C21 Investments Inc 6-K, filed Sep 9, 2025
C21 Investments Inc. (CWLXF)
About this 6-K
C21 Investments Inc filed this 6-K on September 9, 2025.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September, 2025
Commission File Number: 000-55982
C21 Investments Inc.
(Translation of registrant's name into English)
Suite 1900-855 West Georgia St., Vancouver, BC, V6C 3H4
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
[ x ] Form 20-F [ ] Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
SUBMITTED HEREWITH
Exhibits
| 99.1 | CSE Form 9 | |
| 99.2 | CSE Form 6 | |
| 99.3 | Conformed Articles | |
| 99.4 | Notice of Alteration | |
| 99.5 | Notice of Articles |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| C21 Investments Inc. | ||
| (Registrant) | ||
| Date: September 8, 2025 | By: | /s/ Michael Kidd |
|
|
||
| Michael Kidd | ||
| Title: | CFO | |
FORM 9
NOTICE OF PROPOSED ISSUANCE OF LISTED SECURITIES
(or securities convertible or exchangeable into listed securities)
| Name of Listed Issuer: | Symbol(s): |
| C21 Investments Inc. (the "Issuer"). | CXXI |
Date: September 8, 2025 Is this an updating or amending Notice: ☐Yes √ No
If yes provide date(s) of prior Notices: N/A.
Issued and Outstanding Securities of Issuer Prior to Issuance: 117,772,814 common shares of the Issuer (each, a "Common Share") and Nil subordinate voting shares of the Issuer (each, a "Subordinate Voting Share") as at September 8, 2025.
Pricing
Date of news release announcing proposed issuance: September 8, 2025 or
Date of confidential request for price protection: N/A
Closing Market Price on Day Preceding the news release: $0.46 per Common Share ($0.00000046 per Subordinate Voting Share on an as converted basis) or
Day preceding request for price protection: N/A
Closing
Number of securities to be issued: 100,000,000 Subordinate Voting Shares.
Issued and outstanding securities following issuance: 100,000,000 Subordinate Voting Shares (and 117,772,914 Common Shares on an as-converted basis).
Instructions:
1. For private placements (including debt settlement), complete tables 1A and 1B in Part 1 of this form.
2. Complete Table 1A - Summary for all purchasers, excluding those identified in Item 8.
3. Complete Table 1B - Related Persons only for Related Persons
4. If shares are being issued in connection with an acquisition (either as consideration or to raise funds for a cash acquisition) please proceed to Part 2 of this form.
5. An issuance of non-convertible debt does not have to be reported unless it is a significant transaction as defined in Policy 7, in which case it is to be reported on Form 10 - Notice of Proposed Transaction
6. Post the completed Form 9 to the CSE website in accordance with Policy 6 - Distributions. In addition, the completed form must be delivered to listings@thecse.com with an appendix that includes the information in Table 1B for ALL placees.
Part 1. Private Placement
Table 1A - Summary
| Each jurisdiction in which purchasers reside | Number of Purchasers |
Price per Security |
Total dollar value (CDN$) raised in the jurisdiction |
| Canada | 1 | $0.000001 | $100 |
| Total number of purchasers: | 1 | ||
| Total dollar value of distribution in all jurisdictions: | $100 | ||
Table 1B - Related Persons
| Full Name &Municipality of Residence of Placee |
Number of Securities Purchased or to be Purchased |
Purchase price per Security (CDN$) |
Conversion Price (if Applicable) (CDN$) |
Prospectus Exemption |
Total Securities Previously Owned, Controlled or Directed |
Payment Date(1) |
Describe relationship to Issuer (2) |
| Michael Kidd Vancouver, British Columbia |
100,000,000 Subordinate Voting Shares | $0.000001 per Subordinate Voting Share | N/A |
Section 2.24 of National Instrument 45-106 | 0 Subordinate Voting Shares | September 8, 2025 | Director and Officer |
1An issuance of non-convertible debt does not have to be reported unless it is a significant transaction as defined in Policy 7, in which case it is to be reported on Form 10.
1. Total amount of funds to be raised: $100 (the "Transaction").
2. Provide full details of the use of the proceeds. The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material. The purpose of the Transaction was to ensure the Issuer maintains its status as a "foreign private issuer" as defined in Rule 3b-4 under the Securities Exchange Act of 1934, as amended in order to reduce compliance costs.
3. Provide particulars of any proceeds which are to be paid to Related Persons of the Issuer: N/A.
4. If securities are issued in forgiveness of indebtedness, provide details of the debt agreement(s) or and the agreement to exchange the debt for securities. N/A.
5. Description of securities to be issued:
(a) Class Subordinate Voting Shares.
(b) Number 100,000,000 Subordinate Voting Shares.
(c) Price per security $0.000001 per Subordinate Voting Share.
(d) Voting rights 0.000001 of a vote per Subordinate Voting Share.
6. Provide the following information if warrants, (options) or other convertible securities are to be issued:
(a) Number N/A.
(b) Number of securities eligible to be purchased on exercise of warrants (or options) N/A .
(c) Exercise price N/A.
(d) Expiry date N/A.
7. Provide the following information if debt securities are to be issued:
(a) Aggregate principal amount N/A.
(b) Maturity date N/A.
(c) Interest rate N/A.
(d) Conversion terms N/A.
(e) Default provisions N/A.
8. Provide the following information for any agent's fee, commission, bonus or finder's fee, or other compensation paid or to be paid in connection with the placement (including warrants, options, etc.):
(a) Details of any dealer, agent, broker or other person receiving compensation in connection with the placement (name, and if a corporation, identify persons owning or exercising voting control over 20% or more of the voting shares if known to the Issuer): N/A.
(b) Cash N/A.
(c) Securities N/A.
(d) Other N/A.
(e) Expiry date of any options, warrants etc N/A.
(f) Exercise price of any options, warrants etc. N/A.
9. State whether the sales agent, broker, dealer or other person receiving compensation in connection with the placement is Related Person or has any other relationship with the Issuer and provide details of the relationship TBD.
10. Describe any unusual particulars of the transaction (i.e. tax "flow through" shares, etc.).
Pursuant to the special rights and restrictions attaching to the Subordinate Voting Shares, each Subordinate Voting Shares is convertible into 0.000001 Common Shares (subject to adjustment) under certain circumstances and subject to certain restrictions.
11. State whether the private placement will result in a change of control or if the issuance will materially affect control of the Issuer.
N/A .
12. Where there is a change in the control of the Issuer resulting from the issuance of the private placement shares, indicate the names of the new controlling shareholders. N/A .
13. Each purchaser has been advised of the applicable securities legislation restricted or seasoning period. All certificates for securities issued which are subject to a hold period bear the appropriate legend restricting their transfer until the expiry of the applicable hold period required by National Instrument 45-102 Resale of Securities. N/A.
Part 2. Acquisition - N/A
1. Provide details of the assets to be acquired by the Issuer (including the location of the assets, if applicable). The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material: ________________________________________________________________________________________________________ .
2. Provide details of the acquisition including the date, parties to and type of agreement (eg: sale, option, license etc.) and relationship to the Issuer. The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the acquisition without reference to any other material: ___________________________________________________________________________________________
3. Provide the following information in relation to the total consideration for the acquisition (including details of all cash, securities or other consideration) and any required work commitments:
(a) Total aggregate consideration in Canadian dollars: ________________ .
(b) Cash: _______________________________________________________________ .
(c) Securities (including options, warrants etc.) and dollar value: _______________________________________________________________________________________ .
(d) Other: _______________________________________________________________ .
(e) Expiry date of options, warrants, etc. if any: ________________________ .
(f) Exercise price of options, warrants, etc. if any: _____________________ .
(g) Work commitments: ________________________________________________ .
4. State how the purchase or sale price was determined (e.g. arm's-length negotiation, independent committee of the Board, third party valuation etc).
5. Provide details of any appraisal or valuation of the subject of the acquisition known to management of the Issuer:___________________________________________________________________________________________ .
6. The names of parties receiving securities of the Issuer pursuant to the acquisition and the number of securities to be issued are described as follows:
| Name of Party (If not an individual, name all insiders of the Party) |
Number and Type of Securities to be Issued |
Dollar value per Security (CDN$) |
Conversion price (if applicable) |
Prospectus Exemption |
Total Securities, Previously Owned, Controlled or Directed by Party |
Describe relationship to Issuer(1) |
(1) Indicate if Related Person
7. Details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired: ____________________________________________________________________________________________ .
8. Provide the following information for any agent's fee, commission, bonus or finder's fee, or other compensation paid or to be paid in connection with the acquisition (including warrants, options, etc.):
(a) Details of any dealer, agent, broker or other person receiving compensation in connection with the acquisition (name, andif a corporation, identify persons owning or exercising voting control over 20% or more of the voting shares if known to the Issuer): .
(b) Cash ________________________________________________________________ .
(c) Securities ___________________________________________________________ .
(d) Other ________________________________________________________________ .
(e) Expiry date of any options, warrants etc. ___________________________
(f) Exercise price of any options, warrants etc. ________________________ .
9. State whether the sales agent, broker or other person receiving compensation in connection with the acquisition is a Related Person or has any other relationship with the Issuer and provide details of the relationship.
10. If applicable, indicate whether the acquisition is the acquisition of an interest in property contiguous to or otherwise related to any other asset acquired in the last 12 months. ____________________________________________________________________________________________ .
Certificate Of Compliance
The undersigned hereby certifies that:
1. The undersigned is a director and/or senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance on behalf of the Issuer.
2. As of the date hereof there is not material information concerning the Issuer which has not been publicly disclosed.
3. the Issuer has obtained the express written consent of each applicable individual to:
(a) the disclosure of their information to the Exchange pursuant to this Form or otherwise pursuant to this filing; and
(b) the collection, use and disclosure of their information by the Exchange in the manner and for the purposes described in Appendix A or as otherwise identified by the Exchange, from time to time
4. The undersigned hereby certifies to the Exchange that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in National Instrument 14-101) and all Exchange Requirements (as defined in CSE Policy 1).
5. All of the information in this Form 9 Notice of Issuance of Securities is true.
Dated September 8, 2025.
Michael Kidd
Name of Director or Senior Officer
_______________________________
Signature
Chief Financial Officer
Official Capacity
Appendix A
PERSONAL INFORMATION COLLECTION POLICY REGARDING FORM 9
The Canadian Securities Exchange and its subsidiaries, affiliates, regulators and agents (collectively, "CSE or the "Exchange") collect and use the information (which may include personal or other information) which has been provided in Form 9 for the following purposes:
• To determine whether an individual is suitable to be associated with a Listed Issuer;
• To determine whether an issuer is suitable for listing;
• To determine whether allowing an issuer to be listed or allowing an individual to be associated with a Listed Issuer could give rise to investor protection concerns or could bring the Exchange into disrepute;
• To conduct enforcement proceedings;
• To ensure compliance with Exchange Requirements and applicable securities legislation; and
• To fulfil the Exchange's obligation to regulate its marketplace.
The CSE also collects information, including personal information, from other sources, including but not limited to securities regulatory authorities, law enforcement and self-regulatory authorities, regulation service providers and their subsidiaries, affiliates, regulators and agents. The Exchange may disclose personal information to these entities or otherwise as provided by law and they may use it for their own investigations.
The Exchange may use third parties to process information or provide other administrative services. Any third party will be obliged to adhere to the security and confidentiality provisions set out in this policy.
All personal information provided to or collected by or on behalf of The Exchange and that is retained by The Exchange is kept in a secure environment. Only those employees who need to know the information for the purposes listed above are permitted access to the information or any summary thereof. Employees are instructed to keep the information confidential at all times.
Information about you that is retained by the Exchange and that you have identified as inaccurate or obsolete will be corrected or removed.
If you wish to consult your file or have any questions about this policy or our practices, please write the Chief Privacy Officer, Canadian Securities Exchange, 220 Bay Street - 9th Floor, Toronto, ON, M5J 2W4.
FORM 6
CERTIFICATE OF COMPLIANCE
TO: CANADIAN SECURITIES EXCHANGE ("CSE")
C21 Investments Inc. (the "Listed Issuer") hereby certifies to CSE
[Name of Listed Issuer]
that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in National Instrument 14-101) and all Exchange Requirements (as defined in Policy 1).
| Date: | September 8, 2025 | |
| Signed: | ||
| (Signature) | ||
| Michael Kidd | ||
| (Print Name) | ||
| Chief Financial Officer | ||
| (Print Office) |
FORM 6 - CERTIFICATE OF COMPLIANCE
January 2015
CONSENT RESOLUTIONS OF THE DIRECTORS
OF
C21 INVESTMENTS INC.
DATED as of the 27th day of August, 2025
We, the undersigned, being all the directors of C21 Investments Inc. (the "Company") hereby consent to and adopt in writing the following resolutions:
SUBORDINATE VOTING SHARES
WHEREAS:
A. The Company is currently a "foreign private issuer" as determined under Rule 3b-4 under the Securities Exchange Act of 1934, as amended;
B. The Board of Directors of the Company believes that it is in the best interests of the Company to maintain the Company's status as a foreign private issuer by creating a new class of subordinate voting shares of the Company ("Subordinate Voting Shares") with such special rights and restrictions (the "Special Rights and Restrictions") to be attached to such Subordinate Voting Shares as set forth in Schedule "A" hereto (the "Share Amendment");
C. The Company proposes to issue the Subordinate Voting Shares to one or more subscribers resident in a province or territory of Canada (other than Ontario)(the "Canadian Holders") by way of private placement (the "Private Placement") pursuant to the terms of subscription agreements to be entered between the Company and such Canadian Holders (the "Subscription Agreements") such that the Subordinate Voting Shares held by such Canadian Holders shall be sufficient for the Company to maintain its foreign private issuer status for the time being;
D. The Subordinate Voting Shares will not be listed on any stock exchange, cannot be held by any "U.S. persons" (as defined in Regulations S under the Securities Act of 1933, as amended) and are subject to transfer restrictions as further set forth in the Special Rights and Restrictions;
E. The Private Placement is subject to the approval and requirements of the Canadian Securities Exchange (the "CSE");
F. Michael Kidd, Chief Financial Officer, Corporate Secretary and a Director of the Company has advised the Board of Directors of the Company that he intends to directly or indirectly subscribe for 100,000,000 Subordinate Voting Shares under the Private Placement for an aggregate total subscription price of $100, and in that connection, Mr. Kidd has a disclosable interest in the subject matter of these resolutions within the meaning of section 147(1) of the Business Corporations Act (British Columbia) (the "Act") or under related party transaction rules of applicable securities regulatory authorities;
G. The nature and extent of Mr. Kidd's interest in the Private Placement and in his Subscription Agreement shall be deemed to constitute his declaration in writing of his interest in the Private Placement; and
H. Mr. Kidd acknowledges that, pursuant to section 149(2) of the Act, he is not entitled to vote on the following resolutions insofar as such resolutions relate to his subscription for securities of the Company.
BE IT RESOLVED THAT:
1. In connection with the Share Amendment, the Notice of Articles and Articles of the Company be amended to: (i) create a new class of subordinate voting shares without par value of the Company; and (ii) attach the Special Rights and Restrictions as set forth in Schedule "A" hereto to such Subordinate Voting Shares.
2. A Notice of Alteration altering the Notice of Articles of the Company (the "Notice of Alteration") to reflect the effect of this special resolution and the Share Amendment be filed by or on behalf of the Company with the British Columbia Registrar of Companies (the "Registrar") and any director or officer of the Company is authorized to complete and execute the Notice of Alteration and instruct the Company's agent(s) to electronically file the Notice of Alteration with the Registrar.
3. Koffman Kalef LLP be appointed as agent for the Company to electronically file the Notice of Alteration with the Registrar.
4. The Articles of the Company be amended by creating a new Part 27, being the Special Rights and Restrictions attaching to the Subordinate Voting Shares having the text set out in Schedule "A" hereto, such amendment to the Articles of the Company to take effect upon the filing of the Notice of Alteration contemplated by this resolution.
5. Any director of officer of the Company is hereby authorized and directed to execute or cause to be executed, and deliver or cause to be delivered such forms, instruments, agreements, notices and documents, for, in the name of and on behalf of the Company as, in the opinion of such director or officer of the Company (with the advise of legal counsel for the Company), may be required in connection with the Share Amendment and the execution and delivery thereof by such director or officer of the Company will be conclusive evidence of his or her approval thereof.
6. The Private Placement is hereby approved and confirmed and the Company is hereby authorized to take all steps that are necessary or advisable to complete the Private Placement.
7. The Company is hereby authorized to enter into Subscription Agreements with each Canadian Holder (including Mr. Kidd) providing for the purchase and sale of Subordinate Voting Shares pursuant to the Private Placement, and any one officer or director of the Company be and is hereby authorized to execute and deliver the Subscription Agreements on behalf of the Company in such forms as such person may approve, such approval to be conclusively evidenced by such person's signing of each Subscription Agreement.
8. 100,000,000 Subordinate Voting Shares are hereby allotted and reserved for issuance in connection with the Private Placement and, upon the Company's receipt of the subscription price per Subordinate Voting Share subscribed for and upon compliance with the other terms of the respective Subscription Agreements, 100,000,000 Subordinate Voting Shares shall be issued and delivered to the Canadian Holders as fully paid and non-assessable shares.
9. 100 common shares of the Company ("Common Shares") (or such number of Common Shares as may be adjusted pursuant to the Special Rights and Restrictions attaching to the Subordinate Voting Shares) be and they are hereby authorized and conditionally reserved for issuance to the holders of the Subordinate Voting Shares and are authorized to be issued and delivered upon exercise of the conversion and redemption rights of the Company and each Canadian Holder in accordance with the terms and conditions of the Special Rights and Restrictions attaching to the Subordinate Voting Shares, and upon such exercise being effected and compliance with the terms and conditions set forth in the Special Rights and Restrictions attaching to the Subordinate Voting Shares, such Common Share(s) shall be issued and delivered as fully paid and non-assessable shares to the persons entitled thereto.
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10. Any one officer or director of the Company is authorized to execute and deliver on behalf of the Company the specimen share certificate representing the Subordinate Voting Shares in such form as such officer or director may approve, such approval to be conclusively evidenced by such person's signing of such specimen share certificate.
11. Computershare Investor Services Inc. ("Computershare") at its office in Vancouver, British Columbia be appointed as transfer agent, registrar and dividend disbursing agent for the Common Shares and Subordinate Voting Shares pursuant to the terms of the transfer agent, registrar and dividend disbursing agent agreement (the "Transfer Agent Agreement") to be entered into between the Company and Computershare, and any director or officer of the Company is hereby authorized and directed to execute or cause to be executed, and deliver or cause to be delivered, the Transfer Agent Agreement for, in the name of and on behalf of the Company in such form as such person may approve, such approval to be conclusively evidenced by such person's signing of the Transfer Agent Agreement.
12. The Register of Holders and Register of Transfers for the Common Shares shall be kept at the principal stock transfer office of Computershare in the City of Vancouver, British Columbia and Branch Registers of Transfers shall be kept at such other places as may be deemed advisable by any director or officer of the Company.
13. Computershare is hereby authorized and directed to issue, countersign and register certificates or other instruments (including by electronic means) representing the Subordinate Voting Shares, such certificates and other instruments to be issued, registered and delivered to such persons as the Company may direct in writing and the form of all such certificates and other instruments, when issued, shall be deemed to be the form approved by the directors hereby.
14. An application be made to the CSE for the approval of the Private Placement (and any Common Shares issuable upon the conversion or redemption of the Subordinate Voting Shares issued thereunder), and any one officer or director of the Company be and is hereby authorized and directed by the Company to execute or cause to be executed, and deliver or cause to be delivered such forms, instruments, agreements, notices and documents, for, in the name of and on behalf of the Company as, in the opinion of such director or officer of the Company (with the advise of legal counsel for the Company), may be required in connection with the receipt of the approval of the CSE.
15. Any one officer or director of the Company be and is hereby authorized for and on behalf of the Company to do all such acts and things and to execute and deliver all such statements, forms and other documents as such officer or director may consider advisable or as may be reasonably required or recommended by the Company's counsel in connection with the foregoing resolutions and execution by such officer or director shall be conclusive proof of the authority of such officer or director to act and to execute on behalf of the Company.
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16. These resolutions may be signed by the directors in as many counterparts as may be necessary, each of which so signed shall be deemed to be an original (including those transmitted by facsimile or electronic mail), and such counterparts together shall constitute one and the same instrument and notwithstanding the date of execution shall be deemed to bear the date as at the date first written above.
| "Todd Harrison" | "Michael Kidd" | |
| TODD HARRISON | MICHAEL KIDD* | |
| "D. Bruce Macdonald" | "Leonard Werden" | |
| D. BRUCE MACDONALD | LEONARD (WILL) WERDEN |
*Note: Michael Kidd, having disclosed and acknowledged his material interest in certain matters approved by these resolutions, has signed these resolutions notwithstanding his disentitlement to vote, in accordance with the Act, on the subject matter of these resolutions which specifically relate to his subscription for securities of the Company. These resolutions shall not be invalidated by virtue of his signature herein.
SCHEDULE "A"
Special Rights and Restrictions Attached to Subordinate Voting Shares
[See attached]
27. SPECIAL RIGHTS AND RESTRICTIONS ATTACHED TO SUBORDINATE VOTING SHARES
The Subordinate Voting Shares without par value of the Company (the "Subordinate Voting Shares") have attached to them the following special rights and restrictions:
27.1 Voting
Each holder of Subordinate Voting Shares is entitled to receive notice of and attend any general meeting of the shareholders of the Company, except a meeting of which only holders of another particular class or series of shares of the Company shall have the right to vote. At such meeting, holders of Subordinate Voting Shares shall be entitled to one vote in respect of each Common share of the Company (each, a "Common Share") into which such Subordinate Voting Shares are convertible, which shall initially be equal to 0.000001 of a vote per Subordinate Voting Share.
27.2 Alteration to Rights of Subordinate Voting Shares
As long as any Subordinate Voting Shares remain outstanding, the Company will not, without the consent of the holders of the Subordinate Voting Shares by separate special resolution, prejudice or interfere with any right or special right attached to the Subordinate Voting Shares.
27.3 Dividends
The directors of the Company will be at liberty, in their absolute discretion, to declare dividends on the Subordinate Voting Shares. No dividends will be declared or paid on the Subordinate Voting Shares unless the Company simultaneously declares or pays, as applicable, equivalent dividends (on an as-converted to Subordinate Voting Share basis) on the Common Shares.
27.4 Liquidation, Dissolution or Winding-Up
In the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or in the event of any other distribution of assets of the Company among its shareholders for the purpose of winding up its affairs, the holders of Subordinate Voting Shares shall, subject to the prior rights of the holders of any shares of the Company ranking in priority to the Subordinate Voting Shares, be entitled to participate rateably along with all other holders of Subordinate Voting Shares (on an as-converted to Subordinate Voting Share basis) and the Common Shares.
27.5 Rights to Subscribe; Pre-Emptive Rights
The holders of Subordinate Voting Shares are not entitled to a right of first refusal to subscribe for, purchase or receive any part of any issue of Subordinate Voting Shares, Common Shares or bonds, debentures or other securities of the Company now or in the future.
27.6 Ownership Restrictions
The Subordinate Voting Shares may only be beneficially owned or controlled, directly or indirectly, by a person or persons who are not a U.S. Person.
A "U.S. Person" shall mean an individual resident in the United States, an estate or trust of which any executor or administrator or trustee, respectively, is a U.S. Person and any partnership or corporation organized or incorporated under the laws of the United States (as defined in Regulation S under the Securities Act of 1933, as amended (the "U.S. Securities Act")).
27.7 Transfer Restrictions
No Subordinate Voting Share or any rights or interests therein may be transferred legally, beneficially or in any other manner by the holder thereof without the prior written consent of the Board of Directors (or a committee thereof), which may be withheld in its sole discretion.
27.8 Conversion
Subject to the conversion restrictions set forth in this Article 27.8, holders of Subordinate Voting Shares shall have conversion rights as follows:
(a) Right to Convert. Each Subordinate Voting Share shall be convertible, at the option of the holder provided that such holder has received the prior written consent of the Board of Directors (or a committee thereof), which may be withheld in its sole discretion, at any time after the date of issuance of such share at the office of the Company or any transfer agent for such shares, into fully paid and non-assessable Common Shares as is determined by multiplying the number of Subordinate Voting Shares by the Conversion Ratio applicable to such shares, determined as hereafter provided, in effect on the date the Subordinate Voting Shares are surrendered for conversion. The initial "Conversion Ratio" for shares of Subordinate Voting Shares shall be 0.000001 Common Shares, subject to adjustment for each Subordinate Voting Share; provided, however, that the Conversion Ratio shall be subject to adjustment as set forth in Article 27.10.
(b) Mechanics of Conversion. Before any holder of Subordinate Voting Shares shall be entitled to convert Subordinate Voting Shares into Common Shares, the holder thereof shall: (i) have received the prior written consent of the Board of Directors (or a committee thereof) as provided in Article 27.8(a); and (ii) have surrendered the certificate or certificates therefor, or, if uncertificated, such other evidence of ownership as the Company or the transfer agent may require, duly endorsed, at the office of the Company or of any transfer agent for Common Shares, and shall give written notice to the Company at its registered office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates, DRS Advice(s) or other evidence of ownership for Common Shares are to be issued (each, a "Conversion Notice"). The Company shall (or shall cause its transfer agent to), as soon as practicable thereafter to:
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(i) issue and deliver at such office to such holder, or, subject to payment by the registered holder of any stock transfer or other applicable taxes and compliance with any other reasonable requirements of the Company or the transfer agent, as applicable, in respect of such transfer, in such name or names as such registered holder may direct in writing, a certificate or certificates, DRS Advice(s) or other evidence of ownership for the number of Common Shares to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the Subordinate Voting Shares to be converted, and the person or persons entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Shares as of such date;
(ii) remove or cause the removal of such holder from the register of holders in respect of the Subordinate Voting Shares for which the conversion privilege is being exercised, add the holder (or any person or persons in whose name or names such converting holder shall have directed the resulting Common Shares to be registered) to the register of holders in respect of the resulting Common Shares, cancel or cause the cancellation of the certificate or certificates representing such Subordinate Voting Shares; and
(iii) if less than all of the Subordinate Voting Shares represented by any certificate, DRS Advice, or other evidence of ownership are to be converted, the holder shall be entitled to receive a new certificate, DRS Advice or other evidence of ownership representing the Subordinate Voting Shares represented by the original certificate, DRS Advice or other evidence of ownership which are not converted.
(c) Mandatory Conversion. Notwithstanding anything contained herein to the contrary, the Company may require each holder of Subordinate Voting Shares to convert all, and not less than all, of the Subordinate Voting Shares at the applicable Conversion Ratio (a "Mandatory Conversion") if at any time all the following conditions are satisfied:
(i) the Company is no longer a "foreign private issuer" (as determined in accordance with Rule 3b-4 of the Securities Exchange Act of 1934, as amended); or
(ii) the Board of Directors (or a committee thereof) determine that the Subordinate Voting Shares are no longer necessary or required.
(d) Mechanics of Mandatory Conversion. Upon a Mandatory Conversion, the Company shall at its expense:
(i) issue (or cause its transfer agent to issue) to each holder of Subordinate Voting Shares of record a Mandatory Conversion notice at least 10 days prior to the record date of the Mandatory Conversion, which shall specify therein, (A) the number of Common Shares into which the Subordinate Voting Shares are convertible; and
(B) the address of record for such holder;
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(ii) on the record date of a Mandatory Conversion, issue (or cause its transfer agent to issue) each holder of record on the date of the Mandatory Conversion certificates, DRS Advices or other evidence of ownership representing the number of Common Shares into which the Subordinate Voting Shares are so converted and each certificate, DRS Advice or other evidence of ownership representing the Subordinate Voting Shares shall be null and void; and
(iii) remove or cause the removal of such holder from the register of holders in respect of the Subordinate Voting Shares and add or cause to be added such holder to the register of holders in respect of the resulting Common Shares.
(e) Conversion upon an Offer. In the event that an offer is made to purchase Common Shares, and the offer is one which is required, pursuant to applicable securities legislation or the rules of the Canadian Securities Exchange (the "CSE") (or such other stock exchange or quotation system the Common Shares are then principally listed or quoted), if any, to be made to all or substantially all the holders of Common Shares in a province or territory of Canada to which the requirement applies, each Subordinate Voting Share shall become convertible at the option of the holder into Common Shares at the Conversion Ratio then in effect, at any time while the offer is in effect until one day after the time prescribed by applicable securities legislation for the offeror to take up and pay for such shares as are to be acquired pursuant to the offer. The conversion right may only be exercised in respect of Subordinate Voting Shares for the purpose of depositing the resulting Common Shares under the offer, and for no other reason. In such event, the transfer agent for the Common Shares shall deposit under the offer the resulting Common Shares, on behalf of the holder. To exercise such conversion right, the holder or his or its attorney duly authorized in writing shall:
(i) give written notice to the transfer agent for the Common Shares of the exercise of such right, and of the number of Subordinate Voting Shares in respect of which the right is being exercised;
(ii) deliver to the transfer agent the share certificate or certificates representing the Subordinate Voting Shares in respect of which the right is being exercised or, if uncertificated, such other evidence of ownership as the transfer agent may require, if applicable; and
(iii) pay any applicable stamp tax or similar duty on or in respect of such conversion.
No share certificates, DRS Advice(s) or other evidence of ownership representing the Common Shares resulting from the conversion of the Subordinate Voting Shares pursuant to this Article 27.8(e) will be delivered to the holders on whose behalf such deposit is being made. If Common Shares resulting from the conversion and deposited pursuant to the offer are withdrawn by the holder or are not taken up by the offeror, or the offer is abandoned, withdrawn or terminated by the offeror or the offer otherwise expires without such Common Shares being taken up and paid for, the Common Shares resulting from the conversion will be re-converted into Subordinate Voting Shares at the then Conversion Ratio and a share certificate representing the Subordinate Voting Shares or, if uncertificated, such other evidence of ownership will be sent to the holder by the Company or the transfer agent, as applicable. In the event that the offeror takes up and pays for the Common Shares resulting from conversion, the transfer agent shall deliver to the holders thereof the consideration paid for such shares by the offeror.
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(f) Effect of Conversion. All Subordinate Voting Shares which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the time of conversion except only the right of the holders thereof to receive Common Shares or other consideration pursuant to the terms hereof.
27.9 Redemption Rights
The Company has the right to redeem all or some of the Subordinate Voting Shares from any holder thereof at any time by providing two (2) days prior written notice (the "Redemption Notice") to such holder for either: (i) cash, at a price per Subordinate Voting Share equal to the Conversion Ratio (as may be adjusted in accordance with Article 27.10) multiplied by the average volume weighted average trading price of the Common Shares on the CSE (or such other stock exchange or quotation system the Common Shares are then principally listed or quoted) for the ten (10) trading days immediately prior to the date of the Redemption Notice (a "Cash Redemption"); or (ii) Common Shares at the Conversion Ratio, as may be adjusted in accordance with Article 27.10 (a "Share Redemption"). The Company need not redeem Subordinate Voting Shares on a pro-rata basis among the holders of Subordinate Voting Shares. Holders of Subordinate Voting Shares to be redeemed by the Company shall surrender the certificate(s), DRS Advice(s) or other evidence of ownership representing such Subordinate Voting Shares to the Company at its records office or at the office of the transfer agent, as applicable, duly assigned or endorsed for transfer to the Company (or accompanied by duly executed share transfers relating thereto). Each surrendered certificate, DRS Advice or other evidence of ownership shall be cancelled, and the Company shall: (i) in the event of a Cash Redemption, make payment of the applicable redemption amount by certified cheque, bank draft or wire transfer to the registered holder of such certificate; or (ii) in the event of a Share Redemption issue and deliver to the registered holder, or, subject to payment by the registered holder of any stock transfer or other applicable taxes and compliance with any other reasonable requirements of the Company or the transfer agent, as applicable, in respect of such transfer, in such name or names as such registered holder may direct in writing, a certificate or certificates, DRS Advice(s) or other evidence of ownership for the number of Common Shares at the Conversion Ratio, as may be adjusted in accordance with Article 27.10. In the event that less than all the Subordinate Voting Shares represented by a surrendered certificate, DRS Advice or other evidence of ownership are redeemed by the Company, then a new certificate, DRS Advice or other evidence of ownership representing the unredeemed balance of Subordinate Voting Shares represented by such certificate, DRS Advice or other evidence of ownership shall be issued in the name of the applicable registered holder of the cancelled certificate, DRS Advice or other evidence of ownership. If on the applicable redemption date the redemption price is paid (or tendered for payment) in the case of a Cash Redemption or the Company issues (or cause its transfer agent to issue) Common Shares in the case of a Share Redemption, for any of the Subordinate Voting Shares to be redeemed then on such date all rights of the holder in the Subordinate Voting Shares so redeemed shall cease and such redeemed Subordinate Voting Shares shall no longer be deemed issued and outstanding, regardless of whether or not the holder of such Subordinate Voting Shares has delivered the certificate(s), DRS Advice(s) or other evidences of ownership representing such securities to the Company, and from and after such date the certificate(s), DRS Advice(s) or other evidence of ownership formerly representing the redeemed Subordinate Voting Shares shall evidence the only the right of the former holder of such Subordinate Voting Shares to receive the applicable redemption price to which such holder is entitled.
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27.10 Adjustments
(a) Adjustments for Distributions. In the event the Company shall declare a distribution to holders of Common Shares payable in securities of other persons, evidences of indebtedness issued by the Company or other persons, assets (excluding cash dividends) or options or rights not otherwise causing adjustment to the Conversion Ratio (a "Distribution:), then, in each such case for the purpose of this Article 27.10(a), the holders of Subordinate Voting Shares shall be entitled to a proportionate share of any such Distribution as though they were the holders of the number of Common Shares into which their Subordinate Voting Shares are convertible as of the record date fixed for the determination of the holders of Common Shares entitled to receive such Distribution.
(b) Recapitalizations; Stock Splits . If at any time or from time-to-time, the Company shall (i) effect a recapitalization of the Common Shares; (ii) issue Common Shares as a dividend or other distribution on outstanding Common Shares; (iii) subdivide the outstanding Common Shares into a greater number of Common Shares; (iv) consolidate the outstanding Common Shares into a smaller number of Common Shares; or (v) effect any similar transaction or action (each, a "Recapitalization"), provisions shall be made so that the holders of Subordinate Voting Shares shall thereafter be entitled to receive, upon conversion or redemption of Subordinate Voting Shares, the number of Common Shares or other securities or property of the Company or otherwise, to which a holder of Common Shares deliverable upon conversion or redemption would have been entitled on such Recapitalization. In any such case, appropriate adjustment shall be made in the application of the provisions of Articles 27.8 and 27.9 with respect to the rights of the holders of Subordinate Voting Shares after the Recapitalization to the end that the provisions of Articles 27.8 and 27.9 (including adjustment of the Conversion Ratio then in effect and the number of Common Shares issuable upon conversion of Subordinate Voting Shares) shall be applicable after that event as nearly equivalent as may be practicable.
(c) Subdivision or Consolidation. The Subordinate Voting Shares may be subdivided or consolidated by resolution of the Board of Directors (or a committee thereof) without the simultaneous subdivision or consolidation of the Common Shares in the same manner, provided that the Conversion Ratio is correspondingly adjusted and the voting rights of the Subordinate Voting Shares is correspondingly adjusted such that the aggregate number of votes held by all holders of Subordinate Voting Shares prior to subdivision or consolidation is equal to the aggregate number of votes held by all holders of Subordinate Voting Shares following the subdivision or consolidation.
27.11 No Fractional Shares and Certificates as to Adjustments
No fractional Common Shares shall be issued upon the conversion or redemption (in the case of a Share Redemption) of any Subordinate Voting Shares and the number of Common Shares to be issued shall be rounded up or down to the nearest whole Common Share. The number of Common Shares that are issuable upon such conversion or redemption (in the case of a Share Redemption) shall be determined on the basis of the total number of Subordinate Voting Shares of the holder being redeemed or converted into Common Shares and the number of Common Shares issuable upon such aggregate conversion or redemption (in the case of a Share Redemption).
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27.12 Adjustment Notice
Upon the occurrence of each adjustment or readjustment of the Conversion Ratio pursuant to Article 27.10, the Company, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Subordinate Voting Shares a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of any holder of Subordinate Voting Shares, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustment and readjustment, (ii) the Conversion Ratio for the Subordinate Voting Shares at the time in effect, and (iii) the number of Common Shares and the amount, if any, of other property which at the time would be received upon the conversion or redemption of a Subordinate Voting Share.
27.13 Notices of Record Date
Except as otherwise provided under applicable law, in the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of any class or any other securities or property, or to receive any other right, the Company shall send to each holder of Subordinate Voting Shares, at least 10 days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right.
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resolution.
