Bioharvest Sciences Inc F-3, filed Aug 28, 2025
Bioharvest Sciences Inc. (BHST)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BIOHARVEST SCIENCES INC.
(Exact name of Registrant as specified in its charter)
Not applicable
(Translation of Registrant’s name into English)
British Columbia, Canada |
| Not Applicable |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification Number) |
1140-625 Howe Street
Vancouver, British Columbia
V6C 2T6, Canada
(604) 689-5722
(Address and telephone number of Registrant’s principal executive offices)
O’NEILL LAW LLP
Suite 704, 595 Howe Street
Vancouver, British Columbia
V6C 2T5, Canada
(604)-687-5792
(Name, address, and telephone number of agent for service)
Approximate date of commencement of proposed sale 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. ☒
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.C. 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. ☐
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SEC 1983 (02-25)Potential persons who are to respond to the collection of information contained in this Form are not required to respond unless the Form displays a currently valid OMB control number.
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 ☒
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.
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PROSPECTUS SUBJECT TO COMPLETION DATED AUGUST 28, 2025
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 securities and it is not soliciting an offer to buy securities in any state where the offer or sale is not permitted.
BIOHARVEST SCIENCES INC.
USD 100,000,000
Common Shares
Warrants
Units
______________
BioHarvest Sciences Inc. (“we”, “us”, “our”, “BioHarvest” or the “Company”) may offer and issue from time to time in one or more offerings up to an aggregate total amount of USD 100,000,000 (or the equivalent thereof if the Securities are denominated in any other currency or currency unit) during the period that this registration statement (the “Registration Statement”), including any amendments thereto, remains effective, of our common shares (“Common Shares”), common share purchase warrants (“Warrants”) and units comprised of Common Shares and Warrants (“Units”) or any combination thereof (collectively, the “Securities”). The Securities may be offered separately or together, in amounts, at prices and on terms to be determined based on market conditions at the time of sale and set forth in one or more prospectus Supplements (each, a “Prospectus Supplement” and together, the “Prospectus Supplements”) to the prospectus contained in the Registration Statement (the “Prospectus”).
The specific terms of the Securities with respect to a particular offering will be set out in the applicable Prospectus Supplement and may include, where applicable (i) in the case of Common Shares, the number of Common Shares offered, the offering price, and any other terms specific to the Common Shares being offered, (ii) in the case of Warrants, the offering price, the designation, the number and the terms of the Common Shares purchasable upon exercise of the Warrants, any procedures that will result in the adjustment of these numbers, the exercise price, the dates and periods of exercise and any other terms specific to the Warrants being offered, and (iii) in the case of Units, the number of Units offered, the offering price of the Units, the number, designation and terms of the Common Shares and Warrants comprising the Units and any procedures that will result in the adjustment of those numbers and any other specific terms applicable to the offering of Units. Where required by statute, regulation or policy, and where Securities are offered in currencies other than United States dollars, appropriate disclosure of foreign exchange rates applicable to the Securities will be included in the Prospectus Supplement describing the Securities.
All shelf information permitted under applicable law to be omitted from this Prospectus will be contained in one or more Prospectus Supplements that will be delivered to purchasers together with this Prospectus. Each Prospectus Supplement will be incorporated by reference into this Prospectus for the purposes of securities legislation as of the date of the Prospectus Supplement and only for the purposes of the distribution of the Securities to which the Prospectus Supplement pertains.
Our Common Shares are listed on the Nasdaq Global Market, or Nasdaq, under the symbol “BHST.” On August 26, 2025 the average sale price of our Common Shares on Nasdaq was USD 9.00 per share. Our Common Shares previously traded on the Canadian Securities Exchange, or CSE, under the symbol “BHSC” from August 6, 2015 until February 14, 2025.
On August 28, 2025, the aggregate market value of our Common Shares held by non-affiliates was approximately USD 127,878,581 based on 17,333,430 Common Shares outstanding and a per share price of USD 9.00 based on the closing sale price of our Common Shares on August 26, 2025.
We have not offered any securities pursuant to General Instruction I.B.5 on Form F-3 during the prior 12 calendar months period that ends on and includes the date of this Prospectus.
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We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and a “foreign private issuer”, as defined in Rule 405 under the U.S. Securities Act of 1933, as amended, or the Securities Act, and are subject to reduced public company reporting requirements. Investing in the securities involves a high degree of risk. Risks associated with an investment in the securities will be described in any applicable Prospectus Supplement and are and will be described in certain of our filings with the Securities and Exchange Commission, or SEC, as described in “Risk Factors” beginning on page 6. The securities may be sold directly by us to investors, through agents designated from time to time or to or through underwriters or dealers, or through a combination of such methods, on a continuous or delayed basis. For additional information on the methods of sale, you should refer to the section entitled “Plan of Distribution” in this Prospectus. If any agents or underwriters are involved in the sale of the securities with respect to which this Prospectus is being delivered, the names of such agents or underwriters and any applicable fees, commissions, discounts and over-allotment options will be set forth in a Prospectus Supplement. The price to the public of the securities and the net proceeds that we expect to receive from such sale will also be set forth in a Prospectus Supplement.
Neither the SEC nor any state or other foreign securities commission has approved nor disapproved 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 _______________ 2025.
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This Prospectus is part of a Registration Statement on Form F-3 that we filed with the United States Securities and Exchange Commission (the “SEC”) utilizing a “shelf” registration process. Under this shelf registration process, we may offer from time to time up to an aggregate of USD 100,000,000 (or the equivalent thereof if the Securities are denominated in any other currency or currency unit). You should read this Prospectus, including the documents incorporated by reference, and the related Registration Statement carefully. This Prospectus and the Registration Statement contain important information you should consider when making your investment decision.
You should rely only on the information that we have provided in this Prospectus and any applicable Prospectus Supplement. We have not authorized anyone to provide you with different information. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this Prospectus, including the documents incorporated by reference, and any applicable Prospectus Supplement. You must not rely on any unauthorized information or representation. This Prospectus and any applicable Prospectus Supplement is an offer to sell only the securities offered hereby and thereby, but only under circumstances and in jurisdictions where it is lawful to do so. You should assume that the information in this Prospectus, including the documents incorporated by reference, and any applicable Prospectus Supplement is accurate only as of the date on the front of the document, regardless of the time of delivery of this Prospectus, any applicable Prospectus Supplement, or any sale of a Security.
Except as otherwise indicated, references in this Prospectus to “BioHarvest,” “Company,” “we,” “us” and “our” refer to BioHarvest Sciences Inc.
Background
The Company was incorporated as “Midnight Star Ventures Corp.” under the Business Corporations Act (British Columbia) (the “BCBCA”) on April 19, 2013. On October 26, 2018, the Company changed its name from “Midnight Star Ventures Corp.” to “Canna-V-Cell Sciences Inc.” On March 31, 2020, the Company changed its name from “Canna-V-Cell Sciences Inc.” to “BioHarvest Sciences Inc.”
The Company’s registered and records offices are located at Suite 704 - 595 Howe Street, Vancouver, British Columbia V6C 2T5, Canada. The Company’s principal place of business is located at 9 Nahal Snir, Yavne, 8122446, Israel and its telephone number is +972-72-222-1910.
BioHarvest Ltd. (“BioHarvest Israel”) was incorporated as “Hi-Nutra Bioscience Ltd.” in Israel on January 24, 2007 and commenced its operations in July 2007. On February 21, 2011, BioHarvest Israel changed its name from “Hi-Nutra Bioscience Ltd.” to “Fruitura Bioscience Ltd”. On February 10, 2014, BioHarvest Israel changed its name from “Fruitura Bioscience Ltd” to “BioHarvest Ltd.”
On July 23 2014, BioHarvest Israel incorporated a wholly-owned subsidiary, BioHarvest Inc. (“BioHarvest Delaware”), in Delaware.
On February 26, 2018, BioHarvest Israel incorporated a wholly-owned subsidiary, Dolarin Ltd. (“Dolarin”), in Israel.
On September 27, 2018, the Company completed a reverse takeover transaction (the “RTO”) with BioHarvest Israel and Dolarin, pursuant to which the Company issued 48,337,496 pre-Consolidation Common Shares (approximately 1,381,071 post-Consolidation Common Shares) to BioHarvest Israel, representing approximately 50.06% of the issued and outstanding Common Shares immediately following the RTO, in consideration for all of the issued and outstanding shares of Dolarin. As a result of the RTO, Dolarin became a wholly-owned subsidiary of the Company.
On December 5, 2019, the Company incorporated a wholly-owned subsidiary, BioFarming Ltd. (“BioFarming”), in Israel.
On March 31, 2020, the Company completed a business combination (the “2020 Business Combination”) with BioHarvest Israel and BioFarming, pursuant to which the Company issued and granted an aggregate of 299,057,739
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pre-Consolidation Common Shares (approximately 8,544,507 post-Consolidation Common Shares), 39,565,579 pre-Consolidation Warrants (as defined herein) (approximately post-Consolidation 1,130,445 Warrants), with each Warrant exercisable to acquire one (1) Common Share at a pre-Consolidation exercise price of C$1.00 per Common Share (a post-Consolidation exercise price of C$35.00 per Common Share) until August 31, 2020, and 11,910,000 pre-Consolidation Options (as defined herein) (approximately 340,286 post-Consolidation Options), with each Option exercisable at a pre-Consolidation price of C$0.15 per Common Share (a post-Consolidation exercise price of C$5.25 per Common Share) until March 31, 2022 to the former securityholders of BioHarvest Israel, in consideration for all of the issued and outstanding shares of BioHarvest Israel. As a result of the 2020 Business Combination, all of the assets and liabilities of BioFarming were transferred to BioHarvest Israel, which continued as the surviving company and a wholly-owned subsidiary of the Company.
On October 28, 2020, the Company incorporated a wholly-owned subsidiary, Superfood Nutraceuticals Inc. (“Superfood”), in Delaware.
On December 31, 2021, BioHarvest Israel and Dolarin completed a business combination, pursuant to which all of the assets and liabilities of Dolarin were transferred to BioHarvest Israel, which continued as the surviving company and a wholly-owned subsidiary of the Company.
Business
The Company is a biotechnology company that has developed the Botanical Synthesis Platform Technology, which enables the Company to grow, in bioreactors at an industrial scale, the active and beneficial ingredients in certain fruits and plants without the need to grow the plant itself. The Botanical Synthesis Platform Technology is a non-genetically modified organism platform that can produce plant cells with higher concentrations of active ingredients (as compared to those that are produced naturally), as well as high levels of solubility and bio-availability. The Botanical Synthesis Platform Technology is economical, ensures consistency and avoids the negative environmental impacts associated with traditional agriculture by providing consistent product production, a year-round production cycle and products that are devoid of sugar, calories and contaminants, such as pesticides, heavy metals and residues.
The Company is currently focused on utilizing the Botanical Synthesis Platform Technology to develop the next generation of science-based and clinically proven health solutions through two business units:
1.The Products Business Unit, comprising:
(a)Nutraceuticals: Research, development, manufacturing, marketing and sales of science-based health and wellness nutraceutical solutions which are manufactured and sold as dietary supplements and/or functional food (capsules, powders, chews and other delivery mechanisms such as coffee, teas and electrolyte-enhanced beverages); and
(b)Cosmeceuticals: Research and development for future manufacturing, marketing and sales of science-based health and cosmeceutical solutions which are to be developed, manufactured and sold as cosmetic products; and
2.The CDMO Services Business Unit comprising a CDMO that offers customers from the pharmaceuticals, cosmeceuticals, nutraceuticals and nutrition industries, through an end-to-end service agreement, the development and manufacturing of specific plant-based active molecules.
Nutraceuticals:
The Company is engaged in the research and development of science-based health and wellness solutions for the nutraceutical industry. The Company’s first product entry into this market is a polyphenol/anti-oxidant superfruit product called VINIA®, which is a red grape powder that supplies the benefits of red wine consumption but without the sugar, calories and alcohol found in wine.
VINIA® is made of red grape (Vitis vinifera) cells grown in the Company’s proprietary bioreactor facility. VINIA® is a fine, dry pink-purple powder containing a matrix of polyphenols (with a high concentration of piceid resveratrol)
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in their natural state (as can be found in red wine) that has additive and synergistic benefits. One of the main active ingredients in VINIA® is piceid resveratrol, maintaining the quality and inherent benefits present in nature without any solvent extraction or genetic modification. VINIA® is soluble when integrated with various liquids or cosmetics.
The Company has invested over $80 million, primarily in R&D activities, to support the business. This investment has enabled the Company to develop a disruptive technology platform which mirrors nature and allows it to efficiently produce plant cells that are identical to those originally sourced from the parent plant, ensuring optimal bio-availability and efficacy of the secondary metabolites.
On March 4th, 2025, the Company announced new ‘in vitro’ test results for the Company’s proprietary new Olive Cell compound, which showed reduced fat accumulation in human liver cells. Fat accumulation in the liver is a leading cause of non-alcohol fatty liver disease (NAFLD), which affects 30-40% of U.S. adults. The Company demonstrated that in human hepatic (liver) cells, the Olive Cell compound mitigated fat accumulation in a liver steatosis model as well as in experimental models of liver fibrosis. In addition, the Olive Cell compound also succeeded in reducing the level of collagen type 1 in XL-2 cells in an in-vitro fibrosis model. The Company attributes the positive test results of reducing fat accumulation in liver cells to the high levels of Verbascoside (a plant-derived polyphenol with known anti-inflammatory properties that has been researched for a variety of effects on the liver) in the Company’s Olive Cell compound. Based on these results and additional studies to be conducted in 2025, the Company expects to begin selling the Olive Cell product in 2026 as a nutraceutical product, while continuing to explore the potential of partnering with a pharmaceutical company to provide the olive cell composition via a different regulatory path as part of its CDMO model.
Cosmeceuticals:
The Company has spent significant resources investigating the opportunities that exist for its Red Grape Cell molecules in the growing beauty and cosmetics skincare market. The Company conducted a small-scale skin care assessment in Seoul, South Korea (the “Skin Care Assessment”), which received positive anecdotal feedback from all participants regarding their various skin ailments, such as atopic dermatosis, psoriasis, facial redness and folliculitis, after using VINIA®. Based on the positive results of the Skin Care Assessment, the Company plans to bring to the USA market, a VINIA cosmeceutical product which will include its VINIA supplement combined with a VINIA powered topical solution such as a skin moisturizer. The Company is working with a major renowned skin care topical solution contract manufacturer to finalize its topical solution and plans to conduct a clinical study in the United States to assess the efficacy of this unique VINIA® solution on skin health promotion. The Company plans to launch this product in the US market by the end of 2026.
CDMO Services Business Unit:
This CDMO Services Business Unit allows pharmaceutical, cosmeceutical, nutraceutical and nutrition industry companies the opportunity to partner with the Company to utilize the Botanical Synthesis Platform Technology through a CDMO contracting model. The Botanical Synthesis Platform Technology enables the development and manufacturing of patentable plant-based small molecules, complex molecules and unique compositions, which include both small and complex molecules. The Botanical Synthesis Platform Technology can develop complex molecules, otherwise known as biologics, which have a number of unique advantages, including lower costs of development and manufacturing, a faster speed of development and non-immunogenic properties that enhance safety. As a result of these advantages, the Company has decided to name these unique plant-derived complex molecules BIOLOGICS+. BIOLOGICS+ will help address unmet needs in the health industry across pharmaceutical, nutraceutical, cosmeceutical and nutrition verticals.
We are an “emerging growth company” as defined in Section 3(a) of the Exchange Act of 1934, (“Exchange Act”), as amended, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. We will continue to qualify as an “emerging growth company” until the earliest to occur of: (a) the last day of the fiscal year during which we had total annual gross revenues of US$1,235,000,000 (as such amount is indexed for inflation every 5 years by the SEC) or more; (b) the last day of our fiscal year following the fifth anniversary of the date of the first sale of equity securities pursuant to an effective Registration Statement under the Securities Act; (c) the date on which we have, during the previous 3-
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year period, issued more than US$1,000,000,000 in non-convertible debt; or (d) the date on which we are deemed to be a “large accelerated filer”, as defined in Exchange Act Rule 12b-2. We expect to continue to be an emerging growth company for the immediate future.
Generally, a registrant that registers any class of its securities under Section 12 of the Exchange Act is required to include in the second and all subsequent annual reports filed by it under the Exchange Act a management report on internal control over financial reporting and, subject to an exemption available to registrants that are neither an “accelerated filer” or a “large accelerated filer” (as those terms are defined in Exchange Act Rule 12b-2), an auditor attestation report on management’s assessment of internal control over financial reporting. However, for so long as we continue to qualify as an emerging growth company, we will be exempt from the requirement to include an auditor attestation report on management’s assessment of internal controls over financial reporting in its annual reports filed under the Exchange Act, even if we were to qualify as an “accelerated filer” or a “large accelerated filer”. In addition, Section 103(a)(3) of the Sarbanes-Oxley Act of 2002 has been amended by the JOBS Act to provide that, among other things, auditors of an emerging growth company are exempt from any rules of the Public Company Accounting Oversight Board requiring a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the company.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus contains, and any accompanying Prospectus Supplement will contain, “forward-looking information” and “forward-looking statements” within the meaning of Canadian and U.S. securities legislation. The forward-looking statements herein are made as of the respective dates set forth in this Prospectus and the exhibits incorporated by reference into this Prospectus, and the Company does not assume any obligation to update or revise them to reflect new information, estimates or opinions, future events or results or otherwise, except as required by applicable law. Forward-looking statements include, but are not limited to, statements regarding the Company’s or management’s expectations, hopes, beliefs, intentions or strategies regarding the future and other statements that are other than statements of historical fact. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
In particular, this Prospectus, including the exhibits incorporated by reference into this Prospectus, contains forward-looking information, including, without limitation, the initiation, timing, cost, progress and success of existing and planned research and development initiatives; the Company’s ability to achieve profitability; the Company’s ability to obtain funding for its operations; the Company’s ability to establish and maintain relationships with collaborators with acceptable development, regulatory and commercialization expertise and the benefits to be derived from such collaborative efforts; the implementation of its business model and strategic plans; the Company’s ability to develop and commercialize future products, future product lines and future contract development and manufacturing operation (“CDMO”) services; the Company’s commercialization, marketing and manufacturing capabilities and strategy; the Company’s ability to protect its intellectual property and operate its business without infringing upon the intellectual property rights of others; the Company’s expectations regarding national, state/provincial and local regulatory requirements; whether the Company will receive or maintain, and the timing and costs of obtaining or maintaining, regulatory approvals; the health and wellness benefits, effectiveness and safety of the Company’s products; the accuracy of the Company’s estimates of the size and characteristics of the markets that may be addressed by its future products, future product lines and CDMO services; the rate and degree of market acceptance of the Company’s future products and product lines and CDMO services; the Company’s expectations regarding market risk, including interest rate changes and foreign currency fluctuations; the Company’s ability to engage and retain the employees required to grow its business; the compensation that is expected to be paid to employees of the Company; the Company’s future financial performance and projected expenditures, events or trends; results of current sales and production; developments relating to the Company’s competitors and its industry; estimates of the Company’s expenses, future revenue, capital requirements and the Company’s needs for additional financing; the benefits to be derived from the building of the Yavne No. 2 Manufacturing Facility (as defined in the Company’s Annual Information Form for the financial year ended December 31, 2024 (the “AIF”), which is incorporated by reference to this Prospectus)) and the Yavne No. 2 R&D Facility (as defined in the AIF); the completion and timeline for completion of the building of the Yavne No. 2 Manufacturing Facility and the Yavne No. 2 R&D Facility; the ability of the CDMO Services Business
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Unit to generate revenue; the ability of the Company to secure additional development agreements to develop molecules, the successful development of molecules in accordance with the development agreements; molecules developed pursuant to development agreements being eligible for patent protection; existing and future manufacturing capacity; the exploration of potential property acquisitions in Israel and the United States; the Company’s intention to retain all future earnings and other cash resources for the future development and operation of its business; and its intention not to declare or pay any cash dividends in the foreseeable future.
The forward-looking statements in this Prospectus, including the exhibits incorporated by reference into this Prospectus, are based upon various assumptions, many of which are d, in turn, upon further assumptions, including, without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company’s control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. As a result, you are cautioned not to rely on any forward-looking statements.
Many of these statements are based on the Company’s assumptions about factors that are beyond the Company’s ability to control or predict and are subject to risks and uncertainties that are described more fully in below. Any of these factors or a combination of these factors could materially affect the Company’s future results of operations and the ultimate accuracy of the forward-looking statements. In addition to these important factors, important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward-looking statements include, among other things:
·the Company’s negative operating cash flow and the Company’s ability to continue as a going concern;
·the potential political, economic and military instability in Israel, where the Company’s principal place of business, members of the management team, facilities and employees are located;
·the Company’s additional requirements for capital;
·general business risk and liability;
·the Company’s reliance on key business inputs;
·the Company’s reliance on third-party suppliers and white-label manufacturers;
·the Company’s maintenance obligations and facility disruptions
·the success of the Company’s quality control systems;
·the effectiveness and efficiency of the Company’s advertising and promotional expenditures;
·the failure of the Company’s technology to accommodate increased traffic;
·the increasing consumer acceptance of the Internet as a medium of commerce;
·the development and maintenance of the Internet infrastructure;
·a significant downturn in the Company’s subscriptions may not be immediately reflected in its operating results;
·payment-related risks;
·changing consumer preferences;
·risks related to the price of the Company’s products and CDMO services;
·fluctuations in foreign currency exchange rates;
·the recall of the Company’s products as a result of them not having the intended effects or causing undesirable side effects;
·product liability claims in relation to the Company’s products;
·risks related to insurance;
·risks related to the Company’s management of growth;
·computer system failures, cyber-attacks or deficiencies in cyber security;
·conflicts of interest risk;
·risks related to governmental regulations;
·compliance with manufacturing regulations;
·the Company may face manufacturing stoppages and other challenges associated with audits or inspections by regulatory authorities;
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·risks associated with enrolling candidates in clinical trials or studies of others for the Company’s nutraceutical and cosmeceutical products;
·delay in achieving or failure to achieve publicly announced milestones by the Company;
·competition risk;
·obsolescence;
·the loss of key personnel by the Company;
·negative results from clinical or other types of scientific studies and adverse safety events;
·risks related to potential intellectual property claims and patent infringement;
·the protection and enforcement of the intellectual property of the Company;
·the expiration and loss of patents;
·third-party license risk;
·the disclosure of proprietary information and trade secrets of the Company to third parties;
·risks related to smaller companies;
·the Company’s operations may be negatively affected by global financial conditions;
·the Company is a “foreign private issuer” and may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses;
·any return on investment from the Common Shares is not guaranteed;
·the Company may not pay dividends;
·future sales or issuances of debt or equity securities could decrease the value of any existing Common Shares, dilute investors’ voting power, reduce the Company’s earnings per share and make future sales of the Company’s equity securities more difficult;
·holders of Common Shares are at risk for a substantial loss of capital;
·the Company will have broad discretion over the use of the net proceeds from its financings, and it may not use these proceeds in a manner desired by its shareholders;
·the Common Share price has experienced volatility and may be subject to fluctuation in the future based on market conditions;
·market disruption risks could have a material adverse effect on the market price of the Common Shares;
·there is currently no market through which the Company’s securities, other than the Common Shares, may be sold; and
·there is no assurance of a sufficient liquid trading market for the Common Shares in the future.
Please carefully consider the risks described below, together with all of the other information included in this Registration Statement, in evaluating the Company and the Common Shares. The following risk factors could adversely affect the Company’s business, financial condition, results of operations and the price of the Common Shares.
Risks Relating to the Company
Negative operating cash flow and going concern.
The Company has negative cash flow from operating activities and has historically incurred net losses, including for the financial year ended December 31, 2024. As of December 31, 2024, the Company has an accumulated deficit of US$96,418. The Company generated negative cash flows from operating activities of US$6,684 and a loss in the amount of US$12,913 for the financial year ended December 31, 2024.
As of the most recently completed financial period of June 30, 2025, the Company has an accumulated deficit of US$102,836. The Company generated negative cash flows from operating activities of US$2,883 and a loss in the amount of US$6,418 for the six-month period ended June 30, 2025.
There is no assurance that the Company will generate sufficient revenues from sales of its current and future products and the provision of contract development and manufacturing operation (“CDMO”) services in the near future or at all. The Company expects to need to raise additional funds through issuances of securities or through loan financing.
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There is no assurance that additional capital or other types of financing will be available if needed or that these financings will be on terms acceptable to the Company, or otherwise at least as favorable to the Company as those previously obtained, or at all. Importantly, the inclusion in note 1B to the audited annual consolidated financial statements and in “Substantial Doubt About the Company’s Ability to Continue as a Going Concern” in the report thereto of Ziv Haft Certified Public Accountants (Isr.) (PCAOB ID# 1185) of disclosure regarding the Company’s ability to continue as a going concern may negatively impact the Company’s ability to raise future financing. If the Company is unable to obtain additional financing from outside sources and eventually generate enough revenues to sustain its operations, the Company may be forced to sell a portion or all of the Company’s assets or curtail or discontinue the Company’s operations. If any of these events happen, investors may lose all or part of their investment.
Potential political, economic and military instability in Israel, where the principal place of business, members of the management team, facilities and employees are located.
The Company’s principal place of business and its facilities, where most of its employees are employed, are located in Rehovot and Yavne, Israel. In addition, the majority of the Company’s key employees and senior management are Israeli citizens. Accordingly, political, economic, and military conditions in Israel may directly affect the Company’s business. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and groups in its neighboring countries, Hamas (an Islamist militia and political group that has controlled the Gaza Strip) and Hezbollah (an Islamist militia and political group d in Lebanon). While Israel has entered into peace agreements with Egypt, Jordan, the United Arab Emirates, Bahrain, Morocco and Sudan, it has no peace arrangements with any other neighboring or other Arab countries. In addition, relations between Israel and Iran continue to be hostile due to the fact that Iran is perceived by Israel as a sponsor of Hamas and Hezbollah, maintains a military presence in Syria and is viewed as a strategic threat to Israel in light of its nuclear program. The assassinations of Iran’s senior generals Qassim Soleimani by the United States military and Mohsen Farichasde, which Iran claims is associated with Israel, have contributed to the tension in the region and further intensified the hostility between Iran and Israel and between Israel and Hezbollah, which is positioned alongside Israel’s northern border. In addition, several countries, principally in the Middle East, restrict doing business with Israel, and additional countries may impose restrictions on doing business with Israel and Israeli companies, whether as a result of hostilities in the region or otherwise. The restrictive laws, policies, or practices directed towards Israel or Israeli businesses could, individually or in the aggregate, have a material adverse effect on the Company’s business in the future, for example, by way of sales opportunities that the Company could not pursue or from which the Company will be precluded. In addition, should the movement for boycotting, divesting, and sanctioning Israel and Israeli institutions (including universities) and products become increasingly influential in the United States, Canada and elsewhere, this may also adversely affect the Company’s business and financial condition. Further deterioration of Israel’s relations with the Palestinian Authority or countries in the Middle East could expand the disruption of international trading activities in
Israel, may materially and negatively affect the Company’s business conditions, could harm the Company’s results of operations, and adversely affect the market price of the Common Shares.
Any hostilities involving Israel, terrorist activities, political instability or violence in the region, or the interruption or curtailment of trade or transport between Israel and its trading partners could adversely affect the Company’s operations and results of operations and the market price of the Common Shares.
The Company’s commercial insurance does not cover losses that may occur as a result of an event associated with the security situation in the Middle East. Although the Israeli government is currently committed to covering the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, the Company cannot assure you that this government coverage will be maintained or, if maintained, will be sufficient to compensate the Company fully for damages incurred. Any losses or damages incurred by the Company could have a material adverse effect on the Company’s business, financial condition and results of operations.
Further, many Israeli citizens are obligated to perform several days, and in some cases, more, of annual military reserve duty each year until they reach the age of 40 (or older for certain reservists) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists. For example, on October 7, 2023, Hamas terrorists invaded southern Israel and launched thousands of rockets in a widespread terrorist attack on Israel. On the same day, the Israeli government declared that the country was at war, and the Israeli military began to call up reservists for active duty, including a few of the Company’s employees. The Company’s operations could be disrupted by these and future reserve duty call-ups. While
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none of the Company’s facilities or infrastructure have been damaged since the war broke out on October 7, 2023, the import and export of goods may experience disruptions in and out of Israel as a result of such military conflict. The Company currently relies on drying locations in Northern Israel, in areas which may be at greater risk for disruption as a result of such military conflict, and is in the process of examining and evaluating other potential drying alternatives and growing inventory levels in the United States to mitigate the risk of disruption. A prolonged war could result in further military reserve duty call-ups in the future, as well as irregularities in the Company’s supply chain, the movement of components and raw materials into Israel and the Company’s finished products exported from Israel. Such disruption could materially adversely affect the Company’s business, prospects, financial condition and results of operations.
Additional requirements for capital.
Substantial additional financing may be required if the Company is to be successful with the development of its business. No assurances can be given that the Company will be able to raise the additional capital that it may require for its anticipated future program of launching new products, such as cosmeceuticals or new nutraceutical cell-product lines, and expanding existing product lines, such as the VINIA® line of products, and any upgrades or improvements that the Company may need to make to its facilities to support the manufacture of its products or the provision of CDMO services. Any additional equity financing may be dilutive to investors, and debt financing, if available, may involve restrictions on financing and operating activities. There is no assurance that additional financing will be available on terms acceptable to the Company, if at all. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations or anticipated expansion or may not be able to further develop its business at all.
General business risk and liability.
Given the nature of the Company’s business, it may, from time to time, be subject to claims or complaints from investors or others in the normal course of business. The legal risk facing the Company and its directors, officers and employees in this respect includes potential liability for violations of securities laws, breach of fiduciary duty or misuse of investors’ funds. Some violations of securities laws and breaches of fiduciary duty could result in civil liability, fines, sanctions or the suspension or revocation of the Company’s right to carry on its existing business. The Company may incur significant costs in connection with such potential liabilities.
Product development.
If the Company cannot successfully develop, manufacture and distribute its products, or if the Company experiences difficulties in the development process, such as capacity constraints, quality control problems or other disruptions, the Company may not be able to develop market-ready commercial products at acceptable costs, which would adversely affect its ability to effectively enter or maintain its position in the market. A failure by the Company to achieve a low cost structure through economies of scale or improvements in manufacturing processes would have a material adverse effect on its commercialization plans and its business, prospects, results of operations and financial condition.
Reliance on key business inputs.
The Company’s business is dependent on a number of key inputs and their related costs, including raw materials and supplies related to its growing operations, as well as electricity, water and other utilities. Any significant interruption or negative change in the availability or economics of the supply chain for key inputs (e.g. rising energy costs) could materially impact the business, financial condition and operating results of the Company. Any ability to secure required supplies and services or to do so on appropriate terms could also have a materially adverse opinion impact on the business, financial condition and operating results of the Company.
Reliance on third-party suppliers and white-label manufacturers.
The Company intends to maintain a full supply chain for the production of its products. The loss of or disruption to its existing or future suppliers and white-label manufacturers would have a material adverse effect on its business and operational results. With respect to raw ingredient and packaging suppliers, given that the Company imports certain inputs to its products from foreign countries, the Company may be subject to disruptions in supply, time delays, and/or
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cost increases as a result of economic, political, social or other macro factors occurring in those countries, or globally, which are beyond its control. Such disruptions to the supply of key product inputs would have negative downstream impacts on the Company’s overall product development timeline and costs.
Maintenance obligations and facility disruptions.
The Company’s manufacturing processes and those of any of its white-label manufacturers are vulnerable to operational problems that could impair the ability of their respective facilities to manufacture products and the Company to provide CDMO services. The Company and any of its white-label manufacturers could experience a breakdown in any of its machines or other important equipment, and from time to time, planned or unplanned maintenance outages that cannot be performed safely or efficiently during normal hours of operation. Such disruptions could cause a loss of production of the Company’s products or delay in the provision of CDMO services, which could potentially have a material adverse effect on the business, financial conditions and operating results of the Company.
Success of quality control systems.
The quality and safety of the Company’s products are critical to the success of its business and operations. As such, it is imperative that the Company’s quality control systems and those of its service providers operate effectively and successfully. Quality control systems can be negatively impacted by the design of the quality control systems, the quality of training programs and the degree of adherence by personnel to quality control guidelines.
Effectiveness and efficiency of advertising and promotional expenditures.
The Company’s future growth and profitability will depend on the effectiveness and efficiency of its advertising and promotional expenditures, including its ability to (i) create awareness of its current and future products and CDMO services; (ii) determine the appropriate creative message and media mix for future advertising expenditures; (iii) differentiate its products and CDMO services from those of its competitors and (iv) effectively manage advertising and promotional costs in order to maintain acceptable operating margins. There can be no assurance that advertising and promotional expenditures will result in revenues in the future or will generate awareness of the Company’s current and future products and CDMO services. In addition, no assurance can be given that the Company will be able to manage its advertising and promotional expenditures on a cost-effective basis.
Failure to develop the Company’s technology to accommodate increased traffic could reduce demand for its products and impair the growth of its business.
The Company periodically enhances and expands its technology and transaction-processing systems, network infrastructure and other technologies to accommodate increases in the volume of traffic on its e-commerce websites. Any inability to add software and hardware or to develop and upgrade existing technology, transaction-processing systems or network infrastructure to manage increased traffic may cause unanticipated system disruptions, slower response times and degradation in the sales of its products, including the speed of order fulfillment. Failure to manage increased traffic could harm the Company’s reputation and significantly reduce demand for its products, which would
impair the growth of its business. The Company may be unable to improve and increase the capacity of its network infrastructure sufficiently or anticipate and react to expected increases in the use of its e-commerce websites to handle increased volume.
The Company continues to enhance its e-commerce websites to better support new features and functionality expected by its customers. Failure of these to perform as expected could lead to customer dissatisfaction and loss of business.
Increasing consumer acceptance of the Internet as a medium of commerce is important to the success of the Company’s business strategy and future revenue growth.
The majority of the Company’s products are sold through its e-commerce websites, VINIA.com and VINIA.co.il, and Amazon®1 Marketplace. The failure of the Internet to continue developing into a significant commercial medium
1 The Company and its business, operations and products are not affiliated with, endorsed or sponsored by Amazon.com, Inc. or Amazon Technologies, Inc. “Amazon®” is a registered trademark of Amazon Technologies, Inc.
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would harm the Company’s ability to increase its revenue and execute its business strategy. Rapid growth in the acceptance and use of the Internet as an effective medium of commerce is a recent development. The acceptance and use of the Internet may not continue to develop, and a sufficiently broad of consumers may not adopt and continue to use the Internet as a medium of commerce. The Company relies on purchasers who have historically used traditional means of commerce to purchase goods or transact business. If the Company is to be successful, these purchasers must accept and use the Internet as a means of purchasing goods and services and exchanging information. The Company cannot predict the rate at which these purchasers will do so.
Any future disputes between the Company and Amazon®1 may cause a loss of sales.
The Company currently generates approximately 80 percent of its revenue by direct-to-consumer sales through its e-commerce websites, VINIA.com and VINIA.co.il and approximately 20 percent of its revenue from Amazon®1 Marketplace. Should a future dispute exist between the Company and Amazon®(1) regarding any policy violation, the Company account may be suspended or closed which could cause a loss of sales that may take some time for the Company to make up through another customer/channel. The Company expects this risk to be reduced over time as it diversifies its channel/customer composition.
The growth of the market for the Company’s products depends on the development and maintenance of the Internet infrastructure.
The Company’s business is primarily based on selling its products over the Internet, and the success of its business, therefore, depends on the development and maintenance of a sound Internet infrastructure. This includes the maintenance of a reliable network backbone with the necessary speed, data capacity, and security, as well as the timely development of complementary products such as high-speed modems to provide reliable Internet access and services. The Company’s ability to increase the speed and scope of the sale of its products is limited by and depends upon, the speed and reliability of both the Internet. Consequently, as Internet usage increases, the growth of the market for its products depends upon improvements made to the Internet to alleviate overloading and congestion. In addition, any delays in the adoption of new standards and protocols required to govern increased levels of Internet activity or increased governmental regulation may have a detrimental effect on the Internet infrastructure.
The Company recognizes e-commerce revenue from customers’ subscriptions and, therefore, a significant downturn in its business may not be immediately reflected in its operating results.
The Company recognizes certain e-commerce revenue from its customers’ subscriptions. As a result, a significant portion of the revenue the Company reports in each quarter is generated from subscriptions entered into during previous periods. Consequently, a decline in new or renewed subscriptions in any one quarter may not impact the Company’s financial performance in that quarter but might negatively affect its e-commerce revenue in future quarters. If a number of subscriptions expire and are not renewed in the same quarter, the Company’s revenue may decline significantly in that quarter and subsequent quarters. In addition, the Company may be unable to adjust its fixed costs in response to reduced revenue. Accordingly, the effect of significant declines in sales or renewals and market acceptance of the Company’s products may not be reflected in its short-term results of operations.
Payments-related risks.
The Company accepts payments for its products using a variety of methods, including credit cards, debit cards and payment upon delivery. For existing and future payment options the Company offers to its customers, it currently is subject to and may become subject to additional regulations and compliance requirements (including obligations to implement enhanced authentication processes that could result in significant costs and reduce the ease of use of its payments methods), as well as fraud. For certain payment methods, including credit and debit cards, the Company pays interchange and other fees, which may increase over time and raise its operating costs and lower profitability. Failure to comply with these rules or requirements, as well as any breach, compromise, or failure to otherwise detect or prevent fraudulent activity involving the Company’s data security systems, could result in it being liable for card issuing banks’ costs, subject to fines and higher transaction fees, and loss of its ability to accept credit and debit card payments from its customers, process electronic funds transfers or facilitate other types of online payments, and its business and operating results could be adversely affected.
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Changing consumer preferences.
As a result of rapidly changing consumer preferences, which are difficult to predict and over which the Company has little, if any, control, many nutraceutical and cosmeceutical products attain financial success for a limited period of time. Even if the Company’s current and future products find retail success, there can be no assurance that any of these products will continue to see extended financial success. The Company’s success will be dependent upon its ability to anticipate or quickly adapt to changing consumer preferences and develop new products that satisfy such preferences. Even if the Company is successful in introducing new products or developing its current products, a failure to continue to evolve its products to meet consumer preferences could cause a decline in its products’ popularity that could reduce its revenues and harm its business, operating results and financial condition.
Risks related to prices.
As the market for the Company’s products and CDMO services matures, or as new or existing competitors introduce new products or services that compete with the Company’s products and CDMO services, the Company may experience pricing pressure and be unable to renew its agreements with existing customers or attract new customers at prices that are consistent with its pricing model and operating budget. If this were to occur, it is possible that the Company would have to change its pricing model or reduce its prices, which could harm its revenue, gross margin and operating results.
Fluctuations in foreign currency exchange rates.
The Company is subject to foreign currency risk. The strengthening or weakening of the Canadian or United States dollar or new Israeli shekel versus other currencies will impact the translation of the Company’s net revenues generated in these foreign currencies into Canadian or United States dollars or new Israeli shekels. The Company imports certain ingredients in its products from foreign countries and so may become forced to pay higher rates for ingredients as a result of the weakening of the Canadian or United States dollar, new Israeli shekel or Euro.
The Company has not entered into arrangements or agreements or purchased instruments to hedge its exchange rate risks, and there is no assurance that the Company will enter into such arrangements or agreements or purchased instruments in the future and, if so, that it will continue to do so in the future. The availability and effectiveness of any hedging transaction may be limited, and as a result, the Company may not be able to successfully hedge its exchange rate risks in the future.
Product recalls as a result of the products not having the intended effects or causing undesirable side effects.
Product manufacturers and distributors are sometimes required to recall or initiate returns of their products for various reasons, including product defects such as contaminations, unintended harmful side effects or interactions with other products, packaging safety and inadequate or inaccurate labeling disclosure. While the Company believes that all of its products and the combinations of ingredients in them are safe when taken as directed, if any of the Company’s products are recalled, it could incur unexpected expenses relating to the recall and any legal proceedings that might arise in connection with the recall. The Company may lose significant revenue due to loss of sales and may not be able to compensate for or replace that revenue.
In addition, the Company’s products may not have the effect intended if they are not taken in accordance with certain instructions, which include certain dietary restrictions. Furthermore, there can be no assurance that any of the products, even when used as directed, will have the effects intended or will not have harmful side effects in an unforeseen way or on an unforeseen cohort. Furthermore, a highly publicized actual or perceived problem with products that the Company supplies could adversely affect the market’s perception of its products, which may result in a decline in demand for products supplied by the Company, thereby reducing the Company’s revenues and operating results, which could have a material adverse effect on the Company’s business.
Product liability claims.
Although the Company believes that it maintains adequate insurance coverage, it may from time to time be subject to claims for damages resulting from defects in products that it supplies. Product liability claims, even if unsuccessful,
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may result in significant litigation costs to defend the claims as well as other costs incurred to remedy the problem, such as product recalls, which could substantially increase the Company’s expenses. Successful or partially successful product liability claims could result in significant monetary liability and could seriously disrupt the Company’s business, particularly if the Company’s insurance coverage is inadequate or unavailable in respect of any such claims.
Insurance.
The Company’s operations, products and services may result in the Company becoming subject to liability for environmental damage, property damage, personal injury or other hazards. The Company has obtained or may obtain insurance in accordance with industry standards to address certain risks; such insurance has limitations on liability that may not be sufficient to cover the full extent of such liabilities. In addition, such risks may not be insurable in all circumstances, or, in certain circumstances, the Company may elect not to obtain insurance to deal with specific risks due to the high premiums associated with such insurance or other reasons. The payment of such uninsured liabilities would reduce the funds available to the Company. The occurrence of a significant event that the Company is not fully insured against, or the insolvency of the insurer of such event, could have a material adverse effect on the Company’s financial position, results of operations or prospects.
Management of growth.
The inability of the Company to successfully manage its growth could have a material adverse effect on its operating results and cause its results from operations to fluctuate. As part of the Company’s growth strategy, it intends to introduce new and expand existing product lines, expand sales of its products to existing and new customers in new and existing territories and develop the CDMO Services Business Unit. The Company’s expense levels are d, in part, on expected future revenues, and the Company is constrained in its ability to reduce expenses quickly if, for any reason, its sales or revenue levels do not meet expectations for a particular quarter or period. Furthermore, rapid expansion may place a significant strain on the Company’s senior management team and other key personnel, as well as its business processes, operations and other resources. The Company’s ability to manage growth will also depend in part on its ability to continue to enhance its management information systems in a timely fashion, particularly if customer demands change in ways that the Company does not anticipate. Any inability to manage growth could result in delivery or service delays of the Company’s products and CDMO services and cancellation of customer orders or engagements, which could have a material adverse effect on the Company’s business.
Computer system failures, cyber-attacks or deficiencies in the Company’s or related parties’ cyber security could result in a material disruption of its product development programs, compromise sensitive information related to the Company’s business or trigger contractual and legal obligations, any of which could potentially expose it to liability or reputational harm or otherwise adversely affect it business and financial results.
The Company has implemented its security measures designed to protect the information (including but not limited to intellectual property, proprietary business information and personal information) in its possession, custody or control. The Company’s internal computer systems and those of current and future third parties (such as vendors, collaborators or others) on which the Company relies may fail and are vulnerable to breakdown, breach, interruption or damage from computer viruses, computer hackers, malicious code, employee error or malfeasance, theft or misuse, denial-of-service attacks, sophisticated nation-state and nation-state-supported actors, unauthorized access, natural disasters, terrorism, war, telecommunication and electrical failures or other compromise. Despite the Company’s security practices, there is a risk that it may be subject to phishing and other cyberattacks in the future. The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
The Company may not be able to anticipate all types of security threats, and it may not be able to implement preventive measures effective against all such security threats. The techniques used by cybercriminals change frequently, may not be recognized until launched, and can originate from a wide variety of sources, including outside groups such as external service providers, organized crime affiliates, terrorist organizations or hostile foreign governments or agencies. The Company’s information technology and other internal infrastructure systems, including corporate firewalls, servers, leased lines and connection to the Internet, face the risk of systemic failure that could disrupt its operations. If such an event were to occur and cause interruptions in the Company’s operations, it could result in a
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material disruption of its development programs and business operations. For example, the loss of clinical trial data from completed or future clinical trials could result in delays and significantly increase the costs to recover or reproduce the data. Likewise, the Company may rely on third parties in connection with the manufacture of its existing or future products, the performance of the CDMO services and the conduct of clinical trials, and similar events relating to their computer systems could also have a material adverse effect on its business.
To the extent that any disruption or security breach was to result in a loss of, or damage to, its data or applications, or inappropriate use, disclosure of or access to confidential or proprietary information, the Company could incur liability, its competitive position could be harmed and the further development and commercialization of its product candidates or any future product candidates could be hindered or delayed. If the Company were to experience a significant cybersecurity breach of its information systems or data, the costs associated with the investigation, remediation and potential notification of the breach to counterparties, data subjects, regulators or others could be material. In addition, the Company’s remediation efforts may not be successful. Moreover, if the information technology systems of the Company’s vendors, collaborators or other contractors or consultants become subject to disruptions or security breaches, it may have insufficient recourse against such third parties, and it may have to expend significant resources to mitigate the impact of such an event and to develop and implement protections to prevent future events of this nature from occurring. If the Company does not allocate and effectively manage the resources necessary to build and sustain the proper technology and cybersecurity infrastructure, it could suffer significant business disruption, including transaction errors, supply chain or manufacturing interruptions, processing inefficiencies, data loss or the loss of or damage to intellectual property or other proprietary information. Furthermore, any such event that leads to unauthorized access, use or disclosure of personal information, including personal information regarding clinical trial participants or employees, could harm the Company’s reputation, compel it to comply with federal and/or state/provincial breach notification laws, cause it to breach its contractual obligations, subject it to mandatory corrective action, and otherwise subject it to liability under laws, regulations and contracts that protect the privacy and security of personal information, which could result in significant legal and financial exposure and reputational damages. As cyber threats continue to evolve, the Company may be required to incur significant additional expenses in order to enhance its protective measures or to remediate any information security vulnerability.
The financial exposure from the events referenced above could either not be insured against or not be fully covered through any insurance that the Company maintains. There can be no assurance that the limitations of liability in the Company’s contracts would be enforceable or adequate or would otherwise protect it from liabilities or damages as a result of the events referenced above.
Conflicts of interest risk.
While the consulting and employment agreements between the Company and its directors and officers typically include non-competition clauses, certain of these directors and officers may, from time to time, become involved in other business ventures in the biotechnology, nutraceutical, cosmeceutical, CDMO services and related industries through their direct and indirect participation in corporations, partnerships, joint ventures, and the like that may become potential competitors to the Company. Situations may arise in connection with potential acquisitions or opportunities where the other interests of these directors and officers conflict with or diverge from the Company’s interests. In accordance with the BCBCA, directors who have a material interest in any person who is a party to a material contract or a proposed material contract are required, subject to certain exceptions, to disclose that interest and generally abstain from voting on any resolution to approve the contract. In addition, the directors and officers are required to act honestly and in good faith with a view to the Company’s best interests. However, in conflict-of-interest situations, directors and officers may owe the same duty to another company and will need to balance their competing interests with their duties to the Company. Circumstances (including with respect to future corporate opportunities) may arise that may be resolved in a manner that is unfavorable to the Company.
Governmental regulations.
The processing, manufacturing, packaging, labeling, advertising and distribution of the Company’s products are subject to regulation by one or more national, state/provincial and state regulatory authorities where the Company currently sells and desires to sell its products. Achievement of the Company’s business objectives is contingent, in part, upon compliance with the regulatory requirements, including those imposed by the United States Food and Drug Administration (“FDA”), the Israeli Ministry of Health, Health Canada and other government authorities, enacted by
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these government authorities and obtaining, where required, all regulatory approvals, for the sale of its products. The Company cannot predict the time required to secure all appropriate regulatory approvals or support claims for its products or the extent of testing and documentation that may be required by government authorities. Any delays in obtaining or failure to obtain or maintain regulatory approvals or compliance with governmental regulations could significantly delay the development of the Company’s products or require the reformulation of the Company’s products, which could have a material adverse effect on the Company’s business, results of operations and financial condition.
Dietary supplements and dietary ingredients that do not comply with regulations may be deemed adulterated or misbranded. Manufacturers and distributors of dietary supplements and dietary ingredients are prohibited from marketing products that are adulterated or misbranded, and regulatory authorities may take enforcement action against any adulterated or misbranded dietary supplement on the market.
If the Company violates applicable regulatory requirements, a regulatory authority may bring enforcement actions against the Company, which could have a material adverse effect on the Company’s business, prospects, financial condition and results of operations. A regulatory authority may not accept the evidence of safety for any new ingredient that the Company may wish to market, may determine that a particular supplement or ingredient presents an unacceptable health risk and may determine that a particular claim or statement of nutritional value that the Company uses to support the marketing of a supplement is an impermissible drug claim, is not substantiated, or is an unauthorized version of a “health claim” or a “structure/function claim” Any of these actions could prevent the Company from marketing particular nutritional supplement products or making certain claims or statements with respect to those products. Regulatory authorities could also require the Company to remove a particular product from the market. Any future recall or removal would result in additional costs to the Company, including lost revenues from any products that the Company is required to remove from the market, any of which could be material. Any product recalls or removals could also lead to an increased risk of litigation and liability, substantial costs and reduced growth prospects.
A regulatory authority in one jurisdiction may interpret claims or products presumptively valid under the laws and regulations of another jurisdiction as illegal under that jurisdiction’s regulations.
Additional or more stringent laws and regulations of dietary supplements and other products have been considered from time to time. These developments could require the reformulation of some products to meet new standards, recalls or discontinuance of some products not able to be reformulated, additional record-keeping requirements, increased documentation of the properties of some products, additional or different labeling, additional scientific substantiation, or other new requirements. Any of these developments could increase the Company’s costs significantly. In addition, regulators’ evolving interpretation of existing laws could have similar effects.
The United States Federal Trade Commission (the “FTC”), the Canadian Ad Standards (“Ad Standards”) and the Israeli Ministry of Health exercise jurisdiction over the advertising of dietary supplements and requires that all advertising to consumers be truthful and non-misleading. These regulatory authorities actively monitor the dietary supplement space and have instituted numerous enforcement actions against dietary supplement companies for failure to have adequate substantiation for claims made in advertising or for the use of false or misleading advertising claims. Failure to comply with applicable regulations could result in substantial monetary penalties, which could have a material adverse effect on the Company’s financial condition or results of operations.
Compliance with manufacturing regulations.
Governmental authorities ensure the quality of food products and dietary supplements/nutraceuticals by carefully monitoring food and dietary supplement manufacturers’ compliance with GMP regulations. The good manufacturing practices (“GMP”) regulations for food products and dietary supplements/nutraceuticals contain minimum requirements for the methods, facilities and controls used in manufacturing, processing and packing of food products and dietary supplements/nutraceuticals. There can be no assurances that the Company’s existing facilities and those of white-label manufacturers will be able to meet the Company’s timetable and requirements. Further, white-label manufacturers must operate in compliance with GMP regulations, and failure to do so could result in, among other things, the disruption of product supplies. The Company’s dependence upon third parties for the manufacture of its
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products may adversely affect its profit margins and its ability to develop and deliver products on a timely and competitive basis.
The Company may face manufacturing stoppages and other challenges associated with audits or inspections by regulatory authorities.
The regulatory authorities may, at any time and from time to time, audit the facilities in which a product of the Company is manufactured. If any such inspection or audit of such facilities identifies a failure to comply with applicable regulations or if a violation of GMP regulations, the product specifications or other applicable regulations occurs independently of such an inspection or audit, the relevant regulatory authority may require remedial measures that may be costly or time-consuming for the Company to implement and that may include the temporary or permanent suspension of commercial sales or the temporary or permanent closure of a facility. Any such remedial measures imposed upon the Company could materially harm its business.
Risks associated with enrolling candidates in clinical trials and other assessments for the Company’s nutraceutical and cosmeceutical products.
There may be significant competition for recruiting candidates in clinical trials and other assessments, and the Company may be unable to enroll the candidates it needs to complete clinical trials and other assessments on a timely basis or at all. The factors that affect its ability to enroll candidates are largely uncontrollable and include, but are not limited to, the following:
·the size and nature of the candidate population;
·the design of the study protocol;
·the competition with other companies for candidates; and
·the perceived risks and benefits of the products under study.
Delays in completing clinical trials and other assessments may prevent the Company from marketing particular nutritional supplement products or making certain claims or statements with respect to those products.
Delay in achieving or failure to achieve publicly announced milestones.
From time to time, the Company may announce the timing of certain events it expects to occur, such as the anticipated timing of results from its research and development of future products, financial achievements and revenue targets. These statements are forward-looking and are based on the best estimates of management at the time relating to the occurrence of such events. However, the actual timing of such events may differ from what has been publicly disclosed. The timing of events such as initiation or completion of a research and development or manufacturing stage of a future product, product lines or CDMO services, the entry into development agreements to provide CDMO services, the entry obtaining regulatory approval or announcement of clinical trials may ultimately vary from what is publicly disclosed. These variations in timing may occur as a result of different events, including the nature of the results obtained during the research and development phase, the timing of the completion of clinical trials or any other event that has the effect of delaying the publicly announced timeline. The Company undertakes no obligation to update or revise any forward-looking information or statements, whether as a result of new information, future events or otherwise, except as otherwise required by law. Any variation in the timing of previously announced milestones could have a material adverse effect on its business plan, financial condition or operating results and the trading price of the Common Shares.
Competition risk.
The Company faces competition in the markets in which the Company operates and intends to operate in the near future. While the Company believes that the Botanical Synthesis Platform Technology provides an advantage over its competitors, some of the Company’s competitors may be or become better positioned to develop superior products and services at lower costs and able to better adapt to changing market conditions than the Company. The Company’s ability to compete depends on, among other things, science-d claims, patentability and protection of intellectual property, consistency, sustainability, high product quality, efficacy, short lead-time, timely delivery, competitive pricing, range of product offerings and superior customer service. Increased competition in the markets in which the
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Company operates may force it to reduce its product prices or may result in increased costs and may have a material adverse effect on its business and operating results. Any decrease in the quality of the Company’s products or CDMO services or level of service to customers or any forced decrease in product pricing may adversely affect its business and operating results.
The biotechnology, nutraceutical, cosmeceutical and CDMO services industries are intensely competitive and subject to rapid and significant technological change. The Company’s competitors include large, well-established biotechnology, nutraceutical, cosmeceutical and CDMO services companies and academic and research institutions.
Many of the Company’s competitors have substantially greater financial, technical and human resources than the Company has and have significantly greater experience than the Company in scaling up manufacturing operations and obtaining regulatory approvals of products. Accordingly, the Company’s competitors may succeed in obtaining regulatory approval for products more rapidly than it does. The Company’s ability to compete successfully will largely depend on:
·the efficacy and safety profile of the Company’s future products relative to marketed products and other future products in development;
·the Company’s ability to develop and maintain a competitive position in the product and service categories and technologies on which it focuses;
·the time it takes for the Company’s future products to complete clinical development and receive marketing approval;
·the Company’s ability to obtain required regulatory approvals;
·the Company’s ability to commercialize future products and product lines;
·the Company’s ability to establish, maintain and protect intellectual property rights related to the Company’s existing and future products and product lines; and
·the acceptance and promotion of any of the Company’s existing and future products by medical practitioners and social influencers.
Competitors have developed and may develop technologies that could be the basis for products and services that challenge the products the Company is developing and manufacturing or the CDMO services the Company is providing. Some of those products or services may be more effective or less costly than the Company’s products and CDMO services. The success of the Company’s competitors and its products and technologies relative to its technological capabilities and competitiveness could have a material adverse effect on the future development of products, including its ability to obtain the necessary regulatory approvals and the provision of CDMO services. This may further negatively impact the Company’s ability to generate future product development programs. If the Company is not able to compete effectively against its current and future competitors, its business will not grow, and its financial condition and operations will substantially suffer.
Obsolescence.
Maintaining a competitive position requires constant growth, development, strategic marketing, and planning. If the Company is unable to maintain a technological advantage, the Company’s ability to grow its business will be adversely affected, and its products, CDMO services, technologies or operations may become obsolete compared with other products, services, technologies or operations.
Loss of key personnel.
The Company heavily relies on the capabilities and experience of its key executives and scientists, and the loss of any of them could affect its ability to develop its products or provide CDMO services. The loss of the Company’s Chairperson of the Board, Chief Executive Officer or other key members of staff could harm the Company. The Company also depends on its collaborators and advisors, all of whom have outside commitments that may limit their availability to the Company. In addition, the Company’s future success will depend in large part upon its ability to attract and retain highly skilled scientific, managerial manufacturing and regulatory personnel. The Company enters into agreements with scientific and clinical collaborators and advisors, key opinion leaders and academic partners in the ordinary course of its business. The Company cannot predict its success in hiring or retaining the personnel it
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requires for continued growth. The loss of the services of any of the Company executive officers or other key personnel could potentially harm the Company’s business, operating results or financial condition.
Negative results from clinical trials or studies of others and adverse safety events.
From time to time, studies or clinical trials on various aspects of nutraceutical and cosmeceutical products are conducted by academic researchers, competitors or others. The results of these studies or trials, when published, may have a significant effect on the market for the nutraceutical or cosmeceutical product that is the subject of the study. The publication of negative results of studies or clinical trials or adverse safety events related to the Company’s existing products and future products, or the categories in which the Company’s existing products or future products compete, could adversely affect the Company’s future commercialization efforts, its share price and its ability to finance future development of its future products, and its business and financial results could be materially and adversely affected.
Risks related to potential intellectual property claims and patent infringement.
Biotechnology companies frequently own trademarks and trade secrets and often enter into litigation based on allegations of infringement or other violations of intellectual property rights. While the Company believes that its existing and future products, CDMO services and operations will not violate the intellectual property rights of third parties, the Company may be subject to intellectual property rights claims in the future, and its products may not be able to withstand any third-party claims or rights against their use. Any intellectual property claims, with or without merit, could be time-consuming, expensive to litigate or settle and could divert management resources and attention. An adverse determination could also prevent the Company from offering its products and services to others and may require that it procure substitute products or services for these members.
With respect to any intellectual property rights claim, the Company may have to pay damages or stop using intellectual property found to be in violation of a third party’s rights. The Company may have to seek a license for the intellectual property, which may not be available on reasonable terms and may significantly increase its operating expenses. The technology also may not be available for license to the Company at all. As a result, the Company may also be required to pursue alternative options, which could require significant effort and expense. If the Company cannot license or obtain an alternative for the infringing aspects of its business, it may be forced to limit its product and service offerings and may be unable to compete effectively. Any of these results could harm the Company’s brand and prevent the Company from generating sufficient revenue or achieving profitability.
Protection and enforcement of intellectual property.
The Company’s success will depend in part upon its ability to protect its intellectual property, including licensed intellectual property, and proprietary technologies and upon the nature and scope of the intellectual property protection it receives. The ability to compete effectively and to achieve partnerships will depend on the Company’s ability to develop and maintain proprietary aspects of its technology and to operate without infringing on the proprietary rights of others. The presence of such proprietary rights of others could severely limit the Company’s ability to develop and commercialize its products to conduct existing research and could require financial resources to defend against litigation, which may be in excess of its ability to raise such funds. There is no assurance that the Company’s patents will be sufficient to protect its proprietary technology and gain or keep any competitive advantage that the Company may have or will be upheld in any proceedings brought by any third parties.
The Company relies upon patents, copyrights, trade secrets, unpatented proprietary know-how and continuing technology innovation to protect the intellectual property that it considers important to the development of the Company’s business. The Company relies on various methods to protect its proprietary rights, including patent applications, confidentiality agreements with its partners, collaborators, advisors, consultants, employees, service providers and management that contain terms and conditions prohibiting the unauthorized use and disclosure of its confidential information. However, despite the Company’s efforts to protect its intellectual property rights, unauthorized parties may attempt to copy or replicate its intellectual property. There can be no assurances that the steps taken by the Company to protect its intellectual property will be adequate to prevent misappropriation or independent third-party development of its intellectual property. While the Company believes that competitors are unlikely to have the necessary technical ability, resources or capacity to successfully develop, replicate and/or
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implement certain of the Company’s technologies, and in particular, the Botanical Synthesis Platform Technology, to the same extent or at all, it may be possible that other companies can duplicate the Company’s technologies and processes.
The patent positions of biotechnology, nutraceutical, cosmeceutical and CDMO services companies can be highly uncertain and involve complex legal, scientific and factual questions for which important legal principles remain unresolved. Patents issued to the Company may be challenged, invalidated or circumvented. To the extent the Company’s intellectual property, including licensed intellectual property, offers inadequate protection or is found to be invalid or unenforceable, the Company is exposed to a greater risk of direct competition. If the Company’s intellectual property does not provide adequate protection against its competitors’ products, its competitive position could be adversely affected, as could its business, financial condition and results of operations. Both the patent application process and the process of managing patent disputes can be time-consuming, expensive and may divert its management’s attention and its resources, and the laws of some foreign countries may not protect the Company’s intellectual property rights to the same extent as the laws of the United States. The Company will be able to protect its intellectual property from unauthorized use by third parties only to the extent that its proprietary technologies, key products and any future products and CDMO services are covered by valid and enforceable intellectual property rights, including patents or are effectively maintained as trade secrets, and provided it has the funds to enforce its rights, if necessary.
Expiration and loss of patents.
While the Company believes that competitors are unlikely to have the necessary technical ability, resources or capacity to successfully develop, replicate and/or implement certain of the Company’s technologies, and in particular, the Botanical Synthesis Platform Technology, to the same extent or at all, the expiration of patents would nonetheless negatively affect the Company’s ability to enforce its rights against competitors. Competitors may potentially reverse engineer the Company’s technologies, including but not limited to the Botanical Synthesis Platform Technology, and compete directly with the Company in any market where a patent is no longer in force. This may require the Company to reduce the sales price of existing products or fees for CDMO services to remain competitive, invest in further research and development to improve products and CDMO service performance and obtain new patent protection or expend additional funds on marketing to promote brand loyalty. The Company may endeavor to extend the patent life through subsequent patent applications. Commercial products will include intellectual property in the form of trade secrets and know-how; however, this alone cannot protect against competitors designing new technologies, products or services directed to the Company’s patented technologies and processes upon expiration of said patents.
Third-party license risk.
The Company may, from time to time, require third-party licenses to effectively develop, manufacture and/or sell its key products or provide the CDMO services, and it may be unable to predict the availability or cost of such licenses.
A substantial number of patents have already been issued to other biotechnology companies. To the extent that valid third-party patent rights cover its products or CDMO services, the Company or its strategic collaborators would be required to seek licenses from the holders of these patents in order to manufacture, use or sell these products and services, and payments under them would reduce its profits from these products and services. The Company is currently unable to predict the extent to which it may wish or be required to acquire rights under such patents, the availability and cost of acquiring such rights, and whether a license to such patents will be available on acceptable terms or at all. There may be patents in foreign countries or patents issued in the future that are unavailable to license on acceptable terms. The Company’s inability to obtain such licenses may hinder or eliminate its ability to manufacture and market its products or provide and market its CDMO services.
Disclosure of proprietary information and trade secrets to third parties.
The Company may, from time to time, rely to a certain extent on third parties in order to develop or manufacture its products or provide CDMO services, and it may share trade secrets with them. The Company seeks to protect its proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements or other similar agreements with its collaborators, advisors, employees and consultants prior to beginning research or disclosing proprietary information.
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These agreements typically restrict the ability of its partners, collaborators, advisors, employees and consultants to publish data potentially relating to the Company’s trade secrets. The Company’s partners and collaborators may have rights to publish data, provided that the Company is notified in advance and may delay publication for a specified time in order to secure intellectual property rights arising from the collaboration. In other cases, publication rights may be controlled exclusively by the Company, although in some cases, the Company may share these rights with other parties. The Company may also conduct joint research and development programs, which may require it to share trade secrets under the terms of research and development collaborations or similar agreements. Despite the Company’s efforts to protect its trade secrets, its competitors may discover its trade secrets, either through breach of these agreements, independent development or publication of information including its trade secrets in cases where the Company does not have proprietary or otherwise protected rights at the time of publication. A competitor’s discovery of the Company’s trade secrets may impair the Company’s competitive position and could have a material adverse effect on its business and financial condition.
Smaller companies.
Market perception of smaller companies may change, potentially affecting the value of investors’ holdings and the ability of the Company to raise further funds through the issue of further Common Shares or otherwise. The share price of publicly traded smaller companies can be highly volatile. The value of the Company’s securities may go down as well as up, and, in particular, the share price may be subject to sudden and large falls in value given the restricted marketability of the Common Shares, results of operations, changes in earnings estimates or changes in general market, economic and political conditions.
The Company’s operations may be negatively affected by global financial conditions.
Global financial conditions continue to be characterized as volatile. In recent years, global markets have been adversely impacted by various credit crises and significant fluctuations in prices, availability and delivery of fuel and energy, metals, and critical components, including as a result of the COVID-19 pandemic and due to significant fluctuations in commodity prices as a result of the ongoing military conflict between Ukraine and Russia and the economic sanctions imposed on Russia in connection therewith. Many industries have been impacted by these market conditions. Global financial conditions remain subject to sudden and rapid destabilizations in response to international events, as government authorities may have limited resources to respond to future crises. A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to consumer spending, employment rates, business conditions, inflation, fuel and energy costs, consumer debt levels, lack of available credit, the state of the financial markets, interest rates and tax rates, may adversely affect a particular offering of securities of the Company, the Company’s prospects, cash flows, results of operations, investments or financial condition or the value of the Common Shares. Future crises may be precipitated by any number of causes, including natural disasters, geopolitical instability (such as the Russian invasion of Ukraine), changes to energy prices or sovereign defaults. If increased levels of volatility continue or in the event of a rapid destabilization of global economic conditions, it may result in a material adverse effect on prices, demand, availability of credit, investor confidence, and general financial market liquidity, all of which may adversely affect a particular offering of securities of the Company, the Company’s prospects, cash flows, results of operations, investments or financial condition or the value of the Common Shares.
The Company is a “foreign private issuer” and, as a result, is not subject to U.S. proxy rules and are subject to the Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.
The Company reports under the Exchange Act as a non-U.S. company with foreign private issuer status. Because the Company qualifies as a foreign private issuer under the Exchange Act, it is exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (a) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act, (b) the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time and (c) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information. In addition, foreign private issuers are not required to file their annual report on Form 20-F as promptly as U.S. domestic issuers. In addition, The Company is permitted to disclose limited compensation information for its executive officers on an individual basis. Further, the Company is not required to comply with
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Regulation FD, which restricts the selective disclosure of material non-public information to, among others, broker-dealers and holders of a company’s securities under circumstances in which it is reasonably foreseeable that the holder will trade in the company’s securities on the basis of the information. These exemptions and leniencies reduce the frequency and scope of information and protections afforded to shareholders of a company that is not a foreign private issuer.
The Company may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second financial quarter, and, accordingly, the next determination will be made with respect to the Company will be on June 30, 2026. In the future, the Company could lose its foreign private issuer status if (a) more than 50% of its outstanding voting securities are owned by U.S. residents and (b) a majority of its directors or executive officers are U.S. citizens or residents, or the Company fail to meet additional requirements necessary to avoid loss of foreign private issuer status. If the Company loses it foreign private issuer status, the Company will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. The Company will also have to mandatorily comply with U.S. federal proxy requirements, and its officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. As company that is not a foreign private issuer, the Company will incur significant additional legal, accounting and other expenses that it will not incur as a foreign private issuer.
Risks Relating to the Company’s Securities
Any return on investment from the Common Shares is not guaranteed.
There can be no assurance regarding the amount of return to be generated by the Company’s business. The Common Shares are equity securities of the Company and are not fixed-income securities. Unlike fixed-income securities, there is no obligation of the Company to distribute to shareholders of the Company a fixed amount or to return the initial purchase price of a Common Share on a date in the future. The market value of the Common Shares may deteriorate, and that deterioration may be significant.
The Company may not pay dividends.
The Company intends to retain earnings, if any, to finance the growth and development of its business and does not intend to pay cash dividends on the Common Shares in the foreseeable future. The payment of future cash dividends, if any, will be reviewed periodically by the board of directors of the Company (the “Board”) and will depend upon, among other things, conditions then existing, including earnings, financial condition and capital requirements, restrictions in financing agreements, business opportunities and conditions and other factors.
Future sales or issuances of debt or equity securities could decrease the value of any existing Common Shares, dilute investors’ voting power, reduce the Company’s earnings per share and make future sales of the Company’s equity securities more difficult.
The Company may sell additional equity securities in subsequent offerings (including through the sale of securities convertible into equity securities) and may issue additional equity securities to finance operations, acquisitions or other projects. The Company cannot predict the size of future issuances of equity securities or the size and terms of future issuances of debt instruments or other securities convertible into equity securities or the effect, if any, that future issuances and sales of its securities will have on the market price of the Common Shares. Any transaction involving the issuance of previously authorized but unissued Common Shares, or securities convertible into Common Shares, would result in dilution, possibly substantial, to securityholders. Exercises of presently outstanding share options may also result in dilution to securityholders.
The Board has the authority to authorize certain offers and sales of additional securities without the vote of, or prior notice to, shareholders of the Company. Based on the need for additional capital to fund expected expenditures and growth, it is likely that the Company will issue additional securities to provide such capital. Such additional issuances
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may involve the issuance of a significant number of Common Shares at prices less than the current market price for the Common Shares.
Sales of substantial amounts of the Company’s securities, or the availability of such securities for sale, could adversely affect the prevailing market prices for the Company’s securities and dilute investors’ earnings per share. A decline in the market prices of the Company’s securities could impair the Company’s ability to raise additional capital through the sale of securities should the Company desire to do so. Sales of the Common Shares by shareholders might also make it more difficult for the Company to sell equity securities at a time and price that the Company deems appropriate.
The Common Share price has experienced volatility and may be subject to fluctuation in the future based on market conditions.
The Common Shares are listed and traded on the Nasdaq Global Market, or Nasdaq, under the symbol “BHST”, traded on the Frankfurt Stock Exchange under the symbol “8MV0”, traded on the Munich Stock Exchange under the symbol “8MV0”, traded on the Stuttgart Stock Exchange under the symbol “8MV0” and traded on the Dusseldorf Stock Exchange under the symbol “8MV0”. An investment in the Company’s securities is highly speculative. The market has from time to time experienced significant price and volume fluctuations that are unrelated to the financial performance or prospects of any particular company. In addition, because of the nature of the Company’s business, certain factors such as the Company’s announcements, competition, the Company’s financial condition or results of operations as reflected in the Company’s interim and annual financial statements, the Company’s operating performance and the performance of competitors and other similar companies, changes in earnings estimates or recommendations by research analysts who track the Company’s securities or securities of other companies in the Company’s sector, general market conditions, announcements relating to litigation, the arrival or departure of key personnel and the factors listed elsewhere in this Registration Statement can have an adverse impact on the market price of the Common Shares.
Any negative change in the public’s perception of the Company’s prospects could cause the price of the Company’s securities, including the price of the Common Shares, to decrease dramatically. Furthermore, any negative change in the public’s perception of the prospects of biotechnology, nutraceutical, cosmeceutical or CDMO services companies in general could depress the price of the Company’s securities, including the price of the Common Shares, regardless of the Company’s results. In the past, following declines in the market price of a company’s securities, securities class-action litigation often has been instituted against the company. Litigation of this type, if instituted, could result in substantial costs and a diversion of the Company’s management’s attention and resources.
Market disruption risks could have a material adverse effect on the market price of the Common Shares.
War and occupation, terrorism and related geopolitical risks may in the future lead to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. These risks could also adversely affect securities markets, inflation and other factors relating to the securities that would be held from time to time. Such events could, directly or indirectly, have a material adverse effect on the price of the Common Shares.
Holders of Common Shares are at risk for a substantial loss of capital.
Holders of Common Shares could experience a loss of all or substantially all of their investment in the Company. There can be no assurance that the Company will be able to generate positive returns. Therefore, an investment in the Company should only be considered by persons who can afford a loss of their entire investment.
The Company will have broad discretion over the use of the net proceeds from its financings, and it may not use these proceeds in a manner desired by its shareholders.
The Company will have broad discretion over the use of the net proceeds from its financings. Because of the number and variability of factors that will determine the Company’s use of such proceeds, the Company’s ultimate use might vary substantially from its planned use. Prospective investors may not agree with how the Company allocates or spends the proceeds from its financings. The Company may pursue acquisitions, collaborations or other opportunities that do
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not result in an increase in the market value of its securities, including the market value of the Common Shares, and that may increase its losses.
There is no assurance of a sufficient liquid trading market for the Common Shares in the future.
Shareholders of the Company may be unable to sell significant quantities of Common Shares into the public trading markets without a significant reduction in the price of the Common Shares or at all. There can be no assurance that there will be sufficient liquidity of the Common Shares on the trading market, and that the Company will continue to meet the listing or quoting requirements of the Nasdaq Global Market or maintain listing on any other public listing exchange, including but not limited to the Frankfurt Stock Exchange, Munich Stock Exchange, Stuttgart Stock Exchange and Dusseldorf Stock Exchange.
There is currently no market through which the Company’s securities, other than the Common Shares, may be sold.
There is currently no market through which the securities of the Company, other than the Common Shares, may be sold and purchasers of securities of the Company, other than Common Shares, may not be able to resell such securities.
Holders of securities, other than Common Shares, have no rights as shareholders of the Company.
Until a holder of securities of the Company, other than Common Shares, acquires Common Shares upon exercise or conversion of such securities, such holder will have no rights with respect to any Common Shares underlying such securities. Upon exercise or conversion of such securities into Common Shares, such holder will be entitled to exercise the rights of a shareholder of the Company only as to matters for which the record date occurs after the exercise or conversion date.
Except as otherwise disclosed in this Prospectus there have been no material changes to our operations that have occurred since December 31, 2024, and that have not been described in a report on Form 6-K furnished under the Exchange Act and incorporated by reference into this Prospectus.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to “incorporate by reference” the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this Prospectus and information we file later with the SEC will automatically update and supersede this information. The documents we are incorporating by reference as of their respective dates of filing are:
·Our Annual Report on Form 40-F for the fiscal year ended December 31, 2024, filed with the SEC on March 31, 2025.
·Our Reports of Foreign Private Issuer on Form 6-K filed on April 1, 2025, April 1, 2025, May 12, 2025, May 15, 2025, May 15, 2025, May 21, 2025, June 4, 2025, June 19, 2025, July 3, 2025, July 7, 2025, August 11, 2025, August 11, 2025, August 13, 2025 and August 15, 2025.
·The description of our securities contained in our Form 20-FR12G (File No. 000-56663), filed with the SEC on June 14, 2024, pursuant to Section 12 of the Exchange Act, together with any amendments filed for the purpose of updating that description.
All subsequent annual reports filed by us pursuant to the Exchange Act on Form 40-F prior to the termination of the offering shall be deemed to be incorporated by reference to this Prospectus and to be a part hereof from the date of filing of such documents. We may also incorporate part or all of any Report of Foreign Private Issuer on Form 6-K subsequently submitted by us to the SEC prior to the termination of the offering by identifying in such Reports of Foreign Private Issuer on Form 6-K that they, or certain parts of their contents, are being incorporated by reference herein, and any Reports of Foreign Private Issuer on Form 6-K so identified shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of submission of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified
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or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus.
The information we incorporate by reference is an important part of this prospectus, and later information that we file with the SEC will automatically update and supersede the information contained in this Prospectus. We will provide you without charge, upon your written or oral request, a copy of any of the documents incorporated by reference in this Prospectus, other than exhibits to such documents which are not specifically incorporated by reference into such documents. Please direct your written or telephone requests to us at: 1140-625 Howe Street, Vancouver, British Columbia , V6C 2T6, Canada , Tel: (604) 689-5722, Attention: David K. Ryan, Vice President
CAPITALIZATION AND INDEBTEDNESS
The following table sets forth our assets, liabilities, and Shareholders’ equity as of June 30, 2025, In U.S. dollars in thousands. You should read this table in conjunctions with the items titled “Unaudited Interim Consolidated Financial Statements For the Three and Six Months Ended June 30, 2025” and “Management’s Discussion and Analysis for the Three and Six Months Ended June 30, 2025” and as furnished to the SEC as Exhibit 99.1 and Exhibit 99.2, respectively, to our Report of Foreign Price Issuer on Form 6-K on August 11, 2025, which are incorporated by reference herein.
| As of June 30, 2025 |
Assets |
|
Current assets |
|
Cash and cash equivalents | $ 3,727 |
Trade accounts receivable | 1,614 |
Other accounts receivable | 858 |
Inventory | 4,127 |
Total current assets | 10,326 |
Non-current assets |
|
Restricted cash | 397 |
Property, plant and equipment, net | 8,232 |
Right-of-use assets, net | 8,843 |
Total non-current assets | 17,472 |
Total assets | $ 27,798 |
|
|
Liabilities |
|
Current liabilities |
|
Trade accounts payable | $ 3,421 |
Other accounts payable | 4,503 |
Deferred revenue | 990 |
Lease liabilities | 1,454 |
Loans | 4,722 |
Liability for Agricultural Research Organization | 1,552 |
Accrued liabilities | 463 |
Total current liabilities | 17,105 |
Non-current liabilities |
|
Lease liabilities | 9,654 |
Loans | 5,262 |
Total non-current liabilities | 14,916 |
|
|
Shareholders’ equity (deficit) |
|
Share capital and contributed surplus | 98,613 |
Accumulated deficit | (102,836) |
Total Shareholders’ equity (deficit) | (4,223) |
Total liabilities and shareholders’ equity (deficit) | $ 27,798 |
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Unless otherwise indicated in an accompanying Prospectus Supplement, we intend to use the net proceeds from the sale of our securities in this offering for:
·research and development;
·manufacturing;
·marketing;
·advancing the CDMO business unit
·debt reduction or debt refinancing;
·capital expenditures; and
·general corporate purposes, including funding working capital.
Until the net proceeds have been used, we may invest the net proceeds in short-term, investment grade, interest bearing instruments.
The applicable Prospectus Supplement will provide more details on the use of proceeds of any specific offering. There may be circumstances where, on the basis of results obtained or for other sound business reasons, a re-allocation of funds may be necessary or prudent. Accordingly, our management will have broad discretion in the application of the proceeds of an offering of Securities
The following description of our share capital summarizes certain provisions contained in our articles and by-laws. There summaries do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all of the provisions of our articles and by-laws, which have been filed under our profile on SEDAR+ at www.sedarplus.ca and as exhibits to the Registration Statement on Form F-3 of which this Prospectus forms a part.
Authorized Share Capital
We are authorized to issue an unlimited number of Common Shares. Our Common Shares have no par value. As of August 28, 2025, there were 17,333,430 Common Shares issued and outstanding.
Common Shares
Our Common Shares are listed on the Nasdaq Global Market, or Nasdaq, under the symbol “BHST”.
The Common Shares offered under this Prospectus have all of the rights, privileges, restrictions and conditions of other Common Shares of the Company. Holders of Common Shares are entitled to receive notice of any meetings of shareholders of the Company and to attend and cast one (1) vote per Common Share at all shareholder meetings of the Company.
Holders of Common Shares are entitled to receive on a pro-rata basis such dividends on the Common Shares, if any, as and when declared by the Board at its discretion from funds legally available therefor, and upon the liquidation, dissolution or winding up of the Company are entitled to receive on a pro-rata basis the net assets of the Company after payment of debts and other liabilities, in each case subject to the rights, privileges, restrictions and conditions attaching to any other series or class of shares ranking senior in priority to or on a pro-rata basis with the holders of Common Shares with respect to dividends or liquidation. The Common Shares do not carry any pre-emptive, subscription, redemption or conversion rights, nor do they contain any sinking or purchase fund provisions.
Preferred Shares
The Preferred Shares may include one or more series and, subject to the BCBCA, the directors of the Company may, by resolution, if none of the shares of that particular series are issued, alter the Articles and authorize the alteration of the Notice of Articles, as the case may be, to do one or more of the following:
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·determine the maximum number of shares of that series that the Company is authorized to issue, determine that there is no such maximum number, or alter any such determination;
·create an identifying name for the shares of that series, or alter any such identifying name; and
·attach special rights or restrictions to the shares of that series, or alter any such special rights or restrictions.
Dividends
We have never paid any cash dividends on our Common Shares. We do not intend to pay dividends on any of our Common Shares in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of our Board and will be dependent upon our financial condition, results of operations, capital requirements, restrictions under any future indebtedness and other factors our Board deems relevant.
Transfer Agent
The transfer agent and registrar for our Common Shares is National Securities Administrators Ltd. of Vancouver, British Columbia.
We may issue warrants independently or together with any other Securities offered by any Prospectus Supplement and the Warrants may be attached to or separate from those Securities. However, Warrants will typically be offered with Common Shares, with such Securities often referred to collectively as a “Unit”. The Warrants either will be issued under a warrant indenture or agreement that will be entered into by the Company and a trustee at the time of issuance of the Warrants or will be represented by warrant certificates issued by the Company.
Warrants will entitle the holder thereof to receive Common Shares and/or other Securities upon the exercise thereof and payment of the applicable exercise price. A Warrant will be exercisable for a specific period of time at the end of which time it will expire and cease to be exercisable.
Holders of Warrants are not shareholders of the Company. The particular terms and provisions of Warrants offered by this Prospectus and any applicable Prospectus Supplement will be described in the Prospectus Supplement filed in respect of such Warrants. This description may include, without limitation and as applicable:
·the title or designation of the Warrants;
·the number of Warrants offered;
·the number of Common Shares and/or other Securities purchasable upon exercise of the Warrants and the procedures for exercise;
·the exercise price of the Warrants;
·the dates or periods during which the Warrants are exercisable and when they expire;
·exchange distributions and/or secondary distributions;
·the designation and terms of any other Securities with which the Warrants will be offered, if any, and the number of Warrants that will be offered with each such Security;
·any circumstances that will cause the warrants to be deemed to be automatically exercised; and
·any other material terms and conditions of the Warrants including, without limitation, transferability and adjustment terms and whether the Warrants will be listed on a securities exchange.
Units are securities consisting of one or more of the other Securities described in this Prospectus offered together as a “Unit”. A Unit is typically issued such that the holder thereof is also the holder of each Security included in the Unit. Thus, the holder of a Unit will have the rights and obligations of a holder of each Security comprising the Unit. The unit agreement under which a Unit is issued may provide that the Securities comprising the Unit may not be held or transferred separately at any time or before a specified date.
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The particular terms and provisions of Units offered by this Prospectus and any applicable Prospectus Supplement will be described in the Prospectus Supplement filed in respect of such Units. This description may include, without limitation and as applicable: (i) the designation and terms of the Units and of the Securities comprising the Units, including whether and under what circumstances those Securities may be held or transferred separately; (ii) any provisions for the issuance, payment, settlement, transfer or exchange of the Units or of the Securities comprising the Units; (iii) whether the Units will be issued in fully registered or global form; and (iv) any other material terms and conditions of the Units.
We may sell the Securities, separately or together, to or through underwriters or dealers purchasing as principals for public offering and sale by them, and also may sell Securities to one or more other purchasers directly or through agents. We may sell the securities as exchange distributions and/or secondary distributions. Each Prospectus Supplement will set forth the terms of the offering, including the name or names of any underwriters or agents, if any, the purchase price or prices of the Securities and the proceeds we will receive from the sale of the Securities.
The Securities may be sold from time to time in one or more transactions at a fixed price or prices which may be changed or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices including sales in transactions that are deemed to be “at-the-market” distributions or “at the market offerings” as defined in Rule 415(a)(4) under the Securities Act, including sales made directly on the Nasdaq or other existing trading markets for the securities. The prices at which the Securities may be offered may vary as between purchasers and during the period of distribution. If, in connection with the offering of Securities at a fixed price or prices, the underwriters, if any, have made a bona fide effort to sell all of the Securities at the initial offering price fixed in the applicable Prospectus Supplement, the public offering price may be decreased and thereafter further changed, from time to time, to an amount not greater than the initial public offering price fixed in such Prospectus Supplement, in which case the compensation realized by the underwriters will be decreased by the amount that the aggregate price paid by purchasers for the Securities is less than the gross proceeds paid to us by the underwriters.
Underwriters, dealers and agents who participate in the distribution of the Securities may be entitled under agreements to be entered into with us to indemnification by us against certain liabilities, including liabilities under the Securities Act and Canadian securities legislation, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. Such underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for, us in the ordinary course of business.
In connection with any offering of Securities, except as otherwise set out in a Prospectus Supplement relating to a particular offering of Securities, the underwriters may over-allot or effect transactions intended to maintain or stabilize the market price of the Securities offered at a level above that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time
We are paying all of the expenses of the registration of our securities under the Securities Act, including, to the extent applicable, registration and filing fees, expenses, accounting fees and the legal fees of our counsel. We estimate these expenses to be approximately USD 290,310 which at the present time include the following categories of expenses:
SEC registration fee | $ | 15,310 |
Legal fees and expenses |
| 200,000 |
Accounting fees and expenses |
| 50,000 |
Miscellaneous |
| 25,000 |
Total | $ | 290,310 |
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Unless otherwise specified in the Prospectus Supplement relating to an offering of Securities, certain Canadian and United States legal matters relating to the offering of such Securities will be passed upon for us by O’Neill Law LLP as to matters relating to Canadian law and United States federal securities law. In addition, certain legal matters in connection with any offering of Securities may be passed upon for any underwriters, dealers or agents by counsel to be designated at the time of the offering by such underwriters, dealers or agents with respect to matters of Canadian and United States law.
The audited annual consolidated financial statements on Form 40-F for the year ended December 31, 2024 incorporated by reference in this Prospectus have been so incorporated in reliance on the report of Ziv Haft Certified Public Accountants (Isr.), a member firm of BDO, an independent registered public accountant, (the report on the consolidated financial statements contains an explanatory paragraph regarding the Company’s ability to continue as a going concern) appearing elsewhere herein and in the Registration Statement, given on the authority of said firm as experts in auditing and accounting.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURTIES ACT LIAILITIES
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 Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under the laws of British Columbia. Some of our directors and officers, and some of the experts named in this prospectus, are residents of Canada or otherwise reside outside of the United States, and all or a substantial portion of their assets, and all or a substantial portion of our assets, are located outside of the United States. We have appointed an agent for service of process in the United States, but it may be difficult for shareholders who reside in the United States to effect service within the United States upon those directors, officers and experts who are not residents of the United States. It may also be difficult for shareholders who reside in the United States to realize in the United States upon judgments of courts of the United States predicated upon our civil liability and the civil liability of our directors, officers and experts under the United States federal securities laws. There can be no assurance that United States investors will be able to enforce against us, members of our Board, officers or certain experts named herein who are residents of Canada or other countries outside the United States, any judgments in civil and commercial matters, including judgments under the federal securities laws. There is uncertainty with respect to whether a Canadian court would take jurisdiction on a matter of liability predicated solely upon United States federal securities laws, and uncertainty with respect to whether a Canadian court would enforce a foreign judgment on liabilities predicated upon the securities laws of the United States.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We are subject to the information requirements of the Securities Exchange Act, and in accordance therewith file and furnish reports and other information with the SEC. As a foreign private issuer, certain documents and other information that we file and furnish with the SEC may be prepared in accordance with the disclosure requirements of Canada, which are different from those of the United States. In addition, as a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required to publish financial statements as promptly as U.S. companies.
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We maintain a corporate website at https://bioharvest.com. We will post on our website any materials required to be so posted on such website under applicable corporate or securities laws and regulations, including any notices of general meetings of our shareholders.
An investor may read and download the documents we have filed with the SEC under our corporate profile at www.sec.gov. An investor may read and download any public document that we have filed with the Canadian securities regulatory authorities under our corporate profile on the SEDAR+ website at www.sedarplus.ca.
As permitted by the rules and regulations of the SEC, this Prospectus does not contain all the information set forth in the Registration Statement and the exhibits thereto filed with the SEC. For further information with respect to us and the securities offered hereby, you should refer to the complete Registration Statement on Form F-3, which may be obtained from the locations described above. Statements contained in this Prospectus or in any Prospectus Supplement about the contents of any contract or other document are not necessarily complete. If we have filed any contract or other document as an exhibit to the Registration Statement or any other document incorporated by reference in the Registration Statement, you should read the exhibit for a more complete understanding of the document or matter involved. Each statement regarding a contract or other document is qualified in its entirety by reference to the actual document.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers
The Company’s articles (the British Columbia equivalent of by-laws) provide that the Company must indemnify a director, officer, former director or officer or alternate director of the Company and their heirs and legal personal representatives, as set out in the Business Corporations Act (British Columbia) (the “BCBCA”), against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director, officer, former director and officer and alternate director is deemed to have contracted with the Company on the terms of the indemnity contained in Company’s articles. Furthermore, the Company must pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an eligible party in respect of that proceeding but the Company must first receive from the eligible party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited by the BCBCA, the eligible party will repay the amounts advanced. In addition, the Company may indemnify any other person in accordance with the BCBCA.
The enforcement by shareholders of civil liabilities under United States federal securities laws may be affected adversely by the fact that the Company is incorporated under the BCBCA, some of its directors and its executive officers are residents outside the United States and a substantial portion of its assets and the assets of such persons are located outside the United States. Shareholders may not be able to sue a foreign Company or its officers or directors in a foreign court for violations of United States federal securities laws. It may be difficult to compel a foreign company and its officers and directors to subject themselves to a judgment by a United States court.
Item 9. Exhibits
The following exhibits have been filed as part of this Registration Statement:
Exhibit Number |
| Description of Exhibit |
1.1* |
| Underwriting Agreement |
| Articles, as amended on June 26, 2025 | |
4.1* |
| Form of Warrant |
4.2* |
| Form of Unit |
| Opinion of O’Neill Law LLP regarding legality of securities being registered. | |
| Consent of O’Neill Law LLP (contained in 5.1). | |
| Consent of Ziv Haft, Certified Public Accountants (Isr), BDO Member Firm. | |
| Powers of Attorney (included on the signature page of this Registration Statement). | |
107 |
| Filing Fee Table. |
*To be filed, if applicable, by post-effective amendment or incorporated by reference in connection with the offering of any Securities, as appropriate.
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Item 10. Undertakings
(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;
(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 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement;
(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) above do not apply if the if the registration statements 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, as amended, 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, 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 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, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act 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 Registration Statement.
(5)That, for the purpose of determining liability under the Securities Act to any purchaser:
(i)If the registrant is relying on Rule 430B:
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A.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
B.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 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 of the date of the first contract or 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 and 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 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; or
(ii)If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a Registration Statement relating to an offering, other than Registration Statements relying on Rule 430B or other prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the Registration Statement as of the date it is first used after effectiveness. 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 first use, 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 date of first use.
(6)That, for the purpose of determining liability of the registrant under the Securities Act 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 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
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(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, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 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.
(c)Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission 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 controlling person of 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.
(d)The undersigned Registrant hereby undertakes that:
(1)for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.
(2)for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus 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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Pursuant to the requirements of the Securities Act, the Registrant, BioHarvest Sciences Inc., certifies that it has reasonable grounds to believe that it meets all of the requirements for filing a 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 Vancouver, British Columbia, Canada, on August 28, 2025
BIOHARVEST SCIENCES INC.
By: /s/ Ilan Sobel
Ilan Sobel
Chief Executive Officer
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Each person whose signature appears below constitutes and appoints Ilan Sobel and Bar Dichter as his or her true and lawful attorneys-in-fact and agent with full power of substitution and re-substitution for and in his or her name, place and stead, in any and all capacities, to sign on his or her behalf any or all amendments to this Registration Statement (including post-effective amendments or any abbreviated registration statements and any amendments thereto filed pursuant to Rule 462(b) increasing the number of securities for which registration is sought) and to file the same, with all exhibits thereto and other documents in connection therewith, with the SEC, with full power and authority to do and perform each and every act and thing necessary or advisable to be done in connection therewith, as fully to all intents and purposes as he or her might or could do in person hereby ratifying and confirming all that said attorney-in-fact, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following person in the capacities and on the date indicated.
Signature | Title | Date |
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/s/ Ilan Sobel Ilan Sobel | Chief Executive Officer, President, and Director (Principal Executive Officer) | August 28, 2025 |
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/s/ Bar Dichter Bar Dichter | Chief Financial Officer (Principal Financial Officer) | August 28, 2025 |
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/s/ Zaki Rakib Zaki Rakib | President, Chairman and Director | August 28, 2025 |
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/s/ Vivien Rakib Vivien Rakib | Director | August 28, 2025 |
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David Tsur | Director | August 28, 2025 |
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/s/ John Fiddick John Fiddick | Director | August 28, 2025 |
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/s/ Anne Binder Anne Binder | Director | August 28, 2025 |
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/s/ Sharon Malka Sharon Malka | Director | August 28, 2025 |
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SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant’s duly authorized representative has signed this registration statement on Form F-3 in the city of Las Vegas, the State of Nevada, on this 28th day of August, 2025.
/s/ David St. James
David St. James
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Incorporation No. BC0967987
BUSINESS CORPORATIONS ACT
AMENDED ARTICLES
OF
BIOHARVEST SCIENCES INC.
Table of Contents
Part 1 – Interpretation2
Part 2 – Shares and Share certificates3
Part 5 – Acquisition of Shares5
Part 8 – Proceedings at Meetings of Shareholders7
Part 9 – Alterations and Resolutions10
Part 10 – Votes of Shareholders11
Part 12 – Election and Removal of Directors16
Part 13 – Proceedings of Directors22
Part 14 – Committees of Directors23
Part 16 – Certain Permitted Activities of Directors25
Part 20 – Accounting Records27
Part 21 – Execution of Instruments27
Part 23 – Restriction on Share Transfer29
Part 24 – Special Rights and Restrictions30
2
Incorporation No. BC0967987
BUSINESS CORPORATIONS ACT
AMENDED ARTICLES
OF
BIOHARVEST SCIENCES INC.
(the “Company”)
1.1Definitions
Without limiting Article 0, in these Articles, unless the context requires otherwise:
(a)“adjourned meeting” means the meeting to which a meeting is adjourned under Article 0 or 0;
(b)“board” and “directors” mean the board of directors of the Company for the time being;
(c)“Business Corporations Act” means the Business Corporations Act, S.B.C. 2002, c.57, and includes its regulations;
(d)“Company” means BioHarvest Sciences Inc.;
(e)“Interpretation Act” means the Interpretation Act, R.S.B.C. 1996, c. 238;
(f)“senior officers” means the Chief Executive Officer, Chief Financial Officer and such other officers of the Company as designated from time to time by the board;
(g)“trustee”, in relation to a shareholder, means the personal or other legal representative of the shareholder, and includes a trustee in bankruptcy of the shareholder; and
(h)“US Stock Exchange” means an exchange registered as a “national securities exchange” under section 6 of the Securities Exchange Act of 1934, as amended from time to time, or the Nasdaq Stock Market.
1.2Business Corporations Act definitions apply
The definitions in the Business Corporations Act apply to these Articles.
1.3Interpretation Act applies
The Interpretation Act applies to the interpretation of these Articles as if these Articles were an enactment.
1.4Conflict in definitions
If there is a conflict between a definition in the Business Corporations Act and a definition or rule in the Interpretation Act relating to a term used in these Articles, the definition in the Business Corporations Act will prevail in relation to the use of the term in these Articles.
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1.5Conflict between Articles and legislation
If there is a conflict between these Articles and the Business Corporations Act, the Business Corporations Act will prevail.
PART 2 – SHARES AND SHARE CERTIFICATES
2.1Authorized Share Structure
The authorized share structure of the Company consists of shares of the kinds, classes and, if any, series described in the Notice of Articles of the Company.
2.2Form of share certificate
Each share certificate issued by the Company must comply with, and be signed as required by, the Business Corporations Act.
2.3Shareholder Entitled to Certificate or Acknowledgement
Unless the shares are uncertificated shares, each shareholder is entitled, without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder’s name or (b) a non-transferable written acknowledgement of the shareholder’s right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Company is not bound to issue more than one share certificate and delivery of a share certificate for a share to one of several joint shareholders or to one of the shareholders’ duly authorized agents will be sufficient delivery to all.
2.4Sending of share certificate
Any share certificate to which a shareholder is entitled may be sent to the shareholder by mail and neither the Company nor any agent is liable for any loss to the shareholder because the certificate sent is lost in the mail or stolen.
2.5Replacement of worn out or defaced certificate
If the directors are satisfied that a share certificate is worn out or defaced, they must, on production to them of the certificate and on such other terms, if any, as they think fit:
(a)order the certificate to be cancelled; and
(b)issue a replacement share certificate.
2.6Replacement of lost, stolen or destroyed certificate
If a share certificate is lost, stolen or destroyed, a replacement share certificate must be issued to the person entitled to that certificate if the directors receive:
(a)proof satisfactory to them that the certificate is lost, stolen or destroyed; and
(b)any indemnity the directors consider adequate.
2.7Splitting share certificates
If a shareholder surrenders a share certificate to the Company with a written request that the Company issue in the shareholder’s name 2 or more certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the certificate so surrendered, the
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Company must cancel the surrendered certificate and issue replacement share certificates in accordance with that request.
2.8Shares may be uncertificated
Notwithstanding any other provisions of this Part, the directors may, by resolution, provide that:
(a)the shares of any or all of the classes and series of the Company’s shares may be uncertificated shares; or
(b)any specified shares may be uncertificated shares.
3.1Directors authorized to issue shares
The directors may, subject to the rights of the holders of the issued shares of the Company, issue, allot, sell, grant options on or otherwise dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices that the directors, in their absolute discretion, may determine.
3.2Company need not recognize unregistered interests
Except as required by law or these Articles, the Company need not recognize or provide for any person’s interests in or rights to a share unless that person is the shareholder of the share.
4.1Recording or registering transfer
A transfer of a share of the Company must not be registered
(a)unless a duly signed instrument of transfer in respect of the share has been received by the Company and the certificate (or acceptable documents pursuant to Article 0 hereof) representing the share to be transferred has been surrendered and cancelled; or
(b)if no certificate has been issued by the Company in respect of the share, unless a duly signed instrument of transfer in respect of the share has been received by the Company.
4.2Form of instrument of transfer
The instrument of transfer in respect of any share of the Company must be either in the form, if any, on the back of the Company’s share certificates or in any other form that may be approved by the directors from time to time.
4.3Signing of instrument of transfer
If a shareholder, or his or her duly authorized attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a complete and sufficient authority to the Company and its directors, officers and agents to register the number of shares specified in the instrument of transfer, or, if no number is specified, all the shares represented by share certificates deposited with the instrument of transfer:
(a)in the name of the person named as transferee in that instrument of transfer; or
(b)if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the share certificate is deposited for the purpose of having the transfer registered.
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4.4Enquiry as to title not required
Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such shares.
4.5Transfer fee
There must be paid to the Company, in relation to the registration of any transfer, the amount determined by the directors from time to time.
PART 5 – ACQUISITION OF SHARES
5.1Company authorized to purchase shares
Subject to the special rights and restrictions attached to any class or series of shares, the Company may, if it is authorized to do so by the directors, purchase or otherwise acquire any of its shares.
5.2Company authorized to accept surrender of shares
The Company may, if it is authorized to do so by the directors, accept a surrender of any of its shares.
5.3Company authorized to convert fractional shares into whole shares
The Company may, if it is authorized to do so by the directors, convert any of its fractional shares into whole shares in accordance with, and subject to the limitations contained in, the Business Corporations Act.
6.1Powers of directors
The directors may from time to time on behalf of the Company:
(a)borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;
(b)issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person, and at any discount or premium and on such other terms as they consider appropriate;
(c)guarantee the repayment of money by any other person or the performance of any obligation of any other person; and
(d)mortgage or charge, whether by way of specific or floating charge, or give other security on the whole or any part of the present and future assets and undertaking of the Company.
7.1Annual general meetings
Unless an annual general meeting is deferred or waived in accordance with section 182(2)(a) or (c) of the Business Corporations Act, the Company must hold its first annual general meeting within 18
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months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual general meeting.
7.2When annual general meeting is deemed to have been held
If all of the shareholders who are entitled to vote at an annual general meeting consent by a unanimous resolution under the Business Corporations Act to all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders must, in any unanimous resolution passed under this Article 0, select as the Company’s annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.
7.3Calling of shareholder meetings
The directors may, whenever they think fit, call a meeting of shareholders.
7.4Notice for meetings of shareholders
The Company must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting and to each director, unless these Articles otherwise provide, at least the following number of days before the meeting:
(a)if and for so long as the Company is a public company, 21 days;
(b)otherwise, 10 days.
7.5Record date for notice
The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. The record date must not precede the date on which the meeting is held by fewer than:
(a)if and for so long as the Company is a public company, 21 days;
(b)otherwise, 10 days.
If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.
7.6Record date for voting
The directors may set a date as the record date for the purpose of determining shareholders entitled to vote at any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. If no record date is set as provided above, the record date for determining the shareholders entitled to vote at the meeting shall be 5:00 p.m. the day before the meeting.
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7.7Failure to give notice and waiver of notice
The accidental omission to send notice of any meeting to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive or reduce the period of notice of such meeting.
7.8Notice of special business at meetings of shareholders
If a meeting of shareholders is to consider special business within the meaning of Article 0, the notice of meeting must:
(a)state the general nature of the special business; and
(b)if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders:
(i)at the Company’s records office, or at such other reasonably accessible location in British Columbia as is specified in the notice, and
(ii)during statutory business hours on any one or more specified days before the day set for the holding of the meeting.
PART 8 – PROCEEDINGS AT MEETINGS OF SHAREHOLDERS
At a meeting of shareholders, the following business is special business:
(a)at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting or the election or appointment of directors;
(b)at an annual general meeting, all business is special business except for the following:
(i)business relating to the conduct of or voting at the meeting,
(ii)consideration of any financial statements of the Company presented to the meeting,
(iii)consideration of any reports of the directors or auditor,
(iv)the setting or changing of the number of directors,
(v)the election or appointment of directors,
(vi)the appointment of an auditor,
(vii)the setting of the remuneration of an auditor,
(viii)business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution, and
(ix)any other business which, under these Articles or the Business Corporations Act, may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.
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8.2Special resolution
The votes required for the Company to pass a special resolution at a meeting of shareholders is two-thirds of the votes cast on the resolution.
8.3Quorum
Subject to the special rights and restrictions attached to the shares of any affected class or series of shares, the quorum for the transaction of business at a meeting of shareholders is one or more persons, present in person or by proxy, provided that if any class of shares of the Company are listed on a US Stock Exchange, the quorum of business at a meeting of shareholders is one or more persons, present in person or by proxy representing at least 33 1/3% of the outstanding common shares in the capital of the Company.
8.4Other persons may attend
The directors, the president, if any, the secretary, if any, and any lawyer or auditor for the Company are entitled to attend any meeting of shareholders, but if any of those shareholders do attend a meeting of shareholders, that person is not to be counted in the quorum, and is not entitled to vote at the meeting, unless that person is a shareholder or proxy holder entitled to vote at the meeting.
8.5Requirement of quorum
No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote at the meeting is present at the commencement of the meeting.
If, within 1/2 hour from the time set for the holding of a meeting of shareholders, a quorum is not present:
(a)in the case of a general meeting convened by requisition of shareholders, the meeting is dissolved; and
(b)in the case of any other meeting of shareholders, the shareholders entitled to vote at the meeting who are present, in person or by proxy, at the meeting may adjourn the meeting to a set time and place.
8.7Chair
The following individual is entitled to preside as chair at a meeting of shareholders:
(a)the chair of the board, if any;
(b)if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.
8.8Alternate chair
At any meeting of shareholders, the directors present must choose one of their number to be chair of the meeting if: (a) there is no chair of the board or president present within 15 minutes after the time set for holding the meeting; (b) the chair of the board and the president are unwilling to act as chair of the meeting; or (c) if the chair of the board and the president have advised the secretary, if any, or any director present at the meeting, that they will not be present at the meeting. If, in any of the foregoing circumstances, all of the directors present decline to accept the position of chair or fail to choose one of
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their number to be chair of the meeting, or if no director is present, the shareholders present in person or by proxy must choose any person present at the meeting to chair the meeting.
The chair of a meeting of shareholders may, and if so directed by the meeting must, adjourn the meeting from time to time and from place to place, but no business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.
8.10Notice of adjourned meeting
It is not necessary to give any notice of an adjourned meeting or of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the original meeting.
8.11Motion need not be seconded
No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.
8.12Manner of taking a poll
Subject to Article 0, if a poll is duly demanded at a meeting of shareholders:
(a)the poll must be taken
(i)at the meeting, or within 7 days after the date of the meeting, as the chair of the meeting directs, and
(ii)in the manner, at the time and at the place that the chair of the meeting directs;
(b)the result of the poll is deemed to be a resolution of, and passed at, the meeting at which the poll is demanded; and
(c)the demand for the poll may be withdrawn.
8.13Demand for a poll on adjournment
A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at the meeting.
8.14Demand for a poll not to prevent continuation of meeting
The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.
8.15Poll not available in respect of election of chair
No poll may be demanded in respect of the vote by which a chair of a meeting of shareholders is elected.
8.16Casting of votes on poll
On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.
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8.17Chair must resolve dispute
In the case of any dispute as to the admission or rejection of a vote given on a poll, the chair of the meeting must determine the same, and his or her determination made in good faith is final and conclusive.
8.18Chair has no second vote
In case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands or on a poll, have a casting or second vote in addition to the vote or votes to which the chair may be entitled as a shareholder.
8.19Declaration of result
The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands or the poll, as the case may be, and that decision must be entered in the minutes of the meeting.
8.20Meetings by telephone or other communications medium
A shareholder or proxy holder who is entitled to participate in a meeting of shareholders may do so in person, or by telephone or other communications medium, if all shareholders and proxy holders participating in the meeting are able to communicate with each other; provided, however, that nothing in this Section shall obligate the Company to take any action or provide any facility to permit or facilitate the use of any communications medium at a meeting of shareholders. If one or more shareholders or proxy holders participate in a meeting of shareholders in a manner contemplated by this Article 0:
(a)each such shareholder or proxy holder shall be deemed to be present at the meeting; and
(b)the meeting shall be deemed to be held at the location specified in the notice of the meeting.
PART 9 – ALTERATIONS AND RESOLUTIONS
9.1Alteration of Authorized Share Structure
Subject to Article 9.2 and the Business Corporations Act, the Company may by resolution of the directors:
(a)create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;
(b)increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established;
(c)if the Company is authorized to issue shares of a class of shares with par value:
(i)decrease the par value of those shares,
(ii)if none of the shares of that class of shares are allotted or issued, increase the par value of those shares,
(iii)subdivide all or any of its unissued or fully paid issued shares with par value into shares of smaller par value, or
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(iv)consolidate all or any of its unissued or fully paid issued shares with par value into shares of larger par value;
(d)subdivide all or any of its unissued or fully paid issued shares without par value;
(e)change all or any of its unissued or fully paid issued shares with par value into shares without par value or all or any of its unissued shares without par value into shares with par value;
(f)alter the identifying name of any of its shares;
(g)consolidate all or any of its unissued or fully paid issued shares without par value; or
(h)otherwise alter its shares or authorized share structure when required or permitted to do so by the Business Corporations Act.
9.2Change of Name
The Company may by resolution of the directors authorize an alteration to its Notice of Articles in order to change its name or adopt or change any translation of that name.
9.3Other Alterations or Resolutions
If the Business Corporations Act does not specify:
(a)the type of resolution and these Articles do not specify another type of resolution, the Company may by resolution of the directors authorize any act of the Company, including without limitation, an alteration of these Articles; or
(b)the type of shareholders’ resolution and these Articles do not specify another type of shareholders’ resolution, the Company may by ordinary resolution authorize any act of the Company.
PART 10 – VOTES OF SHAREHOLDERS
10.1Voting rights
Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint registered holders of shares under Article 0:
(a)on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote at the meeting has one vote; and
(b)on a poll, every shareholder entitled to vote has one vote in respect of each share held by that shareholder that carries the right to vote on that poll and may exercise that vote either in person or by proxy.
10.2Trustee of shareholder may vote
A person who is not a shareholder may vote on a resolution at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting in relation to that resolution, if, before doing so, the person satisfies the chair of the meeting at which the resolution is to be considered, or satisfies all of the directors present at the meeting, that the person is a trustee for a shareholder who is entitled to vote on the resolution.
10.3Votes by joint shareholders
If there are joint shareholders registered in respect of any share:
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(a)any one of the joint shareholders, but not both or all, may vote at any meeting, either personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or
(b)if more than one of the joint shareholders is present at any meeting, personally or by proxy, the joint shareholder present whose name stands first on the central securities register in respect of the share is alone entitled to vote in respect of that share.
10.4Trustees as joint shareholders
Two or more trustees of a shareholder in whose sole name any share is registered are, for the purposes of Article 0, deemed to be joint shareholders.
10.5Representative of a corporate shareholder
If a corporation that is not a subsidiary of the Company is a shareholder, that corporation may appoint a person to act as its representative at any meeting of shareholders of the Company, and:
(a)for that purpose, the instrument appointing a representative must
(i)be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least 2 business days before the day set for the holding of the meeting, or
(ii)unless the notice of the meeting provides otherwise, be provided, at the meeting, to the chair of the meeting; and
(b)if a representative is appointed under this Article 0,
(i)the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder, and
(ii)the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at the meeting.
10.6When proxy provisions do not apply
Articles 0 to 0 do not apply to the Company if and for so long as it is a public company.
10.7Appointment of proxy holder
Every shareholder of the Company, including a corporation that is a shareholder but not a subsidiary of the Company, entitled to vote at a meeting of shareholders of the Company may, by proxy, appoint a proxy holder to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy.
10.8Alternate proxy holders
A shareholder may appoint one or more alternate proxy holders to act in the place of an absent proxy holder.
10.9When proxy holder need not be shareholder
A person must not be appointed as a proxy holder unless the person is a shareholder, although a person who is not a shareholder may be appointed as a proxy holder if:
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(a)the person appointing the proxy holder is a corporation or a representative of a corporation appointed under Article 0;
(b)the Company has at the time of the meeting for which the proxy holder is to be appointed only one shareholder entitled to vote at the meeting; or
(c)the shareholders present in person or by proxy at and entitled to vote at the meeting for which the proxy holder is to be appointed, by a resolution on which the proxy holder is not entitled to vote but in respect of which the proxy holder is to be counted in the quorum, permit the proxy holder to attend and vote at the meeting.
10.10Form of proxy
A proxy, whether for a specified meeting or otherwise, must be either in the following form or in any other form approved by the directors or the chair of the meeting:
(Name of Company)
The undersigned, being a shareholder of the above named Company, hereby appoints ....................................... or, failing that person, ......................................., as proxy holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the meeting of shareholders to be held on the day of and at any adjournment of that meeting.
Signed this .......... day of .............................................., .................
...............................................................
Signature of shareholder
10.11Provision of proxies
A proxy for a meeting of shareholders must:
(a)be received at the registered office of the Company or at any other place specified in the notice calling the meeting for the receipt of proxies, at least the number of business days specified in the notice or, if no number of days is specified, 2 business days before the day set for the holding of the meeting; or
(b)unless the notice of the meeting provides otherwise, be provided at the meeting to the chair of the meeting.
Subject to Article 0, every proxy may be revoked by an instrument in writing that is:
(a)received at the registered office of the Company at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or
(b)provided at the meeting to the chair of the meeting.
10.13Revocation of proxies must be signed
An instrument referred to in Article 0 must be signed as follows:
(a)if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or his or her trustee; or
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(b)if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under Article 0.
10.14Validity of proxy votes
A vote given in accordance with the terms of a proxy is valid despite the death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received:
(a)at the registered office of the Company, at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or
(b)by the chair of the meeting, before the vote is taken.
10.15Production of evidence of authority to vote
The chair of any meeting of shareholders may, but need not, inquire into the authority of any person to vote at the meeting and may, but need not, demand from that person production of evidence as to the existence of the authority to vote.
10.16Chair May Determine Validity of Proxy
Unless prohibited by applicable law, the chair of any meeting of shareholders may determine whether or not a proxy deposited for use at the meeting, which may not strictly comply with the requirements of this Article 10 as to form, execution, accompanying documentation, time of filing or otherwise, shall be valid for use at the meeting and any such determination made in good faith shall be final, conclusive and binding upon the meeting.
The first directors are the persons designated as directors of the Company in the Notice of Articles that applies to the Company when it is recognized under the Business Corporations Act. Number of directors
11.2Number of directors
The total number of directors comprising the entire board of directors of the Company shall be not less than 6 nor more than 12, with the then-authorized number of directors fixed from time to time by the board of directors.
11.3Classes of directors
The board of directors shall be and is divided into three classes, as nearly equal in number as possible, designated: Class I, Class II and Class III. In case of any increase or decrease, from time to time, in the number of directors, the number of directors in each class shall be apportioned as nearly equal as possible. No decrease in the number of directors shall shorten the term of any incumbent director.
11.4Terms of office
Each director shall serve for a term ending on the date of the third annual meeting following the annual meeting at which such director was elected; provided that: (i) each director initially appointed to Class I shall serve for an initial term expiring at the Corporation’s first annual meeting of shareholders
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following the effectiveness of this provision; (ii) each director initially appointed to Class II shall serve for an initial term expiring at the corporation’s second annual meeting of shareholders following the effectiveness of this provision; and (iii) each director initially appointed to Class III shall serve for an initial term expiring at the corporation’s third annual meeting of shareholders following the effectiveness of this provision; provided further, that the term of each director shall continue until the election and qualification of a successor and be subject to such director’s earlier death, resignation or removal.
11.5Removal
Any director or the entire board of directors may be removed from office only by ordinary resolution of the shareholders entitled to vote thereon.
11.6Vacancies
Vacancies on the board of directors by reason of death, resignation, retirement, disqualification, removal from office or otherwise, and newly created directorships resulting from any increase in the authorized number of directors may be filled by a quorum of the directors. A director elected to fill a vacancy or a newly created directorship shall hold office until the next election of the class for which such director shall have been elected, subject to the election and qualification of a successor and to such director’s earlier death, resignation or removal.
11.7Change in number of directors
If the number of directors is set under Article 11:
(a)the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up to that number;
(b)if, contemporaneously with setting that number, the shareholders do not elect or appoint the directors needed to fill vacancies in the board of directors up to that number, then the directors may appoint, or the shareholders may elect or appoint, directors to fill those vacancies.
11.8Directors’ acts valid despite vacancy
An act or proceeding of the directors is not invalid merely because fewer directors have been appointed or elected than the number of directors set or otherwise required under these Articles.
11.9Qualifications of directors
A director is not required to hold a share in the capital of the Company as qualification for his or her office but must be qualified as required by the Business Corporations Act to become, act or continue to act as a director.
11.10Remuneration of directors
The directors are entitled to the remuneration, if any, for acting as directors as the directors may from time to time determine. If the directors so decide, the remuneration of the directors will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to a director in such director’s capacity as an officer or employee of the Company.
11.11Reimbursement of expenses of directors
The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company.
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11.12Special remuneration for directors
If any director performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director, or if any director is otherwise specially occupied in or about the Company’s business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution, and such remuneration may be either in addition to, or in substitution for, any other remuneration that he or she may be entitled to receive.
11.13Gratuity, pension or allowance on retirement of director
Unless otherwise determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any director who has held any salaried office or place of profit with the Company or to his or her spouse or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.
11.14Additional corporate governance requirement
If any class of shares of the Company are listed on a US Stock Exchange, the majority of the directors of the Company must be comprised of independent directors as defined in the rules of the applicable US Stock Exchange.
PART 12 – ELECTION AND REMOVAL OF DIRECTORS
12.1Election at annual general meeting
At every annual general meeting and in every unanimous resolution contemplated by Article 0, the class of directors up for election under Article 11.4, or as many as necessary to fill existing vacancies will be elected:
(a)the shareholders entitled to vote at the annual general meeting for the election of directors may elect, or in the unanimous resolution appoint, a board of directors consisting of up to the number of directors for the time being set under these Articles; and
(b)the class of directors up for election will cease to hold office immediately before the election or appointment of directors under paragraph 0, but are eligible for re-election or re-appointment.
12.2Consent to be a director
No election, appointment or designation of an individual as a director is valid unless:
(a)that individual consents to be a director in the manner provided for in the Business Corporations Act;
(b)that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director; or
(c)with respect to first directors, the designation is otherwise valid under the Business Corporations Act.
12.3Failure to elect or appoint directors
If:
(a)the Company fails to hold an annual general meeting, and all the shareholders who are entitled to vote at an annual general meeting fail to pass the unanimous resolution contemplated by
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Article 0, on or before the date by which the annual general meeting is required to be held under the Business Corporations Act; or
(b)the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by Article 0, to elect or appoint any directors;
then each director in office at such time continues to hold office until the earlier of:
(c)the date on which his or her successor is elected or appointed; and
(d)the date on which he or she otherwise ceases to hold office under the Business Corporations Act or these Articles.
12.4Directors may fill casual vacancies
Any casual vacancy occurring in the board of directors may be filled by the remaining directors. A director appointed to fill a vacancy shall hold office until the next election of the class for which such director shall have been elected, subject to the election and qualification of a successor and to such director’s earlier death, resignation or removal.
12.5Remaining directors’ power to act
The directors may act notwithstanding any vacancy in the board of directors, but if the Company has fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or for the purpose of summoning a meeting of shareholders to fill any vacancies on the board of directors or for any other purpose permitted by the Business Corporations Act.
12.6Shareholders may fill vacancies
If the Company has no directors or fewer directors in office than the number set pursuant to these Articles as the quorum of directors, and the directors have not filled the vacancies pursuant to Article 12.4 above, the shareholders may elect or appoint directors to fill any vacancies on the board of directors. A director elected to fill a vacancy shall hold office until the next election of the class for which such director shall have been elected, subject to the election and qualification of a successor and to such director’s earlier death, resignation or removal.
Between annual general meetings or unanimous resolutions contemplated by Article 7.2, the directors may appoint one additional director. Any director so appointed, ceases to hold office immediately before the next election or appointment of directors under Article 12.1 (a), but it eligible for re election or re appointment.
12.8Ceasing to be a director
A director ceases to be a director when:
(a)the term of office of the director expires;
(b)the director dies;
(c)the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or
(d)the director is removed from office pursuant to Articles 12.8 or 12.9.
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12.9Removal of director by shareholders
The Shareholders may, by special resolution, remove any director before the expiration of his or her term of office, and may, by ordinary resolution, elect or appoint a director to fill the resulting vacancy. If the shareholders do not contemporaneously elect or appoint a director to fill the vacancy created by the removal of a director, then the directors may appoint, or the shareholders may elect or appoint by ordinary resolution, a director to fill that vacancy.
12.10Removal of director by directors
The directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.
(a)Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Company.
(b)Nominations of persons for election to the board may be made at any annual meeting of shareholders or at any special meeting of shareholders (if one of the purposes for which the special meeting was called was the election of directors):
(i)by or at the direction of the board, including pursuant to a notice of meeting;
(ii)by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the provisions of the Business Corporations Act, or a requisition of the shareholders made in accordance with the provisions of the Business Corporations Act; or
(iii)by any person (a “Nominating Shareholder”): (A) who, at the close of business on the date of the giving of the notice provided for below in this Article 12.10 and on the record date for notice of such meeting, is entered in the securities register as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting; and (B) who complies with the notice procedures set forth below in this Article 12.10.
(c)In addition to any other applicable requirements, for a nomination to be made by a Nominating Shareholder, the Nominating Shareholder must have given timely notice thereof (as provided for in Article 0) in proper written form to the secretary of the Company at the principal executive offices of the Company.
(d)To be timely, a Nominating Shareholder’s notice to the secretary of the Company must be given:
(i)in the case of an annual meeting of shareholders, not less than 30 nor more than 65 days prior to the date of the annual meeting of shareholders; provided, however, that in the event that the annual meeting of shareholders is to be held on a date that is less than 50 days after the date (the “Notice Date”) on which the first public announcement (as defined below) of the date of the annual meeting was made, notice by the Nominating Shareholder may be given not later than the close of business on the tenth (10th) day after the Notice Date in respect of such meeting; and
(ii)in the case of a special meeting (which is not also an annual meeting) of shareholders called for the purpose of electing directors (whether or not called for other purposes),
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not later than the close of business on the fifteenth (15th) day following the day on which the first public announcement of the date of the special meeting of shareholders was made.
In no event shall any adjournment or postponement of a meeting of shareholders or the announcement thereof commence a new time period for the giving of a Nominating Shareholder’s notice as described above.
(e)To be in proper written form, a Nominating Shareholder’s notice to the secretary of the Company must set forth:
(i)as to each person whom the Nominating Shareholder proposes to nominate for election as a director: (A) the name, age, business address and residential address of the person; (B) the principal occupation or employment of the person during the past five years; (C) the class or series and number of shares in the capital of the Company which are controlled or which are owned beneficially or of record by the person as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice; (D) a statement as to whether such person would be “independent” of the Company (as such term is defined under Applicable Securities Laws (as defined below)) if elected as a director at such meeting and the reasons and basis for such determination; (E) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such Nominating Shareholder and beneficial owner, if any, and their respective affiliates and associates, or others acting jointly or in concert therewith, on the one hand, and such nominee, and his or her respective associates, or others acting jointly or in concert therewith, on the other hand; and (F) any other information relating to the person that would be required to be disclosed in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Business Corporations Act and Applicable Securities Laws (as defined below); and
(ii)as to the Nominating Shareholder giving the notice: (A) any proxy, contract, arrangement, understanding or relationship pursuant to which such Nominating Shareholder has a right to vote any shares of the Company; (B) the class or series and number of shares in the capital of the Company which are controlled or which are owned beneficially or of the record by the Nominating Shareholder as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice, and (C) any other information relating to such Nominating Shareholder that would be required to be made in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Business Corporations Act and Applicable Securities Laws (as defined below).
(f)The Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as an independent director of the Company or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such proposed nominee.
(g)The chair of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the provisions set forth in this Article 12.10 and, if any proposed nomination is not in compliance with such provisions, to declare that such defective nomination shall be disregarded.
(h)For purposes of this Article 12.10:
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(i)“Affiliate”, when used to indicate a relationship with a person, means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified person;
(ii)“Applicable Securities Laws” means the applicable securities legislation of each relevant province and territory of Canada, as amended from time to time, the rules, regulations and forms made or promulgated under any such statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities commission and similar regulatory authority of each province and territory of Canada;
(iii)“Associate”, when used to indicate a relationship with a specified person, means:
A.any corporation or trust of which such person beneficially owns, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all voting securities of such corporation or trust for the time being outstanding,
B.any partner of that person,
C.any trust or estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar capacity,
D.a spouse of such specified person,
E.any person of either sex with whom such specified person is living in a conjugal relationship outside marriage, or
F.any relative of such specified person or of a person mentioned in clauses D or E of this definition if that relative has the same residence as the specified person;
(iv)“Derivatives Contract” means a contract between two parties (the “Receiving Party” and the “Counterparty”) that is designed to expose the Receiving Party to economic benefits and risks that correspond substantially to the ownership by the Receiving Party of a number of shares in the capital of the Company or securities convertible into such shares specified or referenced in such contract (the number corresponding to such economic benefits and risks, the “Notional Securities”), regardless of whether obligations under such contract are required or permitted to be settled through the delivery of cash, shares in the capital of the Company or securities convertible into such shares or other property, without regard to any short position under the same or any other Derivatives Contract. For the avoidance of doubt, interests in broad-based index options, broad-based index futures and broad-based publicly traded market baskets of stocks approved for trading by the appropriate governmental authority shall not be deemed to be Derivatives Contracts;
(v)“owned beneficially” or “owns beneficially” means, in connection with the ownership of shares in the capital of the Company by a person:
A.any such shares as to which such person or any of such person’s Affiliates or Associates owns at law or in equity, or has the right to acquire or become the owner at law or in equity, where such right is exercisable immediately or after the passage of time and whether or not on condition or the happening of any contingency or the making of any payment, upon the exercise of any conversion right, exchange right or purchase right attaching to any securities,
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or pursuant to any agreement, arrangement, pledge or understanding whether or not in writing,
B.any such shares as to which such person or any of such person’s Affiliates or Associates has the right to vote, or the right to direct the voting, where such right is exercisable immediately or after the passage of time and whether or not on condition or the happening of any contingency or the making of any payment, pursuant to any agreement, arrangement, pledge or understanding whether or not in writing,
C.any such shares which are beneficially owned, directly or indirectly, by a Counterparty (or any of such Counterparty’s Affiliates or Associates) under any Derivatives Contract (without regard to any short or similar position under the same or any other Derivatives Contract) to which such person or any of such person’s Affiliates or Associates is a Receiving Party; provided, however, that the number of shares that a person owns beneficially pursuant to this clause in connection with a particular Derivatives Contract shall not exceed the number of Notional Securities with respect to such Derivatives Contract; provided, further, that the number of securities owned beneficially by each Counterparty (including their respective Affiliates and Associates) under a Derivatives Contract shall for purposes of this clause be deemed to include all securities that are owned beneficially, directly or indirectly, by any other Counterparty (or any of such other Counterparty’s Affiliates or Associates) under any Derivatives Contract to which such first Counterparty (or any of such first Counterparty’s Affiliates or Associates) is a Receiving Party and this proviso shall be applied to successive Counterparties as appropriate, and
D.any such shares which are owned beneficially within the meaning of this definition by any other person with whom such person is acting jointly or in concert with respect to the Company or any of its securities; and
(vi)“public announcement” shall mean disclosure in a press release reported by a national news service in Canada, or in a document publicly filed by the Company under its profile on the System of Electronic Document Analysis and Retrieval at www.sedar.com.
(i)Notwithstanding any other provision of this Article 12.10, notice given to the secretary of the Company pursuant to this Article 12.10 may only be given by personal delivery, facsimile transmission or by email (at such email address as stipulated from time to time by the secretary of the Company for purposes of this notice), and shall be deemed to have been given and made only at the time it is served by personal delivery, email (at the address as aforesaid, provided that receipt of confirmation of such transmission has been received) or sent by facsimile transmission (provided that receipt of confirmation of such transmission has been received) to the secretary at the address of the principal executive offices of the Company; provided that if such delivery or electronic communication is made on a day which is a not a business day or later than 5:00 p.m. (Vancouver time) on a day which is a business day, then such delivery or electronic communication shall be deemed to have been made on the subsequent day that is a business day.
(j)Notwithstanding the foregoing, the board may, in its sole discretion, waive any requirement in this Article 12.10.
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PART 13 – PROCEEDINGS OF DIRECTORS
13.1Meetings of directors
The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the board held at regular intervals may be held at the place and at the time that the board may by resolution from time to time determine.
13.2Chair of meetings
Meetings of directors are to be chaired by:
(a)the chair of the board, if any;
(b)in the absence of the chair of the board, the president, if any, if the president is a director; or
(c)any other director chosen by the directors if:
(i)neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding the meeting,
(ii)neither the chair of the board nor the president, if a director, is willing to chair the meeting, or
(iii)the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting.
13.3Voting at meetings
Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not have a second or casting vote.
13.4Meetings by telephone or other communications medium
A director may participate in a meeting of the directors or of any committee of the directors in person, or by telephone or other communications medium, if all directors participating in the meeting are able to communicate with each other. A director may participate in a meeting of the directors or of any committee of the directors by a communications medium other than telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all directors who wish to participate in the meeting agree to such participation. A director who participates in a meeting in a manner contemplated by this Article 0 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to participate in that manner.
13.5Who may call extraordinary meetings
A director may call a meeting of the board at any time. The secretary, if any, must on request of a director, call a meeting of the board.
13.6Notice of extraordinary meetings
Subject to Articles 0 and 0, if a meeting of the board is called under Article 0, reasonable notice of that meeting, specifying the place, date and time of that meeting, must be given to each of the directors:
(a)by mail addressed to the director’s address as it appears on the books of the Company or to any other address provided to the Company by the director for this purpose;
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(b)by leaving it at the director’s prescribed address or at any other address provided to the Company by the director for this purpose; or
(c)orally, by delivery of written notice or by telephone, voice mail, e-mail, fax or any other method of legibly transmitting messages.
It is not necessary to give notice of a meeting of the directors to a director if:
(a)the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed or is the meeting of the directors at which that director is appointed;
(b)the director has filed a waiver under Article 0; or
(c)the director attends such meeting.
13.8Meeting valid despite failure to give notice
The accidental omission to give notice of any meeting of directors to any director, or the non-receipt of any notice by any director, does not invalidate any proceedings at that meeting.
13.9Waiver of notice of meetings
Any director may file with the Company a notice waiving notice of any past, present or future meeting of the directors and may at any time withdraw that waiver with respect to meetings of the directors held after that withdrawal.
13.10Effect of waiver
After a director files a waiver under Article 0 with respect to future meetings of the directors, and until that waiver is withdrawn, notice of any meeting of the directors need not be given to that director unless the director otherwise requires in writing to the Company.
13.11Quorum
The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is a majority of the directors.
PART 14– COMMITTEES OF DIRECTORS
The directors may, by resolution:
(a)appoint one or more committees consisting of the director or directors that they consider appropriate;
(b)delegate to a committee appointed under paragraph (a) any of the directors’ powers, except:
(i)the power to fill vacancies in the board,
(ii)the power to change the membership of, or fill vacancies in, any committee of the board, and
(iii)the power to appoint or remove officers appointed by the board; and
(c)make any delegation referred to in paragraph 0 subject to the conditions set out in the resolution.
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14.2Obligations of committee
Any committee formed under Article 0, in the exercise of the powers delegated to it, must:
(a)conform to any rules that may from time to time be imposed on it by the directors; and
(b)report every act or thing done in exercise of those powers to the earliest meeting of the directors to be held after the act or thing has been done.
14.3Powers of board
The board may, at any time:
(a)revoke the authority given to a committee, or override a decision made by a committee, except as to acts done before such revocation or overriding;
(b)terminate the appointment of, or change the membership of, a committee; and
(c)fill vacancies in a committee.
14.4Committee meetings
(a)the members of a directors’ committee may meet and adjourn as they think proper;
(b)a directors’ committee may elect a chair of its meetings but, if no chair of the meeting is elected, or if at any meeting the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair the meeting;
(c)a majority of the members of a directors’ committee constitutes a quorum of the committee; and
(d)questions arising at any meeting of a directors’ committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair of the meeting has no second or casting vote.
14.5Additional corporate governance requirement
(a)Each directors’ committee shall be governed by a charter as the board may adopt to govern such committee; and
(b)If any class of shares of the Company are listed on a US Stock Exchange, the Company will maintain, to the extent required by the rules of the applicable US Stock Exchange, each of the following directors’ committees: an audit committee, a compensation committee and a nominations committee, and each such committee will be comprised of a number of members equal to the number of members required by the rules of the applicable US Stock Exchange. The members of such committees must meet the independence requirements, if any, of the rules of applicable US Stock Exchange.
15.1Appointment of officers
The board may, from time to time, appoint a president, secretary or any other officers that it considers necessary or desirable, and none of the individuals appointed as officers need be a member of the board.
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15.2Functions, duties and powers of officers
The board may, for each officer:
(a)determine the functions and duties the officer is to perform;
(b)entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and
(c)from time to time revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.
15.3Remuneration
All appointments of officers are to be made on the terms and conditions and at the remuneration (whether by way of salary, fee, commission, participation in profits or otherwise) that the board thinks fit and are subject to termination at the pleasure of the board.
PART 16 – CERTAIN PERMITTED ACTIVITIES OF DIRECTORS
16.1Other office of director
A director may hold any office or place of profit with the Company (other than the office of auditor of the Company) in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors may determine.
16.2No disqualification
No director or intended director is disqualified by his or her office from contracting with the Company either with regard to the holding of any office or place of profit the director holds with the Company or as vendor, purchaser or otherwise.
16.3Professional services by director or officer
Subject to compliance with the provisions of the Business Corporations Act, a director or officer of the Company, or any corporation or firm in which that individual has an interest, may act in a professional capacity for the Company, except as auditor of the Company, and the director or officer or such corporation or firm is entitled to remuneration for professional services as if that individual were not a director or officer.
16.4Remuneration and benefits received from certain entities
A director or officer may be or become a director, officer or employee of, or may otherwise be or become interested in, any corporation, firm or entity in which the Company may be interested as a shareholder or otherwise, and, subject to compliance with the provisions of the Business Corporations Act, the director or officer is not accountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such other corporation, firm or entity.
17.1Indemnification of directors and senior officers
The directors must cause the Company to indemnify the directors, senior officers and former directors and senior officers of the Company and each of its subsidiaries, and their respective heirs and personal
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or other legal representatives to the greatest extent permitted by Division 5 of Part 5 of the Business Corporations Act.
17.2Deemed contract
Each director and senior officer is deemed to have contracted with the Company on the terms of the indemnity referred to in Article 0.
18.1Remuneration of an auditor
The directors may set the remuneration of the auditor of the Company without the prior approval of the shareholders.
18.2Waiver of appointment of an auditor
The Company shall not be required to appoint an auditor if all of the shareholders of the Company, whether or not their shares otherwise carry the right to vote, resolve by a unanimous resolution to waive the appointment of an auditor. Such waiver may be given before, on or after the date on which an auditor is required to be appointed under the Business Corporations Act, and is effective for one financial year only.
Subject to the rights, if any, of shareholders holding shares with special rights as to dividends, the directors may from time to time declare and authorize payment of any dividends the directors consider appropriate.
19.2No notice required
The directors need not give notice to any shareholder of any declaration under Article 0.
19.3Directors may determine when dividend payable
Any dividend declared by the directors may be made payable on such date as is fixed by the directors.
19.4Dividends to be paid in accordance with number of shares
Subject to the rights of shareholders, if any, holding shares with special rights as to dividends, all dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.
19.5Manner of paying dividend
A resolution declaring a dividend may direct payment of the dividend wholly or partly by the distribution of specific assets or of paid up shares or fractional shares, bonds, debentures or other debt obligations of the Company, or in any one or more of those ways, and, if any difficulty arises in regard to the distribution, the directors may settle the difficulty as they consider expedient, and, in particular, may set the value for distribution of specific assets.
19.6Dividend bears no interest
No dividend bears interest against the Company.
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19.7Fractional dividends
If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.
19.8Payment of dividends
Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed:
(a)subject to paragraphs 0 and 0, to the address of the shareholder;
(b)subject to paragraph 0, in the case of joint shareholders, to the address of the joint shareholder whose name stands first on the central securities register in respect of the shares; or
(c)to the person and to the address as the shareholder or joint shareholders may direct in writing.
19.9Receipt by joint shareholders
If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of the share.
20.1Recording of financial affairs
The board must cause adequate accounting records to be kept to record properly the financial affairs and condition of the Company and to comply with the provisions of the Business Corporations Act.
PART 21 – EXECUTION OF INSTRUMENTS
The Company’s seal, if any, must not be impressed on any record except when that impression is attested by the signature or signatures of:
(a)any 2 directors;
(b)any officer, together with any director;
(c)if the Company has only one director, that director; or
(d)any one or more directors or officers or persons as may be determined by resolution of the directors.
21.2Sealing copies
For the purpose of certifying under seal a true copy of any resolution or other document, the seal must be impressed on that copy and, despite Article 0, may be attested by the signature of any director or officer.
21.3Execution of documents not under seal
Any instrument, document or agreement for which the seal need not be affixed may be executed for and on behalf of and in the name of the Company by any one director or officer of the Company, or by any other person appointed by the directors for such purpose.
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Unless the Business Corporations Act or these Articles provides otherwise, a notice, statement, report or other record required or permitted by the Business Corporations Act or these Articles to be sent by or to a person may be sent by any one of the following methods:
(a)mail addressed to the person at the applicable address for that person as follows:
(i)for a record mailed to a shareholder, the shareholder’s registered address,
(ii)for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class, or
(iii)in any other case, the mailing address of the intended recipient;
(b)delivery at the applicable address for that person as follows, addressed to the person:
(i)for a record delivered to a shareholder, the shareholder’s registered address,
(ii)for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class,
(iii)in any other case, the delivery address of the intended recipient;
(c)sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;
(d)sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;
(e)physical delivery to the intended recipient; or
(f)such other manner of delivery as is permitted by applicable legislation governing electronic delivery.
22.2Deemed receipt of mailing
A record that is mailed to a person by ordinary mail to the applicable address for that person referred to in Article 0 is deemed to be received by the person to whom it was mailed on the day, Saturdays, Sundays and holidays excepted, following the date of mailing.
22.3Certificate of sending
A certificate signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that behalf for the Company stating that a notice, statement, report or other record was addressed as required by Article 0, prepaid and mailed or otherwise sent as permitted by Article 0 is conclusive evidence of that fact.
22.4Notice to joint shareholders
A notice, statement, report or other record may be provided by the Company to the joint registered shareholders of a share by providing the notice to the joint registered shareholder first named in the central securities register in respect of the share.
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A notice, statement, report or other record may be provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholder by:
(a)mailing the record, addressed to them:
(i)by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or by any similar description, and
(ii)at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or
(b)if an address referred to in Article 0 has not been supplied to the Company, by giving the notice in a manner in which it might have been given if the death, bankruptcy or incapacity had not occurred.
PART 23 – RESTRICTION ON SHARE TRANSFER
23.1Definitions
In this Article 23:
(1)“designated security” means:
(a)a voting security of the Company;
(b)a security of the Company that is not a debt security and that carries a residual right to participate in the earnings of the Company or, on the liquidation or winding up of the Company, in its assets; or
(c)a security of the Company convertible, directly or indirectly, into a security described in paragraph (a) or (b);
(2)“security” has the meaning assigned in the Securities Act (British Columbia);
(3)“voting security” means a security of the Company that:
(a)is not a debt security, and
(b)carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing.
23.2Application
Article 0 does not apply to the Company if and for so long as it is a public company or its designated securities are beneficially owned, directly or indirectly, by more than 50 persons or companies, counting any two or more joint registered owners as one beneficial owner, and not counting employees and former employees of the Company or its affiliates.
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23.3Consent required for transfer of Shares or Designated Securities
No share or designated security may be sold, transferred or otherwise disposed of without the consent of the directors and the directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition.
PART 24 – SPECIAL RIGHTS AND RESTRICTIONS
24.1Preferred shares issuable in series
The Preferred shares may include one or more series and, subject to the Business Corporations Act, the directors may, by resolution, if none of the shares of that particular series are issued, alter the Articles of the Company and authorize the alteration of the Notice of Articles of the Company, as the case may be, to do one or more of the following:
(a)determine the maximum number of shares of that series that the Company is authorized to issue, determine that there is no such maximum number, or alter any such determination;
(b)create an identifying name for the shares of that series, or alter any such identifying name; and
(c)attach special rights or restrictions to the shares of that series, or alter any such special rights or restrictions.
NORTHWEST |
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Suite 704, 595 Howe Street, Box 35 Vancouver, BC, Canada V6C 2T5
Telephone: (604) 687-5792 Fax: (604) 687-6650 | |
LAW GROUP | |||
Stephen F.X. O’Neill* Alan H. Finlayson Charles C. Hethey* Maryna M. O’Neill*
| Michael F. Provenzano Christian I. Cu* Brian S.R. O’Neill* Angie Ko*
| ||
File# 2500241-567
August 28, 2025
BioHarvest Sciences Inc.
1140-625 Howe Street
Vancouver, BC V6C 2T6
Attention: Ilan Sobel, Chief Executive Officer
Dear Sirs/Mesdames:
Re: | BIOHARVEST SCIENCES INC. |
| - Registration Statement on Form F-3 |
| - Legal Opinion |
We have acted as counsel to BioHarvest Sciences Inc., a corporation formed under the laws of the Province of British Columbia, Canada (the “Company”) in connection with the filing of a registration statement on Form F-3, including the prospectus constituting a part thereof (the “Registration Statement”), with the United States Securities and Exchange Commission (the “Commission”) relating to the Company’s offering of up to an aggregate of US$100,000,000 of any combination of: (i) common shares in the capital of the Company (“Common Shares”); (ii) warrants to purchase Common Shares (“Warrants”); (iii) units consisting of Common Shares and Warrants (“Units”); and (iv) the Common Shares that may be issued upon the exercise of the Warrants (“Warrant Shares”) or in connection with the Units, as applicable. The Common Shares, Warrants and Units are referred to herein collectively as the “Securities”. We understand that the Securities may be issued and sold or delivered from time to time as set forth in the Registration Statement, any amendment thereto, the prospectus contained therein (the “Prospectus”) and supplements to the prospectus (the “Prospectus Supplements”) and pursuant to Rule 415 under the Securities Act.
In rendering the opinion set forth below, we have reviewed (i) the Registration Statement and Prospectus, including the exhibits thereto; (ii) copies of the Company’s Articles; (iii) the Company’s Notice of Articles; (iv) certain records of the Company’s corporate proceedings; and (v) such statutes, records and other documents as we have deemed relevant. We have also relied, without investigation, on an officers’ certificate provided by the Company’s Chief Executive Officer and Chief Financial Officer.
Our opinion expressed herein is subject in all respects to the following assumptions, limitations and qualifications:
i.We have assumed:
a.the information in all documents reviewed by us is true and correct;
b.the genuineness of all signatures on documents examined by us;
c.the legal capacity of the officers and directors of the Company;
d.the authenticity of all documents submitted to us as originals;
Northwest Law Group is an association of independent lawyers, law corporations and a limited liability partnership of law corporations.
|
*Practicing through O’Neill Law LLP. O’Neill Law LLP has lawyers licensed to practice in the Province of British Columbia and Arizona, Nevada, New York and Washington States |
NORTHWEST LAW GROUP
August 28, 2025
Page
e.the conformity to authentic originals of all documents submitted to us as certified, conformed, photostatic or other copies;
f.that the documents, in the forms submitted to us for our review, have not been and will not be altered or amended in any respect;
g.no order, ruling or decision of any court or regulatory or administrative body is in effect at any relevant time that restricts the issuance of the Securities
h.the due authorization, execution and delivery of all documents where authorization, execution and delivery are prerequisites to the effectiveness of such documents;
i.the Company has the necessary corporate power and capacity to execute, deliver and perform its obligations under the terms and conditions of any purchase, underwriting or other agreement, indenture or instrument relating to the Company’s creation, authentication, issuance, sale and/or delivery of the Securities to which the Company is party (any such agreement, the “Agreement”);
j.the Company has the necessary corporate power and capacity to authorize, create, authenticate, validly issue, sell and deliver the Securities and perform its obligations under the terms and conditions of the Securities;
k.all necessary corporate action has been taken by the Company to duly authorize the execution and delivery by the Company of the Agreement and the performance of its obligations under the terms and conditions thereof;
l.all necessary corporate action has been taken by the Company to duly authorize, create, authenticate, sell, deliver and validly issue the Securities and to perform its obligations under the terms and conditions of the Securities, and all of the terms and conditions relevant to the execution, delivery and issuance of the Securities in the applicable Agreement have been complied with;
m.all necessary corporate action has been taken by the Company to duly authorize the terms of the offering of the Securities and related matters;
n.the Agreement has been duly authorized, executed and delivered by all parties thereto and such parties had the capacity to do so; constitutes a legal, valid and binding obligation of all parties thereto; is enforceable in accordance with its terms against all parties thereto;
o.the Securities have been duly authorized, created, authenticated, sold and delivered and validly issued by the Company and any other person signing or authenticating the Securities, as applicable;
p.the terms of the offering of the Securities and related matters have been duly authorized by the Company;
q.the execution and delivery of the Agreement and the performance by the Company of its obligations under the terms and conditions thereunder do not and will not conflict with and do not and will not result in a breach of or default under, and do not and will not create a state of facts which, after notice or lapse of time or both, will conflict with or result in a breach of or default under any of the terms or conditions of the notice of articles or articles of the Company, any resolutions of the board of directors or shareholders of the Company, any agreement or obligation of the Company, or applicable law;
r.the authorization, creation, authentication, sale, delivery and issuance of the Securities and the Company’s performance of its obligations under the terms and conditions of the Securities do not and will not conflict with and do not and will not result in a breach of or default under, and do not and will not create a state of facts which, after notice or lapse of time or both, will conflict with or result in a breach of or default under any of the terms or conditions of the notice of articles or articles of the Company, any resolutions of the board of directors or shareholders of the Company, any agreement or obligation of the Company, or applicable law;
NORTHWEST LAW GROUP
August 28, 2025
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s.the terms of the offering of the Securities and related matters do not and will not conflict with and do not and will not result in a breach of or default under, and do not and will not create a state of facts which, after notice or lapse of time or both, will conflict with or result in a breach of or default under any of the terms or conditions of the notice of articles or articles of the Company, any resolutions of the board of directors or shareholders of the Company, any agreement or obligation of the Company, or applicable law.
ii.We have assumed that each of the statements made and certified in the Officers’ Certificate provided to us was true and correct when made, has at no time since being made and certified become untrue or incorrect and remains true and correct on the date hereof; and
Where our opinions expressed herein refer to any of the Securities having been issued as being “fully-paid and non-assessable”, such opinion assumes that all required consideration (in whatever form) has been paid for such shares. No opinion is expressed as to the adequacy of any consideration received. We have no responsibility or obligation to (i) update this opinion; (ii) take into account or inform the addressee or any other person of any changes in law, facts or other developments subsequent to this date that do or may affect the opinions we express; or (iii) advise the addressee or any other person of any other change in any matter addressed in this opinion. Nor do we have any responsibility or obligation to consider the applicability or correctness of this opinion to any person other than the addressee.
We are licensed in the Province of British Columbia, the States of Nevada, Arizona, Washington and New York. The opinions expressed below are restricted to the laws of the Province of British Columbia, the laws of Canada applicable therein, the laws of the States of Nevada, Arizona, Washington, New York, the laws of the United States applicable therein, in each case, in effect on the date hereof. We express no opinion with respect to the laws of any other jurisdiction.
Based upon the foregoing and subject to the above qualifications, we are of the opinion that: (i) on the date hereof, the Common Shares will be validly issued, fully paid and non-assessable shares in the capital of the Company; (ii) Warrants and Units will be validly issued by, and will be binding obligations of the Company; and (iii) upon full payment therefor and the issue thereof in accordance with the terms of the applicable warrant, the Warrant Shares, which have been validly authorized and allotted for issuance, will be validly issued as fully paid and non-assessable common shares in the capital of the Company and will, when sold and paid for as contemplated by the Registration Statement, continue to be validly issued, fully paid and non-assessable; and upon payment for the applicable Securities provided for in the applicable Agreement and when issued, sold and delivered and in accordance with such Agreement.
This opinion letter has been prepared for your use 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 the Company, Prospectus, Registration Statement or Securities. This opinion is rendered on, and speaks only as of, the date of this letter first written above, and does not address any potential change in facts or law that may occur after the date of this opinion letter. We assume no obligation to advise you of any fact, circumstance, event or change in the law or the facts that may hereafter be brought to our attention, whether or not such occurrence would affect or modify any of the opinions expressed herein.
We consent to the use of this opinion as an exhibit to the Registration Statement and further consent to all references to us, if any, in the Registration Statement, the prospectuses constituting a part thereof and any amendments thereto. In giving such consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the United States Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.
Yours truly,
/s/ O’Neill Law LLP
O’Neill Law LLP
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the prospectus constituting a part of this Registration Statement on Form F-3 of our report, dated March 31, 2025 relating to the consolidated financial statements of BioHarvest Sciences Inc., appearing in the company's annual report on Form 40-F for the year ended December 31, 2024, Our report contains an explanatory paragraph regarding the Company’s ability to continue as a going concern.
We also consent to the reference to us under the caption “Experts” in the Registration Statement.
| /s/ Ziv Haft |
| Ziv Haft Certified Public Accountants (Isr.) BDO Member Firm |
Tel-Aviv, Israel
August 28, 2025