
.
Notice or Notice of Meeting means this notice of meeting
including the Explanatory Statement and the Proxy Form.
Option means an option to acquire a Share.
Performance Rights means a right to acquire a Share, subject to
the terms and conditions detailed in Schedule 2.
Proxy Form means the proxy form accompanying the Notice.
Resolutions means the resolutions set out in the Notice, or any
one of them, as the context requires.
Section means a section of the Explanatory Statement.
Sellers means the holders of issued capital in MediCaNL.
Share means a fully paid ordinary share in the capital of the
Company.
Shareholder means a registered holder of a Share.
Securities means a Share, Option, performance right or any other
type of security in the capital of the Company.
WST means Western Standard Time as observed in Perth, Western
Australia.
Schedule 1 - summary of Incentive Plan
A summary of the terms of the Company's Employee Securities
Incentive Plan (Plan) is set out below.
(a) Eligible Participant
Eligible Participant means a person who is a full-time or
part-time employee, a non-executive Director, a contractor or a
casual employee of the Company, or an Associated Body Corporate (as
defined in ASIC Class Order 14/1000), or such other person who has
been determined by the Board to be eligible to participate in the
Plan from time to time.
The Company will seek Shareholder approval for Director and
related party participation in accordance with Listing Rule
10.14.
(b) Purpose
The purpose of the Plan is to:
(i) assist in the reward, retention and motivation of Eligible Participants;
(ii) link the reward of Eligible Participants to Shareholder value creation; and
(iii) align the interests of Eligible Participants with
shareholders of the Group (being the Company and each of its
Associated Bodies Corporate), by providing an opportunity to
Eligible Participants to receive an equity interest in the Company
in the form of Securities.
(c) Plan administration
The Plan will be administered by the Board. The Board may
exercise any power or discretion conferred on it by the Plan rules
in its sole and absolute discretion. The Board may delegate its
powers and discretion.
(d) Eligibility, invitation and application
The Board may from time to time determine that an Eligible
Participant may participate in the Plan and make an invitation to
that Eligible Participant to apply for Securities on such terms and
conditions as the Board decides.
On receipt of an Invitation, an Eligible Participant may apply
for the Securities the subject of the invitation by sending a
completed application form to the Company. The Board may accept an
application from an Eligible Participant in whole or in part.
If an Eligible Participant is permitted in the invitation, the
Eligible Participant may, by notice in writing to the Board,
nominate a party in whose favour the Eligible Participant wishes to
renounce the invitation.
(e) Grant of Securities
The Company will, to the extent that it has accepted a duly
completed application, grant the Participant the relevant number of
Securities, subject to the terms and conditions set out in the
invitation, the Plan rules and any ancillary documentation
required.
(f) Terms of Convertible Securities
Each 'Convertible Security' represents a right to acquire one or
more Shares (for example, under an option or performance right),
subject to the terms and conditions of the Plan. Prior to a
Convertible Security being exercised a Participant does not have
any interest (legal, equitable or otherwise) in any Share the
subject of the Convertible Security by virtue of holding the
Convertible Security. A Participant may not sell, assign, transfer,
grant a security interest over or otherwise deal with a Convertible
Security that has been granted to them unless otherwise determined
by the Board. A Participant must not enter into any arrangement for
the purpose of hedging their economic exposure to a Convertible
Security that has been granted to them.
(g) Vesting of Convertible Securities
Any vesting conditions applicable to the grant of Convertible
Securities will be described in the invitation. If all the vesting
conditions are satisfied and/or otherwise waived by the Board, a
vesting notice will be sent to the Participant by the Company
informing them that the relevant Convertible Securities have
vested. Unless and until the vesting notice is issued by the
Company, the Convertible Securities will not be considered to have
vested. For the avoidance of doubt, if the vesting conditions
relevant to a Convertible Security are not satisfied and/or
otherwise waived by the Board, that Convertible Security will
lapse.
(h) Exercise of Convertible Securities and cashless exercise
To exercise a Convertible Security, the Participant must deliver
a signed notice of exercise and, subject to a cashless exercise of
Convertible Securities (see below), pay the exercise price (if any)
to or as directed by the Company, at any time following vesting of
the Convertible Security (if subject to vesting conditions) and
prior to the expiry date as set out in the invitation or vesting
notice.
An invitation may specify that at the time of exercise of the
Convertible Securities, the Participant may elect not to be
required to provide payment of the exercise price for the number of
Convertible Securities specified in a notice of exercise, but that
on exercise of those Convertible Securities the Company will
transfer or issue to the Participant that number of Shares equal in
value to the positive difference between the Market Value of the
Shares at the time of exercise and the exercise price that would
otherwise be payable to exercise those Convertible Securities.
Market Value means, at any given date, the volume weighted
average price per Share traded on the ASX over the 5 trading days
immediately preceding that given date, unless otherwise specified
in an invitation.
A Convertible Security may not be exercised unless and until
that Convertible Security has vested in accordance with the Plan
rules, or such earlier date as set out in the Plan rules.
(i) Delivery of Shares on exercise of Convertible Securities
As soon as practicable after the valid exercise of a Convertible
Security by a Participant, the Company will issue or cause to be
transferred to that Participant the number of Shares to which the
Participant is entitled under the Plan rules and issue a substitute
certificate for any remaining unexercised Convertible Securities
held by that Participant.
(j) Forfeiture of Convertible Securities
Where a Participant who holds Convertible Securities ceases to
be an Eligible Participant or becomes insolvent, all unvested
Convertible Securities will automatically be forfeited by the
Participant, unless the Board otherwise determines in its
discretion to permit some or all of the Convertible Securities to
vest.
Where the Board determines that a Participant has acted
fraudulently or dishonestly; committed an act which has brought the
Company, the Group or any entity within the Group into disrepute,
or wilfully breached his or her duties to the Group or where a
Participant is convicted of an offence in connection with the
affairs of the Group; or has a judgment entered against him or her
in any civil proceedings in respect of the contravention by the
Participant of his or her duties at law, in equity or under
statute, in his or her capacity as an employee, consultant or
officer of the Group, the Board may in its discretion deem all
unvested Convertible Securities held by that Participant to have
been forfeited.
Unless the Board otherwise determines, or as otherwise set out
in the Plan rules:
(i) any Convertible Securities which have not yet vested will be
forfeited immediately on the date that the Board determines (acting
reasonably and in good faith) that any applicable vesting
conditions have not been met or cannot be met by the relevant date;
and
(ii) any Convertible Securities which have not yet vested will
be automatically forfeited on the expiry date specified in the
invitation or vesting notice.
(k) Change of control
If a change of control event occurs in relation to the Company,
or the Board determines that such an event is likely to occur, the
Board may in its discretion determine the manner in which any or
all of the Participant's Convertible Securities will be dealt with,
including, without limitation, in a manner that allows the
Participant to participate in and/or benefit from any transaction
arising from or in connection with the change of control event
provided that, in respect of Convertible Securities, the maximum
number of Convertible Securities (that have not yet been exercised)
that the Board may determine will vest and be exercisable into
Shares under this Rule is that number of Convertible Securities
that is equal to 10% of the Shares on issue immediately following
vesting under this Rule, which as far as practicable will be
allocated between holders on a pro-rata basis on the basis of their
holdings of Convertible Securities on the date of determination of
vesting.
(l) Rights attaching to Plan Shares
All Shares issued or transferred under the Plan or issued or
transferred to a Participant upon the valid exercise of a
Convertible Security, (Plan Shares) will rank pari passu in all
respects with the Shares of the same class. A Participant will be
entitled to any dividends declared and distributed by the Company
on the Plan Shares and may participate in any dividend reinvestment
plan operated by the Company in respect of Plan Shares. A
Participant may exercise any voting rights attaching to Plan
Shares.
(m) Disposal restrictions on Plan Shares
If the invitation provides that any Plan Shares are subject to
any restrictions as to the disposal or other dealing by a
Participant for a period, the Board may implement any procedure it
deems appropriate to ensure the compliance by the Participant with
this restriction.
For so long as a Plan Share is subject to any disposal
restrictions under the Plan, the Participant will not:
(i) transfer, encumber or otherwise dispose of, or have a
security interest granted over that Plan Share; or
(ii) take any action or permit another person to take any action
to remove or circumvent the disposal restrictions without the
express written consent of the Company.
(n) Adjustment of Convertible Securities
If there is a reorganisation of the issued share capital of the
Company (including any subdivision, consolidation, reduction,
return or cancellation of such issued capital of the Company), the
rights of each Participant holding Convertible Securities will be
changed to the extent necessary to comply with the Listing Rules
applicable to a reorganisation of capital at the time of the
reorganisation.
If Shares are issued by the Company by way of bonus issue (other
than an issue in lieu of dividends or by way of dividend
reinvestment), the holder of Convertible Securities is entitled,
upon exercise of the Convertible Securities, to receive an issue of
as many additional Shares as would have been issued to the holder
if the holder held Shares equal in number to the Shares in respect
of which the Convertible Securities are exercised.
Unless otherwise determined by the Board, a holder of
Convertible Securities does not have the right to participate in a
pro rata issue of Shares made by the Company or sell renounceable
rights.
(o) Participation in new issues
There are no participation rights or entitlements inherent in
the Convertible Securities and holders are not entitled to
participate in any new issue of Shares of the Company during the
currency of the Convertible Securities without exercising the
Convertible Securities.
(p) Compliance with applicable law
No Security may be offered, granted, vested or exercised if to
do so would contravene any applicable law. In particular, the
Company must have reasonable grounds to believe, when making an
invitation, that the total number of Plan Shares that may be issued
upon exercise of Convertible Securities offered under an
invitation, when aggregated with the number of Shares issued or
that may be issued as a result of offers made at any time during
the previous three year period under:
(i) an employee incentive scheme of the Company covered by ASIC Class Order 14/1000; or
(ii) an ASIC exempt arrangement of a similar kind to an employee incentive scheme,
but disregarding any offer made or securities issued in the
capital of the Company by way of or as a result of:
(iii) an offer to a person situated at the time of receipt of the offer outside Australia;
(iv) an offer that did not need disclosure to investors because
of section 708 of the Corporations Act (exempts the requirement for
a disclosure document for the issue of securities in certain
circumstances to investors who are deemed to have sufficient
investment knowledge to make informed decisions, including
professional investors, sophisticated investors and senior managers
of the Company); or
(v) an offer made under a disclosure document,
would not exceed 5% (or such other maximum permitted under any
applicable law) of the total number of Shares on issue at the date
of the invitation.
(q) Maximum number of Securities
When relying on the Class Order relief, the Company will not
make an invitation under the Plan if the number of Plan Shares that
may be issued, or acquired upon exercise of Convertible Securities
offered under an invitation, when aggregated with the number of
Shares issued or that may be issued as a result of all invitations
under the Plan, will exceed 5% of the total number of issued Shares
at the date of the invitation.
(r) Amendment of Plan
Subject to the following paragraph, the Board may at any time
amend any provisions of the Plan rules, including (without
limitation) the terms and conditions upon which any Securities have
been granted under the Plan and determine that any amendments to
the Plan rules be given retrospective effect, immediate effect or
future effect.
No amendment to any provision of the Plan rules may be made if
the amendment materially reduces the rights of any Participant as
they existed before the date of the amendment, other than an
amendment introduced primarily for the purpose of complying with
legislation or to correct manifest error or mistake, amongst other
things, or is agreed to in writing by all Participants.
(s) Plan duration
The Plan continues in operation until the Board decides to end
it. The Board may from time to time suspend the operation of the
Plan for a fixed period or indefinitely and may end any suspension.
If the Plan is terminated or suspended for any reason, that
termination or suspension must not prejudice the accrued rights of
the Participants.
If a Participant and the Company (acting by the Board) agree in
writing that some or all of the Securities granted to that
Participant are to be cancelled on a specified date or on the
occurrence of a particular event, then those Securities may be
cancelled in the manner agreed between the Company and the
Participant.
(t) Income Tax Assessment Act
The Plan is a plan to which Subdivision 83A-C of the Income Tax
Assessment Act 1997 (Cth) applies (subject to the conditions in
that Act).
(u) Maximum number of equity securities proposed to be issued under the Plan
For the purposes of Listing Rule 7.2 (Exception 13(a)), the
maximum number of securities proposed to be issued under the Plan
is 121,635,932.
Schedule 2 - Terms and Conditions of Performance Rights
The following is a summary of the key terms and conditions of
the Performance Rights:
(a) Milestones
The Performance Rights will vest in accordance with the vesting
conditions detailed in Section 4.1 (each, a Milestone).
(b) Notification to holder
The Company shall notify the holder in writing when each
Milestone has been satisfied.
(c) Conversion
Subject to paragraph (m), upon vesting, each Performance Right
will, at the election of the holder, convert into one (1)
Share.
(d) Lapse of a Performance Right
If a Milestone is not achieved by the applicable date specified
in Section 4.1, it will automatically lapse.
Any Performance Right not converted within three years of the
Vesting Date (Expiry Date) shall automatically lapse on the Expiry
Date and the holder shall have no entitlement to Shares pursuant to
those Performance Rights.
(e) Share ranking
All Shares issued upon the vesting Performance Rights will upon
issue rank pari passu in all respects with other Shares.
(f) Application to ASX
The Performance Rights will not be quoted on ASX. The Company
must apply for the official quotation of a Share issued on
conversion of a Performance Right on ASX within the time period
required by the ASX Listing Rules.
(g) Transfer of Performance Rights
The Performance Rights are not transferable.
(h) Participation in new issues
A Performance Right does not entitle a holder (in their capacity
as a holder of a Performance Right) to participate in new issues of
capital offered to holders of Shares such as bonus issues and
entitlement issues.
(i) Reorganisation of capital
If at any time the issued capital of the Company is
reconstructed, all rights of a holder will be changed in a manner
consistent with the applicable ASX Listing Rules and the
Corporations Act at the time of reorganisation.
(j) Adjustment for bonus issue
If the Company makes a bonus issue of Shares or other securities
to existing Shareholders (other than an issue in lieu or in
satisfaction of dividends or by way of dividend reinvestment) the
number of Shares or other securities which must be issued on the
conversion of a Performance Right will be increased by the number
of Shares or other securities which the holder would have received
if the holder had converted the Performance Right before the record
date for the bonus issue.
(k) Dividend and Voting Rights
The Performance Rights do not confer on the holder an
entitlement to vote (except as otherwise required by law) or
receive dividends.
(l) Change in Control
Subject to paragraph (m), upon:
(i) a takeover bid under Chapter 6 of the Corporations Act
having been made in respect of the Company and:
(A) having received acceptances for not less than 50.1% of the
Company's Shares on issue; and
(B) having been declared unconditional by the bidder; or
(ii) a Court granting orders approving a compromise or
arrangement for the purposes of or in connection with a scheme of
arrangement for the reconstruction of the Company or its
amalgamation with any other company or companies,
then, to the extent Performance Rights have not converted into
Shares due to satisfaction of the applicable Milestone, Performance
Rights will accelerate vesting conditions and will automatically
convert into Shares on a one-for-one basis.
(m) Deferral of conversion if resulting in a prohibited acquisition of Shares
If the conversion of a Performance Right under paragraph (c) or
(l) would result in any person being in contravention of section
606(1) of the Corporations Act 2001 (Cth) (General Prohibition)
then the conversion of that Performance Right shall be deferred
until such later time or times that the conversion would not result
in a contravention of the General Prohibition. In assessing whether
a conversion of a Performance Right would result in a contravention
of the General Prohibition:
(i) holders may give written notification to the Company if they
consider that the conversion of a Performance Right may result in
the contravention of the General Prohibition. The absence of such
written notification from the holder will entitle the Company to
assume the conversion of a Performance Right will not result in any
person being in contravention of the General Prohibition; and
(i) the Company may (but is not obliged to) by written notice to
a holder request a holder to provide the written notice referred to
in paragraph (m)(i) within seven days if the Company considers that
the conversion of a Performance Right may result in a contravention
of the General Prohibition. The absence of such written
notification from the holder will entitle the Company to assume the
conversion of a Performance Right will not result in any person
being in contravention of the General Prohibition.
(n) No rights to return of capital
A Performance Right does not entitle the holder to a return of
capital, whether in a winding up, upon a reduction of capital or
otherwise.
(o) Rights on winding up
A Performance Right does not entitle the holder to participate
in the surplus profits or assets of the Company upon winding
up.
(p) No other rights
A Performance Right gives the holder no rights other than those
expressly provided by these terms and those provided at law where
such rights at law cannot be excluded by these terms.
(q) Subdivision 83AC-C
Subdivision 83A-C of the Income Tax Assessment Act 1997 applies
to the Performance Right.
(r) Discretion
Consistent with the terms of the Performance Rights Plan, the
Board may, in its absolute discretion, determine by resolution of
the Board that a particular Milestone has been satisfied or
satisfied to such an extent that the Performance Right to which the
applicable Milestone relates will be deemed to have vested.
Schedule 3 - valuation of Performance RIGHTS
The Class A and Class B Performance Rights to be issued to the
Related Parties pursuant to Resolutions 3 to 8 have been
independently valued using Hoadleys Hybrid ESO Model (a Monte Carlo
sumulation model) and based on the assumptions set out below. Class
C Performance Rights were valued using the share price on the
valuation date.
Item
Value of the underlying Shares $0.061
------------------------------
Valuation date 23 April 2021
------------------------------
Commencement of performance/vesting period A: 1 April 2021
B: 1 April 2021
------------------------------
Performance measurement/vesting date A: Share price target $0.0875
B: Share price target $0.105
------------------------------
Term (performance period) A: 31 March 2022
B: 31 March 2023
------------------------------
Volatility 100%
------------------------------
Risk-free interest rate A: 0.09%
B: 0.06%
------------------------------
Total Value of Performance Rights
------------------------------
Roby Zomer - 27,400,000 (Resolution 3) Class A: $225,750
Class B: $638,750
Class C: $146,400
Total: $1,010,900
------------------------------
Brett Mitchell - 27,400,000 (Resolution 4) Class A: $225,750
Class B: $638,750
Class C: $146,400
Total: $1,010,900
------------------------------
Nativ Segev - 2,100,000 (Resolution 5) Class A: $13,545
Class B: $38,325
Class C: $36,600
Total: $88,470
------------------------------
Stephen Parker - 2,600,000 (Resolution 6) Class A: $18,060
Class B: $51,100
Class C: $36,600
Total: $105,760
------------------------------
Ross Walker - 2,100,000 (Resolution 7) Class A: $13,545
Class B: $38,325
Class C: $36,600
Total: $88,470
------------------------------
Evan Hayes - 2,600,000 (Resolution 8) Class A: $18,060
Class B: $51,100
Class C: $36,600
Total: $105,760
------------------------------
Note: The valuation noted above is not necessarily the market
price that the Performance Rights could be traded at and is not
automatically the market price for taxation purposes.
To find a sample proxy form, please click here:
http://www.rns-pdf.londonstockexchange.com/rns/7346E_1-2021-7-9.pdf
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
NOGDKCBQPBKKOOK
(END) Dow Jones Newswires
July 09, 2021 02:00 ET (06:00 GMT)
Mgc Pharmaceuticals (LSE:MXC)
Historical Stock Chart
From Jun 2024 to Jul 2024
Mgc Pharmaceuticals (LSE:MXC)
Historical Stock Chart
From Jul 2023 to Jul 2024