Form F-3 VIQ Solutions Inc.
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As filed with the Securities and Exchange Commission on August 15, 2022
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VIQ SOLUTIONS INC.
(Exact name of Registrant as specified in its charter)
Not applicable
(Translation of Registrant’s name into English)
| Ontario | Not Applicable | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number (if applicable)) |
5915 Airport Road
Suite 700
Mississauga, Ontario L4V 1T1 Canada
(905) 948-8266
(Address and telephone number of Registrant’s principal executive offices)
C T Corporation System
1015 15th Street N.W., Suite 1000
Washington, D.C., 20005
Telephone: (202) 572-3133
(Name, address, and telephone number of agent for service)
Copies of all communications, including communications sent to agent for service, should be sent to:
Sebastien Paré 5915 Airport Road Suite 700 Mississauga, Ontario L4V 1T1 Canada Telephone: (905) 948-8266
|
Rob Condon Dentons US LLP 1221 Avenue of the Americas New York, New York 10020 Telephone: (212) 768-6839 |
Ora Wexler Dentons Canada LLP 77 King Street West, Suite 400 Toronto, Ontario M5K 0A1 Canada Telephone: (416) 863-4516 |
Approximate date of commencement of proposed sale of the securities to the public:
From time to time after the effective date of this Registration Statement
If only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ¨
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company x
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨
| † | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
PART I
INFORMATION REQUIRED IN PROSPECTUS
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED AUGUST 15, 2022
Preliminary Prospectus
VIQ SOLUTIONS INC.
7,103,704 COMMON SHARES
This Prospectus relates to the resale by the selling shareholders identified herein of up to 7,103,704 common shares (the “Common Shares”) of VIQ Solutions Inc. (the “Company”). The Common Shares being offered for resale include up to (i) 3,551,852 Common Shares, and (iii) 3,551,852 Common Shares issuable upon the exercise of warrants of the Company (the “Warrants”), that were initially issued pursuant to the Securities Purchase Agreement dated as of July 18, 2022 (the “Securities Purchase Agreement”), by and between the Company and the selling shareholders.
We are not selling any Common Shares and will not receive any proceeds from the sale of the Common Shares under this Prospectus. Upon the exercise of the Warrants, however, we will receive the applicable exercise price of the Warrants.
The selling shareholders may, from time to time, sell, transfer or otherwise dispose of any or all of the Common Shares being registered or interests in the Common Shares being registered on any stock exchange, market or trading facility on which our Common Shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. Prices may vary from purchaser to purchaser during the period of distribution. See “Plan of Distribution.” This Prospectus has not been filed in respect of, and will not qualify, any distribution of the Common Shares being registered in any of the provinces or territories of Canada at any time. We will not receive any of the proceeds from the sale or other disposition of the Common Shares by the selling shareholders. The net proceeds received from the sale or other disposition of the Common Shares by the selling shareholders, if any, is unknown to us.
We may amend or supplement this Prospectus from time to time by filing amendments or supplements as required. You should read the entire Prospectus, including the additional information described under the heading “Incorporation of Certain Information by Reference,” and any amendments or supplements carefully before you make your investment decision.
The Common Shares are traded on the Nasdaq Capital Market (“Nasdaq”) and the Toronto Stock Exchange (“TSX”) under the symbol “VQS.” On August 12, 2022, the closing price of the Common Shares was US$1.00 per share on the Nasdaq and CDN$1.31 per share on the TSX. You are urged to obtain current market quotations for the Common Shares.
We have prepared this Prospectus in accordance with United States disclosure requirements. Our financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, as adopted by the International Accounting Standards Board (“IASB”), and thus may not be comparable to financial statements of United States companies.
The enforcement by investors of civil liabilities under United States federal securities laws may be affected adversely by the fact that the Company is incorporated and governed under the laws of the Province of Ontario, Canada, that a number of our officers and directors are residents of countries other than the United States, and a substantial portion of our assets and some of said persons are located outside the United States.
We are an “emerging growth company” as defined by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and, as such, we have elected to comply with certain reduced public company reporting requirements for this Prospectus and future filings. Please see “Prospectus Summary—Implications of Being an Emerging Growth Company.”
No underwriter has been involved in the preparation of this Prospectus nor has any underwriter performed any review of the contents of this Prospectus.
Investing in the Common Shares involves a high degree of risk. Prospective purchasers of the Common Shares should carefully consider all the information in this Prospectus and in the documents incorporated by reference in this Prospectus. See “Risk Factors” beginning on page 6 of this Prospectus.
Neither the Securities and Exchange Commission (the “SEC”), the Canadian Securities Administrators nor any state or other foreign 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 , 2022.
TABLE OF CONTENTS
You should rely only on the information contained in or incorporated by reference into this Prospectus or any prospectus supplement. References to this “Prospectus” include documents incorporated by reference herein. See “Incorporation of Certain Information By Reference.” The information in or incorporated by reference into this Prospectus is current only as of its date. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to offer these securities.
Neither we nor the selling shareholders have authorized anyone to provide you with additional information or information different from that contained in this Prospectus filed with the SEC, in any supplement to this Prospectus filed with the SEC, in any free writing prospectus filed with the SEC, or in the documents described under the heading “Incorporation of Certain Information by Reference.” We and the selling shareholders take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. The selling shareholders are offering to sell, and seeking offers to buy, Common Shares only in jurisdictions where offers and sales are permitted. The information contained in this Prospectus is accurate only as of the date of this Prospectus, regardless of the time of delivery of this Prospectus or any sale of Common Shares. Our business, financial condition, results of operations and prospects may have changed since that date.
For investors outside the United States: Neither we nor the selling shareholders have done anything that would permit this offering or possession or distribution of this 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 must inform themselves about, and observe any restrictions relating to, the offering of the Common Shares and the distribution of this Prospectus outside the United States.
This Prospectus may be supplemented from time to time by one or more prospectus supplements. Such prospectus supplement may also add, update or change information contained in this Prospectus. If there is any inconsistency between the information in this Prospectus and the applicable prospectus supplement, you must rely on the information in the prospectus supplement. You should carefully read both this Prospectus and any applicable prospectus supplement together with additional information described under the heading “Where You Can Find Additional Information” before deciding to invest in any Common Shares being offered.
To the extent there is a conflict between the information contained in this Prospectus, on the one hand, and the information contained in any document incorporated by reference filed with the SEC before the date of this Prospectus, on the other hand, you should rely on the information in this Prospectus. If any statement in a document incorporated by reference is inconsistent with a statement in another document incorporated by reference having a later date, the statement in the document having the later date modifies or supersedes the earlier statement.
Our audited consolidated financial statements have been prepared in accordance with IFRS as issued by the IASB. Our fiscal year is the 12-month period ending December 31. Amounts stated herein and in the documents incorporated by reference herein are in Canadian dollars, unless otherwise indicated. All references to “$” and “CDN$” are to Canadian dollars. All references to “US$” are to United States dollars. Certain totals, subtotals and percentages throughout this report may not reconcile due to rounding.
All references in this Prospectus to “VIQ” the “Company,” “we,” “us” and “our” refer to VIQ Solutions Inc. and its consolidated subsidiaries, except where the context otherwise requires.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated herein by reference contain forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. The statements contained in, or incorporated by reference in, this Prospectus that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements.
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Factors that could cause or contribute to such differences include, but are not limited to, (i) those included in our Annual Report on Form 20-F for the fiscal year ended December 31, 2021 (the “Annual Report”), (ii) those contained in this Prospectus and in our other SEC reports described under “Risk Factors,” (iii) those described elsewhere in this Prospectus, and (iv) other factors that we may publicly disclose from time to time. Furthermore, such forward-looking statements speak only as of the date made. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
The following summary highlights selected information contained elsewhere in this Prospectus and in the documents incorporated by reference in this Prospectus, and does not contain all of the information that you need to consider in making your investment decision. We urge you to read this entire Prospectus, including the more detailed consolidated financial statements, notes to the consolidated financial statements and other information incorporated by reference from our other filings with the SEC. Investing in our securities involves substantial risks. Therefore, carefully consider the risk factors set forth in this Prospectus and in our most recent filings with the SEC including the Annual Report and reports on Form 6-K, as well as other information in this Prospectus and any prospectus supplements and the documents incorporated by reference herein or therein, before purchasing our securities. Each of the risk factors could adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our securities.
Overview of the Company
VIQ combines artificial intelligence (AI)-driven voice and video capture technology and services to securely manage digital content in the most rigid security environments, including governments, courts, insurance, law enforcement, media content, news and conferencing. VIQ’s products and services help cybersecurity focused entities securely speed the capture, creation, and management of large volumes of information, preserve the unique value of the spoken word and video image, and deliver meaningful data that they can utilize.
VIQ offers its clients a technology services stack comprised of six core software solutions: MobileMic Pro, CaptureProTM, NetScribe, First Draft, Editing Services and aiAssist, that are integrated to create a seamless, end to end digital platform, as outlined further below.
VIQ spent the last three years integrating its entire product portfolio into a modern, secured, cloud-based, scalable ecosystem. Through this established commercial platform, VIQ ingests multi-media content across its markets and delivers immediate value to customers in the form of high-quality evidentiary documentation. The effective aggregation of customer information in the platform, which may appear as a by-product, is in fact a valuable asset that is to be monetized. The Company’s first AI-driven use of this information was aimed at improving the efficiency of the verbatim transcription process by delivering a progressively better first draft. In turn, this capability enabled the delivery of First Draft, a service where a machine-generated version of a multi speakers recording is presented to the user, all the while, feeding back into the system the quality-controlled version of the documents we delivered, refining our linguistic and industry specific corpus models, and progressively enhancing the outcome of our services, in a virtuous circle.
VIQ operates worldwide with a network of partners including security integrators, audio-video specialists, and hardware and data storage suppliers. The Company’s revenue is strategically segmented both by geography and industry markets: Approximately 57% of its recent revenue has been from customers located in the United States, 27% from Australia and a growing 4% from Canada, Europe, Middle East and Africa.
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VIQ’s solutions serve a growing customer base across a variety of vertical and horizontal markets, the primary of which are as follows:
· 61% of revenue is in legal (courts);
· 11% in criminal justice (including Law Enforcement);
· 13% in insurance; and
· 15% in media, corporate finance, government and medical.
VIQ delivers its products and services to clients primarily through a network of resellers and integrators, as well as through direct sales, offering a variety of deployment methodologies and business models to meet customer demand including software, SaaS and managed services.
Looking ahead, VIQ intends on utilizing this content to extend the scope of solutions that it offers and to expand the value of the content it collects. To that end, VIQ’s ML-driven AI engine selection process drives the platform to serve emerging needs and unlocks the additional value in the data stream. VIQ takes advantage of all available technologies to accelerate its strategy, as the system is designed intentionally to integrate both VIQ’s internal intellectual property and external applications.
VIQ’s vision is to create an environment where it can cultivate the relationships with its customers through a portfolio of value-added complementary services.
VIQ is transitioning its technology services offerings towards a SaaS revenue model, in which clients are charged recurring monthly fees based on a number of variables. Given the size, nature, and visibility of its sales pipeline, VIQ anticipates this SaaS option will continue to gain traction in the markets in which VIQ’s software is offered.
For a further description of the Company and its business, see the section entitled “Information on the Company” in the Annual Report, which is incorporated by reference in this Prospectus.
Recent Developments
See the interim condensed consolidated financial statements for the three and six months ended June 30, 2022, and our management discussion and analysis, included as exhibits to our Form 6-K, furnished with the SEC on August 11, 2022, as well as information included in our other Form 6-Ks incorporated by reference herein.
Corporate Information
VIQ was incorporated pursuant to the Business Corporations Act (Alberta) on November 10, 2004 and was continued under the Business Corporations Act (Ontario), on April 14, 2017. The Company’s head and registered offices are located at 5915 Airport Road, Suite 700, Mississauga, Ontario, Canada L4V 1T1, and its telephone number is (905) 948-8266.
Implications of Being an Emerging Growth Company
As a company with less than US$1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company,” as defined in the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002 and, to the extent that we no longer qualify as a foreign private issuer, (i) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (ii) exemptions from the requirements of holding a non-binding advisory vote on executive compensation, including golden parachute compensation.
We may take advantage of these provisions for up to five years from the initial public offering of the Common Shares in the United States or such earlier time that we are no longer an emerging growth company. We will cease to be an emerging growth company upon the earliest of the following:
| ■ | the last day of the first fiscal year in which our annual revenues were at least US$1.07 billion; |
| ■ | the last day of the fiscal year following the fifth anniversary of the initial public offering of the Common Shares in the United States; |
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| ■ | the date on which we have issued more than US$1 billion of non-convertible debt securities over a three year period; and |
| ■ | the last day of the fiscal year during which we meet the following conditions: (i) the worldwide market value of our common equity securities held by non-affiliates as of our most recently completed second fiscal quarter is at least US$700 million, (ii) we have been subject to U.S. public company reporting requirements for at least 12 months and (iii) we have filed at least one annual report as a U.S. public company. |
Implications of Being a Foreign Private Issuer
We are also considered a “foreign private issuer” under U.S. securities laws. In our capacity as a foreign private issuer, we are exempt from certain rules under the Exchange Act, that impose certain disclosure obligations and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of our securities. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. In addition, we are not required to comply with Regulation FD, which restricts the selective disclosure of material information.
Both foreign private issuers and emerging growth companies are also exempt from certain more stringent executive compensation disclosure rules for public companies in the United States under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Even if we no longer qualify as an emerging growth company, so long as we remain a foreign private issuer, we will continue to be exempt from such compensation disclosures.
We may take advantage of these exemptions until such time as we are no longer a foreign private issuer. We will remain a foreign private issuer until such time that more than 50% of our outstanding voting securities are held by U.S. residents and any of the following three circumstances applies: (1) the majority of our executive officers or directors are U.S. citizens or residents; (2) more than 50% of our assets are located in the United States; or (3) our business is administered principally in the United States.
PRIVATE PLACEMENT OF COMMON SHARES AND WARRANTS
On July 18, 2022, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Armistice Capital Master Fund Ltd. (“Armistice Master Fund”), Special Situations Fund III QP, L.P. (“SSFQP”), Special Situations Cayman Fund, L.P. (“Cayman”), Special Situations Technology Fund, L.P. (“TECH”), and Special Situations Technology Fund II, L.P. (“TECH II”), also referred to herein as the selling shareholders. Pursuant to the Securities Purchase Agreement, the selling shareholders purchased an aggregate of 3,551,852 Common Shares and Warrants to purchase up to an aggregate of 3,551,852 Common Shares in a private placement which closed on July 21, 2022 (the “Private Placement”), at a combined purchase price of US$1.35, resulting in total gross proceeds of approximately US$4.8 million before deducting placement agent commissions and other offering expenses. In connection with the Private Placement, A.G.P./Alliance Global Partners, as placement agent was paid a cash fee of US$311,675, equal to 6.5% of the gross proceeds of the Private Placement, and was reimbursed for reasonable accountable legal expenses incurred in connection with the Private Placement in the amount of US$50,000 and for non-accountable expenses in the amount of US$15,000.
In connection with the Securities Purchase Agreement, the Company and each selling shareholder entered into a registration rights agreement, dated July 21, 2022 (each, a “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company agreed to prepare and file a registration statement on Form F-3 to provide for the resale of the Common Shares held by selling shareholders and the Common Shares issuable upon exercise of the Warrants held by the selling shareholders. This Prospectus is a part of the registration statement filed pursuant to that obligation. The Private Placement was conducted pursuant to an exemption from the registration requirements of the Securities Act, under Section 4(a)(2) thereof and/or Rule 506 of Regulation D promulgated thereunder.
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| Common shares offered by the selling shareholders | 7,103,704 Common Shares, including 3,551,852 Common Shares issuable upon exercise of the Warrants. |
| Common shares to be outstanding after this offering | 37,067,099 Common Shares (including 3,551,852 Common Shares issuable upon exercise of the Warrants). |
| Use of proceeds | The selling shareholders will receive all of the net proceeds from the sale of the Common Shares in this offering. We will not receive any proceeds from the sale of Common Shares in this offering. We will, however, bear the costs incurred in connection with the registration of these Common Shares and, upon a cash exercise of the Warrants, we will receive the exercise price of the Warrants. |
| Risk factors | See “Risk Factors” beginning on page 6 and the other information included in this Prospectus and incorporated by reference for a discussion of factors you should carefully consider before deciding to invest in our common shares. |
| Nasdaq trading symbol for the Common Shares: | “VQS”. |
The number of Common Shares that will be outstanding immediately after this offering is based on 33,515,247 Common Shares outstanding as of August 10, 2022 and assumes the full exercise of the Warrants described above. There is no guarantee that the Warrants will be exercised for Common Shares. The number of Common Shares that will be outstanding immediately after this offering does not include:
| • | 771,767 stock options outstanding with a weighted average exercise price per Common Share of CAD $2.89 expiring between 2023 and 2025 under the Company’s legacy stock option plan; | ||
| • | 579,563 stock options outstanding with a weighted average exercise price per Common Share of CAD $2.45 expiring 2031 under the Omnibus Equity Incentive Plan; | ||
| • | 66,667 deferred share units outstanding with an average exercise price per Common Share of CAD $1.20 with no expiry date; | ||
| • | 330,279 restricted share units outstanding expiring 2031 and selective units with no expiry dates under the Omnibus Equity Incentive Plan; | ||
| • | 195,000 performance share units with no expiry dates; and | ||
| • | 2,117,647 warrants at an exercise price of $5.00 expiring 2026. |
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Investing in our securities involves a high degree of risk. You should carefully review the risks and uncertainties described under the heading “Risk Factors” contained in this Prospectus and any related free writing prospectus, and in the Annual Report and reports on Form 6-K as updated by our subsequent filings, which are incorporated by reference into this Prospectus, before deciding whether to purchase any of the securities being registered pursuant to the registration statement of which this Prospectus is a part. Each of the risk factors could adversely affect our business, results of operations, financial condition and cash flows, as well as adversely affect the value of an investment in our securities, and the occurrence of any of these risks might cause you to lose all or part of your investment. Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business operations.
Risks Related to the Offering and the Common Shares
The Company has a history of operating losses and negative cash flows and may never achieve consistent profitability, which may adversely affect its ability to continue as a going concern.
During the years ended December 31, 2021 and 2020 and the six months ended June 30, 2022, the Company sustained net losses from operations. During the years ended December 31, 2021 and 2020, the Company had negative cash flow from operating activities. To the extent that the Company experiences negative cash flow from operating activities in any future period, the Company may use all or a portion of the proceeds raised through the Private Placement, as well as cash on-hand and additional financial resources, to fund such negative cash flow.
The Company may not have sufficient cash flow to adequately satisfy its liquidity requirements in the future. Failure to adequately satisfy the Company’s liquidity requirements may have a material adverse effect on the business, results of operations and financial position, and may adversely affect its ability to continue as a going concern. If the Company does not become consistently profitable, its accumulated deficit will grow larger, its cash balances will decline and the Company will require additional financing to continue operations. Any such financing may not be accessible on acceptable terms, if at all. If the Company cannot generate sufficient cash or obtain additional financing, the Company may be required to downsize its business or discontinue operations altogether.
If additional funds are raised through further issuances of equity securities, existing shareholders (including prospective investors) could suffer significant dilution, and any new equity securities issued could have rights, preferences and privileges superior to those of holders of Common Shares. Any debt financing secured in the future could involve restrictive covenants relating to the Company’s capital raising activities and other financial and operational matters, which may make it more difficult for the Company to obtain additional capital and to pursue business opportunities, including potential acquisitions.
Investment in the Common Shares is speculative and involves a high degree of risk. You may lose your entire investment.
There is no guarantee that the Common Shares will earn any positive return in the short term or long term. A holding of Common Shares is speculative and involves a high degree of risk and should be undertaken only by holders whose financial resources are sufficient to enable them to assume such risks and who have no need for immediate liquidity in their investment. A holding of Common Shares is appropriate only for holders who have the capacity to absorb a loss of some or all of their holdings.
The Company will not receive any of the proceeds from the sale of Common Shares in this offering, so your purchase of Common Shares will not directly benefit the Company.
The selling shareholders will receive all of the net proceeds from the sale of Common Shares this offering. We will not receive any proceeds from the sale of Common Shares in this offering, so we will not directly benefit from your purchase of Common Shares. We will, however, bear the costs incurred in connection with the registration of these Common Shares. Upon a cash the exercise of the Warrants, we will receive the exercise price of the Warrants.
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There is no assurance of a liquid trading market for the Common Shares in the future.
Purchasers of Common Shares in this offering may be unable to sell significant quantities of Common Shares into the public trading markets at all or without a significant reduction in the price of their Common Shares. There may not be sufficient liquidity of the Common Shares on any trading market. Additionally, the Company may not continue to meet the listing requirements of the TSX or Nasdaq or be able to achieve listing on any other public listing exchange. If the Common Shares are no longer listed on the TSX or Nasdaq, the trading price of the Common Shares is likely to drop and it would be more difficult for you to sell your Common Shares.
The market price for the Common Shares may be volatile and subject to wide fluctuations in response to numerous factors, many of which are beyond the Company’s control.
We have experienced and expect to continue to experience volatility and wide fluctuations in the market price of the Common Shares. The factors which may contribute to market price fluctuations of the Common Shares include the following:
| • | actual or anticipated fluctuations in the Company’s quarterly results of operations; | |
| • | recommendations by securities research analysts; | |
| • | changes in the economic performance or market valuations of companies in the industry in which the Company operates; | |
| • | addition or departure of the Company’s executive officers and other key personnel; | |
| • | release or expiration of transfer restrictions on outstanding Common Shares; | |
| • | sales or perceived or anticipated sales of additional Common Shares; | |
| • | operating and financial performance that vary from the expectations of management, securities analysts and investors; | |
| • | regulatory changes affecting the Company’s industry generally and its business and operations; | |
| • | announcements of developments and other material events by the Company or its competitors; | |
| • | fluctuations to the costs of vital production materials and services; | |
| • | changes in global financial markets and global economies and general market conditions, such as interest rates and price volatility; | |
| • | significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving the Company or its competitors; | |
| • | operating and share price performance of other companies that investors deem comparable to the Company, or from a lack of market comparable companies; and | |
| • | news reports relating to trends, concerns, technological or competitive developments, regulatory changes and other related issues in the Company’s industry or target markets. |
The Company may be unable to procure sufficient capital to fund its operations.
Should the Company’s costs and expenses prove to be greater than currently anticipated, or should the Company change its current business plan in a manner that will increase or accelerate its anticipated costs and expenses, the depletion of its working capital would be accelerated. To the extent it becomes necessary to raise additional cash in the future as its current cash and working capital resources are depleted, the Company will seek to raise it through the public or private sale of assets, debt or equity securities, the procurement of advances on contracts, debt financing or short-term loans, or a combination of the foregoing. The Company may also seek to satisfy indebtedness without any cash outlay through the private issuance of debt or equity securities. The Company may not be able to secure the additional cash or working capital it may require to continue its operations. Failure by the Company to obtain additional cash or working capital on acceptable terms, on a timely basis and in sufficient amounts to fund its operations, or to make other satisfactory arrangements, may cause the Company to delay or indefinitely postpone certain of its activities, including potential acquisitions, or to reduce or delay capital expenditures, or cause the Company to sell material assets, seek additional capital (if available) or seek compromise arrangements with its creditors. The foregoing could materially and adversely impact the business, operations, financial condition and results of operations of the Company.
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Your ownership interest will be diluted and our stock price could decline when we issue additional Common Shares.
We expect to issue from time to time in the future additional Common Shares or securities convertible into, or exercisable or exchangeable for, Common Shares in connection with possible financings, acquisitions, equity incentives for employees or otherwise. Any such issuance could result in substantial dilution to existing shareholders and cause the trading price of the Common Shares to decline.
We have never paid cash dividends and investors should not expect us to do so in the foreseeable future.
The Company has never declared or paid cash dividends on the Common Shares. We intend to retain future earnings, if any, to finance the operation, development, and expansion of our business. We do not anticipate paying cash dividends on the Common Shares in the foreseeable future. Payment of future cash dividends, if any, will be at the discretion of the board of directors of the Company and will depend on our financial condition, results of operations, capital requirements, business prospects, any contractual restrictions and other factors that the board of directors considers relevant.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline.
The trading market for the Common Shares will depend in part on the research and reports that securities or industry analysts publish about us or our business, which research and reports are not and would not be subject to our control. We currently receive research coverage by securities analysts, but industry analysts that currently cover us may cease to do so. If industry analysts cease coverage of our company, the trading price for the Common Shares could be materially and adversely impacted. In the event we obtain securities analyst coverage, if one or more of the analysts who cover us downgrade the Common Shares or publish inaccurate or unfavorable research about our business, our share price may be materially and adversely impacted. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our shares could decrease, which might cause our share price and trading volume to decline.
A decline in the price of the Common Shares could affect our ability to raise any required working capital and adversely impact our operations.
A decline in the price of the Common Shares could result in a reduction in the liquidity of the Common Shares and a reduction in our ability to raise any required capital for our operations. Because we intend to fund the Company in the future primarily through the sale of equity securities, and our continued operations. A reduction in our ability to raise equity capital in the future may have a material adverse effect upon our business plan and operations. If our share price declines, we may not be able to raise additional capital or generate funds from operations sufficient to meet our obligations.
The proceeds from the sale or other disposition of Common Shares covered by this Prospectus are solely for the account of the selling shareholders. Accordingly, we will not receive any proceeds from the sale or other disposition of such Common Shares, and the net proceeds received from the sale or other disposition of such Common Shares by the selling shareholders, if any, is unknown. We will, however, bear the costs incurred in connection with the registration of these Common Shares and, upon the exercise of the Warrants, we will receive the exercise price of the Warrants. If all of the Warrants sold in the Private Placement were to be exercised in cash at the current exercise price of US$1.39 per Common Share, we would receive additional gross proceeds of approximately US$4.9 million. We cannot predict when or if the Warrants will be exercised. It is possible that the Warrants may expire and may never be exercised.
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CAPITALIZATION AND INDEBTEDNESS
The following table sets forth our capitalization and indebtedness as of June 30, 2022, and as adjusted to give pro forma effect to the Private Placement completed on July 21, 2022. This table should be read in conjunction with our interim condensed consolidated financial statements for the six month period ended June 30, 2022, which are incorporated by reference into this Prospectus.
| As of June 30, 2022 | ||||||||
| Actual (Unaudited) | Pro Forma as adjusted to give effect to the Private Placement | |||||||
| Cash and cash equivalents | 3,491,907 | 7,723,443 | ||||||
| Total debt | 8,837,019 | 8,837,019 | ||||||
| Stockholders’ equity | 72,317,239 | 76,717,239 | ||||||
| Common Shares, no par value, unlimited shares authorized, 29,963,395 shares issued and outstanding as of June 30, 2022, 33,515,247 shares issued and outstanding, as adjusted, as of June 30, 2022 | ||||||||
| Additional paid-in capital | 5,243,008 | 5,243,008 | ||||||
| Contributed surplus | 38,021 | 38,021 | ||||||
| Accumulated deficit | (60,226,993 | ) | (60,226,993 | ) | ||||
| Total stockholders’ equity | 17,371,275 | 21,771,275 | ||||||
| Total capitalization | 26,208,294 | 30,608,294 | ||||||
Any changes to our capitalization will be set forth in a prospectus supplement or in a report on Form 6-K subsequently furnished with the SEC and specifically incorporated herein by reference. Because we will not be receiving any proceeds pursuant to the sale of any Common Shares by the selling shareholders, our capitalization will not be adjusted to reflect such sales.
The Company’s authorized share capital consists of an unlimited number of Common Shares .
As at August 10, 2022 there were (i) 33,515,247 Common Shares issued and outstanding, (ii) 771,767 stock options outstanding with a weighted average exercise price per Common Share of CAD $2.89 expiring between 2023 and 2025 under the Company’s legacy stock option plan; (iii) 579,563 stock options outstanding with a weighted average exercise price per Common Share of CAD $2.45 expiring 2031 under the Omnibus Equity Incentive Plan; (iv) 66,667 deferred share units outstanding with an average exercise price per Common Share of CAD $1.20 with no expiry date; (v) 330,279 restricted share units outstanding expiring 2031 and selective units with no expiry dates under the Omnibus Equity Incentive Plan; (vi) 195,000 performance share units with no expiry dates’ (vii) 2,117,647 warrants at an exercise price of $5.00 expiring 2026; and (viii) 3,551,852 warrants at an exercise price of $1.39 expiring July 21, 2027.
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Common Shares
The holders of Common Shares are entitled to vote at all meetings of the shareholders of the Company either in person or by proxy. The holders of Common Shares are also entitled to dividends, if and when declared by the Board, and the distribution of the residual assets of the Company in the event of a dissolution of the Company. Any dividend unclaimed after a period of six years from the date on which it has been declared to be payable will be forfeited and revert to the Company.
All Common Shares rank equally as to all benefits which might accrue to the holders thereof, including the right to receive dividends, voting powers, and participation in assets and in all other respects, on liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or any other disposition of the assets of the Company among its shareholders for the purpose of winding up its affairs after the Company has paid out its liabilities. The Common Shares are not subject to any call or assessment rights, any pre-emptive rights, any conversion or any exchange rights. The Common Shares are not subject to any redemption, retraction, purchase for cancellation, surrender, sinking or purchase fund provisions. Additionally, the Common Shares are not subject to any provisions permitting or restricting the issuance of additional securities and any other material restrictions or any provisions requiring a securityholder to contribute additional capital to the Company.
Warrants
In the Private Placement that closed on July 21, 2022, Warrants to purchase up to 3,551,852 Common Shares were issued. The Warrants have an exercise price of US$1.39 per Common Share, are exercisable any time after January 21, 2023 and will expire on July 21, 2027.
To date, we have not paid any dividends on the Common Shares. We do not intend to pay dividends on any of the Common Shares in the foreseeable future. In addition, we are restricted from paying dividends pursuant to certain solvency tests prescribed under the Business Corporations Act (Ontario) and in the future may be subject to contractual restrictions on the payment of dividends under certain debt instruments that we enter into. Any future payment of dividends also will depend upon our financial requirements to fund further growth, our financial condition and other factors which our board of directors may consider in the circumstances.
Purchasers of Common Shares being offered pursuant to this Prospectus may suffer immediate and substantial dilution in the net tangible book value per Common Share. Dilution in net tangible book value per share represents the difference between the amount per share paid by purchasers and the net tangible book value per share of Common Shares immediately after a purchase. The amount of dilution experienced by each purchaser of Common Shares under this Prospectus will vary, because the selling shareholders who offer and sell Common Shares covered by this Prospectus may do so at various times, at prices and at terms then prevailing or at prices related to the then current market price, or in negotiated transactions. Accordingly, the amount paid per share by each purchaser and the net tangible book value per share at the time of purchase cannot be determined at this time. Therefore, we have not included in this Prospectus information about the dilution (if any) to the public arising from these sales. See Risk Factors – “Your ownership interest will be diluted and our stock price could decline when we issue additional Common Shares.”
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We are registering the Common Shares previously issued in the Private Placement that closed on July 21, 2022 and the Common Shares issuable upon exercise of the Warrants in the Private Placement to permit the resale of these Common Shares by the selling shareholders from time to time after the date of this Prospectus. We will not receive any of the proceeds from the sale by the selling shareholders of the Common Shares. Upon the cash exercise of the Warrants, however, we will receive the exercise price of the Warrants. We will bear all fees and expenses incident to our obligation to register the Common Shares, except for any applicable underwriting fees, discounts, selling commissions and stock transfer taxes.
Each selling shareholder and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their Common Shares covered hereby on the Nasdaq or any other stock exchange, market or trading facility on which the Common Shares are traded or in private transactions, in all cases, in compliance with applicable laws. These sales may be at fixed or negotiated prices. A selling shareholder may use any one or more of the following methods when selling Common Shares, in any case, in compliance with applicable laws:
| · | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | |
| · | block trades in which the broker-dealer will attempt to sell the Common Shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; | |
| · | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | |
| · | an exchange distribution in accordance with the rules of the applicable exchange; | |
| · | privately negotiated transactions; | |
| · | settlement of short sales; | |
| · | in transactions through broker-dealers that agree with the selling shareholders to sell a specified number of such Common Shares at a stipulated price per security; | |
| · | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; | |
| · | a combination of any such methods of sale; or | |
| · | any other method permitted pursuant to applicable law. |
The selling shareholders may also sell Common Shares under Rule 144 or any other exemption from registration under the Securities Act, if available, rather than under this Prospectus, and in any event, in compliance with applicable laws.
Broker-dealers engaged by the selling shareholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling shareholders (or, if any broker-dealer acts as agent for the purchaser of Common Shares, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with applicable laws including FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in compliance with FINRA Rule 2121.
In connection with the sale of the Common Shares or interests therein, the selling shareholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the Common Shares in the course of hedging the positions they assume. The selling shareholders may also sell Common Shares short and deliver these Common Shares to close out their short positions, or loan or pledge the Common Shares to broker-dealers that in turn may sell these Common Shares. The selling shareholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of Common Shares offered by this Prospectus, which common shares such broker-dealer or other financial institution may resell pursuant to this Prospectus (as supplemented or amended to reflect such transaction).
The selling shareholders and any broker-dealers or agents that are involved in selling the Common Shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the Common Shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each selling shareholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the Common Shares.
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The Company has agreed to indemnify the selling shareholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
We agreed to keep this Prospectus effective until the earlier of (i) the date on which the Common Shares may be resold by the selling shareholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect, or (ii) all of the common shares have been sold pursuant to this Prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable securities laws, including applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the Common Shares for the applicable restricted period, as defined in Regulation M under the Exchange Act, prior to the commencement of the distribution. In addition, the selling shareholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the Common Shares by the selling shareholders or any other person. We will make copies of this Prospectus available to the selling shareholders and have informed them of the need to deliver a copy of this Prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).
Once sold under the registration statement of which this Prospectus forms a part, the Common Shares will generally be freely tradable in the United States in the hands of persons other than our affiliates.
The Common Shares being offered by the selling shareholders are those previously issued to the selling shareholders in the Private Placement that closed on July 21, 2022, and those issuable to the selling shareholders, upon exercise of the Warrants issued in the Private Placement. For additional information regarding the issuances of those Common Shares and Warrants, see “Private Placement of Common Shares and Warrants” above. We are registering the Common Shares in order to permit the selling shareholders to offer such shares for resale from time to time. Except for the ownership of the Common Shares and the Warrants, the selling shareholders have not had any material relationship with us within the past three years.
The table below lists the selling shareholders and other information regarding the beneficial ownership of the Common Shares by each of the selling shareholders. The second column lists the number of Common Shares beneficially owned by each selling shareholder, based on its ownership of the Common Shares and warrants, as of August 10, 2022, assuming exercise of all Warrants held by the selling shareholders on that date, without regard to any limitations on exercise.
The third column lists the Common Shares being offered by this Prospectus by the selling shareholders.
In accordance with the terms of the Registration Rights Agreements, this Prospectus generally covers the resale of the (i) sum of the number of Common Shares issued to the selling shareholders in the Private Placement described above and (ii) the maximum number of Common Shares issuable upon exercise of the related Warrants, determined as if the outstanding Warrants were exercised in full as of the trading day immediately preceding the date the registration statement of which this Prospectus forms a part was initially filed with the SEC, each as of the trading day immediately preceding the applicable date of determination and all subject to adjustment as provided in the registration right agreement, without regard to any limitations on the exercise of the Warrants. The fourth column assumes the sale of all of the Common Shares offered by the selling shareholders pursuant to this Prospectus.
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Under the terms of the Warrants, a selling shareholder may not exercise the Warrants to the extent such exercise would cause such selling shareholder, together with its affiliates and attribution parties, to beneficially own a number of Common Shares which would exceed, at the direction of the selling shareholder, 4.99% or 9.99%, of our then outstanding Common Shares following such exercise, excluding for purposes of such determination of Common Shares issuable upon exercise of such Warrants which have not been exercised. The number of Common Shares in the columns below do not reflect this limitation. The selling shareholders may sell all, some or none of their Common Shares in this offering. See "Plan of Distribution."
| Name of Selling Shareholder | Number of Common Shares Beneficially Owned Prior to the Offering(1) | Percentage of Common Shares Beneficially Owned Prior to the Offering(1) | Number of Common Shares Registered for Sale Hereby(1) | Number of Common Shares Beneficially Owned After the Offering(1) | Percentage of Common Shares Beneficially Owned After the Offering(1) | ||||||||||||||||
| Armistice Capital Master Fund Ltd. (2) | 4,174,293 | (3) | 12.45 | % | (4 | ) | 3,703,704 | (3) | 470,589 | 1.4 | % | ||||||||||
| Special Situations Fund III, QP, L.P. (5) | 2,779,325 | (6) | 8.29 | % | 1,882,046 | (6) | 897,279 | 2.68 | % | ||||||||||||
| Special Situations Cayman Fund, L.P. (7) | 848,418 | (8) | 2.53 | % | 559,202 | (8) | 289,216 | * | |||||||||||||
| Special Situations Technology Fund, L.P. (9) | 218,725 | (10) | * | 151,022 | (10) | 67,703 | * | ||||||||||||||
| Special Situations Technology Fund II, L.P. (11) | 1,196,858 | (12) | 3.57 | % | 807,730 | (12) | 389,128 | 1.16 | % | ||||||||||||
* Less than one percent.
| 1) | This table is based upon information supplied by the selling shareholders, which information may not be accurate as of the date hereof. We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the selling shareholders named in the table above have sole voting and investment power with respect to all Common Shares that they beneficially own, subject to applicable community property laws. Applicable percentages are based on 33,515,247 shares outstanding on August 10, 2022, adjusted as required by rules promulgated by the SEC. |
| 2) | The Common Shares are directly held by Armistice Capital Master Fund Ltd. (the “Master Fund”), a Cayman Islands exempted company, and may be deemed to be indirectly beneficially owned by Armistice Capital, LLC (“Armistice”), as the investment manager of the Master Fund; and (ii) Steven Boyd, as the Managing Member of Armistice Capital. Armistice and Steven Boyd disclaim beneficial ownership of the reported securities except to the extent of their respective pecuniary interest therein. The address of the Master Fund is c/o Armistice Capital, LLC, 510 Madison Avenue, 7th Floor, New York, NY 10022. |
| 3) | Includes 1,851,852 Common Shares and Warrants to purchase up to 1,851,852 common shares, both of which the Master Fund purchased in the Private Placement. The Warrants are subject to a 4.99% beneficial ownership limitation that prohibits the Master Fund from exercising any portion of them if, following such exercise, the Master Fund’s ownership of our Common Shares would exceed 4.99% of the total amount of our outstanding stock. |
| 4) | Does not take into account the application of the beneficial ownership limitation described in footnote 3. |
| 5) | MGP Limited Partnership is the general partner of SSFQP. David Greenhouse and Adam Stettner are the managing members of MGP Limited Partnership. The address of MGP Limited Partnership is Special Situations Fund III, QP, L.P., 527 Madison Avenue, Suite 2600, New York, NY 10022. |
| 6) | Includes 941,023 Common Shares and Warrants to purchase up to 941,023 Common Shares held by SSFQP that were purchased in the Private Placement. |
| 7) | SSCayman LLC is the general partner of Cayman. David Greenhouse and Adam Stettner are the managing members of SS Cayman LLC. The address of SSCayman LLC is c/o Special Situations Cayman Fund, L.P., 527 Madison Avenue, Suite 2600, New York, NY 10022. |
| 8) | Includes 279,601 Common Shares and Warrants to purchase up to 279,601 Common Shares held by Cayman that were purchased in the Private Placement. |
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| 9) | SST Advisers LLC is the general partner of TECH. David Greenhouse and Adam Stettner are the managing members of SST Advisers LLC. The address of SST Advisers LLC is c/o Special Situations Technology Fund, L.P., 527 Madison Avenue, Suite 2600, New York, NY 10022. |
| 10) | Includes 75,511 Common Shares and Warrants to purchase up to 75,511 Common Shares held by TECH that were purchased in the Private Placement. |
| 11) | SST Advisers LLC is the general partner of TECH II. David Greenhouse and Adam Stettner are the managing members of SST Advisers LLC. The address of SST Advisers LLC is c/o Special Situations Technology Fund II, L.P., 527 Madison Avenue, Suite 2600, New York, NY 10022. |
| 12) | Includes 403,865 Common Shares and Warrants to purchase up to 403,865 Common Shares held by TECH II that were purchased in the Private Placement. |
Certain Canadian and United States legal matters relating to this offering will be passed upon for us by Dentons Canada LLP as to matters relating to Canadian law and by Dentons US LLP as to matters relating to United States law.
The consolidated financial statements of the Company as of December 31, 2021 and December 31, 2020 and for the years ended December 31, 2021 and December 31, 2020 appearing in the Annual Report and incorporated herein by reference, have been audited by KPMG LLP, independent registered public accounting firm, as set forth in its report thereon.
The consolidated financial statements of the Company as of December 31, 2019 and for the year ended December 31, 2019 appearing in the Company’s Annual Report, have been audited by MNP LLP, independent registered public accounting firm, as set forth in its report thereon.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
This Prospectus is part of a registration statement we filed with the SEC. This Prospectus does not contain all of the information set forth in the registration statement and the exhibits to the registration statement. For further information with respect to us and the securities being offered under this Prospectus, we refer you to the registration statement and the exhibits and schedules filed as a part of the registration statement. You should rely only on the information contained in this prospectus or incorporated by reference. We have not authorized anyone else to provide you with different information. The securities are not being offered in any jurisdiction where the offer is not permitted. You should not assume that the information in this Prospectus is accurate as of any date other than the date on the front page of this Prospectus, regardless of the time of delivery of this Prospectus or any sale of the securities offered by this Prospectus.
We are subject to the information requirements of the Exchange Act relating to foreign private issuers and applicable Canadian securities legislation and, in accordance therewith, file reports and other information with the SEC and securities regulatory authorities in Canada. Investors may read and download documents we have filed with the SEC’s Electronic Data Gathering and Retrieval system at www.sec.gov. The reports and information we file in Canada are available to the public free of charge on SEDAR at www.sedar.com.
The Company makes available free of charge its annual and current reports and other information upon request. To request such materials, please contact the Corporate Secretary at the following address or telephone number: VIQ Solutions Inc., 5915 Airport Road, Suite 700 Mississauga, Ontario L4V 1T1 Canada, Attention: Corporate Secretary; (905) 948-8266. Exhibits to the documents will not be sent, unless those exhibits have specifically been incorporated by reference in this Prospectus.
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The Company maintains its website at https://viqsolutions.com. The Company’s website and the information contained therein or connected thereto are not incorporated into this Prospectus or the registration statement of which this Prospectus forms a part.
The following table sets forth the expenses (other than underwriting discounts and commissions or agency fees and other items constituting underwriters’ or agents’ compensation, if any) expected to be incurred by us in connection with the offering of securities registered under this registration statement as well as the securities offered and sold in the Private Placement.
| Amount To Be Paid |
|||||
| SEC registration fee | US$ | 790.22 | |||
| Legal fees and expenses | US$ | 145,125 | |||
| Accounting fees and expenses | US$ | 20,207 | |||
| Miscellaneous | US$ | 20,690 | |||
| Total | US$ | 186,812.22 | |||
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
Information has been incorporated by reference in this Prospectus from documents filed with, or furnished to, the SEC. Copies of the documents incorporated herein by reference may be obtained on request without charge upon written or oral request from our Corporate Secretary at 5915 Airport Road, Suite 700, Mississauga, Ontario L4V 1T1 Canada (telephone (905) 948-8266). Copies of these documents are also available through the Internet on the SEC’s Electronic Data Gathering and Retrieval System, which can be accessed online at www.sec.gov and at our website at https://viqsolutions.com.
The following documents, which we filed or furnished with the SEC, as applicable, are specifically incorporated by reference into, and form an integral part of, this Prospectus:
| (a) | The Company’s Annual Report on Form 20-F dated May 2, 2022 for the year ended December 31, 2021 filed with the SEC on May 2, 2022; |
| (c) | The management’s discussion and analysis of the Company for the three-months ended March 31, 2022 and 2021, included as Exhibit 99.3 to the Form 6-K furnished to the SEC on May 11, 2022; |
| (f) | The Company’s Current Report on Form 6-K furnished to the SEC on July 21, 2022; and |
All documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, and any document of the type referred to in the preceding paragraph, subsequent to the date of this Prospectus and prior to the termination of the offering of the securities offered by this Prospectus are incorporated by reference into this Prospectus and form part of this Prospectus from the date of filing or furnishing of these documents. We may incorporate by reference into this Prospectus any Form 6-K that is submitted to the SEC after the date of the filing of the registration statement of which this Prospectus forms a part and before the date of termination of this offering. Any such Form 6-K that we intend to so incorporate shall state in such form that it is being incorporated by reference into this Prospectus. The documents incorporated or deemed to be incorporated herein by reference contain meaningful and material information relating to us, and the readers should review all information contained in this Prospectus and the documents incorporated or deemed to be incorporated herein by reference.
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Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Prospectus, to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not constitute a part of this Prospectus, except as so modified or superseded. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of such a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made.
INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or person controlling the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act, and will be governed by the final adjudication of such issue.
There are no governmental laws, decrees, regulations or other legislation, including foreign exchange controls, in Canada which may affect the export or import of capital or that may affect the remittance of dividends, interest or other payments to non-resident holders of the Company’s securities. Any remittances of dividends to United States residents, however, are subject to a withholding tax pursuant to the Income Tax Act (Canada). Such withholding tax may be reduced pursuant to the terms of an applicable tax treaty between Canada and the non-resident holder’s jurisdiction of residence. See “Certain Income Tax Considerations – Certain Canadian Federal Income Tax Considerations – Taxation of Dividends.”
CERTAIN INCOME TAX CONSIDERATIONS
Material income tax consequences relating to the purchase, ownership and disposition of the common shares offered by this Prospectus are summarized below. You are urged to consult your own tax advisors prior to any acquisition of our securities.
Certain Canadian Federal Income Tax Considerations
Subject to the limitations and qualifications stated herein, the following is, as of the date of this Prospectus, a fair summary of certain of the principal Canadian federal income tax considerations generally applicable under the Income Tax Act (Canada) and the regulations promulgated thereunder (collectively, the “Tax Act”) to a purchaser who acquires, as beneficial owner, Common Shares from the selling shareholders pursuant to this Prospectus and who, for purposes of the Tax Act and at all relevant times: (i) deals at arm’s length with the Company and the selling shareholders; (ii) is not affiliated with the Company or the selling shareholders, and (iii) acquires and holds the Common Shares as capital property. A holder who meets all of the foregoing requirements is referred to as a “Holder” in this summary, and this summary only addresses such Holders. Generally, the Common Shares will be considered to be capital property to a Holder provided that the Holder does not use or hold the Common Shares in the course of carrying on a business and such Holder has not acquired such Common Shares in one or more transactions considered to be an adventure or concern in the nature of trade.
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This summary is applicable to a Holder who, for the purposes of the Tax Act and any applicable tax treaty or convention and at all relevant times: (i) is not resident or deemed to be resident in Canada, (ii) does not use or hold (and is not deemed to use or hold) the Common Shares in connection with a business carried on in Canada, and (iii) is not a “foreign affiliate”, as defined in the Tax Act, of a taxpayer resident in Canada (a “Non-Resident Holder”), and this portion of the summary only addresses such Non-Resident Holders. This part of the summary is not applicable to a Non-Resident Holder that is an insurer that carries on, or is deemed to carry on, an insurance business in Canada and elsewhere or that is an “authorized foreign bank” (as defined in the Tax Act). Such Non-Resident Holders should consult their own tax advisors.
This summary is based on the facts set out in this Prospectus, the provisions of the Tax Act in force as of the date hereof, and the administrative policies and assessing practices of the Canada Revenue Agency (the “CRA”) published in writing by the CRA and publicly available prior to the date hereof. This summary takes into account all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Tax Proposals”) and assumes that the Tax Proposals will be enacted in the form proposed, although no assurance can be given that the Tax Proposals will be enacted in their current form or at all. This summary does not otherwise take into account or anticipate any changes in law or in the administrative policies or assessing practices of the CRA, whether by way of judicial, legislative or governmental decision or action. This summary is not exhaustive of all possible Canadian federal income tax considerations, and does not take into account other federal or any provincial, territorial or foreign income tax legislation or considerations, which may differ materially from those described in this summary.
This summary is of a general nature only and is not, and is not intended to be, and should not be construed to be, legal or tax advice to any particular Non-Resident Holder, and no representations concerning the tax consequences to any particular Non-Resident Holder are made. The tax consequences of acquiring, holding and disposing of Common Shares will vary according to the Non-Resident Holder’s particular circumstances. Non-Resident Holders should consult their own tax advisors regarding the tax considerations applicable to them having regard to their particular circumstances.
In general, for purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of the Common Shares must be converted into Canadian dollars based on the applicable exchange rate quoted by the Bank of Canada for the relevant day or such other rate of exchange that is acceptable to the CRA.
Taxation of Dividends
Dividends paid or credited or deemed to be paid or credited by the Company to a Non-Resident Holder will generally be subject to Canadian withholding tax at the rate of 25%, subject to any reduction in the rate of such withholding to which the Non-Resident Holder is entitled under an applicable income tax treaty between Canada and the country where the Non-Resident Holder is resident. For example, under the Canada-United States Tax Convention (1980), as amended (the “Canada-U.S. Treaty”), the withholding tax rate in respect of a dividend paid to a Non-Resident Holder who is the beneficial owner of the dividend and is resident in the United States for purposes of, and entitled to full benefits under, the Canada-U.S. Treaty, is generally reduced to 15%. The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “MLI”), of which Canada is a signatory, affects many of Canada’s bilateral tax treaties, including the ability to claim benefits thereunder. The MLI does not apply to the Canada-U.S. Treaty. Non-Resident Holders are urged to consult their own tax advisors to determine their entitlement to relief under an applicable income tax treaty or convention.
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Disposition of Common Shares
A Non-Resident Holder will generally not be subject to tax under the Tax Act in respect of any capital gain realized on a disposition or deemed disposition of common shares unless such shares are “taxable Canadian property” of the Non-Resident Holder at the time of disposition and the Non-Resident Holder and the capital gain is not exempt from tax in Canada under the terms of an applicable income tax treaty between Canada and the country in which the Non-Resident Holder is resident.
Provided that the Common Shares are listed on a designated stock exchange (which currently includes the TSX and Nasdaq), the Common Shares generally will not constitute taxable Canadian property of a Non-Resident Holder at the time of their disposition unless, at any time during the 60-month period immediately preceding the disposition both of the following conditions are satisfied concurrently: (i) 25% or more of the issued shares of any class or series of the capital stock of the Company were owned by any combination of (a) the Non-Resident Holder, (b) persons with whom the Non-Resident Holder did not deal at arm’s length, and (c) partnerships in which the Non-Resident Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships; 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 (a) real or immoveable property situated in Canada, (b) “Canadian resource property” (as defined in the Tax Act), (c) “timber resource property” (as defined in the Tax Act), and (d) options in respect of, or interests in, or for civil law rights in, any such property, whether or not the property exists. A Non-Resident Holder’s Common Shares can also be deemed to be taxable Canadian property in certain circumstances set out in the Tax Act.
Non-Resident Holders whose Common Shares may be taxable Canadian property should consult their own tax advisors.
Certain U.S. Federal Income Tax Considerations
The following is a summary of certain U.S. federal income tax considerations generally applicable to a “U.S. Holder” of the ownership and disposition of the Common Shares acquired pursuant to this offering. This summary addresses only holders who acquire and hold the Common Shares as capital assets (generally, property held for investment purposes). This summary does not address all potentially relevant U.S. federal income tax matters, and unless otherwise specifically provided, it does not address any state, local, non-U.S, alternative minimum, unearned income “Medicare” contribution, estate or gift tax consequences of holding or disposing of common shares.
As used herein, the term “U.S. Holder” means any beneficial owner of Common Shares, who, for U.S. federal income tax purposes, is: (i) a citizen or individual resident of the United States; (ii) a corporation (or other entity classified as a corporation for U.S. federal tax purposes) organized in or under the laws of the United States or of any state thereof or the District of Columbia; (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (iv) a trust (A) if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (B) that has elected to be treated as a U.S. person under applicable U.S. Treasury Regulations.
If a partnership (or other entity or arrangement treated as a partnership for U.S. federal tax purposes) holds common shares, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. Partnerships (or other entities or arrangements classified as a partnership for U.S. federal tax purposes) holding common shares, and their partners and other owners, should consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them.
This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), administrative pronouncements and rulings of the Internal Revenue Service (“IRS”), judicial decisions and existing and proposed U.S. Treasury Regulations, changes to any of which subsequent to the date of this Prospectus may affect the tax consequences described herein, possibly on a retroactive basis. This summary is for general guidance only and does not address the consequences applicable to certain categories of shareholders subject to special treatment under the Code, including tax-exempt organizations, pass through entities, certain financial institutions, insurance companies, qualified retirement plans, individual retirement accounts or other tax deferred accounts, persons that hold common shares as part of a straddle, hedging transaction, conversion transaction, constructive sale or other arrangement involving more than one position, persons that acquired common shares in connection with the exercise of employee stock options or otherwise as compensation for services, dealers in securities or foreign currencies, traders in securities that elect to use a mark to market method of accounting, U.S. persons whose functional currency (as defined in the Code) is not the U.S. dollar, former citizens or permanent residents of the United States, or persons that own directly, indirectly or constructively 10% or more of our shares by voting power or by value.
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Prospective investors should consult their own tax advisors with respect to the tax considerations relevant to them, having regard to their own particular circumstances.
The Common Shares
Distributions with respect to the Common Shares
Subject to the passive foreign investment company (“PFIC”) rules discussed below, a U.S. Holder will generally recognize, to the extent out of our current and accumulated earnings and profits (determined in accordance with U.S. federal income tax principles), dividend income on the receipt (or constructive receipt) of distributions on the Common Shares (including amounts withheld to pay any Canadian withholding taxes). The Company does not intend to calculate its earnings and profits. Accordingly, U.S. Holders should expect that a distribution will generally be treated as a dividend for U.S. federal income tax purposes.
The amount of any dividend paid to a U.S. Holder in Canadian dollars (including amounts withheld to pay Canadian withholding taxes) will be includible in income in a U.S. dollar value amount by reference to the exchange rate between the U.S. dollar and the Canadian dollar in effect on the date of receipt of such dividend by the U.S. Holder, regardless of whether the Canadian dollars so received are in fact converted into U.S. dollars. A U.S. Holder will have a tax basis in the Canadian dollars equal to their U.S. dollar value on the date of receipt. If the Canadian dollars received are converted into U.S. dollars on the date of receipt, the U.S. Holder should generally not be required to recognize foreign currency gain or loss in respect of the dividend. If the Canadian dollars received are not converted into U.S. dollars on the date of receipt, a U.S. Holder may recognize foreign currency gain or loss on a subsequent conversion or other disposition of the Canadian dollars. Such gain or loss will generally be treated as U.S. source ordinary income or loss.
The Company believes that it is a “qualified foreign corporation” and, therefore, distributions treated as dividends and received by certain non-corporate U.S. Holders will be taxed at preferential rates, provided applicable holding period and certain other requirements are satisfied, including that it is not treated as a PFIC for the year of the distribution or for the prior taxable year. Any amount of such distributions treated as dividends will generally not be eligible for the “dividends received” deduction ordinarily available to certain U.S. corporate shareholders.
Distributions on Common Shares that are treated as dividends will generally constitute income from sources outside the United States and will generally be categorized for U.S. foreign tax credit purposes as “passive category income.” A U.S. Holder may be eligible to elect to claim a U.S. foreign tax credit against its U.S. federal income tax liability, subject to applicable limitations and holding period requirements, for Canadian tax withheld, if any, from distributions received in respect of common shares. A U.S. Holder that does not elect to claim a U.S. foreign tax credit may instead claim a deduction for Canadian tax withheld, but only for a taxable year in which the U.S. Holder elects to do so with respect to all non-U.S. income taxes paid or accrued in such taxable year. The rules relating to U.S. foreign tax credits are complex, and each U.S. Holder should consult its own tax advisor regarding the application of such rules.
Sale, Exchange or Other Taxable Disposition of the Shares
Subject to the PFIC rules discussed below, upon a sale, exchange or other taxable disposition of a Common Share, a U.S. Holder will generally recognize a capital gain or loss equal to the difference between the amount realized on such sale, exchange or other taxable disposition (or, if the amount realized is denominated in Canadian dollars, its U.S. dollar equivalent, generally, for U.S. Holders that use the cash method and for electing U.S. Holders that use accrual method, determined by reference to the spot rate of exchange on the date of settlement) and the holder’s tax basis of such Common Share. Such gain or loss will be a long-term capital gain or loss if the Common Share has been held for more than one year and will be short-term capital gain or loss if the holding period is equal to or less than one year. Such gain or loss will generally be considered U.S. source gain or loss for U.S. foreign tax credit purposes. Long-term capital gains of non-corporate taxpayers are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.
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PFIC Rules
A foreign corporation will be considered a PFIC for any taxable year in which (i) 75% or more of its gross income is “passive income” or (ii) 50% or more of the average quarterly value of its assets produce (or are held for the production of) “passive income.” For this purpose, “passive income” generally includes interest, dividends, rents, royalties and certain gains. The Company will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other corporation, the equity of which it owns, directly or indirectly, 25% or more (by value). We currently do not believe that we were a PFIC in the preceding taxable year nor do we anticipate that we will be a PFIC in the current taxable year or in future taxable years. However, the determination as to whether we are a PFIC for any taxable year is based on the application of complex U.S. federal income tax rules, which are subject to differing interpretations, and is not determinable until after the end of such taxable year. Further, the determination is based in part on the mix, use and value of our assets, which values may be treated as changing for U.S. federal income tax purposes as our market capitalization changes. Because of the above described uncertainties, there can be no assurance that the IRS will not challenge the determination made by us concerning our PFIC status or that we will not be a PFIC for any taxable year. If we were classified as a PFIC in any taxable year during which a U.S. Holder owns our Common Shares, certain adverse tax consequences could apply to such U.S. Holder. Certain elections may be available to U.S. Holders of Common Shares that may mitigate some of the adverse consequences resulting from our treatment as a PFIC. U.S. Holders should consult their own tax advisors regarding the application of the PFIC rules to their investments in Common Shares and whether to make an election or protective election.
Required Disclosure with Respect to Foreign Financial Assets
Certain U.S. Holders are required to report information relating to an interest in Common Shares, subject to exceptions (including an exception for Common Shares held in accounts maintained by certain financial institutions), by attaching a completed IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold an interest in Common Shares. U.S. Holders should consult their own tax advisors regarding information reporting requirements relating to their ownership of Common Shares.
Information Reporting and Backup Withholding
Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding on a duly executed IRS Form W-9 or otherwise establishes an exemption. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required information is timely furnished to the IRS.
THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR OWN PARTICULAR CIRCUMSTANCES.
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ENFORCEMENT OF CIVIL LIABILITIES
We are a corporation organized under the laws of the Province of Ontario, Canada, and a number of our directors and officers, as well as the Canadian independent registered chartered accountants named in the “Experts” section of this Prospectus, reside outside of the United States. Service of process upon such persons may be difficult or impossible to effect within the United States. Furthermore, because a substantial portion of our assets, and substantially all the assets of our directors and officers and the Canadian experts named herein, are located outside of the United States, any judgment obtained in the United States, including a judgment based upon the civil liability provisions of United States federal securities laws, against us or any of such persons may not be collectible within the United States.
In addition, there is doubt as to the applicability of the civil liability provisions of United States federal securities law to original actions instituted in Canada. It may be difficult for an investor, or any other person or entity, to assert United States securities laws claims in original actions instituted in Canada. However, subject to certain time limitations, a foreign civil judgment, including a United States court judgment based upon the civil liability provisions of United States federal securities laws, may be enforced by a Canadian court, provided that:
| • | the judgment is enforceable in the jurisdiction in which it was given; | |
| • | the judgment was obtained after due process before a court of competent jurisdiction that recognizes and enforces similar judgments of Canadian courts, and the court had authority according to the rules of private international law currently prevailing in Canada; | |
| • | adequate service of process was effected and the defendant had a reasonable opportunity to be heard; | |
| • | the judgment is not contrary to the law, public policy, security or sovereignty of Canada and its enforcement is not contrary to the laws governing enforcement of judgments; | |
| • | the judgment was not obtained by fraud and does not conflict with any other valid judgment in the same matter between the same parties; | |
| • | the judgment is no longer appealable; and | |
| • | an action between the same parties in the same matter is not pending in any Canadian court at the time the lawsuit is instituted in the foreign court. |
Foreign judgments enforced by Canadian courts generally will be payable in Canadian dollars. A Canadian court hearing an action to recover an amount in a non-Canadian currency may render judgment for the equivalent amount in Canadian currency.
The name and address of our agent for service of process in the United States is C T Corporation System, 1015 15th Street N.W., Suite 1000 Washington, D.C., 20005.
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PART II
INFORMATION NOT REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS
Indemnification of Directors and Officers
Under the Business Corporations Act (Ontario), the Company may indemnify a director or officer of the Company, a former director or officer of the Company or another individual who acts or acted at the Company’s request as a director or officer, or an individual acting in a similar capacity, of another entity (each of the foregoing, an “Individual”) against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the Individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the Individual is involved because of that association with the Company or other entity, on the condition that:
| i. | the Individual acted honestly and in good faith with a view to the best interests of the Company or, as the case may be, to the best interests of the other entity for which the Individual acted as a director or officer or in a similar capacity at the Company’s request; and |
| ii. | if the matter is a criminal or administrative action or proceeding that is enforced by a monetary penalty, the Company shall not indemnify the Individual unless the Individual had reasonable grounds for believing that his or her conduct was lawful. |
The Company may advance money to a director, officer or other Individual in relation to the foregoing matters, but the Individual shall repay the money if the Individual does not fulfill the conditions set out in (i) and (ii) above.
Further, the Company may, with the approval of a court, indemnify an Individual in respect of an action by or on behalf of the Company or other entity, or advance moneys as set out above, to obtain a judgment in its favor, to which the Individual is made a party because of the Individual’s association with the Company or other entity as a director or officer, a former director or officer, an Individual who acts or acted at the Company’s request as a director or officer, or an Individual acting in a similar capacity, against all costs, charges and expenses reasonably incurred by the Individual in connection with such action, if the Individual fulfils the conditions in (i) and (ii) above. Such Individuals are entitled to indemnification from the Company in respect of all costs, charges and expenses reasonably incurred by the Individual in connection with the defense of any civil, criminal, administrative, investigative or other proceeding to which the Individual is subject because of the Individual’s association with the Company or other entity as described above, provided the Individual is seeking an indemnity: (A) was not judged by a court or other competent authority to have committed any fault or omitted to do anything that the Individual ought to have done; and (B) fulfils the conditions in (i) and (ii) above.
The by-laws of the Company provide that, subject to the Business Corporations Act (Ontario), the Company shall indemnify an officer or director of the Company, former officer or director of the Company and any individual who acts or acted at the Company’s request as a director or officer, or in a similar capacity, of another entity, from and against all costs, charges and expense, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by that individual in respect or any civil, criminal, administrative, investigative or other proceeding to which that individual is involved because of their association with the Company or other entity if such individual (i) acted honestly and in good faith with a view to the best interests of the Company or, as the case may be, to the best interests of the other entity for which the individual acted as a director or officer or as an individual in a similar capacity at the Company’s request and (ii) in the case or a criminal or administrative action or proceeding that is enforced by monetary penalty, the individual had reasonable grounds for believing that the conduct was lawful.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing, the Company has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
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EXHIBITS
The following exhibits have been filed, or incorporated by reference, as part of this registration statement.
| Exhibit | Description | Incorporation by Reference | ||||||||
| Schedule/ Form |
File Number |
Exhibit | File Date | |||||||
| 1.1 | Articles of Incorporation | 20-F | 001-40717 | 1.1 | May 2, 2022 | |||||
| 1.2* | Articles of Amendment | |||||||||
| 1.3 | Articles of Continuance of VIQ Solutions Inc. | S-8 | 333-257263 | 4.1 | June 22, 2021 | |||||
| 1.4* | VIQ Solutions Inc. Amended and Restated By-law 1. | |||||||||
| 1.5 | VIQ Solutions Inc. By-law 2. | S-8 | 333-257263 | 4.3 | June 22, 2021 | |||||
| 5.1* | Opinion of Dentons Canada LLP | |||||||||
| 23.1* | Consent of KPMG LLP | |||||||||
| 23.2* | Consent of MNP LLP | |||||||||
| 23.3* | Consent of Dentons Canada LLP (included in Exhibit 5.1) | |||||||||
| 24.2* | Power of Attorney (included on signature page) | |||||||||
| 107* | Filing Fee Table | |||||||||
| * | Filed herewith. |
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UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
| (a) | The undersigned registrant hereby undertakes: |
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Filing Fee” table in the effective registration statement; and |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
Provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act of 1933 need not be furnished, provided, that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act of 1933 or Item 8.A of Form 20-F if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.
(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
| (i) | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
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| (ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
| (i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| (iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
| (b) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Mississauga, Province of Ontario, Canada, on August 15, 2022.
| VIQ SOLUTIONS INC. | ||
| By: | /s/ Sebastien Paré |
|
| Name: | Sebastien Paré | |
| Title: | Chief Executive Officer | |
Each person whose signature appears below constitutes and appoints Sebastien Paré and Alexie Edwards, or either of them, as his or her true and lawful attorneys-in-fact and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments to this registration statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said attorneys-in-fact and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof. This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall constitute one instrument.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated, on August 15, 2022.
/s/ Sebastien Paré Sebastien Paré |
Chief Executive Officer (Principal Executive Officer) | |
/s/ Alexie Edwards Alexie Edwards |
Chief Financial Officer (Principal Financial Officer) | |
/s/ Christine Fellowes Christine Fellowes |
Chairman | |
/s/ Harvey Gordon Harvey Gordon |
Director | |
/s/ Shing Pan Shing Pan |
Director | |
/s/ Joseph Quarin Joseph Quarin |
Director | |
/s/ Larry Taylor Larry Taylor |
Director | |
/s/ Bradley Wells Bradley Wells |
Director |
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the undersigned has signed this registration statement, in the capacity of the duly authorized representative of the Registrant in the United States, on August 15, 2022.
| PUGLISI & ASSOCIATES | |
| /s/ Donald J. Puglisi | |
| Donald J. Puglisi | |
| Managing Director |
Exhibit 1.2
| 07119 (2011/05) © Queen's Printer for Ontario, 2011 / © Imprimeur de la Reine pour l'Ontario, 2011 Page 1 of/de 2 For Ministry Use Only À l'usage exclusif du ministère Ontario Corporation Number Numéro de la société en Ontario 1664689 Form 3 Business Corporations Act Formule 3 Loi sur les sociétés par actions ARTICLES OF AMENDMENT STATUTS DE MODIFICATION 1. The name of the corporation is: (Set out in BLOCK CAPITAL LETTERS) Dénomination sociale actuelle de la société (écrire en LETTRES MAJUSCULES SEULEMENT) : V I Q S O L U T I O N S I N C . 2. The name of the corporation is changed to (if applicable ): (Set out in BLOCK CAPITAL LETTERS) Nouvelle dénomination sociale de la société (s'il y a lieu) (écrire en LETTRES MAJUSCULES SEULEMENT) : 3. Date of incorporation/amalgamation: Date de la constitution ou de la fusion : 2004/11/10 (Year, Month, Day) (année, mois, jour) 4. Complete only if there is a change in the number of directors or the minimum / maximum number of directors. II faut remplir cette partie seulement si le nombre d'administrateurs ou si le nombre minimal ou maximal d'administrateurs a changé. Number of directors is/are: minimum and maximum number of directors is/are: Nombre d'administrateurs : nombres minimum et maximum d'administrateurs : Number minimum and maximum Nombre minimum et maximum or ou 5. The articles of the corporation are amended as follows: Les statuts de la société sont modifiés de la façon suivante : The articles of the Corporation be amended to consolidate the outstanding common shares of the Corporation on the basis of one (1) common share post-consolidation for 20 common shares pre-consolidation. |
| 07119 (2011/05) Page 2 of/de 2 6. The amendment has been duly authorized as required by sections 168 and 170 (as applicable) of the Business Corporations Act. La modification a été dûment autorisée conformément aux articles 168 et 170 (selon le cas) de la Loi sur les sociétés par actions. 7. The resolution authorizing the amendment was approved by the shareholders/directors (as applicable) of the corporation on Les actionnaires ou les administrateurs (selon le cas) de la société ont approuvé la résolution autorisant la modification le 2019/11/27 (Year, Month, Day) (année, mois, jour) These articles are signed in duplicate Les présents statuts sont signés en double exemplaire. VIQ Solutions Inc. ___________________________________________________________________________________________________ (Print name of corporation from Article 1 on page 1) (Veuillez écrir le nom de la société de l'article un à la page une) By/ Par : /s/ Alexie Edwards____________________________________ (Signature) (Signature) Alexie Edwards CFO_______________________________________ (Description of Office) (Fonction) |
Exhibit 1.4
AMENDED AND RESTATED BY-LAW NO. 1
A BY-LAW RELATING GENERALLY TO THE CONDUCT
OF THE BUSINESS AND AFFAIRS OF
VIQ SOLUTIONS INC.,
A CORPORATION SUBJECT TO THE
BUSINESS CORPORATIONS ACT (ONTARIO)
AMENDED AND RESTATED BY-LAW NO. 1
TABLE OF CONTENTS
| SECTION 1 – INTERPRETATION | 1 | |
| 1.1 | Definitions | 2 |
| 1.2 | Other Definitions | 2 |
| SECTION 2 – GENERAL BUSINESS | 2 | |
| 2.1 | Registered Office | 2 |
| 2.2 | Corporate Seal | 3 |
| 2.3 | Financial Year | 3 |
| 2.4 | Execution of Instruments | 3 |
| 2.5 | Banking Arrangements | 3 |
| 2.6 | Voting Rights in Other Bodies Corporate | 3 |
| 2.7 | Divisions | 4 |
| SECTION 3 – BORROWING AND SECURITY | 4 | |
| 3.1 | Borrowing Power | 4 |
| 3.2 | Delegation | 5 |
| SECTION 4 – DIRECTORS | 5 | |
| 4.1 | Duties of Directors | 5 |
| 4.2 | Number of Directors | 5 |
| 4.3 | Qualification | 5 |
| 4.4 | Election and Term | 5 |
| 4.5 | Removal of Directors | 6 |
| 4.6 | Ceasing to Hold Office | 6 |
| 4.7 | Filling Vacancies | 6 |
| 4.8 | Action by the Board | 7 |
| 4.9 | Conflict of Interest | 7 |
| 4.10 | Remuneration and Expenses | 7 |
| SECTION 5 – BOARD MEETINGS | 7 | |
| 5.1 | Meeting by Telephone or Electronic Facilities | 7 |
| 5.2 | Place of Meetings | 7 |
| 5.3 | Calling of Meetings | 7 |
| 5.4 | Notice of Meeting | 8 |
| 5.5 | Waiver of Notice | 8 |
| 5.6 | First Meeting of New Board | 8 |
| 5.7 | Adjourned Meeting | 8 |
| 5.8 | Regular Meetings | 8 |
| 5.9 | Chair and Secretary | 8 |
| 5.10 | Quorum | 8 |
| 5.11 | Votes to Govern | 9 |
| 5.12 | Casting Vote | 9 |
| 5.13 | Resolution in Lieu of Meeting | 9 |
| 5.14 | One Director Meeting | 9 |
| (i) | 41MENDED AND RESTATED BY-LAW NO. 1 |
| SECTION 6 – COMMITTEES | 9 | |
| 6.1 | Committees of the Board | 9 |
| 6.2 | Transaction of Business | 10 |
| 6.3 | Advisory Bodies | 10 |
| 6.4 | Procedure | 10 |
| SECTION 7 – OFFICERS | 10 | |
| 7.1 | Appointment | 10 |
| 7.2 | Chair of the Board | 10 |
| 7.3 | Managing Director | 10 |
| 7.4 | President | 11 |
| 7.5 | Secretary | 11 |
| 7.6 | Treasurer | 11 |
| 7.7 | Powers and Duties of Officers | 11 |
| 7.8 | Term of Office | 11 |
| 7.9 | Agents and Attorneys | 11 |
| 7.10 | Conflict of Interest | 12 |
| 7.11 | Fidelity Bonds | 12 |
| SECTION 8 – PROTECTION OF DIRECTORS, OFFICERS AND OTHERS | 12 | |
| 8.1 | Limitation of Liability | 12 |
| 8.2 | Indemnity | 12 |
| 8.3 | Insurance | 13 |
| SECTION 9 – SECURITIES | 13 | |
| 9.1 | Options or Rights | 13 |
| 9.2 | Commissions | 13 |
| 9.3 | Securities Register | 13 |
| 9.4 | Register of Transfers | 14 |
| 9.5 | Registration of Transfers | 14 |
| 9.6 | Transfer Agents and Registrars | 14 |
| 9.7 | Non-recognition of Trusts | 14 |
| 9.8 | Security Certificates | 14 |
| 9.9 | Replacement of Security Certificates | 15 |
| 9.10 | Joint Holders | 15 |
| 9.11 | Deceased Holders | 15 |
| 9.12 | Lien for Indebtedness | 15 |
| SECTION 10 – DIVIDENDS AND RIGHTS | 17 | |
| 10.1 | Dividends | 17 |
| 10.2 | Dividend Cheques | 17 |
| 10.3 | Non-receipt or Loss of Cheques | 17 |
| 10.4 | Currency of Dividends | 17 |
| 10.5 | Record Date for Dividends and Rights | 17 |
| 10.6 | Unclaimed Dividends | 17 |
| (ii) | 41MENDED AND RESTATED BY-LAW NO. 1 |
| SECTION 11 – MEETINGS OF SHAREHOLDERS | 18 | |
| 11.1 | Annual Meetings | 18 |
| 11.2 | Special Meetings | 18 |
| 11.3 | Meeting Held by Electronic Means | 18 |
| 11.4 | Place of Meetings | 18 |
| 11.5 | Notice of Meetings | 18 |
| 11.6 | List of Shareholders Entitled to Notice | 19 |
| 11.7 | Record Date for Notice | 19 |
| 11.8 | Waiver of Notice | 19 |
| 11.9 | Chair, Secretary and Scrutineers | 20 |
| 11.10 | Persons Entitled to be Present | 20 |
| 11.11 | Quorum | 20 |
| 11.12 | Right to Vote | 20 |
| 11.13 | Proxyholders and Representatives | 20 |
| 11.14 | Time for Deposit of Proxies | 21 |
| 11.15 | Joint Shareholders | 21 |
| 11.16 | Votes to Govern | 21 |
| 11.17 | Casting Vote | 21 |
| 11.18 | Show of Hands | 21 |
| 11.19 | Ballots | 21 |
| 11.20 | Adjournment | 22 |
| 11.21 | Resolution in Lieu of Meeting | 22 |
| 11.22 | Only One Shareholder | 22 |
| SECTION 12 – NOTICES | 22 | |
| 12.1 | Method of Giving Notices | 22 |
| 12.2 | Notice to Joint Shareholders | 23 |
| 12.3 | Computation of Time | 23 |
| 12.4 | Undelivered Notices | 23 |
| 12.5 | Omissions and Errors | 23 |
| 12.6 | Persons Entitled by Death or Operation of Law | 23 |
| 12.7 | Waiver of Notice | 23 |
| SECTION 13 – EFFECTIVE DATE | 24 | |
| 13.1 | Effective Date | 24 |
| 13.2 | Paramountcy | 24 |
| 13.3 | Repeal | 24 |
| (iii) | 41MENDED AND RESTATED BY-LAW NO. 1 |
AMENDED AND RESTATED BY-LAW NO. 1
A BY-LAW RELATING GENERALLY TO THE CONDUCT
OF THE BUSINESS AND AFFAIRS OF
VIQ SOLUTIONS INC.,
A CORPORATION SUBJECT TO THE
BUSINESS CORPORATIONS ACT (ONTARIO)
SECTION 1 – INTERPRETATION
| 1.1 | Definitions |
In the By-laws of the Corporation, unless the context otherwise requires:
(1) “Act” means the Business Corporations Act, R.S.O. 1990, c. B.16, or any statute that may be substituted for it, as from time to time amended.
(2) “appoint” includes “elect” and vice versa.
(3) “Articles” means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of arrangement, articles of continuance, articles of dissolution, articles of reorganization and articles of revival, letters patent, supplementary letters patent and a special Act of the Corporation.
(4) “Board” means the board of directors of the Corporation.
(5) “By-laws” means these by-laws and all other by-laws of the Corporation from time to time in force and effect.
(6) “Cheque” includes a draft.
(7) “Corporation” means VIQ Solutions Inc. in its English form.
(8) “Defaulting Shareholder” means a shareholder of the Corporation who defaults in the payment of any Shareholder Debt when the same becomes due and payable.
(9) “Director” means a member of the Board.
(10) “Liened Shares” means the whole or any part of the shares registered in the name of a Defaulting Shareholder.
(11) “meeting of shareholders” means an annual meeting of shareholders and a special meeting of shareholders.
(12) “non-business day” means Saturday, Sunday and any other day that is a holiday as defined in the Legislation Act, 2006 (Ontario) as from time to time amended.
(13) “recorded address” means:
| (a) | in the case of a shareholder, his or her address as recorded in the securities register; |
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| (b) | in the case of joint shareholders, the address appearing in the securities register in respect of the joint holding or the first address so appearing if there is more than one; |
| (c) | in the case of an officer, auditor or member of a committee of the Board, his or her latest address as recorded in the records of the Corporation; and |
| (d) | in the case of a Director, his or her latest address as recorded in the most recent notice filed under the Corporations Information Act (Ontario). |
(14) “resident Canadian” means an individual who is:
| (a) | a Canadian citizen ordinarily resident in Canada; |
| (b) | a Canadian citizen not ordinarily resident in Canada who is a member of a prescribed class of persons as defined in the regulations to the Act; or |
| (c) | a permanent resident within the meaning of the Immigration and Refugee Protection Act (Canada) and ordinarily resident in Canada. |
(15) “Shareholder Debt” means any principal or interest due to the Corporation in respect of any indebtedness owing by the holder of any class or series of shares in the Corporation, including an amount unpaid in respect of a share issued by a body corporate on the date it was continued under the Act.
(16) “special meeting of shareholders” includes a meeting of any class or classes of shareholders and a special meeting of all shareholders entitled to vote at an annual meeting of shareholders.
(17) “Unanimous Shareholder Agreement” means a lawful written agreement among all of the shareholders of the Corporation or among all such shareholders and one or more persons who are not shareholders, or a written declaration of the registered holder of all of the issued shares of the Corporation, that restricts in whole or in part the powers of the Board to manage or supervise the management of the business and affairs of the Corporation, as from time to time amended.
| 1.2 | Other Definitions |
Other than as specified above, words and expressions defined in the Act have the same meanings when used herein. Words importing the singular number include the plural and vice versa; words importing gender include the masculine, feminine and neuter genders; and “including” means including, without limitation.
SECTION 2 – GENERAL BUSINESS
| 2.1 | Registered Office |
The registered office of the Corporation shall be in the municipality or geographic township within Ontario initially specified in its Articles and thereafter as the shareholders may from time to time determine by special resolution and at such location therein as the Board may from time to time determine.
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| 2.2 | Corporate Seal |
The Corporation may but need not have a corporate seal and, if one is adopted, it may be changed from time to time by resolution of the Board.
| 2.3 | Financial Year |
The Board may, by resolution, fix the financial year end of the Corporation and may from time to time, by resolution, change the financial year end of the Corporation.
| 2.4 | Execution of Instruments |
(1) Deeds, transfers, assignments, contracts, obligations, certificates and other instruments may be signed on behalf of the Corporation by any two Directors or officers of the Corporation.
(2) In addition, the Board may from time to time authorize any other person or persons to sign any particular instruments.
(3) The secretary, or any other officer or any Director, may sign certificates and similar instruments (other than share certificates) on the Corporation’s behalf with respect to any factual matters relating to the Corporation’s business and affairs, including certificates verifying copies of the Articles, By-laws, resolutions and minutes of meetings of the Corporation. Any signing officer may affix the corporate seal to any instrument requiring the same.
(4) The signature of any person authorized to sign on behalf of the Corporation may, if specifically authorized by resolution of the Board, be written, printed, stamped, engraved, lithographed or otherwise mechanically reproduced or may be an electronic signature. Anything so signed shall be as valid as if it had been signed manually, even if that person has ceased to hold office when anything so signed is issued or delivered, until revoked by resolution of the Board.
| 2.5 | Banking Arrangements |
The banking business of the Corporation, including the borrowing of money and the giving of security therefor, shall be transacted with such banks, trust companies, credit unions or other bodies corporate or organizations as may from time to time be designated by or under the authority of the Board. Such banking business or any part thereof shall be transacted under such agreements, instructions and delegations of powers as the Board may from time to time prescribe.
| 2.6 | Voting Rights in Other Bodies Corporate |
The signing officers of the Corporation under Section 2.4 may execute and deliver proxies and arrange for the issuance of voting certificates or other evidence of the right to exercise the voting rights attaching to any securities held by the Corporation. Such instruments shall be in favour of such persons as may be determined by the officers executing or arranging for the same. In addition, the Board may from time to time direct the manner in which and the persons by whom any particular voting rights or class of voting rights may or shall be exercised.
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| 2.7 | Divisions |
The Board may cause the business and operations of the Corporation or any part thereof to be divided into one or more divisions upon such basis, including types of business or operations, geographical territories, product lines or goods or services, as may be considered appropriate in each case. In connection with any such division, the Board or, subject to any direction by the Board, the chief executive officer may authorize from time to time, upon such basis as may be considered appropriate in each case:
| (a) | Subdivision and Consolidation. the further division of the business and operations of any such division into sub-units and the consolidation of the business and operations of any such divisions and sub-units; |
| (b) | Name. the designation of any such division or sub-unit by, and the carrying on of the business and operations of any such division or sub-unit under, a name other than the name of the Corporation, provided that the Corporation shall set out both its corporate name and the name of its division or sub-unit in legible characters in all contracts, invoices, negotiable instruments and orders for goods or services issued or made by or on behalf of the Corporation; and |
| (c) | Officers. the appointment of officers for any such division or sub-unit, the determination of their powers and duties, and the removal of any of such officers so appointed, provided that any such officers shall not, as such, be officers of the Corporation. |
SECTION 3 – BORROWING AND SECURITY
| 3.1 | Borrowing Power |
(1) Without limiting the borrowing powers of the Corporation as set forth in the Act, but subject to the Articles and any Unanimous Shareholder Agreement, the Board may from time to time on behalf of the Corporation, without authorization of the shareholders:
| (a) | borrow money upon the credit of the Corporation; |
| (b) | issue, reissue, sell or pledge bonds, debentures, notes or other debt obligations or guarantees of the Corporation, whether secured or unsecured; |
| (c) | give, directly or indirectly, financial assistance to any person by means of a loan or a guarantee on behalf of the Corporation to secure performance of any present or future indebtedness, liability or obligation of any person, or otherwise; and |
| (d) | mortgage, hypothecate, pledge or otherwise create a security interest in all or any currently owned or subsequently acquired real or personal, movable or immovable, property of the Corporation, including accounts, rights, powers, franchises and undertakings to secure any such bonds, debentures, notes or other debt obligations or guarantees or any other present or future indebtedness, liability or obligation of the Corporation. |
(2) Nothing in Section 3.1(1) limits or restricts the borrowing of money by the Corporation on bills of exchange or promissory notes made, drawn, accepted or endorsed by or on behalf of the Corporation.
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| 3.2 | Delegation |
Subject to the Act, the Articles and any Unanimous Shareholder Agreement, the Board may from time to time delegate to a committee of the Board, a Director or an officer of the Corporation or any other person as may be designated by the Board all or any of the powers conferred on the Board by Section 3.1 or by the Act to such extent and in such manner as the Board may determine at the time of such delegation.
SECTION 4 – DIRECTORS
| 4.1 | Duties of Directors |
Subject to any Unanimous Shareholder Agreement, the Board shall manage or supervise the management of the business and affairs of the Corporation.
| 4.2 | Number of Directors |
Until changed in accordance with the Act, the Board shall consist of not fewer than the minimum number and not more than the maximum number of directors as set out in the Articles.
| 4.3 | Qualification |
(1) No person shall be qualified for election or appointment as a Director if he or she:
| (a) | is less than 18 years of age; |
| (b) | has been found under the Substitute Decisions Act, 1992 (Ontario) or under the Mental Health Act (Ontario) to be incapable of managing property or has been found to be incapable by a court in Canada or elsewhere; |
| (c) | is not an individual; or |
| (d) | has the status of a bankrupt. |
(2) A Director need not be a shareholder.
| 4.4 | Election and Term |
(1) Directors shall be elected by the shareholders at the first meeting of shareholders after the effective date of these By-laws and at each succeeding annual meeting at which an election of Directors is required, and shall hold office until the next annual meeting of shareholders or, if elected for an expressly stated term, for a term expiring not later than the close of the third annual meeting of shareholders following the election.
(2) Subject to the Act, the number of Directors to be elected at any such meeting shall be the number of Directors determined from time to time by special resolution or, if a special resolution empowers the Directors to determine the number, by resolution of the Board.
(3) The election of Directors shall be by resolution or, if demanded by a shareholder or a proxyholder, by ballot.
(4) If an election of Directors is not held at the proper time, the incumbent Directors shall continue in office until their successors are elected.
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(5) The election or appointment of a Director is not effective unless:
| (a) | the person elected or appointed consented in writing before or within 10 days after the date of the election or appointment; or |
| (b) | the Director is re-elected or re-appointed so that there is no break in the Director’s term of office. |
(6) If, however, the person elected or appointed as Director consents in writing after the 10-day period referred to in Section 4.4(5)(a), the election or appointment is nevertheless valid.
| 4.5 | Removal of Directors |
Subject to the Act, the shareholders may by ordinary resolution passed at an annual or special meeting of shareholders remove any Director from office, and the vacancy created by such removal may be filled at the same meeting, failing which it may be filled by the Board.
| 4.6 | Ceasing to Hold Office |
(1) A Director ceases to hold office when:
| (a) | he or she dies; |
| (b) | he or she is removed from office by the shareholders; |
| (c) | he or she ceases to be qualified for election as a Director; or |
| (d) | his or her written resignation is received by the Corporation or, if a time is specified in such resignation, at the time so specified, whichever is later. |
(2) A Director named in the Articles is not permitted to resign his or her office before the first meeting of shareholders unless at the time the resignation is to become effective a successor is elected or appointed.
| 4.7 | Filling Vacancies |
(1) Subject to the Act and any Unanimous Shareholders Agreement, a quorum of Directors may fill a vacancy among the Directors, except a vacancy resulting from: (i) an increase in the number of Directors otherwise than in accordance with paragraph 4.7(2), or in the maximum number of Directors, as the case may be, or (ii) a failure to elect the number of Directors required to be elected at any meeting of shareholders.
(2) Where a minimum and maximum number of Directors is provided for in the Articles, if a special resolution passed under paragraph 4.4(2) empowers the Board to determine the number of Directors, the Directors may not, between meetings of shareholders, appoint an additional Director if, after that appointment, the total number of Directors would be greater than one and one-third times the number of Directors required to have been elected at the last annual meeting of shareholders.
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| 4.8 | Action by the Board |
Subject to any Unanimous Shareholder Agreement, the Board shall exercise its powers by or pursuant to a By-law or resolution either passed at a Board meeting at which a quorum is present or consented to by the signatures of all the Directors then in office, if constituting a quorum.
| 4.9 | Conflict of Interest |
A Director who is a party to, or who is a director or officer of or has a material interest in any person who is a party to, a material contract or transaction or proposed material contract or transaction with the Corporation shall disclose in writing to the Corporation, or request to have entered in the minutes of the Board meeting, the nature and extent of his or her interest at the time and in the manner provided by the Act. Such a Director shall not vote on any resolution to approve the same except as provided by the Act.
| 4.10 | Remuneration and Expenses |
Subject to any Unanimous Shareholder Agreement, the Directors shall be paid such remuneration for their services as the Board may from time to time determine. The Directors shall also be entitled to be reimbursed for travelling and other expenses properly incurred by them in attending meetings of the Board or any committee thereof. Nothing herein contained shall preclude any Director from serving the Corporation in any other capacity and receiving remuneration therefor.
SECTION 5 – BOARD MEETINGS
| 5.1 | Meeting by Telephone or Electronic Facilities |
If all the Directors of the Corporation consent thereto generally or in respect of a particular meeting, a Director may participate in a meeting of the Board or of a committee of the Board by means of such telephone, electronic or other communications facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and a Director participating in such a meeting by such means is deemed to be present at the meeting. Any such consent shall be effective whether given before or after the meeting to which it relates and may be given with respect to all meetings of the Board and of committees of the Board.
| 5.2 | Place of Meetings |
Board meetings may be held at the registered office of the Corporation or at any other place within or outside Ontario. In any financial year of the Corporation, a majority of the Board meetings need not be held in Canada.
| 5.3 | Calling of Meetings |
Board meetings shall be held from time to time at such time and at such place as the Board, the chair of the Board, the managing director, the president or any two Directors may determine.
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| 5.4 | Notice of Meeting |
(1) Notice of the time and place of each Board meeting shall be sent in the manner provided in Section 12 to each Director:
| (a) | not less than seven days before the time when the meeting is to be held if the notice is mailed; or |
| (b) | not less than 24 hours before the time the meeting is to be held if the notice is given personally, is delivered or is communicated by telephone or electronic means. |
(2) A notice of a Board meeting need not specify the purpose of or the business to be transacted at the meeting except where the Act requires such purpose or business or the general nature thereof to be specified.
| 5.5 | Waiver of Notice |
A Director may in any manner or at any time waive notice of or otherwise consent to a Board meeting. Attendance of a Director at a Board meeting shall constitute a waiver of notice of that meeting except where a Director attends for the express purpose of objecting to the transaction of any business on the grounds that the meeting has not been properly called.
| 5.6 | First Meeting of New Board |
As long as a quorum of Directors is present, each newly elected Board may without notice hold its first meeting immediately following the meeting of shareholders at which such Board is elected.
| 5.7 | Adjourned Meeting |
Notice of an adjourned Board meeting is not required if the time and place of the adjourned meeting is announced at the original meeting.
| 5.8 | Regular Meetings |
The Board may appoint a day or days in any month or months for regular Board meetings at a place and hour to be named. A copy of any resolution of the Board fixing the place and time of such regular meetings shall be sent to each Director forthwith after being passed, but no other notice shall be required for any such regular meeting except where the Act requires the purpose thereof or the business to be transacted thereat to be specified.
| 5.9 | Chair and Secretary |
The chair of any Board meeting shall be the first mentioned of such of the following officers as have been appointed and who is a Director and is present at the meeting: chair of the Board; managing director; or president. If no such officer is present, the Directors present shall choose one of their number to be chair. The secretary of the Corporation shall act as secretary of any Board meeting, and, if the secretary of the Corporation is absent, the chair of the meeting shall appoint a person who need not be a Director to act as secretary of the meeting.
| 5.10 | Quorum |
Subject to any Unanimous Shareholder Agreement, a majority of the Directors constitutes a quorum at a Board meeting.
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| 5.11 | Votes to Govern |
(1) Subject to any Unanimous Shareholder Agreement, at all Board meetings, every question shall be decided by a majority of the votes cast on the question.
(2) Unless a ballot is demanded, an entry in the minutes of a meeting to the effect that the chair of the meeting declared a resolution to be carried or defeated is, in the absence of evidence to the contrary, proof of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.
| 5.12 | Casting Vote |
Subject to any Unanimous Shareholder Agreement, in case of an equality of votes at a Board meeting, the chair of the meeting shall be entitled to a second or casting vote.
| 5.13 | Resolution in Lieu of Meeting |
A resolution in writing, signed by all the Directors entitled to vote on that resolution at a Board meeting, is as valid as if it had been passed at a Board meeting.
| 5.14 | One Director Meeting |
Where the Board consists of only one Director, that Director may constitute a meeting.
SECTION 6 – COMMITTEES
| 6.1 | Committees of the Board |
The Board may appoint from their number one or more committees of the Board, however designated, and delegate to any such committee any of the powers of the Board, except powers to:
| (a) | submit to the shareholders any question or matter requiring the approval of the shareholders; |
| (b) | fill a vacancy among the Directors or in the office of auditor or appoint or remove any of the chief executive officers, however designated, the chief financial officer, however designated, the chair or the president of the Corporation; |
| (c) | subject to the Act, issue securities except in the manner and on the terms authorized by the Directors; |
| (d) | declare dividends; |
| (e) | purchase, redeem or otherwise acquire shares issued by the Corporation; |
| (f) | pay a commission for the sale of shares of the Corporation; |
| (g) | approve a management information circular; |
| (h) | approve a take-over bid circular, directors’ circular or issuer bid circular; |
| (i) | approve any financial statements; |
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| (j) | approve an amalgamation of the Corporation with any corporation that holds all of its issued and outstanding shares, any wholly-owned subsidiary of the Corporation or corporation all of the issued and outstanding shares of which are held by the same body corporate that holds all issued and outstanding shares in the Corporation; and |
| (k) | adopt, amend or repeal By-laws. |
| 6.2 | Transaction of Business |
Subject to the provisions of Section 6.1, the powers of a committee of the Board may be exercised at a meeting at which a quorum is present or by resolution in writing signed by all members of such committee who would have been entitled to vote on that resolution at a meeting of the committee. Meetings of such committee may be held at any place in or outside Ontario.
| 6.3 | Advisory Bodies |
The Board may from time to time appoint such advisory bodies as it may deem advisable.
| 6.4 | Procedure |
Unless otherwise determined by the Board, each committee and advisory body shall have the power to fix its quorum at not less than a majority of its members, to elect its chair and to regulate its procedure. To the extent that the Board or the committee does not establish rules to regulate the procedure of the committee, the provisions of these By-laws applicable to Board meetings shall apply with all necessary modifications.
SECTION 7 – OFFICERS
| 7.1 | Appointment |
Subject to any Unanimous Shareholder Agreement, the Board may from time to time designate the offices of the Corporation and from time to time appoint a chair of the Board, managing director, president, one or more vice-presidents (to which title may be added words indicating seniority or function), a secretary, a treasurer and such other officers as the Board may determine, including one or more assistants to any of the officers so appointed. One person may hold more than one office. The Board may specify the duties of and, in accordance with these By-laws and subject to the Act, delegate to such officers powers to manage the business and affairs of the Corporation. Except for the chair of the Board and the managing director, an officer may but need not be a Director.
| 7.2 | Chair of the Board |
The Board may from time to time appoint a chair of the Board who shall be a Director. If appointed, the Board may assign to the chair of the Board any of the powers and duties that are by any provisions of these By-laws assigned to the managing director or to the president. The chair shall have such other powers and duties as the Board may specify.
| 7.3 | Managing Director |
The Board may from time to time appoint a managing director who shall be a Director. If appointed, the managing director shall be the chief executive officer and, subject to the authority of the Board, shall have general supervision of the business and affairs of the Corporation. The managing director shall have such other powers and duties as the Board may specify. During the absence or disability of the president, or if no president has been appointed, the managing director shall also have the powers and duties of that office.
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| 7.4 | President |
If appointed, the president shall be the chief operating officer and, subject to the authority of the Board, shall have general supervision of the business of the Corporation. The president shall have such other powers and duties as the Board may specify. During the absence or disability of the managing director, or if no managing director has been appointed, the president shall also have the powers and duties of that office.
| 7.5 | Secretary |
Unless otherwise determined by the Board, the secretary shall attend and be the secretary of all meetings of the Board, shareholders and committees of the Board that he or she attends. The secretary shall enter or cause to be entered in records kept for that purpose minutes of all proceedings at meetings of the Board, shareholders and committees of the Board, whether or not he or she attends such meetings. The secretary shall give or cause to be given, as and when instructed, all notices to shareholders, Directors, officers, auditors and members of committees of the Board. The secretary shall be the custodian of the seal of the Corporation and of all books, records and instruments belonging to the Corporation, except when some other officer or agent has been appointed for that purpose. The secretary shall have such other powers and duties as otherwise may be specified.
| 7.6 | Treasurer |
The treasurer shall keep proper accounting records in compliance with the Act and shall be responsible for the deposit of money, the safekeeping of securities and the disbursement of the funds of the Corporation. The treasurer shall render to the Board whenever required an account of all his or her transactions as treasurer and of the financial position of the Corporation. The treasurer shall have such other powers and duties as otherwise may be specified.
| 7.7 | Powers and Duties of Officers |
The powers and duties of all officers shall be such as the terms of their engagement call for or as the Board or (except for those whose powers and duties are to be specified only by the Board) the chief executive officer may specify. The Board and (except as aforesaid) the chief executive officer may, from time to time and subject to the provisions of the Act and any Unanimous Shareholder Agreement, vary, add to or limit the powers and duties of any officer. Any of the powers and duties of an officer to whom an assistant has been appointed may be exercised and performed by such assistant, unless the Board or the chief executive officer otherwise directs.
| 7.8 | Term of Office |
Subject to any Unanimous Shareholder Agreement, the Board, in its discretion, may remove any officer of the Corporation. Otherwise, each officer appointed by the Board shall hold office until his or her successor is appointed or until his or her earlier resignation.
| 7.9 | Agents and Attorneys |
The Board shall have power from time to time to appoint agents or attorneys for the Corporation in or outside Canada with such powers (including the power to sub-delegate) of management, administration or otherwise as may be thought fit.
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| 7.10 | Conflict of Interest |
An officer shall disclose his or her interest in any material contract or transaction or proposed material contract or transaction with the Corporation in accordance with Section 4.9.
| 7.11 | Fidelity Bonds |
The Board may require such officers, employees and agents of the Corporation as the Board deems advisable to furnish bonds for the faithful discharge of their duties, in such form and with such surety as the Board may from time to time prescribe.
SECTION 8 – PROTECTION OF DIRECTORS, OFFICERS AND OTHERS
| 8.1 | Limitation of Liability |
Every Director and officer of the Corporation in exercising his or her powers and discharging his or her duties to the Corporation shall act honestly and in good faith with a view to the best interests of the Corporation and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Subject to the foregoing, no Director or officer shall be liable for the acts, omissions, failures, neglects or defaults of any other Director, officer or employee, or for joining in any act for conformity, or for any loss, damage or expense suffered or incurred by the Corporation through the insufficiency or deficiency of title to any property acquired by the Corporation or for or on behalf of the Corporation, or for the insufficiency or deficiency of any security in or upon which any of the moneys of the Corporation shall be invested, or for any loss or damage arising from the bankruptcy, insolvency or tortious act of any person with whom any of the moneys, securities or effects of the Corporation shall be deposited, or for any loss occasioned by any error of judgment or oversight on his or her part, or for any other loss, damage or misfortune which shall happen in the execution of the duties of his or her office or in relation thereto. Nothing herein shall relieve any Director or officer from the duty to act in accordance with the Act and the regulations thereunder or from liability for any breach thereof.
| 8.2 | Indemnity |
(1) The Corporation shall indemnify a Director or officer of the Corporation, a former Director or officer or another individual who acts or acted at the Corporation’s request as a director or officer (or an individual acting in a similar capacity) of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of that association with the Corporation or other entity.
(2) The Corporation shall advance moneys to a Director, officer or other individual for the costs, charges and expenses of a proceeding referred to in Section 8.2(1). The individual shall repay the moneys if he or she does not fulfil the conditions of Section 8.2(3).
(3) The Corporation shall not indemnify an individual under Sections 8.2(1)or (2) unless he or she:
| (a) | acted honestly and in good faith with a view to the best interests of the Corporation or, as the case may be, to the best interests of the other entity for which he or she acted as a director or officer or in a similar capacity at the Corporation’s request; and |
| (b) | in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that his or her conduct was lawful. |
(4) The Corporation shall also indemnify the person referred to in Section 8.2(1) in such other circumstances as the Act or law permits or requires. Nothing in these By-laws shall limit the right of any person entitled to indemnity to claim indemnity apart from the provisions of these By-laws.
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| 8.3 | Insurance |
The Corporation may purchase and maintain such insurance for the benefit of any person referred to in Section 8.2(1) as the Board may from time to time determine.
SECTION 9 – SECURITIES
| 9.1 | Options or Rights |
Subject to the Act, the Articles and any Unanimous Shareholder Agreement, the Board may from time to time issue or grant options to purchase the whole or any part of the authorized and unissued shares of the Corporation at such times and to such persons and for such consideration as the Board shall determine, except that no share shall be issued until it is fully paid as provided by the Act.
| 9.2 | Commissions |
The Board may from time to time authorize the Corporation to pay a reasonable commission to any person in consideration of his or her purchasing or agreeing to purchase shares of the Corporation, whether from the Corporation or from any other person, or procuring or agreeing to procure purchasers for any such shares.
| 9.3 | Securities Register |
The Corporation shall prepare and maintain, at its registered office or at any other place in Ontario designated by the Board, a securities register in which it records the securities issued by it in registered form, showing with respect to each class or series of securities:
| (a) | the names, alphabetically arranged, of each person who: |
| (i) | is or has been within six years registered as a shareholder of the Corporation, the address, including the street and number, if any, of every such person while a holder, and the number and class of shares registered in the name of such holder; |
| (ii) | is or has been within six years registered as a holder of debt obligations of the Corporation, the address, including the street and number, if any, of every such person while a holder, and the class or series and principal amount of the debt obligations registered in the name of such holder; or |
| (iii) | is or has been within six years registered as a holder of warrants of the Corporation, other than warrants exercisable within one year from the date of issue, the address, including the street and number, if any, of every such person while a registered holder and the class or series and number of warrants registered in the name of such holder; and |
| (b) | the date and particulars of the issue of each security and warrant. |
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| 9.4 | Register of Transfers |
The Corporation shall cause to be kept a register of transfers in which all transfers of securities issued by the Corporation in registered form and the date and other particulars of each transfer shall be set out.
| 9.5 | Registration of Transfers |
Subject to the Securities Transfer Act, 2006 (Ontario), no transfer of a share shall be registered in a securities register except on presentation of the certificate, if any, issued by the Corporation, representing the share with an endorsement which complies with the Securities Transfer Act, 2006 (Ontario) made on or delivered with it duly executed by an appropriate person as provided by the Securities Transfer Act, 2006 (Ontario), together with such reasonable assurance that the endorsement is genuine and effective as the Board may from time to time prescribe, on payment of all applicable taxes and any reasonable fees prescribed by the Board, on compliance with the restrictions on issue, transfer or ownership authorized by the Articles or any Unanimous Shareholder Agreement and on satisfaction of any lien referred to in Section 9.12(1).
| 9.6 | Transfer Agents and Registrars |
The Board may from time to time, in respect of each class of securities issued by it, appoint one or more trustees, transfer or other agents to keep the securities register and the register of transfers and a registrar, trustee or agent to maintain a central securities register of issued securities and may appoint one or more persons or agents to keep branch registers, and, subject to the Act, one person may be appointed to keep the securities register, register of transfers and the records of issued securities. Such a person may be designated as transfer agent or registrar according to its functions, and one person may be designated both registrar and transfer agent. The Board may at any time terminate such appointment.
| 9.7 | Non-recognition of Trusts |
Subject to the Act, the Corporation may treat the registered holder of any security as the person exclusively entitled to vote, to receive notices, to receive any dividend, interest or other payments in respect of the security, and otherwise to exercise all the rights and powers of an owner of the security.
| 9.8 | Security Certificates |
(1) Subject to Section 9.8(2), every holder of one or more securities of the Corporation shall be entitled, at his or her option, to a security certificate, stating the number and class or series of securities held by him or her as shown in the securities register. The certificates shall be in such form as the Board may from time to time approve and need not be under the corporate seal. Unless otherwise ordered by the Board, any such certificate shall be signed manually by at least one of the Directors or officers of the Corporation.
(2) Unless otherwise provided in the Articles, the Board may provide by resolution that all or any classes and series of shares or other securities shall be uncertificated securities, provided that such resolution shall not apply to securities represented by a certificate until such certificate is surrendered to the Corporation.
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(3) Unless the Board otherwise determines, certificates in respect of which a transfer agent or registrar has been appointed shall not be valid unless countersigned by or on behalf of such transfer agent or registrar.
(4) Signatures of signing officers may be printed or mechanically reproduced in facsimile upon security certificates and every such facsimile shall for all purposes be deemed to be the signature of the officer whose signature it reproduces and shall be binding upon the Corporation, except that at least one Director or officer of the Corporation shall manually sign each certificate (other than a scrip certificate or a certificate representing a fractional share or a warrant or a promissory note that is not issued under a trust indenture) in the absence of a manual signature thereon of a duly appointed transfer agent, registrar, branch transfer agent or issuing or other authenticating agent of the Corporation or trustee who certifies it in accordance with a trust indenture. A security certificate executed as aforesaid shall be valid notwithstanding that the person has ceased to be a Director or an officer of the Corporation at the date of issue of the certificate.
| 9.9 | Replacement of Security Certificates |
The Board may in its discretion (or any officer or agent designated by the Board may in his or her discretion) direct the issue of a new share or other such certificate in lieu of and on cancellation of a certificate that has been mutilated or in substitution for a certificate claimed to have been lost, apparently destroyed or wrongfully taken, on payment of such reasonable fee and on such terms as to indemnity, reimbursement of expenses and evidence of loss and of title as the Board may from time to time prescribe, whether generally or in any particular case.
| 9.10 | Joint Holders |
If two or more persons are registered as joint holders of any security, the Corporation shall not be bound to issue more than one certificate in respect of that security, and delivery of such certificate to one of those persons shall be sufficient delivery to all of them. Any one of those persons may give effectual receipts for the certificate issued in respect of it or for any dividend, interest, bonus, return of capital or other money payable or warrant issuable in respect of that security.
| 9.11 | Deceased Holders |
In the event of the death of a holder, or of one of the joint holders of any security, the Corporation shall not be required to make any entry in the securities register in respect of the death or to make any dividend, interest or other payments in respect of the security except on production of all such documents as may be required by law.
| 9.12 | Lien for Indebtedness |
(1) Except with respect to any class or series of shares listed and posted for trading on any stock exchange in or outside Canada, the Corporation shall have a lien on shares registered in the name of a Defaulting Shareholder for any Shareholder Debt.
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(2) If any Defaulting Shareholder defaults in the payment due in respect of any Shareholder Debt when the same becomes due and payable and continues in default for a period of 15 days after the Corporation has given notice in writing of such default to the Defaulting Shareholder:
| (a) | the Corporation may sell all or any part of the Liened Shares at a bona fide public or private sale or auction; |
| (b) | the terms and manner of the auction or sale shall be in the sole discretion of the Corporation; |
| (c) | the Corporation may accept any offer that it in its absolute discretion considers advisable upon such terms, whether for cash or credit or partly cash and partly credit, as it in its discretion considers advisable; |
| (d) | notice of any public or private sale or auction shall be given to the Defaulting Shareholder at least 15 days prior to the date on which such sale is held; |
| (e) | the proceeds of such sale shall be used and applied in descending order as follows: |
| (i) | first, to the cost and expense of such sale incurred by the Corporation, including legal fees, disbursements and charges; |
| (ii) | second, to reimburse the Corporation for out-of-pocket expenses incurred in connection with the sale; |
| (iii) | third, for the payment in full of the Shareholder Debt and all other sums due to the Corporation by the Defaulting Shareholder; and |
| (iv) | the balance, if any, to the Defaulting Shareholder; |
| (f) | if the proceeds of the sale are insufficient to pay the Shareholder Debt, the Defaulting Shareholder shall remain liable for any such deficiency; |
| (g) | the Corporation may apply any dividends or other distributions paid or payable on or in respect of the Liened Shares in repayment of the Shareholder Debt; |
| (h) | where the Liened Shares are redeemable pursuant to the Articles or may be repurchased at a price determined pursuant to the terms of any Unanimous Shareholder Agreement, the Corporation may redeem or repurchase all or any part of the Liened Shares and apply the redemption or repurchase price to the Shareholder Debt; and |
| (i) | the Corporation may refuse to register a transfer of all or part of the Liened Shares until the Shareholder Debt is paid. |
(3) In exercising one or more of the rights granted in Section 9.12(2), the Corporation shall not thereby prejudice or surrender any other rights of enforcement of its lien which may by law be available to it, or any other remedy available to the Corporation for collection of the Shareholder Debt, and the Defaulting Shareholder shall remain liable for any deficiency remaining.
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SECTION 10 – DIVIDENDS AND RIGHTS
| 10.1 | Dividends |
Subject to the Act and any Unanimous Shareholder Agreement, the Board may from time to time declare dividends payable to the shareholders according to their respective rights and interests in the Corporation. Dividends may be paid in money or property or by the issue of fully paid shares of the Corporation or options or rights to acquire fully paid shares of the Corporation.
| 10.2 | Dividend Cheques |
A dividend payable in money (less any tax or other amounts required to be deducted or withheld by the Corporation) shall be paid to the order of each registered holder of the shares of the class or series in respect of which it has been declared by Cheque in lawful money of Canada at par at any branch in Canada of the Corporation’s bankers for the time being or, in respect of any particular holder, by any other means agreed upon between the Corporation and such holder. The mailing of such Cheque by ordinary unregistered first class pre-paid mail addressed to a holder at his or her address as it appears in the securities register of the Corporation or, in the event of the address of any such holder not so appearing, then at the last address of such holder known to the Corporation or, in the case of joint holders, to the address of that one of the joint holders whose name stands first in such register, or the payment by such other means shall be deemed to be payment of the dividends represented thereby and payable on such date to the extent of the amount of such payment unless the Cheque is not paid upon presentation or payment by such other means is not received.
| 10.3 | Non-receipt or Loss of Cheques |
In the event of non-receipt or loss of any dividend Cheque by the person to whom it is sent, the Corporation shall issue a replacement Cheque for a like amount on such terms as to indemnity, reimbursement of expenses and evidence of non-receipt and of title as the Board may from time to time prescribe, whether generally or in any particular case.
| 10.4 | Currency of Dividends |
Dividends or other distributions payable in cash may be paid to some shareholders in Canadian currency and to other shareholders in equivalent amounts of a currency or currencies other than Canadian currency. The Board may declare dividends or other distributions in any currency or in alternative currencies and make such provisions as it deems advisable for the payment of such dividends or other distributions.
| 10.5 | Record Date for Dividends and Rights |
The Board may fix in advance a date, preceding by not more than 50 days and not less than 21 days, as the record date for the payment of any dividend or the date for the issue of any warrant or other evidence of the right to subscribe for securities of the Corporation, as a record date for the determination of the persons entitled to receive payment of such dividend or to exercise the right to subscribe for such securities, and notice of any such record date shall be given not less than seven days before the record date in the manner provided by the Act. If no record date is so fixed, the record date for the determination of the persons entitled to receive payment of any dividend or to exercise the right to subscribe for securities of the Corporation shall be at the close of business on the day on which the resolution relating to the dividend or right to subscribe is passed by the Board.
| 10.6 | Unclaimed Dividends |
Any dividend unclaimed after a period of six years from the date on which it has been declared to be payable shall be forfeited and shall revert to the Corporation.
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SECTION 11 – MEETINGS OF SHAREHOLDERS
| 11.1 | Annual Meetings |
The annual meeting of shareholders shall be held at such time in each year and, subject to Section 11.4, at such place as the Board may from time to time determine, for the purpose of considering the minutes of an earlier meeting, considering the financial statements and reports required by the Act to be placed before the annual meeting, electing Directors, appointing or waiving the appointment of an auditor, fixing or authorizing the Directors to fix the remuneration payable to any such auditor and for the transaction of such other business as may properly be brought before the meeting.
| 11.2 | Special Meetings |
The Board shall have power to call a special meeting of shareholders at any time.
| 11.3 | Meeting Held by Electronic Means |
A meeting of the shareholders may be held by telephonic or electronic means. A shareholder who, through these means, votes at the meeting or establishes a communications link to the meeting shall be deemed to be present at the meeting.
| 11.4 | Place of Meetings |
Meetings of shareholders shall be held at such place in or outside Ontario as the Directors determine or, in the absence of such a determination, at the place where the registered office of the Corporation is located. A meeting held under Section 11.3 shall be deemed to be held at the place where the registered office of the Corporation is located.
| 11.5 | Notice of Meetings |
Notice of the time and place of each meeting of shareholders shall be given in the manner provided in Section 12, in the case of an offering corporation, not less than 21 days and, in the case of any other corporation, not less than 10 days, but in either case, not more than 50 days before the date of the meeting to each Director, to any auditor and to each shareholder who at the close of business on the record date for notice is entered in the securities register as the holder of one or more shares carrying the right to receive notice of or vote at the meeting. Notice of a meeting of shareholders called for any purpose other than consideration of the minutes of an earlier meeting, financial statements and auditor’s report, election of directors and reappointment of the incumbent auditor or fixing or authorizing the Directors to fix the remuneration payable to such auditor shall state or be accompanied by a statement of:
| (a) | the nature of the business in sufficient detail to permit the shareholders to form a reasoned judgment on it; and |
| (b) | the text of any special resolution or by-law to be submitted to the meeting. |
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| 11.6 | List of Shareholders Entitled to Notice |
For every meeting of shareholders, the Corporation shall prepare a list of shareholders entitled to receive notice of the meeting, arranged in alphabetical order and showing the number of shares held by each shareholder entitled to vote at the meeting. If a record date for the meeting is fixed pursuant to Section 11.7, the shareholders listed shall be those registered at the close of business on that record date. If no record date is fixed, the shareholders listed shall be those registered at the close of business on the day immediately preceding the day on which notice of the meeting is given or, where no such notice is given, on the day on which the meeting is held. The list shall be available for examination by any shareholder during usual business hours at the registered office of the Corporation or at the place where the central securities register is maintained and at the meeting for which the list was prepared. Where a separate list of shareholders has not been prepared, the names of persons appearing in the securities register at the requisite time as the holder of one or more shares carrying the right to vote at such a meeting shall be deemed to be a list of shareholders.
| 11.7 | Record Date for Notice |
The Board may fix in advance a date, preceding the date of any meeting of shareholders by not more than 50 days and not less than 21 days, as a record date for the determination of the shareholders entitled to notice of the meeting, and notice of any such record date shall be given not less than seven days before the record date, by advertisement in a newspaper published or distributed in the place where the Corporation has its registered office and in each place in Canada where it has a transfer agent or where a transfer of the Corporation’s shares may be recorded, and, where applicable, by written notice to each stock exchange in Canada on which the Corporation’s shares are listed for trading unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register of the Corporation at the close of business on the day the Directors fix the record date. If no such record date is so fixed, the record date for the determination of the shareholders entitled to receive notice of the meeting shall be at the close of business on the day preceding the day on which the notice is given or, if no notice is given, shall be the day on which the meeting is held.
| 11.8 | Waiver of Notice |
(1) A meeting of shareholders may be held without notice at any time and place permitted by the Act if:
| (a) | all the shareholders entitled to vote at the meeting are present in person or duly represented or if those not present or represented waive notice of or otherwise consent to the meeting being held; and |
| (b) | the auditor and the Directors are present or waive notice of or otherwise consent to the meeting being held, so long as the shareholders, auditor or Directors present are not attending for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called. |
(2) At a meeting held under Section 11.8(1), any business may be transacted which the Corporation may transact at a meeting of shareholders.
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| 11.9 | Chair, Secretary and Scrutineers |
The chair of any meeting of shareholders shall be the first mentioned of such of the following officers as have been appointed and who is present at the meeting: chair of the Board; managing director; president; or a vice-president who is a shareholder. If no such officer is present within 15 minutes from the time fixed for holding the meeting, the persons present and entitled to vote shall choose one of their number to be chair. If the secretary of the Corporation is absent, the chair shall appoint some person, who need not be a shareholder, to act as secretary of the meeting. If desired, one or more scrutineers, who need not be shareholders, may be appointed by a resolution or by the chair with the consent of the meeting.
| 11.10 | Persons Entitled to be Present |
The only persons entitled to be present at a meeting of the shareholders shall be those entitled to attend or vote at the meeting, the Directors, auditor, legal counsel of the Corporation and others who, although not entitled to attend or vote, are entitled or required under any provision of the Act, the Articles, By-laws or Unanimous Shareholder Agreement to be present at the meeting. Any other person may be admitted only on the invitation of the chair of the meeting or with the consent of the meeting.
| 11.11 | Quorum |
Subject to any Unanimous Shareholder Agreement, a quorum of shareholders is present at a meeting of shareholders irrespective of the number of persons actually present at the meeting, if, in the case of an offering corporation, two or more holders of shares carrying not less in aggregate than 5% of the votes entitled to be voted at the meeting are present in person or represented by proxy and, in the case of any other corporation, the holders of a majority of the shares entitled to vote at the meeting are present in person or represented by proxy. A quorum need not be present throughout the meeting provided that a quorum is present at the opening of the meeting. If a quorum is not present at the time appointed for the meeting or within a reasonable time after that the shareholders may determine, the shareholders present or represented may adjourn the meeting to a fixed time and place but may not transact any other business.
| 11.12 | Right to Vote |
Every person named in the list referred to in Section 11.6 shall be entitled to vote the shares shown on the list opposite his or her name at the meeting to which the list relates.
| 11.13 | Proxyholders and Representatives |
Every shareholder entitled to vote at a meeting of shareholders may appoint a proxyholder, or one or more alternate proxyholders, as his or her nominee to attend and act at the meeting in the manner and to the extent authorized and with the authority conferred by the proxy. A proxy shall be in writing or have an electronic signature executed by the shareholder or his or her attorney and shall conform with the requirements of the Act. Alternatively, every shareholder which is a body corporate or other legal entity may authorize by resolution of its directors or governing body an individual to represent it at a meeting of shareholders and that individual may exercise on the shareholder’s behalf all the powers it could exercise if it were an individual shareholder. The authority of such an individual shall be established by depositing with the Corporation a certified copy of the resolution, or in such other manner as may be satisfactory to the secretary of the Corporation or the chair of the meeting. Any such proxyholder or representative need not be a shareholder. In the case of a proxy appointing a proxyholder to attend and act at a meeting or meetings of shareholders of an offering corporation, the proxy ceases to be valid one year from its date.
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| 11.14 | Time for Deposit of Proxies |
The Board may fix a time not exceeding 48 hours, excluding non-business days, preceding any meeting or adjourned meeting of shareholders before which time proxies to be used at the meeting must be deposited with the Corporation or its agent, and any time so fixed shall be specified in the notice calling the meeting. A proxy shall be acted on only if, before the time so specified, it has been deposited with the Corporation or its agent specified in the notice or if, no such time having been specified in the notice, it has been received by the secretary of the Corporation or by the chair of the meeting before the time of voting.
| 11.15 | Joint Shareholders |
If two or more persons hold shares jointly, any one of them present in person or duly represented at a meeting of shareholders may, in the absence of the other or others, vote the shares, but, if two or more of those persons are present in person or represented and vote, they shall vote as one the shares jointly held by them.
| 11.16 | Votes to Govern |
At any meeting of shareholders, every question shall, unless otherwise required by the Articles, By-laws, any Unanimous Shareholder Agreement or by law, be determined by a majority of the votes cast on the question.
| 11.17 | Casting Vote |
Subject to any Unanimous Shareholder Agreement, in case of an equality of votes at any meeting of shareholders either on a show of hands or on a poll, the chair of the meeting shall be entitled to a second or casting vote.
| 11.18 | Show of Hands |
Subject to the Act, any question at a meeting of shareholders shall be decided by a show of hands, unless a ballot is required or demanded as provided. On a show of hands, every person who is present and entitled to vote shall have one vote. Whenever a vote by show of hands has been taken on a question, unless a ballot is required or demanded, a declaration by the chair of the meeting that the vote on the question has been carried or carried by a particular majority or not carried and an entry to that effect in the minutes of the meeting shall be prima facie evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against any resolution or other proceeding in respect of the question, and the result of the vote so taken shall be the decision of the shareholders on the question.
| 11.19 | Ballots |
On any question proposed for consideration at a meeting of shareholders, and whether or not a show of hands has been taken on it, the chair may require a ballot or any person who is present and entitled to vote on the question at the meeting may demand a ballot. A ballot so required or demanded shall be taken in such manner as the chair shall direct. A requirement or demand for a ballot may be withdrawn at any time before the ballot is taken. If a ballot is taken, each person present shall be entitled, in respect of the shares which he or she is entitled to vote at the meeting on the question, to that number of votes provided by the Act or the Articles, and the result of the ballot so taken shall be the decision of the shareholders on the question.
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| 11.20 | Adjournment |
The chair at a meeting of shareholders may, with the consent of the meeting and subject to such conditions as the meeting may decide, adjourn the meeting from time to time and from place to place. If a meeting of shareholders is adjourned for less than 30 days, it will not be necessary to give notice of the adjourned meeting, other than by announcement at the original meeting that is adjourned. Subject to the Act, if a meeting of shareholders is adjourned by one or more adjournments for an aggregate of 30 days or more, notice of the adjourned meeting shall be given as for an original meeting.
| 11.21 | Resolution in Lieu of Meeting |
A resolution in writing signed by all the shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed at a meeting of the shareholders unless, in accordance with the Act:
| (a) | in the case of the resignation or removal of a Director, or the appointment or election of another person to fill the place of that Director, a written statement is submitted to the Corporation by the Director giving the reasons for his or her resignation or the reasons why he or she opposes any proposed action or resolution for the purpose of removing him or her from office or the election of another person to fill the office of that Director; or |
| (b) | in the case of the removal or resignation of an auditor, or the appointment or election of another person to fill the office of auditor, representations in writing are made to the Corporation by that auditor concerning its proposed removal, the appointment or election of another person to fill the office of auditor or its resignation. |
| 11.22 | Only One Shareholder |
Where the Corporation has only one shareholder or only one holder of any class or series of shares, the shareholder present in person or duly represented constitutes a meeting.
SECTION 12 – NOTICES
| 12.1 | Method of Giving Notices |
Any notice (which term includes any communication or document) to be given (which term includes sent, delivered or served) pursuant to the Act, the regulations, the Articles, the By-laws, any Unanimous Shareholder Agreement or otherwise to a shareholder, Director, officer, auditor or member of a committee of the Board shall be sufficiently given if delivered personally to the person to whom it is to be given or if mailed to him or her at his or her recorded address by prepaid, ordinary or air mail, or if sent to him or her at his or her recorded address by any telephonic or electronic means. A notice so delivered shall be deemed to have been given when it is delivered personally, and a notice so mailed shall be deemed to have been given on the fifth day after it is deposited in a post office or public letter box. A notice sent by any telephonic or electronic means shall be deemed to have been given when dispatched or delivered to the appropriate communication company or agency or its representative for dispatch or through transmission of data or information through automated touch-tone telephone systems, computer networks, any other similar means or any other prescribed means. The secretary may change or cause to be changed the recorded address of any shareholder, Director, officer, auditor or member of a committee of the Board in accordance with any information believed by him or her to be reliable.
AMENDED AND RESTATED BY-LAW NO. 1
- 23 -
| 12.2 | Notice to Joint Shareholders |
If two or more persons are registered as joint holders of any share, any notice may be addressed to all such joint holders, but notice addressed to one of those persons shall be sufficient notice to all of them.
| 12.3 | Computation of Time |
In computing the period of days when notice must be given under any provision requiring a specified number of days notice of any meeting or other event, the period shall be deemed to begin on the day following the event that began the period and shall be deemed to end at midnight of the last day of the period, except that, if the last day of the period falls on a non-business day, the period shall end at midnight on the day next following that is not a non-business day.
| 12.4 | Undelivered Notices |
If any notice given to a shareholder pursuant to Section 12.1 is returned on three consecutive occasions because such shareholder cannot be found, the Corporation shall not be required to give any further notices to that shareholder until he or she informs the Corporation in writing of his or her new address.
| 12.5 | Omissions and Errors |
The accidental omission to give any notice to any shareholder, Director, officer, auditor or member of a committee of the Board or the non-receipt of any notice by any such person or any error in any notice not affecting the substance of the notice shall not invalidate any action taken at any meeting held pursuant to the notice or otherwise founded on it.
| 12.6 | Persons Entitled by Death or Operation of Law |
Every person who, by operation of law, transfer, death of a shareholder or any other means whatsoever, shall become entitled to any share, shall be bound by every notice in respect of the share which has been duly given to the shareholder from whom he or she derives his or her title to the share before his or her name and address is entered on the securities register (whether the notice was given before or after the happening of the event on which he or she became so entitled) and before he or she furnished the Corporation with the proof of authority or evidence of his or her entitlement prescribed by the Act.
| 12.7 | Waiver of Notice |
Any shareholder, proxyholder or other person entitled to notice of or attend a meeting of shareholders, Director, officer, auditor or member of a committee of the Board may at any time waive any notice, or waive or abridge the time for any notice, required to be given to him or her under the Act, the regulations, the Articles, the By-laws, any Unanimous Shareholder Agreement or otherwise, and that waiver or abridgement, whether given before or after the meeting or other event of which notice is required to be given, shall cure any default in the giving or in the time of the notice, as the case may be. Any such waiver or abridgement shall be in writing, except a waiver of notice of a meeting of shareholders or of the Board or a committee of the Board, which may be given in any manner.
AMENDED AND RESTATED BY-LAW NO. 1
- 24 -
SECTION 13 – EFFECTIVE DATE
| 13.1 | Effective Date |
These By-laws shall come into force when made by the Board in accordance with the Act.
| 13.2 | Paramountcy |
In the event of any conflict between any provision of these By-laws and any provision of any Unanimous Shareholder Agreement, the provision of the Unanimous Shareholder Agreement shall prevail to the extent of the conflict, and the Directors and the shareholders shall amend these By-laws accordingly.
| 13.3 | Repeal |
All previous By-laws of the Corporation save and except for By-Law No. 2 of the Corporation (a by-law with respect to the advance notice requirements for nominations of directors) are repealed as of the coming into force of these By-laws. The repeal shall not affect the previous operation of any By-laws so repealed or affect the validity of any act done or right, privilege, obligation or liability acquired or incurred under, or the validity of any contract or agreement made pursuant to, or the validity of any Articles or predecessor charter documents of the Corporation obtained pursuant to, any such By-laws before its repeal. All officers and persons acting under any By-laws so repealed shall continue to act as if appointed under the provisions of these By-laws, and all resolutions of the shareholders or the Board or a committee of the Board with continuing effect passed under any repealed By-laws shall continue to be good and valid except to the extent inconsistent with these By-laws and until amended or repealed.
AMENDED AND RESTATED BY-LAW NO. 1
- 25 -
MADE by the Board the 2nd day of May, 2022.
| (signed) "Sebastien Paré" | |
| Chief Executive Officer |
Exhibit 5.1
 |
Dentons Canada LLP 77 King Street West, Suite 400 Toronto-Dominion Centre Toronto, ON, Canada M5K 0A1 dentons.com |
August 15, 2022
|
VIQ Solutions Inc. 5915 Airport Road, Suite 700 |
Dear Sirs/Mesdames:
| Re: | VIQ Solutions Inc. – Registration of 7,103,704 common shares |
We have acted as Canadian counsel to VIQ Solutions Inc., a corporation existing under the laws of the Province of Ontario (the “Company”), in connection with the filing of a Registration Statement on Form F-3 (the “Registration Statement”) on the date hereof with the U.S. Securities and Exchange Commission (the “SEC”) under the U.S. Securities Act of 1933, as amended. The Registration Statement relates to the issuance of up to an aggregate of 7,103,704 common shares of the Company (the “Registration Shares”), consisting of (i) 3,551,852 common shares of the Company (the “Issued Shares”) registered for resale by the selling shareholders named in the Registration Statement (the “Selling Shareholders”), and (ii) up to 3,551,852 common shares of the Company (the “Warrant Shares”) underlying warrants registered for resale by the Selling Shareholders (the “Warrants”).
A. Documents Reviewed and Reliance
For purposes of this opinion, we have examined (i) the Registration Statement, and (ii) the Securities Purchase Agreement dated July 18, 2022 between the Selling Shareholders and the Company, including the exhibits thereto, including the form of warrant certificate representing the Warrants (the “Warrant Certificate”).
For the purposes of this opinion, we have also examined originals or copies, certified or otherwise identified to our satisfaction, of and relied upon the following documents (collectively, the “Corporate Documents”):
| (a) | the articles and by-laws of the Company; |
| (b) | certain resolutions of the Company’s board of directors; |
| (c) | a certificate of status issued by the Ministry of Government and Consumer Services (Ontario) with respect to the Company generated on August 12, 2022; and |
| (d) | a certificate of an officer of the Company with respect to certain factual matters (the “Officer’s Certificate”). |
| LuatViet ► Fernanda Lopes & Associados ► Guevara & Gutierrez ► Paz Horowitz Abogados ► Sirote ► Adepetun Caxton-Martins Agbor & Segun ► Davis Brown ► East African Law Chambers ► Eric Silwamba, Jalasi and Linyama ► Durham Jones & Pinegar ► LEAD Advogados ► For more information on the firms that have come together to form Dentons, go to dentons.com/legacyfirms |
| |
August 15, 2022 |
dentons.com |
We also have reviewed such other documents, and have considered such questions of law, as we have deemed relevant and necessary as a basis for our opinion. With respect to the accuracy of factual matters material to this opinion, we have relied upon the Corporate Documents, without independent investigation of the matters provided for therein for the purpose of providing our opinion.
B. Assumptions
In examining all documents and in providing our opinion we have assumed, without independent investigation, that:
| (a) | with respect to all documents examined by us, the genuineness of all signatures, the authenticity, completeness and accuracy of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as certified, conformed, telecopied, PDF or photocopied copies of originals and the legal capacity of individuals signing any documents; |
| (b) | the completeness, accuracy and currency of the indices and filing systems maintained at the public offices where we have searched or made relevant inquiries and of other documents and certificates supplied by public officials and |
| (c) | the Officer's Certificate continues to be accurate on the date hereof. |
C. Laws Addressed
We are qualified to carry on the practice of law in the Province of Ontario and we express no opinion as to any laws, or matters governed by any laws, other than the laws of the Province of Ontario and the federal laws of Canada applicable therein.
D. Opinions
Based upon and subject to the foregoing, and subject to the qualifications, assumptions and limitations stated herein, we are of the opinion that, (i) the Issued Shares have been validly issued as fully paid and non-assessable shares in the capital of the Company, and (ii) upon the exercise of the Warrants in accordance with the terms of the Warrant Certificates, including the receipt of the exercise price therefor, the Warrant Shares will be validly issued as fully paid and non-assessable shares in the capital of the Company.
E. Qualifications
Our opinion is expressed with respect to the laws in effect on the date of this opinion and we do not accept any responsibility to take into account or inform the addressee, or any other person authorized to rely on this opinion, of any changes in law, facts or other developments subsequent to this date that do or may affect the opinion we express, nor do we have any obligation to advise you of any other change in any matter addressed in this opinion or to consider whether it would be appropriate for any person other than the addressee to rely on our opinion.
Whenever our opinion refers to securities of the Company, whether issued or to be issued, as being "fully-paid and non-assessable", such phrase means that the holders of such securities will not, after the issuance to them of such securities, be liable to pay further amounts to the Company in respect of the issue price payable for such securities, and no opinion is expressed as to the adequacy of any consideration received by the Company therefor.
| |
August 15, 2022 |
dentons.com |
This opinion is rendered solely in connection with the Registration Statement and is expressed as of the date hereof. Our opinion is expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise, as to any other matters relating to Company, the Registration Statement or the Registration Shares. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our firm’s name wherever appearing in the Registration Statement. By the giving of such consent, we do not admit that we are experts with respect to any part of the Registration Statement, or otherwise, within the meaning of the rules and regulations of the SEC.
Yours very truly,
/s/ Dentons Canada LLP
Dentons Canada LLP
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Directors
VIQ Solutions Inc.
We, consent to the use of our report dated May 2, 2022, on the consolidated financial statements of VIQ Solutions Inc., which comprise the consolidated statements of financial position as of December 31, 2021 and December 31, 2020, the related consolidated statements of loss comprehensive loss, changes in shareholders’ equity and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes, which is incorporated by reference herein and to the reference to our firm under the heading “Experts” in the prospectus included in the Registration Statement on Form F-3 dated August 15, 2022 of VIQ Solutions Inc.
/s/ KPMG LLP
Chartered Professional Accountants, Licensed Public Accountants
August 15, 2022
Vaughan, Canada
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
The Board of Directors
VIQ Solutions Inc.
We, consent to the use of our report dated May 2, 2022, on the consolidated financial statements of VIQ Solutions Inc., which comprise the consolidated statements of financial position as of December 31, 2019, the related consolidated statements of loss and comprehensive loss, changes in shareholders’ equity and cash flows for the year ended December 31, 2019, and the related notes, which is incorporated by reference herein and to the reference to our firm under the heading “Experts” in the prospectus included in the Registration Statement on Form F-3 dated August 15, 2022 of VIQ Solutions Inc.
/s/ MNP LLP
Chartered Professional Accountants, Licensed Public Accountants
August 15, 2022
Toronto, Canada
Exhibit 107
Calculation of Filing Fee Tables
Form F-3
(Form Type)
VIQ Solutions Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered Securities
| Security Type | Security Class Title | Fee Calculation Rule | Amount Registered(1) | Proposed Maximum Offering Price Per Unit | Maximum Aggregate Offering Price | Fee Rate | Amount of Registration Fee | |||||||||||||||||||||
| Fees to Be Paid | Equity | Common Shares, no par value | 457 | (c) | 3,551,852 | $ | 1.01 | (2) | $ | 3,587,371 | 0.0000927 | $ | 332.55 | |||||||||||||||
| Common Shares, no par value, underlying Warrants | 457 | (g) | 3,551,852 | $ | 1.39 | (3) | $ | 4,937,074 | 0.0000927 | $ | 457.67 | |||||||||||||||||
| Total Offering Amounts | $ | 8,524,445 | $ | 790.22 | ||||||||||||||||||||||||
| Total Fees Previously Paid | — | |||||||||||||||||||||||||||
| Total Fee Offsets | — | |||||||||||||||||||||||||||
| Net Fee Due | $ | 790.22 | ||||||||||||||||||||||||||
| (1) | Pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), the common shares offered hereby and the common shares issuable upon exercise of warrants also include an indeterminate number of additional common shares as may from time to time become issuable by reason of share splits, share dividends, recapitalizations or other similar transactions. |
| (2) | With respect to the common shares offered by the selling stockholders, estimated at $1.01 per share, the average of the high and low prices as reported on The Nasdaq Capital Market on August 12, 2022, for the purpose of calculating the registration fee in accordance with Rule 457(c) under the Securities Act. |
| (3) | With respect to the common shares underlying the warrants offered by the selling stockholders, $1.39 per share, which is the exercise price of the warrants, for purposes of calculating the registration fee pursuant to Rule 457(g) under the Securities Act. |
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